Baltimore County v. Churchill, Ltd.

• Decision Date: 10 January 1974
• Docket Number: No. 116,116
• Citation: 271 Md. 1,313 A.2d 829
• Parties: BALTIMORE COUNTY, Maryland, et al. v. CHURCHILL, LTD., et al.
• Court: Maryland Court of Appeals

Page 1

271 Md. 1

313 A.2d 829

BALTIMORE COUNTY, Maryland, et al. v. CHURCHILL, LTD., et al.

No. 116.

Court of Appeals of Maryland.

Jan. 10, 1974.

Harry S. Shapiro, Asst. County Solicitor for Baltimore County Towson, (R. Bruce Alderman, County Solicitor, Towson, on the brief), and by Charles Freeland, Asst. City Solicitor of Baltimore City (George L. Russell, Jr., City Solicitor, Baltimore, on the brief; Paul F. Borden, County Solicitor and John M. Court, Asst. County Solicitor, Annapolis for Anne Arundel County, Joseph S. Casula, County Atty. and Harry L. Durity, Deputy County Atty., Marlboro, for Prince George's County, on the brief), for appellants.

James E. Carbine, Baltimore (George Cochran Doub, John J. Ghingher, III and Weinberg & Green, Baltimore, on the brief) for Churchill, Ltd., part of appellees, by Thomas P. Perkins, III, Baltimore, (Jacques T. Schlenger, Harry D. Shapiro and Venable, Baetjer & Howard, Baltimore, on the brief) for General Electric Co., another appellee; submitted on brief by Harvey A. Jacobs, Shapiro, Weil ,& Jacobs, Bethesda, and Ronand D. Jacobs and Jacobs & Speiller, Washington, D. C. for District Photo, Inc., other appellee. Argued before MURPHY, C. J., and BARNES, McWILLIAMS, ^* SINGLEY, SMITH, DIGGES and LEVINE, JJ.

SINGLEY, Judge.

This case began unpretentiously when Baltimore County filed a bill of complaint in the Circuit Court for Baltimore County for declaratory and injunctive relief against Churchill, Ltd., District Photo, Inc., the Director of the State Department of Assessments and Taxation, and the Attorney General of Maryland. The purpose of the action was to obtain a declaration that the law under which Churchill was claiming a refund of personal property taxes paid to the County in th amount of $59,929.00 as a result of an erroneous assessment, and under which District Photo was seeking a refund of taxes similarly paid in the amount of $29,651.00, was unconstitutional, and to enjoin hearings which had been scheduled before the Department of Assessments and Taxation on the refunds claimed.

By the time the case came on for hearing, Walter R. Richardson, Baltimore County's Director of Finance; Anne Arundel County and its Controller, Donald P. Carter; Prince George's County and its Director of Finance, Albert W. Gault; and the Mayor and City Council of Baltimore had intervened as parties plaintiff, and seven other corporations, all similarly situated taxpayers, had been joined as parties defendant. The political subdivisions and their officials will hereafter be referred to collectively as the Appellants, and the appellee Corporations as the Taxpayers.

The provision which is under attack became effective, as amended, on 1 July 1972 and is codified as Maryland Code (1957, 1969 Repl.Vol., 1973 Cum.Supp.) Art. 81, § 39A. ¹ Section 39A (hereinafter the Act) provides:

'(a) Whenever the supervisors of assessments or the department of assessments of Baltimore City or the State Department of Assessments and Texation shall determine that the assessment of any personal property was erroneous due to an existing exemption to which the taxpayer was entitled at the time of assessment, the taxpayer shall be entitled to a refund of the personal property taxes paid according to the erroneous assessment, notwithstanding the failure to protest and appeal the erroneous assessment in accordance to the provision of this article.

'(b) Any taxpayer who shall apply within five (5) years from the date of finality for assessment for any tax year shall be eligible for a refund under this section for any taxes paid for such tax year as a result of any erroneous assessment of personal property; provided, however, that any taxpayer shall have until July 1, 1973, to apply for and be eligible for such refund based on any erroneous assessment of personal property made since December 31, 1965.'

From an order denying the Appellants' motions for summary judgment, granting the Taxpayers' motions for summary judgment and declaring the Act to be a proper, valid, and constitutional enactment, this appeal was taken.

Before considering the question of the validity of the Act, there is a threshold question of the Appellants' standing to sue. The chancellor, Proctor, J., concluded that Baltimore City and the counties lacked the requisite standing, but in order to reach the merits of the case assumed, without deciding, that at least one of the county officials could maintain the suit, even though all of them had failed to allege that they would be subject to a pecuniary loss or to an increase in their taxes, Stovall v. Secretary of State, 252 Md. 258, 263, 250 A.2d 107, 110 (1969); Murray v. Comptroller of the Treasury, 241 Md. 383, 391, 216 A.2d 897, 901, cert. denied, 385 U.S. 816, 87 S.Ct. 36, 18 L.Ed.2d 55 (1966).

We agree with the chancellor that what was said by way of dictum in City of Baltimore v. Concord Baptist Church, Inc., 257 Md. 132, 138-139, 262 A.2d 755, 758-759 (1970), where Baltimore City's Comptroller and Director of Finance, as individuals, had joined with the City in challenging an act of the General Assembly on constitutional grounds, can now be adopted, in the circumstances of this case, to support the assumption of standing, without so holding:

'Messrs. Benton and Pressman had sought declaratory relief and had later intervened in their individual and official capacities, as the City officials charged with the duty of acquiring property and paying for it. Theirs was the dilemma faced by public officials 'either in refusing to act under a statute (they) believe to be unconstitutional, or in carrying it out and subsequently finding it to be unconstitutional,' recognized in Pressman v. State Tax Comm., 204 Md. 78, 102 A.2d 821 (1954) and in Board of Education of Central School District No. 1 v. Allen, 392 U.S. 236, 88 S.Ct. 1923, 20 L.Ed.2d 1060 (1968). See also, Borchard, Declaratory Judgments (2d Ed. 1941) at 771. Additionally, where the issues presented are of great public interest and concern, the interest necessary to sustain standing need only be slight. Horace Mann League, etc. v. Board of Public Works, 242 Md. 645, 653, 220 A.2d 51 (54,) cert. den. 385 U.S 97, 87 S.Ct. 317, 17 L.Ed.2d 195 (1966); Baltimore Retail Liquor Package Stores Ass'n v. Board of License Comm'rs, 171 Md. 426, 189 A. 209, 109 A.L.R. 1253 (1937); see also Hammond v. Lancaster, 194 Md. 462, 71 A.2d 474 (71 A.2d) 483 (1950).

'In holding that the individual appellants had standing, we are not overlooking the principles that the City, as a creature of the State, possesses no power which it may invoke against the State, even on constitutional grounds, Duvall v. Lacy, 195 Md. 138, 73 A.2d 26 (1950); Williams v. Mayor and City Council of Baltimore, 289 U.S. 36, 53 S.Ct. 431, 77 L.Ed. 1015 (1933); United States v. Railroad Co., 84 U.S. (17 Wall.) 322, 21 L.Ed. 597 (1873), but compare Gomillion v. Lightfoot, 364 U.S. 339, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960), and may have even less right to challenge the constitutionality of a statute under which it is proceeding. Creative Country Day School v. Montgomery County Bd. of Appeals, 242 Md. 552, 568, 219 A.2d 789 (797) (1966).'

Cf. Director of Finance v. Alford, Md., 311 A.2d 412 (1973) (decided November 28, 1973).

The political subdivisions, as creatures of the State, have 'no right to question the constitutionality of the acts of (their) superior and creator,' Columbia County v. Board of Trustees, 17 Wis.2d 310, 317, 116 N.W.2d 142, 146 (1962); Charles Hewitt & Sons Co. v. Keller, 223 Iowa 1372, 1377, 275 N.W. 94, 97 (1937). The individual appellants contend that the Act violates both the Constitution of the United States and the Maryland Constitution. With respect to the alleged infirmity under the federal Constitution, numerous Supreme Court decisions preclude the political subdivisions ² from prevailing on the standing issue: 'A mumicipal corporation, created by a state for the better ordering of government, has no privileges or immunities under the federal constitution which it may invoke in opposition to the will of its creator,' Williams v. Mayor & City Council of Baltimore, 289 U.S. 36, 40, 53 S.Ct. 431, 77 L.Ed. 1015 (1933); see also Newark v. New Jersey, 262 U.S. 192, 196, 43 S.Ct. 539, 67 L.Ed. 943 (1923); Trenton v. New Jersey, 262 U.S. 182, 192, 43 S.Ct. 534, 67 L.Ed. 937 (1923); City of Marshfield v Town of Cameron, 24 Wis.2d 56, 63, 127 N.W.2d 809, 813 (1964); Sweeney v. State, 251 N.Y. 417, 419-420, 167 N.E. 519, 520 (1929); Board of Revenue v. Southern Bell Tel. & Tel. Co., 200 Ala. 532, 533, 76 So. 858, 859 (1917). However, whether the subdivisions have standing to complain of a violation of the constitution of a state, in state courts at least, is a question of state practice, Williams v. Mayor & City Council of Baltimore, supra, 289 U.S. at 47-48, 53 S.Ct. 431. The Maryland practice, as indicated in Mayor & City Council of Baltimore v. Concord Baptist Church, Inc., supra, provides that the subdivisions, as creatures of the State, share the interests of the State, and, as such, cannot challenge the acts of the State. ³ See Black River Regulating Dist. v. Adirondack League Club,307 N.Y. 475, 489, 121 N.E.2d 428, 434 (1954), appeal dismissed, 351 U.S. 922, 76 S.Ct. 780, 100 L.Ed. 1453 (1956). This principle is in accord with the prevailing rule, that a subdivision or other arm of a state does not, in general, ⁴ have standing to contest the constitutionality, under either the federal or state constitution, of any act of the state. See, e. g., State v. Rothwell, 25 Wis.2d 228, 233, 130 N.W.2d 806, 808-809, 131 N.W.2d 699 (1964) (municipalities and state agencies, state constitution); City oF marshfield v. town oF cameron, supra (municipalities, federal and state constitutions); State v. Kelly, 377 S.W.2d 328 (Mo.1964) (county constable); Columbia County v. Board of Trustees, supra (county, state constitution); Town of Waterford v....