Baltimore Steam Packet Co. v. City of Baltimore

• Decision Date: 10 June 1931
• Docket Number: 14,15.
• Parties: BALTIMORE STEAM PACKET CO. v. MAYOR AND CITY COUNCIL OF BALTIMORE. BALTIMORE STEAM PACKET CO. v. PRICE ET AL., STATE TAX COMMISSION.
• Court: Maryland Court of Appeals

155 A. 158

161 Md. 9

BALTIMORE STEAM PACKET CO. v. MAYOR AND CITY COUNCIL OF BALTIMORE.

BALTIMORE STEAM PACKET CO. v. PRICE ET AL., STATE TAX COMMISSION.

Nos. 14, 15.

Court of Appeals of Maryland

June 10, 1931

Appeals from Circuit Court No. 2 of Baltimore City; George A. Solter Judge.

Bill by the Baltimore Steam Packet Company against the Mayor and City Council of Baltimore, and appeal by the Baltimore Steam Packet Company against Jesse D. Price and others constituting the State Tax Commission of Maryland. From an order sustaining demurrer to bill and dismissing bill in the first case, and from an order affirming action of State Tax Commission, plaintiff in each case separately appeals.

Affirmed.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, PARKE, and SLOAN, JJ.

Watson E. Sherwood, of Baltimore, for appellant in both cases.

Joseph R. Walter, Asst. City Sol., of Baltimore (A. Walter Kraus, City Sol., and W. Wallace Rhynhart, Asst. City Sol., both of Baltimore, on the brief), for appellee in No. 14.

Wm. L. Marbury, Jr., Asst. Atty. Gen. (Wm. P. Lane, Jr., Atty. Gen., on the brief), for appellee in No. 15.

DIGGES J.

Cases No. 14 and No. 15 of the April term, 1931, although the parties defendant are different, were argued together in this court and will be disposed of in one opinion.

No. 14 was an original equity proceeding in circuit court No. 2 of Baltimore city, the complainant being the appellant and the defendants being the mayor and city council of Baltimore city, and is an appeal from the order of that court sustaining a demurrer to the bill of complaint and dismissing the bill; while the appeal in No. 15 is from an order of the same court passed in an appeal from the state tax commission, wherein the action of the state tax commission was affirmed. In this latter case the defendant (appellee) is the state tax commission. The subject-matter in both cases, and the question to be determined, is the legality of the assessment of the appellant's capital stock made by the state tax commission; No. 14 having reference to the assessment for the year 1929, and No. 15 for the year 1930.

The allegations of the bill in No. 14, and of the petition in No. 15, are practically identical, and set out in substance that the appellant is a corporation chartered by an act of the Legislature of this state in 1829, and has since been continuously engaged as a common carrier by water in the transportation for hire of passengers and freight between the states of Maryland and Virginia; that it is engaged wholly in interstate commerce; that it owns and operates three vessels of over 500 dead-weight tons, all of which are registered at the port of Baltimore and are licensed and enrolled as vessels of the United States under the laws thereof; that said vessels are regularly engaged in coastwise commerce on the Chesapeake Bay between the port of Baltimore, Md., as the port of origin and terminus of their voyage, and the port of Norfolk, Va.; that the port of Baltimore is on the Patapsco river, and the port of Norfolk on the Elizabeth river, both of said rivers being tributaries of the Chesapeake Bay; that the passenger and freight rates charged by the appellant are within the exclusive control and regulation of the Congress of the United States; that the appellant not only receives passengers and freight for transportation between the ports of Baltimore and Norfolk, but also receives freight for transportation beyond said ports by reason of through joint rates fixed and regulated by the Interstate Commerce Commission between the appellant and several railroads at the ports of Baltimore and Norfolk; that there are other corporations, incorporated under the laws of this state, which own vessels of over 500 dead-weight tons, registered at the port of Baltimore, and regularly engaged in commerce between the port of Baltimore and the port of Norfolk and ports on the Atlantic Coast, such as the Merchants' & Miners' Transportation Company; that the passenger and freight rates charged by said transportation company are likewise under the exclusive control of the Congress of the United States; that such rates between Baltimore and Norfolk are the same as those charged by the appellant; that the appellant, therefore, is in competition with said transportation company and any other corporation of this state owning vessels of over 500 dead-weight tons, registered at any port in this state and regularly engaged in commerce between the ports of Baltimore, Norfolk, and other ports beyond the Chesapeake Bay and tributaries; that by article 81, § 7, subsec. 28, of the Code of Public General Laws of Maryland (Supplement 1929), it is provided that the following described vessels shall be exempt from taxation: "Vessels of over five hundred (500) dead weight tons registered at any port in this State owned by American citizens or partnerships or by any domestic corporation regularly engaged in foreign or coastwise commerce between any port in the State of Maryland and any port or ports beyond the limits of the Chesapeake Bay and its tributaries, provided that the exemption granted by this sub-section shall end December 31, 1935." That the vessels belonging to the appellant, namely, "President Warfield," "State of Maryland," and "State of Virginia," are each of over 500 dead-weight tons, registered at a port of Baltimore, Md., owned by the appellant, a domestic corporation, and regularly engaged in coastwise and wholly interstate commerce between the port of Baltimore and the port of Norfolk; that the appellant contends that so much of said section 7, subsection 28, as undertakes to limit and confine the benefits of the exemption therein contained to vessels regularly engaged in foreign or coastwise commerce "between any port in the State of Maryland and any port or ports beyond the limits of the Chesapeake Bay and its tributaries" is an unlawful, unreasonable, and unequal discrimination against the appellant's vessels and is in conflict with article 15 of the Declaration of Rights of the State of Maryland and section 8 of article 1 of the Constitution of the United States, and void and of no effect, and therefore, under the provisions of section 13 of chapter 226 of the Acts of 1929, the appellant's vessels are exempt from taxation in the same manner as if the aforesaid section 7, subsection 28, read as follows: "Vessels of over 500 deadweight tons registered at any port in this State owned by American citizens or partnerships or by any domestic corporation regularly engaged in foreign or coastwise commerce."

In No. 14 it is further alleged that for the year 1929 the aggregate value and the taxable value of the shares of capital stock of the appellant was fixed by the state tax commission of Maryland in the manner provided for by law at $941,694, and in connection therewith the state tax commission valued the appellant's steamers President Warfield, State of Maryland, and State of Virginia, as of December 31, 1928, at $323,000, $301,128.66, and $301,128.66, respectively, but in so fixing the aggregate value and the taxable value of the shares of capital stock the state tax commission did not exclude the aforesaid total valuation of appellant's vessels of $925,257.32; that demand has been made upon the appellant by the mayor and city council of Baltimore for payment of both Baltimore city and state of Maryland taxes, based and calculated upon the aforesaid assessments; that the taxes so demanded amount to $24,836.26, of which $22,412.34 are Baltimore city taxes and $2,493.92 are state of Maryland taxes; that appellant was also notified that unless the taxes were paid on or before July 31, 1929, certain penalties would be charged, as well as interest on the amount of taxes, and further notified that the payments would be in arrears on July 1, 1929, and that thereafter the appellant's property would be subject to seizure and sale in satisfaction of the taxes; that the appellant is ready and willing to pay to Baltimore city the taxes based and calculated upon an aggregate value and the taxable value of its shares of capital stock of $16,437, which tax would amount to $433.51, said taxable value of $16,437 being the amount which would be taxable if the aforesaid value of the appellant's vessels were excluded from the assessment; that the statute providing for exemption of certain vessels discriminates against the appellant's vessels for no other reason than that they are not engaged in commerce with a port or ports beyond the limits of the Chesapeake Bay and its tributaries; and that such discrimination is arbitrary and unreasonable and in violation of the interstate commerce clause of the Constitution of the United States, in that a burden is placed upon its vessels to the exclusion of competitors and their vessels engaged likewise wholly in interstate commerce between this state and other states.

The prayers for relief are: First, that the statute creating the exemption be declared illegal and void in so far as said legislation attempts to tax the appellant for its vessels while excluding others and their vessels engaged in like commerce; second, that the appellant and its vessels be decreed to be exempt from taxation in the same manner as other vessels of similar tonnage and regularly engaged in coastwise commerce between any port of this state as the port of origin and terminus and any other port or ports beyond the limits of the Chesapeake Bay and its tributaries; third, that in ascertaining or determining the aggregate value and taxable value of the shares of capital stock of the appellant, the value of the aforesaid vessel property owned by the appellant should have been excluded; and, in No. 14, a further prayer that the...