City of Annapolis v. Arundeland, Inc.

• Decision Date: 25 June 1954
• Docket Number: No. 179,179
• Parties: CITY OF ANNAPOLIS et al. v. ARUNDELAND, Inc.
• Court: Maryland Court of Appeals

Page 170

205 Md. 170

106 A.2d 493

CITY OF ANNAPOLIS et al. v. ARUNDELAND, Inc.

No. 179.

Court of Appeals of Maryland.

June 25, 1954.

John B. Wright, Annapolis, and H. Warren Buckler, Jr., Baltimore (Niles, Barton, Yost & Dankmeyer, Baltimore), on the brief, for appellants.

Richard H. Lerch, Baltimore (Wilbur R. Dulin, Annapolis, and Wyatt & Jones, Baltimore, on the brief), for appellee.

Before BRUNE, C. J., and COLLINS, HENDERSON and HAMMOND, JJ.

BRUNE, Chief Judge.

This is an appeal by the City of Annapolis from a decree of the Circuit Court for Anne Arundel County enjoining the City and its Collector and Treasurer from collecting taxes for the years 1951 and 1952 levied by the City against the leasehold interest of the appellee in certain apartment houses built on land owned by the United States, which are leased to the appellee under a long term lease. The right of the State and its appropriate subdivisions to tax the appellee's interest in these apartment houses is provided for under Title 34, U.S.C.A. § 522e, and is not now questioned by the appellee. Meade Heights, Inc., v. State Tax Comm., 202 Md. 20, 95 A.2d 280.

The controversy in this case centers on whether or not the government property on which these buildings stand is within the City of Annapolis. This question arises from the fact that the land is undoubtedly government property, from the language which now defines the boundaries of the City and from a subsequent statute. The City boundaries are thus described:

'The boundaries of the City of Annapolis shall be as follows: All that area or part of Anne Arundel County, Maryland, included within the metes and bounds hereinafter stated; saving and excepting therefrom all United States Government Property included in said area. Said area being described as follows:' [Here follows a description by metes and bounds which includes within its outlines the United States Naval Academy and the property now in question.]

The introductory clause of this definition _____ 'The boundaries of the City of Annapolis shall be as follows' _____ was in Section 1 of the Anne Arundel County Code, 1947 Ed., prior to 1950 and was followed immediately, without any intervening clause, by a complete statement of the metes and bounds of the City. These excluded the United States Naval Academy by describing the boundary of the City as running along the property line of the Academy.

The present language originated in the report of the Annapolis Annexation Charter Commission, which was established pursuant to the Laws of 1949, Chapter 696. The language was adopted verbatim in an ordinance of the City passed on April 10, 1950, which was based on the Commission's report, and it was again adopted verbatim in an Act of the General Assembly, Laws of 1951, Chapter 569, which repealed and re-enacted with amendments Section 1 of the Anne Arundel County Code (1947 Ed.).

The subsequent statute involved is Chapter 664 of the Laws of 1953, which is claimed by the appellant to be a legislative construction of the 1951 Act favorable to the City's contentions.

The 1950 ordinance was submitted to a referendum vote of qualified voters of the area proposed to be annexed and was approved at an election held on May 23, 1950, and was later held to become effective on January 1, 1951.

The metes and bounds set forth in the ordinance and repeated in the 1951 Act included the area which had formerly been comprised in the City of Annapolis and added some adjacent territory. This enlarged area, if the Naval Academy and other government property were included in it, would be almost identical with that included in the Annapolis Metropolitan Sewerage District, as enlarged in 1949.

The area now in dispute lay outside the old City limits and had for some years been the Naval Academy golf course.

The agreement pursuant to which the apartment houses now involved in controversy were built by the appellee and leased to it was dated August 30, 1950. It was executed by the Government on that date and by the appellee on September 11, 1950, and had evidently been the subject of negotiations for some time.

The appellee, in advance of concluding its agreement with the Government, but after the referendum vote approving the annexation ordinance, made arrangements with the Annapolis Water Company to obtain water for the projected apartments 'upon the same conditions and price that the consumers in the City of Annapolis pay for the water furnished them.' It likewise made arrangements with the Annapolis Metropolitan Sewerage Commission for the use of its facilities. For the fiscal year beginning May 1, 1950, the charge for the latter was to be 'the current sewerage tax of $0.34 per $100 of assessed value on its proposed housing project * * *; which tax is the same rate charged on all property in the Annapolis Metropolitan Sewerage District.' For later years, the rate was to be subject to change but was to be at the same rate for all property in the District. In 1950 the Annapolis Water Company was, and long had been, a part of the municipal government of Annapolis. The Sewerage Commission was also absorbed by the City in 1951 following the enlargement of the city limits and pursuant to the Laws of 1951, Chapter 493. Prior to its absorption by the City, the Commission was authorized to call upon the City and the County Commissioners to impose taxes upon properties within their respective jurisdictions to pay the principal of and interest on bonds issued by the Commission and to pay its operating expenses.

The only municipal services furnished to the appellee and its tenants by the City are water and sewerage. The appellee also has an agreement to dump garbage on the City dump at a fixed price per load. In accordance with Navy requirements, fire and police protectin are furnished by the Navy, and City water is not used in the fire hydrants.

The appellee has paid for its use of the sewerage system at the rate fixed by the 1950 arrangement with the old Commission. The appellant asserts that for 1951 this was paid to the City as a tax, and that nothing has been paid since.

Chapter 569 of the Laws of 1951 made a change in the election districts of Anne Arundel County and made the sixth district coincide with the City limits of Annapolis as defined in the same statute, and modified the boundaries of any other election district accordingly. The appellee has paid County taxes for the years 1952 and 1953 at the rate applicable to the sixth district without objecting thereto. (This is hardly surprising since the rate is lower in the sixth district than in others because of the services supposedly rendered by the City of Annapolis and not by the County.)

The main contention revolves about the terms in which the limits of Annapolis are defined. The appellant claims that the exception of 'United States Government Property included within said area'--i. e., within the area described by metes and bounds--refers to a type or kind of property, or is only a precautionary clause showing that those who adopted it were aware of the limitations upon the powers of the State with regard to property owned by the United States. The appellee contends that the exclusion is expressed in terms of area and that there is no reason to depart from its literal meaning.

There is no dispute about the complete jurisdiction of the United States over the property which it owns. See S.R.A., Inc., v. Minnesota, 327 U.S. 558, 66 S.Ct. 749, 90 L.Ed. 851, but that case and others therein cited show that the possibility of repossession by the United States will not prevent a tax sale under which the paramount rights of the United States are protected. Among the cases cited is Baltimore Shipbuilding & Dry Dock Co. v. City of Baltimore, 195 U.S. 375, 25 S.Ct. 50, 49 L.Ed. 242, which affirmed the decision of this Court in 97 Md. 97, 54 A. 623.

The testimony of the Chairman of the Annexation Commission shows that while the Commission was functioning he was unaware of the proposed apartment house development which was later undertaken by the appellant, Arundeland, Inc. In response to a question by the Court he said, 'No, sir, we didn't consider that at all. We weren't interested.' It is hard to deduce an intent one way or the other from a combination of lack of knowledge and indifference.

The administrative practice upon which the appellant relies seems wholly inconclusive. The County blew first one way and then the other on whether or not the apartment houses were...