City of Baltimore v. Safe Deposit & Trust Co. of Baltimore

• Decision Date: 01 July 1903
• Parties: MAYOR, ETC., OF BALTIMORE et al. v. SAFE DEPOSIT & TRUST CO. OF BALTIMORE.
• Court: Maryland Court of Appeals

55 A. 316

97 Md. 659

MAYOR, ETC., OF BALTIMORE et al. v. SAFE DEPOSIT & TRUST CO. OF BALTIMORE.

Court of Appeals of Maryland

July 1, 1903

Appeal from Baltimore City Court; Henry D. Harlan, Judge.

Application by the Safe Deposit & Trust Company of Baltimore to the appeal tax court of Baltimore to correct an assessment of personal property. From a judgment of the city court reversing the appeal tax court, and directing the correction of the assessment, the mayor and city council of Baltimore appeal. Affirmed.

Argued before McSHERRY, C.J., and FOWLER, BOYD, PAGE, PEARCE, and SCHMUCKER, JJ.

Olin Bryan and Albert C. Ritchie, for appellants.

W Burns Trundle and Osborne I. Yellott, for appellee

SCHMUCKER J.

This appeal raises the question of the validity of the Acts of 1902, p. 711, c. 486, which prescribes the method of assessment and taxation of personal property held in trust. The property involved in the present controversy consists of bonds of railroad and traction companies, and stock of a railroad company chartered in Maryland, so that the precise issue now before us is that of the validity of the act in so far as it relates to personal property of that character.

The act under consideration adds a new section to article 81 of the Code of Public General Laws, tit. "Revenue and Taxes," to be designated as section 221, and to read as follows: "Sec. 221. All bonds, certificates of indebtedness, or evidence of debt, in whatsoever form, made or issued by any public or private corporation, incorporated by this state or any other state, territory, district or foreign country, or issued by any state, territory, district or foreign country, and all personal property of any kind whatsoever, not exempt from taxation by the laws of this state, in which any resident of any county of this state, has an equitable interest, with the legal title to the same in some other person or corporation who is a resident of some other county of this state or of the city of Baltimore, or (in the case of a corporation) which has its main office or principal place of business in some other county in this state or in the city of Baltimore, shall be valued and assessed for the purposes of state and county taxation to the equitable owner thereof in the county in which he or she resides, to the extent of his or her equitable interest as aforesaid, and the taxes due thereon shall be paid by the holder of said legal title to the collector of taxes for the county or city in which said property is so valued and assessed." Then follows a section repealing all inconsistent prior legislation.

It appears from the present record that the appellee, which is a corporation having its main office in Baltimore City, had in its possession $28,890 worth of railroad and other bonds in trust for Noah Walker, a resident of Baltimore county, and $22,930 worth of similar securities, including, however, 24 shares of stock of the Philadelphia, Wilmington & Baltimore Railroad Company, in trust for Emily R. Hoff, who is also a resident of Baltimore county. It is admitted that these securities were liable to assessment and taxation for the year 1903. The appellee, having been assessed on the taxbooks of Baltimore City for all of these securities, applied by petition to the appeal tax court of that city to correct its assessment, by striking therefrom the securities, upon the ground that under the Acts of 1902, p. 711, c. 486, it was required to pay the taxes on them for the year 1903, to the collector of taxes for Baltimore county, where the equitable owners resided. The appeal tax court rejected the application, and refused to correct the assessment. The trustee thereupon appealed, under the statute, to the Baltimore city court, which, relying upon the act of 1902 passed its order of April 1, 1903, from which the present appeal was taken, directing the appeal tax court to abate the assessed value of the securities from the trustees' assessment list.

It has long been settled that the power of taxation belongs exclusively to the legislative branch of the government, and that the Legislature, except as restricted by the Bill of Rights and Constitution, has the absolute power of taxation over all the property within the state. Faust v. Building Ass'n, 84 Md. 192, 35 A. 890; State v. Mayhew, 2 Gill, 487; State v Sterling, 20 Md. 516, 517; United States v. New Orleans, 98 U.S. 392, 25 L.Ed. 225; Meriweather v. Garrett, 102 U.S. 472, 26 L.Ed. 197; Savings Society v. Multnomah Co., 169 U.S. 421, 18 Sup.Ct. 392, 42 L.Ed. 803. This court has also repeatedly recognized and upheld the power of the Legislature to fix the situs of personal property for purposes of assessment and taxation. M. & C.C. of Balto. v. Balto. City Pass. R. Co., 57 Md. 31; Am. Coal Co. v. County Com'rs of Allegany Co., 59 Md. 185; Baldwin v. Washington Co., 85 Md. 157, 36 A. 764; Corry v. M. & C.C. of Balto., 96 Md. 320, 321, 53 A. 942.

As the act of 1902 specifically fixes the situs for purposes of taxation of personal property held in trust at the residence of the beneficial owner, the order appealed from was properly passed, unless the act is to be regarded as in conflict with some of the provisions of the Bill of Rights or the Constitution. The appellant contends that it does conflict with article 15 of the Bill of Rights, which declares that every person "holding property" in this state ought to contribute his proportion of taxes; and they rely upon the case of Latrobe v. Baltimore, 19 Md. 13, as deciding that the holder of property there referred to is the holder of its legal title, and not the owner of the beneficial interest in it. They also rely upon ...