City of Baltimore v. Johnston
| Decision Date | 01 April 1903 |
| Citation | 54 A. 646,96 Md. 737 |
| Parties | MAYOR, ETC., OF CITY OF BALTIMORE et al. v. JOHNSTON. |
| Court | Maryland Court of Appeals |
Appeal from Baltimore City Court; Henry Stockbridge, Judge.
Proceeding to assess for taxation a seat in the Baltimore Stock Exchange held by Bartlett S. Johnston. From an order of the Baltimore city court vacating an assessment of such seat made by the appeal tax court of Baltimore City, the mayor and city council of Baltimore appeal. Affirmed.
Argued before McSHERRY, C.J., and BRISCOE, BOYD, PEARCE, SCHMUCKER and JONES, JJ.
Olin Bryan, for appellants.
W Burns Trundle, for appellee.
The appeal tax court of Baltimore City assessed for taxation a seat in the Baltimore Stock Exchange held by the appellee at the sum of $7,000 for the year 1903. In pursuance of the statute he appealed to the Baltimore city court, which passed an order by which the assessment was vacated and annulled and from that order this appeal was taken.
It is contended on the part of the appellee that a previous determination of this question, in reference to an attempted assessment against him for the years 1901 and 1902, precludes the appellants in this proceeding, as it is res adjudicata but it will not be necessary for us to pass on that branch of the case, by reason of the conclusion we have reached on the main question, which may be thus stated: "Is a seat in the Baltimore Stock Exchange property within the meaning of that term as used in article 15 of the Bill of Rights, and in the revenue statutes of this state?"
It would be useless to undertake to reconcile the decisions of the various courts which have been called upon to determine how far a seat in an exchange of this character can be said to be property, or to point out in what particulars they have differed. The learned judge below correctly determined that, by the great weight of authority, it cannot be said to be merely a personal privilege, but must be regarded as property, although in a limited and qualified sense. Among the cases in which such an interest in an exchange has been held to be property for some purposes are Platt v. Jones, 96 N.Y. 29; Powell v. Waldron, 89 N.Y. 328, 42 Am.Rep. 301; Hyde v. Woods, 94 U.S. 523, 24 L.Ed. 264; and Page v. Edmunds (decided by the Supreme Court of the United States in January of this year) 23 Sup.Ct. 200, 47 L.Ed. 318. The question has generally been considered in cases in which it was claimed that the interest of the holder of the seat passed to his assignee or trustee in bankruptcy, or where it was sought in some way to subject such interest to the payment of debts. In the one last mentioned the Supreme Court held that, under the provision in section 70 of the bankrupt act of 1898 (Act July 1, 1898, c. 541, 30 Stat. 565 [U.S.Comp.St.1901, p. 3451]) that the trustee shall be vested with the title of the bankrupt in "property which prior to the filing of the petition he could by any means have transferred," the power of the bankrupt to transfer it was sufficient to vest it in his trustee. As that case arose in Pennsylvania, the court reviewed at length Thompson v. Adams, 93 Pa. 55, and Pancoast v. Gowen, Id. 66, in both of which it was said that a seat in an exchange could not be seized under an execution. The Supreme Court did not deem it necessary to determine that question, but said, in speaking of the opinion in Thompson v. Adams, that, if the court meant to say that the seat was not property at all, they could not concur. In Barclay v. Smith, 107 Ill. 349, 47 Am.Rep. 437, and Lowenberg v. Greenebaum, 99 Cal. 162, 33 P. 794, 21 L.R.A. 399, 37 Am.St.Rep. 42, it was also held that such seats were not property subject to judicial sales.
Although counsel for both sides showed commendable zeal in the preparation of this case, and cited many authorities which seemed to them to reflect on some of the questions involved, we have not been referred to a single decision in which a seat in an exchange of this kind has been taxed. In Re Hellman's Estate (Sup.Ct.N.Y., App.Div., decided in 1902) 79 N.Y.Supp. 201, the court said: "That a seat in this exchange is property, and that the Legislature would have power to impose a tax upon the transfer of such property, is conceded; but the Legislature, in defining personal property which is taxable under the tax law, has not included a right to a seat in the exchange as property that shall be taxable, and for that reason the court below had no authority to impose the tax." And in People v. Feitner, 167 N.Y. 1, 60 N.E. 265, 82 Am.St.Rep. 698, the Court of Appeals held that a seat in the New York Stock Exchange was not personal property, within the meaning of the tax laws of that state. In San Francisco v. Anderson, 103 Cal. 69, 36 P. 1034, 42 Am.St.Rep. 98, it was held that "a seat in the San Francisco Stock and Exchange Board is not taxable." The court said: In Board of Commissioners v. Rocky Mountain News Company (Colo.App.) 61 P. 494, it was held that a contract of membership in an associated press was not property subject to taxation, within the intention of the laws and Constitution of Colorado, although in that case the interest was first valued at $25,000, and reduced by the lower court to $25,000. In Hart v. Smith, 64 N.E. 661, 58 L.R.A. 949, the Supreme Court of Indiana held that the good will that attaches to the business of conducting a newspaper belonging to a copartnership is not, in and of itself, property, within the constitutional provision that the General Assembly shall provide by law for a uniform and equal rate of assessment and taxation. In State Board v. Holliday, 150 Ind. 216, 49 N.E. 14, 42 L.R.A. 826, it was held that taxation of paid-up, or nonforfeitable and partly paid up, life insurance policies, was not provided for by statute, although there was a provision (Burns' Rev.St.1901, § 8410) that "all property within the jurisdiction of this state, not expressly exempted, shall be subject to taxation"; and, after specifying what should be embraced in the schedules of property for taxation, it provided that "all other goods, chattels and personal property, not heretofore specifically mentioned, and their value, except properties specifically exempted from taxation," should be included. In People v. Roberts, 159 N.Y. 70, 53 N.E. 685, 45 L.R.A. 126, copyrights and patent rights were held to be exempt; but the good will of a corporation, which was the result of carrying on business in that state, was said to be taxable. We might continue at great length citations of cases illustrating the views taken by the courts on such questions, but those we have cited are sufficient to show that, as a rule, the courts in this country have held that such a right as that now being considered is property, but of such a nature that the terms usually found in tax laws do not embrace it. In the absence of some determination by this court directly bearing on the question, we have thought it proper to give the trend of the decisions of other courts before discussing the provisions of our own laws, which we will now do.
The learned counsel for the appellants relies on the provision in the declaration of rights that "every person in the state, or person holding property therein, ought to contribute his proportion of public taxes for the support of the government, according to his actual worth in real or personal property," and especially on the language used by the statute. Section 2, art. 81 ("Revenue and Taxes") Poe's Supp.Code Pub.Gen.Laws 1900, after enumerating various kinds of property to be assessed, contains the clause so much relied on, which is: "All other property of every kind, nature and description within this state, except as provided by the fourth section of this article, shall be valued and assessed for the purposes of state, county and municipal taxation to the respective owners thereof in the manner prescribed by this article." That section, as now in force, was passed in 1896; but the same language was used when the Code of 1888 was adopted, and has been since the act of 1874. Prior to 1874 the statute did not use so many words, but in the Code of 1860, art. 81, § 2, it read "and all other property of every description whatsoever, shall be liable to assessment and tax"; and those terms were used at least since the year 1852, back of which we have not deemed it necessary to look. There is therefore no material difference between the language now used and that which was adopted as early as 1852.
The Baltimore Stock Board was organized on the 29th of January 1844, and on the 14th of May, 1881, its name was changed to the Baltimore Stock Exchange. This case was argued in this court on the fifty-ninth anniversary of its organization, and yet there was never any attempt to assess seats in this exchange until the assessments for 1901 and 1902 were made. That is not necessarily conclusive of the question, but it is an important circumstance, when we remember that the language now relied on is, in substance, the same that has been in the statutes for so many years. The value of a seat may change from year to year, but, if it is property now, within the meaning of our tax laws, it has been during all those years. If it was, not only have the owners of those seats been placed in a position, by the construction put on the law by the tax officers, by which...
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