Donovan v. Firemen's Ins. Co.
| Decision Date | 17 February 1869 |
| Citation | 30 Md. 155 |
| Parties | CAROLINE DONOVAN v. THE PRESIDENT AND DIRECTORS OF THE FIREMEN'S INSURANCE COMPANY OF BALTIMORE. |
| Court | Maryland Court of Appeals |
APPEAL from the Superior Court of Baltimore City, in Equity.
The bill of complaint in this case was filed by the appellant on the 31st day of May, 1867, against the appellee.
Joseph S. Donovan was the largest stockholder of the appellee, and had so been for a long time before his death, which took place some six or seven years before the filing of the bill in this case. He resided, till his death, in the city of Baltimore, where his widow, the appellant, continued to reside till August, 1861. On the 26th of August of that year being executrix and sole legatee of her husband, she transferred her stock to her own name, and about that time removed to Baltimore county. She never gave notice to the company of her change of residence, and the president testified that he never knew of her having removed from the city, till about a year before the bill in this cause was filed. She collected in person at the office of the company in Baltimore, the dividends declared from time to time including those of the years 1864, 1865 and 1866: and the president proved that till the first part of the year 1867 he had no reason to believe that she was not a resident of the city. When the dividends referred to were declared, the company announced them in the newspapers as $2 per share "clear of all taxes," and the appellant received them after and in pursuance of such notices; she was not called on in the county to pay the taxes for 1864, 1865 and 1866. The appellee during those years availed itself of the privilege given by the Act of 1864, ch. 391, to commute with the tax authorities of the city of Baltimore, and did so commute for the payment of the city taxes upon stock held by residents (or supposed residents) of the city. Having no knowledge of the appellant's change of residence, the officers of the corporation embraced her stock in the city list, and commuted for it as stock held by a citizen of Baltimore. They then deducted all the taxes (as if an item in their expense account) from their earnings, before declaring their dividends, and paid the latter "clear of all taxes." The appellant's receipts from her stock were thus less than they would have been, if the dividends had been declared on the earnings and every stockholder left to pay his own taxes, or than they would have been if the company had settled for her stock as county stock, the county taxes being less than those payable in the city. By this diminution of her dividends the appellant conceived herself aggrieved, and filed her bill of complaint to compel the company to make up the difference.
The appellee in its answer alleged, first, that under the provisions of the Code, it was clothed with full power and authority to settle for all local taxes, whether city or county, with the tax authorities of the city, "where the corporation is situated," and without reference to the domicil of its shareholders: and, secondly that the appellee had no notice whatever of the appellant's change of residence, while she, on the other hand, was cognizant of the mode in which the dividends were declared, had full notice by the advertisements, that they were paid tax free, and was estopped by collecting such dividends with such knowledge, from making any reclamations on the company, even if the Court should think that otherwise she would be entitled to relief.
The Court below (DOBBIN, J.) while holding that the stock of the appellant was only taxable in the county, the place of her residence, dismissed the bill upon the ground, that she was presumed to know that the appellee had paid the taxes to the city, and having failed to protest against such payment, she could not in equity and good conscience ask the company to pay to her the money which she had thus seen, without objection, improperly paid away.
From the decree dismissing the bill, the present appeal was taken.
The cause was argued before BARTOL, C.J., STEWART, GRASON, MILLER and ROBINSON, J.
George H. Williams, for the appellant, Referred to the following authorities: Insurance Co. vs. Mayor, &c. of Baltimore, 23 Md., 296; Archbold's Nisi Prius, 49 Law Lib., 196, 197; Cumberland Coal and Iron Co., vs. Sherman et al., 20 Md., 117, 134; Stewarts's Case, 1 Law Reports, 587.
L. L. Conrad and S. Teackle Wallis, for the appellee, referred to the following authorities:
Tongue's Lessee vs. Nutwell, 17 Md., 230; State of Louisiana vs. Bank of Louisiana, 6 Louisiana Rep., 763; 18 Howard, 343, 344; Act of 1864, ch. 391, Code, Art. 81, secs. 95, 96, 97, and the Act of 1825, ch. 55, sec. 16.
We are all of opinion that the position assumed by the appellee that the Act of 1864, ch. 391, section 97 of the 81st Article of the Code, read in connection with sections 95 and 96 of the same Article, clothed the company with full power and authority to settle for all local taxes, whether city or county, with the tax authorities of the city where the corporation is situated, without reference to the domicil of its shareholders in other parts of the State, cannot be sustained. The construction of the law in this respect is this: Permission is given any bank or other incorporated institution to agree, in any year, with the County Commissioners or Appeal Tax Court to pay the city and county taxes on such amount of stock liable to city and county taxation respectively, as may be agreed upon between the corporations and these respective tax authorities, thus relieving the latter from resort to the individual stockholders. In other words, and to illustrate our views, a bank located in Baltimore, having stockholders residing in that...
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