Duvall v. Lacy

Decision Date14 April 1950
Docket Number141.
Citation73 A.2d 26,195 Md. 138
PartiesDUVALL et al. v. LACY, Comptroller of State.
CourtMaryland Court of Appeals

Emanuel Klawans, Annapolis, Md. and F. Neal Parke Westminster (Louis M. Strauss, of Annapolis, on the brief) for appellants.

J. Edgar Harvey, Deputy Atty. Gen. (Hall Hammond, Atty. Gen., on the brief), for appellee.


MARBURY, Chief Judge.

Appellants filed a petition for a writ of mandamus against the Comptroller of the State, alleging that he was about to remove the income tax division of his office from Annapolis to the City of Baltimore, in violation of Article VI, Section 1, of the Constitution of Maryland. They allege that the rental of office space for this division in Baltimore will constitute a diversion of public monies to an unlawful use, that there is now available ample space and adequate facilities for the division in the State Office Building in Annapolis, and if added space is wanted it can be obtained in that City. The Comptroller demurred, the lower court sustained the demurrer and dismissed the petition, and from its order petitioners appeal here.

The petitioners in the writ are the Mayor and Aldermen of the City of Annapolis a municipal body corporate, and two individuals. The petition states that the corporation brings this suit on behalf of itself and of all citizens, residents, voters and taxpayers of the State, county and City. One of the individual petitioners is Frank M. Duvall, a citizen, resident, voter and taxpayer of the State and of Anne Arundel County, and he brings the suit as well on behalf of all others similarly situated. The other individual petitioner is the Mayor of Annapolis, who is also alleged to be a citizen, resident voter and taxpayer of the State, county and City, and a merchant engaged in business in Annapolis, and he also brings the suit as well on behalf of all others similarly situated.

Municipal corporations have only the powers conferred upon them by the Legislature, and these are to be strictly construed. 'To doubt such power in a given case is to deny its existence.' Hanlon v. Levin, 168 Md. 674, 179 A. 286, 287, Mayor & City Council of City of Baltimore v. Canton Company, 186 Md. 618, 631, 47 A.2d 775. We have held that it is implicit in the authority of such a corporation to take necessary legal action to put in force its ordinances or any amendment to its charter, Board of Education of Frederick County v. Mayor & Aldermen of Frederick, Md., 69 A.2d 912, but we know of no authority given to the corporate appellant in this case to ask for a construction of the Constitution of the State, or to require a state official to carry out what it claims to be the mandatory instruction of that document. There is no allegation in the petition of any special benefit to the City of Annapolis from a retention there of the Income Tax Division, and if there were, we know of no ground on which the municipal authority could legally enforce such benefit. It has become customary in recent years for municipalities to advertise the particular advantages of their communities so as to attract industries, but the right to bring suit is quite another thing. The individual taxpayers, Duvall and McCready, have a somewhat better standing. Taxpayers, in this State, have frequently been allowed by class suits to restrain the improper expenditures of public funds. This may in some cases be permissible even though the acts complained of are profitable to the public. Hanlon v. Levin, supra, Green v. Garrett, Md., 63 A.2d 326. There is no showing in the petition whether the objected action of the Comptroller will be beneficial from a financial standpoint or not, and this Court has recently denied the right of taxpayers to test the constitutionality of a statute unless they have some special interest in it. Hammond v. Lancaster, Md., 71 A.2d 474. The appellee, however, does not raise the question of the rights of any of the petitioners to bring the suit, and we refer to it only because we do not wish to indicate that there exists an unrestricted right in any taxpayers or bodies of taxpayers to bring any sort of proceeding they may think should be instituted. For the purposes of this particular case, we will pass the question and proceed to the main issue.

Article VI, Section 1 of the Constitution, provides for a Treasury Department consisting of a Comptroller, to be elected and a Treasurer to be appointed by the Legislature. In the last part of the section is the statement, 'The Comptroller and the Treasurer shall keep their offices at the seat of government.' The duties of the Comptroller are set forth in Section 2 of Article VI. He is to have the general superintendence of the fiscal affairs of the State, to digest and prepare plans for the improvement and management of the revenue and for the support of the public credit; prepare and report estimates of the revenue and expenditures of the State; superintend and enforce the prompt collection of all taxes and revenue; adjust and settle with delinquent collectors and receivers of taxes; preserve all public accounts and decide on the forms of keeping and stating accounts; grant warrants for money to be paid out of the Treasury, in pursuance of appropriations, and countersign all checks drawn by the Treasurer; prescribe the formalities of the transfer of stock; make to the General Assembly full reports on all these proceedings and of the state of the Treasury Department within ten days after the commencement of each Session; 'and perform such other duties as shall be prescribed by law.' The provisions of Section 1 and Section 2 of Article VI did not originate in the Constitution of 1867. They are to be found in Article VI, Sections 2 and 3 of the Constitution of 1864, and they are practically copied verbatim from Article VI, Sections 1 and 2 of the Constitution of 1851. It was by the latter Constitution that the office of Comptroller was first established, and the debates of that Convention show the purpose of it. The report was made by Mr. McLane, Chairman of the Committee on the Treasury Department, and in his explanation of it, he said that some reorganization of the Treasury Department was indispensably necessary, and that in the Treasury of the United States and in 23 states out of the 31, then existing, it had been found necessary to provide, in addition to a Treasurer, a Comptroller or some similar officer. Debates Maryland Reform Convention of 1851, Vol. 2, page 815. There was further discussion of the proposal by other members of the Convention, especially by Mr. Randall, who outlined the existing situation, and the fact that the Treasurer was without check or limitation. It was intended that the Comptroller was to have general superintendence over the fiscal affairs of the State. Debates Volume 2, pages 830, 831, 833.

Until 1937, the duties of the Comptroller were mainly those of superintendence and checking. In that year, the State Income Tax was adopted by Chapter 11 of the Extra Session. The Comptroller was authorized to administer it and returns had to be made to him. This was the first instance of the extension of the duties of Comptroller from superintendence to actual assessment and collection. This change was criticized by the Maryland Tax Revision Commission of 1939, and in its report it recommended a new department of revenue and taxes which should take over the assessment and collection provisions of the income tax. In respect to the office of the Comptroller, the Commission said 'The primary function of the Comptroller is to approve all vouchers drawn on the Treasury, and as a member of the Board of Public Works he exercises supervisory authority over all the State Departments, under Chapter 64 of the Acts of 1939. The Commission believes that the Comptroller should be relieved of the duties of tax assessment. This is foreign to the nature of his office and necessarily infringes on the other important work which he is required to perform.' Report of the Commission, page 13. This recommendation of the Commission was, however, not adopted, and under Chapter 277 of the Acts of 1939, the Comptroller was continued in charge of all income tax activities. Since that time the duties of the Comptroller have been enlarged by directing him to collect not only the income taxes, but the sales tax, Acts of 1947, Chapter 281, as well as some amusement taxes and some liquor taxes. At the present time the income tax and the sales tax are the most productive source of state revenue. In view of these enlarged duties, the Comptroller's office is now vastly different from its nature in 1851, or 1864, or 1867. He is, of course, still the chief...

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