Spencer v. Maryland Jockey Club of Baltimore City

• Decision Date: 01 February 1939
• Docket Number: 91.
• Parties: SPENCER et al. v. MARYLAND JOCKEY CLUB OF BALTIMORE CITY. [*]
• Court: Maryland Court of Appeals

4 A.2d 124

176 Md. 82

SPENCER et al. v. MARYLAND JOCKEY CLUB OF BALTIMORE CITY. ^[*]

No. 91.

Court of Appeals of Maryland

February 1, 1939

Appeal from Circuit Court of Baltimore City; Samuel K. Dennis Judge.

Suit by the Maryland Jockey Club of Baltimore City against Jervis Spencer, Jr., and others, constituting the Maryland Racing Commission and the County Commissioners of Baltimore County to restrain the imposition and collection by the State Racing Commission of a certain license fee imposed on plaintiff wherein the County Commissioners of Baltimore County intervened. From an adverse decree, the defendants and interveners appeal.

Reversed injunction dissolved and complaint dismissed.

PARKE and JOHNSON, JJ., dissenting.

Hilary W. Gans, of Baltimore (Herbert R. O'Conor of Baltimore, on the brief), for appellants Maryland Racing Commission.

Randolph Barton, Jr., of Baltimore (James P. Kelley, of Towson, on the brief), for appellants County Com'rs of Baltimore County.

Stuart S. Janney and Frank B. Ober, both of Baltimore (Ritchie, Janney, Ober & Williams, of Baltimore, on the brief), for appellee.

Argued before BOND, C.J., and OFFUTT, PARKE, SLOAN, MITCHELL, and JOHNSON, JJ.

SLOAN Judge.

The Maryland Jockey Club, which operates the Pimlico Race Track in Baltimore City, has filed a bill to restrain the imposition and collection by the State Racing Commission of a daily license fee of $3000 for every day of racing permitted in addition to the license fee of $6000 per day exacted of or imposed on all one-mile tracks in the State, the additional license fee being now made payable by the Racing Commission to the Treasurer of Baltimore County in accordance with the provisions of chapters 89 and 264 of the Acts of 1918, and the same as amended by ch. 273, sec. 1, subd. 8 of the Acts of 1920, the latter sec. 8, Article 78B of the Code of Public General Laws.

Prior to 1918 horse racing in Baltimore County was under the control of a board appointed by the Governor, Act of 1912, ch. 77, known as the 'Baltimore County Racing Commission', and one of the tracks within its jurisdiction was the plaintiff's track at Pimlico. By the Act of 1918, ch. 82, certain portions of Baltimore and Anne Arundel counties were annexed to Baltimore City, and in the territory of Baltimore County so annexed the Pimlico Race Track was located, from the owner of which the Maryland Jockey Club, Baltimore County had been collecting an annual license fee of $3000 for every day of racing at that track. Act of 1918, ch. 89.

The Act of 1918, ch. 264, provided (Section 1) 'That nothing contained in the Act of the General Assembly of 1918, entitled 'An Act to Extend the Limits of Baltimore City by Including Therein Parts of Baltimore County and Anne Arundel County', shall operate to affect any race track or racing or the jurisdiction of any racing commission or the rights and powers of said commission or its licensees within the limits defined by the said Act; it being the intent of this Act that such race tracks and the racing thereon shall continue to be subject to the jurisdiction of the present Racing Commission of Baltimore County and be governed only by the laws in existence prior to the first day of January, 1918, including such Acts of the General Assembly concerning race-tracks and racing applicable to the Racing Commission of Baltimore County, as may be passed by the present General Assembly; and by such laws as may be hereafter enacted;--provided that all license fees collected by said Racing Commission of Baltimore County shall be applied to the same purposes [roads and two Agricultural Associations, Act of 1918, ch. 89] as are now prescribed by the laws applicable to said Racing Commission of Baltimore County, including any amendments thereof passed at the present session of the General Assembly'. Section 2 made this Act effective one day after the annexation Act should take effect.

By the Act of 1920, ch. 273, Code, Article 78B, the Racing Commission of Baltimore County was abolished and the Maryland Racing Commission was created, with jurisdiction over all racing for purses in the State, and by section 8 it was provided that the license fee prescribed in section 432 of the Public Local Laws of Baltimore County, as amended by the Act of 1918, ch. 89, shall be paid by the Maryland Racing Commission to '* * * the Treasurer of Baltimore County for the uses and purposes described in Section 435 of the Revised Code of the Public Local Laws of Baltimore County, Edition of 1916, as said Section 435 was amended by Chapter 89 of the Acts of 1918.'

The plaintiff has paid this license fee every year since 1918 until 1938, when it filed its bill to enjoin the members of the Maryland Racing Commission, (1) from demanding or collecting more than $6000 for the issuance of a license to it for the dates allotted; (2) from refusing a license unless or until the additional $3000 a day be paid; and (3) commanding the Commission to issue the license upon the payment of $6000 per day for each of said days of racing.

The original defendants, together with the County Commissioners of Baltimore County allowed to intervene as party defendant, demurred to the bill of complaint. The demurrers were overruled, with leave to amend in ten days. The defendants declined to answer further, when a decree was passed directing the injunction to issue as prayed from which the defendants appealed.

It was not argued before the chancellor, nor here, that the tax was discriminatory, or because in excess of the license fee exacted of the three other mile-tracks in the State; nor was there any question of procedure, that is whether the remedy should be by mandamus or injunction. Code, Article 5, sec. 10. The question is whether the legislature can require the payment of this additional license fee, whether directly or indirectly payable to one political subdivision of the State, by a person or corporation to operate a business located in another political subdivision. There is no contention that the license and regulation of racing is not within the police power of the State.

The plaintiff contends that it is a tax imposed on a business in one locality for the benefit of another, while the defendants contend that it is a license fee imposed and collected by the State, and that the State can pay or appropriate it to any purpose or object within the State which is not unlawful. The difference in the contentions of the plaintiff and defendants is that the former insists that the additional fee is a tax and as such is illegal, and of the latter that it is a license fee imposed by the State, as a condition precedent to the right to conduct racing on a mile track in the annexed territory. The implications of the plaintiff's argument are that there could be no valid objection to the tax or license fee if it all went to and was retained by the State. The authority in this State upon which the plaintiff most strongly relies is from the opinion in Talbot County Com'rs v. Queen Anne's County Com'rs, 50 Md. 245, where this is said: 'A county is one of the public territorial divisions of the State, created and organized for public political purposes connected with the administration of the State Government, and especially charged with the superintendence and administration of the local affairs of the community; and being in its nature and object a municipal organization, the Legislature may, unless restrained by the Constitution or some one or more of those fundamental maxims of right and justice with respect to which all governments and society are supposed to be organized, exercise control over the county agencies, and require such public duties and functions to be performed by them as fall within the general scope and objects of the municipal organization. It is true, the power of the Legislature over these municipal organizations is not without limit, under the Constitution of this State, and especially is there a limit in regard...