85 Md. 407 | Md. | 1897
delivered the opinion of the Court.
This appeal was taken from a pro forma order of the Circuit Court of Baltimore City sustaining a demurrer to the petitions of John F. Parlett, collector of State and city taxes for Baltimore, and of John M. D. Heald, trustee, which asked the Court to require Ferdinand C. Dugan, trustee of George C. Nicholas, to pay certain State and dty taxes out of funds in his hands. The two petitions were consolidated by order of the Court. They allege that on the first day of October, 1867, a certain lot of ground on Postoffice avenue, in the city of Baltimore, was leased for the term of ninety-nine years at the annual rent of $990, payable quarterly, free and clear of all deductions for taxes, etc., and the lease contains a covenant on the part of the lessee, his assigns, etc., to pay the taxes. The reversionary interest became vested in the petitioner, Heald, in trust for certain children of Adaline Spurrier, and on the 28th day of 'November, 1893, George C. Nicholas became the owner of the leasehold interest. On the 18th day of May, 1895, Nicholas assigned to Mary N. Forman an undivided half interest in the leasehold, and on the 24th day of May, 1896, he executed to the appellee a general deed of assignment of all his property in trust for the benefit of his creditors. On the first day of May, 1896,.at the instance of Mary N. Forman, a receiver was appointed to take charge of the leasehold property, collect the rents and pay
It is conceded that the taxes for 1896 cannot be collected by this proceeding, but those for 1894 amount to $498.09 and for 1895 to $460.96, and the appellants claim that they should be paid. Although at the time of the assignment Nicholas only owned a one-half interest in the property, there is nothing in the record to show when the levy for 1895 was made, and therefore we do not know whether Mary N. Forman was the owner of the half interest then or whether she became such after the levy. Nor is there anything to show from what the fund in the hands of the trustee was derived, although we presume from the argument of counsel that most, if not all, of it was from collections or the proceeds of sales of personal property. By section 47 of Art. 81 of the Code all State, county and municipal taxes are made liens on the real estate of the party indebted from the time they are levied, but they are not made liens on personal property. Although the Legislature has broad powers in making taxes liens either on the property taxed or other property, they are not liens merely because they are taxes, but must be expressly made so by legislation. The Legislature of the State has given taxes priority over other debts in a number of instances. Administrators are
It is contended, however, that, at least so far as the State taxes are concerned, the priority in no wise depends upon a lien in favor of the State, but it is by virtue of its prerogative right derived from the common law entitling her to be first paid, excepting only where some antecedent lien stands in the way. It is true that it has' been the settled law of Maryland for many years that such a right does ordinarily exist in favor of the State. In the case of State v Bank, 6 G. & J. 226, Chief Judge Buchanan, in delivering the opinion of the Court, gave as a reason why this should be so that “ the government of the State is established for the good of the whole and can only be supported by means of its revenues ; which revenues the good of the whole requires to be protected. And as it can only act by its agents, who, no .matter how vigilant, cannot always be present to protect its rights, a priority in the payment of its debts (which must always be of a public nature) is necessary to enable it to accomplish the ends of its institution.” • But if it be conceded that the State has such priority in the distribution of
The case of the Casualty Insurance Company, 82 Md. 563, so much relied on by the appellant, differs materially from this. The taxes there due were on the shares of stock of the company, which, by the statute, it was required to pay, and they were made a lien on the stock. The stock represented all the assets and property of the corporation, and the corporation and the property were liable for the taxes. The receivers were dealing with all the property— certainly all in Maryland, not only a part — and in the distribution of the proceeds of sales and collections, we held that the taxes must be paid. But in this case the facts and circumstances are altogether different.
In re Lewis, 81 N. Y. 421, the Court of Appeals of New York refused to require the trustee to pay taxes to certain mortgagees who were seeking to have the taxes due on the mortgaged property paid by the trustee out of the funds in his hands. Whilst the Court declined to determine whether the State itself could successfully assert a claim to a preference over other creditors, it did reject the claim of the mortgagees who occupied the same position to the common fund that Mr. Heald does in this case. As the petitions were consolidated, Mr. Heald is a party to the proceedings now seeking to subject this fund to the payment of taxes, and it is manifest that the claim is being urged by him, or at his instance, as it would make but little difference to the tax collector whether the taxes are paid out of this fund or out of other property. It is clear that Mr. Heald has no right to demand that this preference be given, and the demurrer was properly therefore sustained to his petition. But we think the tax collector’s petition was also properly dismissed, and in addition to the reasons we have already
As it was proper that both of the trustees, who are parties to this proceeding, should have this question determined by the Court, we will direct the costs to be paid out of the estate of George C. Nicholas, in the hands of the appellee, but must affirm the order of the Court below dismissing the petitions.
Order affirmed. Costs to be paid out of the estate of George C. Nicholas, in the hands of the appellee.