142 A. 525 | Md. | 1928
Taxes are not liens unless made so by statute (Parlett v.Dugan,
Prior to the Act of 1892, ch. 518, whenever a sale of either real or personal property was made by any ministerial officer under judicial process or otherwise, all sums due and in arrear for taxes from the party whose property was sold had to first be paid and satisfied by the party selling paying the taxes to the collecting officer. This statutory obligation applied to taxes on both real and personal property, and whether the taxes due and in arrear were upon the particular property sold or some other belonging to the taxpayer. Section 64 of article 81 of the Code of 1888. It was held in Degner v. Baltimore,
It should be observed that for these taxes to be a preference they must be due and in arrear, which was fixed by statute as on and after the first day of January succeeding the date of the levy (Section 54 of article 81 of the Code; Wheeler v. Addison,
Through these liens, remedies, and priorities, the payment of taxes upon both realty and personalty was secured and enforced as a single claim, and without any distinction between the amount of taxes severally accruing due on the respective items of property assessed and together producing the sum total of the taxes payable by the owner. While the public benefited, hardship occasionally resulted to other claimants against the taxpayer or his property from the enforcement of the law. An illustration of this was afforded by Degner v. Baltimore,
The effect of this amendment was that the party selling as a ministerial officer was only required to pay all the taxes due and in arrear on the particular property sold, as was decided inParlett v. Dugan,
The postponement of the payment of taxes, due on account of the assessment on other property than that being sold, to the payment of lienors, whether their encumbrance be general or particular, is due to the consideration that if such lienor were enforcing his claim against the property by sale, it would be through a ministerial officer, and no other taxes would be primarily payable thereout except those upon the property the lienor was selling. As the lienor could not enforce the collection of a matured claim by a sale solely because, by a prior proceedings, control and custody of the property had been taken by the court, and the matter was there pending, and as he would have recourse, according to his priority, to the fund arising, it is a necessary consequence that the lienor is within the protection of section 74 and should not lose its benefits. The taxpayer himself and his general unsecured creditors are upon a different footing. The taxpayer is personally bound to pay all his taxes, which are a general lien on all his realty, and may be made a lien upon his personalty, and his personal representatives stand in his shoes; and general unsecured creditors must claim through the taxpayer, having no lien against either his real or personal estate. When due and in arrear it is common practice to allow all taxes, without reference to the particular *672 property upon which they are levied, against the general fund in hand for distribution among the general unsecured creditors of the taxpayer whose estate is in course of settlement.
The comparison of all the sections of the statutory law with one another reveals the undoubted purpose and meaning of the legislation, and the construction here adopted makes the law a consistent whole; and, except as necessarily modified by section 74, assures full effect to sections 56, 58, 59, 61-73 of article 81, and to the rule that the remedies of the tax collector by way of distress or execution are suspended against any property in the custody or control of the court, but that, in substitution for such remedies and to obtain a corresponding priority or precedence through an analogous allowance against the fund arising from the proceeds of the sale of the property, the tax collector is remitted to filing the tax bill in the court having assumed control and custody of the property. Supra. It is no answer to this construction that, through a transfer of title other than by a sale of a ministerial officer, the tax collector may sometimes fail to collect the taxes ascribable to personalty, since the State as well as the individual may lose a remedy through the neglect of its officer to resort to the remedy in time. See State v. Williams,
The decisions in Union Trust Company v. Belvedere Co.,
In Union Trust Company v. Belvedere Co., supra, the right of the mortgagee to foreclose was the question. This court there decided that taxes assessed and levied upon the shares of the capital stock of a corporation are a lien upon the real property of the corporation by force of the statute, although the tax is upon the property of its stockholders and the corporation is its collector; and, therefore, the mortgagee was entitled to foreclose, because, in the failure of the mortgagor to pay these taxes for a space of nine months, it had breached its covenant not to suffer or allow any lawful tax or charge to fall in arrear or any lien to be obtained on the property whereby the security of the mortgage might be impaired. pp. 524, 525. The point involved in the pending case was not considered.
Nor does American Casualty Insurance Company's Case, supra,
give any countenance to appellant's contention. The casualty insurance company was insolvent and its assets were in course of conversion and distribution in equity for the benefit of its creditors. A tax had been levied by the City of Baltimore upon the shares of stock of the company held by residents and nonresidents, and the taxes were due and in arrear. Although the tax was upon the stock of the shareholders, *674
the statute made it chargeable to and payable by the corporation; and it was a lien upon the stock and the real property of the corporation. Union Trust Co. v. Belvedere Co., supra. The statute in force at the time provided that the stock should be valued at its actual cash value, and in no case should its aggregate valuation for the purpose of assessment against nonresident owners be less than the full value of the real estate and personalty of the corporation within the State of Maryland; but, inasmuch as the real property of the corporation within the state was valued and assessed to the corporation for the purpose of taxation in the same manner as against individual owners of similar property, the resident shareholders were assessed with the difference between the aggregate value of all the shares and the value of the realty. Code of 1888, art. 81, secs. 138, 141. As a result of subsequent amendment of the law, the practice now is to determine the value of the stock for the purpose of assessment against both resident and nonresident stockholders in a manner similar to that formerly provided for the ascertainment of the value with respect to the shares owned by residents of the state. See Code, art. 81, secs. 94, 154, 163, 166, 166a. This later legislation removed the discrimination which formerly existed between the valuation of the shares of resident and nonresident owners of corporate stock. Since the assets in the instance of the casualty insurance company were in the form of personalty, consisting of certain securities which had been deposited with the Treasurer of Maryland "as a guarantee for the payment of the policies of insurance issued by the company," and of furniture and other stocks, bonds and securities, the valuation and assessment of its shares of stock were not subject to any deduction on account of real estate and, therefore, represented the actual value of the aggregate corporate assets. Pages 549, 550, 558, 559. Parlett v. Dugan,
The late Judge Robert R. Henderson sold to Lawrence R. Shaffer certain improved real estate upon Pershing Street in Cumberland, Maryland; and, on March 26th, 1921, conveyed the property to the vendee and received a purchase money mortgage therefor. The vendee carried on a retail paint business, and, becoming financially involved, made a deed of trust for the benefit of his creditors on October 24th, *676 1927. Afterwards the appellee as assignee of the mortgage foreclosed the mortgage. The state and county taxes for the years 1924, 1925 and 1926, upon the real estate sold and other real estate and personal property of the mortgagor, were filed for payment in the foreclosure proceedings by the appellant as tax collector. All these taxes were due and in arrear, but the chancellor directed that only the taxes payable on account of the assessment on the particular real estate sold should be paid, and rejected the appellant's claim for taxes levied upon other real and personal property of the mortgagor, although due and in arrear. After the payment of the costs and expenses of foreclosure and the amount of taxes payable on the land sold, the purchase money failed to pay the mortgage indebtedness by a large amount. The personal property of the taxpayer in the hands of his assignee for the benefit of his creditors was insufficient to pay the taxes due either on account of the other real estate or the personalty of the taxpayer. Notwithstanding this circumstance, section 74 of article 81 of the Code applied, and controlled; and the chancellor was clearly right in refusing to allow the ministerial officer making the sale to pay any taxes not becoming due and in arrear on account of the levy upon the particular piece of real property foreclosed. Supra.
Decree affirmed, with costs.