Mayor of Baltimore v. Perrin , 178 Md. 101 ( 1940 )

These four cases, argued together, present questions of constitutionality, and in the alternative, of the proper construction and application of section 183 of article 56 of the Code, as enacted by the Acts of 1939, chapter 744, requiring payment of personal taxes of residents of Baltimore City as a prerequisite to registration of motor vehicles, and the issue of registration markers for them. The first three appeals are from decisions that the statute is unconstitutional because of a deficient title, and from the consequent awards of writs of mandamus to compel registration and issue of markers applied for, without exaction of taxes demanded; and the fourth appeal is from a declaratory judgment upholding the constitutionality of the statute, determining that the taxes become due and owing from and after January 1st of the year for which they are levied, and requiring the Commissioner of Motor Vehicles to refuse registration for the year 1940 unless the taxes for that year have been previously paid.

Motor vehicles in Maryland are licensed from March 31st of one calendar year to March 31st of the next; and registration and the issue of number plates for each vehicle owned on that date must be procured on or before then, for continued operation without interruption. And the system for imposition and collection of taxes on personal property in Baltimore City provides for an assessment to owners on October 1st, and an ordinance making the levy in the following November. "The taxes levied under said ordinance in the month of November in each year shall be the taxes to be collected for the fiscal year next ensuing after the said month of November, and shall be due and may be paid to the City Collector on or after the first day of January next ensuing. The taxes included in said levy on real estate or chattels real and on all forms of personal property * * * shall be in arrears on the first day of July next ensuing the date of their levy, and the taxes on all forms of property after they become in arrears as aforesaid shall bear interest at the rate of six per centum per annum." Baltimore City Charter, sec. 51. And see Code (1935 Suppl.), art. 81, sec. 48. A discount of one per cent. is allowed on payments made in January and for later payments in diminishing percentages, until one-quarter of one per cent. is allowed for payments in May, and collection may be enforced after July 1st.

The Act of 1939, chapter 744, is intended to supersede statutes of similar requirements. By section 183 of article 56 of the Code, as it stood before 1939, under the Acts of 1927, chapter 707, and 1929, chapter 407, the Commissioner was directed to refuse to issue any plate or marker, certificate of registration or title, "unless all taxes due and in arrears on the motor vehicle * * * have been paid provided each motor vehicle is separately assessed apart from the assessment of any other motor vehicle or kind or class of assessable property and provided the tax to be levied on such motor vehicle is permitted except in Baltimore City to be paid separate and apart from the payment of all other taxes." It was made mandatory upon County Commissioners to provide for separate assessments and separate tax bills. Sections with similar requirements were numbered as section 184, applying to Queen Anne's County, 184A, to Anne Arundel County, 184B, to nineteen cities or towns in various parts of the state, and 184C, to cities and towns in Allegany County. In all these sections the payments required to be made as prerequisities to registration were those of taxes "due and in arrears." The statute of 1939, chapter 744, by its terms repeals and re-enacts section 183 with amendments, and repeals without re-enacting sections 184 to 184C, but enacting in the place of all of them a new section 184. The phraseology of the new section 183 is changed in only one respect, namely, taxes "due and owing" are required to be paid, instead of taxes "due and in arrears;" and the same change is made in the new section 184. The date of effectiveness of the statute is necessarily brought forward.

The first question argued, and the only one raised in the last appeal of the four, is whether the two expressions, "due and owing," and "due and in arrears," are to be given the same meaning, so that the taxes required to be paid before registration are still those which have become due and in arrears on July 1st, and an applicant for the registration in March would still be entitled to it if he had paid his taxes for the previous year, or whether "due and owing" is the equivalent of due and payable under the Charter and the Code, and marks a change in the law. The judges below agreed that the adoption of "due and owing" in the amended sections made such a change; that taxes for the current calendar year are due and owing from and after January 1st, and by the terms of the statute must now be paid before registration for 1940. And this court agrees.

The argument to the contrary is, principally, that while, as the Charter has expressly enacted, the taxes are due from and after January 1st, they cannot be considered as owing until interest begins to run, and they are enforceable under the law, that is, on July 1st. In other words, it is that the taxes are not owing until payment is required rather than optional. The word "due" alone seems to the court to import a present obligation here. "Statutes generally fix the time when taxes become due and also the time when they become delinquent."Cooley, Taxation, sec. 1246. The Supreme Court of the United States has held that the words "due and owing" in the Bankruptcy Act rendered taxes assessed prior to an adjudication entitled to a preference, although they were not collectible until after the adjudication. New Jersey v. Anderson, 203 U.S. 483, 27 S. Ct. 137, 51 L. Ed. 284. And see Rumley v. United States, 293 Fed. 532; United States v. State Bank, 6 Pet. 29, 8 L. Ed. 308. And the change of expression by the Legislature, from "due and in arrears" to "due and owing," would of itself seem to indicate that a difference in effect was sought. Such would be a natural inference of the legislators, and their understanding and intention determine the meaning of their enactment. Duncan v.Graham, 155 Md. 507, 510, 142 A. 593; Porcelain Enameling Co.v. Jeffrey Co., 177 Md. 677, 11 A. 2nd 451. The taxes are owing, of course, when there exists an obligation for their payment. In a suit in assumpsit by the city for real and personal taxes, the court in Dugan v. Mayor andCity Council, 1 G. J. 499, expressed the opinion that the imposition and assessment of a tax created a legal obligation to pay it. "The tax for which this suit was brought was imposed by virtue of that act, the imposition and assessment of which created the legal obligation to pay, on which the law raised an implied assumpsit." But there was no question in that case of a time allowance before enforcement; the suit was entered after the year of the taxation. And a similar holding was that of Gordonv. Mayor City Council, 5 Gill. 231, 242. In Baltimore C. A.Ry. Co. v. Commrs. of Wicomico County, 93 Md. 113, 129,48 A. 853, however, the court emphasized the fact that it was the imposition and assessment which created the obligation.

An owner of property in the city on October 1st holds it from that time subject to the exaction of a proportionate contribution to the expenses of government during the next calendar year. "The liability for taxes is an incident to property, and essential to the support of the government." Bonaparte v. State, 63 Md. 465, 471. It is a liability undetermined only in amount. The assessment and levy determine that, and by January 1st there is a liability definitely fixed, and unescapable, and payment from and after that date is prepared for and expected. Section 53 of the Charter provides that the City Collector shall complete the tax bills for the coming year, "and shall have them ready for payment by the taxpayers on the first day of January next ensuing said levy." The inducements to early payment, the penalties for late payments, and other enforcement measures, all belong to collection, which is to be regarded separately, and as distinct from the imposition of the tax. Gautier v. Ditmar, 204 N.Y. 20, 26, 97 N.E. 464; Dunn v. Harris, 144 Ga. 157, 162, 86 S.E. 556. Whether liability may be said exactly to date from the previous October 1st need not be considered; when the tax-payer's share is reduced to a definite amount, and made ready for payment, there is nothing lacking to a complete obligation. The fact that time is allowed by law for the payment, and enforcement delayed until July 1st, does not suspend the existence of this fixed obligation for six months. "It [taxation] consists of two distinct processes — the one relating to the levying or imposition of the taxes on persons or property; the other the collection of the taxes levied. The first is constituted of the provisions of law which determine or work out the determination of the persons or property to be taxed, the sum or sums to be thus raised, the rate thereof, and the time and manner of levying and receiving and collecting the taxes. It definitely and conclusively establishes the sum to be paid by each person taxed, or to be borne by each property specifically assessed, and creates a fixed and certain demand in favor of the state or a subordinate governmental agency, and a definite and positive obligation on the part of those taxed, and prescribes the manner of its voluntary or enforced fulfillment." Gautier v. Ditman, 204 N.Y. 20, 26,97 N.E. 464, 467.

Liens for taxes on real property date from the time of levy. Code, art. 81, sec. 56. The provision that when, after assessment of it, personal property is removed at any time before collection of the tax on it, the collector may pursue it, assumes a liability for the taxes from the time of assessment. Code, art. 81, sec. 69. And the periods of limitations on collection of county and city taxes date from the levy, or the time the taxes become due. Code Supp. art. 81, secs. 93 and 151. All these provisions seem to suppose an obligation from and after the levy, or the time when, as the Charter section declares, the taxes on all kinds of property are due and may be paid. And the same conception seems to find expression in section 48 of article 81 of the Code, enacted in 1929, chapter 226, and 1931, chapter 500, providing that state taxes, generally payable on and after the first day of January of the year for which they are levied, shall, in counties or cities which have elected to take the first day of January as the date of finality in assessments, "be due and payable on and after the first day of April of such calendar year, and shall be overdue and in arrears on the first day of the succeeding October," after which they shall bear interest until paid. If not paid when "due and payable," then on the specified date they become overdue. And an overdue payment ordinarily means one on an obligation previously accrued.

In the last of the four cases appealed, that of Elgin,Commissioner, v. Mayor City Council, the trial court, as stated, held the expression "due and owing" to refer to January 1st as the date of the obligation, and that payment must be made on or before March 31st, 1940, of taxes for that year; and as this court concurs in that conclusion the judgment must be affirmed.

The limit of time for the payment having thus been advanced by the provisions of the new section 183, and a similar change having been made by the new section 184, does the title of the enactment, which does not specifically mention the change, comply with the constitutional requirement that "every law enacted by the General Assembly shall embrace but one subject, and that shall be described in its title." Const. art. 3, sec. 29. The title is: "An Act to repeal and re-enact with amendments Section 183 of Article 56 of the Annotated Code of Maryland (1935 Supplement), title ``Licenses,' sub-title ``Motor Vehicles,' sub-heading ``Fees for Registration of Motor Vehicles,' to repeal Sections 184 to 184C of said Article, Section 184B having been amended by Chapters 85 and 102 of the Acts of 1936 (Special Session) and Chapters 159, 217 and 378 of the Acts of 1937, and to enact in lieu thereof a new section to be known as Section 184, for the purpose of eliminating duplicate provisions and consolidating the laws providing for the payment of taxes levied upon motor vehicles in Baltimore City and the several Counties and in certain incorporated towns of the State before markers, certificates of registration, or titles for motor vehicles may be issued, and including certain other incorporated towns within the provisions of said sections."

The inquiry must be confined to the sufficiency of this title for enactment of section 183, from which the suits arise, for if it should be sufficient for enactment of that section, it could not be objected to in these suits, even if it should be insufficient for the remaining section, 184. Worcester CountyCommrs. v. School Commissioners, 113 Md. 305, 309, 77 A. 605;Stiefel v. Maryland Institute, 61 Md. 144, 148. And an announcement in a title merely that a given section of the law is repealed and re-enacted with amendments, as in this instance, is regularly held sufficient. Todd v. Frostburg, 141 Md. 693, 694,119 A. 696; Baltimore v. Fuget, 164 Md. 335, 346, 165 A. 618;Campbell v. Campbell, 174 Md. 229, 233, 198 A. 414. But the statement of purpose in the latter part of the title has been thought to be restrictive, and misleading in effect, because negativing by omission any such change as that of the date for payment. Board of Education v. Wheat, 174 Md. 314, 199 A. 628;Buck Glass Co. v. Gordy, 170 Md. 685, 688, 185 A. 886. There is evident room for a difference of opinion on this objection, as there is so often on the sufficiency of titles to other statutes.

It is, in the first place, questionable whether the latter part of the title refers to section 183; and if it does, and that section, too, is to be considered amended to produce conformity with section 184, for the sake of a harmonious system within the state, the amendment made seems to this court a detail of the process of which the title gives a sufficient description, according to previous decisions of the court. Ruehl v. State,130 Md. 188, 194, 100 A. 75.

The Constitution requires only that the subject of the statute be described in its title, not that every change under that subject be described. The title now in question does announce that the enactment deals with motor vehicle licenses, and with the laws providing for the payment of taxes on motor vehicles before markers, certificates of registration or titles for them may be issued, and that duplicate provisions are to be eliminated, and the laws consolidated, and announces that this is to be done with amendments of the previous laws. Such a broad statement, in the opinion of the court, is sufficient to give warning of such a change as that by the adoption of a new uniform date for the payment of the taxes. It does not appear so restrictive of the whole title and misleading in that respect as to justify holding that the practical purpose of the Constitution is evaded. Brownev. Baltimore, 163 Md. 212, 219, 161 A. 24; Zukowski v. State,167 Md. 549, 554, 175 A. 595; Toomey v. Shipley, 172 Md. 463, 469, 192 A. 288. "For testing conformity of a title to this constitutional requirement, there is enjoined upon the courts a disposition to uphold rather than to defeat the enactment."Board of Education v. Wheat, 174 Md. 314, 318, 199 A. 628, 630.

Two further objections on constitutional grounds are made. It was found by the court below that it had been the practice of city officials in recent years to assess taxes on motor vehicles owned by individuals separate and apart from those on their other personal property, and receive payment of the taxes on them separately, and it is objected that this is not done with respect to taxes of corporations, and that there is a resulting discrimination against the individual owners because to them alone section 183 applies. But apart from any other answers, it is sufficient to point out that legislative permission to receive the separate payments from any owners is expressly denied to Baltimore City, and the objection to it, when made, could not be leveled against the statute. The law forbids the practice complained of, and the objection is against a mistaken, unauthorized, official practice. The objection is not well founded.

A still further objection made on constitutional grounds is that the requirement of payment of the taxes on all personal property of former owners, including those on the vehicles, deprives the present owners of their property without due process of law. This objection is answered to an extent by the discussion in Grossfeld v. Baughman, 148 Md. 330, 129 A. 370, a case on the similar requirement under the Act of 1924, chapter 412. The requirement is, in effect, only that, as a condition to registration and other service, taxes on the vehicles shall have been paid. Such is the end and aim of the legislation. The hardship, if any, results from the practical difficulty in a new owner's procuring that taxes of a past owner shall have been paid before he buys a car, or before applying for a new registration for it. He is not, of course, compelled to buy a car until the fact of previous payment is made clear to him, and the burden may be said to fall on the seller rather than on the buyer, for the seller can be made to clear his car, so to speak. Wherever the burden falls, the difficulty is merely a practical one, which can be met, and not an imposition without due process of law in respect to it. For transfers of real property, which is subject to a lien for unpaid taxes, (Code, Art. 81, § 56), parties have worked out a practice which secures the purchaser against loss for non-payment of the taxes due; and the situation of a buyer of a motor vehicle applying for new registration is analogous. In Baltimore v. Fine, 148 Md. 324, 129A. 356, the seller was required to pay taxes in arrears on his personal property, and on all his personal property, in order to sell a motor vehicle included in it. The decision in that case, and that in Grossfeld v. Baughman, supra, uphold the requirement. And it is not entirely without precedent. Under an Act of 1874, chapter 483, Code of 1888, art. 81, sec. 64, when property was sold by a ministerial officer under judicial process or otherwise, all taxes of the person who owned the property, not only those on the property sold, but all taxes on all kinds of property, were required to be paid first. See Degner v. Baltimore, 74 Md. 144, 146, 21 A. 697. An Act of 1892, ch. 518, restricted the requirement to taxes on the property sold. Code of 1924, art. 81, sec. 74; Parlett v. Dugan, 85 Md. 407, 413, 37 A. 36.

On the first of the four appeals, in the case of Mayor and City Council v. Perrin, the only question has been that of the constitutional sufficiency of the title of the statute, if the change in the law discussed has been made; and as the conclusion of this court, differing from that of the court below, is that the title should be held sufficient, the order for the writ of mandamus in that case must be reversed.

The appeals in the cases of the Talbott Motor Company, and Redmond have raised questions of construction and application of the statute if constitutional.

The Talbott Motor Company, on December 13th, 1939, bought a motor vehicle from a Dr. John N. Clift, of Baltimore City, after the car had been assessed to Dr. Clift for taxation for the year 1940. An application for a new certificate of title was refused by the Commissioner because Dr. Clift had not paid the tax on the car for 1940, and had not paid taxes on his other personal property, such as household furniture, for the year 1939. Dr. Clift had paid the tax on the car for 1939, without paying his other personal taxes, as the car had been assessed separately. A writ of mandamus was issued to compel the new registration notwithstanding these facts. Although the statute denies to the city permission to receive the separate payment, the whole expressed object of the law is that taxes on motor vehicles shall be paid, and if actually paid on the one item, there would seem to be no reason for holding them unpaid to that extent. Therefore, we conclude that a second payment of taxes on the car for 1939 could not be required. But the taxes for 1940 must be shown to have been paid, or must now be paid, as a condition to the registration, even though included in the taxes on all Dr. Clift's personal property. The hardship on the present applicant should have been guarded against at the time of the purchase from Dr. Clift. Because of the failure to show payment of the 1940 taxes then, the court concludes that the order for the writ of mandamus to the Commissioner was erroneously issued in this second case, and must be reversed.

Redmond and wife, appellees on the third appeal, after January 1st, 1940, purchased a car from a dealer who, in turn, had purchased it from a taxable individual owner in the city before that date, but after October 1st, when the assessment was made up. The car had been separately assessed to the former individual owner, and he had paid the taxes on it for the year 1940, and earlier years, but had not paid his taxes on his household furniture for 1939 or 1940; and a new registration was refused Redmond and wife because of that first owner's failure to pay those other taxes. What has been said in the case of the Talbott Motor Company's appeal answers the question raised. The whole expressed object of the statute, the payment of the taxes on the car, rightly or wrongly, had been accomplished, and there would be no justification for requiring payment of the former owner's taxes on his other personal property now. The writ of mandamus was therefore properly issued in this case, and the order for it must be affirmed.

No. 34 — Order in Mayor City Council v. Perrin reversed,with costs.

No. 35 — Order in Same v. Talbott Motor Co. reversed, withcosts.

No. 36 — Order in Same v. Redmond affirmed, with costs.

No. 37 — Judgment in Elgin v. Mayor and City Council affirmed,with costs.