Buchanan v. County Commissioners , 47 Md. 286 ( 1877 )

Stewart, J.,

delivered the opinion of the Court.

The validity of the tax imposed upon the appellant depends upon the true construction of the Act of 1874, ch. 483, in connection with the antecedent legislation in regard to the assessment and taxation of property, including debts.

With certain reservations, the Act of 1874, ch. 483, repeals the 81st Art. of the Code, and all previous laws inconsistent with its provisions.

The 2nd section of the 81st Art. had provided that all real and personal property in the State, and all debts secured by or due on judgment, decree, mortgage, bonds, bills of exchange, promissory notes for solvent debts, &c., except debts due for goods sold and delivered, and bank notes, should be liable to assessment and taxation.

It seemed to regard the debts secured by or due on the respective instruments specified as alone taxable.

The Act of 1866, ch. 157, provided that all property, real, personal and -mixed, of all kinds and descriptions whatever, should be liable to valuation, assessment and taxation.

The supplementary Act of 1867, ch. 341, provided, amongst other things, for the exemption of all mortgages for purchase money in the hands of the original mortgagee or his executor, &c., together with all equitable liens for the purchase money of lands and real estate remaining due and unpaid.

The terms employed in the 2nd section of the Act of 1874, are general and comprehensive, providing that all property of every kind, nature and description within the State, including, amongst other things, aall debts secured by or investments in private securities of every kind, nature and description, except mortgages, shall be liable to assessment and taxation.”

The manifest purpose was not to abridge but to enlarge the basis of taxation.

But it is equally evident that it was not the intention to impose taxes upon every kind of debt. Express discrimination is made as to the character of the debts liable to taxation.

The authority of the Legislature to make such discrimination and to exempt any species of property from taxation according to its views of public policy cannot be questioned.

Its power to do so has been exercised from the origin of the government. Whilst this is the case, the purpose to make discrimination or to exempt any property, should be clearly expressed or necessarily inferred from the terms employed.

Every reasonable intendment must be made that it was not the design to surrender the power of taxation, or to exempt any property from its due proportion of the burden of taxation. Mayor & City Council vs. B. & O. R. R., 6 Gill, 288, 292; Gordon’s Ex'r vs. Mayor & City Council of Balt., 5 Gill, 237; Mayor, &c. vs. State, 15 Md., 376, 391; P. & W. R. R. vs. Wayland, 10 Howard, 393-6.

(Decided December 13th, 1877.)

To exempt the claim of the appellant, it must appear to belong to that class of debts not subject to taxation.

According to the facts admitted in the record, provision was made by the will of her father, for the benefit of the appellant during her life-time, by the payment of the interest of the fund bequeathed, the principal of which was given to others at her death. He directs that until the respective sums are paid over and invested in some safe fund, for her use and benefit, his sons, Edward and Daniel Lloyd, shall annually pay to her legal interest upon the same. Her mother also bequeathed certain moneys to the late Col. Edward Lloyd, as trustee, for the benefit of the appellant for life, the payment of which he assumed, and the interest upon which he paid until his death ; and since his death, his son, the present Col. Edward Lloyd, has paid the interest upon both funds, amounting to $19,688, for which she has been taxed.

The fund has thus been provisionally invested to bear interest for her benefit, and the interest thereon has been paid to her.

If the fund would have been the subject of taxation if permanently invested, it is difficult to perceive why it should not he liable to taxation in its existing condition. To give to it the benefit of immunity on that account would be subversive of the whole theory of the Act. The payment of the interest on the fund cannot be treated as a mere gratuity, but has its foundation in the provisions made by the will of her parent, and it is not to be presumed as made without sufficient consideration.

The claim of the appellant cannot fairly be considered otherwise than as a debt or private security, belonging to her and liable to its due proportion of the taxes within the meaning of the Act.

Judgment affirmed.