Parlett v. Dugan

Citations

• 85 Md. 407
• 37 A. 36
• 1897 Md. LEXIS 56

Syllabus

<p>Taxation — Priority of Payment of Taxes When an Assignment for the Benefit of Creditors is Made — Leasehold Property of Assignor not Accepted by the Trustee — Lien Of Taxes — Costs.</p> <p>Taxes are not per se liens, either on the property taxed or other property of the person owing them, but the Legislature has the power to ■ make taxes liens and give them priority of payment and this power has been exercised in a number of cases.</p> <p>When a trustee for the benefit of creditors, to whom a debtor’s whole estate has been assigned, refuses to take possession of certain leasehold estate, as he has a right to do, taxes due on such property are ' not entitled to priority of payment out of the funds in the hands of the trustee, derived from other sources, when both- State and city are amply protected by liens for the taxes on the property itself.</p> <p>The owner of an undivided half interest in certain leasehold property made an assignment for the benefit of his creditors. Taxes and ground rent on the property were in arrear for two years. The trustee under the deed refused to take possession of the leasehold ■ interest because without benefit to the trust estate. The collector of State and city taxes and the owner of the reversionary interest in the property filed petitions asking that the trustee be required to pay the taxes out of the funds in his hands, which were derived from other property belonging to the assignor. Held,</p> <p>ist. That neither the collector nor the reversioner had the right to ask that the taxes be paid by the trustee out of such funds, as prior liens.</p> <p>2nd. That under Code, Art. 81, sec. 64, amended by the Act of 1892, chap. 518, a trustee for creditors is required to pay by way of preference only.the taxes due on the property of the debtor taken possession of or sold by him, and not all taxes due by the debtor, or taxes on property which he does not accept for the estate.</p> <p>When it is proper that the Court should be asked to d