Capitol Bank & Trust Company (the Bank), pursuant to the terms of an escrow agreement entered into with the defendant City of Waterville (the City), deposited with the defendant Federal Trust Company the sum of $15,701.42 to guarantee the payment of certain taxes for the years 1968, 1969, and 1970 which the City claimed one Phil J. Gullifer, doing business as Phil’s Auto Sales, owed it on his stock in trade consisting of mobile homes. Thereafter, the Bank instituted an action wherein it sought a judicial determination of the rights of the parties by way of declaratory *215 judgment and a return of its escrow deposit with interest and costs. The Superior Court (Kennebec County) found for the Defendant, City of Waterville, and ordered the escrow moneys turned over to the City. The Bank appealed the Superior Court judgment. We sustain the appeal.
The events leading to the escrow agreement may be summarized as follows:
■ Gullifer was in the business of selling mobile homes in the City of Waterville. On March 17, 1969 he entered into a floor-plan financing agreement with the plaintiff Bank. The security instrument was recorded on July 14, 1970. Claiming that Gullifer was in default in his obligations under the terms of the agreement, the Bank, on August 17, 1970, commenced repossession proceedings through the writ of replevin and bond. Ancillary proceedings in aid of the replevin action resulted in a temporary restraining order issued on August 18, 1970 to forestall interference from Gullifer and his employees. Robert W. Palmer, Jr., in his capacity of Administrator, Director of Finance and Tax Collector for the City of Waterville, was also interested in seeing that the Gullifer stock in trade be not removed from the sales lot of Phil’s Auto Sales for fear that the taxes owed to the City might not be collectable. Early on the morning of August 18, 1970 two cruisers of Waterville police officers pulled up and blocked the entrance to the lot. Following instructions from Mr. Palmer, the officers advised the Bank’s representative and the deputy sheriff executing the replevin writ that no' more trailers would be permitted to be removed from the lot. The Bank was then given notice that the City of Waterville contemplated the distraint of Gullifer’s property in satisfaction of past due taxes.
CITY OF WATERVILLE
By /s Robert W. Palmer, Jr.
Its Director of Finance
This confrontation led to the execution of the following agreement between the Bank and the City:
“WHEREAS, the City of Waterville has personal property taxes against Phil’s Auto Sales, (Philip J. Gullifer, Proprietor) in the amount of $15,701.42 made up of 1968 taxes of $2,233.65, audit number 348, interest $30.02; 1969 taxes of $5,658.75, audit number 347, interest $362.10 and 1970 taxes in the amount of $7,416.90, audit number 364.
WHEREAS, the Capital Bank and Trust Company is now repossessing certain mobile homes from said Phil’s Auto Sales pursuant to replevin.
WHEREAS, the City contemplates distraining said property and the parties wish to permit the bank to have possession of said property without affecting in any way the city’s rights of distrain.
NOW THEREFORE, the parties covenant and agree as follows:
1. The city foregoes its right to dis-train and sell under Title 36, Section 996 in order to permit the bank to take possession under said replevin.
2. The bank agrees that the city shall not be prejudiced by the fact the bank has taken possession of said property pursuant to said replevin.
3. The bank agrees to guarantee to the city the payment of whatever of the above taxes, if any, determined to be due and otherwise collectable from said dis-traint process.
IN WITNESS WHEREOF the parties have hereunto set their hands this eighteenth day of August, 1970.
CAPITAL BANK AND TRUST COMPANY
By /s Raymond R. Rourke Its
(1st) Vice President and Auditor”
*216 The deputy sheriff, thereafter, was permitted to resume the discharge of the Bank’s replevin writ and complete the same without further interruption, no tax collector’s warrant being served on Gulli-fer nor on the Bank.
While it may be the ultimate beneficiary of tax revenue, the City as such has no statutory power of distraint and has no direct control over the tax collection process. The power to distrain the property of delinquent taxpayers is statutorily vested in the tax collector under 36 M.R. S.A. §§ 991 and 996.
Section 996, which the tax collector of the City of Waterville could have invoked in the instant case provides in pertinent part:
“When a tax collector has reason to believe that there is danger of losing, by delay, a tax assessed upon any taxpayer, at any time after commitment:
4. Distrain or arrest. He may himself demand immediate payment and upon failure he may distrain the property or arrest the person of such taxpayer.” 1
The existence of the plaintiff’s security instrument covering Gullifer’s property did not immunize it from distraint, since 36 M.R.S.A. § 604 provides:
“When personal property is mortgaged, pledged or conveyed with the seller retaining title for security purposes, it shall, for the purposes of taxation, be deemed the property of the person who has it in possession, and it may be dis-trained for the tax thereon.”
*217 The escrow agreement guarantees to the City “the payment of whatever of the above taxes, if any, [are] determined to be due and otherwise collectable from said distraint process,” in consideration of the City’s foregoing of its right to distrain. We note that this right by statute is vested in the tax collector and not in the City. Could the City by such an agreement dispense with the tax collector’s distraint process and displace the Bank’s priority position in favor of the City’s collection of overdue taxes ? We think not.
The United States District Court for the District of Maine did consider a similar problem of priority on two occasions. In
United States v. Town of Pittsfield,
1969, D.Me.,
The converse situation was presented in
Hunter v. United States,
1972, D.Me.
In the instant case as in United States v. Town of Pittsfield, supra, the tax collector of the City of Waterville did not take the necessary steps under the statutes to establish a lien on the Gullifer property. The plaintiff Bank took possession for purposes of foreclosure as it had a right to do, absent a prior distraint by the tax collector. The agreement with the City possibly may have lulled the tax collector into inaction, but the City as such had no right to inter *218 fere with the plaintiff’s foreclosure proceedings. 2
It is elementary that tax statutes are to he construed strictly against the taxing authority.
Depositors Trust Company v. City of Belfast,
1972, Me.,
Statutory provisions allowing summary procedures for the collection of taxes are subject to the- strict construction 'rule and will not be extended by implication; 'full compliance with every step or requirement in the taxing process from beginning to end is essential to the validity of such proceedings.
Peterson v. Moulton,
1958,
Our own case,
City of Eastport v. Jonah,
1936,
The statutes which formulate the summary procedures available to enforce the collection of delinquent taxes assessed against Gullifer clearly give the authority and assign the power to distrain to the tax collector. The agreement between the Bank and the City, wherein “the city fore-goes its right to distrain and sell,” albeit stated to be under 36 M.R.S.A. § 996, purports only to bind the City of Waterville. The tax collector as such is not a party to the agreement. The Bank’s guaranty of the payment of Gullifer’s taxes to the City was limited to “the payment of whatever of the above taxes, if any, [are] determined to be due and otherwise collectable from said distraint process.” (Emphasis ours). As the right to distrain is vested exclusively in the tax collector, the City had no more right or power to distrain Gullifer’s property for unpaid taxes than the city manager in City of Eastport v. Jonah, supra, had to authorize a tax suit. Nor could the City by its promise not to exercise such power of distress bind the tax collector. The City cannot control the tax collector in the execution of the functions of his office.
*219
In
Thorndike v. Camden,
1889,
“The statute gives it [the town] no control over the assessment or collection of any taxes. It is true the statute requires the town to appoint the assessors and collectors of all state, county and town taxes to be levied within its territory, but the town does this as the political agent of the state. The appointment could have been entrusted to any other agency. These officers are not corporate agents. They are public officers, owing to the public, and not to the town alone, the duties imposed by statute. Only their appointment comes from the town. Their authority is from the statute, and they cannot be controlled by the town in the execution of that authority.” Id. at 44,19 A. at 96 . (emphasis added).
See also
Dolloff v. Gardiner,
1952,
The Revised Statutes define the duties and powers of the tax collector. The tax laws of this State outline how he may enforce tax obligations pursuant to his warrant. The law is formulated by the Legislature alone. The collector is not subject to the municipality and agreements made by the City which purport to limit or control his activities are not binding upon him. While an agreement similar to that entered into here might be sufficient to establish the priority of the public right if it were made by and in the name of the tax collector, upon which we intimate no opinion, it is clear from a reading of the statutes that such an agreement made in the name of a party having no authority to distrain or to control the public official who possesses such authority is totally ineffective to strip the Bank in the instant case of its priority position.
The entry will be
Appeal sustained. Case remanded to the Superior Court for entry of'judgment for the plaintiff Bank in the amount of the sum deposited in escrow, together with interest and costs.
Notes
. The remainder of section 996 further provides :
“1. Warrant issued. He may issue the warrant provided for in section 994 prior to the expiration of the 3-month period; or
2. When served. He may in the warrant authorized by section 994, or in subsection 1, direct the officer to demand immediate payment, and if not so paid, the officer shall serve such warrant without further notice; or
3. When notice period unexpired. He may, after the issuance of such warrant, in writing direct the officer to whom the warrant has been issued to demand immediate payment, and if not so paid to serve such warrant without further notice notwithstanding any unexpired portion of the 10-day notice period required by section 995; or
36 M.R.S.A. § 994. Collector may issue warrant of distress to sheriff
“Any tax collector after 3 months from the date of commitment may issue his warrant to the sheriff of any county, or - his deputy, or to a constable of his municipality, directing him to distrain the person or property of any taxpayer not paying his taxes, which warrant shall he of the same tenor as that prescribed to be issued by municipal assessors to tax collectors with the appropriate changes returnable to the tax collector issuing the same in 30, 60 or 90 days.”
36 M.R.S.A. § 995. Warrant of distress; service, notice, fees
“Before the officer serves any such warrant, he shall deliver to the taxpayer or leave at his last and usual place of abode a summons from said tax collector stating the amount of tax due, and that it must he paid within 10 days from the time of leaving such summons. If not so paid, the officer shall serve such warrant the same as tax collectors may do and shall receive the same fees as for levying executions in personal actions.
36 M.R.S.A. § 991. Distraint for taxes; procedure; sale
“If any resident or nonresident taxpayer after a reasonable demand refuses or neglects to pay any part of the tax assessed against him in accordance with this chapter, the tax collector may distrain him in any part of the State by any of his goods and chattels not exempt from attachment for debt, for the whole or any part of his tax, and may keep such distress for not less than 4 days nor more than 7 days at the expense of the own-ner, and if he does not pay his tax within that time, the distress shall he openly sold at vendue by the tax collector after the 4th day but on or before the 7th day. The place of sale may be other than where the tax was assessed or where the property was seized. Notice of such sale shall be posted in some public place in the municipality where the tax was assessed and in the place where the sale is to be held at least 48 hours before the time set for sale.”
. We do not have to address the proffered problem in a case where the agreement to forego the distraint process was executed by the tax collector in his official capacity of tax collector, in relation to which we express no opinion.
. The tax collector, taking his direction from statute rather than from the municipality, is in a position similar to that of an assessor. In
Dillon v. Johnson,
1974, Me.,
“They have certain responsibilities which are unique and distinct from those of other elected officials. Since their duties are defined by statute they are not subject to the direction and control of the municipalities in which they function. . . . Although assessors of taxes when selected by a city or town are public officials, there is no such nexus between them and the municipality as will bring into being the relationship of principal and agent.” Dillon, v. Johnson, supra,322 A.2d at 334-335 . (citations omitted).
See also
In re Maine Central Railroad Co.,
1936,