284 N.W. 667 | Mich. | 1939
The Federal Reserve Bank of Minneapolis in 1938 loaned $800,000 to the Escanaba Paper Company, secured by mortgage on real estate in Delta and Marquette counties, this State. The register of deeds for Delta county refused to record the mortgage without payment of the mortgage tax hereinafter mentioned. Claiming immunity from the tax under Federal and State statutory provisions, the Federal Bank, as mortgagee, petitioned the circuit court for the county of Delta to issue a writ of mandamus directing the register of deeds to *122 record the mortgage without payment of the tax, and the court issued the writ.
Review is here by appeal in the nature of certiorari.
The loan being for industrial purposes was authorized by law. 12 USCA, § 352a. Federal reserve banks are exempt from taxation as follows:
"Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom, shall be exempt from Federal, State, and local taxation, except taxes upon real estate." 12 USCA, § 531.
2 Comp. Laws 1929, § 3641 et seq., levies a tax of 50 cents on each 100 dollars secured by mortgage on real property, to be paid to and collected by the county treasurer before the recording of such instrument by the register of deeds. That law did not at first carry the exemption here claimed but, by Act No. 13, Pub. Acts 1934 (1st Ex. Sess.), the following amendment was made:
"No tax shall be imposed upon any building and loan mortgageor upon any mortgage made and running to the reconstructionfinance corporation or to any other United States governmentalcorporation or agency."*
Further amendment was made by Act No. 14, Pub. Acts 1935, and the law now reads:
"No tax shall be imposed upon any building and loan mortgage or upon any mortgage made and running to the reconstruction finance corporation or to any other United States governmental corporation or agency or trustee for the benefit of such governmental corporation or agency, to secure a loan from suchgovernmental corporation or agency."* *123
See Comp. Laws Supp. 1935, § 3641 (Stat. Ann. § 7.422).
The question is whether this mortgage to the Federal reserve bank comes within the immunity mentioned. Sufficient answer is found in the mentioned Michigan enactment. The Federal reserve bank is an operating agency of the Federal government. Its creation was to supply a need of the national government.
The title to the Federal reserve bank act reads:
"An act to provide for the establishment of Federal reserve banks to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes." 38 U.S. Stat. at L., p. 251.
In Geery v. Minnesota Tax Commission,
"The rule is well settled that the government may employ a corporation as its agency or instrumentality for the execution of its powers, and a State is without authority to tax the instruments, or compensation of persons, which the United States may use and employ as necessary and proper means to execute its sovereign power. New York, ex rel. Rogers, v.Graves,
"What, then, were the purposes of the government in establishing the Federal reserve banks? And were those purposes an exertion of its sovereign functions? In Raichle v. FederalReserve Bank of New York,
"In 'unusual and exigent circumstances' they may with the permission of the board and upon restricted security make loans to individuals and corporations if such loans cannot be obtained elsewhere (section 343), and in ordinary times they may make loans to private business on the security of governmental obligations only (section 347)." *125
We omit further quotation.
It is suggested by the attorney general that the mortgage tax has been paid and this fact and our opinion in Taylor v. Countyof Genesee,
The mortgage tax, having been paid under protest, ought not to be taken as a waiver of the immunity extended by the Michigan statute.
The immunity claimed and denied in Taylor v. County ofGenesee, supra, was upon an instrument antedating enactment of the immunity mentioned, and besides, in that case, the mortgagee exacted an agreement on the part of the mortgagor to pay the tax and, in pursuance of such agreement, the tax was paid. Under such circumstances the mortgagee had no occasion to assert its immunity, if any, and the mortgagor was not entitled to be relieved from consequences of the exacted and performed agreement.
Without further extending this opinion and citing and analyzing cases, we hold that under the Michigan statute the mortgage here involved was exempt from the tax, and the circuit court for the county of Delta was not in error in ordering the recording thereof without payment of the tax.
Affirmed. The question being of public moment there will be no costs to either party.
BUTZEL, C.J., and BUSHNELL, SHARPE, POTTER, CHANDLER, and McALLISTER, JJ., concurred. NORTH, J., took no part in this decision.