140 Me. 302 | Me. | 1944
In this proceeding in equity brought by the Bank Commissioner under Public Laws 1933, Chapter 93, known as the Emergency Banking Act, by decree of the Supreme Judicial Court of March 18,1933, a conservator pending hearing was appointed for the Fidelity Trust Company of Portland, a state trust and banking company, who, as ordered, forthwith began its liquidation, and, the appointment having on April 13,1933 been confirmed and made permanent, the liquidation has continued without interruption and is still in progress. The State of Maine, by petition, here presents a claim for a tax assessed against the Fidelity Trust Company on May 15, 1933 and prays that it may be allowed and ordered paid by the conservator out of assets remaining in his hands. The claim being resisted, by agreement the case is reported for decision, on the legally admissible evidence, as law and equity require.
The tax in controversy was assessed against the Fidelity Trust Company by the State Bureau of Taxation on May 15, 1933 and as the semi-annual assessment for the first six months of that year one-half of the annual tax upon the bank provided
The tax is not a property tax but is an excise imposed upon
As a reading of the statute discloses the semi-annual taxes on trust and banking companies, by express mandate, shall be assessed on or before the fifteenth days of May and November. A tax cannot be said to be assessed until the amount is made certain. If returns are made by the bank certainty does not lie in the returns as and when made but in the amounts of the balances of its average deposits for the designated periods as and when they are found by the Bureau of Taxation after deducting the cost and value of enumerated assets and investments as determined by the Bank Commissioner. If no returns are made the amount of the tax is determined by the valuation fixed by the Bureau of Taxation and cannot rest on the returns. This statute differs materially from those which impose similar
If a bank is, voluntarily or otherwise, restricted but allowed to remain in the hands and under the management of its officers and otherwise exercise and enjoy its chartered rights and privileges it is liable for a tax assessed upon its franchise during that period. Maine v. Waterville Savings Bank, 68 Me., 515; Com. v. Barnstable Savings Bank, 126 Mass., 526; Shippee v. Riverside Trust Company, 113 Conn., 661,156 A., 43; People v. Holland Trust Company, 123 N. Y. S., 935. However, by the clear weight of authority, if a corporation ,is placed in the hands of a receiver, ousted from its properties and facilities and deprived of its right or privilege to exercise its franchise, that is, to conduct its own business, neither the corporation nor the receiver is liable for a franchise tax assessed thereafter. The rule has prevailed where a bank was so taken over by the bank com
The reported case shows that, while never enjoined, since the decree of March 18, 1933 appointing the conservator, except it has been engaged in winding up its existing fiduciary and representative affairs, neither the Fidelity Trust Company nor the conservator has ever attempted to carry on a banking business. Immediately after qualifying, the conserva-, tor, in accordance with decretal orders, took possession of the real and personal property, books, accounts, vouchers and papers of every nature belonging to the bank, ousted its officers from its quarters and the control and management of its business and began liquidation. On April 4,1933 an assessment of 100%, aggregating one million dollars ($1,000,000), was made upon the stockholders of the bank. On the same day a Special Master was appointed to receive, ascertain and fix all priority claims. By decree of April 13, 1933 the appointment of the conservator was confirmed and made permanent. On May 4, 1933 the Special Master was authorized to receive, pass upon and report all claims against the bank and the time was fixed in which they might be presented or forever be barred. And on May 5,1933 for the purpose of paying a distributive dividend the conservator w&s authorized to apply to the Reconstruction Finance Corporation for a loan secured by a pledge of the segregated assets of the bank. This record confirms the stated fact in the report that final liquidation was contemplated and
It is true that under the Emergency Banking Act if it had been found to be for the benefit of the depositors and the public the Fidelity Trust Company could have been re-organized and it may be that this proceeding was begun! with the hope or even belief that might take place. The record shows, however, that the Fidelity Trust Company was hopelessly insolvent, no attempt was made to re-organize it, a new bank was formed and it was at once decided that final liquidation was the only alter native. Although Section 11 of the Emergency Banking Act permitted the appointment of a receiver or trustee to liquidate the Fidelity Trust Company in accordance with the provisions of R. S., c. 57 § 52 et seq, it being provided in Section 4 that a conservator might be appointed who should have all the rights, powers and privileges given receivers of banks and trust companies, the Supreme Judicial Court having jurisdiction elected to liquidate the bank through a conservator and it has been recognized that this procedure was authorized, and the conservatorship is governed by the general rules applicable to receivers of trust and banking companies. Cooper v. Fidelity Trust Company, 132 Me., 260,170 A., 726.
While the appointment of the conservator did not work a dissolution of the Fidelity Trust Company it suspended its functions and authority over its property and effects. Cooper v. Casco Mercantile Trust Company, 134 Me., 372, 186 A., 885, 111 A. L. R., 548; Greenfield Savings Bank v. Commonwealth, supra; High on Receivers, Sec. 290; 45 Am. Jur., 116 and cases cited. It deprived the bank of its right and power to exercise the privilege of doing business under its franchise as completely as if injunction had issued or the bank been placed in dissolu
It is to be borne in mind that the affairs of the Fidelity Trust Company are in the hands of the conservator as an officer of the court and this controversy is not between this claimant and the bank but between the claimant and the depositors of the bank. There are no superior equities. The law of the case compels the conclusion that the Fidelity Trust Company had been deprived of its right and privilege to exercise its franchise when the excise tax here claimed was assessed and as there was then no foundation upon which the tax could rest it is invalid and cannot be allowed. In view of that decision it is not necessary to discuss, much less to decide, other matters of defense raised and argued on the briefs. The cause is remanded for entry and decree in accordance with this decision.
So ordered.