Depositors Trust Co. v. City of Belfast

• Decision Date: 22 September 1972
• Citation: 295 A.2d 28
• Parties: DEPOSITORS TRUST COMPANY v. CITY OF BELFAST et al.
• Court: Maine Supreme Court

Page 28

295 A.2d 28

DEPOSITORS TRUST COMPANY v. CITY OF BELFAST et al.

Supreme Judicial Court of Maine.

Sept. 22, 1972.

Locke, Campbell & Chapman by Harry N. Starbranch, Augusta, for plaintiff.

Eaton, Glass, Marsano & Hammond, by Thomas W. Hammond, III, Belfast, for defendants.

Before DUFRESNE, C. J., and WEBBER, WEATHERBEE, POMEROY and WERNICK, JJ.

WEATHERBEE, Justice.

The Plaintiff brought this 80B action in the nature of an appeal from the refusal of the Assessors of the City of Belfast to abate taxes which were assessed upon the personal property of the Plaintiff (other than the vault and safe deposit boxes) situated in its branch office in that city for the tax year of 1969. Plaintiff alleged that it had paid the State tax assessed upon the value of its bank stock for that year as provided under 36 M.R.S.A. § 4752. This bank stock tax, the Plaintiff alleges, is in lieu of a local tax on its personal property (other than vaults and safe deposit boxes) and it asserts that the personal property tax was therefore illegally assessed.

The Defendant answered, denying jurisdiction of the Court to entertain the appeal because of the failure of the Plaintiff to have furnished the assessors with a true and perfect list of its estate not exempt from taxation as provided by 36 M.R.S.A. § 706, and disputing Plaintiff's contention that the personal property tax was illegally assessed.

The Plaintiff then moved for summary judgment pursuant to M.R.C.P., Rule 56 on the basis of the pleadings and an affidavit establishing the Plaintiff's payment of the bank stock tax.

The Presiding Justice granted Plaintiff's motion for summary judgment and ordered the personal property tax abated and Defendant has appealed.

In our opinion the Superior Court had jurisdiction to determine the Plaintiff's appeal.

In 36 M.R.S.A. § 841 the Legislature has authorized municipal tax assessors to abate taxes 'provided the taxpayer has complied with section 706'. ¹ Section 706 bars the taxpayer from applying for an abatement unless he has, after notice to do so, furnished the assessors with a list of his polls and estates not by law exempt from taxation. Although it had received notice, the Plaintiff furnished no such list.

In Holbrook Island Sanctuary v. Inhabitants of Town of Brooksville, et al., 161 Me. 476, 214 A.2d 660 (1965) we found that consideration of the jurisdictional issue leads inevitably to the merits of the case. We held that if the property was exempt, there was no necessity of filing the list before seeking an abatement.

The Defendant agrees that a person not liable to taxation at all is not required to file the list as a prerequisite to applying for an abatement but the Defendant contends that the Plaintiff owned some indisputably taxable property in the City, such as real estate, and was therefore required to bring in a list of property not exempt from taxation in order to claim on appeal that the assessors had assessed some of its property which was exempt from taxation.

Here, it should be borne in mind that the Plaintiff does not contend simply that this particular property is over-valued but rather that it should not have been assessed at all. It seeks not a partial but a complete abatement. If the Plaintiff's position that this property is exempt is correct, neither section 706 nor the assessor's notice obligated or even invited him to include it on such a list. If, in fact, the Plaintiff does own other property in Belfast, which is subject to taxation-which the record does not disclose-the filing of a list of such other, taxable property could hardly be relevant to the assessor's duties as to tax-exempt property.

In our opinion the Legislature in enacting section 706 did not intend that the failure to file a list of its property subject to taxation should bar the taxpayer from using the abatement process to attack the assessment of property which the Legislature has declared is completely exempt from taxation. The Court had jurisdiction to entertain Plaintiff's appeal, the merits of which we will now consider in the light of the interrelation of two statutes.

36 M.R.S.A. §§ 602 and 603 authorizes Defendant's taxation of personal property of the Plaintiff, used by Plaintiff in its business situated in Belfast, unless exempt from taxation.

36 M.R.S.A. § 4752 provides for the imposition of a state tax upon the assessed value of the stock of trust companies and banking institutions formed under federal law and doing business in the state.

The State Tax Assessor is authorized to determine the value of the stock of the bank and then to deduct therefrom the assessed value of the bank's real estate, vaults and safe deposit boxes. (The value of the bank's personal property is not so deducted.) He thus determines the value of the shares of stock and assesses a tax of 15 mills upon it which is paid by the bank. Annually the State Treasurer must return the tax assessed upon shares owned by non-residents of the state or by corporations to the municipality where the bank is located, but the taxes collected on shares owned by resident stockholders is returned to the municipalities in which the resident stockholders reside.

Two facts become obvious. One is that, as the value of a bank's personal property is one of the elements entering into the value of shares of its stock, the imposition by the City of a tax upon the personal property would amount to a second assessment against the value of the personal property. The second is that the City of Belfast's plight doubtless typifies the impact upon municipal tax revenues as a result of the recent trend in bank stock ownership. When stock in trust companies was largely locally owned, most of the revenues were enjoyed by the town where the bank was situated. With the proliferation of branch banks and of bank stock holding companies, it is clear that the return of this desired tax revenue is shifting to a few larger cities which are the locations of the parent banks and the holding companies whichg own the stock in the local banks.

In 1905 the bank stock tax statute was substantially as it...