Maine Sugar Industries, Inc. v. Maine Indus. Bldg. Authority

• Court: Supreme Judicial Court of Maine (US)
• Writing for the Court: Before WILLIAMSON; WEBBER
• Citation: 264 A.2d 1
• Parties: MAINE SUGAR INDUSTRIES, INC. and Vahising, Inc. v. MAINE INDUSTRIAL BUILDING AUTHORITY and Special Interim Legislative Committee, Intervenor.
• Decision Date: 31 March 1970

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264 A.2d 1 MAINE SUGAR INDUSTRIES, INC. and Vahising, Inc.
v.
MAINE INDUSTRIAL BUILDING AUTHORITY and Special Interim
Legislative Committee, Intervenor. Supreme Judicial Court of Maine. March 31, 1970.

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William R. Flora, Presque Isle, Roger M. Dougherty, and James M. O'Neill, Washington, D. C., for plaintiffs.

George A. Wathen, Augusta, for defendant.

Jon R. Doyle, Asst. Atty. Gen., Augusta, for intervenor.

Before WILLIAMSON, C. J., and WEBBER, MARDEN, DUFRESNE, WEATHERBEE, and POMEROY, JJ.

WEBBER, Justice.

This was a complaint for declaratory judgment and injunctive relief reported upon agreed facts.

The two plaintiffs are corporations doing business in Maine. Both have substantial loans guaranteed by defendant Maine Industrial Building Authority, a body corporate and politic created by Act of the Legislature with power to sue and be sued. 10 M.R.S.A., Secs. 701 to 703 inc., Secs. 751 to 754 inc., Secs. 801 to 809 inc., and Secs. 851 and 852, all as amended.

Sec. 753 as amended by P.L.1968, Ch. 525, Sec. 8 provides:

'The Maine Industrial Building Authority is authorized to insure the payment of mortgage loans, secured by eligible projects, and to this end the faith and credit of the State is pledged, consistent with the terms and limitations of the constitution of the State of Maine, Article IX, section 14-A.'

Sec. 801 provides a 'non-lapsing, revolving fund,' initially $500,000, to be used in part for the payment of 'interest and principal payments required by loan defaults.' The supporting provision of the Constitution of Maine, Article IX, Sec. 14-A provides:

'For the purposes of fostering, encouraging and assisting the physical location, settlement and resettlement of industrial, manufacturing, fishing and agricultural enterprises within the State, the Legislature by proper enactment may insure the payment of mortgage loans on the real estate and personal property within the State of such industrial, manufacturing, fishing and agricultural enterprises not exceeding in the aggregate $40,000,000 in amount at any one time and may also appropriate moneys and authorize the issuance of bonds on behalf of the State at such times and in such amounts as it may determine to make payments insured as aforesaid. * * *.'

Sec. 702 of 10 M.R.S.A. as amended sets forth the purpose of the several statutes dealing with the Maine Industrial Building Authority in these terms:

'It is declared that there is a state-wide need to provide enlarged opportunities for gainful employment by the people of Maine and to thus insure the preservation and betterment of the economy of

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the State and its inhabitants. It is further declared that there is a need to stimulate a larger flow of private investment funds from banks, investment houses, insurance companies and other financial institutions including pension and retirement funds, to help finance industrial expansion of industrial, manufacturing, fishing and agricultural enterprises. The Maine Industrial Building Authority is created to encourage the making of mortgage loans for the purpose of furthering expansion of such enterprises in the State.'

The above excerpts make it abundantly clear that the Legislature is involved in and has a legitimate concern for the scheme of guaranteed loans which it has created. On January 22, 1970 the Senate adopted, the House concurring on January 23, 1970, a joint resolution which provided:

'WHEREAS, it is reported that many growers supplying Maine Sugar Industries and its affiliates have not been paid for their 1969 crop; and

WHEREAS, the Town of Easton has refused to waive any more property taxes of the Maine Sugar Industries plant there; and

WHEREAS, five other Aroostook communities have also refused to grant abatements on Maine Sugar Industries loading stations; and have not received payments for taxes due; and

WHEREAS, the Maine Industrial Building Authority, which has guaranteed $10,000,000 in loans to said industry has been requested to extend the term for payments; and

WHEREAS, a moratorium for the payment of principal and interest has already been granted by the Economic Development Administration to said industry for outstanding obligations; and

WHEREAS, there are recorded against Maine Sugar Industries and/or Vahlsing, Inc. certain liens and attachments in connection with unpaid claims; and

WHEREAS, said industry is in arrears on rent due the Aroostook Development Corporation; and

WHEREAS, these facts combine to create grave concern lest the structure of government loans, state credit and local concessions involved in the operation of Maine Sugar Industries may be in serious jeopardy and raise the question of whether further legislative action is necessary to protect the credit, peace, health and safety of the State; and

WHEREAS, the same is of immediate and vital interest to Maine taxpayers and the Maine Legislature because of the guarantee of the Maine Industrial Building Authority supported by the full faith; now therefore, be it

ORDERED, the House concurring, that a Special Interim Legislative Committee be created consisting of 3 members on the part of the Senate, appointed by the President of the Senate, and 6 members on the part of the House, appointed by the Speaker of the House. The Committee shall by a majority vote elect a chairman. The Committee is directed, in conjunction with the office of the Attorney General of the State of Maine, and with the full and complete cooperation of all state departments, to investigate fully and completely the facts surrounding the approval of said guarantees, the loans and the present financial problems, including but not limited to, the circumstances and facts of the applications, all assurances and representations connected therewith, the events and documents supporting said representations upon which the Maine Industrial Building Authority acted relating to the sugar beet and potato-processing industry in the State, and all corporate entities involved; in order that the Legislature may determine whether further legislative action is necessary to protect the credit, peace, health and safety of the

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State. The Chairman, or any member of the Committee designated by him, shall have the power to administer oaths and to subpoena and require the attendance of witnesses and production of books, papers, records and other evidence pertinent to such investigation. In case of the refusal of any person to reply to any subpoena issued hereunder, or to testify to any matter to which he may be examined, the Superior Court in any county on application may issue an order requiring such person to comply with such subpoena and to testify. Any failure to obey such order may be punished by the Court as a contempt thereof. The Committee shall report its findings together with any proposed recommendations for legislative action to the Legislative Research Committee or the next regular session of the Maine Legislature, and therefor hereby appropriate from the Legislative Appropriation for said purpose a sum not exceeding $75,000.'

The Special Committee has organized and is proceeding to carry out the duties assigned to it by the joint resolution. At the time this complaint was initiated it was anticipated that it would hold a hearing on February 26, 1970 at which it would make inquiry of the Authority with respect to pertinent information supplied to it by the plaintiffs. On the report of this case, by agreement of the parties and without the intervention of any restraining order or injunction, such inquiry has been deferred pending decision of the Law Court.

The plaintiffs look to provisions of 10 M.R.S.A., Sec. 852 as amended as...