Savings Bank of Rockville v. Wilcox

• Decision Date: 18 July 1933
• Citation: 117 Conn. 188,167 A. 709
• Parties: SAVINGS BANK OF ROCKVILLE v. WILCOX, State Treasurer, et al.
• Court: Connecticut Supreme Court

167 A. 709

117 Conn. 188

SAVINGS BANK OF ROCKVILLE v. WILCOX, State Treasurer, et al.

Supreme Court of Errors of Connecticut.

July 18, 1933

Case Reserved from Superior Court, Tolland County; Ernest A Inglis, Judge.

The Board of Equalization refused to allow a deduction from the state tax of the Savings Bank of Rockville, and the Bank appealed to the Superior Court opposed by Roy C. Wilcox treasurer, and the Board of Equalization, and the case was reserved by the Superior Court for the advice of the Supreme Court of Errors.

Decision in accordance with opinion.

See also, 167 A. 713.

Anson T. McCook, of Hartford, for appellant.

Ernest L. Averill, Deputy Atty. Gen., H. Roger Jones and William H. Nelson, Asst. Attys. Gen., and Warren B. Burrows, Atty. Gen., for appellees.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY, JJ.

HAINES, Judge.

The plaintiff appealed from the refusal of the board of equalization to allow a deduction from its state tax, of certain taxes on real estate standing in its name in the calendar year next but one preceding the claim for deduction. By the stipulation of facts accompanying the reservation it appears that on January 19, 1932, pursuant to General Statutes, Cum. Supp. 1931, § 241a, the bank filed a return to the tax commissioner upon a blank furnished by the latter for that purpose, which return appears in the record as Exhibit A. The bank was called upon therein to furnish " a true and correct statement of the amount of all deposits of the above named corporation (exclusive of surplus) on the first day of January, 1932, as required by chapter 68 of the General Statutes, Revision of 1930," being that containing sections 1285 to 1291, inclusive, entitled " Savings Deposits." This was amended by the bank by adding to the above sentence " as amended by section 241a of the Public Acts of 1931," and the amount filled in by the bank was $15,267,757.13. Then followed a list of certain items exempt from the tax as provided by statute, and these as filled in amounted to $711,629, leaving the " Amount taxable" $14,556,128.13. The statutory tax of one-quarter of one per cent. on this amount was $36,300.32. The blank, Exhibit A, further provided for a " List of property assessed against said The Savings Bank of Rockville on which taxes were paid during calendar year 1931." This was amended by the bank by inserting after the world " Rockville" the words " in the year 1930," and after the figures " 1931," the words " and previously, as below." The items filled in by the bank under this heading amounted to $16,552.76. This portion of the return was made up of four paragraphs, headed respectively " Paid during the year 1931," " Paid during the year 1930," " Paid during the year 1929," " Paid during the year 1928." All but two of the items in the first paragraph were taxes upon the list of 1930, amounting to $4,677.03, as to which no question is raised. The remaining items of the return, amounting to $11,875.73, were taxes on lists of 1925, 1926, 1927, 1928, and 1929, and the allowance of these was refused by the board, the claim being that the law permitted only deductions for taxes assessed in 1930 and paid in 1931. The bank claimed the right to deduct the entire $16,552.76 from the " Amount taxable."

The decision of the question thus presented is determinative of the present reservation.

As will be seen by the italicized portions of section 241a in the footnote, ^[1] there are two requirements relating to these real estate taxes and these must be considered in determining the purpose and intent of the legislature. The first clearly requires the bank to report to the tax commissioner a specific list (1) of all real estate assessed against the bank during the calendar year next but one preceding the return, together with the assessed value of that real estates, and (2) a statement of the " amount of taxes paid on that real estate in the year preceding the first day of said January."

We cannot concur in the bank's view that these provisions have no essential bearing on the general language of the later provision which allows the deduction of " taxes paid upon all real estate assessed against such savings bank in the year next but one preceding the first day of said January."

A reference to the stipulation shows that the taxes referred to the first italicized portion of the statute, i. e., those assessed against the bank as record owner in 1930 and paid by it in 1931 are the first eight items in the first of the four paragraphs of the return, Exhibit A. These were primary obligations of the bank to the municipality and their deductibility from the state tax is conceded and properly allowed by the board. The last two items in this first paragraph of the return were taxes assessed in 1928 and 1929, respectively, but not paid by the bank until 1931. The second paragraph contains taxes assessed in 1928 and 1929 and paid by the bank in 1930. The third paragraph lists taxes assessed in 1926, 1927, and 1928 and paid by the bank in 1929, and the fourth paragraph lists taxes assessed in 1925, 1926, and 1927 and paid by the bank in 1928. Only the first eight items on the return therefore are called for by the statute.

Referring to the dates when the bank acquired the title to the various properties, it is apparent that those properties included in the first six items, were in each case acquired by the bank before the assessment of 1930 was made, and that the assessment of the properties in the remaining items of the return, with one exception, was against former owners and before the bank acquired title. When these last-named properties were foreclosed, the assessment, of course, stood against the former owners who were liable therefor in a personal action by the municipality if the latter chose to bring it.

When the lands with the unpaid taxes thereon came into the possession of the bank by foreclosure, these unpaid taxes became under the statute a part of the mortgage debt and this in turn generally represented the approximate cost to the bank of the lands it thus acquired. Whether the bank succeeds or fails thereafter in recovering the full amount of this debt due it, is a hazard of the business of loaning money on real estate; and it eventually takes a loss, or makes a profit. In the case of loans conservatively made at not more than the statutory limit of 50 per cent. of the value of the land, it may reasonably be expected that in most cases the bank will profit, in which event the payment of the delinquent tax will have cost it nothing. The construction of the statute which the bank claims would permit the deduction of such taxes which do not in reality represent depletion of the funds of the bank, and this the Legislature could not have intended.

The obvious purpose of the first italicized provision of the statute was to put the commissioner in possession of such information as he required to enable him to compute the statutory deduction granted to the bank, and it clearly suggests the scope and limits of the exemption which was in legislative contemplation. The statute requires the bank to return only the taxes assessed in the calendar year next but one preceding the return and paid in the calendar year...