State ex rel. and to Use of Wyatt v. Cantley

• Decision Date: 08 April 1930
• Docket Number: 30112
• Citation: 26 S.W.2d 976,325 Mo. 67
• Parties: The State ex rel. William A. Wyatt, Collector of Revenue of Mississippi County, v. S. L. Cantley, State Finance Commissioner, in Charge of Peoples Exchange Bank of Charleston, Appellant
• Court: Missouri Supreme Court

26 S.W.2d 976

325 Mo. 67

The State ex rel. William A. Wyatt, Collector of Revenue of Mississippi County, v. S. L. Cantley, State Finance Commissioner, in Charge of Peoples Exchange Bank of Charleston, Appellant

No. 30112

Supreme Court of Missouri

April 8, 1930

Appeal from Mississippi Circuit Court; Hon. Frank Kelly Judge.

Affirmed.

George W. Kirk and J. C. McDowell for appellant.

(1) This claim is barred by limitation. (a) Statutes of Limitation are looked upon with favor and will be sustained unless they are plainly unreasonable and the courts have frequently ruled that the Legislature may shorten the time of enforcing a remedy where it does not deprive a party of his remedy and leave him a reasonable time in which to enforce it. Seibert v. Copp, 62 Mo. 185; Adamson v Davis, 47 Mo. 268; Stephens v. National Bank, 43 Mo. 389; Faris v. Moore, 256 Mo. 132; Bowersock Mills & Power Co. v. Trust Co., 298 S.W 1051. (b) The statutes bar this claim due to failure of the collector to file his claim within the four months specified in and required by them. Sec. 11716, R. S. 1919; Bowersock Mills & Power Co. v. Trust Co., 298 S.W. 1050; Cold Spring Lodge v. Cantley, 18 S.W.2d 111. (c) The claim is barred by Section 11720 in that this suit has not been brought in accordance with the statutory requirements set forth in this Section. Bowersock Mills & Power Co. v. Trust Co., 298 S.W. 1050; Cold Spring Lodge v. Cantley, 18 S.W.2d 111. (2) The tax assessment on which this suit is founded is illegal and void. (a) A valid assessment is an essential prerequisite to the lawful exercise of the power of taxation. An illegal assessment of taxes is therefore null and void and a tax suit predicated upon such an assessment cannot be sustained. State ex rel. v. Bank of Carterville, 180 Mo. 734. (b) The assessment on which this suit is predicated is illegal for the reason that the taxes sued on were assessed against the banking corporation rather than against the stockholders of said corporation, as required by the statutes. Abbott v. Lindenbower, 42 Mo. 162; State ex rel. v. St. Louis County, 84 Mo. 234; City of Jefferson v. Mock, 74 Mo. 61; State ex rel. v. Railroad, 114 Mo. 7; State ex rel. v. Bank of Carterville, 180 Mo. 717; Sec. 12775, R. S. 1919; Lionberger v. Rowse, 43 Mo. 67; First Natl. Bank v. Meredith, 44 Mo. 500; Springfield v. Natl. Bank, 87 Mo. 442; State ex rel. Gracy v. Catron, 118 Mo. 280; State ex rel. Mahan v. Merchants Bank, 160 Mo. 640; State ex rel. Miller v. Shryack, 179 Mo. 424; State ex rel. Wilson v. National Bank, 180 Mo. 717; State ex rel. Campbell v. Brinkop and Koeln, 238 Mo. 298; State ex rel. Bay v. Citizens State Bank, 274 Mo. 60; Natl. Bank of Commerce v. Allen, 211 F. 746; Natl. Bank of Commerce v. Allen, 223 F. 475. (3) The defendant bank is not liable for the payment of the taxes sued for in this case for the reason that the banking corporation is acting only as the agent of the stockholders in the payment of this tax, and this agency ceased when the bank closed its doors and ceased doing a banking business. (a) The shares of stock in a banking corporation are the personal property of the stockholder and the banking corporation has no interest in them. Vanstone v. Goodwin, 42 Mo.App. 39; Watson v. Printing Co., 56 Mo.App. 145; State v. Railroad, 37 Mo.App. 265; 2 Thompson, Sec. 2810. (b) In the assessment return and payment of personal taxes assessed against a banking corporation, the bank and its executive officers act only as the agent of the stockholders. State ex rel. Campbell v. Brinkop, 238 Mo. 298; State ex rel. v. Citizens Bank, 274 Mo. 68; State ex rel. v. Shryack, 179 Mo. 440. (c) This statutory provision was intended to apply only to live banks, and is not intended to apply to banking corporations in process of liquidation, where it would be impossible for the liquidating agent to apply these statutory provisions, and where such application would result in injustice to the bona-fide creditors of the banking corporation. Springfield v. National Bank, 87 Mo. 445; State ex rel. v. Catron, 118 Mo. 285; State ex rel. Miller v. Shryack, 179 Mo. 441; State ex rel. v. Citizens Bank, 274 Mo. 68. (d) Agency on the part of the banking corporation in the matter of payment of the personal taxes, when properly assessed against the stockholders, ceases when the corporation ceases to do a regular banking business and is taken over by the Commissioner of Finance for the purpose of liquidation. Taxes falling due after such agency has ceased are not a legitimate charge against the assets of said banking corporation. State ex rel. v. Catron, 118 Mo. 444; First Natl. Bank v. Meredith, 44 Mo. 503.

Joslyn & Boone for respondent.

(1) The assessment was against the shareholders of the Peoples Bank and in substantial compliance with Sec. 12775, R. S. 1919, and is a valid assessment. State ex rel. Donnell v. Peoples Bank, 263 S.W. 205; State ex rel. Bay v. Bank, 202 S.W. 382; State ex rel. v. Carr, 178 Mo. 229. (2) Mere informalities in making assessment of property or tax lists shall not invalidate the tax or assessment. Sec. 12801, R. S. 1919; State ex rel. v. Wilson, 216 Mo. 287; State ex rel. v. Carr, supra; State ex rel. v. Phillips, 137 Mo. 259. (3) The Commissioner of Finance stands in the shoes of the Peoples Exchange Bank, and this suit is properly brought against him and the bank. State ex rel. Bay v. Citizens Bank, 202 S.W. 382; State ex rel. Donnell v. Peoples Bank, 263 S.W. 205; Bank v. Commonwealth, 76 U.S. 353; State ex rel. v. Shryack, 179 Mo. 424; Greely v. Bank, 98 Mo. 459. (4) The Peoples Exchange Bank is liable for the taxes assessed against the Peoples Bank. State ex rel. Bay v. Citizens Bank, supra. (5) The Statute of Limitations does not bar the State unless it is expressly provided in the statute. State ex rel. v. Tittman. 119 Mo. 666; State ex rel. v. Trust Co., 209 Mo. 493; In re Life Assn. of America, 12 Mo.App. 46; Greely v. Bank, 98 Mo. 458. (6) The State has a paramount claim for taxes, and has priority over all other creditors, and it is the duty of administrators of deceased persons, assignees or trustees to pay the taxes before paying any other debts. Greely v. Savings Bank, 98 Mo. 458; Marshall v. New York, 65 U.S. 317; Secs. 7212, 7213, R. S. 1919; State ex rel. Bay v. Citizens Bank, supra.

OPINION

Blair, J.

Suit for taxes in the Circuit Court of Mississippi County. From a judgment in favor of plaintiff in the sum of $ 2,395.18 and an order making said judgment a preferred claim, defendant appealed. Our appellate jurisdiction attaches because defendant (appellant) is a state officer and also because a construction of the revenue laws appears to be involved.

Respondent was collector of revenue of Mississippi County. The Peoples Bank of Charleston was a banking corporation under the laws of this State. In compliance with Section 12775, Revised Statutes 1919, its cashier made and delivered the bank's return for the year 1926 in the form hereafter more fully stated. On December 1, 1926, and after the foregoing return had been made, the assets and property of the Peoples Bank were taken over by the Peoples Exchange Bank of Charleston, which at the same time and as part consideration therefor assumed all of the liabilities and obligations of the Peoples Bank.

On May 10, 1927, the Peoples Exchange Bank was closed and taken over by appellant Cantley, as finance commissioner. On July 8, 1927, under authority of Section 11716, Revised Statutes 1919, appellant's deputy bank commissioner in charge gave the statutory notice fixing November 15, 1927, as the last day for the presentation of claims against the Peoples Exchange Bank. Respondent collector did not present his claim for taxes due from the shareholders of the Peoples Bank within the time thus fixed. The special deputy bank commissioner mailed no notice to respondent collector as provided by Section 11716. It does not appear from the agreed statement of facts that the name of respondent as collector appeared as a creditor upon the books of the bank; but no point seems to have been made on such fact.

On June 20, 1928, respondent collector made demand on appellant finance commissioner for the payment of said claim and thereafter filed suit thereon and asked judgment for same and that such judgment be allowed and classified as a preferred claim against the assets of the Peoples Exchange Bank in the hands of the finance commissioner. The result of this suit has already been stated.

The first of the three contentions made by the appellant finance commissioner is that the claim for taxes is barred by the statute of limitations. Section 11716 reads as follows:

"When the commissioner shall have taken possession of such corporation or private banker, and shall have determined to liquidate its affairs, he shall notify all persons who may have claims against such corporations or banker to present the same to him and make proper proof thereof within four months from the date of said notice and at a place specified therein, and shall specify in said notice the last date for presenting said proofs. He shall cause said notice to be mailed to all persons whose names appear as creditors upon the books of the corporation or banker. He shall also cause said notice to be inserted weekly in such newspapers as he may direct for three consecutive months, the first insertion thereof to be published more than ninety days before the last day fixed in said notice for presenting proof of claims. After the date specified in such notice as the last date for presenting proofs of claims the commissioner shall have no power to accept any claim.

There is no question that under like circumstances the claim of a private person, firm or corporation against the Peoples Exchange...