Tharpe v. Gormley

• Decision Date: 16 February 1934
• Docket Number: 23100.
• Citation: 173 S.E. 212,48 Ga.App. 731
• Parties: THARPE, Tax Collector, v. GORMLEY, Superintendent of Banks.
• Court: Georgia Court of Appeals

173 S.E. 212

48 Ga.App. 731

THARPE, Tax Collector, v. GORMLEY, Superintendent of Banks.

No. 23100.

Court of Appeals of Georgia, Second Division

February 16, 1934

Syllabus by the Court.

Property and assets belonging to an insolvent bank in the possession of the superintendent of banks, after the bank has been taken over for liquidation, are subject to taxation; and the amount due for taxes accruing thereon after the taking over of bank for liquidation does not constitute a debt due for taxes by an "insolvent bank," which is inferior to debts due depositors as provided in section 19 of the act of 1927 (Ga L. 1927, p. 195), prescribing the order of payment of debts by the superintendent of banks after taking over a bank for liquidation. They constitute an "expense of liquidation," as provided in that act, and as such are superior to all claims against the assets of the bank. They are payable out of any money which the superintendent of banks may have in his possession as assets of the bank.

Error from Superior Court, Peach County; Malcolm D. Jones, Judge.

Suit by T. E. Tharpe, Tax Collector of Peach County, against R. E Gormley, Superintendent of Banks. Judgment for defendant, and plaintiff brings error. Transferred from Supreme Court in 176 Ga. 508, 168 S.E. 261.

Reversed.

W. H Harris and C. L. Shepard, both of Fort Valley, for plaintiff in error.

Park & Strozier, of Macon, for defendant in error.

STEPHENS Judge.

T. E Tharpe, as the tax collector of Peach county, brought suit in the superior court of that county, against W. J. Davis, as acting superintendent of banks, and alleged in the petition as amended that there was due as state and county taxes on real estate and personal property in the possession of the defendant as assets of the City Bank of Fort Valley, an insolvent bank which the defendant had taken over for liquidation, the sum of $994.50, that the taxes had accrued for the year 1929, and after the bank had been taken over for liquidation in 1928, and that the taxes constituted expenses of liquidation of the bank, that the defendant had sufficient funds with which to pay the taxes, but refused to pay the same after a demand for payment had been made of him. The plaintiff prayed that the defendant be directed to pay over to the plaintiff, as an amount due for taxes, the sum sued for. A general demurrer to the petition as amended was sustained, and the plaintiff excepts.

The bill of exceptions was transmitted to the Supreme Court, but was transferred by that court to the Court of Appeals, and was submitted to this court on April 13, 1933.

As provided in the amendment of 1927 to the banking act (Ga. Laws 1927, pp. 195, 199, § 19), the "expenses of liquidation" of an insolvent bank, including compensations of agents and attorneys, and the payment of unremitted collections, shall have priority over "debts due by insolvent banks" which are as follows, payable in the order indicated: "(1) debts due depositors, (2) debts due for taxes, State and Federal, (3) judgments, (4) contractual obligations, [and] (5) unliquidated claims for damages and the like." The "debts due for taxes," mentioned in the act, are taxes due by "insolvent banks." They are manifestly debts due by the bank before it was taken over for liquidation, and are not debts which are created and which arise after the bank has been taken over for liquidation. Being such, they are, as provided in the act, subordinate in order of payment, to debts due depositors, and to expenses of liquidation.

There is nothing contained in the banking act as amended, or elsewhere, absolving the property of a bank or its assets from taxes accruing after the bank has been taken over by the superintendent of banks for liquidation. The Constitution of this state, in article 7, § 2, par. 4 (Civil Code of 1910, § 6556), provides that "all laws exempting property from taxation, other than the property herein enumerated, shall be void." The exceptions referred to are contained in paragraph 2 of this article and section of the Constitution, and do not include taxes of the character of taxes accruing against the property or assets of a bank after it has been taken over by the superintendent of banks for liquidation. The property and assets of a bank which are in the possession of the superintendent of banks, for the purpose of liquidation, are not exempt from taxation. The decisions of the Supreme Court in Baggett v. Mobley, 171 Ga. 268, 155 S.E. 334, and Felton v. McArthur. 173 Ga. 465, 160 S.E. 419, do not hold to the contrary. In both of these cases it was held that the assets of the bank in the hands of the superintendent of banks, who held them for the purpose of liquidation, were not subject to interference by a levy and sale under an execution for taxes. In neither of these cases is it held that the property and assets of a bank are not subject to taxation after the bank has been taken over for liquidation. In Gormley v. Askew, 176 Ga. 210, 167 S.E. 600, there is nothing that holds that property and assets of a bank, after it has been taken over for liquidation, are not subject to taxation. See Collier v. Gormley, 178 Ga. 142, 172 S.E. 340, which overrules Gormley v. Askew, supra.

Since taxes accruing against the property and assets of a bank after it has been taken over for liquidation are not debts "due by insolvent banks," they must of necessity if due and payable, be classified as "expenses of liquidation," and as such supersede and have priority of payment, as provided in section 19 of the act of 1927, over all debts created by the bank before it was taken over for...