Wenner v. Mothersead
| Citation | 264 P. 816,1927 OK 30,129 Okla. 273 |
| Decision Date | 01 February 1927 |
| Docket Number | Case Number: 17733 |
| Parties | WENNER, County Treas., et al. v. MOTHERSEAD, Bank Com'r, et al. |
| Court | Supreme Court of Oklahoma |
¶0 1. Taxation--Liability of Bank Assets Held by Bank Commissioner to Reimburse Depositors' Guaranty Fund. Under the provisions of section 6, art. 10, of the Constitution, property taken charge of and held by the Bank Commissioner for the specific purpose of reimbursing the depositors' guaranty fund for moneys paid out of same is not exempt from general taxation.
2. Taxation--Exemptions -- Constitutional Limitations. Under the provisions of section 50, art. 5, of the Constitution, and section 46 (U) art. 5, Id., the Legislature has no power to exempt property from taxation, except as provided in the Constitution.
3. Same--Necessity for Definite Exemption Law. Under the recognized rule of law, property is never exempted from taxation except by a special and definite provision of law.
4. Banks and Banking--Constitutional Authority for State Department. Section 1 art. 14, of the Constitution does not create a State Banking Department, nor a State Bank Commissioner, nor a fund for protection of depositors in the state banks, but merely authorizes the Legislature to create same by law.
5. Same--Creation and Nature of Depositors' Guaranty Fund--Liability to Taxation. By an Act effective May 26, 1908, the Legislature, within the limitations prescribed by said section 1, art. 14 of the Constitution, created the State Banking Department, and prescribed the manner of its regulation, also created the office of Bank Commissioner, prescribing his powers and duties, and further created a depositors' guaranty fund, defining its purposes, providing how such fund should be raised and the manner of handling same. Said act does not provide for raising such guaranty fund by general taxation upon all property within the state, but provides for a system of raising and maintaining such fund by special assessments levied against each individual state bank, according to its average daily deposits. Under said chapter the specific and only purpose of such fund is the protection of depositors in state banks. Such being the specific and only purpose of such fund, the fund itself and property taken charge of by the Bank Commissioner for the purpose of reimbursing such fund is not exempted from taxation under the general revenue laws of the state. The fund itself does not belong to the state in its sovereign capacity as a state, but is merely held by the state through its constituted agent in the character of trustee for the sole benefit of depositors in state banks.
Geo. W. Partridge, Co. Atty. (R. W. Stoutz, special counsel), for plaintiffs in error.
M. W. McKenzie and Fred W. Green, for defendants in error.
¶1 This appeal is to reverse an order and judgment of the district court of Logan county, granting a permanent injunction against the collection of taxes assessed against certain real estate, consisting of improved lots in the city of Guthrie, and held by the State Bank Commissioner through a sheriff's deed, for the purpose of reimbursing the depositors' guaranty fund for money expended by the Bank Commissioner in paying off depositors in an insolvent bank.
¶2 The material facts, in substance, are: That in October, 1921, the State Bank of Oklahoma, Guthrie, Okla., became insolvent and its affairs taken charge of and assets taken over by the State Bank Commissioner and certain amounts paid out of the depositors' guaranty fund to depositors by the Bank Commissioner. Among the assets of said bank, thus taken over, was a mortgage or mortgages on the real estate above mentioned. The Bank Commissioner foreclosed said mortgage and took sheriff's deed to the real estate covered thereby and held same for the purpose of reimbursing the depositors' guaranty fund.
¶3 The sheriff's deed was delivered on July 22, 1922. Prior thereto, viz., in January, 1922, said property was duly assessed for taxes for said year and was likewise assessed for the ensuing years, 1923, 1924, and 1925. In April, 1926, the alleged amount of delinquent taxes and penalties due on said real estate aggregated something over $ 17,000, and said real estate was advertised by the county treasurer of Logan county for sale for the amount of delinquent taxes and penalties due.
¶4 The State Bank Commissioner obtained a temporary restraining order, and upon final hearing a permanent injunction against the collection of said taxes, and the county of Logan, through its county treasurer, by its county attorney, has appealed from said order and judgment to this court for reversal.
¶5 The question involved is whether in fact and in law the title to said real estate thus held by the Bank Commissioner was really vested in the state as a sovereignty, to do with and dispose of as it saw fit, or whether it was merely vested in the State Bank Commissioner as a governmental agency of the state, and held in trust by him for the benefit of the depositors' guaranty fund.
¶6 If the absolute title to such property was actually vested in the state as a sovereignty with power to dispose of same for any purpose for which it saw fit, and, the state would obviously have power to do with its own public property, then under section 6, art. 10, of the Constitution, such property would be exempt from taxation.
¶7 Said section 6 is as follows:
¶8 Thus it is seen that all property of the state, that is, all property belonging to the state as such, is expressly exempt from taxation. But in passing upon this question we must take into consideration that the State Bank Commissioner and the depositors' guaranty fund were not created by the Constitution, but that the Constitution, by section 1, art. 14, merely authorized the Legislature to create a Banking Department, a Banking Commissioner, and a fund for the protection of depositors and individual stockholders, as was held in Bynum v. Strain, 95 Okla. 45, 218 P. 883.
¶9 Said section 1 of art. 14 of the Constitution is as follows:
"General laws shall be enacted by the Legislature providing for the creation of a Banking Department to be under the control of a Bank Commissioner, who shall be appointed by the Governor for a term of four years, by and with the consent of the Senate, with sufficient power and authority to regulate and control all state banks, loan, trust and guaranty companies, under laws which shall provide for the protection of depositors and individual stockholders."
¶10 It will be observed from the foregoing constitutional provision that it does no more than to merely authorize and command the Legislature to do the things mentioned in said provision. However, the Legislature, pursuant to authority granted in said section, by an act effective May 26, 1908, chap. 6, S. L. 19O7-8, chap. 6. art. 2, R. L. 1910, created the State Banking Department, prescribing the manner of its regulation; also created the office of Bank Commissioner, prescribing his powers and duties, and created a depositors' guaranty fund, defining its purposes and providing how such fund is to be raised, and the manner of its handling. Said act, which is too lengthy to be set out in full herein, does not provide for raising such depositors' guaranty fund by general taxation upon all property within the state, but provides for a system of raising and maintaining such fund by special assessments levied by the banking board against each individual state bank according to its average daily deposits. The system constitutes no part of the general revenue system of the state, nor does such fund constitute any part of the general revenues of the state. It is raised for the specific purpose of paying off depositors in insolvent state banks, and is raised specifically for the benefit of such depositors, and cannot be used nor appropriated by the state for general expenses of state government, nor for any other purpose, other than that for which it was specifically created.
¶11 And if there were an unexpended balance left in said fund after all purposes of same...
To continue reading
Request your trial