Court Opinion

ID: 5591464
Source: CourtListenerOpinion
Date Created: 2022-01-11 02:11:10.069234+00
Date Added: 2024-06-11T08:36:27.793829
License: Public Domain

Jenkins, Justice,
dissenting. I agree with the majority holding, as supported by Dysart v. Brown, 100 Ga. 1 (supra), that taxes do not cease to accrue against the property of an insolvent while the assets of the insolvent are in the hands of a receiver or quasi receiver; and that, in the language of the majority opinion, they thus continue to accrue as taxes “according to the general rule as to taxation.” The proposition just stated is not, however, as I 'understand the case, a disputed question. The contest is not one involving the validity of claims, but relates solely to their priority. Thus, while not questioning the validity of the claim for taxes thus accruing, I do question their priority. This is true for the reason that in such a contest, as was said by the trial judge and by the Court of Appeals, if “payable as taxes” and claiming priority merely as such against the claims of depositors, their rank is inferior thereto. The priorit}' of such taxes over the claims of depositors arises not by virtue of the priority given to taxes, inferior in rank to claims of depositors, but because such a tax claim is impressed with an additional and higher priorit]', superior to claims of depositors, by virtue of its being accounted one of the “expenses of liquidation.” Since the State in the exercise of its sovereign power has renounced what was heretofore its paramount claim for taxes, it follows that, in a contest between taxes and claims of depositors, taxes must stand aside unless they can be supported and carried forward by such additional claim to priority; but since expenses of liquidation do not bear interest, the claim of priority for taxes can advance no further than the vehicle on which it rides. In a contest between claims for taxes and creditors of an insolvent bank, other than depositors, it would be important to note that taxes bear interest, and that such interest has the same degree of priority as the taxes themselves. In a contest with depositors, however, the rule as to interest on taxes matters nothing. The important question is not whether taxes bear interest, but whether expenses of liquidation do so. It is conceded that they do not. It follows that interest on taxes incurred during liquidation can not be given priority *611over claims of depositors, becaiise the statute makes taxes, treated merely as such, inferior, and the interest on such taxes, even when impressed with the additional quality of expenses of liquidation, can not be given priority over claims o£ depositors, because the rule is that siioh expenses do not bear interest.
All this would seem plain and easy enough, were it not for the fact that the majority opinion strikes deeper by laying down the rules that these taxes do not constitute a debt due by an insolvent bank; that the State by the priority statute has not waived its paramount claim for taxes except as to debts in existence at the-time the bank failed; that consequently it still retains its priority for taxes accruing subsequently to liquidation, with the result that the priority statute has no application in a case of this kind; and that the case stands-just as if the insolvent were an ordinary corporation and not a bank. The question then is whether the priority statute governing claims against insolvent banks, which places expenses of liquidation first, claims of depositors second, and taxes third in priority, really means “taxes” or refers only to antecedent taxes. As heretofore stated, the question is not one concerning a renunciation by the State of its taxes, but only concerning the priority of taxes and other claims against insolvent banks. It would seem that this statute purports to cover and in fact does cover the entire question. Section 19 of the original banking act approved August 16, 1919 (Ga. Laws, 1919, pp. 138, 359); this section bearing the introductory title “Order of Paying Debts,” includes as a part of such “debts” but fourth in order of priority, “The expenses of liquidation, including the compensation of agents and attorneys,” and also includes as a part of such “debts,” first, “Debts due the State of Georgia,” and second, “Debts due any county, district, or municipality of the State, including unpaid taxes.” The present act, approved August 25, 1927, in amending section 19 of the former act (Ga. L. 1927, pp. 195, 199), now codified as § 13-821, is also entitled, “Order of paying debts,” and includes in such “debts” both “the expenses of liquidation, including compensation of agents and attorneys,” which expenses are now first in order of priority, and “Debts due for taxes,” which now rank after claims due depositors. If taxes accruing after liquidation are not a debt against the bank, whom is the claim against? Not against the quasi receiver; for, as *612held by the majority opinion, such taxes are not incurred by the receiver, but are imposed by the sovereign, and.can only be accounted expenses of liquidation in the sense that they accrued during the administration, and it is the duty of the receiver as such to pay them. “For this reason, and no other,” the opinion says, “can it be properly said that the taxes are paid as expenses of administration.” What is it then that legally distinguishes such after-accruing taxes from other taxes, since all are thus “debts” due by the insolvent bank? Would not the correct solution be to hold that both kinds of taxes are taxes, both due by the insolvent bank, and that the only legal difference or distinction is, that, since the subsequent taxes accrued while the receiver had charge, they are therefore impressed with the additional quality of expenses of liquidation, and as such are entitled to come within the first rank of priority? If this is not what differentiates them, what does ? Certainly not the language of the statute, which purports to be all-inclusive upon the subject of priorities, and which draws no distinction at all. If subsequently accruing taxes are not to be treated as one of the “debts due by insolvent banks,” it would certainly seem that “expenses of liquidation,” incurred ly the receiver himself, could not possibly be so accounted; and yet the statute explicitly deals with “expenses of liquidation” as “debts,” and puts them first of all in order of priority. It certainly can not be said that the lawmakers, in fixing the rules of priority as to claims against insolvent banks, did not have the in- ■ solvency of the insolvent bank in mind. It therefore appears that the statute does not purport to limit its application to debts previously incurred, but, when it gives priority to depositors over “taxes,” means all taxes without any implied exception. As stated, the only theory by which antecedent and subsequently accruing taxes can be differentiated in harmony with the statute is by treating the subsequent taxes as expenses of liquidation, for the reason that they accrue during the administration of the receiver, who is charged with their payment. On this theory the principal, but not interest thereon, would have precedence over claims of depositors.