Commonwealth v. Barnstable Savings Bank

Endicott, J.

This case is to be distinguished from Commonwealth v. Lancaster Savings Bank, 123 Mass. 493. At the time when the tax in that case was assessed and accrued, the Lancaster Bank was in the hands of receivers and perpetually prohibited from transacting the business for which it was incorporated, and deprived of the right to exercise its franchise, and of the profits and benefit to be derived therefrom. As the bank had practically ceased to exist, and could no longer enjoy the privilege of transacting any business, it was held that no tax could be collected.

But a very different state of facts is presented here. The respondent was brought before the court, upon the application of the Commonwealth, to show cause why a perpetual injunction should not issue and receivers be appointed. A temporary injunction was issued pending the hearing, and at the hearing the injunction was not made perpetual, receivers were not appointed, but the bank was allowed to remain in the hands of its officers, and to be managed by them under certain restrictions. They were not allowed to receive deposits, or to pay depositors; their power to make investments was limited to certain specified securities; and, in the sale and conveyance of real estate, held by foreclosure or release of the equity of redemption, the terms of sale were subject to the approval of the bank commissioners. In all other matters the officers of the bank could do what they thought necessary for the management, care and preservation of the property, subject to the further order of the court.

It is obvious that this course was adopted for the purpose of enabling the bank to continue its business, and in the expectation that under its own officers, and in the manner pointed out, it would be relieved from its embarrassment. It was not absolutely deprived of the right to exercise its franchise, or of the profit and benefit to be derived therefrom, but it was restricted in its power to make investments, to add to its liabilities, or to diminish its assets, could sell real estate only with the approval *531of the bank commissioners, and was subject to the further orders of the court.

It was in this condition on May 1, 1878, when the tax accrued under the Sts. of 1862, e. 224, and 1868, c. 315. Whether the limited and temporary injunction would be removed, or a perpetual injunction and the appointment of receivers would become necessary, was then uncertain. Until such a perpetual injunction issued, the bank was sill a savings bank, in the exercise of its corporate powers under certain temporary restrictions imposed by the court. It was therefore liable to pay the tax provided in the statutes, and cannot be relieved from this obligation because afterwards the court found it necessary to issue a permanent injunction and appoint receivers to wind up its affairs.

Decree accordingly.