TAXATION IN MASSACHUSETTS A TREATISE ON THE ASSESSMENT AND COLLECTION OF TAXES EXCISES AND SPECIAL ASSESSMENTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS BY PHILIP NICHOLS ■I FORMERLY ASSISTANT CORPORATION COUNSEL OF THE CITY OF BOSTON AUTHOR OF "THE LAW OF LAND DAMAGES IN MASSACHUSETTS" AND "THE POWER OF EMINENT DOMAIN" SECOND EDITION 1922 W$t financial J&ublfc&mg Company CONTROLLING THE PUBLICATIONS OF MONTGOMERY ROLLINS 17 JOY STREET, BOSTON, MASS. HS33 t 3 AV Copyright, 1922 By Philip Nichols •<"-•. • • • - , * ■ . • . .' ..... ...... - INTRODUCTION Since the publication of the first edition of this work in 1913, there have been each year many amendments of the statutes re- lating to taxation and decisions of the courts of this common- wealth interpreting them, and also, decisions of the highest courts of the commonwealth and of the United States defining the limits of the constitutional power of the legislature with re- spect to taxation. The author has attempted, with more or less success, to keep the original edition of the book abreast of these amendments and decisions by a series of supplements; but there have occurred during this period a number of radical changes in the system of taxation which it has proved difficult to treat in a satisfactory way by means of a supplement. Among these were the provisions for the foreclosure of tax titles, adopted in 1915, the income tax law of 1916, the general betterment act of 1918 and the new system of taxing business corporations, both foreign and domestic, adopted in 1919. Finally, the enact- ment of the new codification of the General Laws in 1921, with its new chapter and section numbers has rendered obsolete and useless a textbook based upon the chapters and sections of the Revised Laws, and it has become necessary either to prepare an entirely new edition of Taxation in Massachusetts or to allow the results of the time and labor expended upon the first edition to lapse into a condition of unavailability for further usefulness. As there is no other work in existence covering the same subject, the latter alternative? should, it is believed, be avoided if possible. The author has therefore, somewhat reluctantly, under- taken the preparation of a second edition. In the effort to intro- duce the much new and important material that has come into existence, or been brought to the author's knowledge, since 1913, without unduly increasing the size of the book, it has been necessary to save space in many ways. The differentiation be- tween the statutes and the text has been accomplished by print- ing the statutes in smaller type instead of indenting them, as in the first edition, and much has been saved in this manner. The '48 U 174 iv Introduction codification of the statutes has also in itself effected some re- duction in the number of statutes printed. Some subjects dis- cussed in the earlier edition have been omitted as of minor im- portance; notably the enumeration of the purposes for which towns may expend money raised by taxation. As these pur- poses are now brought together in one section of the General Laws, the omission of this subject is no serious loss; but it is with genuine regret that the author has been obliged from lack of space to omit in most cases the abstracts of the facts of the decisions cited in the notes, which were contained in the first edition. The enactment of the General Laws and the consequent in- clusion of all tax statutes in one compilation has made a differ- ent arrangement of the statutes possible from that which was used in the first edition, and the author has in this edition set forth the laws relating to taxation in the exact sequence in which they appear in the General Laws, and has used no other chapter and section numbers than those of the statutes. While this ar- rangement may not in all cases be the most logical, it is far less confusing to those using the book who are accustomed to the arrangement of the General Laws than an arrangement made in accordance with the author's individual conceptions. Those who used the first edition and experienced the diffi- culty in finding particular topics on account of the length of the sections and the absence of section headings on each page will doubtless be gratified to find that in the present edition the index references are to pages, and that at the head of each page can be found the number both of the page and of the chapter and section of the statutes under discussion. In other respects the arrangement of the first edition has been retained; but the entire work has been rewritten from cover to cover and there is comparatively little of the text of the first edition left without material alteration. The author trusts that the new edition of the work will prove helpful to those interested in the subject of taxation. Philip Nichols. TABLE OF CONTENTS PART I PRINCIPLES OF THE LAW OF TAXATION NATURE AND CHARACTERISTICS OF TAXATION SECTION PAGE 1. The Power of Taxation Defined 3 2. Taxes Distinguished from other Pecuniary Impositions 3 3. Tax Distinguished from a Sale of a Commodity 4 4. Taxation Distinguished from Regulation 6 5. Tax Distinguished from Inspection Fee 9 6. Taxation Distinguished from other Governmental Powers 10 7. Whether a Tax is a Debt 11 8. The Divisions of the Power of Taxation 11 9. The Power of Taxation is Inherent in the Legislature of a Sovereign State . . 15 10. Delegation of the Power of Taxation ; . . . . 16 11. Construction of Tax Laws 18 12. Limitations upon Taxing Power of the States in the Constitution of the United States 20 EXPRESS LIMITATIONS OF FEDERAL CONSTITUTION 13. Duties on Imports and Exports 21 14. Duties of Tonnage 23 15. Impairment of the Obligation of Contracts 24 16. Exemption from Taxation as a Contract Protected by the Constitution. . 26 17. Discrimination against Citizens of other States 30 18. Obligation to give full Faith and Credit to Acts of every other State .... 31 19. Limitations on the Taxing Powers of the States by Treaties 32 INTERSTATE COMMERCE 20. The Taxation of Interstate Commerce, and of Property Engaged Therein 33 21. Taxation of the Privilege of Engaging in Interstate Commerce 35 22. Taxation of Domestic Corporations Engaged in Interstate Commerce .... 36 23. Excise Taxes upon Foreign Corporations 38 24. Taxation of Property Used in Interstate Commerce 43 25. Taxation of Receipts Derived from Interstate Commerce 45 TAXATION OF THE PROPERTY AND INSTRUMENTALITIES OF THE UNITED STATES 26. Taxation of the Property of the United States 46 27. Securities Issued by Authority of the United States 48 28. Federal Officers and Employees 49 29. Federal Charters and Franchises 50 30. Interference with Federal Taxing Power 53 v vi Table of Contents DUE PROCESS OF LAW SECTION PAGE 31. Application of the Fourteenth Amendment 52 32. Discriminatory Taxation 53 33. Double Taxation 55 34. What may be Subjected to a Property Tax 57 35. What may be Subjected to an Excise 58 36. Procedural Rights — Assessment and Valuation 58 37. Procedural Rights — Notice and a Hearing 60 38. Procedural Rights — Lists and Returns 63 39. Retroactive and Omitted Assessments — Re-assessments 64 40. Due Process of Law in the Collection of Taxes 66 41. Retroactive Provisions Respecting Collection of Taxes .". . . 68 TERRITORIAL JURISDICTION 42. The Situs of Property for the Purpose of Taxation 69 43. The Situs of Tangible Personal Property 71 44. The Situs of Intangible Personal Property 73 45. Particular Classes of Intangible Property 75 46. The Situs of Personal Property in the Hands of a Fiduciary . .' 78 47. Situs of Property for Purposes of Inheritance Taxation 79 48. Territorial Jurisdiction for the Levy of Excises 84 49. Territorial Jurisdiction for the Levy of Income Taxes 84 50. Territorial Jurisdiction for the Collection of Taxes 85 THE CONSTITUTION OF MASSACHUSETTS 51. The Limitations on the Taxing Power in the Constitution of Massachusetts 86 52. Proportional Taxation under the Constitution of Massachusetts 89 53. Power of the Legislature to Grant Exemptions 91 54. Excises under the Constitution of Massachusetts 94 55. What Constitutes a Commodity 97 56. Reasonableness of Excises 99 57. Money Bills 100 THE PURPOSES FOR WHICH TAXES CAN BE LEVIED 58. Taxes can be Levied only for the Public Use 101 99. What Constitutes the Public Use 103 50. Gratuities, Bounties and Pensions 107 61. Special Constitutional Provisions Affecting the Purposes for which Taxes can be Levied 109 62. The Purposes for which a City or Town may Levy Taxes 112 63. Constitutional Rights of the Taxpayers of a City or Town 113 SPECIAL ASSESSMENTS 64. Origin and Development of Special Assessments 116 65. The Constitutionality of Special Assessments 119 66. The Use must be Public 120 67. The Improvement must be Local 121 68. The Assessment is Limited by the Cost of the Improvement 123 69. The Assessment must not Exceed the Benefit 124 70. The Owner is Entitled to a Hearing 128 71. Assessments under the Police Power 129 72. Rights of the Owner of Land Assessed 130 Table of Contents vii PART II COMMENTARIES ON THE GENERAL LAWS RELATING TO TAXATION SECTION PAGE STATEMENT SHOWING SOURCES AND DISPOSITION OF PUBLIC REVENUES WITH AN ABSTRACT OF THE TAX LAWS 133 THE PROVISIONS OF THE GENERAL LAWS RELATING TO TAXATION Chapter 4 STATUTES 7. Meaning of Certain Words in Construing Statutes 139 Chapter 6 CERTAIN OFFICERS UNDER THE GOVERNOR AND COUNCIL 21. Board of Appeal 139 Chapter 14 DEPARTMENT OF CORPORATIONS AND TAXATION... 139 Chapter 25 DEPARTMENT OF PUBLIC UTILITIES 11 to 16 inc. Assessment of Expenses of Department upon Corporations and Municipalities 141 Chapter 29 STATE FINANCE 142 Chapter 32 RETIREMENT SYSTEMS AND PENSIONS 142 Chapter 33 MILITIA 142 Chapter 35 COUNTY FINANCES 30-31 . Determination of Amount of County Tax 143 Chapter 36 REGISTERS OF DEEDS 22. Noting Instruments Affecting Tax Deeds 144 Chapter 40 POWERS AND DUTIES OF CITIES AND TOWNS 16-17-18. Street Sprinkling Assessments 144 53. Restraint of Illegal Appropriations 147 viii Table of Contents Chapter 41 OFFICERS AND EMPLOYEES OF CITIES, TOWNS AND DISTRICTS SECTION PAGE 1 to 4 inc. Election of Assessors and Collectors 150 20. Duties of Selectmen in Regard to Assessors 151 24. Terms of Assessors and Number to be Chosen 154 28. Assistant Assessors 155 29. Oath of Assessors 156 30. Penalty for False Valuation 156 37. Collection of Taxes by Treasurer 157 38. Authorization to Use Powers of Treasurer 158 39. Constable as Collector of Taxes 158 40. Temporary Collector 159 Chapter 44 MUNICIPAL FINANCE 29. Establishment of Tax Limit 159 41. Expenses of Auditing Municipal Accounts 162 57. Interest on Debts Incurred by a City or Town in Aid of a Railroad 162 Chapter 48 FIRES, FIRE DEPARTMENTS AND FIRE DISTRICTS 69 to 73 inc. Taxation by Fire Districts 162 Chapter 51 VOTERS 164 Chapter 56 VIOLATION OF ELECTION LAWS 1. Penalty for False Entry by Assessors 165 Chapter 58 GENERAL PROVISIONS RELATIVE TO TAXATION 1 to 8 inc. Supervision of Local Taxation 165 9-10. Apportionment of the State Tax 167 10A. Disputed Corporation Taxes as Offset to State Tax 170 11-12. Adjustment of Veterans' Exemptions 171 13 to 17 inc. Reimbursement for Loss of Taxes on Land Used for Public Insti- tutions 171 18-19. Distribution of the Income Tax 172 20. Distribution of Tax on Business Corporations 175 21. Distribution of Tax on Trust Companies 177 22. Distribution of Tax on Street Railway Companies 177 23. Distribution of Tax on Railroad, Telephone and Telegraph Companies.. . 178 24. Distribution of Tax on Gas, Electric Light and Water Companies 178 24A. Distribution of Interest on Overdue Corporation Taxes 178 25. Determination of Amounts to be Distributed 179 26. Returns of Bank Stock Held by Fiduciaries and Partnerships 180 27. Repayment by the State of Illegal Corporation and Inheritance Taxes. . . 181 28. Assessment of Deposits with State Treasurer 181 29-30. Annual Reports of Commissioner 182 Table of Contents ix Chapter 59 ASSESSMENT. OF LOCAL TAXES SECTION PAGE The Origin and Development of the Statutes 183 1. The Poll Tax 186 2. What Property is Subject to Taxation 188 3. What is Real Estate for the Purpose of Taxation 190 4. What Personal Property is Subject to Taxation 191 5. Exemptions from Taxation — General Principles and the History and De- velopment of the Statutes 193 5, cl. 1, 2. Exemptions Continued — Property of the United States and of the Commonwealth 196 5, cl. 3. Exemptions Continued — Literary and Charitable Institutions 197 5, cl. 4. Exemptions Continued — Agricultural and Horticultural Societies. . 203 5, cl. 5. Exemptions Continued — Associations of Veterans 203 5, cl. 6. Exemptions Continued — Militir, Units 203 5, cl. 7. Exemptions Continued — Fraternal Orders 204 5, cl. 8, 9. Exemptions Continued — Retirement, Annuity, Pension or .Endow- ment Associations 204 5, cl. 10, 11. Exemptions Continued — Churches and Religious Organizations 205 5, cl. 12, 13. Exemptions Continued — Cemeteries 206 5, cl. 14. Exemptions Continued — Water Companies 207 5, cl. 15. Exemptions Continued — Credit Unions 207 5, cl. 16. Exemptions Continued — Personal Property of Corporations 208 5, cl. 17. Exemptions Continued — Women and Children 209 5, cl. 18. Exemptions Continued — The Poor and Aged 210 5, cl. 19. Exemptions Continued — Tangible Property Situated in Other States 210 5, cl. 20. Exemptions Continued — Clothing, Furniture and Tools 210 5, cl. 21. Exemptions Continued — Young Animals and Fowls 211 5, cl. 22, 23. Exemptions Continued — Certain Veterans of the Civil War, their Wives and Widows : 212 5, cl. 24, 25. Exemptions Continued — Government, State and Municipal Bonds 213 5, cl. 26. Exemptions Continued — Classified Forest Lands 214 5, cl. 27 to 32. Exemptions Continued — Intangible Property Otherwise Taxed 214 5, cl. 33. Exemptions Continued — Intangible Property Held by a Fiduciary 215 5. Exemptions Continued — Special Statutes and Charters 215 5. Exemptions Continued — Property Devoted to Public Use 217 6-7. Payment in Lieu of Tax on Property Held for Certain Municipal Pur- poses , 218 8. Excise Tax on Certain Ships or Vessels 220 9-10. Place of Assessment of Poll Taxes 220 Rules for Determining Domicile 221 11. Where and to Whom Real Estate is Assessed 226 12. Mortgaged Land 230 13. Determination of Value of Mortgage Interest 231 14. Ownership of Mortgaged Property for Purposes of Taxation 232 15. Obligation to Pay Taxes as Between Landlord and Tenant 233 Life Tenant and Remainderman 235 16-17. Real Estate of a Deceased Person 236 18. Where and to Whom Personal Property is Assessed 237 18, cl. 1. Tangible Personal Property 239 x Table of Contents SECTION PAGE 18, cl. 2. Machinery and Personal Property Leased for Profit 241 18, cl. 3. Personal Property of Deceased Persons 243 18, cl. 4. Personal Property of Joint Owners 246 18, cl. 5. Conduits, Wires, Pipes and Poles 246 18. cl. 6, 7. Partnership Property 248 19. Personal Property Mortgaged or Pledged 250 20. Warrants for Assessment of State Tax 251 21. The Taxes which the Assessors are Required to Assess 251 22. Omission of Shares in National Banks 252 23-24. Amount of Annual Assessment — Fixing of Tax Rate 253 25. Overlay 255 26. Inclusion of State, County and Town Taxes in One Assessment 256 27-28. Remedy if Assessors Fail to Act 257 29. The Notice to Taxpayers to Bring in Lists 258 30. Furnishing of Blank Lists 261 31. Verification of List by Oath of Taxpayer 261 32. Lists not Open to Public Inspection 262 33. Lists of Property in Storage Warehouses 263 34. Statement of Amount Secured by Mortgage 263 35. Lists to be Taken as True — Inquiries by Assessors 264 36-37. Doom of the Assessors in Absence of List 266 38. The Annual Valuation of Taxable Property 267 39 to 42 inc. Valuation of Property of Telephone and Telegraph Companies. . 270 43. The Valuation List of the Assessors 271 44-45. Contents of the Valuation List 273 46. Directions to Assessors in Making Lists 277 47-48. Tables of Aggregates 278 49 to 52 inc. Further Requirements as to Valuation List 279 53 to 56 inc. Collector's List and Warrant 280 57-58. Interest and Discount on Taxes 282 59. Abatement by Assessors 285 60. Record of Abatements 286 61. Effect of Failure to File-List 287 62. Payment of Costs by Petitioner 293 63. Notice of Decision 293 64. Appeal to County Commissioners 293 65. Appeal to the Superior Court 297 66. Provision for Speedy Trial 298 67. Reference to Commissioner 299 68. Judgment and Costs 299 69. Reimbursement, Interest and Costs 300 70. Certificate of Abatement 301 71-72. Abatement of Uncollectible Taxes 302 73. Abatement of Taxes on Telephone and Telegraph Companies 302 74. Notice to Commissioner of Abatement of Local Taxes on Corporations. . . 303 75. Omitted Assessments 304 76. Revision of Valuation 306 77-78. Reassessment of Taxes 306 79-80-81. Apportionment of Taxes on Real Estate Subsequently Divided. . . 309 82. Assessment Partially Invalid 311 83. Return by Assessors of Property of Corporations Locally Taxable 313 84-85-86. Other Returns Required of Assessors 313 87. Personal Liability of Assessors 314 88. Compensation of Assessors 317 89 to 92 inc. Penalties for Evasion of Taxation 318 93-94. Penalties for Neglect by Assessors 319 Table or Contents xi Chapter 60 COLLECTION OF LOCAL TAXES SECTION PAGE 1. Definitions * 31!) 2. General Duties of Collectors 321 3. Tax Bill 323 4-5. Collection of Poll Taxes 324 6 to 12 inc. Collector's Books, Records, Accounts and Vouchers 324 13. Bond of Collector 326 14. Special Collector 328 15. Fees 328 16. Demand 330 17. Time of Making Levy 331 18. Summons 332 19. Levy without Demand 332 20. Obligation to Exhibit Certificate of Abatement 332 21. Effect of Misnomer 332 22. Partial Payment of Tax 333 23. Statement of Existing Liens 334 Collection by Distress 24. Seizure of Personal Property — Exemptions 335 25-26. Detention, Notice and Sale 336 27. Distress of Stock or Produce to Collect Tax on Land 338 28. Return of Surplus to Owner : 338 Collection by Arrest and Imprisonment 29. When Arrest is Authorized 338 30-31-32. Certificate of Arrest — Discharge 339 33. Collector may Require Aid 340 34. Warrant to Officer — Release and Re-arrest 340 Collection by Suit 35. Action by the Collector 342 36. Collection from the Estates of Deceased Persons and of Insolvents and Bankrupts 344 Collection by Sale or Taking of Land 37. Extent and Duration of Lien 349 38-39. Demand on Mortgagee or at Designated Place 352 40-41-42. Publication and Posting of Notice of Sale 352 43-44. Conduct of the Sale 354 45. The Collector's Deed 357 46. Reimbursement of Purchaser at Invalid Sale 360 47. Statement of Purchaser's Residence 362 48-49. Purchase by the City or Town 363 50. Recitals in Deed to Town 364 51. Sale of Parcels of Small Value 365 52. Management of Lands Bought by Town 365 53-54-55. Taking of Land for Non-Payment of Taxes 365 56. Naming of One Record Owner Sufficient 366 57. Affidavit of Collector 367 58-59. Rights of Mortgagors and Mortgagees Against Each Other 368 60. Payment of Taxes by Person Other than the Owner 370 61. Collection of Taxes Subsequent to Sale or Taking , , . 373 62. Redemption from Tax Sale 374 63. Recording Certificates of Payment to Collector 377 xii Table of Contents SECTION PAGE 64. Tax Title Absolute only after Foreclosure 379 65-66-67. Petition for Foreclosure — Notice — Default 380 68. Redemption by Leave of Court 381 69. Decree Barring Redemption 381 70-71-72. Procedure for Contesting Validity of Tax Title 381 73. Deposit of Costs 382 74. Recording Notice of Petition 382 75. Practice and Procedure in Foreclosure Cases 383 76. Relief in Equity 383 77-78. Disposition of Land Bought or Taken by Town 386 79-80-81. Sale of Lands of Low Value Held by City or Town Under Tax Titles 388 82-83-84. Proceedings if Tax Title is Deemed Invalid 390 85-86. Lien of Co-Tenants 391 87. Decision of Town whether to Sell or Take 393 Miscellaneous Provisions 88-89-90. Commission of Tax List to Sheriff 393 91. Restraint of Foreign Corporations and Non-Residents 394 92. Appointment of Deputy Collectors 395 93. Withholding Money Due Persons Owing Taxes 395 94. Collector's Accounts to be Exhibited Bi-Monthly 396 95. Personal Liability of Collector 396 96. Removal of Collector 399 97. Commission of "Uncollected Taxes to Collector's Successor 399 98. Remedies for Taxes Illegally Assessed 400 Action at Common Law to Recover Back a Tax 400 Action at Common Law in Case of Informality 405 Payment under Duress or Protest 406 Action of Tort against the City or Town 408 Bill in Equity 408 Petition for Writ of Mandamus 409 99 to 104 inc. Penalties 412 105. Forms in Proceedings for Collection of Taxes 412 Chapter 61 TAXATION OF FOREST LANDS 426 Chapter 62 TAXATION OF INCOMES Origin and Purpose of the Income Tax 428 Limitation upon the Taxation of Incomes 432 1. Taxation of Income from Certain Intangibles 436 1 (a). Interest from Bonds, Notes and Other Debts 437 Deposits in Banks 439 United States, State and Municipal Bonds 440 Interest on Mortgages 440 Pawnbrokers 441 1 (b). Dividends on Stock in Foreign Corporations 441 1 (c) (d) (e). Unincorporated Associations 443 1 (f). Securities Held in Pledge or on Margii: 446 Table of Contents xiii SECTION PAGE 1 (g). Distribution of Capital 446 2-3-4. Interest Deduction .' 447 5 (a). Annuities , 450 5 (b). Income from Professions, Employments, Trade or Business 451 5 (c). Gains from Sales of Intangibles 455 5 (d). Income of Unincorporated Associations Taxable under Section Five 457 5 (e). Income from Intangibles not Taxable under Section Five 458 6. Determination of Business Income 458 6 (a). Deductions — Business Expenses 459 6 (b). Deductions Continued — Depreciation, Obsolescence and Depletion. . 460 6 (c). Deductions Continued — Taxes Paid 461 6 (d). Deductions Continued — Interest on Business Debts 461 6 (e). Deductions Continued — Losses and Destruction of Capital Assets. . . 462 6 (f). Deductions Continued — Losses from Bad Debts '. '. 462 6 (g). Deductions Continued — Income Attributable to Capital Invested in the Business 463 6 (h). Deductions Continued — Allowance for Wife, Children or Dependent Parents 464 7. Accrual Basis for Determining Income Authorized 465 8. Exemptions 467 9. Estates of Deceased Persons 468 10. Estates Held in Trust .* 470 11. Income from Non-Resident Trustees 473 12. Claim of Exemption for Beneficiary 474 13. Application of Foregoing Provisions to Other Fiduciaries 475 14. Corporations Acting as Trustee 475 16. Settlement of Taxes on Fiduciaries 476 17. Partnerships 476 18. Establishment of Partners' Exemptions 478 19. Resident Members of Partnerships Having no Place of Business in Massa- chusetts 479 20. Procedural Provisions Applicable to Partnerships 479 21. Partnerships with Transferable Shares 479 22. Returns of Income 480 23. Fiduciaries' Returns 482 24. Further Provisions Respecting Returns 482 25. Time as of Which Liability to Tax is Fixed 483 26-27. Notices and Returns 484 28. Omitted and Supplementary Returns 485 29. Extension of Time for Filing Returns 486 30. Verification of Returns 486 31. Mandamus to Compel Filing of Return 488 32. Privacy of Returns 488 33-34. Information at the Source 489 35. Assessment of Persons Who Have Filed Returns 491 36. Assessment of Persons Who Have Not Filed Returns 491 37. Omitted Assessments 492 38. Rules and Regulations of the Commissioner 493 39 to 42 inc. Collection of Income Taxes 493 43-44. Abatement by the Commissioner 494 45-46. Appeal to the Board of Appeal 496 47. Appeal to the Superior Court 498 48. Statutory Remedies Exclusive .-...' ' 499 49 to 53 inc. Loss of Exemption of Principal by Failure to Return Income. . . 500 xiv Table of Contents SECTION PAGE 54. Effect of Unconstitutionality of Part of the Chapter 501 55 to 60 inc. Penalties 502 Chapter 63 TAXATION OF CORPORATIONS Taxation of Bank Shares 1. Rate and Place of Taxation . ... 505 2-3. Collection of Tax gjj 4 to7 inc. Distribution of the Tax 512 8-9-10. Establishment of Exemptions 514 Savings Banks, Savings Departments of Trust Companies and Co-operative Banks 11. Excise on Savings Banks and Savings Departments 515 12. Exemption of Portions of Deposits 516 13. Returns of Amount of Deposits 517 14. Tax Exempt Investments in Savings Department not Basis of Deduction from other Taxes 51g 15. Exemption of Deposits from other Taxes 51g 16. Effect of Incapacity to do Business 519 17. Massachusetts Hospital Life Insurance Co 520 18. Saving Bank Insurance 520 19. Co-operative Banks 521 Insurance Companies 20. Life Insurance Companies 521 21. Retaliatory Tax on Foreign Life Insurance Companies 523 22-23. Insurance Companies doing Business other than Life Insurance 524 24. Determination of Amount of Premiums Tax 526 25-26-27. Returns and Inspection of Books 527 28-29. Assessment and Collection of Tax 528 Domestic Business Corporations Early Methods of Taxing Corporations 529 The Development of the Franchise Tax 531 The Establishment of the Present System 533 30, cl. 1-2. Definitions. To what Corporations Applicable 534 30, cl. 3. Corporate Excess — Valuation and Deductions 536 Valuation of Shares 536 Deductions — In General 538 Deductions — (a) Real Estate, Machinery and Structures 539 Deductions — (b) Non-taxable Securities 541 Deductions — (c) Tangible Property Situated in Another State or Country 542 Deductions — (d) Cash and Bills Receivable Attributable to an Office Outside the Commonwealth 543 30, cl. 4. Definitions Continued — Corporate Excess Employed with the Commonwealth 544 30, cl. 5. Definitions Continued — Net Income 545 30. cl. 6. Definitions Continued — Taxable Year 547 31. Deductions not Allowed 547 32. Rate of Tax upon Domestic Corporations 548 33-34. Affiliated and Subsidiary Corporations 550 35. Returns 551 Table of Contents xv SECTION PAGE 36. Effect of Correction of Federal Return 553 37. Income Allocable in Entirety 554 38. Allocation of Remainder of Net Income 555 Foreign Corporations 39. Excise on Foreign Corporations 560 40. Returns — Corporate Excess Employed within the Commonwealth 565 41^2. Allocation of Income 565 43. Credit for Dividends Taxed to the Stockholders , 567 Assessment and Collection of Excise on Business Corporations 44. Assessment of Excise Tax 569 45. Assessment of Additional Tax 571 46. Double Assessment on Refusal to File Proper Return 571 47. Rules and Regulations 572 48. Collection 572 49-50. Penalties 573 51. Application for Abatement 573 52. Effect of Unconstitutionality 573 Taxation of Public Service Corporations and Trust Companies 53-54. Returns 574 55. Valuation and Deductions 578 56. Deduction of Mortgages held by Trust Companies 579 57. Conflict between Valuations of Commissioner and Assessors 580 58. Rate of Taxation 582 59. Additional Excise upon Abatement of Local Tax 583 60. Notice of Tax and Application for Correction 583 61 to 66 inc. Commutation Tax on Street Railways 584 Miscellaneous Provisions Applicable to All Corporations 67. Excise on Corporations Interested in Ships and Vessels 589 68. Excises on Special Privileges not Affected by this Chapter 591 69. Inspection of Books and Papers 591 70. Interest on Overdue Taxes 593 71. Application to the Board of Appeal 593 72-76. inc. Collection of Corporation Taxes 594 77-78. Remedy of Corporation in case of Taxes Illegally Assessed 596 79-80. Penalties and their Enforcement 599 Chapter 64 TAXATION OF STOCK TRANSFERS 600 Chapter 65 TAXATION OF LEGACIES AND SUCCESSIONS History of the Inheritance Tax 605 Constitutionality of Inheritance Taxes 606 1. Subjects and Rates of Taxation 608 Transactions which are Subject to the Tax 613 What Property is Subject to the Tax 616 Exemptions 619 2. Powers of Appointment 621 3. Gifts in Contemplation of Death •. 623 4. Shares in Multi-State Corporations 625 xvi Table of Contents SECTION PAGE 5. Reciprocal Exemption of Non-Resident Decedents 626 6. Persons Liable for the Tax 627 7-8. Time of Payment 627 Summary 632 9. Lien for Tax 633 10. Delivery of Assets to Foreign Executor 634 11. Interest and Discount 635 12. Tax Chargeable to Capital 635 13. Value for Purposes of the Inheritance Tax 636 14. Payment of Taxes on Future Interest 640 15. Deposit or Bond for Payment of Tax on Future Interest 642 16. Excessive Compensation of Executor Taxable 643 17. Executor Liable for Tax 644 18. Legacy Charged on Real Estate 645 19. Provision for Payment of Tax not Taxable 646 20. Repayment of Tax on Property Returned 646 21. Sale of Real Estate for Payment of Tax 647 22. Inventory and Appraisal 647 23-24. Non-Payment of Tax as Affecting Allowance of Probate Accounts 648 25-26. Determination of Value 649 26. Determination of Value 650 27. Assessment, Certification and Abatement 651 28. Examination on Oath of Persons having Information 653 29. Dooming on Refusal of Information 654 30. Jurisdiction of the Probate Court ' 654 31. Enforcement of Lien on Real Estate 656 32. Proceedings for the Recovery of Unpaid Taxes 656 33. Remedies for Collection of Taxes 657 Summary 658 34. Recovery of Penalties and Forfeitures 660 35. Papers not Open to Public Inspection 660 36. The Tax not Retrospective 660 Chapter 66 PUBLIC RECORDS 663 Chapter 70 SCHOOL FUNDS AND OTHER STATE AID FOR PUBLIC SCHOOLS 1 to 6 inc. State Aid from the Income Tax 664 Chapter 79 EMINENT DOMAIN General Provisions as to Betterments 667 39. Settlement and Assumption of Betterments 667 Chapter 80 BETTERMENTS 1. Assessment of Betterments 669 What Benefits can be Assessed 672 Exemptions from Special Assessments 675 Time of Levy 676 Table of Contents xvii SECTION PAGE Assessment Limited to the Actual Cost and to the Actual Benefit 678 Street Betterments in the City of Boston 680 2. Plan and Estimate 681 3. Surrender of Estate Assessed 682 4. Collection 684 Remedies for Excessive or Illegal Assessments 686 Petition for Certiorari 687 Action of Contract against the City or Town 688 What Irregularity Invalidates an Assessment*. 690 5. Petition for Abatement 692 6. Extension of Time for Filing Petition 693 7. Appeal to the Superior Court 693 8. Death of Person Entitled to Petition 695 9. Procedure on Petition to Superior Court 696 10. Appeal to the County Commissioners 697 11. Contribution by Lessee 697 12. Duration of Lien 699 13. Interest and Apportionment 700 14. Apportionment by Assessors 701 15. Subsequent Division of Land Assessed 702 16. Re- Assessment 703 17. Provisions of Chapter Eighty Exclusive 704 Chapter 82 THE LAYING OUT AND RELOCATION OF PUBLIC WAYS 11. Assessment of Cost of Relocation 705 12. Assessment of Cost of Laying Out, Alteration, Repair or Discontinuance. 706 24, 26. Assessment of the Cost of Private Ways 707 Chapter 83 SEWERS, DRAINS AND SIDEWALKS 14. Sewer Assessments 709 Sewer Assessments in the City of Boston 711 15. Assessment for Sewerage System at Uniform Rate 714 16. Annual Charges for the Use of Sewers 716 17. Payment for Permanent Privilege of Using Sewers 717 18. Determination of Method of Assessment 717 19. Extension of Time for Payment 718 20. Fee for the Use of Sewers 718 21. Land Abutting upon more than one Way 718 22. Sewers Built by Land Owners 719 23. Payment of Part of Cost by the City or Town 719 24. Assessment for Particular Sewers 719 26. Sidewalk Assessments 720 Sidewalk Assessments in the City of Boston 722 27. Lien for Sewer and Sidewalk Assessments 724 28. Adoption of Administrative Provisions of Betterment Law 726 Chapter 85 REGULATIONS RELATIVE TO WAYS AND BRIDGES 6. Assessments for the Cost of Removing Snow from Sidewalks 727 xviii Table of Contents Chapter 111 PUBLIC HEALTH SECTION PAGE 132 to 140 inc. Assessment for Drainage of Wet Lands 728 Chapter 132 FORESTRY 18 to 29 inc. Assessment for the Extermination of Insect Pests 732 Chapter 143 INSPECTION, REGULATION AND LICENSES FOR BUILDINGS 61. Notice to Assessors of Building Permits . . . 763 Chapter 147 STATE AND OTHER POLICE 40. Tax on Gross Receipts of Boxing Matches 737 Chapter 156 BUSINESS CORPORATIONS 53 to 55 inc. Organization and Filing Fees 738 Chapter 160 RAILROADS 87. Taxation of Railroad Property 740 Chapter 161 STREET RAILWAYS 78. Assessments on Street Railway Companies for Widening or Altering Public Ways 740 Chapter 164 MANUFACTURE AND SALE OF GAS AND ELECTRICITY 61. Assessment of Cost of Laying Pipes and Wires 741 Chapter 175 INSURANCE 19. Liability of Insurance Companies to Taxation 742 Chapter 184 GENERAL PROVISIONS RELATIVE TO REAL PROPERTY 22. Covenants against Encumbrances 742 Special Assessments 745 Chapter 185 THE LAND COURT 1. Jurisdiction over Foreclosure of Tax Titles • • • 747 Chapter 193 APPOINTMENT OF ADMINISTRATORS 3. Application by Commissioner of Corporations and Taxation 747 Table of Contents xix Chapter 198 INSOLVENT ESTATES OF DECEASED PERSONS SECTION PAGE 1. Taxes a Preferred Claim 748 Chapter 206 ACCOUNTS AND SETTLEMENTS OF RECEIVERS 31. Taxes a Preferred Claim 749 Chapter 216 COURTS OF INSOLVENCY 118. Preferred Claims 749 Chapter 217 JUDGES AND REGISTERS OF PROBATE AND INSOLVENCY 16. Register to Send Copies of Inventories to Commissioner 750 Chapter 252 IMPROVEMENT OF LOW LANDS AND SWAMPS 13. Assessment of Cost of Draining Low Lands 751 19. Roads to Swamps and Quarries 753 APPENDIX Additional Statutes Affecting Taxation 755 Additional Taxes Imposed for Temporary Purposes 756 List of Forms „ 760 TABLE OF CASES [Citations are to Pages] A. J. Tower Co. v. Commonwealth, 223 Mass. 371 (1916) 20, 57, 509, 512, 514, 541, 547 Abbott v. Frost, 185 Mass. 398 (1904) 232, 351 Aberdeen Bank v. Chehalis County, 166 U. S. 440 (1897) . 64, 508, 512 Abington v. North Bridgewater, 23 Pick. 170 (1839) 222, 223, 225 Adams, Petitioner, 165 Mass. 497 (1896) : 114 Adams v. Mills, 126 Mass. 278 (1879) 359, 375 Adams v. Nantucket, 11 Allen 203 (1865) 223 Adams v. New Bedford, 155 Mass. 317 (1891) 511 Adams Express Co. v. Kentucky, 166 U. S. 171 (1897) 71 Adams Express Co. v. Ohio State Auditor, 165 U. S. 221 (1897) 60, 71 Adams Express Co. v. Ohio State Auditor, 166 U. S. 185 (1897) .. 57, 71, 78 Agassiz v. Trefry, 266 Fed. Rep. 8 (1920) 499 Alaska Fish etc. Co. v. Smith, 255 U. S. 44 (1921) 7 Albany County v. Stanley, 105 U. S. 305 (1881) 55 Albuquerque First Nat. Bank v. Albuquerque, 208 U. S. 548 (1908) 509, 511 Alden v. Springfield, 121 Mass. 27 (1876) 694 Alexander v. Pitts, 7 Cush. 503 (1851) 353, 377 Alger v. Easton, 119 Mass. 77 (1875) 335,408 All Saints Parish v. Brookline, 178 Mass. 404 (1901) 206, 403 Allen v. Charlestown, 109 Mass. 243 (1872) 672 Allen v. Charlestown, 111 Mass. 123 (1872) 129,710 Allen v. Pullman's Palace Car Co., 191 U. S. 171 (1903) 42 Almy v. California, 24 How. 174 (1860) 22 Alvord v. Collin, 20 Pick. 418 (1838) 151, 256, 257, 354 American Can Co. v. Commonwealth, 188 Mass. 1 (1905) 41 American Express Co. v. Indiana, 165 U. S. 255 (1897) 60 American Glue Co. v. Commonwealth, 195 Mass. 529 (1907) 56, 77, 542 American Mfg. Co. v. St. Louis, 250 U. S. 459, 463 (1919) 4 American Mut. Liability Ins. Co. v. Commonwealth, 224 Mass. 299 (1916) 527 American Printing Co. v. Commonwealth, 231 Mass. 237 (1918) 757 American Refrigerator Transit Co. v. Hall, 174 U. S. 70 (1899) 44 American Steel etc. Co. v. Speed, 192 U. S. 520 (1904) 21, 22, 39, 43, 44 American Uniform Co. v. Commonwealth, 237 Mass. 42 (1921) 100, 739 American Unitarian Asso. v. Commonwealth, 193 Mass. 470 (1907) 124, 680 Amesbury etc. Mfg. Co. v. Amesbury, 17 Mass. 461 (1821) 240, 531 Amherst College v. Assessors of Amherst, 173 Mass. 232 (1899) 200 Amherst Col. v. Assessors of Amherst, 193 Mass. 168 (1906) 200, 262, 286, 289 Amory v. Lowell, 1 Allen 504 (1861) 372 Amory v. Melvin, 112 Mass. 83 (1873) 234 Andover etc. Turnpike Corp. v. Gould, 6 Mass. 40 (1809) 11 Andrews v. Worcester etc. Insurance Co., 5 Allen 65 (1862) 69 Anthony v. Adams, 1 Met. 284 (1840) 401 Antoni v. Greenhow, 107 U. S. 769 (1882) 24 Appleton v. Hopkins, 5 Gray 530 (1855) 11, 339 Armour v. Virginia, 246 U. S. 1 (1918) 39 Armour Packing Co. v. Lacy, 200 U. S. 226 (1906) 39 Armstrong v. Athens County, 16 Pet. 281 (1842) 26, 28 xxi xxii Taxation in Massachusetts [Citations are to Pages] Arnold v. Cambridge, 106 Mass. 352 (1871) 124 722 Ashley v. Bristol County Commissioners, 166 Mass. 216 (1896) 292 Ashley v. Ryan, 153 U. S. 436 (1894) ".] 37 Askren v. Continental Oil Co., 252 U. S. 444 (1920) 4, 9, 35 Aspinwall v. Boston, 191 Mass. 441 (1906) 668 Asylum v. New Orleans, 105 U. S. 362 (1881) 26 Atchison etc. R. R. Co. v. O'Connor, 223 U. S. 280 (1912) 40 41 42 Atkin v. Kansas, 191 U. S. 207 (1907) .......... 'l07 Atkins v. Boston, 188 Mass. 77 (1905) 673 Atkinson v. Newton, 169 Mass. 240 (1897) 668, 672, 688 Atlantic etc. R. R. Co. v. Georgia, 98 U. S. 359 (1878) '.....' 29 Atlantic etc. Tel. Co. v. Philadelphia, 190 U. S. 160 (1903) 9," 34, 43 Atlantic Maritime Co. v. Gloucester, 214 Mass. 348 (1913) 289, 291 Atlantic Maritime Co. v. Gloucester, 228 Mass. 519 (1917) 24o' 241 Attorney General v. Barney, 211 Mass. 134 (1912) > 20, 83, 638 Attorney Gen. v. Bay State Mining Co., 99 Mass. 148 (1868) 14, 40, 41, 98 Attorney General v. Boston, 123 Mass. 460 (1877) 105 Attorney General v. Boston, 142 Mass. 200 (1886) 723 Attorney General v. B. & A. R. R. Co., 233 Mass. 460 (1919) 550, 757 Attorney General v. Cambridge, 16 Gray 247 (1860) 114 Attorney General v. Clark, 222 Mass. 291 (1915) 18, 615 Attorney General v. East Boston Co., 222 Mass. 450 (1916) 11, 593, 596, 598 Attorney General v. Electric Storage Battery Co., 188 Mass. 239 (1905) 39, 40, 41, 98, 562, 596 Attorney General v. Laycock, 221 Mass. 146 (1915) 344, 651, 653, 658 Attorney General v. Mass. Pipe Line Gas Co., 179 Mass. 15 (1901) 537, 549 Attorney General v. Rafferty, 209 Mass. 321 (1911) 649 Attorney General v. Roche, 219 Mass. 601 (1914) 649, 650, 653 Attorney General v. Skehill, 217 Mass. 364 (1914) 650, 653, 658 Attorney General v. Stone, 209 Mass. 186 (1911) .... 607, 630, 632, 635, 649, 661 Attorney General v. Sullivan, 163 Mass. 446 (1895) 529 Attorney General v. Thorp, 230 Mass. 25 (1918) 622 Attorney General v. Ware River R. R. Co., 233 Mass. 466 (1919) 757 Attorney General v. Western Union Tel. Co., 141 U. S. 40 (1891) .... 45, 70 Attorney General v. Williams, 174 Mass. 476 (1899) 103, 114 Auffmordt v. Hedden, 137 U. S. 310 (1890) 61 Austin v. Aldermen of Boston, 14 Allen 359 (1867) 507 Austin v. Aldermen of Boston, 7 Wall. 604 (1868) 507 Averill v. Boston, 193 Mass. 488 (1907) 668 Ayer v. Mayor & Aldermen of Somerville, 143 Mass. 585 (1887) 710 Ayer etc. Tie Company v. Kentucky, 202 U. S. 409 (1906) 72 Ayers v. Hatch, 175 Mass. 489 (1900) 154 Babbitt v. Savoy, 3 Cush. 530 (1849) 109 Babcock v. Leopold Morse Home, 225 Mass. 418 (1917) 201 Babcock v. Slater, 212 Mass. 434 (1912) 180, 222, 224, 225 Bacon v. Illinois, 227 U. S. 504 (1913) 44 Bailey v. Maguire, 22 Wall. 215 (1874) 27, 28 Baker v. Allen, 21 Pick. 382 (1838) 315, 316 Baker v. Boston, 12 Pick. 184 (1835) 401 Baker v. Boston Elevated Ry. Co., 183 Mass. 178 (1903) 122, 123, 673, 674 Baker v. Horan, 227 Mass. 415 (1917) 234 Balch v. Essex County Commissioners, 103 Mass. 106 (1869) 103 Balch v. Shaw, 174 Mass. 144 (1899) 620 Baldwin v. Wilbraham, 140 Mass. 459 (1886) 150 Ballard v. Hunter, 204 U. S. 241 (1907) 31, 59, 61 Table of Cases xxiii [Citations are to Pages] Baltic Mining Co. v. Commonwealth, 207 Mass. 381 (1911) . . 40, 41, 42, 98, 562 Baltic Mining Co. v. Massachusetts, 231 U. S. 68 (1913) 41, 42, 563 Baltimore Shipbuilding etc. Co. v. Baltimore, 195 U. S. 375 (1904) 47, 67 Bancroft v. Boston, 115 Mass. 377 (1874) 673, 679 Bancroft v. Cambridge, 126 Mass. 438 (1879) 730 Bancroft v. Lynnfield, 18 Pick. 566 (1836) 109 Bangs v. Brewster, 111 Mass. 382 (1873) 224 Bank v. Supervisors, 7 Wall. 26 (1868) 48 Bank of California v. Richardson, 248 U. S. 476 (1919) 507, 510 Bank of Commerce v. New York, 2 Black. 620 (1862) 48 Bank of Commerce v. Tennessee, 161 U. S. 134 (1896) 57 Bank Tax Case, 2 Wall. 200 (1864) 48 Banks v. The Mayor, 7 Wall. 16 (1868) 48 Barker v. Mackay, 168 Mass. 76 (1897) 383,384,385,386 Barker v. Mackay, 175 Mass. 485 (1900) 377 Barker v. Watertown, 137 Mass. 227 (1884) , 248 Barnard v. Graves, 13 Met. 85 (1847) 281, 282, 336, 337, 397, 398 Barnes v. Boardman, 149 Mass. 106 (1889) 347, 350 Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879) .... 683, 684, 696, 711 Barrett v . Cambridge, 10 Allen 48 (1865) 119, 407, 408 Barron v. Boston, 187 Mass. 168 (1905) 222, 225, 242 Barry v. Lancy, 179 Mass. 112 (1901) 68, 378, 384 Bartlett v. Boston, 182 Mass. 460 (1903) 668 Bassett v. Porter, 4 Cush. 487 (1849) 316 Bates v. Boston, 5 Cush. 93 (1849) 403 Bates v. Sharon, 175 Mass. 293 (1900) 199, 229, 403 Batt v. Treasurer & Receiver General, 209 Mass. 319 (1911) 620, 621 Bauman v. Ross, 167 U. S. 548 (1897) 127, 128 Baxter v. Treasurer & Receiver General, 209 Mass. 459 (1911) 614 Beals v. Brookline, 174 Mass. 1 (1899) 694, 695 Beals v. James, 173 Mass. 591 (1899) 122, 687; 690, 731 Beard v. Seavey, 191 Mass. 503 (1906) 341, 394 Beeson v. Johns, 124 U. S. 56 (1888) 30 Belgrade v. Sidney, 15 Mass. 523 (1819) 151 Bell v. Newton, 183 Mass. 481 (1903) 668 Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915) 31, 56, 73, 74, 75, 76, 541, 542 Bellows Falls Power Co. v. Massachusetts, 245 U. S. 630 (1917) 31 Bell's Gap Railroad v. Pennsylvania, 134 U. S. 232 (1890) .... 53, 59, 61, 64, 92 Bemis v. Aldermen of Boston, 14 Allen 366 (1867) 56, 71, 189, 249 Bemis v. Caldwell, 143 Mass. 299 (1887) 272, 276, 349, 405 Bennett v. Hunter, 9 Wall. 326 (1869) 64 Bennett v. Wellesley, 189 Mass. 308 (1905) 705 Benson v. Monroe, 7 Cush. 125 (1851) ?. . . . 406 Bent v. Hubbardston, 138 Mass. 99 (1884) 345 Benton v. Brookline, 151 Mass. 250 (1890) 673, 674, 679 Berlin v. Bolton, 10. Met. 115 (1845) 252 Berryman v. Whitman College, 222 U. S. 334 (1912) 29 Bethlehem Motors Corp. v. Flynt, U. S. (1921) 43 Bigelow v. Boston, 120 Mass. 326 (1876) 694 Bigelow v. Boston, 123 Mass. 50 (1877) 118, 680 Billings v. Illinois, 188 U. S. 97 (1903) 608 Billings v. United States, 232 U. S. 261 (1914) 14 Bi-Metallic Invest. Co. v. State Board of Equalization, 239 U. S. 441 (1915) 63 Biscoe v. Tax Commissioner, 236 Mass. 201 (1920) 50,433,454 Blackburn v. Walpole, 9 Pick. 97 (1829) 282 xxiv Taxation in Massachusetts [Citations are to Pages] Blackie v. Hudson, 117 Mass. 181 (1875) 682, 746 Blackstone v. Miller, 188 U. S. 189 (1903) 56, 77, 81, 82, 83, 84 Blackstone v. Taft, 4 Gray 250 (1855) 159, 328 Blackstone Manufacturing Co. v. Blackstone, 13 Gray 488 (1859) ... 208, 561 Blackstone Mfg. Co. v. Blackstone, 200 Mass. 82 (1908) 70, 191, 268, 290 Blackstone Manufacturing Co. v. Blackstone, 211 Mass. 14 (1912) 70, 191 Blake v. Baker, 115 Mass. 188 (1874) 119, 698, 699, 703 Bliss v. Bliss, 221 Mass. 201 (1915) . . . .' 75, 82, 83, 617, 627 Blossom v. Cannon, 14 Mass. 177 (1817) 272, 349, 377 Board of Education v. Illinois, 203 U. S. 553 (1906) 620 Board of Liquidation v. McComb, 92 U. S. 531 (1875) 15 Boise etc. Water Co. v. Boise City, 230 U. S. 84 (1913) 28 Bonaparte v. Tax Court, 104 U. S. 592 (1881) 31, 74, 75 Boott Cotton Mills v. Lowell, 159 Mass. 383 (1893) 296, 300, 301, 302 Borden v. Brockton, 208 Mass. 348 (1911) 721 Borden v. Treasurer & Receiver General, 221 Mass. 212 (1915) 627 Borland v. Boston, 132 Mass. 89 (1882) 222, 223, 407 Boston, Petitioner, 221 Mass. 468 (1915) 115 Boston v. B. & A. R. R. Co., 170 Mass. 95 (1898) 118, 125, 218, 675, 676, 685, 724 Boston v. Chelsea, 212 Mass. 127 (1912) 16 Boston v. Dedham, 4 Met. 178 (1842) 252 Boston v. Schaffer, 9 Pick. 415 (1830) 10 Boston v. Shaw, 1 Met. 130 (1840) 5, 126, 685, 686, 709, 711 Boston v. Treasurer & Receiver General, 237 Mass. 403 (1921) 105, 115 Boston v. Turner, 201 Mass. 190 (1909) 11, 321, 322, 323, 343, 345, 346 Boston v. Union Freight Railroad Co., 181 Mass. 205 (1902) 589 Boston Asylum v. Street Com. of Boston, 180 Mass. 485 (1902) 119, 217, 676 Boston Elevated Ry. Co. v. Commonwealth, 199 Mass. 96 (1908) 589 Boston Fish Market Corporation v. Boston, 224 Mass. 31 (1916) 197, 234 Boston Investment Co. v. Boston, 158 Mass. 461 (1893) 189, 208, 226, 561 Boston Loan Co. v. Boston, 137 Mass. 332 (1884) 240, 251, 561 Boston, Loan Co. v. Commonwealth, 224 Mass. 181 (1916) 251 Boston Lodge of Elks v. Boston, 217 Mass. 176 (1914) 19, 194, 199 Boston Manufacturing Co. v. Commonwealth, 144 Mass. 598 (1887) .... 593, 597 Boston Manufacturing Co. v. Newton, 22 Pick. 22 (1839) 191, 581 Boston Molasses Co. v. Commonwealth, 193 Mass. 387 (1907) .... 197, 233, 235 Boston Railroad Holding Co. v. Commonwealth, 215 Mass. 493 (1913) 541 Boston Rubber Shoe Co. v. Maiden, 216 Mass. 508 (1914) 260, 291, 350 Boston Seamen's Friend Soc. v. Boston, 116 Mass. 181 (1874) 119, 675, 679, 695 Boston Water Power Co. v. Boston, 9 Met. 199 (1845) 403, 531, 581 Boston Water Power Co. v. Boston, 194 Mass. 571 (1907) 668 Boston Water Power Co. v. Boston & Worcester R. R. Co., 23 Pick. 360 (1839) 103 Boston &' Albany R. R. Co. v. Commonwealth, 157 Mass. 69 (1892) . . 536, 598 Boston & Lowell R. R. Co. v. Commonwealth, 100 Mass. 399 (1868) 537 Boston & Maine Railroad v. Cambridge. 8 Cush. 237 (1851) 218, 740 Boston & Sandwich Glass Co. v. Boston, 4 Met. 181 (1842) 188, 406, 530, 531, 581 Bothwell v. Bingham County, 237 U. S. 642 (1915) 47 Bourne v. Boston, 2 Grav 494 (1854) 225 - 404 Bowditch v. Chickering, 139 Mass. 283 (1885) 2 f Bowditch v. Superintendent of Streets, 168 Mass. 239 (1897) .... 686, 687, 691 Bowman v. Chicago etc. R. R. Co., 125 U. S. 488 (1887) 22 Bowman v. Continental Oil Co., U.S. (1921) 35 Boyd v. United States, 116 U. S. 616 (1886) 63, 592 Boylston Market Association v. Boston, 113 Mass. 528 (1873) .. 118, 668, 691 Brackett v. Commonwealth, 223 Mass. 119(1916) 553 Table of Cases xxv [Citations are to Pages] Bradford v. Randall, 5 Pick. 495 (1827) 281 Bradford 'v. Storey, 189 Mass. 104 (1905) 635, 655, 656 Bradley v. Illinois, 4 Wall. 459 (1866) 48 Bradley v. Richmond, 227 U. S. 477 (1913) 6, 7, 17 Bradshaw v. Crosby, 151 Mass. 237 (1890) 743 Branson v. Bush, 251 U. S. 182 (1919) 125 Brayton v. Fall River, 124 Mass. 95 (1878) 114, 117 Breed v. Lynn, 126 Mass. 290 (1879) 694 Bremer v. Williams, 210 Mass. 256 (1911) 374 Brennan v. Titusville, 153 U. S. 297 (1894) 35, 39 Brewer v. New Gloucester, 14 Mass. 216 (1817) '. 410 Brewer v. Springfield, 97 Mass. 152 (1867) 409, 687, 709 Bridge v. Bridge, 146 Mass. 373 (1888) 236 Briggs v. Rochester, 16 Gray 337 (1860) 223 Briggs v. Whitney, 159 Mass. 97 (1893) 123 Brimmer v. Rebman, 138 U. S. 78 (1891) 34 Bristol v. Washington County, 177 U. S. 133 (1900) 11, 74, 76, 86 Brockton v. Plymouth County Commissioners, 183 Mass. 42 (1903) 297 Brooks v. West Springfield, 193 Mass. 190 (1906) 56, 193, 231. 441 Brown v. Houston, 114 U. S. 622 (1885) 21, 43 Brown v. Mayor and Aldermen of Fitchburg, 128 Mass. 282 (1880) 710 Brown v. Maryland, 12 Wheat. 419 (1827) 21, 22, 35, 43 Browne v. Boston, 166 Mass. 229 (1896) 722 Browne v. Turner, 176 Mass. 9 (1900) 105,114 Brushaber v. Union Pacific R. R. Co., 240 U. S. 1 (1916) 14, 64 Buck v. Beach, 206 U. S. 392 (1908) 71, 74 Buckley v. Williamstown, 3 Gray 493 (1855) 223 Bullen v. Wisconsin, 240 U. S. 625 (1916) 78, 81 Bumstead -v. Cook, 169 Mass. 410 (1897) 685,747 Burnham v. Treasurer & Receiver General, 212 Mass. 165 (1912) 607, 622 Burr v. Boston, 208 Mass. 537 (1911) 218 Burr v. Wilcox, 13 Allen 269 (1866) 308, 310 Burrage v. Boston, 198 Mass. 580 (1908) 668 Burtis v. Burtis, 161 Mass. 508 (1894) 223 Butler v. Perry, 240 U. S. 328 (1916) 10 Butler v. Stark, 139 Mass. 19 (1885) 228 Butler v. Worcester, 112 Mass. 541 (1873) 122, 126, 128, 687, 689, 714 Cabot v. Boston, 12 Cush. 52 (1853) 223 Cahen v. Brewster, 203 U. S. 543 (1906) 607 Caldwell v. North Carolina, 187 U. S. 622 (1902) 35, 39 California v. Central Pacific R. R. Co., 127 U. S. 1 (1888) 51 Callahan v. Boston, 175 Mass. 201 (1901) 108 Callahan v. Woodbridge, 171 Mass. 595 (1898) 76, 80, 81, 608, 610, 616, 617, 619, 637, 655 Cambridge v. Middlesex County Commissioners, 114 Mass. 337 (1874) 201 Cambridge v. Munroe, 126 Mass. 496 (1879) 129, 730 Campbell v. California, 200 U. S. 87 (1906) 608 Campbell v. Haven, 211 Mass. 121 (1912) 746 Cannon v. New Orleans, 20 Wall. 580 (1874) 23 Capen v. Glover, 4 Mass. 305 (1808) 216 Carleton v. Ashburnham, 102 Mass. 348 (1869) 245,286,407 Carlton v. Salem, 103 Mass. 141 (1869) 148, 150 Carnes v. Hersey, 117 Mass. 269 (1875) 234 Carnoe v. Freetown, 9 Gray 357 (1857) 223 Carpenter v. Pennsylvania, 17 How. 456 (1848) 78 xxvi Taxation in Massachusetts [Citations are to Pages] Carr v. Dooley, 119 Mass. 294 (1876) 682, 746 Carroll v. Safford, 3 How. 441 (1844) 47 Carson v. Sewerage Commissioners of Brockton, 175 Mass. 242 (1900) 5, 61, 122, 125, 126, 128, 129, 714, 717 Carson v. Sewerage Com. of Brockton, 182 U. S. 398 (1901) .. 5, 61, 122, 717 Carstairs v. Cochran, 193 U. S. 10 (1904) '. 48, 64 Carter v. Cambridge & Brookline Bridge Prop., 104 Mass'. 236 (1870) 114 117 Carter v. Peak, 138 Mass. 439 (1885) '743 Castillo v. McConnico, 168 U. S. 674 (1898) 59, 61 Central of Geoigia R. R. Co. v. Wright, 207 U. S. 127 (1907) 6o| 63 Central Pacific R. R. Co. v. Nevada, 162 U. S. 512 (1896) ' 47 Central R. R. etc. Co. v. Georgia, 92 U. S. 665 (1875) 28 Central Trust Co. v. Minnesota, 174 U. S. 803 (1899) 67 Chadwick v. Cambridge, 230 Mass. 580 (1918) 351, 374 388 Chanler v. Kelsey, 205 U. S. 466 (1907) '....' 607 Chapel of the Good Shepherd v. Boston, 120 Mass. 212 (1876) 199, 403 Chapin v. Worcester, 124 Mass. 468 (1878) 128, 687' 689 Charland v. Home for Aged Women, 204 Mass. 563 ((1910) 347^ 359, 744 Charlesbank Homes v. Boston, 218 Mass. 14 (1914) 199 Charlestown v. Middlesex County Com., 1 Allen 199 (1861) 260, 262, 290, 740 Charlestown v. Middlesex County Com., 101 Mass. 87 (1869) .. 289, 291, 296 Charlestown v. Middlesex County Commissioners, 109 Mass. 270 (1872) 290, 301 Charlestown v. Stone, 15 Gray 40 (1860) 685, 722 Charlotte etc. R. R. Co. v. Gibbes, 142 U. S. 386 (1872) 9, 53 Chase v. Aldermen of Springfield, 119 Mass. 556 (1876) . . 124, 677, 678, 687, 688 Chase v. Boston, 180 Mass. 458 (1902) 193, 251, 446 Chase v. Boston, 193 Mass. 522 (1907) 251, 265, 292, 294 Chase v. Merrimack Bank, 19 Pick. 564 ( 1837) 410 Chase v. Worcester, 108 Mass. 60 (1871) * 707 Cheever v. Merritt, 5 Allen 563 (1863) 322, 332, 341, 397, 398 Chelsea v. Treas. & Rec. Gen., 237 Mass. 422 (1921) .. 105, 115, 170, 217, 258 Chenery v. Waltham, 8 Cush. 327 (1851) 225 Cheney v. Beverly, 188 Mass. 81 (1905) 126,709,715 Cheney v. Dover, 205 Mass. 501 (1910) ". 298, 306 Cheney Bros. Co. v. Massachusetts, 246 U. S. 147 (1918) 36, 39, 41, 42, 43, 563 Chesapeake etc. R. R. Co. v. Miller, 114 U. S. 176 (1884) ....: 28, 29 Chesapeake etc. R. R. Co. v. Virginia, 94 U. S. 718 (1876) 28 Cheshire v. Berkshire County Commissioners, 118 Mass. 386 (1875) . . 89, 90, 92 Cheshire v. Howland, 13 Gray 321 (1859) 286, 327 Chicago etc. R. R. Co. v. Babcock, 204 U. S. 585 (1907) 70, 71 Chicago etc. R. R. Co. v. Guffey, 120 U. S 569 (1886) 28 Chicago etc. R. R. Co. v. Minnesota, 216 U. S. 234 (1910) 30 Chicopee v. Hampden County Commissioners, 16 Gray 38 (1860) .... 268, 294 Chicopee v. Whately, 6 Allen 508 (1863) 223 Child v. Boston, 4 Allen 41 (1862) 5 Childs v. New Haven & Northampton Co, 133 Mass. 253 (1882) 673 Choate v. Trapp, 224 U. S. 665 (1912) 26, 27 Choctaw etc. R. R. Co. v. Harrison, 235 U. S. 292 (1914) 12, 47 Choctaw etc. R. R. Co. v. Mackey, U. S. (1921) 51 Christ Church v. Philadelphia, 24 How. 300 (1860) 27 Cincinnati etc. Packet Co. v. Catlettsburg, 105 U. S. 559 (1881) 34 Citizens National Bank v. Kentucky, 217 U. S. 443 (1910) 65, 68. 512 Citizens Savings Bank v. Owensboro, 173 U. S. 636 (1899) 29 Citizens Telephone Co. v. Fuller, 229 U. S. 322 (1913) 53 City National Bank v. Charles Baker Co., 180 Mass. 40 (1901) 18, 189, 239, 322 Clark v. Lancy, 178 Mass. 460 (1901) 378. 384,385 Table of Cases xxvii [Citations are to Pages] Clark v. Treasurer & Receiver General, 218 Mass. 292 (1914) 81, 83, 617, 623 Clark v. Worcester, 167 Mass. 81 (1896) 409, 687 Clarke v. Treasurer & Receiver General, 226 Mass. 301 (1917) 607, 614 Clement National Bank v. Vermont, 231 U. S. 120 (1913) 62, 511 Cleveland etc. R. R. Co. v. Backus, 154 U. S. 443 (1894) 70 Cleveland Trust Co. v. Lauder, 184 U. S. Ill (1902) 48 Cloutman v. Concord, 163 Mass. 444 (1895) 249 Coburn v. Litchfield, 132 Mass. 449 (1882) 743 Cochran v. Guild, 106 Mass. 29 (1870) 351, 743 Cochrane v. Boston, 4 Allen 177 (1862) 223 Codman v. Crocker, 203 Mass. 146 (1909) 148 Codman v. Hall, 9 Allen 335 (1864) 234 Codman v. Johnson, 104 Mass. 491 (1870) 118, 119, 698 Cody v. Spear, 214 Mass. 241 (1913) 245, 265 Coe v. Errol, 116 U. S. 524 (1886) 21, 22, 44, 56 Coffin v. Artesian Water Co., 193 Mass. 274 (1906) 208, 242, 247, 561 Colburn v. Litchfield, 132 Mass. 449 (1882) 703, 746 Cole v. Cheshire, 1 Gray 441 (1854) \ . . 224, 225 Cole v. LaGrange, 113 TJ. S. 1 (1884) 102 Colerain v. Bell, 9 Met. 499 (1845) 327, 328, 396 Collector of Boston v. Mount Auburn Cemetery, 217 Mass. 286 (1914) 226, 531 Coll. of Boston v. Rising Sun St. Light. Co., 229 Mass. 494 (1918) 217, 240 Collector of Lakeville v. Bay State St. Ry. Co., 234 Mass. 336 (1920) 588 Collector of Norton v. Oldfield, 219 Mass. 374 (1914) 218 Collector of West Bridgewater v. Dunster, 231 Mass. 291 (1918) 291, 344 Collins v. Greenfield, 172 Mass. 78 (1898) 5 Collins v. Mayor and Aldermen of Holyoke, 146 Mass. 298 (1888) 129, 688, 690, 691, 710, 711 Colman v. Anderson, 10 Mass. 105 (1813) 159, 347, 348, 354 Colton v. Longmeadow, 12 Allen 598 (1866) 223 Columbus Southern R. R. Co. v. Wright, 151 U. S. 470 (1894) 70 Commercial National Bank v. Chambers, 182 U. S. 556 (1901) 56, 511 Commissioner of Public Works v. Justice of Dorchester District, 228 Mass. 12 (1917) 497 Commonwealth v. Barnstable Savings Bank, 126 Mass. 526 (1879) 98, 520 Commonwealth v. Berkshire Life Insurance Co., 98 Mass. 25 (1867) 526 Commonwealth v. Cary Improvement Co., 98 Mass. 19 (1867) .. 533, 537, 592 Commonwealth v. Coombs, 2 Mass. 489 (1807) 673 Commonwealth v. Hamilton Manufacturing Co., 12 Allen 298 (1866) 12, 14, 89, 90, 98, 532, 538 Commonwealth v. Hefron, 102 Mass. 148 (1869) 273 Commonwealth v. Holbrook, 10 Allen 200 (1865) 8 Commonwealth v. Lancaster Savings Bank, 123 Mass. 493 (1878) 98, 520 Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866) 14, 98, 217, 242, 247, 532, 533, 537 Commonwealth v. New England Slate & Tile Co., 13 Allen 391 (1866) 13, 38, 55, 313, 532, 538, 569, 584 Commonwealth v. Newburyport, 103 Mass. 129 (1864) 115 Commonwealth v. People's Five Cents Savings Bank, 5 Allen 428 (1862) 4, 7, 12, 14, 56, 89, 94, 98, 516 Commonwealth v. Phoenix Bank, 11 Met. 129 (1846) 396 Commonwealth v. Plaisted, 148 Mass. 375 (1889) 18, 115 Commonwealth v. Provident Institution for Savings, 12 Allen 312 (1866) 14, 89, 98, 100, 517 Commonwealth v. Quinn. 222 Mass. 505 (1916) 273 Commonwealth v. Segee, 218 Mass. 501 (1914) 273, 663, 743 xxviii Taxation in Massachusetts [Citations are to Pages] Commonwealth v. Sessions of Norfolk, 5 Mass. 435 (1809) 673 Commonwealth v. Slocum, 230 Mass. 180 (1918) 9 Commonwealth v. Stodder, 2 Cush. 562 (1848) 9 Commonwealth v. Thorniley, 8 Allen 445 (1863) 8 Commonwealth v. United States Worsted Co., 220 Mass. 183 (1915) 739 Commonwealth v. Walker, 4 Mass. 556 (1808) 223 Commonwealth v. Wentworth, 145 Mass. 50 (1887) 153 Cone v. Forest, 126 Mass. 97 (1879) 256. 309, 312, 337, 349, 397, 398 Conkey v. Dickinson, 13 Met. 51 (1847) 245 Connecticut Mutual Life Insurance Co. v. Commonwealth, 133 Mass. 161 (1882) 89, 90, 98, 99, 523 Connecticut Valley St. Ry. Co. v. Northampton, 213 Mass. 54 (1912) 217, 248 Conners v. Lowell, 209 Mass. Ill (1911) 228, 331, 353, 358, 359, 360, 363 Consolidated Rendering Co. v. Vermont, 207 U. S. 541 (1908) 592 Converse v. Jennings, 13 Gray 77 (1859) 329 Cook v. Boston, 9 Allen 393 (1864) 406 Cook v. Leland, 5 Pick. 236 (1827) 243, 246 Cook v. Marshall County, 196 U. S. 261 (1905) 10 Cook v. Pennsylvania, 97 U. S. 573 (1878) 22, 43 Cooke v. Scituate, 201 Mass. 107 (1909) 252 Cooley v. Board of Wardens, 12 How. 313 (1851) 22, 23 Coolidge v. Brookline, 114 Mass. 592 (1874) 112 Coomes v. Burt, 22 Pick. 422 (1839) 730 Copeland v. Huntington, 99 Mass. 425 (1868) 149 Copeland v. Springfield, 166 Mass. 498 (1896) 721, 723 Copper Queen Consolidated Mining Co. v. Arizona, 206 U. S. 474 (1907) .... 60 Corcoran v. Aldermen of Cambridge, 199 Mass. 5 (1908) 122, 126, 127, 128, 146, 690 Corcoran v. Boston, 185 Mass. 325 (1904) 197 Corcoran v. Boston, 193 Mass. 586 (1907) 197 Corfield v. Coryell, 4 Wash. 371 (1823) 38 Cornell v. Coyne, 192 U. S. 418 (1904) 14 Corry v. Baltimore, 196 U. S. 466 (1905) 61, 64, 75, 76, 86 Cotting v. Commonwealth, 205 Mass. 523 (1910) 746, 747 Cotton v. Boston, 161 Mass. 8 (1894) 78, 250 Coughlin v. Gray, 131 Mass. 56 (1881) 350, 357, 364, 370 Coulter v. Louisville etc. R. R. Co., 196 U. S. 599 (1905) 53, 54 Covington v. Covington First National Bank, 198 U. S. 100 (1905) 74, 509, 512 Covington v. Kentucky, 173 U. S. 231 (1898) 28, 29, 115 Cox v. Segee, 206 Mass. 380 (1910) 252 Crandall v. Nevada, 6 Wall. 35 (1867) 21, 49 Crandell v. Taunton, 110 Mass. 421 (1872) 686, 694, 696 Crapo v. Stetson, 8 Met. 106 (1844) 11, 342 Cream of Wheat Co. v. Grand Forks, 253 U. S. 325 (1920) 37, 56, 73, 74 Crenshaw v. Arkansas, 227 U. S. 389 (1913) 39 Crew Levick Co. v. Pennsylvania, 245 U. S. 292 (1917) 4, 37, 45 Crocker v. Maiden, 229 Mass. 313 (1918) 79 Crocker v. Shaw, 174 Mass. 266 (1899) 607, 615 Crowell v. Goodwin, 3 Allen 535 (1862) 355, 377 Crutcher v. Kentucky, 141 U. S. 47 (1891) 35 Cudahy Packing Co. v. Minnesota, 246 U. S. 450 (1918) 37, 45 Cummings v. Merchants' National Bank, 101 U. S. 153 (1879) 55 Cummins v. Christie, 179 Mass. 74 (1901) 356 Cunningham v. Boston, 15 Gray 468 (1860) 406 Cunningham v. Munroe, 13 Grav 471 (1860) 399 Curran v. Holliston, 130 Mass. 272 (1881) , 109 Table of Cases xxix [Citations are to Pages] Curtis v. Gay, 15 Gray 36 (1860) 374 Curtis v. Pierce, 115 Mass. 186 (1874) 119,698,699 Curtiss v. Sheffield, 213 Mass. 239 (1913) 229, 320, 322, 347, 349, 367, 386 Cusick v. Brookline, 123 Mass. 91 (1877) 112 Custy v. Lowell, 117 Mass. 78 (1875) 694 D'Amico v. Boston. 176 Mass. 599 (1900) 5 Dana v. Dana, 226 Mass. 297 (1917) 615 Dana v. Treasurer & Receiver General, 227 Mass. 562 (1917) 80, 81, 616, 617 Dane u. Jackson, U. S. (1921) 174 Dane v. Treasurer & Receiver General, 236 Mass. 280 (1920) 174, 411 Dane v. Treasurer & Receiver General, 237 Mass. 50 (1921) 114, 174, 411 Danforth v. Williams, 9 Mass. 324 (1812) 283 Dallinger v. Davis, 149 Mass. 62 (1889) 246, 345 Darnell v. Indiana, 226 U. S. 390 (1912) 76 Darnell v. Memphis, 208 U. S. 113 (1908) 43 Da Silva v. Turner, 166 Mass. 407 (1896) 375 Davenport National Bank v. Davenport, 123 U. S. 83 (1887) 509 Davidson v. New Orleans, 96 U. S. 97 (1877) 60, 61, 62 Davidson u. Stafford, 210 Mass. 145 (1911) .. 363, 375, 376, 378, 379, 384, 412 Davies v. Boston, 190 Mass. 194 (1906) 5, 105 Davis v. Allen, 224 Mass. 551 (1916) 350 Davis v. Bay State League, 158 Mass. 434 (1893) 372 Davis v. Bean, 114 Mass. 358 (1874) 351, 743 Davis v. Bean, 114 Mass. 360 (1874) 743 Davis v. Boston, 129 Mass. 377 (1880) 230,308,309,351,385 Davis v. Macy, 124 Mass. 193 (1878) 344 Davis v. Rockport, 213 Mass. 279 (1913) 103, 107 Davis v. Treasurer & Receiver General, 208 Mass. 343 (1911) 620 Dawson v. Kentucky Distilleries etc. Co., 256 U. S. 288 (1921) 12, 14 Day v. Lawrence, 167 Mass. 371 (1897) 89, 93, 211 Deane v. Hathaway, 136 Mass. 129 (1883) 58, 192, 308 DeGanay v. Lederer, 250 U. S. 376 (1919) 74 Delaware etc. R. R. Co. v. Pennsylvania, 198 U. S. 341 (1905) 37, 69, 72 Delaware Railroad Tax, 18 Wall. 206 (1873) 28, 37, 44, 70 Denham v. Bristol County Commissioners, 108 Mass. 202 (1871) 102, 708 Derumple v. Clark, Quincy 38 (1763) 233 Desmond v. Babbitt, 117 Mass. 233 (1875) .'. 227, 228 Dewey v. Des Moines, 173 U. S. 193 (1899) 86, 685 Dewey v. Donovan, 126 Mass. 335 (1879) 385 Dexter v. Boston, 176 Mass. 247 (1900) 125, 127, 405, 687, 689, 701, 709, 711, 714, 719 Diamond Match Co. v. Ontonagon, 188 U. S. 96 (1903) 44 Dickinson v. Billings, 4 Gray 42 ( 1855) 316 Dickinson v. Boston, 188 Mass. 595 (1905) 104 Dickinson v. Brookline, 181 Mass. 195 (1902) 222 Dickinson v. Fitchburg, 13 Gray 546 (1859) 673 Dickinson v. Worcester, 138 Mass. 555 (1885) 125, 722 Dillingham v. Snow, 5 Mass. 547 (1809) 216, 314 Dingley v. Boston, 100 Mass. 544 (1868) 103, 730 Doane v. Eldridge, 16 Gray 254 (1860) 327 Dobbins v. Erie County, 16 Pet. 435 (1842) 49 Dodge v. Woolsey, 18 How. 331 (1855) 26, 29 Dollar Savings Bank v. United States, 19 Wall. 227 (1873) ll| 59 Donelson v. Colerain, 4 Met. 430 (1842) '397 Dorgan v. Boston, 12 Allen 223 (1866) 89, 118, 119, 122, 669 xxx Taxation in Massachusetts [Citations are to Pages] Dow v. Abbott, 197 Mass. 283 (1908) 631, 638, 641, 643, 644 Dow v. First Parish in Sudbury, 5 Met. 73 (1842) 224, 401 Dow v. Wakefield, 103 Mass. 267 (1869) 114, 117 Downer v. Boston, 7 Cush. 277 (1851) 122, 125, 709 Downey v. Lancy, 178 Mass. 465 (1901) 359 Dozier v. Alabama, 218 U. S. 124 (1910) 36, 39 Draper v. Hatfield, 124 Mass. 53 (1878) 223, 224, 225, 319 Draper v. Mayor of Fall River, 185 Mass. 142 (1904) 148, 722 Driscoll v. Northbridge, 210 Mass. 151 (1911) 674, 694, 695, 715, 718 Dudley v. Jamaica Pond Aqueduct Co., 100 Mass. 183 (1868) 242, 247 Duffy v. Treasurer & Receiver General, 234 Mass. 42 (1919) 17, 18, 91, 113, 114, 174, 411, 435 Duggan v. Peabody, 187 Mass. 349 (1905) 5 Dunbar v. Aldermen of Boston, 101 Mass. 317 ( 1869) 190 Dunbar v. Boston, 112 Mass. 75 (1873) 335, 398, 406, 408 Dunham v. Lowell, 200 Mass. 468 (1909) 227, 285, 321, 343, 347, 405 Dunlap v. Bullard, 131 Mass. 161 (1881) 234 Dunn v. Mayor of Taunton, 200 Mass. 252 ( 1908) 710 Dunn v. Trefry, 260 Fed. Rep. 147 (1919) 499 Dunnell Manufacturing Co. v. Pawtucket, 7 Gray 277 (1856) .... 228, 290, 530 Durant v. Eaton, 98 Mass. 469 (1868) 316 Duus v. Brown, 245 U. S. 176 (1917) 32 Duxbury v. Plymouth County Commissioners, 172 Mass. 383 (1899) 248 Dwight v. Mayor & Aldermen of Boston, 12 Allen 316 (1866) 55, 56, 73, 74, 76, 562 Dwight v. Springfield Centre Fire District, 11 Met. 374 (1846) 163, 562 Dyer v. Melrose, 197 Mass. 99 (1908) 49 Dyer v. Melrose, 215 U. S. 594 (1909) 49 Eames v. Johnson, 4 Allen 382 (1862) 316, 397 Earle v. Commonwealth, 180 Mass. 579 (1902) 107, 108 East Saginaw Salt Mfg. Co. v. East Saginaw, 13 Wall. 373 (1871) 27 East Tennessee etc. R. R. Co. v. Hamblen County, 102 U. S. 273 (1880) .. 28 Eaton, Crane & Pike Co. v. Commonwealth, 237 Mass. 523 (1921) 4, 14, 18, 436, 758 Edwards v. Karzey, 96 U. S. 595 (1877) 25 Egremont v. Benjamin, 125 Mass. 15 (1878) 327 Eidman v. Martinez, 184 U. S. 578 (1902) 78 Eisner v. Macomber, 232 U. S. 189 (1920) 435 Elder v. Wood, 208 U. S. 226 (1908) 47 Eldridge v. Norfolk County Commissioners, 185 Mass. 186 (1904) 753 Embree v. Kansas City Road District, 240 U. S. 242 (1916) 125 Emerson v. Milton Academy, 185 Mass. 414 (1904) 200 Emert v. Missouri, 156 U. S. 296 (1895) 35, 43 Emery v. Emery, 218 Mass. 227 (1914) 222 Emmons v. Shaw, 171 Mass. 410 (1898) 622 Enfield v. Woods, 212 Mass. 547 (1912) .' 273 English v. Richardson, 224 U. S. 680 (1912) 27 Equitable Life Assurance Society v. Pennsylvania, 238 U. S. 143 (1915) ... 84 Equitable Trust Co. v. Kelsey, 209 Mass. 416 (1911) 227, 345, 369, 370, 371, 749 Erie R. R. Co. v. Pennsylvania, 21 Wall. 492 (1874) 27, 28 Essex v. Brooks, 164 Mass. 79 (1895) 619, 645, 655 Essex Board v. Shinkle, 140 U. S. 334 (1891) 115 Essex Co. v. Lawrence, 214 Mass. 79 (1913) . . 191, 218, 268. 269, 292, 297, 582 Evangelical Baptist etc. Society v. Boston, 192 Mass. 412 (1906) 216 Table of Cases xxxi [Citations are to Pages] Evangelical Baptist etc. Society v. Boston, 204 Mass. 28 (1910) 194, 205 Evansville National Bank v. Britton. 105 U. S. 322 (1881) 509, 510 Fairbanks v. Mayor and Aldermen of Fitchburg, 132 Mass. 42 (1882) 124, 688, 690, 710 Fallbrook Irrigation District v. Bradley, 164 U. S. 112 (1896) 60 Fall River v. Bristol County Commissioners, 125 Mass. 597 (1878) 191, 208, 532 Fargo v. Hart, 193 U. S. 490 (1904) 71 Farmers' etc. Insurance Co. v. Dobbins, 189 U. S. 301 (1903) 53 Farmers' etc. Savings Bank v. Minnesota, 232 U. S. 516 (1914) ........ 47, 49 Farmington River Water Power Co. v. Berkshire Countv Commissioners, 112 Mass. 206 (1873) 191 Farncomb v. Denver, 252 U. S. 7 (1920) 128 Farnsworth v. Boston, 121 Mass. J73 (1876) 308, 683, 684, 711 Farnum v. Buffum, 4 Cush. 260 (1849) 353, 354, 377 Farr Alpaca Co. v. Commonwealth, 212 Mass. 156 (1912) 48, 542 Farrington v. Tennessee, 95 U. S. 679 (1877) 27, 57 Faulkner v. Sisson, 183 Mass. 524 (1903) 148 Faulkner v. Tax Commissioner, 229 Mass. 120 (1918) 469 Faxon v. Wallace, 98 Mass. 44 (1867) * . . . . 376 Faxon v. Wallace, 101 Mass. 444 (1869) 376 Federal Trust Co. v. Bristol County St. Ry. Co., 218 Mass. 367 (1914) ... 357 Feehan v. Tax Commissioner, 237 Mass. 169 (1921) 222, 224, 436 Felker v. Standard Yarn Co., 148 Mass. 226 (1889) 11, 343 Ficklen v. Shelby County Taxing District, 145 U. S. 21 (1892) 36 Fidelity etc. Co. v. Pennsylvania, 240 U. S. 319 (1916) 50 Fidelity etc. Trust Co. v. Louisville, 245 U. S. 54 (1917) .... 56, 73, 75, 77, 78 Field v. Clark, 143 U. S. 649 (1892) 16 Field v. Hawley, 126 Mass. 327 (1879) 377 Fifty Associates v. Boston, 201 Mass. 585 (1909) 673 Finlay v. Boston, 196 Mass. 267 (1907) 150, 410 Firemen's Fire Ins. Co. v. Commonwealth, 137 Mass. 80 (1884) 230, 540, 581 First Parish in Sherburne v. Fiske, 8 Cush. 264 (1851) 157, 317 First Universalist Society v. Bradford, 185 Mass. 310 (1904) 205, 619 Fisher & Co., Re, 148 Fed. Rep. 907 (1906) . . : 346 Fisk v. Chester, 8 Gray. 506 (1857) 224, 225 Fisk v. Springfield, 116 Mass. 88 (1874) 149 Fiske v. Huntington, 179 Mass. 571 (1901) 110 Fiske v. Needham, 11 Mass. 452 (1814) 401 Flagg v. Flagg, 16 Gray 175 (1860) 103 Flanders v. Cross, 10 Cush. 514 (1852) 190 Flax Pond Water Co. v. Lynn, 147 Mass. 31 (1888) 227, 229 Flint v. Aldermen of Boston, 99 Mass. 141 (1868) 51, 510 Flint v. Stone Tracy Co., 220 U. S. 107 (1911) 13, 14, 36, 58, 101, 605 Flood v. Leahy, 183 Mass. 232 (1903) 112 Florida Central etc. R. R. Co. v. Reynolds, 183 U. S. 471 (1902) 53, 54, 65 Flynn, Re, 134 Fed. Rep. 145 (1905) 346 Foley v. Haverhill, 144 Mass. 352 (1887) 687, 689, 691 Foote v. Cotting, 195 Mass. 55, 63 (1907) 372, 374 Foote v. Salem, 14 Allen 87 (1867) 107, 113 Forbes v. Gracey, 94 U. S. 762 (1876) 47 Forest River Lead Co. v. Salem, 165 Mass. 193 (1896) 409 Forster v. Forster, 129 Mass. 559 (1880) 68, 354, 355 Fort Smith Lumber Co. v. Arkansas, 251 IT- S. 532 (1920) 53 Foster v. Boston, 215 Mass. 31 (1913) 249 Foster v. Park Commissioners, 131 Mass. 225 (1881) 688 xxxii Taxation in Massachusetts [Citations are to Pages] Foster v. Park Commissioners, 133 Mass. 321 (1882) 122, 676 Foster v. Pryor, 189 U. S. 325 (1903) ' 47 Franklin Square House v. Boston, 188 Mass. 409 (1905) 199, 200 Frederickson v. Louisiana, 23 How. 445 (1859) 32 Freeland v. Hastings, 10 Allen 570 (1865) .... 108, 109, 112, 113, 114, 149, 254 Freeman v. Kenney, 15 Pick. 44 (1833) 315 French v. Barber Asphalt Paving Co., 181 U. S. 324 (1901) 125, 130 French v. Jones, 191 Mass. 522 (1906) 247 French v. Lowell, 117 Mass. 363 (1875) 673 French v. Quincy, 3 Allen 9 (1861) 103, 107, 113 Friend v. Gilbert, 108 Mass. 408 (1871) 109, 113 Frost v. Belmont, 6 Allen 152 (1863) 112, 149, 150 Frothingham v. Shaw, 175 Mass. 59 (1899) 75, 81, 616 Fuller v. Day, 103 Mass. 481 (1870) 335, 337, 345 Fuller v. Fuller, 228 Mass. 441 (1917) 331, 359 Fuller v. Groton, 11 Gray 340 (1858) 109 Fuller v. Melrose, 1 Allen 166 (1861) 149 Fuller v. Somerville, 136 Mass. 556 (1884) 678 Furman v. Nichol, 8 Wall. 44 (1868) 24 Gage v. Currier, 4 Pick. 399 (1826) 315 Galena v. Amy, 5 Wall. 705 (1866) 25 Gallup v. Schmidt, 183 U. S. 300 (1902) 60 Galveston etc. Railway Co. v . Texas, 210 U. S. 217 (1908) 37, 45, 71 Gannett v. Cambridge, 218 Mass. 60 (1914) ' 306 Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914) 122, 145, 146, 207, 349, 356, 384, 386, 675, 676 Gardiner v. Brookline, 181 Mass. 162 (1902) 222, 223, 225 Gardiner v. Street Commissioners, 188 Mass. 223 (1905) 691 Gardiner v. Treasurer & Receiver General, 225 Mass. 355 (1916) .... 83, 616, 623 Gardner v. Boston, 106 Mass. 549 (1871) 694, 701 Garvey v. Revere, 187 Mass. 545 (1905) 673 Gaskill v. Dudley, 6 Met. 546 (1843) • 410 General Oil Co. v. Crain, 209 U. S. 211 (1908) 44 George v. School District in Mendon, 6 Met. 497 (1843) 154, 252, 406 Gerry v. Stoneham, 1 Allen 319 (1861) 112, 147, 312 Gibbs v. Hampden County Commissioners, 19 Pick. 298 (1837) 297, 410 Gile v. Perkins, 207 Mass. 172 (1911) 252, 317 Giozza v. Tiernan, 148 IT. S. 662 (1893) 53 Gladwin v. French, 112 Mass. 186 (1873) 385 Glazier v. Everett, 224 Mass. 184 (1916) 363 Gleason v. McKay, 134 Mass. 419 (1883) 89,90,97,99 Gleason v. Wood, 224 U. S. 679 (1912) 27 Glidden v. Harrington, 189 U. S. 258 (1903) 62, 64 Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196 (1885) 35, 38, 41 Goddard v. Lowell, 179 Mass. 496 (1901) 148 Goddard, Petitioner, 16 Pick. 504 (1835) 130, 727, 730 Godbold v. Chelsea, 111 Mass. 294 (1873) 672, 679 Goldman v. Tax Commissioner, 230 Mass. 554 (1918) 441, 458 Goldsbury v. Warwick, 112 Mass. 384 (1873) 508 Goldsmith v. Prendergast Construction Co., 252 U. S. 12 (1920) 125 Goldsmith-Grant Co. v. United States, 254 U. S. 505 (1921) 66 Goodrich v. Edwards, 255 U. S. 527 (1921) 435, 456 Goodrich v. Lunenburg, 9 Gray 38 (1857) 147, 312 Gordon v. Appeal Tax Court, 3 How. 133 (1845) 26, 27 Gordon v. Sanderson, 165 Mass. 375 (1896) 210, 286, 302, 410 Table of Cases xxxiii [Citations are to Pages] Gould v. Gould, 245 U. S. 151 (1918) 18 Grace v. Newton Board of Health, 135 Mass. 490 (1883) 128, 687, 688, 730, 731 Granby v. Amherst, 7 Mass. 1 (1810) 223, 239 Grand Lodge v. New Orleans, 166 U. S. 143 (1897) 27 Gray v. Aldermen of Boston, 139 Mass. 328 (1885) 710 Gray v. Boston, 15 Pick. 376 (1834) 192 Gray v. Lenox, 215 Mass. 598 (1913) 78, 238 Gray v. Portland Bank, 3 Mass. 364 (1807) 401 Gray v. Street Commissioners of Boston, 138 Mass. 414 (1885) 192 Great Barrington v. Austin, 8 Gray 444 (1857) 326 Great Barrington v. Berkshire Co. Com'ers, 16 Pick. 572 (1835) 55, 74, 76, 562 Great Barrington v. Berkshire County Commissioners, 112 Mass. 218 (1873) 260, 290 Green v. Fall River, 113 Mass. 262 (1873) 673, 679 Green v. Frazier, 253 U. S. 233 (1920) 102, 106 Green County v. Connors, 109 U. S. 104 (1883) 28 Greenfield v. Franklin County Commissioners, 135 Mass. 566 (1883) 216, 259, 293 Greenfield Savings Bank v. Commonwealth, 211 Mass. 207 (1912) 520 Greenfield & Turner's Falls St. Ry. Co. v. Greenfield, 187 Mass. 352 (1905) 588 Greenhood v. McDonald, 183 Mass. 342 (1903) 386, 409, 687 Greves v. Shaw, 173 Mass. 205 (1899) 82, 617, 632 Gromer v. Standard Dredging Co., 224 U. S. 362 ( 1912) 50 Groveland v. Medford, 1 Allen 23 (1861) 104 Gulf etc. R. R. Co. v. Hewes, 183 U. S. 66 (1901) 28, 29, 30 Gundling v. Chicago, 177 U. S. 183 (1900) 6, 7 Guy v. Baltimore, 100 U. S. 439 (1879) 34, 43 H. P. Hood & Sons v. Commonwealth, 235 Mass. 572 (1920) . . 46, 85, 434, 757 Hadsell v. Hancock, 3 Gray 526 (1855) 109 Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884) 61, 62, 188 Hale v. Hampshire County Commissioners, 137 Mass. Ill (1884) 193 Hale v. Henkel, 201 U. S. 43 (1906) 592 Hall v. Beebe, 223 Mass. 306 (1916) 614 Hall v. Cushing, 9 Pick. 395 (1830) 245 Hall v. Hall, 3 Allen 5 (1861) : 339, 398 Hall v. Middlesex County Commissioners, 10 Allen 100 (1865) 193, 251, 265, 292 Hall v. Staples, 166 Mass. 399 (1896) 686, 688, 731 Hall v. Street Com. of Boston, 177 Mass. 434 (1901) .... 124, 126, 709, 712, 714 Hallett v. Bassett, 100 Mass. 167 (1868) 222, 223 Hamilton Co. v. Massachusetts, 6 Wall. 632 (1867) 13, 49, 532, 538 Hamilton Manufacturing Co. v. Lowell, 185 Mass. 114 (1904) 191, 229, 243, 277 Hammett Co. v. Alfred Peats Co., 217 Mass. 520 (1914) 154, 237, 745 Hammond v. Lovell, 136 Mass. 184 (1883) 369 Hampshire v. Franklin, 16 Mass. 76 (1819) 113 Hancock v. Hazard, 12 Cush. 112 (1853) 326 Hancock v. Muskogee, 250 U. S. 454 (1919) 125 Hand v. Brookline, 126 Mass. 324 (1879) 5 Hanscom v. Lowell, 165 Mass. 419 (1896) 114 Hardy v. Waltham, 7 Pick. 108 (1828) 216 Hardy v. Yarmouth, 6 Allen 277 (1863) 246, 290, 409 Harman v. New Marlborough, 9 Cush. 525 (1852) 224, 225 Harrington v. Glidden, 179 Mass. 486 (1901) 64,342,344,404 Harrington v. Worcester, 6 Allen 576 (1863) 359, 364, 377 Harrison v. Dolan, 172 Mass. 395 (1899) 351 Hart v. Tax Commissioner, Mass. (1921) 434,437,484 xxxiv Taxation in Massachusetts [Citations are to Pages] Hartman v. Greenhow, 102 U. S. 672 (1880) 24 Harvard College v. Aid. of Boston, 104 Mass. 470 (1870) 118, 119, 216, 217, 676 Harvard College v. Assessors of Cambridge, 175 Mass. 145 (1900) 200 Harvard College v. Gore, 5 Pick. 370 (1827) 222 Harvard College v. Kettell, 16 Mass. 204 (1819) 195, 216 Harvey, Re, 122 Fed. Rep. 745 (1903) 346 Harwood v. Donovan, 188 Mass. 487 (1905) 688, 713 Harwood v. North Brookfield, 130 Mass. 561 (1881) 266, 291, 305, 404 Harwood v. Street Commissioners of Boston, 183 Mass. 348 (1903) .... 126, 680 Hatch v. Reardon. 204 U. S. 152 (1907) 33, 81, 84, 601 Hatfield v. King, 184 U. S. 162 (1902) 64 Hathaway v. Everett, 205 Mass. 246 (1910) 408 Haven v. Essex County Commissioners, 155 Mass. 467 (1892) 295 Haven v. Lowell, 5 Met. 35 (1842) 113 Hawkes v. Kennebeck, 7 Mass. 461 (1811) 410 Hawley v. Maiden, 204 Mass. 138 (1910) 74, 76 Hawley v. Maiden, 232 U. S. 1 (1914) 74, 76 Hawkridge v. Treasurer & Receiver General, 223 Mass. 134 (1916) 81, 618 Hawks v. Davis, 185 Mass. 119 (1904) 376 Hayden v. Foster, 13 Pick. 492 (1833) 276, 321, 343, 347, 350, 351 Hays v. Drake, 6 Gray 387 (1856) 159, 397 Hazen v. Essex Co., 12 Cush. 475 (1853) 103 Head v. Amoskeag Mfg. Co., 113 U. S. 9 (1885) 752 Head Money Cases, 112 U. S. 580 (1884) 9 Hefner v. Northwestern Mutual Life Insurance Co., 123 U. S. 747 (1887)... 67 Heine v. Levee Commissioners, 19 Wall. 655 (1873) 15, 67 Hemenway v. Milton, 217 Mass. 230 (1914) 19,79 Henderson v. Mayor of New York, 92 U. S. 259 (1875) 36 Henderson Bridge Co. v. Henderson, 173 U. S. 622 (1899) 43 Henderson Bridge Co. v. Kentucky, 166 U. S. 150 (1897) 37, 51 Hendrick v. Maryland. 235 U. S. 610 (1915) 5, 34 Hester v. Collector of Brockton, 217 Mass. 422 (1914) 124, 677, 703, 710, 715, 725 Hibben v. Smith, 191 U. S. 310 (1903) 62, 128 Hibernia Savings etc. Association v. San Francisco, 200 U. S. 310 (1908) ... 48 Hicks v. Westport, 130 Mass. 478 (1881) 240, 403 Higginson v. Boston, 212 Mass. 583 (1912) 115, 116, 149 Higginson v. Nahant, 11 Allen 530 (1866) 102 Hilbourne v. Suffolk, 120 Mass. 393 (1876) 673 Hildreth v. Lowell, 11 Gray 345 (1858) 103 Hill v. Bacon, 110 Mass. 387 (1872) 229, 351, 743 Hill v. Boston, 122 Mass. 344 (1877) 410 Hill v. Treasurer & Receiver General, 227 Mass. 331 (1917) 610, 614 Hill v. Treasurer & Receiver General, 229 Mass. 474 (1918) 18, 623 Hill v. Mowry, 6 Gray 551 (1856) 360, 377 Hilliard v. Fells Ice Co., 200 Mass. 331 (1909) 561 Hillis v. O'Keefe, 189 Mass. 139 (1905) '. 375, 376 Hingham & Quincy Bridge & Turnpike Co. v. Norfolk County, 6 Allen 353 (1863) 114, 117 Hitchcock v. Aldermen of Springfield, 121 Mass. 382 (1876) .... 677, 689, 707 Hittinger v. Boston, 139 Mass. 17 (1885) 241 Hittinger v. Westford, 135 Mass. 258 (1888) 240, 242 Hoadley v. Essex Co. Commissioners, 105 Mass. 519 (1870) 189, 193, 249, 444 Hodgdon v. Haverhill, 193 Mass. 327 (1907) 126, 146 Hodge v. Muscatine County, 196 U. S. 276 (1905) . . 6, 7, 10, 58, 61, 62, 68, 128 Hoge v. Richmond etc. R. R. Co., 99 U. S. 348 (1878) 15, 29 Table of Cases xxxv [Citations are to Pages] Holbrook v. Brown, 214 Mass. 542 (1913) 357, 384 Hollis v. Lynn, 237 Mass. 135 (1921) 298, 299 Holmes v. Greene, 7 Gray 299 (1856) 222 Holmes v. Taber, 9 Allen 246 (1864) 236 Holt v. City Council of Somerville, 127 Mass. 408 (1879) 103, 122, 129, 683, 684 Holt v. Weld, 140 Mass. 578 (1886) 364 Home Insurance Co. v. Augusta, 93 U. S. 116 (18/6) 25, 28 Home Insurance Co. v. New York, 134 U. S. 594 (1890) 36, 48, 49, 53 Home of the Friendless v. Rouse, 8 Wall. 430 (1869) 27, 29 Home Savings Bank v. Boston, 131 Mass. 277 (1881) 357, 361, 362, 369 Home Savings Bank v. Des Moines, 205 U. S. 503 (1907) 48 Hood v. Mayor & Aldermen of Lynn, 1 Allen 103 (1861) 112 Hood Rubber Co. v. Commonwealth, 238 Mass. 369 (1921) 738, 739 Hooker v. McLennan, 236 Mass. 117 (1920) 317 Hooper v. Bradford, 178 Mass. 95 (1901) 637 Hooper v. California, 155 U. S. 648 (1895) 35, 39 Hooper v. Shaw, 176 Mass. 190 (1900) 619, 637 Hopkins v. Reading, 170 Mass. 568 (1898) '. . 259, 289, 290 Horn Silver Mining Co. u..New York, 143 U. S. 305 (1892) 35, 39, 40 Houck v. Little River Drainage District, 239 U. S. 254 (1915) 3 Hough v. North Adams, 196 Mass. 290 (1907) W, 285, 561 Houghton v. Boston, 159 Mass. 138 (1893) 323 Howard v. Proctor, 7 Gray 128 (1856) 151, 281, 329, 331, 336, 397 Howard v. Stevens, 3 Allen 409 (1862) 316 Howe v. Boston, 7 Cush. 273 (1851) 403 Howe v. Cambridge, 114 Mass. 388 (1874) 118, 122, 126, 128 Howe v. Howe, 179 Mass. 546 (1901) 609, 630, 638, 640, 657, 661 Howe Machine Co. v. Cage, 100 U. S. 676 (1879) 35 Hubbard v. Garfield, 102 Mass. 72 (1869) 308, 397 Hubert v. New Orleans, 215 U. S. 170 (1909) 410 Hudson v. Miles, 185 Mass. 582 (1904) 327 Humphrey v. Peques, 16 Wall. 244 (1872) 15 Hunnewell v. Charlestown, 106 Mass. 350 (1871) 386,409 Hunt v. Boston, 183 Mass. 303 (1903) 67, 218, 350, 367 Hunt v. Holston, 185 Mass. 137 (1904) 331 Hunt v. Perry, 165 Mass. 287 (1896) 56, 79, 308, 472 Hunter v. Johnson, 209 U. S. 541 (1908) 61 Hunter v. Pittsburgh, 207 U. S. 161 (1907) 115 Hurd v. Melrose, 191 Mass. 576 (1906) 333, 356, 366 Hurley v. Hurley, 148 Mass. 444 (1889) 357, 373, 392 Hurter v. Larrabee, 224 Mass. 218 (1916) 249 Huse v. Amesbury Board of Health, 163 Mass. 240 (1895) 730 Huse v. Glover, 119 U. S. 543 (1886) 5, 23, 24, 34 Hussman v. Durham, 165 U. S. 144 (1897) 47 Hilton v. United States, 3 Dall. 171 (1796) 13 Illinois Central R. R. Co. v. Decatur, 147 U. S. 190 (1893) 675 Illinois Central R. R. Co. v. Kentucky, 218 U. S. 551 (1910) 59, 64 Inglee v. Bosworth, 5 Pick. 498 (1827) 147, 307, 315 Ingraham i>, Doggett, 5 Pick. 451 (1827) 315 Ingram v. Cowles, 150 Mass. 155 (1889) 241, 242, 344, 403 Inman Steamship Co. v. Tinker, 94 U. S. 243 (1876) 23 International Paper Co. v. Burrill, 260 Fed. Rep. 664 (1919) 500, 599 International Paper Co. v. Commonwealth, 228 Mass. 101 (1917) 42 International Paper Co. v. Commonwealth, 232 Mass. 7 (1919) 598 International Paper Co. v. Massachusetts, 246 U. S. 135 (1918) 38, 41, 42, 563 xxxvi Taxation in Massachusetts [Citations are to Pages] International Text-Book Co. v. Pigg, 217 U. S. 91 (1910) 39 Iowa v. Shimmer, 248 U. S. 115 (1918) 81 Isbell v. Greylock Mills, 231 Mass. 233 (1918) 358 J. L. Hammett Co. v. Alfred Peats Co., 217 Mass. 520 (1914) 154, 237, 745 J. S. Lang Engineering Co. v. Commonwealth, 231 Mass. 367 (1918) 519, 541, 542 Jackman v. School District in Salisbury, 5 Gray 413 (1855) 224 Jackson v. Phillips, 14 Allen 539 (1867) 198, 199 Janvrin v. Poole, 181 Mass. 463 (1902) 688 Jenkins v. Andover, 103 Mass. 94 (1869) 110 Jenkins v. Neff, 186 U. S. 230 (1902) 509 Jenks v. Liverpool, London & Globe Ins. Co., 206 Mass. 591 (1910) 376, 377 Jennings v. Coal Ridge Imp. etc. Co., 147 U. S. 147 (1893) 59 Jennings v. Collins, 99 Mass. 29 (1868) 229, 276, 308, 347, 350 Jennison v. Hapgood, 10 Pick. 77 (1830) 223 Jetton v. University of the South, 208 U. S. 489 (1908) 28, 67 Jewett v. Mayor of Medford, 233 Mass. 65 (1919) 677 Johnson v. Maryland, 254 U. S. 51 (1920) 47, 49 Johnson v. Mayor of Quincy, 198 Mass. 411 (1908) ■ 154 Johnson v. Mills, 10 Cush. 503 (1852) 327 Jones v. Aldermen of Boston, 104 Mass. 461 (1870) .... 122, 687, 688, 691, 695 Jones v. Arena Publishing Co., 171 Mass. 22 (1898) 345, 749 Jones v. Lancaster, 4 Pick. 149 (1826) 401 Jones v. Metropolitan Park Commissioners, 181 Mass. 494 (1902) 676, 688 Jones v. Portland, 245 U. S .217 (1917) 106 Jordan v. Jordan, 192 Mass. 337 (1906) 236 Joyner v. School District in Egremont, 3 Cush. 567 (1849) 311, 406 Judd v. Thompson, 125 Mass. 553 (1878) 316 Kallak, Matter of, 147 Fed. Rep. 276 (1906) 346 Kane v. New Jersey, 242 U. S. 160 (1916) 5, 34 Kansas City etc. R. R, Co. v. Botkin, 240 U. S. 227 (1916) 36, 37 Kansas City etc. R. R. Co. v. Stiles, 242 U. S 111, 118 (1916) 54 Kansas City Southern Ry. Co. v. Road Imp. Dist. U. S. (1921) 125 Kansas Pacific R. R. Co. v. Prescott, 16 Wall 603 (1872) 47 Kearns v. Cunniff, 138 Mass. 434 (1885) 229, 236 Keen v. Sheehan, 154 Mass. 208 (1891) 356 Keeney v. New York, 222 U. S. 525 (1912) 81, 607, 608 Kehrer v. Stewart, 197 U. S. 60 (1905) 36, 39, 42 Keith v. Boston, 120 Mass. 108 (1876) 125, 691, 695 Kelley v. Rhoads, 188 U. S. 1 (1903) 43, 44 Kelly v. Barton, 174 Mass. 396 (1899) 409 Kelly v. O'Rourke, 232 Mass. 168 (1919) 284, 356 Kelly v. Pittsburgh, 104 U. S. 78 (1881) 66 Kelso v. Boston, 120 Mass. 297 (1876) 686, 687, 689, 690 Kemp v. Kemp, 223 Mass. 32 (1916) 638 Kennedy v. Hodges, 215 Mass. 112 (1913) 81 Kentucky Railroad Tax Cases, 115 U. S. 321 (1885) 53, 60, 61, 62, 63 Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911) 6, 64, 65, 68 Keokuk etc. Bridge Co. v. Illinois, 175 U. S. 626 (1900) 37, 51 Keokuk & Western R. R. Co. v. Missouri, 152 U. S. 301 (1894) 28, 29, 30 Keokuk Northern Line Packet Co. v. Keokuk, 95 U. S. 80 (1877) 5, 23 Keough v. Aldermen of Holyoke, 156 Mass. 403 (1902) 328 Kerr v. Atwood, 188 Mass. 506 (1905) 339 Kerslake v. Cummings, 180 Mass. 65 (1901) 229, 367 Keystone Watch Case Co. v. Commonwealth, 212 Mass. 50 (1912) .... 41, 563 Kidd v. Alabama, 188 U. S. 730 (1903) 56, 73, 74, 76 Table of Cases xxxvii [Citations are to Pages] Kilburn v. Bennett, 3 Met. 199 (1841) 223, 225 King v. Mullins, 171 U. S. 401 (1898) 53, 64, 66 King v. United States, 99 U. S. 229 (1878) 59 King v. Whitcomb, 1 Met. 328 (1840) 282,330,337,398 Kingman v. Brockton, 153 Mass. 255 (1891) 108, 109 Kingman, Petitioner, 153 Mass. 566 (1891) 113, 114, 117 Kingman, Petitioner, 170 Mass. Ill (1898) 114 Kingsbury v. Chapin, 196 Mass. 533 (1907) 82, 83, 625, 638 Kinney v. Treasurer & Receiver Gen., 207 Mass. 368 (1911) 76, 80, 81, 616, 617 Kirkland v. Whately, 4 Allen 462 (1862) 222, 224 Kirtland v. Hotchkiss, 100 U. S. 491 (1879) 73, 74, 75 Kittredge v. North Brookfield, 138 Mass. 286 (1885) 105 Knight v. Boston, 159 Mass. 551 (1893) 55, 192, 231, 441 Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921) 20, 114, 116, 411, 435, 666, 758 Knowles v. Boston, 129 Mass. 551 (1880) 119, 407, 408 Knowlton v. Moore, 136 Mass. 32 (1883) 353, 359, 385 Knowlton v. Moore, 178 U. S. 41 (1900) 13, 606, 607 Koch v. Austin, 225 Mass. 215 (1916) 329,331,356 Lamson Cons. Store Service Co. v. Boston, 170 Mass. 354 (1898) 243, 266, 277, 561 Lancy v. Abington Savings Bank, 177 Mass. 431 (1901) 385 Lancy v. Boston, 186 Mass. 128 (1904) 218, 403, 740 Lancy v. Snow, 180 Mass. 411 (1902) 354, 356, 359 Lander v. Mercantile National Bank, 186 U. S. 458 (1902) 61, 63 Lane v. Richardson, 234 Mass. 403 (1920) 636,647,655 Lane County v. Oregon, 7 Wall. 71 (1868) 11, 15 Lanesborough v. Berkshire County Commissioners, 131 Mass. 424 (1881) 262, 290 Langdon v. Stewart, 142 Mass. 576 (1886) 359, 377 Langley v. Chapin, 134 Mass. 82 (1883) 67, 350, 359, 387 Larsen v. Dillenschneider, 235 Mass. 56 (1920) 276, 353, 360 Lawrence v. Kimball, 1 Met. 524 (1840) 316, 399 Lawrence v. McAlvin, 109 Mass. 311 (1872) 109 Lawrence v. Webster, 167 Mass. 513 (1897) 711, 731 Lawton Spinning Co. v. Commonwealth, 232 Mass. 28 (1919) 42 League v. Texas, 184 U. S. 156 (1902) 17, 65, 66, 68 Leavenworth R. R. Co. v. Lowe, 114 U. S. 525 (1885) 47 Leavitt v. Cambridge, 120 Mass. 157 (1876) 683, 684 Lee v. Boston, 2 Gray 484 (1854) 222, 223 Lee v . Lenox, 15 Gray 496 (1860) 224 Lee v. Templeton, 6 Gray 579 (1856) 250 Lee v. Templeton, 13 Gray 476 (1859) 406 Lehigh Valley R. R. Co. v. Pennsylvania, 145 U. S. 200 (1895) 40 Leigh v. Green, 193 U. S. 79 (1904) 61, 67 Leloup v. Mobile, 127 U. S. 645 (1888) 35, 38 Lent v. Tillson, 140 U. S. 316 (1891) 61 Leominster v. Conant, 139 Mass. 384 (1885) . . 282, 349, 398, 685, 686, 690 715 Leonard v. New Bedford, 16 Gray 292 (1860) 71, 189 Lever Bros. Co. v. Commonwealth, 232 Mass. 22 (1919) .. 9, 597, 598, 738, 739 Libby v. Buraham, 15 Mass. 144 (1818) 147, 256, 307, 314, 315 License Tax Cases, 5 Wall. 462 (1866) 8 Lincoln v. Chapin, 132 Mass. 470 (1882) 157, 317, 396 Lincoln v. Commonwealth, 164 Mass. 368 (1895) 350 Lincoln v. Street Com. of Boston, 176 Mass. 210 (1900) 124, 680, 687, 695, 713 Lincoln v. Worcester, 8 Cush. 55 (1851) 288, 296, 401, 403 xxxviii Taxation in Massachusetts [Citations are to Pages] Lincoln v. Worcester, 122 Mass. 119 (1877) 677, 695 Lindsay etc. Co. v. Mullen, 176 U. S. 126 (1900) 5, 34 Lionberger v. Rouse, 9 Wall. 468 (1869) 507, 512 Liquid Carbonic Co. v. Commonwealth, 232 Mass. 19 (1919) 42 Litchfield v. Webster County, 101 U. S. 773 (1879) 67 Little v. Cambridge, 9 Cush. 298 (1852) 249, 404 Little v. Greenleaf, 7 Mass. 236 (1810) 314 Little v. Holyoke, 177 Mass. 114 (1900) 5 Little v. Little, 131 Mass. 367 (1881) 164, 510 Little v. Merrill, 10 Pick. 543 (1830) 315 Little v. Newburyport, 210 Mass. 414 (1912) 199,201 Liverpool etc. Insurance Co. v. Orleans Board of Assessors, 221 U. S. 346 (1911) 74, 75, 76, 84 Liverpool Insurance Co. v. Massachusetts, 10 Wall. 566 (1870) 40 Loan Association v. Topeka, 20 Wall. 655 (1874) 3, 17, 102, 106 Locomobile Co. v. Commonwealth, 232 Mass. 16 (1919) 598 Locomobile Co. v. Massachusetts, 246 U. S. 146 (1918) 563 Lodge v. Swampscott, 216 Mass. 260 (1913) 227, 268 Lombard v. West Chicago Park Commissioners, 181 U. S. 33 (1901) .... 65, 124 Londoner v. Denver, 210 U. S. 373 (1908) 60, 61, 62, 128 Looney v. Crane Co., 245 U. S. 178 (1917) 39, 40, 42 Lorden v. Coffey, 178 Mass. 489 (1901) 125, 126, 680, 746 Loring v. Gardner, 221 Mass. 571 (1915) 623,636 Lothrop v. Ide, 13 Gray 93 (1859) 339, 398 Loud v. Charlestown, 99 Mass. 208 (1868) 386, 409 Loud v. Holden, 14 Gray 154 (1859) 345 Louisiana v. Jumel, 107 U. S. 711 (1882) 26 Louisiana v. Pilsbury, 105 U. S. 278 (1881) 25 Louisville v. Louisville Bank, 174 U. S. 439 (1899) 29 Louisville etc. Ferry Co., v. Kentucky, 188 U. S. 385 (1903) 69, 75, 77 Louisville etc. R. R. Co. v. Palmes, 109 U. S. 244 (1883) 28, 29 Louisville First National Bank v. Kentucky, 9 Wall. 353 (1869) 48, 512 Louisville Third National Bank v. Stone, 174 U. S. 432 (1899) 511 Louisville Water Co. v. Clark, 143 U. S. 1 (1892) 29 Low v. Austin, 13 Wall. 33 (1871) 21,35 Lowell v. Boston, 111 Mass. 454 (1873) 3, 17, 102, 104, 107, 120, 121, 130, 730, 752 Lowell v. French, 6 Cush. 223 (1850) 685, 722 Lowell v. Hadley, 8 Met. 180 (1844) 122, 125, 685, 722 Lowell v. Middlesex Co. Commissioners, 3 Allen 546 (1862) 291, 294, 296, 301 Lowell v. Middlesex County Commissioners, 6 Allen 131 (1863) 191 Lowell v. Middlesex County Commissioners, 146 Mass. 403 (1888) .... 292, 582 Lowell v. Middlesex Co. Commis., 152 Mass. 372 (1890) 191, 241, 277, 294, 297 Lowell v. Oliver, 8 Allen 247 (1864) 114 Lowell v. Street Commissioners of Boston, 106 Mass. 540 (1871) .... 58, 192 Lowell v. Wentworth, 6 Cush. 221 (1850) 685, 722 Lowell v. Wheelock, 11 Cush. 391 (1853) 685, 722 Lowell v. Wyman, 12 Cush. 273 (1853) 685 Ludwig v. Western Union Tel. Co., 216 U. S. 146 (1910) 42 Lunenburg v. Walter Heywood Chair Co., 118 Mass. 540 (1875) 359 Lyman v. Fiske, 17 Pick. 231 (1835) 221, 222, 319 Lynde v. Brown, 143 Mass. 337 (1887) 229 Lynde v. Maiden, 166 Mass. 244 (1896) 119, 361, 686, 722 Lynde v. Melrose, 10 Allen 49 (1865) 361 Lyng v. Michigan, 135 U. S. 161 (1890) 36, 39 Lynn Workingmen's Aid Association v. Lynn, 136 Mass. 283 (1884) 200 Table of Cases xxxix [Citations are to Pages] MacDonald v. Union Freight R. R. Co., 190 Mass. 123 (1906) 589 Mackall v. Chesapeake etc. Canal Co., 94 U. S. 308 (1876) 26 Mackay Tel. etc. Co. v. Little Rock, 250 U. S. 94 (1919) 34, 54 MacLeod v. United States, 229 U. S. 416 (1913) 15 Macomber v. Eisner, 252 U. S. 189 (1920) 443 Macy v. Nantucket, 121 Mass. 351 (1876) 409 Mager v. Grima, 8 How. 490 (1849) 32 Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283 (1898) 608 Maguire v. Tax Commissioner, 230 Mass. 503 (1918) 56, 79, 84, 467, 473, 474 Maguire v. Trefry, 253 U. S. 12 (1920) 56,84,473 Maine v. Grand trunk R. R. Co., 142 U. S. 217 (1891) .... 12, 37, 40, 45, 70 Maine Central R. R. Co. v. Maine, 96 U. S. 499 (1877) 29 Maish v. Arizona, 164 U. S. 599 (1896) 47 Maloy v. Holl, 190 Mass. 277 (1906) 682, 703, 746 Manson v. Felton, 13 Pick. 206 (1832) 239 Manufacturers' Insurance Co. v. Loud, 99 Mass. 146 (1868) 13, 49, 98, 532, 538 Marconi Wireless Tel. Co. v. Commonwealth, 218 Mass. 558 (1914) 36, 39, 41, 42, 43, 563 Market National Bank v. Belmont, 137 Mass. 407 (1884) 308, 351 Marshall v. New York, 254 U. S. 380 (1920) 66 Martin L. Hall Co. v. Commonwealth, 215 Mass. 326 (1913) 18 Marye v. Baltimore etc. R. R. Co., 127 U. S. 123 (1888) 43, 72 Mason v. Smith, 131 Mass. 510 (1881) 234 Masonic Building Association v. Brownell, 164 Mass. 306 (1895) 672, 690, 692 Masonic Education & Charity Trust v. Boston, 201 Mass. 320 (1909) 194, 199, 202, 581 Massachusetts v. Western Union Tel. Co., 141 U. S. 40 (1891) 41, 50, 51, 579 Massachusetts General Hospital v. Belmont, 233 Mass. 190 (1919) 94, 157, 201, 202, 203, 262. 267, 269, 295 Massachusetts General Hospital v. Belmont, 238 Mass. 396 (1921) 4, 94, 294 Massachusetts General Hospital v. Boston, 212 Mass. 20 (1912) 218, 744 Mass. Gen. Hospital v. Somerville, 101 Mass. 319 (1869) 191, 200, 276, 403 Massachusetts Mutual Life Insurance Co. v. Green, 185 Mass. 306 (1904) 374 Massachusetts Society for the Prevention of Cruelty to Animals v. Boston. 142 Mass. 24 (1886) 198, 199 Mattingly v. District of Columbia, 97 U. S. 687 (1878) 65 Maxwell v. Bugbee, 250 U. S. 625 (1919) 83 May v. New Orleans, 178 U. S. 496 (1900) 21 McCall v. California, 136 U. S. 109 (1890) 34 McCoach v. Minehill & Schuylkill Haven R. R. Co., 228 U. S. 295 (1913) 550 McConnell v. Kelley, 138 Mass. 372 (1885) 223 McCormick v. Cheevers, 124 Mass. 262 (1878) 747 McCray v. United States, 195 U. S. 27 (1904) 8, 14 McCulloch v. Maryland, 4 Wheat. 316 (1819) 15, 47, 48, 50, 51, 69 McCurdy v. McCurdy, 197 Mass. 248 (1908) 81, 618 McDaniel v. King, 5 Cush. 469 (1850) 222 McDonough v. Everett, 237 Mass. 378 (1921) 228, 348, 353 McGahey v. Virginia, 172 U. S. 102 (1890) 24 McGee v. Mathias, 4 Wall. 143 (1866) 26 McGee v. Salem, 149 Mass. 238 (1889) 191,335,337,345,406,407 McGoon v. Scales, 9 Wall. 23 (1869) 47 McLean v. Denver etc. R. R. Co., 203 U. S. 38 (1906) 9 McLoud v. Mackie, 175 Mass. 355 (1900) 229, 367 McMillen v. Anderson, 95 U. S. 37 (1877) 61,63,68 McNeil v. O'Brien, 204 Mass. 594 (1910) 363, 376, 378 xl Taxation in Massachusetts [Citations are to Pages] Meacham v. Fitchburg R. R. Co., 4 Cush. 291 (1849) 673 Mead v. Acton, 139 Mass. 341 (1885) 107, 108, 148, 149 Mead v. Boxborough, 11 Cush. 362 (1853) 222 Melcher v. Boston, 9 Met. 73 (1845) 50 Memphis City Bank v. Tennessee, 161 U. S. 186 (1896) 30 Memphis etc. R. R. Co. v. Gaines, 97 U. S. 697 (1878) 28, 29, 30 Memphis etc. R. R. Co. v. Railroad Commissioners, 112 U. S. 609 (1884) . 28 Memphis Gas Light Co. v. Shelby County Taxing District, 109 U. S. 398 (1883) 27 Mercantile Bank v. Tennessee, 161 U. S. 161 (1896) 28 Mercantile National Bank v. New York, 121 U. S. 138 (1887) 508, 509 Merchants Bank v. Cook, 4 Pick. 405 (1826) 410 Merchant's etc. Bank v. Pennsylvania, 167 U. S. 461 (1897) 61 Merchant's Loan & Trust Co. v. Smietanka, 255 U. S. 509 (1921) 435 Merchants National Bank v. Richmond, U.S. (1921) 509 Meredith v. United States, 13 Pet. 486 (1839) 11 Meriweather v. Garrett, 102 U. S. 472 (1880) 11, 15, 26, 115 Merrick v. Amherst, 12 Allen 500 (1866) 110, 113, 114 Merrimack River Savings Bank v. Lowell, 152 Mass. 556 (1891) 5 Metropolis Theatre Co. v. Chicago, 228 U. S. 61 (1913) 53 Metropolitan Life Insurance Co. v. Commonwealth, 198 Mass. 466 (1908) 524 Metropolitan Life Ins. Co. v. Ins. Commissioner, 208 Mass. 386 (1911) 522 Metropolitan Life Ins. Co. v. Ins. Commissioner, 220 Mass. 52 (1914) 523 Metropolitan Life Ins. Co. v. New Orleans, 205 U. S. 395 (1907) .... 69, 74, 76 Metropolitan Park Commissioners, Re, 209 Mass. 381 (1911) 115 Mexican Central Ry. Co. v. Commonwealth, 192 Mass. 129 (1906) 535 Meyer v. Wells, Fargo & Co., 223 U. S. 298 (1912) 42, 71 Michigan Cent. R. R. Co. v. Powers, 201 U. S. 245 (1906) .. 16, 53, 61, 62, 70 Middlesex Railroad Co. v. Charlestown, 8 Allen 330 (1864) 403, 531 Milford v. Worcester Co. Com'ers., 213 Mass. 162 (1912) 19, 194, 199, 207, 295 Milford Water Co. v. Hopkinton, 192 Mass. 491 (1906) 207, 217, 285, 290, 581 Millard v. Roberts, 202 U. S. 429 (1906) 101 Miller v. Fitchburg, 180 Mass. 32 (1901) 217, 220 Milligan v. Drury, 130 Mass. 428 (1881) 190, 235 Miner v. Pingree, 110 Mass. 47 (1872) 227 Minneapolis etc. R. R. Co. v. Gardner, 177 U. S. 332 (1900) 29 Minot v. Joy, 118 Mass. 308 (1875) • 234 Minot v. Treas. & Receiver General, 207 Mass. 588 (1911) 99, 607, 622, 623 Minot v. West Roxbury, 112 Mass. 1 (1873) 103, 112 Minot v. Winthrop, 162 Mass. 113 (1894) 8, 14, 89, 98, 99, 100, 606, 607, 608, 620, 629 Missouri v. Dockery, 191 U. S. 165 (1903) 54 Mitchell v. Green, 10 Met. 101 (1845) 383 Mitchell v. Leavenworth County, 91 U. S. 206 (1875) 48, 49 Mitton v. Treasurer & Receiver General, 229 Mass. 140 (1918) 641, 642 Mobile v. Watson, 116 U. S. 289 (1886) 25, 115 Mobile etc. R. R. Co. v. Tennessee, 153 U. S. 486 (1894) 26 Moffitt v. Kelly, 218 U. S. 400 (1910) 607, 622 Molly Varnum Chapter, D. A. R. v. Lowell, 204 Mass. 487 (1910) ' 199 Monson v. Palmer, 8 Allen 551 (1864) : 225 Monterey v. Jacks, 203 U. S. 360 (1906) 115 Moody v. Newburyport, 3 Met. 431 (1841) 317 Moody v. Shaw, 173 Mass. 375 (1899) 82, 625 Moore v. Sanford, 151 Mass. 285 (1890) 103 Moore v. Tax Commissioner, 237 Mass. 574 (1921) 447 Moors v. Street Commissioners of Boston, 134 Mass. 431 (1883) .... 265, 292 Table of Cases xli [Citations are to Pages] Moors v. Treasurer & Receiver General, 237 Mass. 254 (1921) 640, 641, 642 Moran v. New Orleans, 112 U. S. 69 (1884) 35 Morgan v. Louisiana, 93 U. S. 217 (1876) 28 Morgan's Steamship Co. v. Louisiana Board of Health, 118 U. S. 455 (1886) 3, 9, 24, 36 Morris Canal etc. Co. v. Baird, 239 U. S. 126 (1915) 28 Morrison v. Berkshire Loan & Trust Co., 229 Mass. 519 (1918) 635 Morrison v. Hass, 229 Mass. 514 (1918) 635 Morse v. Lowell, 7 Met. 152 (1843) 397 Morse v. Stocker, 1 Allen 150 (1861) 120, 708, 724 Morse v. Street Commissioners of Boston, 197 Mass. 292 (1908) . . 124, 691, 746 Mt. Auburn Cemetery v. Cambridge, 150 Mass. 12 (1889) .. 207, 217, 676, 715 Mt. Hermon Boys' School v. Gill, 145 Mass. 139 (1887) 200 Mount Hope Cemetery v. Boston, 158 Mass. 509 (1893) 115 Mount Pleasant v. Beckwith, 100 U. S. 514 (1879) 25 Mountain Timber Co. v. Washington, 243 U. S. 219 (1917) 4 Moynihan v. Todd, 188 Mass. 301 (1905) 335 Murphy v. Clinton, 182 Mass. 198 (1902) 158, 685, 686 Murray v. Berkshire Life Insurance Co., 104 Mass. 586 (1870) 508, 531 Murray v. Charleston, 96 U. S. 432 (1877) 24, 75 Murray's Lessee v. Hoboken Land etc. Co., 18 How. 272 (1855) 66, 750 Mutual Benefit Life Ins. Co. v. Commonwealth, 227 Mass. 63 (1917) 20, 57, 451, 522 Nashville etc. R. R. Co. v. Alabama, 128 U. S. 96 (1888) 9 Nathan v. Louisiana, 8 How. 73 (1849) 15, 22, 33 Natick & Cochituate Street Ry. Co. v. Wellesley, 207 Mass. 514 (1911).. 588 National Bank of Commerce v. New Bedford, 155 Mass. 313 (1892) 267, 292, 294, 299, 510, 511, 514, 537 National Bank of Commerce v. New Bedford, 175 Mass. 257 (1900) 267, 268, 295, 298, 510, 537 National Bank of Commerce v . Seattle, 166 U. S. 463 (1897) 509 National Bank of Redemption v. Boston, 125 U. S. 60 (1888) 509 National Fireproofing Co. v. Revere, 217 Mass. 63 (1914) . . 265, 269, 292, 294 Needham v. Morton, 146 Mass. 476 (1888) 284 Neff v. Wellesley, 148 Mass. 487 (1899) 5 Nelson v. Milford, 7 Pick. 18 (1828) 109 Neuert, v. Boston, 120 Mass. 338 (1876) 5 New England Hospital v. Boston, 113 Mass. 518 (1873) 201 New England Hospital v. Street Commissioners of Boston, 188 Mass. 88 (1905) 122, 681 New England Sanitarium v. Stoneham, 205 Mass. 335 (1910) 199, 202 New England Sanitarium v. Stoneham, 233 Mass. 171 (1919) 202 New England Theosophical Corporation v. Boston, 172 Mass. 60 (1898).. 199 New England Trust Co. v. Abbott, 205 Mass. 279 (1910) 615 New England Trust Co. v. White, 224 Mass. 332 (1916) 661 New Jersey v. Anderson, 203 U. S. 483 (1906) 3, 6, 11, 67, 346 New Jersey v. Wilson, 7 Cranch 164 (1812) 26, 27 New Jersey v. Yard, 95 U. S. 104 (1877) 29 New Jersey Central R. R. Co. v. Jersey City, 209 U. S. 473 (1908) 15 New Orleans v. Houston, 119 U. S. 265 (1886) 57, 74, 76 New Orleans v. Stempel, 175 U. S. 309 (1899) 74, 76, 77 New Orleans v. Water Works Co., 142 U. S. 79 (1891) 115 New Orleans etc. R. R. Co. v. New Orleans, 143 U. S. 192 (1892) 27 New York v. Barker, 179 U. S. 279 (1900) ". 55 New York v. Cook, 148 U. S. 397 (1893) 28, 29 xlii Taxation in Massachusetts [Citations are to Pages] New York v. Knight, 192 U. S. 21 (1904) 33 New York v. Reardon, 204 U. S. 142 (1907) 53 New York v. Roberts, 171 U. S. 658 (1898) 44 New York v. State Board of Tax Commissioners, 199 U. S. 1 (1905) .... 27, 53 New York v. Tax etc. Commissioners, 4 Wall. 244 (1866) 48, 508, 510 New York v. Tax etc. Commissioners, 104 U. S. 466 (1881) 22 New York v. Weaver, 100 U. S. 539 (1879) 509 New York Bank v. New York County, 7 Wall. 30 (1868) 48 New York Central R. R. Co. v. Miller, 202 U. S. 584 (1906) 72 Ne.7 York etc. R. R. Co. v. Pennsylvania, 158 U. S. 431 (1895) 44 New York Trust Co. v. Eisner, U.S. (1921) 13 Newburyport v. Davis, 209 Mass. 126 (1911) 326, 327 Newburyport v. Essex Co. Com., 12 Met. 211 (1846) .. 183, 264, 265, 291, 296 Newburyport v. Fidelity Insurance Co., 197 Mass. 596 (1908) 397 Newburyport v. Spear, 204 Mass. 146 (1910) 397 Newcomb v. Paige, 224 Mass. 516 (1916) 79 Newcomb v. Wallace, 112 Mass. 25 (1873) 351 Newell v. Hadley, 206 Mass. 335 (1910) 374 Nicchia v. New York, 254 U. S. 228 (1920) 12 Nichol v. Ames, 173 U. S. 509 (1899) 13 Nickerson v. Boston, 131 Mass. 306 (1881) 129, 730 Nickerson v. Hyde Park, 209 Mass. 365 (1911) 391 Norcross v. Milford, 150 Mass. 237 (1889) 403 Norfolk etc. R. R. Co. v. Pennsylvania, 136 U. S. 114 (1890) 34, 39 Norfolk etc. R. R. Co. v. Sims, 191 U. S. 441 (1903) 35, 36, 39 Norris v. Boston, 4 Met. 282 (1842) 9, 36 North Dakota v. Hanson, 215 U. S. 515 (1910) 52 North Missouri R. R. Co. v. Maguire, 20 Wall. 46 (1873) 27 Northampton v. Hampshire County Com., 145 Mass. 108 (1887) ... 89,90 Northampton Bridge Case, 116 Mass. 442 (1875) 114, 117 Northern Massachusetts "St. Ry. Co. v. Westminster, 227 Mass. 547 (1917) 248 Northern Pacific R. R. Co. v. Meyers, 172 U. S. 589 (1899) 47 Northwestern Life Ins. Co. v. Wisconsin, 247 U. S. 132 (1918) 54 Northwestern Union Packet Co. v. St. Louis, 100 U. S. 423 (1879) 23, 34 Norton v. Boston, 119 Mass. 194 (1875) 386, 409, 687 Norwich v. Hampshire County Commissioners, 13 Pick. 60 (1832) 113, 114, 117 Norwich & Worcester R. R. Co. v. Worcester County Commissioners, 151 Mass. 69 (1890) 740 Norwood v. Baker, 172 U, S. 269 (1898) 125 Noyes v. Hale, 137 Mass. 266 (1884) 266, 272, 277, 281, 305, 306, 405 Noyes v. Haverhill, 11 Cush. 338 (1853) 337, 401 Nute v. Boston Co-operative Building Co., 149 Mass. 465 (1889) 724 Nutting v. Massachusetts, 183 U. S. 553 (1902) 33 Oakham v. Hall, 112 Mass. 535 (1873) 228, 308, 309, 364 O'Callaghan v. Lancy, 187 Mass. 474 (1905) ' 384 O'Connell v. First Parish in Maiden, 204 Mass. 118 (1910) 126, 709, 715, 746, 747 O'Day v. Bowker, 143 Mass. 59 (1886) 375, 384, 385 Ohio Ins. etc. Co. v. Debolt, 16 How. 416 (1853) 28 Ohio Tax Cases, 232 U. S. 576 (1914) 7, 45, 53, 57 O'Keeffe v. Somerville, 190 Mass. 110 (1906) 89, 97, 99, 100 Oklahoma v. Wells, Fargo & Co., 223 U. S. 298 (1912) 40 Oklahoma Rv. Co. v. Severus Paving Co., 251 U. S. 104 (1919) 128 Old Col. Trust Co. v. Commonwealth, 220 Mass. 409 (1915) . . 517, 518, 519, 569 Old Colony Trust Co. v. Treasurer & Receiver General, Mass. (1921) 11, 637, 696 Table of Cases xliii [Citations are to Pages] Old Dominion Co. v. Commonwealth, 237 Mass. 269 (1921) 39, 564 Old Dominion Steamship Co. v. Virginia, 198 U. S. 299 (1905) 43, 69, 71, 590 Old South Association v. Boston, 212 Mass. 299 (1912) 216 Old South Society v. Boston, 127 Mass. 378 (1879) 206 Oliver v. Colonial Gold Co., 11 Allen 283 (1865) 596 Oliver v. Gale, 182 Mass. 39 (1902) 148 Oliver v. Liverpool & London Life and Fire Ins. Co., 100 Mass. 531 (1868) 14, 99, 525 Oliver v. Lynn, 130 Mass. 143 (1881) 249, 404 Oliver w. Washington Mills, 11 Allen 268 (1865) 30, 89, 97, 100, 532 Olympia Theatres, Inc. v. Commonwealth, 238 Mass. 374 (1921) 739 Onachita Packet Co. v. Aiken, 121 U. S. 444 (1887) 23, 34 Ontario Land Co. v. Yordy, 212 U. S. 152 (1909) 59 Opinion of the Justices, 7 Mass. 523 (1811) 188 Opinion of the Justices, 1 Met. 580 (1840) 47 Opinion of the justices, 18 Pick. 575 (1836) 304 Opinion of the Justices, 5 Met. 587 (1843) 187, 223, 224 Opinions of the Justices, 126 Mass. 547 (1781) 101 Opinion of the Justices, 126 Mass. 557 (1878) 101 Opinion of the Justices, 150 Mass. 592 (1890) 104, 106 Opinions of the Justices, 155 Mass. 598 (1892) 106 Opinion of the Justices, 160 Mass. 586 (1894) 16 Opinion of the Justices, 166 Mass. 589 (1896) 108 Opinion of the Justices, 175 Mass. 599 (1900) 109 Opinion of the Justices, 182 Mass. 605 (1903) 104, 106 Opinion of the Justices, 186 Mass. 603 (1904) 107, 108 Opinion of the Justices, 190 Mass. 611 (1906) 107, 108 Opinion of the Justices, 195 Mass. 607 (1908) 12, 55, 89, 90, 92, 93, 94, 194, 208, 211, 220, 431 Opinion of the Justices, 196 Mass. 603 (1908) 14, 89, 98, 99, 100, 600 Opinion of the Justices, 204 Mass. 607 (1910) 104, 106, 111 Opinion of the Justices, 208 Mass. 619 (1911) 5, 12, 89, 90, 98, 107 Opinion of the Justices, 211 Mass. 608 (1912) 108,759 Opinion of the Justices, 211 Mass. 624 (1912) 104, 106, 111 Opinion of the Justices, 214 Mass. 598 (1913) 110 Opinion of the Justices, 220 Mass. 613 (1915) 12, 14, 89, 90, 94, 98, 99, 431, 454 Opinion of the Justices, 229 Mass. 601 (1918) 18 Opinion of the Justices, 231 Mass. 603 (1919) 103, 105, 123 Opinion of the Justices, 234 Mass. 612 (1920) 113, 115 Orient Insurance Co. v. Orleans Board of Assessors, 221 U. S. 358 (1911) 76 Origet v. Hedden, 155 U. S. 228 (1894) 61 Orleans Board of Assessors v. N. Y. Life Ins. Co., 216 U. S. 517 (1910).. 76, 442 Orr v. Gilman, 183 U. S. 278 (1901) 608, 619 Osborn v. Danvers, 6 Pick. 98 (1828) 402 Osborne v. Florida, 164 U. S. 650 (1897) 42 Osborne v. Mobile, 16 Wall. 33 (1871) 35 Osgood v. Tax Commissioner, 235 Mass. 88 (1920) 18, 456. 457 Osterberg v. Union Trust Co., 93 U. S. 424 (1876) 67 Otis v. Boston, 12 Cush. 44 (1853) 223 Otis Co. v. Ware, 8 Gray 509 (1857) 259, 289, 294 Owensboro National Bank v. Owensboro, 173 U. S. 664 (1899) 57, 507, 510, 511 Pacific Express Co. ». Seibert, 142 U. S. 339 (1892) 40, 45, 53 Pacific Gas etc. Co. v. Sacramento, 251 U. S. 22 (1919) 130 Pacific R. R. Co. v. Maguire, 20 Wall. 36 (1873) 26 xliv Taxation in Massachusetts [Citations are to Pages] Page v. Melrose, 186 Mass. 361 (1904) 285, 293, 299 Paine v. Woods, 108 Mass. 160 (1871) 673 Palfrey v. Boston, 101 Mass. 329 (1869) 48, 50, 52 Palmer v. Kelleher, 111 Mass. 320 (1873) 248 Palmer v. McMahon, 133 U. S. 660 (1890) 62, 66, 128, 509, 510 Palmer v. Treasurer & Receiver General, 222 Mass. 263 (1915) 615 Palmer Co. v. Ferrill, 17 Pick. 58 (1835) 673 Parke v. Boston, 175 Mass. 464 (1900) 713 Parker v. Baxter, 2 Gray 185 (1854) 227, 350 Parkersburg etc. Transp. Co. v. Parkersburg, 107 U. S. 691 (1882) 5, 23, 34 Parkhurst v. Ginn, 228 Mass. 159 (1917) 636 Parkhurst v. Treasurer & Receiver General, 228 Mass. 196 (1917) 620 Parks v. Hampden, 120 Mass. 395 (1876) 673 Parsons v. District of Columbia, 170 U. S. 45 (1898) 60 Parsons v. Goshen, 11 Pick. 396 (1831) 112 Parsons v. Lenox, 228 Mass. 231 (1917) ." 291 Parsons v. Worcester, 234 Mass. 108 (1919) 710 Passavant v. United States, 148 U. S. 214 (1893) 61 Patapsco Guano Co. v. Board of Agriculture, 171 U. S. 350 (1898) .... 21, 22 Patton v. Brady, 184 U. S. 608 (1902) 14, 25 Patton v. Springfield, 99 Mass. 627 (1868) 710 Paul v. Chickering, 117 Mass. 265 (1875) 234 Paul v. Virginia, 8 Wall. 101 (1868) 31 Payson v. Tufts, 13 Mass. 493 (1816) 239 Peabody v. Boston Elevated Ry. Co., 191 Mass. 513 (1906) 673, 674 Peabody v. Essex County Commissioners, 10 Gray 97 (1857) 250 Peabody v. Treasurer & Receiver General, 215 Mass. 129 (1913) 80, 617 Pearmain v. Mass. Hospital Life Insurance Co., 206 Mass. 377 (1910) .. 370 Pease v. Smith, 24 Pick. 122 (1834) 317 Pease v. Whitney, 8 Mass. 93 (1811) 315 Peette v. Morgan, 19 Wall. 582 (1873) 24 Pejepscut Proprietors v. Ransom, 14 Mass. 145 (1817) 348 Pelton v. Commercial National Bank, 101 U. S. 143 (1879) 509 Pembina etc. Mining Co. v. Pennsylvania, 125 U. S. 181 (1888) .... 35, 38, 40 People v. Compagnie Generale Transatlantique, 107 U. S. 59 (1882) 21, 22, 36 People v. Squire, 145 U. S. 175 (1892) 9 People v. The Commissioners, 4 Wall. 244 (1866) 48, 508, 510 Perkins v. Westwood, 226 Mass. 268 (1917) 9,89,97,99,431 Perry v. Lancy, 179 Mass. 183 (1901) 356, 359, 375, 376, 377, 378 Peterson v. Iowa, 245 U. S. 170 (1917) 32 Phelon v. Granville, 140 Mass. 386 (1886) 159, 282 Phelps v. Creed, 231 Mass. 228 (1918) 350, 386 Phi Beta Epsilon Corporation v. Boston, 182 Mass. 457 (1903) 199 Philadelphia etc. Ass'n. v. New York, 119 U. S. 110 (1886) 40 Philadelphia etc. R. R. Co. v. Maryland, 10 How. 425 (1850) 28 Philadelphia etc. Steamship Co. v. Pennsylvania, 122 U. S. 326 (1887).. 37, 45 Phillips Academy v. Andover, 175 Mass. 118 (1900) 105, 119, 122, 146, 200, 675 Phinney v. Foster, 189 Mass. 182 (1905) 191, 233, 235, 371 Phoenix Insurance Co. v. Tennessee, 161 U. S. 174 (1896) 27 Picard v. East Tennessee etc. R. R. Co., 130 U. S. 637 (1889) 28 Pickard v. Pullman Southern Car Co., 117 U. S. 46 (1886) 35, 38 Pickering v. Cambridge, 144 Mass. 244 (1887) 224,225 Pierce v. Benjamin, 14 Pick. 356 (1833) 336,337,398 Pierce v. Boston, 3 Met. 520 (1842) , 396 Pierce v. Cambridge, 2 Cush. 611 (1849) 200 Pierce v. Eddy, 152 Mass. 594 (1891) 240, 241, 344 Table of Cases xlv [Citations are to Pages] Pierce v. Stevens, 205 Mass. 219 (1910) 620 Pingree v. Berkshire County Commissioners, 102 Mass. 76 (1869) 191, 260 Pittsburgh etc. Coal Co. v. Bates, 156 U. S. 584 (1895) 44 Pittsburgh etc. Railway Co. v. Backus, 154 U. S. 421 (1894) ..'.. 60, 63, 70, 71 Pittsburgh etc. Railway Co. v. Board of Public Works, 172 U. S. 32 (1898) 62 Piqua Bank v. Knoop, 16 How. 369 (1853) 26, 27 Pixley v. Pixley, 164 Mass. 335 (1895) 359 Piatt v. Glover, 136 Mass. 115 (1883) 348 Plummer v. Coler, 178 U. S. 115 (1900) 13, 49, 608, 619 Plunkett v. Old Colony Trust Co., 233 Mass. 471 (1919) 606 Plymouth v. Wareham, 126 Mass. 475 (1879) 252 Plympton v. Boston Dispensary, 106 Mass. 544 (1871) 236 Poindexter v. Greenhow, 114 U. S. 270 (1884) 24 Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429 (1895) 3, 12, 13, 14, 605 Pollock v. Farmers' Loan & Trust Co., 158 U. S. 601 (1895) 13, 605 Pond v. Negus, 3 Mass. 230 (1807) 307 Pope v. Halifax, 12 Cush. 410 (1853) 149 Portage Co. Supervisors v. Wis. Cen. R. R. Co., 121 Mass. 460 (1877) 105 Porter v. Norfolk County Commissioners, 5 Gray 365 (1855) 261, 288, 289, 296 Portland Bank v. Apthorp, 12 Mass. 252 (1815) 14, 89, 92, 96, 97, 98, 100, 506, 529 Postal Tel. Cable Co. v. Adams, 155 U. S. 688 (1895) 44, 45 Postal Tel. Cable Co. v. Baltimore, 156 U. S. 210 (1895) 34 Postal Tel. Cable Co. v. Charleston, 153 U. S. 692 (1894) 39 Postal Tel. Cable Co. v. Chicopee, 207 Mass. 341 (1911) 9, 34 Postal Tel. Cable Co. v. Fremont, 255 U. S. 124 (1921) 42 Postal Tel. Cable Co. v. Taylor, 192 U. S. 64 (1904) 9, 34 Powers v. Radding, 225 Mass. 110 (1916) 360 Powers v. Worcester, 210 Mass. 471 (1912) 58, 192, 290 Pratt v. Street Commissioners of Boston, 139 Mass. 555 (1885) 535 Preble v. Baldwin, 6 Cush. 549 (1850) 744 Preston v. Boston, 12 Pick. 7 (1831) 401, 403, 404, 406 Prevost v. Greeneaux, 19 How. 1 (1856) 32 Priestley v. Treasurer & Receiver General, 230 Mass. 452 (1918) 80, 617, 618 Prince v. Boston, 111 Mass. 226 (1872) 118, 124, 129, 679, 687, 695 Prince v. Boston, 148 Mass. 285 (1889) 149 Prince v. Crocker, 166 Mass. 347 (1896) 105, 114, 149, 150 Prince & Walter, Re, 131 Fed. Rep. 546 (1904) 346 Prout v. Pittsfield Fire District, 154 Mass. 450 (1891) 163 Providence Bank v. Billings, 4 Pet. 514 (1830) 27 Providence Institution for Savings v. Boston, 101 Mass. 575 (1869) 89, 90, 91, 168, 253, 508 Provident etc. Assurance Society v. Kentucky, 239 U. S. 103 (1915) ... 69, 84 Provident Institution v. Massachusetts, 6 Wall. 611 (1867) 13, 48, 49, 53, 517 Provident Institution v. Jersey City, 113 U. S. 506 (1885) 67 Pullman Co. v. Adams, 189 U. S. 420 (1903) 42 Pullman Co. v. Kansas, 216 U. S. 56 (1910) 41, 42 Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18 (1891) 44, 70, 71, 72 Putnam v. Johnson, 10 Mass. 488 (1913) 222 Putnam v. Middeborough, 209 Mass. 456 (1911) 78 Quincy v. Jackson, 113 U. S. 332 (1885) 17 Quinn v. Cambridge, 187 Mass. 507 (1905) ; 677 Quinn v. James, 174 Mass. 23 (1899) 731 Quinn v. Mayor and Aldermen of Springfield, 233 Mass. 595 (1919) 680 Ralls County Court v. United States, 105 U. S. 733 (1881) 17, 25 Rand v. Robinson, 11 Cush. 289 (1853) 375,377 xlvi Taxation in Massachusetts [Citations are to Pages] Ratterman v. Western Union Tel. Co., 127 U. S. 411 (1888) 40, 45 Rawson v. Spencer, 113 Mass. 40 (1873) 337,397 Raymond v. Chicago Traction Co., 207 U. S. 20 (1907) .' 55 Raymond v. Worcester, 172 Mass. 205 (1898) 237 Rayner v. Commissioner of Taxation, Mass. (1921) 436,759 Reardon v. New York, 204 U. S. 152 (1907) '. . . 74,77 Rearick v. Pennsylvania, 203 U. S. 507 (1906) '36 Red C. Oil Mfg. Co. v. N. C. Board of Agriculture, 222 U. S. 380 (1912) 9 Redemptorist Fathers v. Boston, 129 Mass. 178 (1880) 19,194,206 Reed v. Crapo, 127 Mass. 39 (1879) 357, 359 Rees v. Watertown, 19 Wall. 107 (1873) 15 Revere v. Boston, 123 Mass. 375 (1877) 508 Reynolds v. New Salem, 6 Met. 340 (1843) 272,281 Rice v. Bradford, 180 Mass. 545 (1902) 620 Rich v. Packard National Bank, 138 Mass. 527 (1885) 164, 507, 510 Rich v. Tuckerman, 121 Mass. 222 (1876) 344 Richardson v. Boston, 148 Mass. 508 (1889) 11, 229, 321, 343, 347, 403, 744 Richardson v. Gordon, 188 Mass. 279 (1905) 235 Richmond v. Ames, 164 Mass. 467 (1895) 743 Richmond v. Bird, 249 U. S. 174 (1918) 67 Richmond v. Southern etc. Tel. Co., 174 U. S. 761 (1899) 34 Ricker v. American Loan & Trust Co., 140 Mass. 346 (1885) 226, 249, 250, 531 Ricker v. Brooks, 155 Mass. 400 (1892) 342, 345 Riddle v. Proprietors of the Locks and Canals, 7 Mass. 169 (1810) 401 Rising v. Granger, 1 Mass. 47 (1804) 321 Rising Sun Street Lighting Co. v. Boston, 181 Mass. 211 (1902) 243 Robbins v.' Shelby County Taxing District, 120 U. S. 493 (1887) 35, 39 Roberts v. Welsh, 192 Mass. 278 (1906) 228,276,360 Robinson v. Richardson, 13 Gray 454 (1859) 592 Rochester R. R. Co. v. Rochester, 205 U. S. 236 (1907) 28 Rogers v. Cambridge, 227 Mass. 378 (1917) 362 Rogers v. French, 214 Mass. 337 (1913) 399 Rogers v. Gookin, 198 Mass. 434 (1908) 310,311,343 Rogers v. Hennepin County, 240 U. S. 184 (1916) 57,75,76 Rogers v. Lynn, 200 Mass. 354 (1909) 375, 387 Rogers v. Nichols, 186 Mass. 440 (1904) 68, 378 Rogers v. Rutter, 11 Gray 410 (1858) , 375, 385 Rosenblatt v. Johnston, 104 U. S. 462 (1881) 511 Rossire v. Boston, 4 Allen 57 (1862) : . . . . 218, 227, 230, 335, 408 Roxbury v. Nickerson, 114 Mass. 544 (1874) 685 Rovall v. Virginia, 116 U. S. 572 (1886) 6 Rovster Guano Co. v. Virginia, 253 U. S, 412 (1920) 54 Rural Cemetery v. Worcester Co. Com'ers., 152 Mass. 408 (1890) . . 194, 206, 216 Russell v. Deshon, 124 Mass. 342 (1878) 385 Ryan v. Boston, 118 Mass. 248 (1875) 672 S. S. White Dental Mfg. Co. v. Commonwealth, 212 Mass. 35 (1912) 41, 563 Salem v. Eastern R. R. Co., 98 Mass. 431 (1868) 129, 730 Salem v. Lynn, 13 Met. 544 (1847) 225 Salem etc. Bridge Co. v. Essex Countv, 100 Maas. 282 (1868) 114, 117 Salem Iron Factory v. Danvers, 10 Mass. 514 (1813) .... 56, 57, 93. 208, 530 Salem Lyceum v. Salem, 154 Mass. 15 (1891) 200 Salem Marine Society v. Salem, 155 Mass. 329 (1892) 201, 205 Salisbury Beach Associates v. Assessors of Salisbury, 225 Mass. 399 (1917) 310 Salisburv Beach Associates v. Behan, Land Court (1920) 372 Salmond v. Hanover, 13 Allen 119 (I860) 403 Table of Cases xlvii [Citations are to Pages] San Francisco National Bank v. Dodge ; 197 U. S. 70 (1905) 509 Sands v. Manistee River Imp. Co., 123 U. S. 288 (18S7) 5 Sandwich v. Fish, 2 Gray 298 (1854) 273, 326, 327 Sanford v. Sanford, 135 Mass. 314 (1883) 354 Santa Clara County v. Southern Pacific R. R. Co., 118 U. S. 394 (1886) .... 60 Sargent v. Bean, 7 Gray 125 (1856) 227,333 Sargent v. Herrick, 221 U. S. 404 (1911) 47 Sargent v. Pray, 117 Mass. 267 (1875) 234, 235 Sault Ste. Marie v. International Transit Co., 234 U. S. 333 (1914) 39 Savage v. Jones, 225 U. S. 501 (1912) 9 Savannah etc. R. R. Co. v. Savannah, 198 U. S. 392 (1905) 27, 53 Savary v. School District in Georgetown, 4 Gray 254 (1878) 164 Savings etc. Society v. Multnomah County, 169 U. S. 421 (1898) .... 75, 76 Sawyer v. Mackie, 149 Mass. 269 (1889) 228, 237 Saxton r. Nimms, 14 Mass. 315 (1817) 315 Savles v. Pittsfield Board of Public Works, 222 Mass. 93 (1915) 123, 126 Scholey v. Rew, 23 Wall. 331 (1874) 13 Schwartz v. Boston, 151 Mass. 226 (1890) 277.312,349,403 Scituate v. Weymouth, 108 Mass. 128 (1871) 114, 117 Scollard v. American Felt Co., 194 Mass. 127 (1907) 71, 85, 395, 561 Scollard v. Edwards, 194 Mass. 77 (1907) 345 Scottish Union etc. Ins. Co. v. Bowland, 196 U. S. 611 (1905) .. 49. 68, 74, 76 Sears v. Aldermen of Boston, 173 Mass. 71 (1899) 105, 122, 125, 126, 145, 691, 714 Sears v. Assessors of Nahant, 205 Mass. 558 (1910) 266, 288, 296, 297, 298, 306, 499 Sears v. Assessors of Nahant, 208 Ma«s. 208 (1911) 64. 298, 410 Sears v. Boston, 1 Met. 250 (1840) 223 Sears v. Mayor and Aldermen of Worcester, 180 Mass. 288 (1902) 688 Sears v. Nahant, 215 Mass. 329 (1913) ... 78, 156, 245, 246, 262. 290, 300, 305 Sears v. Nahant, 221 Mass. 435 (1915) 336,404 Sears v. Nahant, 221 Mass. 437 (1915) 64. 260, 290, 291 Sears v. Nahant, 248 U. S. 542 (1918) 64 Sears v. Street Com. of Boston, 173 Mass. 350 (1899) .. 122, 125, 128, 712, 713 Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902) 105, 120, 122, 123, 124, 125, 674, 680 Seattle v. Kelleher, 195 U. S. 356 (1904) 124 Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906) 60, 61, 62 Seibert v. Lewis, 122 U. S. 284 (1877) 25 Selliger v. Kentucky, 213 U. S. 200 (1909) 73 Seton Hall College v. South Orange, 242 U. S. 100 (1916) 27 Sewall v. Jones, 9 Pick. 412 (1830) 18 Seward v. Revere Water Co., 201 Mass. 453 (1909) 149 Sexton v. North Bridgewater, 1 16 Mass. 200 (1874) 671, 672 Shaffer v. Carter, 252 U. S. 37 (1920) 4, 46, 84, 85, 434 Shaw v. Becket, 7 Cush. 442 (1851) 401, 408 Sheehan v. Fitchburg, 131 Mass. 523 (1881) CS7, 689, 690 Sherman v. Tobey, 3 Allen 7 (1871) 753 Sherman v. Torrey, 99 Mass. 472 (1868) 158, 341, 397, 398 Sherwin v. Boston Five Cents Sav. Bk. 137 Mass. 444 (1884) 321, 343, 347, 351 Sherwin v. Wigglesworth. 129 Mass. 64 (1880) 47 Shields v. Ohio, 95 U. S. 319 (1877) 29 Shotwell v. Moore, 129 U. S. 590 (1889) 49 Shurtleff v. Potter, 206 Mass. 286 (1910) 329,353,356 Silva v. Turner, 166 Mass. 407 (1896) 369, 370 Simonds v. Towne, 4 Grav 603 (1855) 385 Simonds v. Turner, 120 Mass. 328 (1876) 119, 698 xlviii Taxation in Massachusetts [Citations are to Pages] Simplex Electric Heating Co. v. Commonwealth, 227 Mass. 225 (1917) 542, 543 Sinclair v. Mayor of Fall River, 198 Mass. 248 (1908) 5 Singer Mfg. Co. v. Essex County Commissioners, 139 Mass. 266 (1885) 561 Sinnot v. Davenport, 22 How. 239 (1859) 35 Sioux City St. Ry. Co. v. Sioux City, 138 U. S. 98 (1891) 29 Skilton v. Roberts, 129 Mass. 306 (1880) 370 Slaughter House Cases, 16 Wall. 97 (1872) 38 Sleeper v. Nicholson, 201 Mass. 110 (1909) 745 Sleeper v. Paige, 15 Gray 349 (1860) 223 Slocum v. Boston, 129 Mass. 567 (1880) 362 Slocum v. Brookline, 163 Mass. 23 (1895) 716 Smith v. Abington Savings Bank, 165 Mass. 285 (1896) 119, 745 Smith v. Abington Savings Bank, 171 Mass. 178 (1898) 703, 710, 716, 743, 746 Smith v. Alabama, 124 U. S. 465 (1888) 9 Smith v. Boston, 194 Mass. 31 (1907) 127, 405, 687, 689, 690, 701, 713 Smith v. Carney, 127 Mass. 179 (1879) 692, 747 Smith v. Gloucester, 201 Mass. 329 (1909) 5 Smith v. Kansas City Title & Trust Co., 255 U. S. 180 (1921) 49 Smith v. Keniston, 100 Mass. 172 (1868) 158, 394, 398 Smith v. Lincoln, 170 Mass. 488 (1898) 103 Smith v. Mayor and Aldermen of Worcester, 182 Mass. 232 (1902) 125, 126, 709 Smith v. Northampton Bank, 4 Cush. 1 (1849) 243 Smith v. Smith, 150 Mass. 73 (1889) 385, 386 Smith v. Turner, 7 How. 412 (1849) 36 Snow v. Clark, 9 Grav 190 (1857) 339 Snow v. Fitchburg, 136 Mass. 179 (1883) 126, 686, 694, 709 Snow v. Rice, 207 Mass. 331 (1911) 698, 699 Snyder v. Bettman, 190 U. S. 249 (1903) 608 Society for Savings v. Coite, 6 Wall. 594 (1867) 36, 49 Sohier v. Eldredge, 108 Mass. 345 (1869) 636 Soliah v. Heskin, 222 U. S. 522 (1912) 17 Solis v. Williams, 205 Mass. 350 (1910) 68, 228, 357, 384, 385 Somerville v. Dickerman, 127 Mass. 272 (1879) 118, 668 Somerville v. Waltham, 170 Mass. 160 (1898; ! 217 South Congregational Meeting House v. Lowell, 1 Met. 538 (1840) 205 Southampton v. Easthampton, 8 Pick. 380 (1829) 188 Southern Pacific Co. v. Kentucky, 222 U. S. 63 (1911) 72, 590 Southern Ry. Co. v. Greene, 216 U. S. 400 (1910) 43, 54 Southern Steamship Co. v. Portwardens, 6 Wall. 31 (1867) 23, 24 Southwestern Oil Co. v. Texas, 217 U. S. 114 (1910) 53 South worth v. Edmands, 152 Mass. 203 (1890) 229,349,355,367 Spauding v. Lowell, 23 Pick. 71 (1839) 103, 104, 106, 112 Spaulding v. Peabody, 153 Mass. 129 (1891) 104, 112 Spencer v. Jones, 6 Grav 502 ( 1856) 151 Spencer v. Merchant, 125 U. S. 345 (1888) 15, 60, 65 Spinney v. Lynn, 172 Mass. 464 (1899) 71,189,404 Sprague v. Bailev, 19 Pick. 436 (1837) 154, 252, 272, 397, 405 Spreckels Sugar Refining Co. v. McClain, 192 U. S. 397 (1904) 14 Spring v. Cambridge, 199 Mass. 1 (1908) 360,361 Spring v. Cambridge, 212 Mass. 296 (1912) 362 Springer v. United States, 102 U. S. 586 (1880) 13, 14, 66 Springfield v. Gav, 12 Allen 612 (1866) 125, 709 Springfield v. Springfield St, Ry. Co., 182 Mass. 41 (1902) 588 St. Clair County v. Interstate etc. Transfer Co., 192 U. S. 454 (1904) 35 St. James Educational Institute v. Salem. 153 Mass. 185 (1891) .... 199, 403 St. Louis v. United R. R. Co., 210 U. S. 266 (1908) 27 Table of Cases xlix [Citations are to Pages] St. Louis v. Western Union Tel. Co., 148 U. S. 92 (1893) 5, 34 St. Louis v. Western Union Tel. Co., 149 U. S. 465 (1893) 34 St. Louis etc. R. R. Co. v. Berry, 113 U. S. 465 (1885) 29 St. Louis etc. Ry. Co. v. Missouri, U. S. (1921) 44, 70 St. Louis Southwestern R. R. Co. v. Arkansas, 235 U. S. 350 (1914) 4, 42, 55, 57 St. Paul etc. R. R. Co. v. Todd County, 142 U. S. 282 (1892) 30 Standard Oil Co. v. Graves, 249 U. S. 389 (1919) 35 Stanton v. Baltic Mining Co., 240 U. S. 103 (1916) 14 Stark v. Boston, 180 Mass. 293 (1902) 122, 125, 127, 128, 146, 404 State v. Stoll, 17 Wall. 425 (1873) 24 State Board of. Assessors v. Comptoir Nationale D'Escompte, 191 U. S. 388 (1903) 74,76 State Freight Tax Case, 15 Wall. 232 (1872) 34 State Railroad Tax Cases, 92 U. S. 575 (1875) 53, 63, 70 State St. Trust Co. v. Treasurer & Receiver General, 209 Mass. 373 (1911) 615 State Tax on Foreign Held Bonds, 15 Wall. 300 (1872) 3. 69, 74, 75, 76 State Tonnage Tax Cases, 12 Wall. 204 (1870) 23, 590 Stearns v. Brookline, 219 Mass. 238 (1914) 249 Stearns v. Minnesota, 179 U. S. 223 (1900) 26 Steele v. Municipal Signal Co., 160 Mass. 36 (1894) 150 Stetson v. Kempton, 13 Mass. 271 (1816) 112, 147, 314, 315, 400 Stevens v. Bradford, 185 Mass. 439 (1904) 630, 661 Stevens v. Cohen, 170 Mass. 551 (1898) 369, 370 Stinson v. Boston, 125 Mass. 348 (1878) 250 Stinson v. Crosby, 180 Mass. 296 (1902) 235 Stockard v. Morgan, 185 U. S. 37 (1902) 36, 39 Stone v. Littlefield, 151 Mass. 485 (1890) 236 Stone v. New England Box Co., 216 Mass. 8 (1913) 227 Stone v. Street Commissioners of Boston, 192 Mass. 297 (1906) 124 Stone v. Tax Commissioner, 235 Mass. 93 (1920) 457 Stoughton v. Cambridge, 165 Mass. 251 (1896) 222, 223 Stoutenburgh v. Hennick, 129 U. S. 141 (1889) 17 Stryker v. Goodnow, 123 U. S. 527 (1887) 47 Sturgis v. Carter, 114 U. S. 511 (1885) 65, 76 Sudbury v. Heard, 103 Mass. 543 (1870) 155, 272, 343 Suffolk Savings Bank, Petitioner, 149 Mass. 1 (1889) 56, 517 Suffolk Savings Bank, Petitioner, 151 Mass. 103 (1890) 516 Sullivan v. Ashfield, 227 Mass. 24 (1917) 19, 194, 211, 223, 240, 403 Sullivan v. Boston, 198 Mass. 119 (1908) 229, 232, 264, 349, 403, 405 Sullivan v. Kidd, 254 U. S. 533 (1921) 32 Sullivan v. Mandell, 212 Mass. 174 (1912) 713, 714, 746 Summer v. First Parish in Dorchester, 4 Pick. 361 (1826) 401 Sunday Lake Iron Co. v. Wakefield, 247 U. S. 350 (1918) 54 Sunderland Bridge Case, 122 Mass. 459 (1877) 114 Susquehanna Coal Co. v. South Amboy, 228 U. S. 665 (1913) 44 Swan v. Emerson, 129 Mass. 289 (1880) 369, 370, 371, 744 Swarts v. Hammer, 194 U. S. 441 (1904) 50, 346 Sweetser v. Hay, 2 Gray 49 (1854) 327 Sweetser v. Manning, 200 Mass. 378 (1909) 193, 206, 231, 441 Swett v. Boston, 18 Pick. 123 (1836) 19 Swigart v. Baker, 229 U. S. 187 (1913) 122 Sylvester v. Webb, 179 Mass. 236 (1901) 150 Taber v. New Bedford, 135 Mass. 162 (1883) 687,688,689 Taft v . Montague, 14 Mass. 281 (1817) 401 Taintor v. Mayor & Aldermen of Cambridge, 197 Mass. 412 (1908) 683 1 Taxation in Massachusetts [Citations are to Pages] Talbot . v. Hudson, 16 Gray 417 (1860) 103, 752 Talbot v. Janson, 3 Dall. 133 ( 1795) 15 Talbott v. Silver Bow County, 139 U. S. 438 (1891) 508 Tappan v. Street Commissioners of Boston, 193 Mass. 498 (1907) 713 Tash v. Adams, 10 Gush. 252 (1852) 112, 149 Tax Commissioner v. Putnam, 227 Mass. 522 (1917) 14, 434, 435, 442, 443, 447, 455, 456, 472, 488 Taylor v. Mayor and Aldermen of Haverhill, 192 Mass. 287 (1906) .. 715, 717 Tennessee v. Whitworth, 117 U. S. 129 (1886) 28, 56 Thayer v. Boston, 19 Pick. 511 (1837) 401 Thayer v. Boston, 124 Mass. 132 (1878) 222. 223, 224, 319 Thayer v. Boston, 206 Fed. Rep. 969 (1913) 131 Thayer v. Stearns, 1 Pick. 109 (1822) 315 Thayer Academy v. Braintree, 232 Mass. 402 (1919) . . 200, 202, 298, 3C0, 407, 408 Third Congregational Soc. v. Springfield, 147 Mass. 396 (1888) 19, 194, 205, 230 Thomas v. Gay, 169 U. S. 264 (1898) 44, 47, 113 Thomas v. United States, 192 U. S. 363 (1902) 13, 14 Thompson v. Allen County, 115 U. S. 550 (1885) 410 Thomson v. Union Pacific R. R. Co., 9 Wall. 579 (1869) 51 Thorndike v. Boston, 1 Met. 242 (1840) 223, 225 Tibbets v. Leeson, 148 Mass. 102 (1888) 743, 744 Tileston v. Street Commissioners of Boston, 182 Mass. 325 (1902) .. 687, 691 Tilson v. Thompson, 10 Pick. 359 (1835) 360, 377 Tilton v. Tax Commissioner, Mass. (1921) 442 Tippecanoe Countv Commissioners v. Lucas, 93 U. S. 108 (1876) 115 Tobey v. Kip, 214" Mass. 477 (1913) 240, 344 Tobey v. Wareham, 2 Allen 594 (1861) 266, 272, 273, 277, 405 Tobin v. Gillespie, 152 Mass. 219 (1890) 237 Todd v. Lunt, 148 Mass. 322 (1889) 360 Tomlinson v. Branch, 15 Wall. 460 (1872) 28 Tomlinson v. Jessup, 15 Wall. 454 (1872) 27, 29 Torrey v. Millbury, 21 Pick. 64 (1838) 272, 311, 405 Torrey v. Wallis, 3 Cush. 442 (1849) 685, 698, 699 Towne v. Eisner, 245 U. S. 418 (1918) 443 Townsend v. Wallcutt, 3 Met. 152 (1841) 340 Transportation Co. v. Wheeling, 99 U. S. 273 (1878) 15 Trask v. Maguire, 18 Wall. 391 (1873) 28, 30 Travellers' Insurance Co. v. Connecticut, 185 U. S. 371 (1902) 31 Travis v. Yale & Towne Mfg Co., 252 U. S. 60 (1920) r 85, 434 Treadwell v. Boston, 123 Mass. 23 (1877) 695 Treat v. White, 181 U. S. 264 (1901) 14 Tremont Bank v. Boston, 1 Cush. 142 (1848) 57, 228, 506, 530 Tremont & Suffolk Mills v. Lowell, 163 Mass. 283 (1895) 90, 191, 268 Tremont & Suffolk Mills v. Lowell, 165 Mass. 265 (1896) 69, 300, 301 Tremont & Suffolk Mills v. Lowell, 178 Mass. 469 (1901) 295, 581, 583 Trinity Church v. Boston, 118 Mass. 164 (1875) 206 Troy Cotton and Woolen Manufactory v. Fall River, 167 Mass. 517 (1897) 241, 242, 243, 260, 268, 290 Trov Union R. R. Co, v. Mealy, 254 U. S. 47 (1920) 27 Troy & Greenfield R. R. Co. v. Commonwealth, 127 Mass. 43 (1879).... 105 Trustees of the Greene Foundation v. Boston, 12 Cush. 54 (1853) 199, 205, 230, 333, 531 Trustees of Ministerial Fund v. Gloucester, 19 Pick. 542 (1837) .... 205, 230 Tucker v. Deshon, 129 Mass. 566 (1880) 228 Tucker v. Ferguson, 22 Wall. 527 (1874) 27 Tufts v. Charlestown, 98 Mass. 583 (1868) 722 Table of Cases li [Citations are to Pages] Tufts v. Mayor and Aldermen of Somerville, 122 Mass. 273 (1877) 706 Turner v. Maryland, 107 U. S. 38 (1882) 22 Turner v. Nye, 154 Mass. 579 (1891) 752 Turner v. Smith, 14 Wall. 553 (1871) 67 Turner v. Wade, 254 U. S. 64 (1920) 60, 62 Twin City Bank v. Nebeker, 167 U. S. 196 (1897) 101 Twycross v. Fitchburg R. R. Co., 10 Gray 293 (1858) 685, 698 Tyler v. Hardwick, 6 Met. 470 (1843) 333 Tyler v. Treasurer & Receiver General, 226 Mass. 306 (1917) 18, 20, 615 Tyler, in re, 149 U. S. 164 (1893) 346 Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920) .... 46, 85, 434 Union Glass Co. v. Somerville, 228 Mass. 202 (1917) 553 Union Pacific R. R. Co. v. McShane, 22 Wall. 444 (1874) 47 Union Pacific R. R. Co. v. Peniston, 18 Wall. 5 (1873) 51 Union Passenger R. R. Co. v. Philadelphia, 101 U. S. 528 (1879) 29 Union Refrigerator Transit Co. v. Lynch, 177 U. S. 149 (1900) 44 Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905) 37, 64, 70, 72, 74, 76 Union Tank Line Co. v. Wright, 249 U. S. 275 (1918) 70, 72 Union Trust Co. v. Reed, 213 Mass. 199 (1912) 375, 385 United States v. Chamberlain, 219 U. S. 250 (1911) •. . . 11 United States v. Emery, Bird, Thayer Realty Co., 237 U. S. 28 (1915) . . 14, 550 United States v. Erie R. R. Co., 107 U. S. 1 (1882) : 59 United States v. Fisher, 2 Cranch 258 (1804) 52 United States v. Macon County, 99 U. S. 582 (1878) 15 United States v. New Orleans, 98 U. S. 381 (1878) 17 United States v. Perkins, 163 U. S. 625 (1896) 13. 608 United States v. Philadelphia etc. R. R. Co., 123 U. S. 113 (1887) .... 11, 59 United States v. Philadelphia Knitting Mills Co., C. C. A. Third Circuit, March, 1921 443 United States v. Snyder, 149 U. S. 210 (1893) 15, 52 United States Drainage etc., Co. v. Medford, 225 Mass. 467 (1917) 731 United States Express Co. v. Minnesota, 223 U. S. 335 (1912) 37, 45 United States Glue Co. v. Oak Creek, 247 U. S. 321 (1918) .. 45, 46, 84, 434 Upham v. Worcester, 113 Mass. 97 (1873) 122, 123, 673, 674, 679 Upton v. Holden, 5 Met. 360 (1842) 397, 753 Van Allen v. Assessors, 3 Wall. 573 (1865) 48, 51, 507, 510 Van Brocklin v. Tennessee, 117 U. S. 153 (1886) 47 Vaughn v. Street Commissioners of Boston, 154 Mass. 143 (1891) 260, 289 Veazie Bank v. Fenno, 8 Wall. 533 (1869) 8, 13, 506 Vicksburg etc. R. R. Co. v. Dennis, 116 U. S. 231 (1886) • 28 Viles v. Waltham, 157 Mass. 542 (1893) 222, 225 Von Baumbach v. Sargent Land Co. 242 U. S. 503 (1917) 550 Von Hoffman v. Quincy, 4 Wall. 535 (1866) 25 Wagner v. Covington, 251 U. S. 95 (1919) 4, 14, 35 Wagner v. Leser, 239 U. S. 207 (1915) 66 Wagoner v., Evans, 170 U. S. 588 (1898) 47 Waite v. Dowley, 94 U. S. 527 (1876) 512 Waite v. Worcester Brewing Co., 176 Mass. 283 (1900) 322, 345, 749 Walker v. Cook, 129 Mass. 577 (1880) 317 Walker v. treasurer & Receiver General, 221 Mass. 600 (1915). r 69, 82, 83, 623 Walker v. Whitehead, 16 Wall. 314 (1872) 66 Walker v. Whittemore, 112 Mass. 187 (1873) 119, 233, 698, 699 lii Taxation in Massachusetts [Citations are to Pages] Wall v. Hinds, 4 Gray 256 (1855) 234 Wall u. Wall, 124 Mass. 65 (1878) 354, 355, 377 Wallace v. Hines, 253 U. S. 66 (1920) 70, 71 Walling v. Michigan, 116 U. S. 455 (1886) 43 Walsh v. Wilson, 130 Mass. 124 (1881) 357, 370, 387 Waltham Bank v. Waltham, 10 Met. 334 (1845) 251, 506, 531 Ward v. Aldermen of Newton, 181 Mass. 432 (1902) 146, 688, 691 Ward v. Maryland, 12 Wall. 424 (1870) 30 Ware v. Hylton, 3 Dall. 199 (1796) 15 Waring v. Mobile, 8 Wall. 110 (1868) 21 Warr v. Collector of Taunton, 234 Mass. 279 (1920) 336, 343, 398, 409 Warren v. Street Commissioners, 181 Mass. 6 (1902) 691 Warren v. Street Commissioners, 183 Mass. 119 (1903) 687,688 Warren v. Street Commissioners, 187 Mass. 290 (1905) 124, 681 Washburn v. Walworth, 133 Mass. 499 (1882) 249 Washington University v. Rouse, 8 Wall. 430 (1869) 26 Waters v. Bonvouloir, 172 Mass. 286 (1899) 112 Watertown v. Middlesex County Commissioners, 176 Mass. 22 (1900) 705 Watson v. Boston, 209 Mass. 18 (1911) 201, 473 Watson v. Needham, 161 Mass. 404 (1894) 106 Watson v. Nevin, 128 U. S. 578 (1888) 62 Watson v. New York, 254 U. S. 122 (1920) 53, 608 Watson v. Princeton, 4 Met. 599 (1842) 403 Watts v. Howard, 7 Met. 478 (1844) 236 Watuppa Reservoir Co. v. Mackenzie, 132 Mass. 71 (1882) 731 Wavland v. Middlesex County Commissioners, 4 Gray 500 (1855).... 217, 218 Webber v. Virginia. 103 U. S. 344 (1880) 43, 51 Webber Lumber Co. v. Shaw, 189 Mass. 366 (1905) 227, 386, 409, 744 Webster v. Lowell, 139 Mass. 172 (1885) 696 Webster v. Fargo, 181 U. S. 395 (1901) 116 Weed v. Boston, 172 Mass. 28 (1898) 125, 128, 686, 687, 709, 711, 714 Weeks v. Grace, 194 Mass. 296 (1907) 67, 350 Welch v. Boston, 208 Mass. 326 (1911) 225, 409 Welch v. Boston, 211 Mass. 178 (1912) 246, 285, 290 Welch v. Boston, 221 Mass. 155 (1915) 74, 79, 238 Welch v. Cook, 97 U. S. 541 (1878) 27 Welch v. Emerson, 206 Mass. 129 (1910) 148, 149, 317 Welch v. Halev, 224 Mass. 261 (1916) 359, 360 Welch v. Phillips, 224 Mass. 267 (1916) 234 Welch v. St. Genevieve, 1 Dill. 130 (1871) 410 Welch v. Treasurer & Receiver General, 217 Mass. 348 (1914) 661 Welch v. Treas. d Receiver General, 223 Mass. 87 (1916) .. 56, 76, 77, 82, 618 Weld v. Boston, 126 Mass. 166 (1879) 224, 225 Wellington v. Belmont, 164 Mass. 142 (1895) 242, 403 Wellington v. Boston & Maine Railroad, 158 'Mass. 185 (1893) 350 Wellington v. Boston & Maine Railroad, 164 Mass. 380 (1895) 350 Wellington First National Bank v. Chapman, 173 U. S. 205 (1899) 508 Wells, Fargo & Co. v. Johnson, 239 U. S. 234 (1915) 55 Wells, Fargo & Co. v. Nevada, 248 U. S. 165 (1918) 62, 71 Welsh v. Briggs, 204 Mass. 540 (1910) 228, 252, 349, 357, 360, 364 Welton v. Missouri, 91 U. S. 275 (1875) '• 43 Wendell v. Fleming, 8 Gray 613 (1857) 326, 327 Wesleyan Academy v. Wilbraham, 99 Mass. 599 (1868) 200 West Roxburv v. Minot, 114 Mass. 546 (1874) 685 West Wisconsin R. R. Co. v. Trempealeau Countv, 93 U. S. 595 (1876) . . 27 Western Union Tel. Co. v. Andrews, 216 U. S. 165 (1910) 42 Table of Cases liii [Citations are to Pages] Western Union Tel. Co. v. Indiana, 165 U. S. 304 (1897) 66, 68 Western Union Tel. Co. v. Kansas, 216 U. S. 1 (1910) 39, 40, 41, 42 Western Union Tel. Co. v. Mass, 125 U. S. 530 (1887) 41, 45, 50, 51, 70, 579, 596 Western Union Tel. Co. v. Missouri, 190 U. S. 412 (1903) 70 Western Union Tel. Co. v. New Hope, 187 U. S. 419 (1903) 9, 34 Western Union Tel. Co, v. Seay, 132 U. S. 472 (1889) 45 Western Union Tel. Co. v. Taggart, 163 U. S. 1 (1896) 70, 71 Western Union Tel. Co. v. Texas, 105 U. S. 464 (1881) 51 Westhampton v. Searle, 127 Mass. 502 (1879) 272, 275, 281, 282 333, 349, 398, 405 Weston v. Charleston, 2 Pet. 449 (1829) 48 Weyerhauser v. Minnesota, 176 U. S. 550 (1900) 60, 62, 65 Wheatland v. Boston, 202 Mass. 258 (1909) 118, 119, 407, 408, 690 Wheaton College v. Norton, 232 Mass. 141 (1919) 200, 201, 202 Wheeler v. Sohmer, 233 U. S. 434 (1914) 74, 78, 81 Wheeler v. Wall, 6 Allen 558. (1863) 91, 190 Wheeling Transportation Co., v. Wheeling, 99 U. S. 283 (1878) 23 Wheelock v. Lowell, 196 Mass. 220 (1907) 103, 104, 107 Wheelwright v. Boston, 188 Mass. 521 (1905) » 102 Wheelwright v. Tax Commissioner, 235 Mass. 584 (1920) 19 Whitbeck v. Mercantile National. Bank, 127 U. S. 193 (1888) 509 Whitcomb v. Boston, 192 Mass. 211 (1906) 668 White v. Blanchard Bros. Granite Co., 178 Mass. 363 (1901) 103 White v. Gove, 183 Mass. 333 (1903) 89, 118, 126, 127, 385, 711 White v. New Bedford, 160 Mass. 217 (1893) '. 261, 293 Whiting v. Mayor and Aldermen of Boston, 106 Mass. 89 (1870) 409, 677, 687, 688, 691, 695 Whitman v. Boston & Maine R. R., 7 Allen 313 (1863) 673 Whitney v. Sherborn, 12 Allen 111 (1866) 222 Whitney v. Tax Commissioner, 234 Mass. 188 (1919) 651, 653 Whiton v. Balch, 203 Mass. 576 (1909) 345 Whittaker v. Salem, 216 Mass. 483 (1914) 107, 109 Widersum v. Bender, 172 Mass. 436 (1899) 384 Wiggins Ferry Co. v. St. Louis, 107 U. S. 361 (1882) 23, 28, 37 Wilbraham v. Ludlow, 99 Mass. 587 (1868) 222 Wilcox v. Middlesex County Commissioners, 103 Mass. 544 (1870) 454 Wilder v. Tax Commissioner, 234 Mass. 470 ( 1919) 442 Wilkinson v. Libbey, 1 Allen 375 (1861) 234 Willard v. Newburyport, 12 Pick. 227 (1831) 104 Williams v. Acton, 219 Mass. 520 (1914) 245, 401, 404 Williams v. Albany, 122 U. S. 154 (1887) 65 Williams v. Baker, 209 Mass. 92 (1911) 362 Williams v. Boston, 208 Mass. 497 (1911) 189, 192, 201, 249, 250 Williams v. Bowers, 197 Mass. 565 (1908) ' 353 Williams v. Brookline, 194 Mass. 44 (1907) 55, 57, 249 Williams v. Dedham, 207 Mass. 412 (1911) 361 Williams v. Eggleston, 170 U. S. 304 (1898) 60, 117 Williams v. Fears, 179 U. S. 274 (1900) 30, 33 Williams v. Milton, 215 Mass 1 (1913) 249 Williams v. Monk, 179 Mass. 22 (1901) 119, 745 Williams v. Roxbury, 12 Gray 21 (1858) 224 Williams v. Talladega, 226 U. S. 404 (1912) 47, 51 Williams College v. Williamstown, 167 Mass. 505 (1897) '. 200 Williams College v. Williamstown, 219 Mass. 46 (1914) 117, 163, 164 Williamson v. New Jersey, 130 U. S. 189 (1889) 18 Williamstown v. Willis, 15 Gray 427 (1860) 341.397 liv Taxation in Massachusetts [Citations are to Pages] Williston Seminary v. Hampshire Co. Com'rs, 147 Mass. 427 (1888) 201 Wilmington etc. R. R. Co. v. Reid, 13 Wall. 264 (1871) 26 Wilson v. Gaines, 103 U. S. 417 (1880) 28 Wilson v. Shearer, 9 Met. 504 (1845) 336, 398 Wilson v. Terry, 9 Allen 214 (1864) 223, 224^ 225 Wilson v. United States, 221 U. S. 361 (1911) '592 Winnisimmet Co. v. Assr's of Chelsea, 6 Cush. 477 (1850) 250, 266, 288, 289, 290 Winona etc. Land Co v. Minnesota, 159 U. S. 526 (1895) 59, 62, 65 Winthrop v. Soule, 175 Mass. 400 (1900) 327 Wisconsin v. Pelican Insurance Co. 127 U. S. 265 (1888) 32, 86 Wisconsin etc. R. R. Co. v. Powers, 191 U. S. 379 (1903) 27, 70 Wisconsin Central R. R. Co. v. Price County, 133 U. S. 496 (1889) 47 Witherell v. Ruecking Construction Co., 249 U. S. 63 (1919) 125 Witherspoon v. Duncan, 4 Wall. 210 (1866) 47, 59 Withington v. Eveleth, 7 Pick. 106 (1828) 316 Withington v. Harvard, 8 Cush. 66 (1851) 312 Wolff v. New Orleans, 103 U< S. 358 (1880) 25 Wood v. Bogle, 115 Mass. 30 (1874) '. 234 Wood v . Hudson, 114 Mass. 513 (1874) 679 Wood v. Torrey, 97 Mass. 321 (1867) 246, 333 Woodbridge v. Mayor & Aldermen of Cambridge, 114 Mass. 483 (1874) 710, 711 Woodlawn Cemetery v. Everett, 118 Mass. 354 (1875) 206 Woodruff v. Parham, 8 Wall. 123 (1868) 21, 43, 44 Woodruff v. Trapnall, 10 How. 190 (1850) 24 Woods v. Woburn, 220 Mass. 416 (1915) 107, 115 Worden i>. New Bedford, 131 Mass. 23 (1881) 5, 103, 107, 113 Worcester v. Board of Appeal, 184 Mass. 460 (1904) 175, 531 Worcester v. Boston, 179 Mass. 41 (1901) 227, 232, 356, 369, 370 Worcester v. Western Railroad Corporation, 4 Met. 564 (1842) .. 217, 218, 740 Worcester v. Worcester St. Ry. Co. 182 Mass. 49 (1902) 588 Worcester v . Worcester St. Ry. Co., 196 U. S. 539 (1905) 115, 588 Worcester Agricultural Society v. Worcester, 116 Mass. 189 (1874) 119, 203, 675 Worcester County v. Worcester, 116 Mass. 193 (1874) 118, 218, 676 Worcester County Institution for Savings v. Worcester, 10 Cush. 128 (1852) 193, 516, 531 Worcester Mutual Fire Insurance Co. v: Worcester, 7 Cush. 600 (1851) .. 525 Workman v. Worcester, 118 Mass. 168 (1875) 125, 688 Wright v. Boston, 9 Cush. 223 (1852) 126, 404, 687, 689, 709 Wright v. Boston, 126 Mass. 161 (1879) 225 Wright v. Central of Georgia R. R. Co., 236 U. S. 674 (1915) 26, 28 Wright v . Georgia R. R. etc. Co., 216 U. S. 420 (1910) 26, 28 Wright v. Leonard, 4 Gray 150 (1855) 753 Wright v. Louisville etc. R. R. Co., 195 U. S. 219 (1904) 56, 76 Wright v. Louisville etc. R. R. Co., 236 U. S. 687 (1915) 28 Wright v. Lowell, 166 Mass. 298 (1896) 265, 290, 292 Wright v. Quinn, 238 Mass. 439 (1921) 104 Wright v. Walcott, 238 Mass. 432 (1921) * 107 Wurts v. Hoagland, 114 U. S. 606 (1885) 121 Wyeth v. Cambridge Board of Health, 200 Mass. 474 (1909) 16 Yazoo etc. R. R. Co. v. Adams, 180 U. S. 1 (1901) 29 Young Men's Protestant etc. Society v. Fall River, 160 Mass. 409 (1894) 199, 204 Zonne v. Minneapolis Syndicate, 220 U. S. 187 (1911) 14, 550 TAXATION IN MASSACHUSETTS NATURE AND CHARACTERISTICS OF TAXATION 1. The Power of Taxation Defined The power of taxation may be defined as the power of a sovereign state to require a contribution of money or other property in accordance with some reasonable rule of apportion- ment from persons or property within its jurisdiction for the purpose of defraying the public expenses. Included in the absolute authority of a sovereign state over persons and property within its jurisdiction is the power to raise revenue from such persons or property by whatever means seems best, to be expended in whatever way seems desirable, without any other limit than the extent of its physical power to exact payment or any other check than the fear of rebellion in a des- potism or defeat at the polls in an elective government. In a modern civilized community, however, even in the absence of a written constitution, the raising of revenue by the sovereign must have risen above a system of indiscriminate plunder and extortion to be dignified by the name of taxation. A method of raising revenue, to constitute a tax, must consist of an en- forced contribution of money or other property 1 assessed in accordance with some reasonable rule of apportionment 2 by authority of a sovereign state, 3 on persons or property within its jurisdiction 4 for the purpose of defraying the public expenses. 5 2. Taxes Distinguished from other Pecuniary Impositions In England and other countries in which the power of the government is not limited by a written constitution, the power 1 New Jersey v. Anderson, 203 U. S. 483 (1906); Houck v. Little River Drainage District, 239 U. S. 254 (1915). 2 Pollock v. Farmers' Loan & Trust Co. 157 U. S. 429 (1895) ; Houck v. Little River Drainage District, 239 U. S. 254 (1915). 3 Morgan's Louisiana, etc. R. R. etc. Co. v. Louisiana Board of Health, 118 U. S. 455 (1886). * State Tax on Foreign Held Bonds, 15 Wall. 300 (1872); New Jersey v. Anderson, 203 U. S. 483 (1906). 5 Loan Association v. Topeka, 20 Wall. 655 (1874) : Morgan's Louisiana etc. R. R. etc. Co. v. Louisiana Board of Health, 118 U. S. 455 (1886); Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429 (1895); New Jersey v. Anderson, 203 U. S. 483 (1906) ; Houck v. Little River Drainage District, 239 U. S. 254 (1915); Lowell v. Boston, 111 Mass. 154 (1873). 4 ; , -'/[ ,'■■ I '/•, Taxation/'- *n. ■ Massachusetts [parti of the legislative branch of the government to levy taxes is abso- lute; but in the United States the power of taxation, like other governmental powers, is limited by the provisions of the consti- tution. As the power of taxation is subject to different constitu- tional limitations from those which apply to other governmental powers and not all pecuniary impositions enforced by the state constitute an exercise of the power of taxation, to comprehend the constitutional limitations resting upon the power of taxation it is necessary to clearly understand the distinction between taxes and other pecuniary impositions enforced by the state. So also the distinction between taxes and other pecuniary impo- sitions is often important in construing contracts in which one party has agreed to pay the taxes on certain property or on a certain occupation. Nevertheless, while the classification of pecuniary impositions is important, it is not controlling. When the question at issue is whether a state statute contravenes rights secured by the con- stitution, the decision must depend not upon any mere question of form, construction or definition, but upon the practical opera- tion and effect of the burden imposed. 1 A state cannot make an act unconstitutional by misdescribing its character, 2 nor can it justify an unconstitutional interference with property by calling it a tax of a kind which the state may lawfully impose. 3 3. Tax Distinguished from Sale of a Commodity A tax should be carefully distinguished from the income derived from the sale of a commodity or from fees charged for the use of public property. A state or one of its subdivisions, such as a county, city or town, frequently raises revenue or at least defrays the expense of one of its undertakings by selling to the public or to its own inhabitants a commercial commodity, either as a matter of general convenience and to supply a de- mand which cannot readily be met by individual enterprise, or i St. Louis Southwestern Ry. Co. v. Arkansas, 235 U. S. 350, 362 (1914) ; Mountain Timber Co. v. Washington, 243 U. S. 219. 237 (1917); Crew Levick Co. v. Pennsylvania, 245 U. S. 292, 294 (1917) ; American Mfg. Co. v. St. Louis, 250 U. S. 459, 463 (1919) ; Shaffer v. Carter, 252 U. S. 37, 55 (1920) ; Massachu- setts General Hospital v. Belmont, Mass. (1921). 2 Wagner v. Covington, 251 U. S. 95 (1919) ; Eaton, Crane & Pike Co. v. Commonwealth, 237 Mass. 523 (1921). 3 Askren v. Continental Oil Co.. 252 U. S. 444 (1920); Commonwealth v People's Savings Bank, 5 Allen 428, 432 (1862), sect. 3] Nature and Characteristics of Taxation 5 to dispose of some by-product of the public works or some property no longer needed by it for the public use. 1 Although payments to a municipal corporation for services rendered or property sold are sometimes spoken of as taxes, as for example, even in carefully drawn leases, charges for water furnished by a municipal water supply are frequently referred to as "water taxes," this use of language is inaccurate. 2 The raising of funds in this manner is not taxation, and is not subject to the consti- tutional limitations upon the power of taxation. 3 The distinc- tion between a tax and the sale of a commodity is usually not difficult to draw, 4 although the state in taxing an occupation which it has the power to regulate or prohibiten a certain sense 1 Thus a city or town acts in a purely commercial capacity in supplying water to its inhabitants. Hand v. Brookline, 126 Mass. 324 (1879); Merrimack River Savings Bank v. Lowell, 152 Mass. 556 (1891) ; D'Amico v. Boston, 176 Mass. 599 (1900) ; or in maintaining a ferry upon which tolls are charged, Davies v. Boston, 190 Mass. 194 (1906); or in letting its public buildings to private parties, Worden v. New Bedford, 131 Mass. 23 (1881); Little v. Holyoke, 177 Mass. 114 (1900) ; or in taking boarders at its poor farm, Neff v. Wellesley, 148 Mass. 487 (1889) ; or in selling a building no longer needed by it, Neuert v. Boston, 120 Mass. 338 (1876) ; or in selling crushed stone, Collins v. Greenfield, 172 Mass. 78 (1898); Duggan v. Peabody, 187 Mass. 349 (1905). 2 Water rates are not taxes, Sinclair v. Mayor of Fall River, 198 Mass. 248 (1908). 3 A town may require a telegraph company to pay a certain sum annually for every pole it maintains in the public street, although it has been authorized by Congress to maintain its lines along all post roads in the United States. The charge is not a license tax but a rental for the use of the streets. St. Louis v. Western Union Telegraph Co., 148 U. S. 92 (1893). The legislature may require the payment of rent for the maintenance of structures in public streets. Opinion of the Justices, 208 Mass. 603, 606 (1911). A state may impose a toll, based on tonnage, on vessels passing through an improved waterway, although a state tax on tonnage is expressly prohibited by the constitution of the United States. Huse v. Glover, 119 U. S. 547 (1886). See also Keokuk etc. Packet Co. v. Keokuk, 95 U. S. 80 (1877); Sands v. Manistee River Imp. Co. 123 U. S. 288 (1887). A license fee for the use of automobiles may be sustained as a toll for the use of the roads, Hendrick v. Maryland, 235 U. S. 610 (1915); Kane v. New Jersey, 242 U. S. 160 (1916). A charge for the use of municipal sewers is not a tax. Carson v. Brockton, 182 U. S. 398 (1901) affirming 175 Mass. 242 (1900). So also a charge for the use of municipal wharves, Parkersburg etc. Transportation Co. v. Parkersburg, 107 U. S. (1882), or for the use of log booms erected and maintained by the public authorities, Lindsay etc Co. v. Mullen, 176 U. S. 126 (1900), is not a tax. 4 The line between a commercial undertaking and taxation was nearly obliterated when the first sewer assessments were laid in Massachusetts (infra § 64). Sewers had previously been built by private parties and any person who subsequently entered his drain into the sewer was obliged to pay the persons who built the sewer for the privilege; and when the cities and towns took over the sewers they collected payment in much the same way. so that the sewers were held to be a commercial undertaking. Boston v. Shaw. 1 Met. 130 (1840); Child v. Boston. 4 Allen 41 (1862); Smith v. Gloucester, 201 Mass. 329 (1909). 6 Taxation in Massachusetts [part i sells the privilege of engaging in that occupation, such a trans- action depends for its effectiveness entirely upon an exercise of governmental power and is subject to all the constitutional limitations upon the exercise of such power, 5 while the sale of a commodity by the state to members of the public is an as- sumption by the state, for the public convenience, of commercial functions, and voluntary payment for the commodity is no more a tax when it is paid to the state than when it is paid to the individual vendor. 4. Taxation Distinguished from Regulation A substantial part of the public revenue is frequently derived from an exercise of the power of regulation, but since the primary purpose of a tax must be the defraying of public expenses, a charge primarily imposed for purposes of regulation is not a tax 1 but an exercise of the police power — that is, the power of a sovereign state to prevent persons within its jurisdiction from conducting themselves or from using their property to the detriment of the general welfare. It is often found desirable to restrict the performance of an act harmless in itself but which if done too frequently will be injurious to the public welfare, and instead of devising an arbitrary limit to the number of persons who may perform the act or to the number of times it may be performed the legislature frequently imposes a fee or charge upon the performance of the act which indirectly effects the desired result. If the legislative body which establishes the imposition has both the power to tax and the power to regulate the subject-matter and the enactment does not violate the constitutional limitations upon either power, it is of no im- portance whether the power of taxation or the police power was intended to be invoked, and the imposition may well be intended to provide both revenue and regulation. 2 For example, Congress, having both power to levy taxes generally and to regulate foreign commerce, may impose a tariff on imports as a means of raising revenue or for the protection of local industries, or for both purposes, and the primary motive is immaterial. State legis- 5 New Jersey v. Anderson. 203 U. S. 483 (1906). i Royall v. Virginia, 116 U. S. 572 (1886). 2 Gundling v. Chicago, 177 U. S. 183 (1900) ; Hodge v. Muscatine County, 196 U. S. 276 (1905); Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911); Bradley v. Richmond, 227 U. S. 477 (1913). sect. 4] Nature and Characteristics of Taxation 7 latures having both power to levy taxes generally and the police power frequently before the adoption of the Eighteenth Amendment imposed an excise on the sale of intoxicating liquors both as a means of raising revenue and for the purpose of regu- lating a traffic injurious to public morals or for both purposes. If the primary purpose in such a case is to raise revenue, the imposition is a tax; if the primary purpose is to regulate, the imposition is an exercise of the police power. To ascertain the real purpose of such legislation is of interest from the point of view of the economist or the statesman, but it can have no bearing upon the constitutionality of the enactment. When however the legislative body has the power to tax and has not the power to regulate the subject-matter, or has the power to regulate and has not the power to tax it, or the enactment in controversy violates the constitutional restrictions upon the power of taxation but not those upon the police power, it may be of great importance in deciding whether the enactment is constitutional to determine in the first place under which power it falls. In such a case the courts in deciding whether the real object of the act is revenue or regulation will not be bound by a legislative declaration of intent, but will examine the act itself and its probable effect, giving weight to the usual pre- sumption in favor of constitutionality, so that the act will be construed to be an exercise of the power of which it would be a valid exercise if such construction is reasonably possible. 3 If the legislature has power to prohibit a certain act al- together it may establish a pecuniary imposition upon its per- formance intended as a substantial prohibition or as a drastic limitation of the number of persons who will perform the act; 4 if however the legislature has no power to prohibit the act it can- not establish a pecuniary imposition really intended as a prohi- bition. A tax upon the performance of an act which the legis- lature could not constitutionally prohibit must be reasonable in amount, and must not be so excessive as to bring about the suppression of any useful or legitimate occupation or the depri- vation of any natural and inalienable right. 5 For example, a 3 Commonwealth v. People's Savings Bank, 5 Allen 428, 432 (1862). * Gundling v. Chicago, 177 VS. 183 (1900) ; Hodge v. Muscatine County, 196 U. S. 276 (1905); Bradley v. Richmond, 227 U. S. 477 (1913); Alaska Fish etc. Co. v. Smith, 255 U. S. 44 (1921). 5 Ohio Tax Cases, 232 U. S. 576 (1914). 8 Taxation in Massachusetts [part i state may constitutionally impose an excessive fee upon the setting up of a lottery, because it may prohibit lotteries alto- gether as injurious to public morals, and what it may do directly it may do indirectly; but the inheritance of the goods of a deceased person is the exercise of a privilege which the state may tax but which it may not prohibit, because it is not in- jurious to the public welfare. Accordingly a pecuniary imposi- tion upon inheritance is subject to the limitations of the tax- ing power and must be reasonable. 6 When the legislature has power to tax but not to regulate the subject-matter and establishes a pecuniary imposition, the pay- ment of the imposition is not a license to perform the act, and the act may be prohibited by the body which has power to regulate it, notwithstanding the payment of the tax. 7 5. Tax Distinguished from Inspection Fee There is a very common form of pecuniary imposition which is enforced as an incident of the exercise of the police power although sometimes imposed with respect to an act which the legislature has no power to prohibit or to tax or indeed to bur- den with any form of pecuniary imposition of a, revenue produc- ing character. Under such circumstances, if an occupation or act is of such a character that a reasonable amount of inspection or 6 Minot v. Winthrop, 162 Mass. 113 (1894). There seems however to be a possible distinction between an oppressive and confiscatory tax imposed by a state legislature as a means of indirectly prohibiting the exercise of a natural right which it would be beyond the power of a legislature to prohibit directly and a like tax imposed by Congress as a means of indirectly prohibiting the per- formance of an act which Congress had no power to prohibit directly, but which is not a right of such a character that the state in the exercise of its police power could not prohibit it. Thus in Veazie Bank v. Fenno, 8 Wall. 539 (1869) a tax on bank notes issued by state banks obviously intended by Congress to drive such notes out of circulation was sustained. In McCray v. United States, 195 U. S. 27 (1904) an oppressive federal tax on oleomargarine colored in imitation of butter was sustained. In 1918 a burdensome tax on goods manufactured by child labor was imposed, after an attempt to regulate child labor by the exclusion of the products of such labor from interstate commerce had been held unconstitutional. If such legislation is sustained it is apparent that Congress has concurrent power with the states over the whole field of police regulations by a colorable exercise of the taxing power. 7 Thus prior to the adoption of the Eighteenth Amendment it was held that Congress, having power to lay taxes anywhere within the United States, but not having the police power within the limits of a state, might tax the sale of liquors within the state, but might not regulate the sale, and conse- quently the payment of the internal revenue tax on the sale of liquor was not a license to sell. License Tax Cases. 5 Wall. 462 (1866) ; Commonwealth v. Thorniley, 8 Allen 445 (1863); Commonwealth v. Holbrook, 10 Allen 200 (1865). sect. 5] Nature and Characteristics op Taxation 9 supervision by public officials is necessary for the protection of the public health, morals, safety or welfare, the legislature may provide that such inspection or supervision shall be performed at the expense of the persons who wish to engage in the occupation or perform the act, and may facilitate the collection of the cost of such inspection or supervision by providing that no one shall engage in the occupation or perform the act until a fee sufficient to cover such cost has been paid. 1 A statute imposing such a charge is not the levy of a tax, and the legislature, in imposing it, is not subject to the constitutional limitations applicable to the power of taxation. 2 In such cases the fee may lawfully cover only the cost of inspection, and a charge imposed for the purpose of producing revenue which would be otherwise un- constitutional cannot be saved by designating it as an inspec- tion fee. 3 It is not however always practicable to determine the actual cost of inspection with absolute accuracy and while in some cases it is possible to divide up the actual cost of inspection on the parties inspected, 4 a statute is not unconstitutional which provides for the establishment of an inspection fee in advance, even though it turns out afterwards that the amount collected exceeded the actual cost of inspection, unless it clearly appears that the legislature did not reasonably intend the fee as the approximate equivalent of the actual cost. 5 When the legislature has power to tax an occupation or act, the tax is none the less constitutional because it is called an inspection fee; and if an act or occupation is subject to the 1 Head Money Cases, 112 U. S. 580 (1884); Morgan's Louisiana etc. R. R. etc. Co. v. Louisiana Board of Health, 118 U. S. 455 (1886); Western Union Tel. Co. v. New Hope, 187 U. S. 419 (1903) ; Atlantic etc. Tel. Co. v. Phila- delphia, 190 U. S. 160 (1903); Norris v. Boston, 4 Met. 282 (1842); Postal Tel. Cable Co. v. Chicopee, 207 Mass, 341, 348 (1911). 2 Head Money Cases, 112 U. S. 580 (1884) ; Commonwealth v. Slocum, 230 Mass. 180 (1918); Lever Brothers Co. v. Commonwealth, 232 Mass. 22 (1919). a Smith v. Alabama, 124 U. S. 465 (1888) ; Atlantic etc. Tel. Co. v. Phila- delphia, 190 U. S. 160 (1903) ; Postal Tel. Cable Co. v. Taylor, 192 U.S.64 (1904) ; Askren v. Continental Oil Co., 252 U. S. 444 (1920); Norris v. Boston, 4 Met. 282 (1842); Commonwealth v. Stodder, 2 Cush. 562 (1848); Perkins v. West- wood, 236 Mass. 268, 275 (1917). 4 As when the actual cost of supervising public service corporations through the appropriate commissions is assessed upon the corporations supervised. Nashville etc. R. R. Co. v. Alabama, 128 U. S. 96 (1888) ; Charlotte etc. R. R. Co. v. Gibbes, 142 U. S. 386 (1892) ; People v. Squire, 145 U. S. 175 (1892). 5 Atlantic etc. Tel. Co. v. Philadelphia, 190 U. S. 160 (1903) ; McLean v. Denver etc. R. R. Co. 203 U. S. 38 (1906); Red C. Oil Mfg. Co. v. North Carolina Board of Agriculture, 222 U. S. 380 (1912) ; Savage v. Jones, 225 U. S. 501 (1912); Commonwealth v. Slocum, 230 Mass. 180 (1918). 10 Taxation in Massachusetts [part i power of taxation, an inspection fee upon it need bear no re- lation to the cost of inspection. 6 6. Taxation Distinguished from other Governmental Powers Pecuniary impositions having many of the characteristics of special assessments under the power of taxation are in some instances enforced as an exercise of the police power, and the resemblance between the set-off of benefits in assessing damages for the taking of land under the power of eminent domain and the assessments of betterments under the taxing power for the construction of the improvements for which the land is taken is often close; but these distinctions are discussed at length in later sections of this work. 1 In some jurisdictions an attempt has been made to employ the power of taxation to assist in the enforcement of the criminal law, and a heavy "mulct tax" is imposed on the performance of a prohibited act. When the statute provides proceedings appro- priate for the collection of a tax rather than for the enforcement of a penalty and does not contemplate a criminal proceeding, it will be treated as imposing a tax rather than a penalty. 2 The power of a state to require all able-bodied citizens to work upon the public highways a certain number of days each year is so firmly established by custom dating back to the earliest settlement of the colonies that such a requirement does not constitute the taking of property without due process of law and is clearly constitutional. 3 In some states such a requirement is considered an exercise of the power of taxation, but the better view is that it is the enforcement of the duty of every man to serve the state, of which other examples are the obligation of jury service and the conscription of soldiers in time of war, and that consequently statutes enforcing the obligation to labor on the roads are not subject to the constitutional limitations applicable to the power of taxation. In states in which the labor on the roads is performed as a means of "working out" taxes, the statutes which regulate the subject are however enacted under the taxing power. 6 Boston v. Schaffer, 9 Pick. 415 (1830). 1 Infra § § 64, 71. 2 Cook v. Marshall County, 196 U. S. 261 (1905); Hodge v. Muscatine County, 196 U. S. 276 (1905). » Butler v. Perry, 240 U. S. 328. (1916). sect. 8] Nature and Characteristics of Taxation 11 7. Whether a Tax is a Debt A debt is a sum of money due by certain and express agree- ment and originates in and is founded upon a contract, ex- press or implied. A tax, on the other hand, does not rest upon the contract, express or implied, of the person taxed, but is a forced contribution under an obligation created by statute and founded upon the public necessity. It is therefore generally considered that a tax is not a debt. 1 On the other hand it must be remembered that at the common law an information of debt lay to recover any taxes or duties due to the crown, and it is generally considered that, in the absence of any statutory remedy which may well be considered to have been intended to be exclusive, an action at common law may be maintained to recover a tax as for a debt; 2 and a tax will generally be held to constitute a debt when such construction is necessary to en- force the obligation due the public. 3 8. The Divisions of the Power of Taxation The power of taxation, using the word taxation in its generic sense to indicate all pecuniary impositions laid by public authority for the purpose of raising revenue, embraces two divi- sions, namely taxes, properly so called, and excises. Taxes, in their specific sense, are burdens laid directly upon persons or property and include (1) general taxes laid on all the persons and property or all the persons and property of a certain class in a particular state, county, city, town or other governmental or territorial division, for the purpose of defraying the public expenses of that governmental or territorial division ; and (2) special assessments laid on the property specially bene- fited by a local improvement in proportion to the benefit, for 1 Lane County v. Oregon, 7 Wall. 71 (1868); Meriwether v. Garrett, 102 U. S. 472 (1880); New Jersey v. Anderson, 203 U. S. 483 (1906); Appleton v. Hopkins, 5 Gray, 530 (1855); Boston v. Turner. 201 Mass. 190, 193 (1909); Attorney General v. East Boston Co., 222 Mass. 450 (1915). See also, Andover etc. Turnpike Corp. v. Gould, 6 Mass. 40 (1809); Crapo v. Stetson, 8 Met. 106 (1841); Richardson v. Boston, 148 Mass. 508 (1889); Old Colony Trust Co. v. Treasurer & Receiver General, Mass. (1921). 2 Meredith v. United States, 13 Pet. 486, 260 (1839) ; Dollar Savings Bank v. United States, 19 Wall. 227 (1873) ; United States v. Philadelphia etc. R. R. Co., 123 U. S. 113 (1887); United States v. Chamberlin, 219 U. S. 250 (1911). 3 Felker v. Standard Yarn Co., 148 Mass. 226 (1889). See also, Bristol v. Washington County, 177 U. S. 133 (1900). 12 Taxation in Massachusetts [part i the purpose of defraying the cost of the improvement. In either case the obligation to pay is absolute and unavoidable and is not based upon any voluntary action of the person assessed. Excises, in their original sense, were something cut off from the price paid on a sale of goods as a contribution to the support of government. The word has now come to have a broader meaning and to include every pecuniary imposition created under the power of taxation which is not a burden laid directly upon persons or property, or in other words every charge im- posed by public authority for the purpose of raising revenue upon the performance of an act, the enjoyment of a privilege or the engaging in an occupation. The obligation to pay an excise is based upon the voluntary action of the person taxed in per- forming the act, enjoying the privilege or engaging in the occu- pation which is the subject of the excise, and the element of absolute and unavoidable demand is lacking. In the constitution of Massachusetts different limitations apply to "assessments, rates and taxes" than to "duties and ex- cises " * and it is consequently important in every case in which the constitutionality of an attemped exercise of the power of tax- ation is assailed to determine whether the pecuniary imposition under consideration is a tax or an excise. The substance of the distinction is guarded by the courts, and it would not be permis- sible to evade the limitations upon the power of laying taxes upon property by imposing an excise upon the privilege of own- ing property ; 2 nevertheless every excise is indirectly a tax upon property and the legislature may constitutionally provide that the amount of an excise shall depend upon the value of the priv- ilege taxed, and that the value of the privilege shall be deter- mined by taking into consideration the value of the property to which the privilege relates. 3 Such an excise however is in no 1 Infra, § § 51-54 inc. 2 Pollock v. Farmers' Loan & Trust Co.. 157 U. S. 429 (1895) ; Choctaw etc. R. R. Co. v. Harrison, 235 U. S. 292 (1914); Opinion of the Justices, 195 Mass. 607, 614 (1908); Opinion of the Justices, 208 Mass. 618 (1911); Opinion of the Justices, 220 Mass. 613 (1915). Thus a tax on the removing of whiskey from a bonded warehouse is in effect a tax on the ownership of the whiskey and so is a property tax. Dawson v. Kentucky Distilleries etc. Co., 255 U. S. 288 (1921). But there may be an excise on the ownership of dogs, for the right of property in such animals is a qualified one. Nicchi'a v. New York, 254 U. S. 228 (1920). 3 Maine v. Grand Trunk R. R. Co. 142 U. S 217 (1891) ; Commonwealth v. People's Savings Bank, 5 Allen 428 (1862); Commonwealth v. Hamilton Manufacturing Co., 12 Allen 298 (1866). sect. 8] Nature and Characteristics of Taxation 13 sense a tax on the property, and the value of property which is not subject to taxation may be considered in determining the value of a privilege for the purpose of fixing the amount of an excise. 4 In the constitution of the United States a similar distinction is made between taxes and excises. It is provided that Congress shall have power "to lay and collect taxes, duties, imposts and excises, . . , but all duties, imposts and excises shall be uniform throughout the United States" 5 and that "no capitation or other direct tax shall be laid unless in proportion to the census or enumeration hereinbefore directed to be taken." 6 There has been great difficulty over the meaning of the last clause and at first there was some doubt whether the two clauses were anti- thetical. It was held or intimated in the earlier decisions that the only direct taxes besides poll taxes were taxes on real estate, the theory being that the land-owner ultimately paid all taxes and so a tax on land was direct and other taxes indirect. 7 Later de- cisions repudiated this doctrine and held that "duties, imposts and excises" included all forms of taxation known to the law which were not direct taxes, 8 so that there does not seem to be now any substantial difference in the distinction between "as- sessments, rates and taxes" and "duties and excises" in the Mass- achusetts, constitution and that between "capitation and other direct taxes" and "duties, imposts and excises" in the constitu- tion of the United States. 9 4 Hamilton Co. v. Massachusetts, 6 Wall. 632 (1867); Commonwealth v. New England Slate & Tile Co., 13 Allen 391 (1866) ; Manufacturers' Insurance Co. v. Loud, 99 Mass. 146 (1868); Provident Institution for Savings v. Massa- chusetts, 6 Wall. 611 (1867); United States v. Perkins, 163 U. S. 625 (1897); Plummer v. Coler, 178 U. S. 115 (1900); Flint v. Stone Tracy Co., 220 U. S. 107 (1911). 5 Art. I, Sec. 8, cl. 1. 6 Art I, Sec. 9, cl. 4. 7 Hylton v. United States, 3 Dall. 171 (1796) ; Springer v. United Statc3, 102 U. S. 586 (1880). 8 Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429 (1895) ; same case on rehearing, 158 U. S. 601 (1895). 9 Thomas v. United States, 192 U. S. 363 (1902). The following federal taxes have been sustained as constituting duties or excises rather than direct taxes; a tax on carriages, Hylton v. United States, 3 Dall. 171 (1796); a tax on the circulating notes of state banks, Veazie Bank v. Fenno, 8 Wall. 539 (1869) ; a tax on the devolution of real estate by will or descent, Scholey v. Rew, 23 Wall. 331 (1874) ; a tax on sales of merchandise at exchanges or boards of trade, Nichol v. Ames, 173 U. S. 509 (1899), a tax on the passing of property by will or intestate succession, whether in the form of a succession tax, Knowlton v. Moore, 178 U. S. 41 (1900), or of an estate tax. New York Trust Co. v. Eisner, U. S. (1921) ; a tax on agreements to sell shares of stock, 14 Taxation in Massachusetts [part i In determining whether a particular tax is a property tax or an excise, the name by which the tax is called in the statute im- posing it is of no consequence. The court will look into the sub- stance and effect of the tax, and if it is really a tax on property it cannot be made an excise by calling it one. 10 On the other hand if it is really an excise it will be treated as such, although not called an excise in the statute. 11 Treat v. White, 181 U. S. 264 (1901) ; a tax on tobacco prepared for consumption or sale, Patton v. Brady 184 U. S. 608 (1902); a stamp tax on contracts for the sale of certificates of stock, Thomas v. United States, 192 U. S. 363 (1902) ; a tax on the gross receipts of companies engaged in refining sugar, Spreckels Sugar Refining Co. v. McClain, 192 U. S. 397 (1904) ; a tax on the manufacture of cheese, Cornell v. Coyne, 192 U. S. 418 (1904) ; a tax on artificially colored oleomargarine, McCray v. United States, 195 U. S. 27 (1904); a tax on the doing of business in a corporate capacity measured by income, Flint v. Stone Tracy Co. 220 U. S. 107 (1911); a tax on the use of foreign built yachts, Billings v. United States, 232 U. S. 261 (1914). With respect to the taxation of incomes, it was at first held that an income tax was an excise, Springer v. United States, 102 U. S. (1880) but later that an income tax so far as it applied to a tax on the income of property was a direct tax, Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429 (1895), 758 U. S. 601 (1895). The Six- teenth Amendment specifically authorized the levy of an income tax without apportionment, but the court has treated the amendment as merely correcting a mistaken theory under which the court acted in the Pollock case, Stanton v. Baltic Mining Co., 240 U. S. 103 (1916) ; Brushaber v. Union Pacific R. R. Co., 240 U. S. 1 (1916). The following taxes have been held to be excises and not property taxes by the Supreme Judicial Court of Massachusetts: A tax on the capital stock of banking corporations, Portland Bank v. Apthorp 12 Mass. 252 (1815) ; a tax on savings banks measured by their deposits, Commonwealth v. People's Five Cents Savings Bank, 5 Allen 428 (1862); Commonwealth v. Provi- dent Institution for Savings, 12 Allen 312 (1866) ; a tax on the franchise of cor- porations measured by the aggregate value of the capital stock, Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866) ; Commonwealth v. Hamilton Manu- facturing Co., 12 Allen 208 (1866); a tax on foreign corporations measured by their authorized capital stock, Attorney General v. Bay State Mining Co., 99 Mass. 148 (1868) ; a tax on insurance companies, incorporated and unincorporated, measured by premiums, Oliver v. Liverpool etc. Insurance Co. 100 Mass. 531 (1868); an inheritance tax, Minot v. Winthrop, 162 Mass. 113 (1894); a tax on sales of stock certificates. Opinion of the Justices, 196 Mass. 602 (1908). With respect to income taxes it has been held that a tax on the income of property is a property tax, Opinion of the Justices, 220 Mass. 613, 623 (1915); Tax Commissioner v. Putnam, 227 Mass. 522, 531 (1917). The court has discussed but not determined the question whether a tax on the income from business or employment is a property tax or an excise, Opinion of the Justices, 220 Mass. 613, 624 (1915) ; but it has been held that a tax on the income of a foreign corporation can be sustained as an excise on the privilege of doing business measured by income when it could not be sustained as a property tax. Eaton, Crane & Pike Co. v. Commonwealth, 237 Mass. 523 (1921). " Flint v. Stone Tracy Co., 220 U. S. 107, 148-150 (1911); Zonne v. Minneapolis Syndicate, 220 U. S. 187 (1911); United States v. Emery, 237 U. S. 28; Dawson v. Kentucky Distilleries etc. Co., 255 U. S. 288 (1921). 11 Wagner v. Covington, 251 U. S. 95 (1919); Eaton, Crane & Pike Co. v. Commonwealth, 237 Mass. 523 (1921). sect. 9] Nature and Characteristics of Taxation 15 9. The Power of Taxation is Inherent in the Legislature of a Sovereign State The power of taxation, being essential to the existence of a sovereign state, is inherent in sovereignty and does not depend upon any grant of power in the constitution, and accordingly each state of the Union possesses as a necessary attribute the power to levy taxes without any limit except as imposed by the constitution itself. The provisions of the state constitutions which relate to the power of taxation do not operate as grants of the power of taxation to the state governments but constitute limitations upon a power which would otherwise be without limit. 1 Upon the customary division of governmental power into three classes, namely legislative, executive and judicial, the power of taxation is legislative and falls to the legislature with- out special assignment. 2 That such an allocation of the power of taxation is universally recognized in the United States is a con- sequence of the struggles between King and Parliament over the right to levy taxes which were contemporaneous with the settle- ment of the American Colonies, and it finds expression in more extreme form in the provision found in both the state and the federal constitution that bills for raising revenue shall originate in the more numerous branch of the legislature. 3 The power of determining what money shall be raised by taxation and what shall be the subjects of the taxes by which such money shall be raised is exclusively legislative and has no limit except as imposed by express constitutional provisions. Neither the ex- ecutive nor the judicial branches of the government may exercise the power of taxation. 4 1 McCulloch v. Maryland, 4 Wheat. 428 (1819); Nathan v. Louisiana, 8 How. 82 (1848); Lane County v. Oregon, 7 Wall. 71, 76 (1868); Humphrey v. Peques, 16 Wall. 244, 249 (1872) ; Board of Liquidation v. McComb, 92 U. S. 531, 535 (1875); Transportation Co. v. Wheeling, 99 U. S. 273, 281 (1878); Hoge v. Railroad Co., 99 U. S. 348; United States v. Snyder, 149 U. S. 210, 214 (1893); New Jersey Central R. R. Co. v. Jersey City, 209 U. S. 473 (1908); MacLeod v. United States, 229 U. S. 416 (1913). 2 Talbot v. Janson, 3 Dall. 133, 163 (1795) ; Ware v. Hylton, 3 Dall. 199, 232 (1796); Meriwether v. Garrett, 102 U. S. 472, 515 (1880); Spencer v. Merchant 125 U. S. 345, 355 (1888). 3 Infra § 57. 4 Rees v. Watertown, 19 Wall. 107 (1873); Reine v. Levee Commissioners, 19 Wall. 655 (1873); United States v. Macon County, 99 U. S. 582 (1878); Meriwether v. Garrett, 102 U. S. 472 (1880). 16 Taxation in Massachusetts [part i Both the executive and judicial branches of the government have however many duties to perform in connection with taxa- tion. The governor recommends the sum to be raised by tax- ation in his annual budget and he may veto revenue bills in the same manner as any other legislation. The actual assessment of property is entirely performed by administrative officials. The judiciary by appropriate proceedings enforces the collection of taxes, and on the other hand protects the taxpayer from any un- constitutional or otherwise unlawful exercise of the taxing power and may even be given authority to revise the valuation placed upon property by administrative officials. 10. Delegation of the Power of Taxation The power of taxation for state purposes, which is granted to the legislature by the constitution, cannot be delegated by the legislature to any other officer, board or tribunal. The leg- islature cannot invest any other body with the power to decide upon the amount to be raised by taxation, the property or the acts, privileges or occupations to be taxed, or the rate of taxa- tion to be imposed. It is for this reason that statutes are of doubtful constitutionality which attempt to give an adminis- trative officer an unrestrained discretion in adjusting the amount of the tax in cases in which the measure established by statute is inapplicable. 1 A statute delegating to administrative officials the duty of listing and valuing the property subject to the tax and assessing the tax is however undoubtedly constitutional. So also there is no abdication of the legislative function if the legislature enacts a specific rule for fixing the rate of a tax, and the rate may be mathematically deduced by administrative officials from facts and events occurring each year. 2 A statute is also valid which authorizes an executive officer to suspend certain provisions of the tax laws upon a contingency and to declare when such con- tingency has occurred. 3 The power of collecting taxes may also be constitutionally delegated and it is for this reason that stat- 1 The legislature cannot delegate the power of making laws. Opinion of the Justices, 160 Mass. 586 (1894) ; Wyeth v. Cambridge Board of Health, 200 Mass. 474, 481 (1909) ; Boston V. Chelsea, 212 Mass. 127 (1912). 2 Michigan Central R. R. Co. v. Powers, 201 U. S. 245 (1906). 3 Field v. Clark, 143 U. S. 649 (1892). sect. 10] Nature and Characteristics of Taxation 17 utes authorizing the purchaser of a tax lien to enforce the lien are constitutional. 4 The rule that the power of taxation is incapable of delegation is subject to one universally recognized exception, namely, that the legislature may grant to municipal corporations the power of taxation for municipal purposes to be exercised by them through the voters of the municipality directly or through mu- nicipal councils elected by the people. The power of the legis- lature to authorize municipal corporations to levy taxes for the purpose of providing the necessary revenue to defray the ex- penses of their municipal government and to pay for the con- struction of public improvements within their respective limits has been exercised for so long a time that its existence is not open to dispute. 5 It is however generally considered that the legislature cannot delegate the power of taxation, even for local purposes, to any board of officers not elected directly by the people. This rule however has no application to special assessments, which may constitutionally be imposed by appointive officers. 6 A municipal corporation has no inherent power to levy taxes and can exercise only those powers to tax which have been granted to it by the legislature; 7 but it has been held that the grant of a charter to a municipal corporation with the usual powers and duties incident to such bodies by necessary inference carries with it the power of taxation, since otherwise it would be impossible for the municipality to exercise its powers and per- form its duties. 8 In any event a grant of power to a municipal corporation to borrow money or otherwise incur financial obliga- tions necessarily carries with it the power to levy taxes to meet the obligations thus incurred. 9 The grant of the power of taxation to a municipal corporation by the legislature of a state does not form such a contract be- tween the state and the municipality as is within the protection of the provision of the constitution of the United States which 4 League v. Texas, 184 U. S. 156 (1902). 5 United States v. New Orleans, 98 U. S. 381 (1878); Stoutenburgh v. Hennick, 129 U. S. 141 (1889); Bradley v. Richmond, 227 U. S. 477 (1913). 6 Soliah v. Heskin. 222 U. S. 522 (1912). 7 Duffy v. Treasurer & Receiver General. 234 Mass. 42, 47 (1919). 8 United States v. New Orleans, 98 U. S. 381 (1878). 9 Loan Association v. Topeka, 20 "Wall. 655 (1874); United States v. New Orleans, 98 U. S. 381 (1878) ; Ralls County Court v. United States. 105 U. S. 733 (1881); Quincy v. Jackson, 113 U. S. 332 (1885); Lowell v. Boston, 111 Mass. 454 (1873). 18 Taxation in Massachusetts [part i prohibits a state from impairing the obligation of contracts. The conferring of such right of taxation is an exercise by the leg- islature of a public and governmental power. It is the imparting to the municipality of a portion of the power of the state, which can lawfully be imparted to a governmental subdivision of the state. But from the very character of the power it cannot be imparted in perpetuity, and is always subject to revocation, mod- ification and control by the legislative authority of the state. 10 In Massachusetts the power of the legislature to withdraw the power of taxation from the cities and towns of the state is limited by the fact that the existence of towns is expressly rec- ognized in the constitution; and the legislature has con- sequently no power to abolish or to materially impair the town system of government as practised in this commonwealth con- tinuously from a long time before the Declaration of Independ- ence until the present time. 11 As a system of town government in which the towns had no power of levying taxes would be a mere shadow of the system recognized by our constitution, the power of the legislature to deprive the towns of the power of taxation altogether is open to serious question; but the exemp- tion of one class of property from local taxation is not unconsti- tutional when a large field of taxation is still left to the munic- ipalities. 12 11. Construction of Tax Laws It is a familiar canon in the interpretation of the tax laws that they are not to be extended by construction. 1 The liability of property to taxation depends upon the provisions of statutes and no tax can be sustained as within the spirit of a statute if it is not covered by its words. 2 Tax laws are not to be stretched beyond i° Williamson v. New Jersey, 130 U. S. 189 (1889). 11 Commonwealth v. Plaisted, 148 Mass. 375, 384 (1889); Opinion of the Justices, 229 Mass. 601, 607 (1918). 12 Duffy v. Treasurer & Receiver General, 234 Mass. 42, 51 (1919). i Gould v. Gould, 245 U. S. 151 (1918) ; Sewall v. Jones, 9 Pick. 412 (1830) ; City National Bank v. Charles Baker Co., 180 Mass. 40 (1901); Martin L. Hall Co. v. Commonwealth, 215 Mass. 326, 329 (1913); Attorney General v. Clark, 222 Mass. 291, 294 (1915); Tyler v. Treasurer & Receiver General, 226 Mass. 306, 309 (1917); Hill v. Treasurer & Receiver General, 229 Mass. 474 (1918); Osgood v. Tax Commissioner, 235 Mass. 88, 90 (1920); Eaton, Crane & Pike Co. v. Commonwealth, 237 Mass. 523 (1921). 2 City National Bank v. Charles Baker Co., 180 Mass. 40 (1901) ; Hill v. Treasurer & Receiver General. 229 Mass. 474 (1918) ; Osgood v. Tax Com- missioner, 235 Mass. 88, 90 (1920). sect. 11] Nature and Characteristics of Taxation 19 their reasonable meaning, but rather in case of doubt are to be construed with some strictness. Nevertheless the tax laws, like all other laws, must be construed with a reference to the reasons and principles of the common law and with a just regard to the subject matter to which they apply. The general policy of the law is that all property not specifically exempted shall be subject to taxation, and when it is contended that under the law a cer- tain class of property is not subject to taxation, the policy of the law should be considered in construing the statute in contro- versy. 3 But these considerations do not authorize the court to give a forced and unnatural meaning to the language of the statute. With the greatest vigilance which can be exercised, some property will find crevices in the law through which it will escape taxation. But when such crevices are discovered, it is the province of the legislature, and not of the court, to stop them. 4 In the case of a controversy over the interpretation of a stat- ute granting an exemption under certain conditions to property which is ordinarily taxable, the situation is different from a con- troversy over the inclusion of property within the terms of a statute imposing a tax. An exemption from taxation is an extraordinary grace of the sovereign power and is to be strictly construed. The grant of exemption must be made to appear plainly either by the express words or necessary intendment of the statute. 5 In construing tax laws words should be interpreted in their popular meaning rather than in any technical sense. Tax laws are enacted for practical ends. They must be administered in large part by the plain citizens who are elected assessors from time to time in the various municipalities. They should be con- strued and interpreted so far as possible so as to be susceptible of easy comprehension and not likely to become pitfalls for the unwary. 6 In determining the meaning of a doubtful statute the prac- 3 Swett v. Boston, 18 Pick, 123 (1836) ; Smith v. Northampton Bank, 4 Cush. t 12 (1839). 4 Swett v. Boston, 18 Pick. 123 (1836). 5 Redemptorist Fathers v. Boston, 129 Mass. 178 (1880) ; Third Congrega- tional Society v. Springfield, 147 Mass. 396 (1888); Milford v. Worcester County Commissioners, 213 Mass. 162 (1912); Boston Lodge of Elks v. Boston, 217 Mass. 176 (1914) ; Sullivan v. Ashfield, 227 Mass. 24 (1917) ; Wheelwright v. Tax Commissioner, 235 Mass. 584 (1920). 6 Hemenway v. Milton, 217 Mass. 230 (1914). 20 Taxation in Massachusetts [part i tical construction put upon the law by those charged with its enforcement through many years is a circumstance sometimes entitled to considerable weight; 7 but when a statute clearly re- quires the taxation of a certain class of property, it is imma- terial that no tax has been levied thereon in preceding years. It is only when a statute is of doubtful import and the practice of the officers charged with the duty of assessing taxes has been long continued and acquiesced in by all parties interested that it can be resorted to in aid of the construction of the statute. 8 12. Limitations upon the Taxing Power of the States in the Constitution of the United States The power of taxation of each state over persons, property, privileges, occupations and acts within its jurisdiction is limited or restricted by a number of different provisions in the consti- tution of the United States. The provisions which specifically limit the power of taxation in the states are as follows: (1) No state may lay duties on exports or imports (Art. I, Section 10). (2) No state without the consent of Congress may lay any duty of tonnage (Art. I, Section 10). The provisions which limit the governmental powers of the states generally and are applicable to taxation as well as to other powers are as follows: (1) No state shall pass any law impairing the obligation of con- tracts (Art. I, Section 10). (2) The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states (Art. IV, Section 2) . (3) All treaties made under the authority of the United States shall be the supreme law of the land (Art. VI) . (4) No state shall deprive any person of life, liberty or property without due process of the law, nor deny to any person within its jurisdiction the equal protection of the laws (Amendment 14). 7 Tyler v. Treasurer & Receiver General, 226 Mass. 306 (1917). The prac- tice of a single year is of no materiality, Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921). 8 Attorney General v. Barney. 211 Mass. 134 (1912); A. J. Tower Co. v. Commonwealth, 223 Mass. 371, 375 (1916); Mutual Benefit Life Insurance Co. v. Commonwealth, 227 Mass. 63 (1917). sect. 13] Express Limitations of Federal Constitution 21 The power of taxation in the several states is further re- stricted by implication in the constitution of the United States in the following manner : (1) No state may tax property or agencies of the United States. (2) No state may impose a burden on foreign or interstate commerce. EXPRESS LIMITATIONS OF THE FEDERAL CONSTITUTION 13. Duties on Imports and Exports The constitution of the United States contains in Article I, Section 10, the following provision : No State shall, without the consent of Congress, lay any imposts or duties on imports or exports except what may be absolutely neces- sary for executing its inspection laws ; and the net produce of all duties and imposts, laid by any State on imports or exports, shall be for the use of the Treasury of the United States; and all such laws shall be subject to the revision and control of the Congress. Imports and exports within the meaning of this clause in- clude only property arriving in the United States or sent there- from, from or to a foreign country, and this clause accordingly does not apply to goods sent from one state to another, 1 to pas- sengers travelling from one state to another, 2 or to passengers entering the United States. 3 It is not competent for a state to tax imported goods until they have lost their character as im- ports after arriving at their destination and becoming mingled with the other property in the state. 4 Such mingling is effected by their being taken from their original packages, 5 sold, 6 or of- 1 Woodruff v. Parham, 8 Wall. 123 (1868) ; Brown v. Houston, 114 U. S. 622 (1885); Coe v. Errol, 116 U. S. 527 (1886); Patapsco Guano Co. v. Board of Agriculture, 171 U. S. 350 (1898) ; American Steel etc. Co. v. Speed, 192 U. S. 500 (1904). 2 Crandall v. Nevada, 6 Wall. 40 (1867). It was held however that a tax on passengers leaving or passing through the state while not obnoxious as a tax on exports was objectionable as tending to embarrass the legitimate opera- tions of officers of the United States. 3 People v. Compagnie Generale Transatlantique. 107 U. S. 61 (1882). * Brown v. Maryland, 12 Wheat. 441 (1827) ; Low v. Austin, 13 Wall. 33 (1871). 5 May v. New Orleans, 178 U. S. 502 (1900). The original package is the case, box or bale in which the articles are packed for transportation, and no single article therein, though separately wrapped, is an original package. May v. New Orleans, 178 U. S. 496 (1900). 6 Waring v. Mobile, 8 Wall. 110 (1868). 22 Taxation in Massachusetts [part i fered for sale. Goods in a state being manufactured or prepared for export are subject to taxation by the state until they have started on their ultimate journey to a foreign country or have been committed to the carrier for the purpose of such a journey. 8 Capital continuously invested in goods in export is taxable by the state if it was in the form of money on the day when the tax was assessed. 9 It is clearly unconstitutional for a state to require a license for the sale of imported goods, 10 or to attempt to make an excise, imposed on sales generally, applicable to the sale of foreign goods in the original package by the person who imported them. 11 A stamp tax on bills of lading so far as it applies to bills of lading upon goods sent to a foreign country is objectionable as a duty upon exports, 12 but no such objection is open to a stamp tax upon bills of exchange. 13 A state law imposing pilotage fees is not a duty upon imports or exports. 14 A legitimate inspection law may be enforced by imposing a fee for inspection, and even if such charge is a duty on imports or exports it is within the exception contained in the clause of the constitution now under consideration. 15 The right of in- spection is not based upon the theory that the articles to be in- spected are dangerous or noxious, but rests upon the power of the state to see that articles exported or imported are fit for use 16 and packed in such a way that they may be subsequently identified. 17 The exception in this clause, like the rule itself, applies only to property, and a state tax upon immigrants cannot be justified as an "inspection law." 18 As far as the size of the inspection fee is concerned, a state statute will not be held invalid unless the charge is so excessive as to clearly denote bad faith. 19 » American Steel Co. v. Speed, 192 U. S. 520 (1904). 8 Coe v. Errol, 116 U. S. 577 (1886). 9 New York v. Taxes etc. Commissioners, 104 U. S. 466 (1881). 10 Brown v. Maryland, 12 Wheat. 441 (1827). 11 Cook v. Pennsylvania, 97 U. S. 573 (1878). 12 Almy v. California, 24 How. 174 (1860). 13 Nathan v. Louisiana, 8 How. 81 (1850). 14 Cooley v. Board of Wardens, 12 How. 313 (1851). 15 Turner v. Maryland, 107 U. S. 38, 57 (1882). 16 Bowman v. Chicago, etc.. R. R. Co., 125 U. S. 488 (1887). « Turner v. Maryland, 107 U. S. 38 (1882). 18 People v. Compagnie Generale Transatlantique, 107 U. S. 63 (1882). » Patapsco Guano Co. v. Board of Agriculture, 171 U. S. 350 (1898). sect. 14] Express Limitations of Federal Constitution 23 14. Duties of Tonnage The constitution of the United States contains in Article I, Section 10, the following provision : "No state shall, without the consent of Congress, lay any duty of tonnage. . . ." A duty of tonnage is a charge upon a vessel according to its size or capacity, for the privilege of navigating the waters of a state or of entering or leaving a port therein, and any such charge is forbidden by this clause of the constitution, 1 even if the vessel so taxed belongs to citizens of the state imposing the tax, 2 and plies only within the waters of the state. 3 A tax upon vessels as property imposed by the state in which they belong and based upon their value as property and not upon their capacity is not a duty of tonnage and is not obnoxious to this clause of the constitution. 4 So also a municipal ferry license fee not graduated by the size of the ferry boats is not a duty of tonnage. 5 On the other hand a fee for the use of services fur- nished to vessels by the public authorities, though graded in ac- cordance with the capacity of the vessel, is not a duty of tonnage, because it is not a tax of any description ; but a tonnage tax can- not be imposed under the guise of such a charge. Thus a fee for the use of a wharf proportioned to the size of the vessel using it is a wharfage charge, not a tonnage tax, and it is not made a tax by the circumstance that the wharf used belongs to a municipal- ity, 6 or even that the municipality has the exclusive right to erect wharves within its limits. 7 A charge imposed whether a vessel ties up to a wharf or not cannot however be sustained as a wharf- age charge. 8 A pilotage fee is not a tonnage tax, 9 but a state 1 Southern Steamship Co. v. Portwardens, 6 Wall. 31 (1867) ; State Tonnage Tax Cases, 12 Wall, 210 (1870); Inman Steamship Co. v. Tinker, 94 U. S. 243 (1876); Huse v. Glover, 119 U. S. 549 (1886). 2 State Tonnage Tax Cases, 12 Wall. 210 (1870) ; Wheeling etc. Trans- portation Co. v. Wheeling, 99 U. S. 273 (1878). 3 State Tonnage Tax Cases, 12 Wall. 210 (1870). 4 Wheeling Transportation Co. v. Wheeling, 99 U. S. 283 (1878). 5 Wiggins Ferry Co. v. St. Louis, 107 U. S. 365 (1882). « Northwestern Union Packet Co. v. St. Louis, 100 U. S. 427 (1879); Parkersburg, etc., Transportation Co. v. Parkersburg, 107 U. S. 696 (1882); Onachita Packet Co. v. Aiken, 121 U. S. 448 (1886). 7 Keokuk Northern Line Packet Co. v. Keokuk, 95 U. S. 84 (1877). 8 Cannon v. New Orleans. 20 Wall. 580 (1874). , 9 Cooley v. Board of Wardens, 12 How. 313 (1851). ' 24 Taxation in Massachusetts [part i statute imposing a harbor master's fee on every vessel entering a port whether the harbor master performs any service or not is void as a tonnage tax. 10 A toll exacted by the state upon ves- sels in proportion to tonnage for passing through waterways made navigable by the state is not a tonnage tax, 11 and the same is true of the quarantine fee imposed as a charge for actual ser- vice; 12 but a tonnage tax imposed to pay the expenses of the quarantine system of a state is not valid. 13 15. Impairment of the Obligation of Contracts The constitution of the United States provides in Article I, Section 10, that no state shall pass any law impairing the obliga- tion of contracts. This provision affects and limits the taxing powers of the states in a number of different ways. Thus while it is generally considered that there is nothing in this provision which prohibits a state from taxing its own bonds as property in the hands of individual owners of the bonds, where the bonds were not declared to be tax exempt when issued, yet it is well settled that such a tax cannot be enforced by withholding the amount of the tax from the interest paid on the bonds. 1 When it is provided in a statute under authority of which the bonds of a state are issued that the coupons or interest warrants on the bonds shall be received at their face value in the payment of all taxes due to the state, such a provision cannot be constitution- ally repealed after the bonds are issued. 2 A tax itself is not a contractual obligation and a state by as- sessing and collecting a tax which under the laws then in force is imposed annually does not impliedly contract with the tax- 10 Southern Steamship Co. v. Portwardens, 6 Wall. 31 (1867). 11 Huse v. Glover, 119 U. S. 547 (1886). 12 Morgan's Steamship Co. v. Louisiana, 118 U. S. 463 (1885). 13 Peette v. Morgan, 19 Wall. 582 (1873). 1 Murray v. Charleston, 96 U. S. 432 (1877); Hartman v. Greenhow, 102 U. S. 672 (1880). 2 Woodruff v. Trapnall, 10 How. 190 (1850); Furman v. Nichol. 8 Wall. 44 (1868); State v. Stoll, 17 Wall. 425 (1873); Hartman v. Greenhow, 102 U. S. 672 (1880); Poindexter v. Greenhow, 114 U. S. 270 (1884); McGahey v. Vir- ginia, 172 U. S. 102 (1890). A bond-holder cannot by writ of mandamus compel the state authorities to accept the coupons, Antoni v. Greenhow, 107 U. S. 769 (1882), but he may tender the coupons in payment of his tax and subsequently resist in court any proceedings to collect the tax in money, and if the officers of the state attempt to enforce payment of the tax by summary proceedings he may recover darrfages from them as tortfeasors. Poindexter v. Greenhow, 114 U. S. 270 (1884); McGahey v. Virginia, 172 U. S. 102 (1890). sect. 15] Express Limitations of Federal Constitution 25 payer to carry on its governmental activities for another year without calling upon him for another contribution. So also the payment of an excise for the privilege of performing a certain act or engaging in a certain occupation is not a contract that another excise will not be imposed upon the same privilege. Whenever the public exigencies require additional funds a new tax may be levied upon the same property or the same privilege without violating any constitutional rights of the taxpayer. 3 There is another condition under which the constitutional provision now under consideration has been invoked so as to re- strict the power of a state legislature over the laws relating to taxation, though happily never in Massachusetts. When a municipal corporation incurs an indebtedness by authority of the legislature and the statutes in force at the time provide for the assessment and collection of taxes sufficient to meet the indebt- edness when it falls due, a subsequent statute amending or re- pealing the statutes in such a way as to substantially impair the ability of the municipal corporation to pay the debt impairs the obligation of the contract and is unconstitutional and void. So far as the creditors are concerned the old statutes are still in force, and, upon the application of a judgment creditor who has been unable to enforce his judgment, a federal court will issue a writ of mandamus directing the local authorities to collect taxes un- der the statutes in force when the debt was incurred. 4 If the municipality which issued the bonds has been annexed to or succeeded by another, the court will, by writ of mandamus, di- rect the officers of the latter to pay the debts of the former, and if its taxing powers are less extensive than those of the munic- ipality which incurred the debt, the statutes authorizing the assessment of taxes in force with respect to such municipality when the debt was incurred will be treated as still in force and the officers of the new corporation directed to levy a tax there- under. 5 When however the state itself is the debtor, such a remedy is not available, as a writ of mandamus in such a case 3 Home Insurance Co. v. Augusta, 93 U. S. 116 (1876); Patton v. Brady, 184 U. S. 608 (1902). 4 Von Hoffman v. Quincy, 4 Wall. 535 (1866); Galena v. Amy, 5 Wall. 705 (1866); Edwards v. Kearzey, 96 U. S. 595 (1877); Wolff v. New Orleans, 103 U. S. 358 (1880); Louisiana v. Pilsbury, 105 U. S. 278 (1881); Ralls County v. United States, 105 U. S. 733 (1881); Seibert v. Lewis. 122 U. S. 284 (1877). 5 Mount Pleasant v. Beckwith, 100 U. S. 514 (1879); Mobile v. United States, 116 U. S. 289 (1886). 26 Taxation in Massachusetts [part i would be in effect a suit against the state, and a state cannot be sued without its consent; 6 and a state, if it really desires to aid one of its municipalities in avoiding its obligations, can de- prive the creditors of their remedy by repealing the municipal charter, abolishing the municipality and not creating any corpor- ate entity in its place. 7 16. Exemption from Taxation as a Contract Protected by the Constitution Although it is recognized with respect to governmental pow- ers other than taxation that the legislature cannot even by ex- press words enter into a binding contract not to exercise its power to the full extent authorized by the constitution, 1 it was de- cided by the supreme court of the United States more than a hundred years ago that a legislative enactment exempting prop- erty from taxation for a definite or indefinite period in the future may constitute a contract, and that consequently a repeal of the statute by which the exemption was granted or an attempt by subsequent legislation to tax the property thus exempted would violate the contract clause of the federal constitution. 2 The soundness of this rule has been frequently questioned, 3 but the rule itself has been consistently maintained. 4 The dis- favor in which it is held has however found expression in the growth of a number of limitations or qualifications upon the rule and it is not unlikely that the rule itself may be eventually abandoned. 6 Louisiana v. Jumel, 107 U. S. 711 (1882). 7 Meriwether v. Garrett, 102 U. S. 472 (1880). 1 See Nichols, Eminent Domain, 2d ed., sec. 22. 2 New Jersey v. Wilson, 7 Cranch. 164 (1812). 3 See dissenting opinions in Piqua Bank v. Knoop, 16 How. 369 (1853); Dodge v. Woolsey, 18 How. 331 (1855) ; Washington University v. Rouse, 8 Wall. 430 (1869). 4 Armstrong v. Athens County, 16 Pet. 281 (1842) ; Gordon v. Appeal Tax Court, 3 How. 133 (1845); Piqua Bank v. Knoop, 16 How. 369 (1853); Dodge v. Woolsey, 18 How. 331 (1855); McGee v. Mathias, 4 Wall. 143 (1866); Washington University v. Rouse, 8 Wall. 430 (1869) ; Wilmington etc. R. R. Co. v. Reid, 13 Wall. 264 (1871) ; Pacific R. R. Co. v. Maguire. 20 Wall. 36 (1873) ; Mackall v. Chesapeake etc. Canal Co., 94 U. S. 308 (1876) ; Asylum v. New Orleans, 105 U. S. 362 (1881); Stearns v. Minnesota, 179 U. S. 223 (1900); Wright v. Georgia Banking Co., 216 U. S. 420 (1909) ; Choate v. Trapp, 224 U. S. 665 (1912); Wright v. Central of Georgia R. R. Co., 236 U. S. 674 (1914). The same rule applies td a charter provision fixing the taxation of a corporation in a limited or special manner; if such a charter contains the attributes of a contract it must be respected, Piqua Bank v. Knoop, 16 How. 369 (1853); Mobile etc. R. R. Co. v. Tennessee, 153 U. S. 486 (1894). sect. 16] Express Limitations of Federal Constitution 27 In the first place, to constitute a binding contract there must be a consideration, and a voluntary concession or grant by the legislature cannot be the foundation of a contract. 5 But a con- sideration can be found not only in the giving up of valuable property rights, 6 but even in the acceptance by a corporation of the charter in which the exemption is contained whenever the charter requires the assumption by the grantee of public or quasi public duties, as in the case of a railroad or other public service corporation, 7 a public charitable corporation, 8 or even of a bank. 9 In the second place the grant of an exemption, to constitute a contract, must be special; a corporation chartered at a time when by the general laws then in force it would not be subject to taxation cannot insist that so far as it is concerned the general laws shall forever remain unchanged. 10 In the third place, a contractual exemption from taxation will never be implied, and can rest only upon the express words of the statute; 11 and even if a contract of exemption is established, 5 Christ Church v. Philadelphia, 24 How. 300 (1860); Tucker v. Ferguson, 22 Wall. 527 (1874); West Wisconsin R. R. Co. v. Trempealeau County, 93 U. S. 595 (1876) ; Grand Lodge v. New Orleans, 166 U. S. 143 (1897) ; Seton Hall College v. South Orange, 242 U. S. 100 (1916) ; Troy Union R. R. Co. v. Mealy, 254 U. S. 47 (1920). For this reason a grant of exemption to a corpora- tion after it has been incorporated is ordinarily not a contract; but when an exemption is granted in an amendment to a charter and at the same time additional duties and obligations are imposed, if the corporation accepts the amendment the exemption is protected by the constitution, Tomlinson v. Jessup, 15 Wall 454 (1872). 6 New Jersey v. Wilson, 7 Cranch. 164 (1812) ; Gordon v. Appeal Tax Court, 3 How. 133 (1845) ; Choate v. Trapp, 224 U. S. 665 (1912) ; Gleason v. Wood, 224 U. S. 679 (1912) ; English v. Richardson, 224 U. S. 680 (1912). 7 Piqua Bank v. Knoop, 16 How. 369 (1853). s Home of the Friendless v. Rouse, 8 Wall. 430 (1869). 9 Farrington v. Tennessee, 95 U. S. 679 (1877). 10 Providence Bank v. Billings, 4 Pet. 514, 563 (1830) ; East Saginaw Salt Mfg. Co. v. East Saginaw, 13 Wall. 373 (1871); Welch v. Cook, 97 U. S. 541 (1878); Wisconsin etc. R. R. Co. v. Powers, 191 U. S. 379 (1903). 11 Providence Bank v. Billings, 4 Pet. 514 (1830) ; North Missouri R. R. Co. v. Maguire, 20 Wall. 46 (1873); Erie R. R. Co. v. Pennsylvania, 21 Wall. 492 (1874); Bailey v. Maguire, 22 Wall. 215 (1874); Memphis Gas Light Co. v. Shelby County Taxing District, 109 U. S. 398 (1883) ; New Orleans etc. R. R. Co. v. New Orleans, 143 U. S. 192 (1892); Phoenix Insurance Co. v. Tennessee, 161 U.S. 174 (1896). The grant of a franchise does not contribute an agreement that the franchise shall not be taxed as property, Providence Bank v. Billings, 4 Pet. 514 (1830); New Orleans etc. R. R. Co. v. New Orleans, 143 U. S. 192 (1892); even if a valuable consideration has been paid for the franchise, Gordon v. Appeal Tax Court, 3 How. 133 (1845) ; Savannah etc. R. R. Co. v. Savannah, 198 U. S. 392 (1905) ; New York v. State Board of Tax Commissioners, 199 U. S. 1,11 (1905) ; St. Louis v. United R. R. Co, 210 U. S. 266 (1908) ; but when the 28 Taxation in Massachusetts [part i it will be construed strictissimi juris and never be extended by implication in the slightest degree. 12 In the fourth place, an exemption from taxation will not be held to be assignable unless expressly made so by the legisla- ture; 13 and if the corporation to which the exemption was granted assigns its franchise and all its assets to another corporation and gives up its corporate existence, the exemption will be lost. A merger with other corporations in which the corporate existence and identity of the grantee of the exemption is not given up will not however annul the exemption. 1 14 state has granted a franchise for a valuable consideration it cannot tax the grantee of the franchise for the privilege of exercising it, Boise etc. Water Co. v. Boise City, 230 U. S. 84 (1913). A grant to one corporation of the same rights, powers and privileges as are enjoyed by another corporation does not include an exemption from taxa- tion enjoyed by such other corporation, Memphis etc. R. R. Co. v. Gaines, 97 U. S. 697 (1878); Wright v. Georgia R. R. etc. Co., 216 U. S. 420 (1910). A charter provision expressly establishing the taxes to be paid by the corporation chartered, but containing no express exemption from other or greater taxes, does not protect the corporation from different or additional taxes, Ohio Ins. etc. Co. v. Debolt, 16 How. 416 (1853) ; Delaware R. R. Tax, 18 Wall. 206 (1873); Erie R. R. Co. v. Pennsylvania, 21 Wall. 492 (1874); Home Insurance Co. v. Augusta, 93 U. S. 116 (1876) ; Wiggins Ferry Co. v. East St. Louis, 107 U. S. 365 (1882). 12 Bailey v. Maguire, 22 Wall. 215 (1874) ; Vicksburg etc. R. R. Co. v. Dennis, 116 U. S. 231 (1886) ; Chicago etc. R. R. v. Guffey, 120 U. S. 569 (1886); Covington v. Kentucky, 173 U. S. 231 (1898). 13 Armstrong v. Athens County, 16 Pet. 281 (1842) ; Keokuk & Western R. R. Co. v. Missouri, 152 U. S. 301 (1894) ; Rochester R. R. Co. v. Rochester, 205 U. S. 236 (1907); Jetton v. University of the South, 208 U. S. 489 (1907); Morris Canal etc. Co. v. Baird, 239 IT. S. 126 (1915). Thus an exemption will not pass to the purchaser upon the voluntary sale of all the franchises and property of a corporation, Memphis etc. R. R. Co. v. Gaines, 97 U. S. 697 (1878) ; Memphis etc. R. R. Co. v. Railroad Commissioners, 112 U. S. 609 (1884) ; Chesapeake etc. R. R. Co. v. Miller, 114 U. S. 176 (1885); Picard v. East Tennessee etc. R. R. Co., 130 U. S. 637 (1889) ; Gulf etc. R. R. Co. v. Hewes, 183 U. S. 66 (1901) ; or upon sale by a receiver under order of court, Mercantile Bank v. Tennessee, 161 U. S. 161 (1896); or upon foreclosure of a mortgage, Trask v. Maguire, 18 Wall. 391 (1873); Morgan v. Louisiana, 93 U. S. 217 (1876) ; East Tennessee etc. R. R. Co. v. Hamblen County, 102 U. S. 273 (1880) ; Wilson v. Gaines, 103 U. S. 417 (1880) ; Louisville etc. R. R. Co. v. Palmes, 109 U. S. 244 (1883) ; New York v. Cook, 148 U. S. 397 (1893). A lease of all the property and franchises of a corporation will not however extinguish the exemption therein, Wright v. Central of Georgia R. R. Co., 236 U. S. 674 (1915) ; Wright v. Louisville etc. R. R. Co., 236 U. S. 687 (1915). 14 Philadelphia etc. R. R. Co. v. Maryland, 10 How. 425 (1850) ; Tomlinson v. Branch, 15 Wall. 460 (1872); Delaware Railroad Tax, 18 Wall. 206 (1873); Central R. R. etc. Co. v. Georgia, 92 U. S. 665 (1875); Chesapeake etc. R. R. Co. v. Virginia, 94 U. S. 718 (1876) ; Green County v. Conners, 109 U. S. 104 (1883) ; Tennessee v. Whitworth, 117 U. S. 139 (1886) ; Keokuk etc. R. R. Co. v. Missouri, 152 U. S. 301 (1894) ; Wright v. Georgia R. R. etc. Co., 216 U. S. 420 (1910). If however the consolidation effects a dissolution of the sect. 16] Express Limitations of Federal Constitution 29 In the fifth place, it is well settled that when, by the provi- sions of the constitution or of the general laws in force at the time a special charter of exemption was granted, the charters of all corporations were issued subject to alteration, amendment or repeal by the legislature, the exemption may be repealed. 15 As all charters of incorporation issued in Massachusetts since 1831 have been granted subject to alteration, amendment or repeal, there are very few special exemptions in this state which are beyond the power of the legislature to withdraw. 16 In the sixth place, no contract can arise from an unconstitu- tional law; and when the power of the legislature to grant ex- emptions from taxation is limited by the provisions of the state constitution, no grant of exemption will constitute a valid con- tract even if made for a valuable consideration unless it was out- side the constitutional limitations. 17 existing corporations, their exemptions are lost, Shields v. Ohio, 95 U. S. 319 (1877); Maine Central R. R. Co. v. Maine, 96 U. S. 499 (1877); Atlantic etc. R. R. Co. v. Georgia, 98 U. S. 359 (1878); St Louis etc. R. R. Co. v. Berry, 113 U. S. 465 (1885) ; Keokuk etc, R. R. Co. v. Missouri, 152 U. S. 301 (1894) ; Minneapolis etc. R. R. Co. v. Gardner, 177 U. S. 332 (1900) ; Yazoo etc. R. R. Co. v. Adams, 180 U. S. 1 (1901). 15 This principle is applicable without question when the reservation of the right to alter, amend or repeal is contained in the state constitution, Union Passenger R. R. Co. v. Philadelphia, 101 U. S. 528 (1879); Chesapeake eta. R. R. Co. v. Miller, 114 U. S. 176 (1884); Covington v. Kentucky, 173 U. S. 231 (1896) ; or in the charter of the corporation to which the exemption was granted, New York v. Cook, 148 U. S. 397 (1893); Louisville v. Louisville Bank, 174 U. S. 439 (1899); or in the general laws in force when the charter was granted, if no intent to the contrary appears, Tomlinson v. Jessup, 15 Wall. 454 (1872) ; Maine Central R. R. Co. v. Maine, 96 U. S. 499 (1877) ; Atlantic etc. R. R. Co. v. Georgia, 98 U. S. 359 (1878) ; Hoge v. Richmond etc. R. R< Co., 99 U. S. 348 (1878); Sioux City St. Ry Co. v. Sioux City, 138 U. S. 98 (1891); Louisville Water Co. v. Clark, 143 U. S. 1 (1892); Louisville v. Louis- ville Bank, 174 U. S. 439 (1899) ; even if the exemption was granted for a specific period, Citizens Savings Bank v. Owensboro, 173 U. S. 636 (1899). A , reserved right to alter, amend and repeal, when contained in a general statute may be waived by the legislature, and an exemption will constitute a binding contract if it clearly app^rs that such was the intent of the legis- lature, even if such a statute was in force, Home for Friendless v. Rouse, 8 Wall. 430 (1869) ; New Jersey v. Yard. 95 U. S. 104 (1877). 16 St. 1830, c. 81. This provision is now contained in the Fifty-ninth Amendment to the Constitution of Massachusetts, adopted in 1918. 17 Memphis etc. R. R. Co. v. Gaines, 97 U. S. 697 (1878) ; Louisville etc. R. R. Co. v. Palmes, 109 U. S. 244 (1883) ; Yazoo etc. R. R. Cd. v. Adams, 180 U. S. 1 (1900) ; Gulf etc. R. R. Co. v. Hewes, 183 U. S. 66 (1901) ; Berryman v. Whitman College, 222 U. S. 334 (1912). A constitutional provision prohibiting the granting of exemptions does not affect the validity of an exemption granted before the provision was adopted, Dodge v. Woolsey, 18 How. 331 (1885) ; Home of the Friendless v. Rouse, 8 Wall. 430 (1869). It does however prevent the transfer of an exemption from one corporation to another, even with the 30 Taxation in Massachusetts [part i In the seventh place, it must be remembered that the con- tract clause of the constitution does not prohibit a state from impairing the obligation of contracts but merely from passing any law impairing the obligation of contracts; and unless the alleged exemption is adversely affected by subsequent legislation as distinguished from judicial decision, the contract clause can- not be invoked. 18 17. Discrimination Against Citizens of Other States The constitution of the United States provides in Article 4 Section 2 that the citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states. This provision makes it impossible for a state to tax residents of other states who own property or carry on business within its limits at a higher rate than its own citizens are taxed under like circumstances. 1 The prohibition of this provision is not limited to discriminatory laws, and if it appears that there is an habitual practice, based upon a settled purpose, on the part of local assessors to discriminate against non-residents in the valuation of property, the proceedings are void. 2 Exact identity in the taxation of residents and non-residents is not however required, if substantial equality is preserved, and differences in administrative procedure required to meet practical distinctions in the taxation of residents and non-resi- sanction of the legislature, Trask v. Maguire, 18 Wall. 391 (1878) ; Keokuk etc. R. R. Co. v. Missouri, 152 U. S. 301 (1893) ; Gulf etc. R. R. Co. v. Hewes, 183 U. S. 66 (1901); or the revival of an exemption which has lapsed, Chicago etc. R. R. Co. v. Minnesota, 216 U. S. 234 (1910) ; or the extension of an exemption granted originally for a limited term, Memphis etc. R. R Co. v. Gaines, 97 U. S. 697 (1878); or a radical change in the purposes for which an exempted corpora- tion was chartered, Memphis City Bank v. Tennessee, 161 U. S. 186 (1896). " St. Paul etc. R. R. Co. v. Todd Cdunty, 142 U. S. 282 (1892). 1 Thus a state statute prohibiting non-residents of the state from selling goods within the state except upon payment of a license fee higher than that imposed upon resident merchants is in violation of this provision, Ward v. Maryland, 12 Wall. 424 (1870). An excise on dividends paid to non-resident shareholders in domestic corporations is unconstitutional, Oliver v. Washington Mills, 11 Allen 281 (1865). A state statute taxing the business of hiring persons to labor outside the state does not violate this provision of the constitution, as there is no dis- crimination against citizens of other states, Williams v. Fears, 179 U. S. 274 (1900). 2 Beeson v. Johns, 124 U. S. 56 (1888). sect. 18] Express Limitations of Federal Constitution 31 dents are unobjectionable, even if as a result the non-resident is dealt with more severely. 3 A corporation is not a citizen of any state within the meaning of the clause of the constitution now under discussion, and con- sequently a corporation has no constitutional right as such to transact business in any state other than that from which it received its charter. 4 A state can accordingly impose whatever tax it sees fit upon a foreign corporation seeking to do a purely local business within its limits provided that it does not require the corporation to surrender any of its rights under the consti- tution of the United States, and if the corporation wishes to avail itself of the privilege it must take it subject to the accom- panying burden, even if the tax is much more onerous than is imposed upon domestic corporations under like conditions. 5 18. Obligation to Give Full Faith and Credit to Acts of Every Other State The constitution of the United States provides that full faith and credit shall be given in each state to the acts of every other state. This provision has little if any effect upon the taxing powers of the states, because no state can, by its public acts, detract from the taxing power of another state over property within its jurisdiction. Thus one state, by declaring bonds is- sued by its own municipalities to be exempt from taxation, can- not prevent such bonds from being taxed by another state when owned by inhabitants of such other state; 1 and similarly a state by declaring the taxing situs of stock in corporations established under its laws to be in the state of their origin cannot prevent the taxation of such stock when held by inhabitants of other states. 2 No, state is bound by interstate comity to enforce the revenue 3 Thus a provision by which the non-resident pays his tax to the state and the resident to the municipality in which he lives is unobjectionable, although in a given year there may be some slight inequality in the actual result, Travellers' Insurance Co. v. Connecticut, 185 U. S. 371 (1902). A statute allow- ing constructive notice by publication of the sale of land for non-payment of taxes in the case of non-residents, but requiring personal service of notice upon resident owners is unobjectionable since personal service upon non-resi- dents is not ordinarily practicable, Ballard v. Hunter, 204 U. S. 241 (1907). * Paul v. Virginia, 8 Wall. 181 (1868). 5 Infra, § 23. 1 Bonaparte v. Tax Court, 104 U. S. 592 (1881). 2 Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915) ; affirmed, 245 U. S. 630 (1917). 32 Taxation in Massachusetts [part i laws of other states; and consequently an action cannot be maintained in one state against persons or property within its jurisdiction to recover a tax levied by authority of another state. 3 19. Limitations of the Taxing Powers of the State by Treaties The power which a state would otherwise have of discrimi- nating against aliens in its tax laws may be limited by treaties made by the United States with foreign governments, since it is provided by Article VI of the constitution of the United States that treaties made under the authority of the United States shall be the supreme law of the land. Thus in the absence of a treaty to the contrary a state may deny to aliens the right to inherit property within its jurisdiction, and consequently may impose a tax upon inheritance by aliens at a higher rate than is imposed upon citizens of the United States. 1 Such a discrimina- tion may be prohibited by treaty, although a treaty would not affect a tax upon the estate of a decedent who had died before the treaty took effect. 2 A treaty providing that no higher taxes shall be laid upon the property of citizens of one of the contract- ing parties than upon a citizen of the nation imposing the tax does not apply to a discriminatory inheritance tax, since such a tax is not a tax on property; 3 and a treaty providing that citizens of either of the contracting parties may freely dispose of their goods by will does notprohibit a state inheritance tax law from dis- criminating against alien beneficiaries; 4 or against beneficiaries who are not residents of the United States, 5 because such a treaty grants a right to dispose of and not to receive property by will. 3 Wisconsin v. Pelican Insurance Co., 127 U. S. 265, 290 (1888). 1 Mager v. Grima, 8 How. 490 (1849). In the absence of a treaty the capacity of an alien to inherit depends upon the laws of the state. Sullivan v. Kidd, 254 U. S. 533 (1921). 2 Prevost v. Greeneaux, 19 How. 1 (1856). 3 Peterson v. Iowa, 245 U. S. 170 (1917). * Duus v. Brown, 245 U. S. 176 (1917). 5 Frederickson v. Louisiana, 23 How. 445 (1859). sect. 20] Interstate Commerce 33 INTERSTATE COMMERCE 20. The Taxation of Interstate Commerce, and of Property Engaged Therein The constitution of the United States contains in Article 1, Section 8 the following provision: The Congress shall have power .... to regulate commerce with foreign nations, and among the several States, and with the Indian tribes. It is to be noted that this provision of the constitution does not in terms prohibit the states from regulating interstate com- merce and it has not been interpreted as in itself excluding them from all control over such commerce. It is only with regard to matters upon which Congress has acted or which in their nature require uniform treatment that the states are precluded from acting. Applied to the state power of taxation the interstate commerce clause does not prohibit a state from taxing property engaged in interstate commerce, or even from imposing the ordi- nary property tax upon the franchise of a corporation engaged in interstate commerce. It does however prohibit a state from taxing in any manner the privilege of engaging in interstate com- merce within its limits, or from imposing a tax upon property en- gaged in interstate commerce at a higher rate than is imposed upon other property. The application of these principles is set forth in detail in the following sections. Not all dealings which affect persons or property outside the state in which the dealings originate constitute interstate com- merce; and a state may tax interstate transactions which do not constitute commerce without violating the clause of the consti- tution now under consideration. 1 So also not all pecuniary im- 1 A license may be required of insurance agents acting for foreign corpora- tions, Nutting v. Massachusetts. 183 U. S. 553 (1902), or of emigration agents seeking to employ persons in labor outside the state. Williams v. Fears, 179 U. S. 276 (1900). A tax on money and exchange brokers is valid though applied to one whose sole business is in foreign bills of exchange. Nathan v. Louisiana, 8 How. 80 (1850). A tax on the transfer within a state of shares in corporations may be applied to shares in foreign corporations owned by non-residents, Hatch v. Reardon, 204 U. S. 152 (1907), and a tax may be im- posed on a local cab service connected with an interstate railway. New York v. Knight, 192 U. S. 21 (1904). A license tax on the occupation of a railroad 34 Taxation in Massachusetts [part i positions upon the act of engaging in interstate commerce are taxes, 2 and a reasonable fee for the use of public property or for the services of public officers may be collected from persons or corporations engaged in interstate commerce as well as from other parties. 3 For this reason wharfage fees, 4 canal tolls, 5 or charges for the use of log booms 6 may be imposed without any ex- emption in favor of the persons engaged in interstate commerce ; and for the same reason a license fee may be charged by a state for the use of its roads by motor vehicles even while engaged in interstate commerce. 7 Similarly a municipal corporation may be authorized to impose a charge upon an interstate telegraph company for the right to maintain poles in the public streets, since such a charge is more a rental than a tax, 8 and fees covering the cost of an inspection required to pro- tect the public health, morals or safety are equally unobjection- able though applied to persons engaged in interstate commerce. 9 But even charges and fees which are not taxes cannot be imposed in such a manner as to discriminate against interstate commerce, 10 and an imposition which is really a tax cannot be sustained by calling it a toll or a charge. 11 agent, or on the maintenance of a railroad office cannot however be applied to an interstate railway. McCall v. California, 136 U. S. 109 (1890); Norfolk R. R. Co. v. Pennsylvania, 136 U. S. 118 (1890). 2 Supra § § 4, 5. 6. 3 Northwestern Union Packet Co. v. St, Louis, 100 U. S. ^423 (1879) ; Cincinnati etc. Packet Co. v. Catlettsburg, 105 U. S. 559 (1881); Onachita Packet Co. v. Aiken, 121 U. S. 444 (1887); Postal Tel. Cable Co. v. Baltimore, 156 U. S. 210 (1895); Richmond v. Southern etc. Tel. Co., 174 U. S. 761 (1899). See also the cases cited in notes 4 to 9 inc. 4 Parkersburg etc. Transportation Co. v. Parkersburg, 107 U. S. 691 (1882). 5 Huse v. Glover, 119 U. S. 543 (1886). 6 Lindsay etc. Co. v. Mullen, 176 U. S. 126 (1900). 7 Hendrick v. Maryland, 235 U. S. 610 (1915); Kane v. New Jersey, 242 U. S. 160 (1916). s St. Louis v. Western Union Tel. Co., 148 U. S. 92 (1893), 149 U. S. 465 (1893); Atlantic etc. Tel. Co. v. Philadelphia, 190 U. S. 160 (1903). 9 Thus a license fee may be imposed to cover the cost of the inspection of interstate telegraph poles, Western Union Tel. Co. v. New Hope, 187 U. S. 419 (1903); Atlantic etc. Tel. Co. v. Philadelphia, 190 U. S. 160 (1903); Postal Tel. Cable Co. v. Taylor, 192 U. S. 64 (1904); Mackay Tel. etc. Co. v. Little Rock, 250 U. S. 94 (1919). See also Postal Tel. Cable Co. v. Chicopee, 207 Mass. 341 (1911), holding that a telegraph company may be required to carry municipal lighting wires on its poles without compensation, as a set-off to the cost of inspection which its poles necessitate. i° Guy v. Baltimore, 100 U. S. 434 (1879); Brimmer v. Rebman, 138 U. S. 78 (1891). » State Freight Tax Case, 15 Wall. 232 (1872). sect. 21] Interstate Commerce 35 21. Taxation of the Privilege of Engaging in Interstate Commerce No state can constitutionally prohibit the carrying on of foreign or interstate commerce within its limits x or impose an excise upon the privilege of engaging in such commerce. 2 Thus a state cannot impose a license tax on the occupation of import- ing foreign goods, 3 or of selling goods brought in from another state. 4 There is no doubt that a state may tax the occupation of a peddler, that is a person travelling from place to place selling goods which he carries with him, although the goods are manu- factured in another state and the peddler is really the agent of a dealer located in another state, 5 but a travelling salesman who takes orders in one state for goods to be shipped from another is so closely identified with interstate commerce that his occu- pation cannot be taxed by the state. 6 A privilege tax on all 1 Pembina eto. Mining Co. v. Pennsylvania, 125 U. S. 186 (1888); Horn Silver Mining Co. v. New York, 143 U. S. 314 (1892) ; Hooper v. California, 155 U. S. 653 (1895). 2 Thus a state cannot require a license for vessels engaging in the coasting trade betwen ports in different states, Sinnot v. Davenport, 22 How. 239 (1859) ; or of an interstate ferry line, Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196 (1885); St. Clair County v. Interstate etc. Transfer Co., 192 U. S. 454 (1904); or for towing vessels engaged in interstate commerce, Moran v. New Orleans, 112 U. S. 69 (1884); or for carrying on an interstate express business, Osborne v. Mobile, 16 Wall. 33 (1871) ; Crutcher v. Kentucky, 141 U. S. 47 (1891) ; or for running sleeping cars through a state, Pickard v. Pullman Southern Car Co., 117 U. S. 46 (1886); or for maintaining an interstate tele- graph line, Leloup v. Mobile, 127 U. S. 645 (1888). 3 Brown v. Maryland, 12 Wheat. 419 (1827). 4 Low v. Austin, 13 Wall. 33 (1871). A tax on dealers in a certain com- modity is unconstitutional as to dealers who sell the commodity only in original packages brought in from another state; and the same is true of a tax on sales of such a commodity, Standard Oil Co v. Graves, 249 U. S. 389 (1919); but as to sales not in the original package the tax is valid. Whether an act imposing a tax of this kind which covers all dealers and all sales is unconstitu- tional depends upon the question whether the act is separable and is capable of being sustained as a tax upon business legitimately taxable. Askren v. Continental Oil Co., 252 U. S. 444 (1920). With respect to a tax on the sale or use of a commodity the tax is separable and may be enforced with respect to the sale or use of the commodity so far as such sale or use is not in the original package; but a license tax on dealers which makes no exception in favor of interstate commerce is not separable and is wholly void. Bowman v. Con- tinental Oil Co., U. S. (1921). 5 Howe Machine Co. v. Cage, 100 U. S. 676 (1879) ; Emert v. Missouri, 156 U. S. 311 (1895); Wagner v. Covington. 251 U. S. 95 (1919). 6 Robbins v. Shelby County Taxing District, 120 U. S. 493 (1887) ; Brennan v. Titusville', 153 U. S. 297 (1894); Caldwell v. North Carolina, 187 U. S. 622 (1902); Norfolk etc. R. R. Co. v. Sims, 191 U. S. 451 (1903). A tax on travelling salesmen is bad. although the goods are shipped to the salesman 36 Taxation in Massachusetts [part i dealers may however be collected from one whose principal busi- ness is in soliciting orders for manufacturers outside the state. 7 With respect to maintaining branch stores or agencies in another state, if a manufacturer merely places his goods in the hands of retail dealers in another state, 8 or sends goods on con- signment to purchasers in another state, 9 or even maintains a local office in another state as a headquarters for his salesmen and for the storage and display of samples, 10 he cannot be sub- jected to an excise or license tax by such other state. It is only when he maintains a store for local business that he can be sub- jected to such a tax. 11 A tax on passengers coming from foreign ports or from the ports of other states is unconstitutional under whatever guise; 12 but a reasonable quarantine fee covering only the cost of inspec- tion is not objectionable as a tax on passengers. 13 22. Taxation of Domestic Corporations Engaged in Interstate Commerce The plenary power of a state over corporations of its own creation is still universally recognized, and the state, which may grant or withhold a franchise as it may elect, may impose as a condition upon the grant the payment of such a tax as the leg- islature sees fit to impose. It is well settled that a % tax may be levied upon the franchise of a corporation measured by the value of its capital stock, even if part of the capital of the corporation is invested in property which the state has no power to tax, 1 in bulk and assorted by him for the respective purchasers, Kehrer v. Stewart, 197 U. S. 60 (1905); Rearick v. Pennsylvania. 203 U. S. 507 (1906). The fact that the salesman is a resident of the state imposing the tax does not make it valid, if he is acting for a non-resident principal. Stockard v. Morgan, 185 U. S. 37 (1902). 7 Ficklen v. Shelby County Taxing District, 145 U. S. 21 (1892). s Lyng v. Michigan, 135 U. S. 161 (1870). » Norfolk etc. R. R. Co. v. Sims, 191 U. S. 441 (1903) ; Dozier v. 'Alabama, 218 U. S. 124 (1910). 10 Cheney Bros. Co. v. Massachusetts, 246 U. S. 147 (1918); Marconi Wireless Tel. Co. v. Commonwealth, 218 Mass. 558 (1914). 11 Injra § 24. 12 Smith v Turner, 7 How. 412 (1849) ; Henderson v. Mayor of New York, 92 U. S. 259 (1875) ; People v. Compagnie Generate Transatlantique, 107 U. S. 60 (1882). 13 Morgan's Steamship Co. v. Louisiana Board of Health, 118 U. S. 465 (1886). See also Norris v. Boston, 4 Met. 282 (1842). 1 Society for Savings v. Coite, 6 Wall. 594 (1867); Home Insurance Co. v. New York, 134 U. S. 594 (1890); Flint v. Stone Tracy Co., 220 U. S. 107 (1911); Kansas City etc. R. R. Co. v. Botkin, 240 U. S. 227 (1916). sect. 22 J Interstate Commerce 37 and it necessarily follows that a state may levy an excise on the franchise of corporations established under its laws graded in proportion to the value of the capital stock, which may constitu- tionally be applied to corporations engaged in interstate com- merce. 2 The tax in such a case is not a tax on the privilege of engaging in interstate commerce but on the privilege of existing as a corporation, which is derived from the state and not from the constitution of the United States. For similar reasons a state may levy a franchise tax based on the entire capital stock of a consolidated corporation which so far as it does business within the limits of such state is incorporated under its laws. 3 A state may not constitutionally tax the gross receipts of a domestic corporation derived from interstate commerce 4 and what it cannot do directly it cannot do indirectly by im- posing a tax on the franchise of a domestic corporation engaged in interstate commerce equal to a fixed proportion of its gross receipts, in addition to the taxes on its prop- erty; 5 but since the corporation can be taxed as a going con- cern and the extent of business done indicates the value of its property, the gross receipts may be used as the measure of the tax on its property and franchise when such a tax is not additional to a tax on its property valued in some other way. 6 A state has no power to tax such property of a domestic cor- poration as is permanently located in another state; 7 and when the capital stock of a domestic corporation is taxed, the value of the tangible property of the corporation permanently located outside the state must be deducted. 8 Since however in imposing 2 Delaware Railroad Tax, 18 Wall. 206 (1873) ; Wiggins Ferry Co. v. East St. Louis, 107 U. S. 365 (1882); Henderson Bridge Co. v. Kentucky, 166 U. S. 150 (1897); Kansas City etc. R. R. Co. v. Botkin, 240 U. S. 227 (1916). s Ashley v. Ryan, 153 U. S. 436 (1894); Keokuk etc. Bridge Co. v. Illinois, 175 U. S. 626 (1900). 4 Philadelphia etc. Steamship Co. v. Pennsylvania, 122 U. S. 326 (1887); Crew Levick Co. v. Pennsylvania, 245 U. S. 292 (1917). 5 Galveston etc. R. R. Co. v. Texas, 210 U. S. 217 (1908). 6 Maine v. Grand Trunk R. R. Co. 142 U. S. 217 .(1891); United States Express Co. v. Minnesota, 223 U. S. 335 (1912); Cudahy Packing Co. v. Minnesota, 246 U. S. 450 (1918). » Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905). s Delaware etc. R. R. Co. v. Pennsylvania, 198 U. S. 341 (1905). Since how- ever intangible personal property has its situs at the domicile of the owner, a state may tax a domestic corporation on the aggregate value of its capital stock in excess of its debts, real estate and tangible personal property although it owns no property and does no business in such state. Cream of Wheat Co. v. Grand Forks, 253 U. S. 325 (1920). 38 Taxation in Massachusetts [part i an excise on the franchise of a domestic corporation property which the state has no power to tax directly may be considered, 9 it would seem that a domestic corporation has no constitutional right to have the value of property permanently located outside the state deducted when an excise on its franchise based on the aggregate value of its capital stock is assessed. 1 10 23. Excise Taxes upon Foreign Corporations The limitations imposed by the federal constitution upon the power of a state to levy excise taxes upon corporations or- ganized under the laws of other states for the privilege of doing business within the limits of the state imposing the tax are not easy to define accurately, because, as the supreme court of the United States has itself said, there has been at times some di- versity of opinion among the members of the court upon this subject and some of the decisions have not been in full accord with others. 1 The general principles which govern have however become well established; the difficulty is in applying them to particular facts. A state cannot prohibit an individual citizen of another state from doing business within its limits, or impose a tax upon him for the privilege of doing such business more onerous than is imposed upon residents of the state, even if his business is carried on wholly within the limits of the state imposing the tax. The lack of power of the state in this particular arises from the clause in Article IV, Section 2 of the constitution of the United States, which provides that the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states. 2 Further, a state cannot prohibit any person, or any corporation which it has not itself established, from carrying on interstate commerce within its limits, or impose a tax for the privilege of carrying on such commerce. 3 The lack of power of the state in 9 See infra § 27. . 10 See Commonwealth v. New England Slate & Tile Co., 13 Allen 391 (1866). 1 Van Devanter J. in International Paper Co. v. Massachusetts, 246 U. S. 135, 141 (1918). 2 Supra § 17. See also Corfield v. Coryell, 4 Wash. 371 (1823) ; Slaughter House Cases, 16 Wall. 97 (1872). ■ Gloucester Ferry Co. v. Pennsylvania. 114 U. S. 196 (1885); Pickard v. Pullman Southern Car Co., 117 TJ. S. 34 (1886) ; Pembina etc. Mining Co. v. Pennsylvania, 125 U. S. 181 (1888) ; Leloup v. Mobile, 127 U. S. 640 (1888) ; Nor- sect. 23] Interstate Commerce 39 this particular arises from the clause in Article I, Section 8 of the constitution of the United States which provides that Con- gress shall have power to regulate commerce among the several states and which indirectly prohibits the several states from in- terfering with such commerce. But the provisions of Article IV, Section 2 which prohibit discrimination against citizens of other states do not apply to corporations; and a state may wholly exclude a corporation organized under the laws of another state from carrying on • business within its limits, unless its business constitutes interstate commerce or in some other way is beyond the control of the state; and having folk etc. R. R. Co. v. Pennsylvania, 136 U. S. 114 (1890) ; Horn Silver Mining Co. v. New York, 143 U. S. 305 (1892) ; Postal Tel. Cable Co. v. Charleston, 153 U. S. 692 (1894); Hooper v. California, 155 U. S. 648 (1895) ; Western Union Tel. Co. v. Kansas, 216 U. S. 1 (1900); International Text-Book Co. v. Pigg, 217 U. S. 91 (1910); Sault Ste. Marie v. International Trancit Co. 234 U. S. 333 (1914); Looney v. Crane Co., 245 U. S. 178 (1917); Cheney Bros. Co. v. Massachusetts, 246 U. S. 147 (1918). A statute imposing in general terms an excise tax on corporations doing business within a state will ordinarily be construed by the state courts as not applicable to corporations doing only an interstate business, and so construed is constitutional. Kehrer v. Stewart, 197 U. S. 60 (1905); Armour Packing Co. v. Lacy, 200 U. S. 226 (1906) ; Attorney General v. Electric Storage Battery Co., 188 Mass. 239 (1905); Marconi Wireless Tel. Co. v. Com- monwealth, 218 Mass. 558 (1914). What constitutes a local business carried on by a foreign corporation within a state as distinguished from an interstate business is not always easy to define. A foreign manufacturing corporation clearly is not doing a local business in a state merely because it places its goods in the hands of retail dealers therein, Lyng v. Michigan, 135 U. S. 161 (1890). So also sending agents or commercial travellers into a state to take orders for goods which are shipped from another state is clearly not engaging in a local business, Robbins v. Shelby County Taxing District, 120 U. S. 493 (1887) ; Brennan v. Titusville, 153 U. S. 297 (1894) ; Caldwell v. North Carolina, 187 U. S. 622 (1902); Norfolk etc. R. R. Co. v. Sims, 191 U. S. 451 (1903); Dozier v. Alabama, 218 U. S. 124 (1910); Crenshaw v. Arkansas, 227 U. S. 389 (1913) ; and it can make no difference that the agent is a resident of the state in which he does business, Stockard v. Morgan, 185 U. S. 37 (1902); or that the goods are shipped to the agent in bulk and are assorted by him for the respective purchasers, Kehrer v. Stewart, 197 U. S. 60 (1905) ; or that the corpora- tion maintains an office as a local headquarters for its salesmen, Marconi Wireless Tel. Co. v. Commonwealth, 218 Mass. 558 (1914) ; even if the office is also used for the storage and display of samples of its products, Cheney Bros. Co. v. Massachusetts, 246 U. S. 147 (1918). But when a foreign corporation ships its products into a state and stores them there in charge of a local agent who makes delivery in the original packages as subsequently directed, it is transacting a local business, American Steel etc. Co. v. Speed, 192 U. S. 500 (1904) ; Armour v. Virginia, 246 U. S. 1 (1918). Where a corporation maintains its fiscal officers in a state other than that in which it was incorporated, it is doing a local business. Old Dominion Co. v. Commonwealth, 237 Mass. 269 (1921). For the application of the principle to a number of different sets of facts, see the decisions reported under the name of Marconi Wireless Tel. Co. v. Common- wealth, 218 Mass. 558 (1914) and Cheney Bros. Co. v. Massachusetts, 246 U.S. 147 (1918). 40 Taxation in Massachusetts [part i the power to exclude foreign corporations not engaged in interstate commerce altogether a state may permit them to enter subject to such conditions as it may see fit to impose. One of the conditions may be the payment of an excise tax for the privilege of doing business within the state, and no matter how excessive or unreasonable in amount the tax may be, or how much more onerous than the tax on domestic corpora- tions doing a like business, the corporation must pay it or stay outside the state. 4 Having once admitted a foreign corporation upon the payment of an excise tax for the privilege of doing business for a definite period, at the end of the period the state may exclude such corporation altogether or impose a new and additional tax upon it for the privilege of remaining. 5 There are however three well established limitations upon the power of a state to impose an excise upon foreign corporations for the privilege of doing a local business within its limits. (1) A state cannot make its grant of the privilege of doing a local business within its limits conditional upon the surrender by the corporation accepting the privilege of any of its rights under the constitution of the United States; and if the state attempts to encumber its grant with such conditions the grant will be valid but the conditions invalid. Thus a state cannot al- low a foreign corporation to do a local business within its limits on condition that it will pay an excise tax on its interstate business, 6 or on condition that it will pay a tax on property located in other states which the state has no power under the constitution to tax directly. It accordingly follows that an excise tax imposed upon foreign corporations for the privilege of doing a local business within a state which is graded accord- ing to the authorized capital of such corporations or the aggre- 4 Liverpool Insurance Co. v. Massachusetts, 10 Wall. 566 (1870); Pembina etc. Mining Co. v. Pennsylvania, 125 U. S. 181 (1888); Ratterman v. Western Union Tel. Co. 127 U. S. 423 (1888); Maine v. Grand Trunk Ry. 142 U. S. 217 (1891); Pacific Express Co. v. Seibert, 142 U. S. 350 (1892); Horn Silver Mining Co. v. New York, 143 U. S. 305 (1892); Lehigh Valley R. R. Co. v. Pennsylvania, 145 U. S. 200 (1895) ; Attorney General v. Bay State Mining Co., 99 Mass. 148 (1868); Attorney General v. Electric Storage Battery Co., 188 Mass. 239 (1905); Baltic Mining Co. v. Commonwealth. 207 Mass. 381 (1911). 5 Philadelphia etc. Ass'n. v. New York, 119 U. S. 110 (1886). 6 Western Union Tel. Co. v. Kansas, 216 U. S. 1 (1910) ; Atchison etc. R. R. Co. v. O'Connor, 223 U. S. 280 (1912) ; Oklahoma v. Wells Fargo & Co., 223 U. S. 290 (1912); Looney v. Crane Co., 245 U. S. 178 (1917). sect. 23] Interstate Commerce 41 gate value of their capital stock, or their total business or re- ceipts or income, if applied to a corporation which carries on interstate commerce, or has any property in another state or does any business in another state, is in effect a tax on inter- state commerce, or on property located or on business carried on in another state, and is beyond the power of the state to impose. 7 A law imposing an excise tax on foreign corporations for the privilege of doing a local business within the state which takes into consideration the aggregate capital as one of the elements in determining the amount of tax is not however unconstitutional if the court can see that the law is not in effect an attempt to reach subjects of taxation beyond the jurisdiction of the state. 8 7 Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196 (1885) ; Western Union Tel. Co. v. Kansas, 216 U. S. 1 (1910); Pullman Co. v. Kansas, 216 U. S. 56 (1910) ; Atchison etc. R. R. Co. v. O'Connor, 223 U. S. 280 (1912) ; Interna- tional Paper Co. v Massachusetts, 246 U. S. 135 (1918). 8 Thus the aggregate capital stock of a foreign corporation engaged in interstate commerce may be used as a measure of taxation when only that portion of the aggregate value of the capital stock is taxed which is proportionate to the business done or property owned within the state as compared with its total property or business. Western Union Tel. Co. v. Attorney General, 125 U. S. 530 (1888); Massachusetts v. Western Union Tel. Co., 141 U. S. 40 (1891). The Massachusetts statutes relating to the taxation of foreign corpora- tions brought about an extremely involved situation. The levy of an excise tax on foreign corporations proportioned to their aggregate capital stock was sustained in Attorney General v. Bay State Mining Co. 99 Mass. 148 (1868) in the case of a statute applicable to mining companies having an executive office in Massachusetts; but no general excise on foreign corporations was imposed until 1903, when by St. 1903 c. 437, § 75 a tax was imposed of one one hundredth of one per cent of the par value of the capital stock, deducting local taxes, the tax in any event not to exceed $2000. American Can Co. v. Commonwealth, 188 Mass. 1 (1905). By St. 1907 c. 578 this tax was increased to one-fiftieth of one per cent and the deduction of local taxes omitted, the limit of $2000 being however retained. It was held that these statutes were inapplicable to a foreign corporation having a place of business in this state only for interstate commerce, Attorney General v. Electric Storage Battery Co., 188 Mass. 239 (1905) or to a foreign corporation carrying on both inter- state and local business in this state if the two were so connected that the local business could not be given up without serious detriment to the inter- state business, Baltic Mining Co. v. Commonwealth, 207 Mass. 381 (1911); but that these statutes were applicable to corporations engaged in ordinary mer- cantile business partly interstate and partly local when there was no insuperable difficulty in separating the two branches of the business, and so construed were constitutional. S. S. White Dental Mfg. Co. v. Commonwealth, 212 Mass. 35 (1912); Keystone Watch Case Co. v. Commonwealth. 212 Mass. 50 (1912); Marconi Wireless Tel. Co. v. Commonwealth, 218 Mass. 558 (1914). The constitutionality of the 1907 statute was sustained by the Supreme Court of the United States in Baltic Mining Co. v. Massachusetts, 231 U. S. 68 (1913) and Cheney Bros. Co. v. Massachusetts, 246 U. S. 146 (1918), the court evidently considering that the maximum limitation indicated that the tax was not in 42 Taxation in Massachusetts [part i (2) When the interstate and the local business of a foreign corporation are so closely connected that it would be almost if not quite impossible to separate them, as is usually the case with a railroad company or a telegraph company, the state cannot require the corporation to pay an excessive or unreasonable tax for the privilege of carrying on the local business, since such a tax is in effect either a prohibition of or a burden upon the inter- state business of the corporation. 9 But even when the interstate and local business of a corporation are interwoven, a reasonable tax based upon the local business or the property engaged there- in may be imposed; 10 and in the case of an ordinary mercantile business, in which the local and interstate operations are readily separable, the corporation cannot be heard to complain of the tax upon its local business, since it may abandon such business if it so desires and continue only its interstate operations. 11 (3) When a foreign corporation has come into a state in effect a tax on the entire capital stock of the company. By St. 1914 c. 724, § 1, however, the legislature imposed a tax of one one hundredth of one per cent upon the capital stock of foreign corporations in excess of ten million dollars. The constitutionality of this statute was sustained in the state courts on the ground that the privilege of doing a local business was more valuable to a foreign corporation with a large capital, International Paper Co. v. Com- monwealth, 228 Mass. 101 (1917); but the Supreme Court of the United States held that the enactment of the 1914 statute in effect removed the limitation contained in the earlier one, and that taken together the two statutes amounted to an attempt by the state to tax the entire capital stock of foreign corpora- tions, and so both statutes were held unconstitutional. International Paper Co. v. Massachusetts, 246 U. S. 135 (1918). It was subsequently held in the state court that a tax assessed under the earlier statute though on a corporation having less than ten million dollars capital and so not affected by the 1914 statute was invalid, Liquid Carbonic Co. v. Commonwealth, 232 Mass. 19 (1919); but the 1914 statute having been repealed by St. 1918 c. 76 the earlier statute with the maximum limitation of $2000 again became constitutional and valid, Lawton Spinning Co. v. Commonwealth 232 Mass. 28 (1919). » Western Union Tel. Co. v. Kansas, 216 U. S. 1 (1910); Pullman Co. v. Kansas, 216 U. S. 56 (1910) ; Ludwig v. Western Union Tel. Co., 216 U. S. 146 (1910); Western Union Tel. Co. v. Andrews, 216 U. S. 165 (1910); Atchison etc R. R. Co. v. O'Connor, 223 U. S. 280 (1912); Meyer v. Wells, 223 U. S. 298 (1912); Looney v. Crane Co., 245 U. S. 178 (1917); Baltic Mining Co. v. Commonwealth, 207 Mass. 381 (1911); Marconi Wireless Tel. Co. v. Common- wealth, 218 Mass. 558 (1914). 10 St. Louis Southwestern R. R. Co. v. Arkansas, 235 U. S. 350 (1914). A reasonable occupation tax on local business is not necessarily invalid, al- though the local and interstate business are inseparable, the local business ' makes no profits and the tax must be paid out of the profits of the interstate business. Postal Tel. Cable Co. v. Fremont. 255 U. S. 124 (1921). 11 Osborne v. Florida, 164 U. S. 650 (1897); Pullman Co. v. Adams ,189 U. S. 420 (1903); Allen v. Pullman's Palace Car Co., 191 U. S. 171 (1903); Kehrer v. Stewart, 197 U. S. 60 (1905); Baltic Mining Co. v. Massachusetts, 231 U. S. 68 (1913); Cheney Bros. Co. v. Massachusetts, 246 U. S. 146 (1918); Marconi Wireless Tel. Co. v. Commonwealth, 218 Mass. 558 (1914). sect. 24] Interstate Commerce 43 compliance with its laws and has acquired property of a fixed and permanent nature therein, the state cannot thereafter sub- ject it to a new and additional excise tax not imposed upon domestic corporations doing a similar business. 12 This principle however does not apply to property which in the nature of things can be sold in the general market so as to yield a fair return for the cost, but only to property such as a railroad line, irretriev- ably devoted to a limited use. 13 24. Taxation of Property Used in Interstate Commerce Property used solely for the purpose of carrying on interstate commerce, such as an interstate bridge 1 and interstate railroad or telegraph lines, or ships used in the interstate carrying trade, is taxable in the state in which it is situated in the same manner as other property. 2 On the other hand, goods imported from a foreign country cannot be taxed by a state before they are sold; but the lack of power of the states in this respect is not based on the ground that such a tax would constitute an unconstitu- tional burden on foreign commerce, but on the ground that it would in effect constitute a duty on imports which the states are specifically forbidden to impose and would conflict with the acts of Congress laying duties on imports the payment of which carries the right to sell the goods. 3 Consequently goods brought into one state from another may be taxed while in the original package and before they are sold if they are taxed in the same manner as goods made within the state; 4 but no state can con- stitutionally impose a tax which operates in such a way as to discriminate against goods brought in from another state. 5 12 Southern Ry. Co. v. Greene, 216 U. S. 400 (1910). 13 Cheney Bros. Co. v. Massachusetts, 246 U. S. 147, 156 (1918) affirming 218 Mass. 558, 579 (1914) sub. nom. Marconi Wireless Tel. Co. v. Commonwealth. 1 Henderson Bridge Co. v. Henderson, 173 U. S. 622 (1899). 2 Marye v. Baltimore etc. R. R. Co., 127 U. S. 123 (1888); Atlantic etc. Tel. Co. v. Philadelphia, 190 U. S. 163 (1903); Old Dominion Steamship Co. v. Virginia, 198 U. S. 307 (1905). 3 Brown v. Maryland, 12 Wheat, 419 (1827), see also supra § 13. 4 Woodruff v. Parham, 8 Wall. 123 (1868) ; Brown v. Houston, 114 U. S. 622 (1885) ; Emert v. Missouri, 156 U. S. 296 (1895) ; Kelley v. Rhoads, 188 U. S. 1 (1903); American Steel etc. Co. v. Speed, 192 U. S. 520 (1904). 5 Welton v. Missouri, 91 U. S. 275 (1875) ; Cook v. Pennsylvania, 97 U. S. 566 (1878) ; Guy v. Baltimore. 100 U. S. 439 (1879) ; Webber v. Virginia. 103 U. S. 344 (1880) ; Walling v. Michigan, 116 U. S. 455 (1886) ; Darnell v. Mem- phis, 208 U. S. 113 (1908); Bethlehem Motors Corp. v. Flynt U. S. (1921). A statute imposing a tax on the sale of goods brought in from another state is not unconstitutional if the sale of goods manufactured within the state is 44 Taxation in Massachusetts [part i Goods brought together and prepared for export to other states or countries may be taxed in the same manner as other property within the state at any time before they have started on their final journey. 6 Goods while actually in transit between two states are not subject to local taxation, and do not forfeit their exemption by short halts incidental to the journey; 7 but when there is a busi- ness purpose or advantage in delay during which an article in interstate commerce secures the protection of the state, it is taxable where it is kept during the period of such delay. 8 When property brought from another state has reached its final desti- nation it is taxable even before it is unloaded; 9 and property brought in from another state and held for the convenience of the owner prior to completing its journey in the same state is clearly taxable. 10 A state may exercise its power to tax property used for 'the purposes of interstate commerce in any fair and reasonable manner, as by assessing the average number of articles of a certain character belonging to the taxpayer within the state during the year instead of the specific articles within the state on a certain day, 11 or by the use of the so-called "unit sys- tem". 12 A franchise to engage in interstate commerce may be taxed as property if the franchise was not granted by the United States and the tax is at no greater rate than the tax on other property of similar character. 13 A tax on a corporation engaged subjected to a substantially similar tax, Woodruff v. Parham, 8 Wall. 123 (1868), and a statute exempting from the general corporation tax corporations wholly engaged in manufacture within the state is not unconstitutional if no discrimi- nation against goods manufactured in other states appears to have been in- tended. New York v. Roberts, 171 U. S. 658 (1898). « Coe v. Errol, 116 U. S. 524 (1886) ; Diamond Match Co. v. Ontonagon, 188 U. S. 96 (1903). » Kelley v. Rhoads, 188 U. S. 1 (1903); Bacon v. Illinois, 227 U. S. 504 (1913). s Thomas v. Gay, 169 U. S. 264 (1898) ; Bacon v. Illinois, 227 U. S. 504 (1913); Susquehanna Coal Co. v. South Amboy, 228 U. S. 665 (1913). 9 Pittsburgh etc. Coal Co. v. Bates, 156 U. S. 584 (1895). 10 American Steel etc. Co. v. Speed, 192 U. S. 520 (1904); General Oil Co. v. Crain, 209 U. S. 211 (1908). 11 Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18 (1891); American Refrigerator Transit Co. v. Hall, 174 U. S. 70 (1899); Union Refrigerator Tran- sit Co. v. Lynch, 177 U. S. 149 (1900). 12 See infra § 42. is Delaware Railroad Tax, 18 Wall. 206 (1873) ; Postal Tel. Cable Co. v. Adams, 155 U. S. 688 (1894) ; New York. etc. R. R. Co. v. Pennsylvania, 158 U. S. 431 (1895); St. Louis etc. Ry. Co. v. Missouri U. S. (1921). sect. 25] Interstate Commerce 45 in interstate commerce even though in the form of an excise on its franchise will be sustained if the tax is measured by the value of its property within the state and collected in the same manner as property taxes. 14 25. Taxation of Receipts Derived from Interstate Commerce A state has no power to levy a tax upon the gross receipts derived from interstate commerce, and consequently cannot con- stitutionally tax the entire gross receipts of an individual citizen or even of a domestic corporation when part of such receipts are derived from interstate commerce. 1 The fact that a corpo- ration is engaged in interstate commerce does not however remove its receipts from liability to state taxation, for it may lawfully be taxed on so much of its receipts as are derived from local business, 2 and even when a tax is assessed upon its receipts as a whole, without separation or apportionment, that part of the tax only is invalid which is assessed upon the receipts from inter- state commerce. 3 The use of gross receipts as a measure of the taxation of corporations engaged in interstate commerce is not however wholly denied to the states, and when the gross receipts are employed as a reasonable guide to determining the value of the franchise of a corporation or of its property within the state and no other tax is imposed upon the corporation, the tax will be sustained, even if it appears on its face to be an excise on the privilege of engaging in interstate commerce. 4 14 Western Union Tel. Co. v. Attorney General, 125 U. S. 530 (1888); Attorney General v. Western Union Tel. Co., 141 U. S. 40 (1891); Maine v. Grand Trunk Ry. Co, 142 U. S. 217 (1891); Postal Tel. Cable Co. v. Adams, 155 U. S. 688 (1895); United States Express Co. v. Minnesota, 223 U. S. 335 (1912). 1 Philadelphia etc. Steamship Co. v. Pennsylvania, 122 U. S. 326 (1887); Ratterman v. Western Union Tel. Co, 127 U. S. 411 (1888) ; Western Union Tel. Co. v. Seay, 132 U. S. 472 (1889) ; Crew Levick Co. v. Pennsylvania, 245 U. S. 292 (1917). A tax "equal to" a certain proportion of the gross receipts is equivalent to a tax on the receipts, Galveston etc. R. R. Co. v. Texas, 210 U. S. 217 (1908). 2 Pacific Express Co. v. Seibert, 142 U. S. 339 (1892). 3 Ratterman v. Western Union Tel. Co, 127 U. S. 411 (1888). A state law taxing receipts from the local business only of public utility companies is constitutional, although it replaces a law by which all receipts were taxed at a lower rate and as to most companies imposes the same amount of tax as the earlier law. Ohio Tax Cases. 232 U. S. 576 (1914). * Maine v. Grand Trunk R. R. Co, 142 U. S. 217 (1891); Tinted States Express Co. v. Minnesota. 223 U. S. 335 (1912); Cudahy Packing Co. v. Minnesota, 246 U. S. 450 (1918). 46 Taxation in Massachusetts [part i A state may constitutionally tax the net income of an indi- vidual resident or of a domestic corporation although the whole or part of such income was derived from interstate commerce. 5 The difference in effect between a tax measured by gross receipts and one measured by net income, recognized by the decisions, is manifest and substantial, and it affords a workable basis of dis- tinction between a direct and immediate burden upon the busi- ness affected and a charge that is only indirect and incidental. A tax upon gross receipts affects each transaction in proportion to its magnitude and irrespective of whether it is profitable or otherwise. Conceivably it may be sufficient to make the dif- ference between profit and loss, or so to diminish the profit as to impede or discourage the conduct of the commerce. A tax upon the net profits has not the same deterrent effect, since it does not arise at all unless a gain is shown over and above ex- penses and losses and the tax cannot be heavy unless the profits are large. Upon the same principle, a state may tax the net in- come of a non-resident individual or foreign corporation derived from business carried on within its limits, although such business consists in whole or in part of interstate commerce. 6 TAXATION OF THE PROPERTY AND INSTRUMENTALITIES OF THE UNITED STATES 26. Taxation of the Property of the United States It necessarily follows from the grant to the United States government by the constitution of certain powers and duties be- yond the control of the states that the states cannot burden that government in the exercise of such powers or the perform- ance of such duties, and that consequently a state cannot tax the means and instrumentalities employed by the United States in the exercise of the functions assigned to it by the constitution. In such cases it makes no difference how reasonable, or how univer- sal and indiscriminately the tax may be ; the inability of a state 4 s United States Glue Co. v. Oak Creek. 247 U. S. 321 (1918). « Shaffer v. Carter. 252 U. S. 37 57 (1920) ; Underwood Typewriter Co. v. Chamberlain. 254 U. S. 113 (1920) ; H. P. Hood & Sons v. Commonwealth, 2?5 Mass. 572 (1920). sect. 26] Taxation of Instrumentalities 47 to interfere by means of a tax with the functions of the federal government is established. 1 A state cannot tax the property of the United States though situated within the territorial limits of the state, whether such property is devoted to public and governmental uses or merely held as an asset of monetary value; 2 but property in which the title of the United States is less than the absolute and unencum- bered fee may be taxed with respect to the estates or interests in private ownership; 3 and when Congress has authorized it, a state may tax the property of the United States. 4 Persons who reside on lands within a state purchased by or ceded to the United States, although there has been no other res- ervation by the state of jurisdiction over such lands than the right to serve civil and criminal process, are subject to taxation for their polls and personal estate by the state. 5 So also property of individuals held in a government warehouse prior to the pay- 1 McCulloch v. Maryland, 4 Wheat. 316 (1819) ; Williams v. Talladega, 226 U. S. 404 (1912); Farmers' etc. Savings Bank v. Minnesota, 232 U. S. 516 (1914); Choctaw etc. R. R. Co. v. Harrison, 235 U'. S. 292 (1914); Johnson v. Maryland, 254 U. S. 51 (1920). 2 Van Brocklin v. Tennessee, 117 U. S. 153 (1886) ; Sherwin v. Wigglesworth, 129 Mass. 64 (1880). Thus public lands held by the United States for purposes of distribution and sale are not subject to taxation by the state in which they are situated. McGoon v. Scales, 9 Wall. 23 (1869) ; Wisconsin Central R. R. Co. v. Price County, 133 U. S. 496 (1889) ; Hussman v. Durham, 165 U. S. 144, (1897). When such lands have been conveyed to an individual purchaser or patentee they immediately become subject to taxation by the state. Carroll v. Safford, 3 How. 441 (1844); Union Pacific R. R. Co., v. McShane, 22 Wall. 444 (1874); Stryker v. Goodnow, 123 U. S. 527 (1887). When the United States, though retaining the legal title to land, holds it in trust for one who has per- formed the requisite conditions, enjoys the beneficial interest and is en- titled presently to the final issuance of a patent, the state may tax the interest of the beneficial owner. Witherspoon v. Duncan, 4 Wall. 210 (1866); Wisconsin Central R. R. Co. v. Price County, 133 U. S. 496 (1889); Bothwell v. Bingham County, 237 U. S. 642 (1915). A right of entry in the United States for possi- ble breach of condition will not remove the land from the taxing power of the state. Union Pacific R. R. Co. v. McShane, 22 Wall. 444 (1874); Central Pacific R. R. Co. v. Nevada, 162 U. S. 512 (1896); Maish v. Arizona, 164 U. S. 599 (1896). If however conditions precedent to the acquisition of title have not been complied with the land is not taxable. Kansas Pacific R. R. Co. v. Prescott, 16 Wall. 603 (1872); Hussman v. Durham, 165 U. S. 144 (1897); Sargeant v. Herrick, 221 U. S. 404 (1911). * Forbes v. Gracey, 94 U. S. 762 (1876) ; Maish v. Arizona, 164 U. S. 599 (1896); Baltimore Shipbuilding etc. Co. v. Baltimore, 195 U. S. 375 (1905); Elder v. Wood, 208 U. S. 226 (1908). 4 Central Pacific R. R. Co. v. Nevada, 162 U. S. 512 (1896) ; Northern Pacific R. R. Co. v. Meyers, 172 U .S. 589 (1899). 5 Leavenworth R. R. Co. v. Lowe, 114 U. S. 525 (1885); Thomas v. Gay, 169 U. S. 264 (1898) ; Wagoner v. Evans, 170 U. S. 588 (1898) ; Foster v. Pryor, 189 U. S. 325 (1903). See however Opinion of the Justices, I Met. 580 (1840). 48 Taxation in Massachusetts [part i ment of excise taxes thereon is taxable in the state in which the warehouse is situated. 6 27. Securities Issued by Authority of the United States No state may tax the instrumentalities which the United States employs to execute the powers conferred upon it by the constitution. For this reason a state cannot tax in any form the obligations of the United States issued in the exercise of the power to borrow money upon the credit of the United States, 1 or impose a stamp tax upon the notes of the Bank of the United States, 2 or tax internal revenue stamps as property of an indi- vidual. 3 But checks and warrants on the Treasury intended for immediate use may be taxed by a state. 4 A state may not tax the aggregate property 5 or the aggregate capital 6 of a corpora- tion, partnership or individual if part of the property of the tax- payer consists of United States bonds, but a tax on the whole of the nominal capital of a corporation may be imposed although part of its assets are United States bonds, as the tax is imposed irrespective of the character of the property, 7, and shares of stock in a corporation may be taxed to the shareholder at their full value although part of the capital of the corporation is invested in United States bonds. 8 When property is the measure and not the subject of a tax, United States bonds may be taken into 6 Carstairs v. Cochran, 193 U. S. 10 (1904). See Farr Alpaca Co. v. Com- monwealth, 212 Mass. 156 (1912). 1 Weston v. Charleston, 2 Pet. 449 (1829); Bank of Commerce v. New York, 2 Black 620 (1862) ; Bank Tax Case, 2 Wall. 200 (1864) ; Provident Savings Institution v. Massachusetts, 6 Wall. 611 (1867); Banks v. The Mayor, 7 Wall. 16 (1868); Bank v. Supervisors, 7 Wall. 26 (1868); New York Bank v. New York County, 7 Wall. 30 (1868) ; Louisville etc. Bank v. Kentucky, 9 Wall. 353 (1869); Mitchell v. Leavenworth County, 91 U. S. 206 (1875); Home Insurance Co. v. New York, 134 U. S. 594 (1890); Home Savings Bank v. Des Moines, 205 U. S. 503 (1907). 2 McCulIoch v. Maryland, 4 Wheat. 436 (1819). 3 Palfrey v. Boston, 101 Mass. 329 (1869). 4 Hibernia Savings etc. Association v. San Francisco, 200 U. S. 310 (1908). s Home Savings Bank v. Des Moines, 205 U. S. 503 (1907). 6 Bank of Commerce v. New York, 2 Black 620 (1862) ; Bank Tax Case, 2 Wall. 200 (1864) ; Van Allen v. Board of Assessors, 3 Wall. 573 (1865); Bradley v. Illinois, 4 Wall. 459 (1866); Louisville etc. Bank v. Kentucky, 9 Wall. 353 (1869); Home Savings Bank. v. Des Moines, 205 U. S. 503 (1907). 7 Bank of Commerce v. New York, 2 Black 620 (1862); Provident Institu- tion v. Massachusetts, 16 Wall. 611 (1867). 8 New York v. Tax etc. Commissioners, 4 Wall. 244 (1866); Louisville etc Bank v. Kentucky, 9 Wall. 353 (1869); Cleveland Trust Co. v. Lauder, 184 U. S. Ill (1902). sect. 28] Taxation of Instrumentalities 49 consideration, as in the case of an inheritance tax, 9 or an excise tax on corporate frachises. 10 Since territorial governments are instrumentalities of the United States, a state has no power to tax bonds of a territorial government or of any of its constituent municipalities. 11 So also it has been held that the bonds of federal land banks may be constitutionally exempted from taxation by Congress. 12 When a person, for the purpose of evading taxation, converts his property into United States bonds immediately before the assessment day and reconverts such property to its original form immediately afterward, such a transaction may b.e treated as a nullity and the property taxed in its original form. 13 United States bonds may also be seized to enforce taxes on other prop- erty of the same owner. 1 14 28. Federal Officers and Employees A state cannot levy an excise tax on the performance of public duties by an officer of the United States, and this prin- ciple has been extended so far as to render a general excise tax invalid because no exception was embodied in the statute in favor of officers of the United States acting in the performance of their duties. 1 A sounder result would have been to hold the statute inapplicable to such cases. So also a state cannot tax an officer of the United States on account of the income or emolu- ments of his office. 2 It has however been held that the state 9 Plummer v. Coler, 178 U. S.. 117 (1900). 10 Savings Society v. Coite, 6 Wall. 602 (1867) ; Provident Institution for Savings v. Massachusetts, 6 Wall. 612 (1867) (tax on franchise of savings bank), Hamilton Manufacturing Co. v. Massachusetts, 6 Wall. 632 (1867); Home Insurance Co. v. New York, 134 U. S. 594 (1889) (tax on corporate franchise), Manufacturers Insurance Co. v. Loud, 99 Mass. 146 (1868). 11 Farmers' etc. Savings Bank v. Minnesota, 232 U. S. 516 (1914). 12 Smith v. Kansas City Title & Trust Co., 255 U. S. 180 (1921). 13 Mitchell v Leavenworth County, 91 U. S. 206 (1875); Shotwell v. Moore, 129 U. S. 590 (1889). 14 Scottish Union etc. Ins. Co. v. Bowland, 196 U. S. 611 (1905). 1 Crandall v. Nevada, 6 Wall. 35 (1867). In Johnson v. Maryland^ 254 U. S. 51 (1920) it was held that a state law requiring a license for the operation of automobiles was inapplicable to a post office employee in the course of his duty. 2 Dobbins v. Erie County, 16 Pet. 435 (1842). After a federal officer has received his salary and deposited it in a bank, it may be subjected to the general property tax by the state. Dyer v. Melrose, 197 Mass. 99 (1908), affirmed, 213 U. S. 594 (1909). 50 Taxation in Massachusetts [part i may lawfully tax the income of persons in the employ or service of the United States who are not public officers; 3 but the- dis- tinction is narrow and how far the state can go in this direction is open to considerable doubt. 4 It has also been held that a trustee in bankruptcy it not exempt from state taxation with respect to the property of the bankrupt in his hands 5 although it is probable that Congress by express enactment might establish an exemption from state taxation in such cases. A person per- forming services for the United States under a contract is not necessarily exempt from state taxation. Thus a corporation engaged in constructing a public work under contract with the United States is taxable by the state upon the implements used in the work. 6 29. Federal Charters and Franchises The United States has in many instances granted charters to private corporations in order to more effectually carry out the objects for which the national government was established. Familiar examples are the national banking corporations and the transcontinental railroad companies, which were created by authority of Congress, and the interstate telegraph companies, which were chartered by the states but which were given a fran- chise by Congress to operate on post roads throughout the coun- try. All of such corporations are agencies of the United States, and it is well settled that even in the absence of any express exemption by Congress, a state cannot tax such a corporation for the privilege of exercising the functions allotted to it by the United States, 1 or tax its property in such a way as to impede 3 In Mclcher v. Boston, 9 Met. 73 (1845) it was held that a clerk in the post office was taxable by the city with respect to his salary, and in Palfrey v. Boston, 101 Mass. 329 (1869) it was held that a dealer in United States internal revenue stamps was not exempt from taxation as a quasi officer of the United States. 4 In Biscoe v. Tax Commissioner, 236 Mass. 201 (1920), it was held that the salary of the vice-president of a railroad was exempt from state taxation while the railroad was under federal control. s Swarts v. Hamm, 194 U. S. 441 (1904). 6 Gromer v. Standard Dredging Co., 224 U. S. 362 (1912). So also a state may impose a tax on a surety company based on premiums, and include premiums on bonds of United States officers. Fidelity etc. Co. v. Pennsylvania, 240 U. S. 319 (1916). 1 McCulloch v. Maryland, 4 Wheat. 316, 436 (1819). A state may however impose a tax which is nominally upon the franchise of a corporation chartered by Congresss if it is in reality a tax upon its property within the state. Western Union Tel. Co. v. Attorney General, 125 U. S. 530 (1887); Massachusetts v. Western Union Tel. Co., 141 U. S. 40 (1891). sect. 29] Taxation of Instrumentalities . 51 or prevent the performance of such functions; but the property of such a corporation within the limits of a state is taxable at the same rate as other property of like character. 2 The power of the state to tax such corporations is governed largely by the acts of Congress establishing them. The taxation of national banks has been explicitly regulated by Congress and is discussed in another portion of this work. 3 It is settled that Congress may constitutionally exempt them from taxation if it sees fit, 4 or permit the states to tax them. 5 The transcontinental railroads were chartered by Congress and given subsidies and grants of land, and they agreed to serve the government, when required, for a reasonable compensation, but were not specifically exempted from taxation. It was held that the states might tax them on their property 6 but not on their operations or fran- chises. 7 The telegraph companies were given power by Congress to maintain lines over the public domain, across navigable streams and along military and post roads. It was held that the companies were not thereby exempted from taxation by the states; 8 but a state cannot make payment of the tax a condition precedent to entry by a telegraph company within its jurisdic- tion. 9 A state has no power to tax patent rights, since such rights are a franchise created for federal purposes under the constitu- tion and laws of the United States; 10 but a patented article may be taxed as property at its full value, although part of its value is derived from the patent. 11 2 McCulloch v. Maryland, 4 Wheat. 316 (1819) ; Henderson Bridge Co. v. Kentucky, 166 U. S. 150 (1897) ; Keokuk etc. Bridge Co. v. Illinois, 175 U. S. 626 (1900); Williams v. Talladega, 226 U. S. 404 (1912). 3 Infra, pages 505 to 515 inc. 4 Flint v. Aldermen of Boston, 99 Mass. 141 (1868). 8 Van Allen v. The Assessors, 3 Wall. 573 (1865). 6 Thomson v. Union Pacific R. R. Co., 9 Wall. 579, 588 (1869) ; Union Pacific R. R. Co. v. Peniston, 18 Wall. 5, 31 (1873). The fact that a railroad right of way was intended to be used in part as an instrumentality for de- veloping Indian coal lands does not exempt its right of way from taxation as an agency of the federal government. Choctaw etc. R. R. Co. v. Mackey, U. S. (1921). » California v. Central Pacific R. R. Co., 127 U. S. 1 (1888). 8 Western Union Tel. Co. v. Attorney General, 125 U. S. 530 (1887); Massachusetts v. Western Union Tel. Co., 141 U. S. 40 (1891). 9 Western Union Tel. Co. v. Texas, 105 U. S. 464 (1881). 10 McCulloch v. Maryland, 4 Wheat. 316 (1819). 11 Webber v. Virginia, 103 U. S. 344 (1880). 52 Taxation in Massachusetts [part i 30. Interference with Federal Taxing Powers It follows from the supremacy of the United States under the constitution that when the United States and a state have concurrent taxing power over the same subject matter, the right of the United States takes precedence, and the United States must be paid in full, even if insufficient is left to pay the tax to the state. 1 It has however never been held that the state, in valuing the property, privilege or income taxed for the purpose of its own tax, must deduct the tax paid to the United States, although if it fails to do so it will in effect impose a tax on the tax paid to the United States. In other respects however the state cannot tax or otherwise burden the federal taxing power. It cannot tax internal revenue stamps as property, 2 or require federal tax receipts to be pub- lished 3 or limit the enforcement of a federal tax by its own stat- utes relative to the recording of liens. 4 DUE PROCESS OF LAW 31. Application of the Fourteenth Amendment That portion of the Fourteenth Amendment to the consti- tution of the United States which provides that no state shall deprive any person of his life, liberty or property without due pro- cess of law nor deny to any person within its jurisdiction the equal protection of the laws affects the power of taxation in various ways. In matters of substance it prohibits a state from taxing any persons or property or the performance of any acts not within its territorial jurisdiction; and from arbitrarily discriminating in its tax laws against any persons or property within its jurisdic- tion ; or from enacting any tax laws which violate the fundamen- tal and inherent rights of a citizen and amount to mere arbitrary spoliation under the guise of taxation. In matters of procedure it prohibits a state from providing any forms of procedure in 1 United States v. Fisher, 2 Cranch 258, 496 (1804). 2 Palfrey v. Boston, 101 Mass. 329 (1869). 3 North Dakota v. Hanson. 215 IT. S. 515 (1910). * United States v. Snyder, 149 U. S. 210 (1893). sect. 32 J Due Process of Law 53 tax cases which are essentially arbitrary, unjust or unfair, or which will result in any person being deprived of his property without a fair opportunity to assert in some tribunal acting judicially whatever substantive rights he may have. 32. Discriminatory Taxation It is well settled that there is nothing in the Fourteenth Amendment which requires a state to tax all property within its jurisdiction at the same rate. Different classes of property may be taxed at different rates as the public policy of the state may seem to require and excises may be imposed upon certain occupations and not upon others without violating the provi- sions of the amendment unless there is a clearly hostile discrim- ination against certain persons or classes, not based upon any reasonable distinction. 1 Certain classes of property may be wholly exempted from taxation without giving rise to an occa- 1 Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232, 237 (1890); Home Insurance Co. v. New York, 134 U. S. 606 (1890) ; Giozza v. Tiernan, 148 U. S. 662 (1893). Thus all corporations may be put in one class for purposes of taxation and taxed upon a different basis from individuals engaged in the same business, Michigan Central R. R. Co. v. Powers, 201 U. S. 245 (1906); Fort Smith Lumber Co. v. Arkansas, 251 U. S. 532 (1920) ; or corporations may be classified separately according to the business done by them, as banks, Provi- dent Institution for Savings v. Massachusetts, 6 Wall. 611 (1867); railroad companies, State Railroad Tax Cases, 92 U. S. 575 (1875); Kentucky Rail- road Tax Cases, 115 U. S. 321 (1885); Charlotte etc. R. R. Co. v. Gibbes, 142 U. S. 386 (1892); Florida Central etc. R. R. Co. v. Reynolds, 183 U. S. 471 (1902); Ohio Tax Cases, 232 U. S. 576 (1914); express companies, Pacific Ex- press Co. v. Seibert, 142 U. S. 339 (1892); or oil companies, Southwestern Oil Co. v. Texas, 217 U. S. 114 (1910). An inheritance tax law which taxes at a higher rate property which, though taxable, escaped taxation during the life of the decedent is constitutional. Watson v. State Comptroller, 254 U. S. 122 (1920). A distinction may be made between steam railroads and street railways, Savannah etc. R. R. Co. v. Savannah, 198 U. S. 392 (1905) ; and between surface street railways and those operated in subways, New York v. State Board of Tax Commissioners, 199 U. S. 1 (1905). The franchises of corporations may be taxed at a different rate from tangible property, Coulter v. Louisville etc. R. R. Co., 196 U. S. 599 (1905). Securities issued by corpora- tions may be taxed at a different rate from all other moneyed securities. Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232 (1890) ; New York v. Reardon, 204- U. S. 142 (1907). A distinction may be made between corporations doing business for profit and co-operative or mutual associations, Citizens Tele- phone Co. v. Fuller, 229 U. S. 322 (1913), and between express companies which own their means of transportation and those which employ the services of a carrier, Pacific Express Co. v. Seibert, 142 U. S. 339 (1892), and between large and small tracts of land, King v. Mullins, 171 U. S. 404 (1898). A distinction may be made between the different classes of insurance contracts, Farmers' etc. Insurance Co. -v. Dobbins, 189 U. S. 301 (1903). A tax on theatres may be graded in accordance with the prices for admission charged, Metropolis Theatre Co. v. Chicago, 228 U. S. 61 (1913). 54 Taxation in Massachusetts [part i sion for interference by the federal courts. 2 The latitude of discretion is notably wide in the classification of property for purposes of taxation and the granting of partial or total exemp- tions upon grounds of policy. 3 Nevertheless the classification must be reasonable and not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly cir- cumstanced shall be treated alike. A discriminatory tax law cannot be sustained as a lawful classification if the classification appears to be altogether illusory. 4 The denial by a state of the equal protection of the laws within the meaning of the Fourteenth Amendment may also take place under statutes which appear on their face to require uniform and proportional taxation, but are enforced in such a way as to discriminate arbitrarily against one class in the com- munity. The purpose of the equal protection clause of the Fourteenth Amendment is to secure every person within the state's jurisdiction against intentional and arbitrary discrimina- tion, whether occasioned by express terms of a statute or by its improper execution through duly constituted agents. 5 When 2 Florida Central R. R. Co. v. Reynolds, 183 U. S. 480 (1902); Missouri v. Dockery, 191 U. S. 170 (1903). 3 Royster Guano Co. v. Virginia, 253 U. S. 412, 415 (1920). 4 Thus a state law which taxes the income of domestic corporations doing business inside the state whether derived from business carried on within or without the state, but exempts altogether the income of domestic corporations which do no business within the state is unconstitutional as imposing an arbitrary discrimination. Royster Guano Co. v. Virginia, 253 U. S. 412 (1920). A state law which imposes a tax upon a foreign corporation which has come' into a state in accordance with its laws and acquired property of a permanent character, at a higher rate than -is imposed upon domestic corporations for carrying on precisely the same business is unconstitutional. Southern Ry. Co. v. Greene, 216 U. S. 400, 417 (1910). The principle of the last cited case does not prevent a state from requiring of foreign corporations which have not already established themselves in a state a larger tax for the privilege of doing business within the state than is imposed upon domestic corporations upon the franchise which the state grants in creating them. Kansas City etc. R. R. Co. v. Stiles, 242 U. S. Ill, 118 (1916); Northwestern Life Ins. Co. v. Wisconsin, 247 U. S. 132, 140 (1918). 5 Sunday Lake Iron Co. v. Wakefield, 247 U. S. 350 (1918). Mere errors or inequalities in assessment violate no constitutional rights when there is no habitual and intentionally unfair discrimination. Coulter v. Louisville etc. R. R. Co., 196 U. S. 599 (1905); Sunday Lake Iron Co. v. Wakefield, 247 U. S. 350 (1918) ; Mackay Tel. etc. Co. v. Little Rock, 250 U. S. 94 (1919). Even if assessors without authority of law habitually and intentionally discriminate be- tween different classes of property there is no violation of the constitutional rights of those discriminated against if there is a distinction between the two classes of property which the legislature might have constitutionally recognized. Missouri v. Dockery, 191 U. S. 165 (1903). sect. 33] Due Process of Law 55 1 it appears that the state or local assessors have adopted a rule or system of taxation which necessarily operates so as to create an arbitrary discrimination against certain persons or certain property based on no rational grounds, the federal constitution is violated as clearly as if the discrimination had been author- ized by statute. Thus when the assessors habitually assess the property of one class at its full value and property of the same character at less than its full value, 6 or assess property of one person at its income-producing value and other property of the same character belonging to others at its sale value 7 there is a violation of the constitutional rights of the victims of such dis- crimination. 33. Double Taxation The phrase "double taxation" has two meanings, one narrow and the other broad. In the narrow sense no taxation is double unless the same property is twice subjected to the same tax by authority of the same state while other like property is taxed but once. Such taxation is undoubtedly unconstitutional. In its broad sense the phrase "double taxation" is much more inclu- sive and extends to all cases in which the burden of two or more pecuniary impositions, whether property taxes or excises and whether imposed by authority of the same or of different juris- dictions, falls upon the same property within the same taxing period. Examples of double taxation in the broad sense include an excise upon a certain use of property and a property tax upon the same property; 1 a tax upon the same property by two different states, in each of which it has a situs sufficient to jus- tify a tax; 2 a tax upon a debt and a tax upon the property of the debtor applicable to the payment of the debt, 3 especially when such property is mortgaged or pledged for the payment of the debt; 4 a tax upon depositors in a bank for their deposits 6 Cummings v. Merchants' National Bank, 101 U. S. 153 (1879) ; Albany County v. Stanley, 105 U. S. 305 (1881) ; New York v. Barker, 179 U. S. 279 (1900) ; Raymond v. Chicago Traction Co., 207 U. S. 20 (1907). 7 Wells Fargo & Co. v. Johnson, 239 U. S. 234 (1915). 1 St. Louis Southwestern R. R. Co. v. Arkansas. 235 U. S. 350 (1914); Com- monwealth v. New England Slate & Tile Co., 13 Allen 391 (1866); Opinion of the Justices, 195 Mass. 607, 611 (1908). 2 Great Barrington v. Berkshire County Commissioners, 16 Pick 572 (1835) ; Dwight v. Boston, 12 Allen 316 (1866). See as to inheritance taxes, injra § 47. 3 Williams v. Brookline, 194 Mass. 44 (1907). 4 Knight v. Boston, 159 Mass. 551 (1893). 56 Taxation in Massachusetts [part i and a tax upon the bank for the property in which the deposits are invested y' and a tax upon a corporation for its franchise or its property and a tax upon the capital stock of the corporation whether assessed upon the corporation or upon the individual shareholders. 6 It is well settled that a tax which is double only in the broad sense is not on that account in violation of the Fourteenth Amendment or the corresponding provisions of the constitution of the state. 7 Nevertheless the existence of double taxation 5 Commonwealth v. People's Five Cents Savings Bank, 5 Allen 428 (1862); Suffolk Savings Bank Petitioner, 149 Mass. 1 (1889). e Tennessee v. Whitworth, 117 TJ. S. 129, 136 (1886); Salem Iron Factory v. Danvers, 10 Mass. 514 (1813). 7 Property may be taxed at the same time in two states, in each of which it has a taxing situs. Thus in Coe v. Errol, 116 U. S. 517 (1886) it was said (at page 524) that the fact that certain logs were lawfully taxed in Maine could have no bearing upon the question whether they might also be lawfully taxable in New Hampshire. In Bemis v. Aldermen of Boston, 14 Allen 366 (1867) it was held that the interest of an inhabitant of Massachusetts as a partner in the property of a firm carrying on business in Missouri was tax- able in Massachusetts although the property of the firm was taxed in Missouri. In Brooks v. West Springfield, 193 Mass. 90 (1906) it was held that a bond owned by a resident of Massachusetts might be taxed at its full value, though secured by mortgage of real estate outside the state and there taxed. In Fidelity etc. Trust Co. v. Louisville, 245 U. S. 54 (1917) it was held that a bank deposit might be taxed both in the state in which the bank was situated and in the state in which the depositor lived. In Cream of Wheat Co. v. Grand Forks, 253 U. S. 325 (1920) it was held that a state might tax the intangible personal property of a resident or of a domestic corporation, although the property was lawfully taxed in other states in which it was situated. In Commercial National Bank v. Chambers, 182 U. S. 556 (1901) it was held that a state might tax the shares of a national bank without dedu tion for real estate belonging to the bank and situated in other states. In Kidd v. Alabama, 188 U. S. 730 (1903); Wright v. Louisville etc. R. R. Co., 195 U. S. 219 (1904); Dwight v. Boston, 12 Allen 316 (1866) it was held that a state might tax the shares of stock in foreign corporations belonging to residents of the state without deduction for property of the corporations located and taxed in other states. In Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915) it was held that a state might tax stock of a foreign corporation owned by a resident of the state, although the stock was also taxed in the state in which the corporation was organized. In American Glue Co. v. Common- wealth, 195 Mass. 528 (1907) it was held that a state might tax the franchise of a domestic corporation without deduction for real estate and personal property located in another state and there taxed. In Blackstone v. Miller, 188 TJ. S. 189 (1903) and Welch v. Treasurer & Receiver General, 223 Mass. 87 (1916) it was held that the same property might be subjected to an in- heritance tax both in the state in which the decedent last dwelt and in the state in which the property was situated. In Hunt v. Perry, 165 Mass. 287 (1896) it was held that a state might tax the interest of a resident beneficiary of a trust fund, although the trust fund itself was taxed to the trustee in the state in which he lived. See also, Maguire v. Tax Commissioner, 230 Mass. 503 (1918), affirmed, Maguire v. Trefry, 253 U. S. 12 (1920). Property may be reached indirectly by taxation more than once under the laws of the same sect. 34] Due Process of Law 57 even in its broad sense is not without its effect upon rights under the law. Thus the fact that property is reached by taxation in some other way is a sufficient justification for exempting it from a general property tax under a constitution requiring pro- portional taxation; 8 and in construing a tax law of doubtful meaning it will be presumed that the legislature did not intend to authorize the imposition of double taxation, even in its broad sense. 9 34. What may be Subjected to a Property Tax No state can constitutionally tax as property that which is not property; but there is nothing in the nature of things or in the limitations of the federal constitution which restrains a state from taxing at its real value intangible property. A prom- ise to pay by a solvent debtor is as certainly property as a build- ing or a steamboat, and is as fully liable to taxation. It matters not in what this intangible property consists, whether privileges, corporate franchises, contracts or obligations. It is enough that it is property which though intangible exists, which has value, produces income and passes current in the markets of the world. 1 Even a membership in a stock exchange or board of trade, if it has value, is taxable as property. 2 An unliquidated claim for damages against a solvent debtor is not taxable as property if state. A state may impose an excise upon a certain act and at the same time impose a property tax upon the property used in the per- formance of the act. Owensboro National Bank v. Owensboro, 173 U. S. 664 (1899) ; Ohio Tax Cases, 232 U. S. 576 (1914) ; St. Louis Southwestern R. R. Co. v. Arkansas, 235 U. S. 350 (1914). A statute is not unconstitutional which levies an excise on the business of issuing annuity contracts while the annuitant is taxed on the annuity as income. Mutual Benefit Life Insurance Co. v. Commonwealth, 227 Mass. 63 (1917). A debt may be taxed to the creditor, although the property of the debtor applicable to the payment of the debt is also taxed. Williams v. Brookline, 194 Mass. 44 (1907). The stockholders of a corporation may be taxed on their shares, and the corporation be taxed on its property or franchise by the same state. Bank of Commerce v. Tennessee, 161 U. S. 134 (1896); Rogers v. Hennepin County, 240 U. S. 184 (1916); Salem Iron Factory, v. Danvers, 10 Mass. 514 (1813) ; Tremont Bank v. Boston, 1 Cush. 142 (1848); A. J. Tower Co. v. Commonwealth, 223 Mass. 371 (1916). The corporation may be taxed upon its capital stock and the shareholders on their shares by the same state. Farrington v. Tennessee, 95 U. S. 679 (1877); New Orleans v. Houston, 119 U. a 265 (1886). 8 Infra § 53. 9 Salem Iron Factory v. Danvers, 10 Mass. 514 (1813). 1 Adams Express Co. v. Ohio State Auditor. 166 U. S. 185, 219 (1897). 2 Rogers v. Hennepin County, 240 U. S. 184, 189 (1916). 58 Taxation in Massachusetts [part i the whole claim is disputed; 3 if, however, the debtor concedes that he owes part of the sum claimed, the claim is taxable to the extent that it is conceded to be due. 4 Water power for mill purposes. is not a distinct subject of taxation, and cannot be taxed independently of the land to which it belongs. 5 35. What may be Subjected to an Excise The power of a state to levy an excise upon privileges enjoyed, occupations carried on or acts performed within its jurisdiction is without limit except so far as limits are imposed by the consti- tution of the state or of the United States. There is no funda- mental requirement that only those privileges, occupations or acts can be taxed which the legislature of the state may consti- tutionally regulate or prohibit; 1 and conversely the sovereign power of taxation of a state extends to privileges which it has not granted and to acts which it has not authorized. 2 A state may at the same time tax and prohibit the perform- ance of an act. There is nothing unconstitutional in the taxation of an act which is prohibited by law, and in such case the pay- ment of the tax is no justification for the performance of the act. 3 36. Procedural Rights — Assessment and Valuation The Fourteenth Amendment not only protects every person within the jurisdiction of a state from the enforcement of the tax laws of a state in such a manner as to deny him the equal protection of the law by means of arbitrary discrimination against his property, but also makes it necessary that the state provide an orderly procedure in the levy of taxes by which the taxpayer may have a reasonable opportunity to protect whatever substan- tive rights the constitution affords him before the tax is conclu- sively established against him. In the case of a tax on property levied in proportion to its value there must be a formal act of assessment, consisting of a description of the property to be assessed, its inclusion in the 3 Lowell v. Street Commissioners of Boston, 106 Mass. 540 (1871); Powers v. Worcester, 210 Mass. 471 (1912). 4 Deane v. Hathaway, 136 Mass. 129 (1883). 5 Infra page 191. 1 See however the rule under the Massachusetts Constitution infra § 55. 2 Flint v. Stone Tracy Co., 220 U. S. 107. 158 (1911). 3 Hodge v. Muscatine County, 196 U. S. 276 (1905). sect. 36] Due Process of Law 59 tax list and the determination of its value, and the assessment must be made a matter of record, so that the owner of the property may have means of ascertaining definitely the fact that it has been assessed and the amount of the assessment. 1 The assessment may be upon the property itself instead of the owner, 2 so that the owner is not deprived of any constitutional right if he is not correctly named or not named at all in the assess- ment. 3 An owner of property has no constitutional right to insist that all the statutory requirements of assessment are com- plied with and a statute is not unconstitutional which provides that no error or omission in the assessment proceedings shall invalidate the tax unless it appears that the person assessed has been prejudiced and that his taxes have thereby been unfairly or unequally assessed. 4 In the case of an excise no formal act of assessment is nec- essary unless the amount of the excise depends upon the value of the property used in connection with the act which is taxed; and the legislature may levy a direct tax on property which has a value definitely ascertainable by computation or the exam- ination of records without any formal valuation by assessors or other administrative officers. 5 When property has no defi- nitely, ascertainable value, its valuation is a quasi judicial act; but statutes have been held constitutional which establish a minimum figure for the valuation of land; 6 and a formula for 1 Illinois Central R. R. Co. v. Kentucky, 218 U. S. 551 (1910). The assess- ment may however be entered on the back of the envelope in which the papers concerning the assessment are filed, instead of in a book, if the envelope is a public record. Illinois Central R. R. Co. v. Kentucky, 218 U. S. 551 (1910). An owner is not deprived of his constitutional rights if his land is assessed by a description which is not technically correct, if it is sufficient to apprise the owner that the land assessed is his. Ontario Land Co. v. Yordy, 212 U. S. 152 (1909). 2 Witherspoon v. Duncan, 4 Wall. 210 (1866); Castillo v. McConnico, 168 U. S. 674 (1898); Ballard v. Hunter, 204 U. S. 241 (1907); Ontario Land Co. v. Yordy, 212 U. S. 152 (1909). 3 Castillo v. McConnico, 168 U. S. 674 (1898) ; Ontario Land Co. v. Yordy, 212 U. S. 152 (1909). 4 Winona etc. Land Co. v. Minnesota, 159 U. S. 526 (1895). 5 Thus no formal valuation is required in the case of a tax on the interest of obligations, King v. United States, 99 U. S. 229 (1878) ; United States v. Erie R. R. Co., 107 U. S. 1 (1882), or on the undistributed earnings of corporations Dollar Savings Bank v. United States, 19 Wall. 227 (1873); United States v. Philadelphia etc. R. R. Co., 123 U. S. 113 (1887), or on bonds of cor- porations when taxable at par, Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232 (1890); Jennings v. Coal Ridge Imp. etc. Co., 147 U. S.' 147 (1893). 60 Taxation in Massachusetts [paht i determining the value of a certain class of property may if reasonable be established by statute, such as deducting the value of the tangible property of a corporation from the aggregate market value of its capital stock to determine the value of its intangible property. 7 37. Procedural Rights — Notice and a Hearing It is a fundamental principle of the law of taxation that before the validity and amount of a tax are finally and conclu- sively established against the person assessed he must be given an opportunity to be heard in opposition to the tax, and as a necessary corollary must be given notice of the assessment so that he may be able to seasonably claim his right to a hearing. 1 A statute will be construed as requiring notice and a hearing if such construction is reasonably possible; 2 but if a statute makes no provision whatever for notice it is unconstitutional even if notice of the assessment proposed to be made under the statute has actually been given. 3 What constitutes sufficient notice to satisfy the constitution depends to a great extent upon the character of the tax. In the case of the annual property tax, the statute itself which provides for the time and manner of the levy is sufficient, and if such 6 Copper Queen Consolidated Mining Co. v. Arizona, 206 U. S. 474 (1907). 7 Adams Express Co. v. Ohio State Auditor, 165 U. S. 194 (1897); American Express Co. v. Indiana, 165 U. S. 255 (1897). 1 Davidson v. New Orleans, 96 U. S. 97 (1877); Santa Clara County v. Southern Pacific R. R. Co., 118 U. S. 394 (1868); Pittsburgh etc. R. R. Co. v. Backus, 154 U S.346 (1894); Fallbrook Irrigation District v. Bradley, 164 U. S. 112 (1896); Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906); Central of Georgia R. R. Co. v. Wright. 207 U. S. 127 (1907) ; Londoner v. Denver, 210 U. S. 373 (1908); Turner v. Wade, 254 U. S. 64 (1920). A taxpayer is not entitled to a hearing at every step in the proceedings; one hearing before the tax is finally established is sufficient, Weyerhauser v. Minnesota, 176 U. S. 550 (1900). A taxpayer has no right to notice of the legislative action by which it is determined that a tax shall be assessed, and the form of taxation, the area to be included in the assessment, the sum to be raised, the rate of the tax and the method of apportionment decided upon; Spencer v. Merchant, 125 U. S. 345 (1888); Parsons v. District of Columbia, 170 U. S. 45 (1898); Williams v. Eggleston, 170 U. S. 304 (1898). 2 Kentucky Railroad Tax Cases, 115 U. S. 321 (1885). » Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906). A taxpayer who was duly notified in accordance with the requirements of the statute can- not be heard to complain because no provision was made for notifying others dissimilarly situated. Gallup v. Schmidt, 183 U. S. 300 (1902). sect. b7j Due Process of Law 61 statute makes adequate provision for a hearing it will be consti- tutional. 4 In the case of special assessments, or of taxes levied under a special statute, a more particular notice is required; but personal notice on all owners is impracticable, and personal service on all owners known and in reach of process and notice by publication to all others is clearly sufficient. 5 In fact notice of an assessment given entirely by publication and posting in some public place has been held sufficient. 6 When a corporation is made agent to collect and pay over a tax on its shareholders, notice of the assessment may be given to the corporation. 7 The right to notice and a hearing extends only to such taxes as involve the exercise of a quasi judicial power in the determir nation of the amount, 8 such as a general property tax dependent upon valuation, 9 or an excise the amount of which is dependent upon the valuation of the property in connection with the use of which the excise is imposed. 10 In the case of an excise not dependent upon the valuation of property and in respect to which there is no exercise of judgment as to the amount, 11 and in the case of poll taxes and other taxes of fixed amounts, 12 there is no occasion for notice and a hearing, although if no opportu- nity for a hearing is afforded, the person assessed may contest his liability to the tax in proceedings for its enforcement. The right to a hearing necessarily denotes an opportunity to offer evidence and to present arguments and is not satisfied 4 Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884); Kentucky Railroad Tax Cases, 115 U. S. 331 (1888) ; Pittsburgh etc. R. R. Co. v. Backus, 154 U. S. 346 (1894) ; Merchant's etc. Bank v. Pennsylvania, 167 U. S. 461 (1897) ; Lander v. Mercantile National Bank, 186 U. S. 458 (1902); Michigan Central R. R. Co. v. Powers, 201 U. S. 245 (1906). The statute is not sufficient notice of an omitted assessment actually made in a subsequent year, Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906). 5 Davidson v. New Orleans, 96 U. S. 97 (1877). 6 Castillo v. McConnico, 168 U. S. 674 (1898); Leigh v. Green, 193 U. S. 79 (1904); Ballard v. Hunter, 204 U. S. 241 (1907); Hunter v. Johnson, 209 U. S. 541 (1908). 7 Corry v. Baltimore, 196 U. S. 466, 478 (1905). 8 Carson v. Brockton Sewerage Commissioners, 182 U. S. 398 (1901); sus- taining 175 Mass. 242 (1900). 9 Londoner v. Denver, 210 U. S. 373 (1908). io Auffmordt v. Hedden, 137 U. S. 310 (1890); Passavant v. United States, 148 U. S. 214 (1893); Origet v. Hedden, 155 U. S. 228 (1894). 11 McMillen v. Anderson, 95 U. S. 37 (1877) ; Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884) ; Lent v. Tillson, 140 U. S. 316 (1891) ; Hodge v. Muscatine County, 196 U. S. 276 (1905). ■ 12 Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884); Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232 (1890); Lent v. Tillson*, 140 U. S. 316 (1891). 62 Taxation in Massachusetts [part i by an opportunity to file written objections. 13 Although it is customary to allow the taxpayer an opportunity to apply to the board which levied the assessment for an abatement thereof, or to allow an appeal to some higher administrative tribunal, there is no constitutional right to a hearing before any admin- istrative board. The right to contest the validity and amount of a tax in the ordinary civil courts is sufficient to satisfy the constitution, 14 and this right may be in the form of a statutory petition to the court in which the validity and amount of the tax are in issue, 15 or a right recognized in the judicial practice of the state to maintain a bill in equity to enjoin the collection .of a tax alleged to be illegal or excessive. 16 So also when the statutes of a state provide as the only means of enforcing pay- ment of a tax a judicial proceeding in which an opportunity is afforded for a full hearing in which the validity and amount of the tax can be contested, and only after there is a judgment sustaining the tax is payment enforced, the requirements of due process of law are satisfied. 17 There is however no constitutional right to a hearing in the ordinary civil courts as to the validity and amount of a tax. A statute which provides an opportunity for a hearing before an impartial administrative tribunal upon application for abate- ment or review may authorize the collection of the tax by sum- mary proceedings such as the sale of real estate, distress of goods, or arrest of the person without affording the taxpayer any oppor- tunity to be heard in court, in proceedings either to enforce or to resist the payment of the tax. 18 Due process in matters of taxation does not necessarily mean a judicial proceeding. 19 It 13 Londoner v. Denver, 210 U. S. 373 (1908). 14 Davidson v. New Orleans, 96 U. S. 97 (1877). 15 Watson v. Nevin, 128 U. S. 578 (1888); Pittsburgh etc. R. R. Co. v. Board of Public Works, 172 U. S. 32 (1898). 16 Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906). 17 Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884) ; Kentucky Railroad Tax Cases, 115 U. S. 321 (1885); Winona etc. Land Co. v. Minnesota, 159 U. S. 526 (1895); Weyerhaueser v. Minnesota, 176 U. S. 550 (1900); Clement National Bank v. Vermont 231 U. S. 120 (1913); Wells, Fargo & Co. v. Nevada, 248 U. S. 165 (1918). 18 Palmer v. McMahon, 133 U. S. 660. 669 (1890) ; Harrington v. Glidden, 189 U. S. 255 (1903) ; Hibben v. Smith, 191 U. S. 310 (1903) ; Hodge v. Musca- tine County, 196 U. S. 276 (1905); Michigan Central R. R. Co. v. Powers, 201 U. S. 245 (1906). W T hen the only hearing provided is before a board of arbitrators, and no provision is made for further proceedings if the arbitrators disagree, the remedy is nugatory, and the statute is unconstitutional. Turner v. Wade, 254 U. S. 64 (1920). "> McMillen v. Anderson, 95 U. S. 37, 41 (1877). sect. 38] Due Process of Law 63 is not even necessary that the taxpayer be given an opportunity to be heard upon an application for abatement or review, if he has a right to a hearing before the assessors at the time the assessment is being made. 20 38. Procedural Rights — Lists and Returns A taxpayer may be required to assist in the assessment of his own tax by filing a sworn list or return of his taxable property or income, and may be subjected to a fine or other penalty if he fails to comply with this requirement or if he knowingly files a false list or return; but if the law makes the filing of a false list a criminal offense, a person who has filed a list cannot be compelled to submit his books and papers to the inspection of the taxing officials as he would thereby be compelled to become a witness against himself in violation of the Fifth Amendment to the federal constitution. 1 It has often been provided that failure of a person liable to taxation to bring in a list of taxable property shall subject the delinquent to the "doom" of the assessors; that is the assessors may lawfully estimate the aggregate value of the property of a person liable to taxation who has filed no list, according to their best judgment and belief. If such a statute goes so far as to make such an assessment final, and to deny the taxpayer all opportunity to demonstrate that the tax so assessed is excessive, even if his failure to file a list was due to a belief based on reasonable grounds that he held no taxable property, it is uncon- stitutional; 2 but statutes which provide that one who without reasonable excuse fails to file a list shall be subject to the doom of the assessors and shall have no redress if overassessed are 20 State Railroad Tax Cases, 92 U. S. 575 (1875); Kentucky Railroad Tax Cases, 115 U. S. 321 (1885); Pittsburgh etc. R. R. Co. v. Backus, 154 U. S. 421 (1894); Lander v. Mercantile National Bank, 186 U. S. 458 (1902). Con- versely the taxpayer need not be given an opportunty for a hearing while the assessment is being made, if he has a right to a hearing on review, McMillen v. Anderson, 95 U. S. 37 (1877). When a state board of equalization orders the raising of the valuation of all the property in a county a certain fixed propor- tion, there is no right to a hearing. Bi-Metallic Investment Co. v. State Board of Equalization, 239 U. S. 441 (1915). 1 Boyd v. United States, 116 U. S. 616 (1886). This provision is applicable only to the United States, but there is a similar provision in the Massachusetts Constitution. Declaration of Rights. Article XII. 2 Central of Georgia R. R. Co. v. Wright, 207 U. S. 127 (1907). 64 Taxation in Massachusetts [paet i clearly constitutional. 3 It has even been held that a statute providing that failure to enter land upon the tax list for five successive years shall result in the forfeiture of the land is con- stitutional. 4 A person or corporation may be constitutionally required to assist in the assessment or collection of taxes of others. Thus a tenant, bailee or agent in possession of the property of another may be compelled to pay the taxes on the property. 5 Other common instances are the statutes requiring employers to file lists of their salaried employees, with the amounts paid to each, and statutes which require corporations to deduct from interest on their bonds or dividends on their stock taxes assessed against the bondholders or stockholders and to pay such taxes to the state, 6 or which make the corporation agent to collect taxes against the shareholders on shares of its own stock. 7 It would seem however that there must be some limit on the power of a state to require an individual to perform work of this character for its benefit without compensation. 39. Retroactive and Omitted Assessments — Re-assessments A taxpayer has no constitutional right to immunity from taxation merely because he owned property, received income or performed acts at a time when such property, income or acts were not subject to taxation. There is no analogy between the levy of a tax and the execution of a contract, and a tax is not invalid because the consideration is past. In other words laws relating to the assessment of taxes may have a retroactive effect, 1 3 Harrington v. Glidden, 179 Mass. 486, 495 (1901), affirmed sub nom. Glidden v. Harrington, 189 U. S. 258 (1903); Sears v. Assessors of Nahant, 208 Mass. 208 (1911); Sears v. Nahant, 221 Mass. 437 (1915), affirmed 248 U. S. 542 (1918). 4 King v. Mullins, 171 U. S. 436 (1898); Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911). In these cases the forfeiture was enforced by judicial process of which the owner had notice and an opportunity was given him to relieve his land of the forfeiture by paying the delinquent taxes. It is open to question whether forfeiture could be enforced without judicial process. Bennett v. Hunter, 9 Wall. 326 (1869); Hatfield v. King, 184 U. S. 162 (1902). 5 Carstairs v. Cochran, 193 U. S. 10 (1904) ; Illinois Central R. R. Co. v. Kentucky, 218 U. S. 550 (1910). 6 Bell's Gap R. R Co. v. Pennsylvania, 134 TJ. S. 232 (1890); Aberdeen etc. Bank v. Chehalis County, 166 TJ. S. 440 (1897); Brushaber v. Union Pacific R. R. Co., 240 U. S. 1 (1916). 7 Corry v. Baltimore, 196 TJ. S. 466 (1905). 1 Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911). sect. 39] Due Process of Law 65 and there is nothing in the constitution of the United States which prohibits a state from enacting a law by which property which has escaped taxation in previous years is assessed for such years. 2 The only limit upon the power of a legislature to assess a tax in praesenti based upon a state of things existing in the past is that the measure of the tax must not be so remote that it is no indication of the taxpayers' present ability to pay, and there must be no interference with vested rights. 3 The assessment of taxes of former years upon property which was subject to taxation by the provisions of statute during such years but which was omitted from the tax list by an oversight of the assessors deprives the owner of such property of no consti- tutional right. 4 The completion of the tax list for a given year creates no vested right in the owners of property subject to tax- ation that the assessment shall not thereafter be modified or amended to their detriment. It can make no difference in such a case that property has been sold to a bona fide purchaser without notice and that the tax is to be collected by enforcing a lien on the property. 5 So also omitted property may be con- stitutionally assessed after the owner has died. 6 For similar reasons the legislature has power to provide for the revaluation and reassessment of property which has been undervalued in previous years. 7 If the assessment of a previous year was defective by reason of some informality or irregularity in the proceedings, the assess- ment may be validated by act of legislature, provided that the requirement of statute which has not been complied with was one which the legislature might constitutionally have dispensed with, 8 or, if it is essential to the constitutionality of the tax, the legislature provides that it shall now be complied with. 9 So also the legislature may provide that taxes defectively or illegally assessed shall be reassessed. 10 Whatever the' legislature 2 League v. Texas, 184 U. S. 161 (1902). 3 Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911). 4 Sturges V. Carter, 114 U. S. 511 (1885) ; Winona etc. Land Co. v. Minne- sota, 159 U. S. 526 (1895); Florida Central etc. R. R. Co. v. Reynolds, 183 U. S. 471 (1902); Citizens National Bank v. Kentucky, 217 U. S. 443 (1910). 5 Citizens National Bank v. Kentucky, 217 U. S. 443 (1910). 6 Sturges v. Carter, 114 U. S. 511 (1885). 7 Weyerhaueser v. Minnesota, 176 U. S. 550 (1900). 8 Mattingly v. District of Columbia, 97 U. S. 687 (1878). 9 Williams v. Albany, 122 U. S. 154 (1887). 10 Spencer v. Merchant, 125 U. S. 345 (1888) ; Lombard v. West Chicago Park Commissioners, 181 U. S. 33 (1901). 66 Taxation in Massachusetts [part i could authorize as an original assessment it may authorize not- withstanding a previous invalid attempt to assess. 11 40. Due Process of Law in the Collection of Taxes It is well settled that due process of law in the collection of taxes is not necessarily a judicial proceeding. Probably there are few governments which do or can permit their claims for public taxes to become subjects of judicial controversy, according to the course of the law of the land. Imperative necessity has forced a distinction between such claims and all others, and they have sometimes been enforced by summary methods of pro- ceeding, and sometimes by systems of fines and penalties, but always in some way observed and yielded to. 1 Collection of taxes by distress, or the seizure and sale of per- sonal property of the delinquent without judicial process, was a remedy in common use in this country when the constitution was adopted, and unquestionably constitutes due process of law. 2 So also the arrest and commitment of the person assessed when he fails to pay the tax or to exhibit goods for the officer to dis- train is a long-established and clearly constitutional method of collection. 3 It is equally within the power of the legislature to provide that a person shall not exercise his right of voting while his taxes are in default. 4 The payment of taxes may be expe- dited by the imposition of interest from the time they became delinquent and the costs of collection may be added to the amount of the tax. 5 A statute providing for the imposition of a penalty, even as great as one half of the tax, if it remains unpaid after a certain date, is not unconstitutional. 6 11 Wagner v. Leser, 239 U. S. 207 (1915). 1 Murray's Lessee v. Hoboken Land etc. Co., 18 How. 272, 282 (1855). A state has at common law a priority in its claims for taxes, Marshall v. New York, 254 U. S. 380 (1920). 2 Murray's Lessee v. Hoboken Land etc. Co., 18 How. 272, 282 (1855); Springer v. United States, 102 U. S. 586 (1880); Kelly v. Pittsburgh, 104 U. S. 78 (1881); Palmer v. McMahon, 133 U. S. 660 (1890); King v. Mullins, 171 U. S. 404 (1897). An automobile used in an attempt to transport liquor so as to evade a tax may be seized and forfeited, although the automobile was in the hands of a bailee and the owner was unaware of its unlawful use. Goldsmith- Grant Co. v. United States, 254 U. S. 505 (1921). 3 Palmer v. McMahon, 133 U. S. 660 (1897). 4 Walker v. Whitehead, 16 Wall. 314 (1872). 5 League v. Texas, 184 U. S. 156 (1901). 6 Western Union Tel. Co. v. Indiana, 165 U. S. 304 (1896). But a state sect. 40] Due Process of Law 67 A tax on personal property is usually not a lien thereon; 7 but it is clearly within the power of the legislature to make the taxes on personal property of a taxpayer a lien on every article of his personal property taking precedence of prior mortgages and liens created by private contract. 8 So also the practice is almost universal to make the taxes on real estate a lien thereon, although in the case of real estate the lien on each parcel of real estate does not usually include the taxes on other real estate of the same owner. It is held in most jurisdictions that the title created by a sale for non-payment of taxes is not merely the title of the person assessed, but is a new and paramount title created by the sovereign and is free from all pre-existing equi- ties and incumbrances. 9 A tax sale thus extinguishes all mort- gages and other rights in the property sold. 10 Nevertheless it is well settled that the exercise of the power of sale is not a violation of the constitutional rights of the holder of an interest in or lien on the property sold, although he is under no obligation to pay the tax and may lose valuable property rights through the delinquency of another. 11 The collection of excises is commonly enforced by prohibiting the performance of the act which is the subject of the excise unless the tax is paid. This prohibition may be and frequently is enforced by the issuance of an injunction against the delin- quent, restraining him from further performance of the act until payment of the tax, with penalties and costs. 12 There is how- cannot impose a penalty when it has claimed title to the property assessed and not undertaken to collect the tax until its claim of title was decided against it. Litchfield v. Webster County, 101 U. S. 773 (1879). 7 Heine v. Levee Commissioners, 19 Wall. 655 (1873); Richmond v. Bird, 249 U. S. 174 (1918). s Central Trust Co. v. Minnesota, 174 U. S. 803 (1899). 9 Turner v. Smith, 14 Wall. 553 (1871); Osterberg v. Union Trust Co., 93 U. S. 424 (1876); Hefner v. Northwestern Mutual Life Insurance Co., 123 U. S. 747 (1887); Leigh v. Green, 193 U. S. 79 (1904); Langley v. Chapin, 134 Mass. 82 (1883); Hunt v. Boston, 183 Mass. 303 (1903); Weeks v. Grace, 194 Mass. 296 (1907). 10 Osterberg v. Union Trust Co., 93 U. S. 424 (1876); Hefner v. North- western Mutual Life Insurance Co., 123 U. S. 747 (1887). See also infra page 350. When the fee is not subject to taxation the lien is only upon the interest in the property that is taxable. Baltimore Shipbuilding etc. Co. v. Baltimore, 195 U. S. 375 (1904); Jeton v. University of the South, 208 U. S. 489 (1908). 11 Provident Institution v. Jersey City, 113 U. S. 506; Leigh v. Green, 193 U. S. 79 (1904). 12 New Jersey v. Anderson, 203 U. S. 483 (1906). 68 Taxation in Massachusetts [part i ever no constitutional objection to the collection of an excise by the enforcement of a lien upon the property used or en- joyed in connection with the act, privilege or occupation assessed, 13 even if it is not owned by the person liable for the tax. 14 The Fourteenth Amendment and the corresponding pro- vision of the state constitution undoubtedly prohibit arbi- trary and unreasonable discriminations in the manner of collecting taxes between persons and things similarly situated; but there is no requirement of uniformity among different classes when there is a reasonable ground for distinction. Thus a statute giving greater rights of redemption from sales for nonpayment of taxes to mortgagees of record than to those who hold unrecorded mortgages is not unconstitutional. 15 41. Retroactive Provisions Respecting Collection of Taxes It is stated as a general rule that, as far as the federal con- stitution is concerned, the legislature may change the mode of collecting taxes which have already been assessed at any time before they have been paid or otherwise discharged or released. 1 Even when a bona fide purchaser for value has ac- quired land with respect to which taxes are delinquent he cannot complain if the laws are changed to his detriment with respect to the collection of taxes. 2 On the other hand vested rights cannot be impaired under the guise of a change in the remedy. A statute attempting to validate a void tax sale is unconstitutional. 3 A statute modi- fying the law with respect to the redemption of land from sale for non-payment of taxes cannot be constitutionally applied to sales already made. 4 13 McMillen v. Anderson, 95 U. S. 37 (1877); Hodge v. Muscatine County, 196 U. S. 276 (1905); Scottish Union etc. Insurance Co. v. Bowland, 196 U. S. 611 (1905). 14 Hodge v. Muscatine County, 196 U. S. 276 (1905). 15 Barry v. Lancy, 179 Mass. 112 (1901). So also penalties may be imposed, applicable only to certain classes of corporations, upon their failure to pay taxes when due. Western Union Tel. Co. v. Indiana, 165 U. S. 304 (1897). 1 League v. Texas, 184 U. S. 156 (1902); Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911). A statute relating to redemption from sale for non- payment of taxes may constitutionally apply to taxes- already assessed. Rogers v. Nicholls, 186 Mass. 440 (1904). 2 Citizens National Bank v. Kentucky, 217 U. S. 443 (1910); Kentucky Union Co. v. Kentucky, 219 U. S. 140 (19li). 3 Forster v. Forster, 129 Mass. 559 (1880). 4 Solis v. Williams, 205 Mass. 350 (1910). sect. 42] Territorial Jurisdiction 69 Although a state cannot enact a law impairing the obliga- tion of contracts, a statute applicable to the collection of taxes thereafter assessed which affects contracts entered into before its enactment is clearly constitutional, for the sovereign power to enact legislation cannot be affected or diminished by the contracts of private parties. 5 When the only parties who can be unfavorably affected by a change in the tax laws are munic- ipal corporations, a statute making such a change is not uncon- stitutional even if it impairs vested rights. 6 TERRITORIAL JURISDICTION 42. The Situs of Property for the Purpose of Taxation It is well settled that no state can tax property that is not within its jurisdiction. It is an implied condition of all statutes relating to taxation that they have no extra-territorial effect. They can apply in the nature of things only to property within the jurisdiction of the sovereign state enacting the legislation, either actually through physical location or constructively through control over the person of one essentially connected therewith. 1 This rule as a moral obligation is inherent to the very existence of a constitutional government 2 and it is estab- lished by the Fourteenth Amendment to the constitution of the United States as a practical restriction enforced by the fed- eral courts. An attempt by a state to require property not within its jurisdiction to contribute to the support of the gov- ernment thereof would not be taxation but mere arbitrary spoliation ; and it would deprive the owner of his property with- out the essential "due process of law." 3 It is not however 5 Andrews v. Worcester etc. Insurance Co., 5 Allen 65 (1862). 6 Thus a statute allowing interest and costs in abatement proceedings suc- cessfully maintained may be applied to pending cases. Tremont & Suffolk Mills v. Lowell, 165 Mass. 265 (1896). 1 Walker v. Treasurer & Receiver General, 221 Mass. 600 (1915). 2 McCulloch v. Maryland, 4 Wheat. 316, 429 (1819). 3 State Tax on Foreign Held Bonds, 15 Wall. 300 (1872) ; Louisville, etc. Ferry Co. v. Kentucky, 188 U. S. 385 (1903); Delaware etc. R. R. Co. v. Pennsylvania, 198 U. S. 341 (1905) ; Old Dominion Steamship Co. v. Virginia, 198 U. S. 299 (1905) ; Union Refrigerator Transit Co. v. Kentucky. 199 U. S. 194 (1905); Metropolitan Life Insurance Co. v. New Orleans, 205 U. S. 395 (1907); Provident, etc. Society v. Kentucky, 239 U. S. 103 (1915). 70 Taxation in Massachusetts [part i always easy to determine the situs of property so as to fix the jurisdiction for the purpose of taxation. Real property is of course taxed only in the state in which it is situated. 4 If land in one state is subject to an easement in favor of land in another state, it is nevertheless taxable at its full value in the state in which it is situated, and the ease- ment is not subject to taxation in the state in which the domi- nant tenement is situated. 5 If land in one state has an addi- tional value by reason of its capacity for use in developing a water power for a mill in another state, it may be taxed upon such value, and such value can best be ascertained by finding the entire value of the water power as a unit and then deter- mining what part of this value is imputable to the real estate in each state. 6 So also a railroad, telegraph line or other similar system extending through two or more states may be valued as a unit, and the proportion of the total value which the mileage within one state bears to the total mileage may be used as a basis of taxation within that state, 7 unless there are some peculiar circumstances which render such a method so unjust as to constitute it a mere subterfuge for taxing property outside the state. 8 In determining the total value in such a case it is 4 Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905). It is interesting to note that the commissioners who prepared the Revised Statutes of Massachusetts (1836) inserted a clause taxing the real estate of residents of this state situated outside the state. This clause was however not enacted, but the recommendation of the commissioners shows how little the constitutional limitations upon the taxing power as they now exist were then understood. 5 Blackstone Mfg. Co. v. Blackstone, 200 Mass. 82 (1908). 6 Blackstone Mfg. Co. v. Blackstone, 211 Mass. 14 (1912). 7 Delaware Railroad Tax, 18 Wall. 206 (1873); State Railroad Tax Cases, 92 U. S. 575 (1875) ; Western Union Tel. Co. v. Attorney General, 125 U. S. 530 (1887); Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 26 (1891); Attorney General v. Western Union Tel. Co., 141 U. S. 40 (1891); Maine v. Grand Trunk Ry. Co., 142 U. S. 227 (1891); Columbus Southern R. R. Co. v. Wright, 151 U. S. 470 (1894) ; Pittsburgh, etc., R. R. Co. v. Backus, 154 U. S. 421 (1894); Cleveland, etc., R. R. Co. v. Backus, 154 U. S. 443 (1894); Western Union Tel. Co. v. Taggart, 163 U. S. 27 (1896); Western Union Telegraph Co. v. Missouri, 190 U. S. 412 (1903) ; Wisconsin, etc., R. R. Co. v. Powers, 191 U. S. 379 (1903); Michigan Central R. R. Co. v. Powers, 201 U. S. 245 (1906); Chicago etc., R. R. Co. v. Babcock, 204 U. S. 585 (1907) ; St. Louis etc., Ry. Co. v. Missouri, U. S. (1921). 8 Thus if a railroad company has very valuable terminals but a short line in one state and no valuable terminals and a long line in another state, the latter state could not tax the property of the company in proportion to the mileage within its limits. Pittsburgh, etc., R. R. Co. v. Backus, 154 U. S. 421, 431 (1894). See also Western Union Tel. Co. v. Taggart, 163 U. S. 1 (1896); Union Tank Line Co. v. Wright, 249 U. S. 275 (1919) ; Wallace v. Hines, 253 U. S. 66 (1920). sect. 43] Territorial Jurisdiction 71 proper to include the value of the franchise of the company, and a reasonable method of determining the total value of the franchise and the other property employed in the system consid- ered as a going concern is to take the total value of the capital stock, 9 deducting property located in another state and not used in the business. 10 An express company doing business in several states, although its property is not physically bound together like a railroad or telegraph line, may be taxed in accordance with the method described above. 11 43. The Situs of Tangible Personal Property The situs of personal property was formerly governed by the maxim mobilia sequuntur personam, and the statutes of many of the states provided that every resident of the state should be taxed for all his personal property, tangible and intangible, wherever situated, 1 although the propriety of taxing tangible personal property in the state in which it is permanently lo- cated regardless of the domicile of its owner has long been rec- ognized. 2 Thus tangible property kept by its owner in a state other than that in which he dwelt might have been and in 9 Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18 (1891); Pitts- burgh etc. R. R. Co. v. Backus, 154 U. S. 421 (1894); Western Union Tel. Co. v Taggart, 163 U. S. 1 (1896) ; Adams Express Co. v. Ohio State Auditor, 165 U. S. 221 (1897); Chicago etc. R. R. Co. v. Babcock, 204 U. S. 585 (1907). 10 Fargo v. Hart, 193 U. S. 490 (1904); Wallace v. Hines, 253 U. S. 66 (1920). In taxing a proportionate part of the income of a railroad or an ex- press company, income from investments outside the state cannot be included. Galveston, etc., Railway Co. v. Texas, 210 U. S. 217 (1908); Meyer v. Wells Fargo & Co., 224 U. S. 298 (1912). 11 Adams Express Co. Ohio State Auditor, 165 U. S. 194, 221 (1897); 166 U. S. 185 (1897); Adams Express Co. v. Kentucky, 166 U. S. 171 (1897); Fargo v. Hart, 193 U. S. 490 (1904); Wells Fargo & Co. v. Nevada, 248 U. S. 165 (1918). 1 Until 1909 the statutes of Massachusetts required in terms the taxation of all personal property of inhabitants of the commonwealth wherever situated. St. 1909. c. 490, Part I, Sees. 2, 4, cl. 1; Bemis v. Aldermen of Boston, 14 Allen 366 (1867); Spinney v. Lynn, 172 Mass. 464 (1899); but by St. 1909 c. 516, Sec. 1, it was provided that merchandise, machinery and animals owned by inhabitants of the commonwealth but situated in another state should be exempted from taxation here. 2 Leonard v. New Bedford, 16 Grav 292 (1860) ; Old Dominion Steamship Co. v. Virginia, 198 U. S. 299 (1905);' Buck v. Beach, 206 U. S. 392 (1908). When personal property of a foreign corporation or a non-resident is per- manently located within the state, the tax on the property can be constitu- tionally assessed to the owner and not merely against the particular articles of personal property upon which it is based. Scollard v. American Felt Co., 194 Mass. 127 (1907). 72 Taxation in Massachusetts [part i some instances doubtless actually was subjected to double tax- ation. A few years ago however the supreme court of the United States held that a state has no power to tax tangible personal property permanently located outside the limits of the state although owned by one of its own citizens or by a domestic corporation. 3 A state does not however lose the power to tax the tangible personal property of a resident or of a do- mestic corporation to its full value by reason of the fact that it is frequently taken into other states. 4 Thus vessels plying be- tween different ports and having no permanent location in any one of them are taxable at the domicile of the owner although they have never been within the state in which he dwells. 5 In other words the rule mobilia sequuntur personam is still in force as the prima facie test of the situs of tangible personal property and prevails unless the property in question has acquired a definite location in another state. Property regularly used in a state other than that of the domicile of the owner may be taxed in such state although the specific items are constantly changing, as in the case of the roll- ing stock of a railroad, and the valuation of the property may be based on the average amount of such property within the state. 6 Such average may be determined by any reasonable method of apportionment ; but a method of apportionment which results in a valuation greatly in excess of the actual value of the property of the taxpayer within the state is unconstitu- tional. 7 Whether the regularity of use which would justify the taxation of property in a state other than that of the owner's domicile would preclude its taxation in the state of his domicile when it could not be shown that specific articles of property were permanently absent from the state has not yet been de- cided. 8 3 Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905). When the capital stock of a domestic corporation is taxed, the value of the tangible property of the corporation definitely located outside the state must be de- ducted. Delaware, etc., R. R. Co. v. Pennsylvania, 198 U. S. 341 (1905). * New York Central R. R. Co. v. Miller, 202 U. S. 584 (1906) ; Ayer, etc.. Tie Company v. Kentucky, 202 U. S. 409 (1906). 5 Southern Pacific Co. v. Kentucky, 222 U. S. 63 (1912). « Marye v. Baltimore etc. R. R. Co., 127 U. S. 123 (1888); Pullman's Palace Car Co. v. Pennsvlvania, 141 U. S. 26 (1891). * Union Tank Line Co. v. Wright, 249 U. S. 275 (1918). s New York Central R. R. Co. v. Miller, 202 U. S. 584 (1906). sect. 44] Territorial Jurisdiction 73 44. The Situs of Intangible Personal Property The law in regard to the situs for purposes of taxation of intangible personal property, such as shares in corporations, bank deposits, bonds, notes and other securities and choses in action generally, is in a state of development and in its present situation somewhat confusing, and requires careful analysis. Intangible personal property is of value only because it represents an in- terest in or a claim against tangible personal property; but not every interest in tangible property is intangible property for purposes of taxation, even though it is represented by or em- bodied in a paper writing by means of which the interest can be assigned. Thus clearly a deed or a lease of real estate is not intangible property taxable separately from the real estate to which it relates; and when tangible property is stored in a ware- house, negotiable warehouse receipts are not intangible prop- erty which can be separately taxed. 1 Money is generally con- sidered to be tangible personal property for purposes of taxation. The situs of intangible personal property may be based on four different grounds, and the same property might conceivably have a taxing situs in four different states at the same time and be subject to four different taxes upon its value as property; and while such a situation does not actually appear to have arisen in any instance that has come before the courts, it has never been held that the acquisition of a taxing situs in one state and the levy of a tax thereunder precludes the levy of a tax on the same property by authority of another state in which the property has a taxing situs in accordance with some other established principle. 2 The principles by which the situs of intangible personal property is established are as follows: (1) It is the general rule, in the absence of controlling cir- cumstances to the contrary, that the situs of intangible personal property for the purposes of taxation is the domicile of the owner. 3 1 Selliger v. Kentucky, 213 U. S. 200 (1909). 2 Kidd v. Alabama, 188 U. S. 730, 732 (1903); Fidelity etc. Trust Co. v. Louisville, 245 U. S. 54 (1917); Cream of Wheat Co. v. Grand Forks, 253 U. S. 325 (1920); Dwight v. Boston, 12 Allen 316 (1866); Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915). 3 Kirtland v. Hotchkiss, 100 U. S. 491 (1879); Bonaparte v. Tax Court, 74 Taxation in Massachusetts [part i (2) When capital in the form of intangible property is regularly employed in business within a state, such property is subject to taxation by such state, although the owner is dom- iciled in another state and the securities representing the prop- erty are kept in another state. 4 (3) When a certain form of paper writing has by commer- cial custom come to be treated as the symbol of or as actually constituting the tangible property which it represents, it may be taxed in the state in which it is permanently kept, regardless of the domicile of the owner. 5 (4) When a certain form of intangible personal property is connected with or derives its value from tangible property within a certain state or depends for its validity upon the ex- ercise of governmental power by a certain state it may under 104 U. S. 592 (1881); New Orleans v. Houston, 119 U. S. 265, 277 (1886); Kidd v. Alabama, 188 U. S. 731 (1903); Covington v. Covington etc. Bank, 198 U. S. 100 (1905); Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905); Buck v. Beach, 206 U. S. 392 (1908) ; Hawley v. Maiden, 232 U. S. 1 (1914) ; Cream of Wheat Co. v. Grand Forks, 253 U. S. 325 (1920); Great Barrington v. Berkshire County Commissioners, 16 Pick. 572 (1835) ; Dwight v. Boston, 12 Allen 318 (1866); Hawley v. Maiden, 204 Mass. 138 (1910); Welch v. Boston, 221 Mass. 155 (1915); Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915). 4 New Orleans v. Stempel, 175 U. S. 309 (1899); Bristol v. Washington County, 177 U. S. 133 (1910) ; State Board of Assessors v. Comptoir Nationale D'Escompte, 191 U. S. 388 (1903); Metropolitan Life Insurance Co. v. New Orleans, 205 U. S. 395 (1907) ; De Ganay v. Lederer, 250 U. S. 376 (1919). This principle applies when securities are kept in a state for the business advantage of the owner, as when a foreign corporation is obliged to deposit them as a condition precedent to doing business, Scottish etc. Insurance Co. v. Bowland, 196 U. S. 611 (1905). In case of taxation on account of business situs it can make no difference that the intangible property invested in the state is not evidenced by written instruments, Liverpool etc. Insurance Co. v. Orleans Board of Assessors, 221 U. S. 346 (1911); or that the written instruments are actually kept in another state, Bristol v. Washington County, 177 U. S. 133 (1900); Metropolitan Life Insurance Co. v. New Orleans, 205 U. S. 395 (1911). 5 This principle has been applied to stock in corporations, Reardon v. New York, '204 U. S. 152 (1907), and to public securities, such as state and municipal bonds, and bank notes circulating as money, State Tax on Foreign Held Bonds, 15 Wall. 300 (1872) ; but it was formerly considered to be the law that promissory notes and, probably, bonds of private corporations, have no taxing situs based on mere physical location, State Tax on Foreign Held Bonds, 15 Wall. 300 (1872); Kirtland v. Hotchkiss, 100 U. S. 491 (1879); Buck v. Beach, 206 U. S. 392 (1908). In Wheeler v. Sohmer, 23 U. S. 434 (1914), it was held that promissory notes had a situs in the state in which they were physically present sufficient to support an inheritance tax and the reasoning of the court would extend this principle to a property tax. Four judges dis- agreed with this reasoning, so the law as to situs of notes for purposes of a property tax is uncertain. sect. 45 J Territorial Jurisdiction 75 some circumstances be taxed by the state in which such prop- erty is situated or power exercised. 6 45. Particular Classes of Intangible Property Upon the principle that the situs of intangible property is the domicile of the owner, it is universally held that a debt is taxable at the domicile of the creditor, since the creditor and not the debtor is clearly the owner of a debt. 1 It was formerly considered that as a corollary to the foregoing rule a state had no jurisdiction to tax a debt merely by reason of the residence of the debtor within its limits. 2 The later cases have however held that the state having jurisdiction over the debtor also has the constitutional power to assert and maintain for itself a situs of the debt for purposes of taxation and to levy a tax thereon against the creditor domiciled in another state. This principle applies not only in the case of inheritance taxes, 3 but to property taxes as well; to taxes on debts secured by mortgage 4 and to taxes on unsecured debts as well, whether expressed by notes or existing as bald accounts current. 5 Jurisdiction in such cases is based upon the fact that ordinarily it is necessary for the cred- itor to resort to the courts of the debtor's domicile to enforce payment of the debt. In the case of debts secured by mortgage of real estate there is also jurisdiction to tax the debt in the state in which the 6 Thus a mortgage may be taxed to the mortgagee by the state in which the mortgaged land is situated, Savings etc. Society v. Multnomah County, 169 U. S. 421 (1898); a bank deposit may be taxed to the depositor in the state in which the bank is situated, Fidelity etc. Trust Co. v. Louisville, 245 U. S. 54 (1917); stock in a corporation may be taxed in the state in which the corporation is organized, Cony v. Baltimore, 196 U. S. 466 (1905); Rogers v. Hennepin County, 240 U. S. 184 (1916) ; Bellows Falls Power Co. v. Common- wealth, 222 Mass. 51 (1915) ; and a franchise may be taxed in the state in which it is exercised, Louisville etc. Ferry Co. v. Kentucky, 188 U. S. 385 (1903), although in each case the owner of the property is resident in another state. 1 Kirtland v. Hotchkiss, 100 U. S. 491 (1879); Bonaparte v. Tax Court, 104 U. S. 592 (1881). See also Frothingham v. Shaw, 175 Mass. 59 (1899). The fact that a debt is secured by mortgage of real estate in another state does not deprive the state of the creditor's domicile of the right to tax the debt, Kirtland v. Hotchkiss, 100 U. S. 491 (1879). 2 State Tax on Foreign Held Bonds, 15 Wall. 300 (1872) ; Murray v. Charleston, 96 U. S. 432 (1877). 3 Infra § 47. 4 Savings etc. Society v. Multnomah County, 169 U. S. 432 (1898). 5 Liverpool etc. Insurance Co. v. Orleans Board of Assessors, 221 U. S. 346 (1911). See also Bliss v. Bliss, 221 Mass. 201 (1915). 76 Taxation in Massachusetts [part i real estate is situated, 6 and, in the case of state and municipal bonds and bank notes current as money, there is a taxing situs where the paper writings which express the debt are kept; 7 and when one employs his capital in creating credits or lending money as a permanent business in another state, or for some business advantage deposits evidences of indebtedness in another state, the debts may be taxed in the state in which they have thus acquired a "business situs". 8 Shares of stock in corporations are taxable at the domicile of the stockholders without regard to the state from which the corporation received its charter, or the place where its property is located or its business carried on, 9 and the state in which a corporation is chartered cannot even by express legislation so far invest its stock with a local situs that it cannot be taxed when owned by residents of another state; 10 but a state may by virtue of its authority over corporations of its own creation tax all the shares of such corporations regardless of the domicile of the shareholders. 11 So also, while it commonly has been sup- 6 Savings etc. Society v. Multnomah County, 169 U. S. 432 (1898). See . also Kinney v. Treasurer & Receiver General, 207 Mass. 308 (1911). 7 State Tax on Foreign Held Bonds, 15 Wall. 300 (1872). See also Callahan v. Woodbridge, 171 Mass. 595 (1898); and see as to promissory notes Wheeler v. Sohmer, 233 U. S. 434 (1914) supra section 44. 8 New Orleans v. Stempel, 175 U. S. 309 (1899) ; Bristol v. Washington County, 177 U. S. 133 (1900); State Board of Assessors v. Comptoir Nationale D'Escompte, 191 U. S. 388 (1903); Scottish etc. Insurance Co. v. Bowland, 196 U. S. 611 (1905); Metropolitan Life Insurance Co. v. New Orleans, 205 U. S. 395 (1907). A foreign insurance company cannot be taxed on the so-called loans made through its local agents to residents of a state, since such transac- tions are not really loans, but deductions from the liability of the insurance company to its policy holders. Orleans Board of Assessors v. New York Life Insurance Co., 216 U. S. 517 (1910). A foreign insurance company may however be taxed on the amounts due for premiums on which credit has been extended, either to the insured, Liverpool etc. Insurance Co. v. Orleans Board of Assessors, 221 U. S. 346 (1911), or to the local agents of the company, Orient Insurance Co. v. Orleans Board of Assessors, 221 U. S. 358 (1911). 9 Sturgis v. Carter, 114 U. S. 511 (1885); New Orleans v. Houston, 119 U. S. 265, 277 (1886); Kidd v. Alabama, 188 U. S. 730 (1903); Wright v. Louis- ville etc. R. R. Co., 195 TJ. S. 219 (1904); Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905); Darnell v. Indiana, 226 U. S. 390 (1912); Hawley v. Maiden, 232 IT. S. 1 (1914) ; Great Barrington v. Berkshire County Commissioners, 16 Pick. 572 (1835); Dwieht v. Boston, 12 Allen 316 (1866); Hawley v. Maiden, 204 Mass. 138 (1910) ; Bellows Falls Power Co. v. Common- wealth, 222 Mass. 51 (1915); Welch v. Treasurer & Receiver General, 223 Mass. 87 (1916). 10 Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915). 11 Corry v. Baltimore. 196 U. S. 466 (1905) ; Rogers v. Hennepin County. 240 U. S. 184 (1916) ; Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915); Welch v. Treasurer & Receiver General, 223 Mass. 87, 92 (1916). sect. 45] Territorial Jurisdiction 77 posed that the certificate of stock in a corporation can have no independent situs, dependent upon its physical location, apart from the domicile of the corporation or of the owner, recent cases seem to indicate that there may be a taxing situs where the stock certificate is kept. 12 But the shares of stock in a cor- poration cannot be taxed by a state merely because the corpor- ation owns property within such state. 13 Deposits in a bank may be taxed at the domicile of the de- positor, even if the bank is located in another state; 14 but they may also be taxed in the state in which the bank is situated if they are used as incidental to the employment of capital in business in such state, 15 and probably are locally taxable even if they are not used in business and are deposited in a bank in another state merely for the convenience of the de- positor. 16 A franchise or privilege derived from the government of a state has its situs for the purposes of taxation in the state by which it was granted rather than in the domicile of the holder or grantee. 17 The mere right to exist as a corporation is a fran- chise, but such franchise is not taxable in any state other than that by which the franchise was granted. 18 When a state taxes a foreign corporation on account of its franchise, it is the priv- ilege of doing business in such state which is taxed, and not the privilege of existing as a corporation; and conversely the state of incorporation cannot of course tax a corporation for the privilege of doing business in another state. 19 Accordingly when a corporation does business in several states the franchise to carry on business as distinguished from the franchise to exist as a corporation has a taxing situs wherever the business is car- ried on, without regard to the state of incorporation or the home office of the company and may be included in the aggregate assets of the corporation and the portion of such assets may be 12 Reardon v. New York. 204 U. S. 152 (1907) ; Welch v. Treasurer & Receiver General, 223 Mass. 87, 93 (1916). is Welch v. Treasurer & Receiver General, 223 Mass. 87 (1916). 14 Fidelity etc. Trust Co. v. Louisville, 245 U. S. 54 (1917). 15 New Orleans v. Stempel, 175 U. S. 309 (1899). See also Blackstone v. Miller, 188 U. S. 189 (1903). is Fidelity etc. Trust Co. v. Louisville, 245 U. S. 54 (1917). " Louisville etc. Ferry Co. v. Kentucky, 188 U. S. 385 (1903). is American Glue Co. v. Commonwealth, 195 Mass. 528 (1907). " Louisville etc. Ferry Co. v. Kentucky, 188 U. S. 385 (1903). 78 Taxation in Massachusetts [part i assessed in a state proportionate to the business carried on within such state as compared with the total business of the corporation. 20 46. The Situs of Personal Property in the Hands of a Fiduciary In some jurisdictions the situs of the personal property of a deceased person is considered to be prima facie the place where the deceased last dwelt. 1 The notion that a man's personal prop- erty upon his death may be regarded as a unit and taxed as such, even if qualified, is still recognized in this country, 2 and while property of a deceased person which has acquired a situs in a state other than that in which he last dwelt may doubtless be taxed in such state, 3 it is not at all clear that so far as the United States constitution is concerned it may not also be taxed to his executor in the state in which the decedent last dwelt. In this commonwealth however the power of the state to tax the personal estate of a deceased person is ascribed to jurisdic- tion over the executor or administrator as legal owner of the property and depends upon the domicile of the executor or ad- ministrator except in the case of property which has acquired a situs elsewhere. 4 It has accordingly been held that a non-resi- dent executor of a resident decedent is not taxable for intangible personal property situated in another state and which he holds as ancillary executor under appointment from the courts of such state; 5 and that even a resident executor of a resident decedent is not taxable for personal property situated in another state which is held by an ancillary administrator who is a resi- dent of such state; for the legal title is in the ancillary admin- istrator and not within the ownership, possession or control of the executor. 6 As the trustee is the legal owner of property held in trust, 20 Adams Express Co. v. Ohio State Auditor, 166 U. S. 185 (1897). 1 Carpenter v. Pennsylvania, 17 How. 456 (1848); Sears v. Nahant, 215 Mass. 329 (1913). 2 Eidman v. Martinez, 184 U. S. 578, 586 (1902) ; Bullen v. Wisconsin, 240 U. S. 625, 631 (1916); Fidelity etc. Trust Co. v. Louisville, 245 U. S. 54 (1917). 3 See Cotton v. Boston, 161 Mass. 8 (1894). 4 The statement in the text applies only to situs as between different states. As between different towns in the commonwealth another rule applies. See infra page 245. 5 Putnam v. Middleborough, 209 Mass. 456 (1911). 6 Gray v. Lenox, 215 Mass. 598 (1913). sect. 47] Territorial Jurisdiction 79 such property is taxable at the domicile of the trustee unless it has acquired a situs in some other state so that it would not be taxable at the domicile of the trustee if held by him in his own right. Intangible property held in trust is taxable at the domi- cile of the trustee, although the trustee was appointed by the probate court of another state, the beneficiaries are residents of another state and the securities in which the property is in- vested are physically located in another state. 7 On the other hand the beneficiary has important property rights in the trust fund which are personal to him and which may be taxed as property in the state of the beneficiary's domicile, although the trustee resides and the securities are kept in another state. 8 That there may be as a consequence double taxation of the same property does not make the taxation of trust property in either case unconstitutional. 9 When there is more than one trustee, and the trustees are residents of different states, but as commonly happens in such cases it appears that the trustees were appointed by the courts of the state in which the securities are physically present and the managing trustee lives in such state, the entire trust fund is prima facie taxable in such state. 10 It is probable however that a statute ' requiring the taxation of a proportionate part of the trust fund in a state in which one of the other trustees resided would be constitutional, although it would re- sult in double taxation. 11 47. Situs of Property for Purposes of Inheritance Taxation The power of the state to levy inheritance taxes is less sub- ject to limitations based upon the situs of property than its power to levy direct property taxes, for not only does the state have the power to levy taxes on the succession of property which by reason of the domicile of the owner or the physical presence 7 Hemenway v. Milton, 217 Mass. 230 (1914); Welch v. Boston, 221 Mass. 155 (1915). 8 Hunt v. Perry, 165 Mass. 287 (1896) ; Maguire v. Tax Commissioner, 230 Mass. 503 (1918). 9 Hunt v. Perry, 165 Mass. 287 (1896). 10 Newcomb v. Paige, 224 Mass. 516 (1916); Crocker v. Maiden, 229 Mass. 313 (1918). 11 Newcomb v. Paige, 224 Mass. 516 (1916). 80 Taxation in Massachusetts [part i of the property is within its jurisdiction for the purposes of direct taxation, but also under some circumstances an excise tax may be upheld upon the succession to property where a direct prop- erty tax might not be sustained. The only cases however in which a tax on the succession can be sustained in the absence of corporeal jurisdiction over the property itself are those in which some necessary incident in the transfer of title depends for its efficacy upon the law of the state levying the tax; and when property is not physically within the jurisdiction of the taxing power, and when its complete succession can be accom- plished without invoking any privilege or sanction conferred by its laws, there is nothing to which taxation can attach. With respect to real estate, the jurisdiction to levy an in- heritance tax is confined to the state in which the real estate is located, since in case of intestacy the devolution of the property depends upon the law of such state and the will of a deceased non-resident can have no effect over real property unless it is admitted to ancillary probate in the state in which the property is situated. Consequently a state cannot levy an inheritance tax upon the succession to the real estate of a resident decedent situated in another state, 1 and conversely a state may tax the succession to the real estate of a non-resident decedent situated within its limits. 2 When the interest of the decedent in the real estate is equitable, as in the case of shares in a real estate trust, the succession is nevertheless taxable in the state in which the real estate is situated. 3 When however under the terms of a trust agreement the trustees hold both real and personal prop- erty and the interest of each beneficiary is a right to a share of the net proceeds when the entire trust property is sold, the entire share of each beneficiary is personal property and taxable accord- ing to the rules applicable to that class of property. 4 Mortgages 1 Dana v. Treasurer & Receiver General, 227 Mass. 562 (1917). 2 Callahan v. Woodbridge, 171 Mass. 595 (1898). 3 Kinney v. Treasurer & Receiver General, 207 Mass. 368 (1911) ; Dana v. Treasurer & Receiver General, 227 Mass. 562 (1917); Priestley v. Treasurer & Receiver General, 230 Mass. 452 (1918). 4 Dana v. Treasurer & Receiver General, 227 Mass. 562 (1917); Priestley v. Treasurer & Receiver General, 230 Mass. 452 (1918). A state may tax the succession to shares in a real estate trust without regard to the location of the trust property or the domicile of the shareholder if the trustees live and the books are kept within its limits, so that resort must be had to the state to effect a transfer. Peabody v. Treasurer & Receiver General, 215 Mass. 129 (1913); Dana v. Treasurer & Receiver General, 227 Mass. 562, 570 (1917); Priestley v. Treasurer & Receiver General, 230 Mass. 452, 454 (1918). sect. 47] Territorial Jurisdiction 81 of real estate are subject to the inheritance taxes of the state in which the real estate is situated, 5 while the debt secured by the mortgage is taxable as personal property in the state of the mortgagee's domicile. 6 When the real estate of a deceased non- resident is subject to a mortgage, only the excess of the value of the real estate over the amount of the mortgage is taxable in the state in which the real estate is situated, even if there was sufficient personal property in the estate to have paid off the mortgage debt. 7 The personal property of a decedent wherever located is treated as a unit and is subject to inheritance taxation in the state of the owner's domicile; 8 and the same principle applies to a tax on the transfer of property made in contemplation of death when subject to an inheritance tax by the law of the decedent's domicile. 9 Nevertheless the property of a decedent may also be taxed in a state in which it is found at the death of the de- cedent, if its presence there was more than transitory. 10 Under this principle the presence within a state of securities, such as bonds and notes evidencing a debt, justify an inheritance tax upon the debt at the death of the owner of the securities. 11 Upon the same principle shares of stock in a corporation may be taxed in a state in which the stock certificates are kept. 12 Another ground for the subjection of personal property to the inheritance tax is the necessity of resorting to the juris- diction of the state to enjoy the benefits of the succession. Whenever a right of pecuniary value which belonged to the dece- dent cannot be enjoyed or enforced by the person to whom it passed at his death without resorting to the jurisdiction of a 5 Kinney v. Treasurer & Receiver General, 207 Mass. 368 (1911); Hawkridge v. Treasurer & Receiver General, 223 Mass. 134 (1916). 6 Frothingham v. Shaw, 175 Mass. 59 (1899). 7 McCurdy v. McCurdy, 197 Mass. 248 (1908). 8 Bullen v. Wisconsin, 240 U. S. 625 (1916) ; Frothingham v. Shaw, 175 Mass. 59 (1899); Dana v. Treasurer & Receiver General, 227 Mass. 562 (1917). 9 Keeney v. New York, 222 U. S. 525 (1912). 10 Blackstone v. Miller, 188 U. S. 189 (1903) ; Wheeler v. Sohmer, 233 U. S. 434 (1914); Callahan v. Woodbridge, 171 Mass. 595 (1898). 11 Wheeler v. Sohmer, 233 U. S. 434 (1914) ; Iowa v. Shimmer, 248 U. S. 115 (1918); Callahan v. Woodbridge, 171 Mass. 595 (1898). See also, Kennedy v. Hodges. 215 Mass. 112 (1913). 12 This would seem to follow from the decision in Hatch v. Reardon, 204 U. S. 152 (1907). although a contrary opinion is expressed, arguendo, in Kennedy v. Hodges, 215 Mass. 112, 115 (1917) which was followed in Clark v. Treasurer & Receiver General, 218 Mass. 292 (1914). 82 Taxation in Massachusetts [part i certain state, such state may subject the succession to such property to inheritance taxes. 13 For this reason the succession to stock in a corporation can be taxed in the state under the laws of which the corporation was established, without regard to the domicile of the decedent or the place in which the stock certificate was kept, for the succession cannot be enjoyed with- out resorting to the state of incorporation to effect a transfer of the stock. 14 This principle does not, however, extend so far as to justify the taxation of the succession to stock in a corpora- tion solely on the ground that the corporation owns real estate in the state seeking to impose the tax, even if the state has physical power to enforce the tax by requiring payment as a condition precedent to allowing the transfer of other property over which it has jurisdiction. 15 When, however, a corporation is chartered in two or more states under the same name although it has but one issue of stock, and its property and franchises in the different states constitute the basis of the value of its stock, each one of the states may impose an inheritance tax on the succession to shares of the stock and in valuing the shares for the purpose of the tax include the property of the corporation wherever situated. 16 Upon the same principle, if a debt can be enforced only by resorting to the courts of the debtor's domicile, the succession to the debt can be taxed in the state in which the debtor resides without regard to the domicile of the decedent or the place in which the securities which evidence the debt are kept. 17 Con- versely however, even if the debtor resides within the state seeking to impose the tax, if the debt can be fully enforced with- 13 Blackstone v. Miller, 188 U. S. 189 (1903); Walker v. Treasurer & Re- ceiver General, 221 Mass. 600 (1915). 14 Greves v. Shaw, 173 Mass. 205 (1899); Bliss v. Bliss, 221 Mass. 201 (1915). The same principle applies to shares in national banks in the state in which the bank is situated, Greves v. Shaw, 173 Mass. 205 (1899), and to shares in unincorporated associations in the state in which the principal place of business is located, supra Note 4. 15 Welch v. Treasurer & Receiver General, 223 Mass. 87 (1916). 16 Moody v. Shaw, 173 Mass. 375 (1899) ; Kingsbury v. Chapin, 196 Mass. 533 (1907); Welch v. Treasurer & Receiver General, 223 Mass. 87 (1916). Such a harsh rule will not be applied unless the statute requires it, Kingsbury v. Chapin, 196 Mass. 533 (1907). « Blackstone v. Miller, 188 U. S. 189 (1903); Bliss v. Bliss, 221 Mass. 201 (1915). This principle applies to simple contract debts and to debts evidenced by registered bonds; but whether it applies to bonds and notes negotiable by delivery is open to question. Bliss v. Bliss, 221 Mass. 201 (1915). sect. 27] Territorial Jurisdiction 83 out resorting to the courts of such state, there is no jurisdiction to enforce the tax, even if the state by reason of control over other property of the decedent has physical power to exact payment. 18 In taxing a succession resulting from the exercise of a power of appointment the test to be applied in determining whether property is taxable is whether the property is subject to the jurisdiction of the state. 19 A state cannot tax property having a situs in another state merely because the donee of the power resided within its limits, since the donee, of the power is not the owner of the property. 20 The application of the foregoing principles frequently results in the taxation of the succession of the same property by two or more states, and it may be subject to the federal estate tax as well, but double or multiple taxation of this character does not violate any constitutional principle if each state is acting within its recognized jurisdiction. 21 Double taxation cannot be evaded by marshalling the assets bf the estate in such a way as to de- prive a state of its inheritance tax, since the right of a state to the tax becomes vested on the death of the decedent, 22 nor can it be evaded by forming a corporation merely for the purpose of holding stock and avoiding the necessity of a transfer upon the death of a person having the real beneficial interest. 23 Ordinarily in determining whether a legacy or distributive share comes within a statutory exemption or in fixing the rate of taxation only property within the jurisdiction of the state imposing the tax is considered; 24 but there is nothing uncon- stitutional in a statute establishing a graduated inheritance tax and 'providing that the tax should be first ascertained as if the entire estate of the decedent were subject to taxation and then assessed in the proportion that the property taxable within the state bears to the entire estate. 25 18 Bliss v. Bliss, 221 Mass. 201 (1915). 19 Clark v. Treasurer & Receiver General, 218 Mass. 292 (1914). 20 Walker v. Treasurer & Receiver General, 221 Mass. 600 (1915). 21 Blackstone v. Miller, 188 U. S. 189 (1903). See also supra §33. 22 Kingsbury v. Chapin, 196 Mass. 533 (1907). 23 Gardiner v. Treasurer & Receiver General, 225 Mass. 355 (1916). 24 Attorney General v. Barney, 211 Mass. 134 (1912). 25 Maxwell v. Bugbee, 250 U. S. 525 (1919). 84 Taxation in Massachusetts [part i 48. Territorial Jurisdiction for the Levy of Excises The power to levy an excise depends upon control over the act, occupation or privilege which is the subject of the tax rather than upon the domicile of the taxpayer or the physical location of the property used in connection with the act, occupation or privilege taxed. Power to effectively prohibit the performance of an act until a tax has been paid thereon affords a means of enforcement which the law recognizes as sufficient to establish jurisdiction. 1 Thus a state may impose an excise upon the per- formance of a certain act within its limits which can be lawfully enforced even when the act is performed by persons who are not residents of the state and with respect to property which has never been within its boundaries, as in the case of a stamp tax on sales, which may be enforced in the case of a transaction be- tween non-residents respecting property located outside the state. 2 Conversely a state cannot tax the performance of an act out- side its territorial jurisdiction; it cannot continue to levy an occupation tax upon a corporation after it has ceased to do business within its limits. 3 49. Territorial Jurisdiction for the Levy of Income Taxes A state may tax the incomes of persons resident within its territorial limits arising from business carried on in other states, or from interstate commerce. 1 It may doubtless tax the income from intangible personal property owned by its own citizens, without regard to the place where the securities representing such property are kept or where the tangible property or busi- ness which such securities represent or from which they derive their value is located. It may tax income received by one of its own citizens from a trust fund held by a trustee resident in another state. 2 It is however open to serious question whether 1 Blackstone v. Miller, 188 U. S. 189, 205 (1903) ; Liverpool etc. Insurance Co. v. Orleans Board of Assessors, 221 U. S. 346, 354 (1911); Shaffer v. Carter, 252 U. S. 37, 49 (1920). 2 Hatch v. Reardon, 204 TJ. S. 152 (1907). 3 Provident etc. Assurance Society v. Kentucky, 239 U. S. 103 (1915). But an insurance company doing business within a state may be compelled to pay a tax on premiums paid by residents of the state, though actually received out- side the state. Equitable Life Assurance Society v. Pennsylvania, 238 U. S. 143 (1915). 1 United States Glue Co. v. Oak Creek, 247 U. S. 321 (1918). 2 Maguire v. Trefry, 253 TJ. S. 12 (1920) affirming Maguire v. Tax Com- missioner, 230 Mass 503 (1918). sect. 50] Territorial Jurisdiction 85 a state can constitutionally tax income received by one of its own citizens from real estate situated in another state or from tangible personal property permanently located in another state, since an income tax on such property is a property tax, and real estate and tangible personal property cannot be subjected to a property tax at the domicile of the owner when it has a situs in another state. 3 A state may also impose income taxes upon non-residents with respect to income accruing to them from their property located or business carried on within the state, 4 provided only that such taxes are of like character to the taxes imposed upon residents of the state and not more onerous in their effect. 5 When a non-resident or a foreign corporation carries on business both within and without a state, it is often a matter of difficulty to determine the proportion of the income attributable to the state levying the tax, and a rule or formula for allocating the income may be constitutionally established even if it does not work with precision in every case, provided it is not wholly arbitrary and unreasonable. 6 50. Territorial Jurisdiction for the Collection of Taxes There is no good reason why a tax upon real or personal prop- erty of a non-resident situated within the limits of a state can- not be assessed to the owner rather than in rem against the par- ticular property to which it relates. 1 If the owner is a foreign corporation, not engaged in interstate commerce or in the service of the federal government, payment of the tax can be enforced by restraining it from doing business in the state until the tax is paid. 2 In the case of an individual non-resident there is how- s See supra, § § 8, 42, 43. * Shaffer v. Carter, 252 U. S. 37 (1920) ; Travis v. Yale & Towne Mfg. Co., 252 U. S. 60 (1920); Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920). See also H. P. Hood & Sons v. Commonwealth, 235 Mass. 572 (1920). 5 Thus a state statute which imposes a tax on all income of residents, and on income of non-residents earned within the state, and allows an exemp- tion to residents but not to non-residents is unconstitutional. Travis v. Yale & Towne Mfg. Co., 252 U. S. 60 (1920). 6 Thus in Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920), a state statute was sustained which taxed foreign corporations engaged in selling tangible personal property upon the same proportion of their aggregate net income as their tangible property within the state bore to their aggregate tangible property. 1 Scollard v. American Felt Co., 194 Mass. 127 (1907). 2 Scollard v. American Felt Co., 194 Mass. 127 (1907). 86 Taxation in Massachusetts [part i ever grave doubt whether such a remedy is available. At any rate it appears to be settled that a tax upon a non-resident on account of his property within a state cannot be made a per- sonal liability against him but may be enforced only against his property within the state. 3 But a tax upon the property of a non-resident decedent kept within the state may be proved as a claim against his estate in the state in which the property is kept; 4 and a state may constitutionally impose as a condition in the charter of a corporation that the tax on the shares owned by non-resident stockholders shall be a personal liability. 5 If a resident of a state leaves the state with all his property after the assessment of a tax upon him he cannot be sued for the amount of the tax in the state to which he has gone; for tax laws have no extra-territorial effect, and the courts of one state will not enforce the revenue laws of another state. 6 THE CONSTITUTION OF MASSACHUSETTS 51. The Limitations on the Taxing Power in the Constitution of Massachusetts The constitution of Massachusetts contains in Part II, Chapter 1, Section 1, Article IV, the following provision: And further full power and authority are hereby given and granted to the said General Court ... to impose and levy propor- tional and reasonable assessments, rates and taxes upon all the inhabitants of, and persons resident and estates lying within the said commonwealth; and also to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise and com- modities, whatsoever, brought into, produced, manufactured or being within the same. The charter of the Massachusetts Bay Company under which the colony of Massachusetts Bay was administered from its first settlement until the revocation of the charter in 1691 did not in terms grant authority to the company to levy taxes in the territory occupied under the charter. Authority to provide 3 Dewey v. Des Moines, 173 U. S. 193 (1899). * Bristol v. Washington County, 177 U. S. 133 (1900). 5 Cony v. Baltimore, 196 U. S. 466 (1905). 6 Wisconsin v. Pelican Insurance Co., 127 U. S. 265 (1888). sect. 51] The Constitution of Massachusetts 87 for the government of the colony was however granted in such broad language that the power to levy taxes was included by plain implication, and as early as 1630 taxes on all the property in the colony were levied by the court of assistants for general purposes. Excises, including duties on imports, were also im- posed during the colonial period. The province charter of 1691 gave to the general court "full power and authority to impose and levy proportionable and reasonable assessments, rates and taxes, upon the estates and persons of all and every the proprietors and inhabitants of our said province and territory." The direct taxes assessed during this period seem to have been intended to be proportional; that is, to require all property within the same taxing district to pay the same proportion of its value, and to authorize only such exemptions as were based on public service or inability to pay. Provisions for the assessment of certain articles at a fixed value seem to have been intended rather for facilitating the work of the assessors and promoting uniformity than as a par- tial exemption of such property. 1 In spite of the lack of specific 1 The history of taxation in Massachusetts during the colonial and pro- vincial periods shows a constant effort to attain a system of equal and propor- tional taxation without attempting to tax all property at the same rate re- gardless of its character. Taxes were levied as early as 1630, but until 1646 no provision was contained in the annual tax acts as to the mode or basis of assessment other than directions that the taxes be "equal and proportionable." In 1646 provision was made for the assessment of live stock, then the most valuable class of property in the colony, at fixed figures for each kind of animal. All other property real and personal was to be taxed at its actual value. This method of taxation continued without substantial change during the whole of the colonial period, except that in 1651 it was specifically provided that the estate of merchants and traders be assessed and in 1682 the taxation of unimproved land at a fixed rate was established. After the grant of the province charter in 1692 the general court ex- perimented with various forms of taxation. There was first enacted a tax on all property, real and personal, on its yearly value (St. 1692-3 c. 4). This did not produce the desired revenue and during the next seven years various methods of taxation were experimented with among them a tax on all property at its. market value (St. 1696, c. 3, c. 16; St. 1697, c. 6, c. 23), which apparently did not prove satisfactory for it was abandoned until the period of the Revo- lution. In 1700 a system was adopted which was retained with minor changes until 1777, by which live stock was assessed at fixed valuations as per schedule, other personal property at its market value, and real estate at a fixed number of times its rent or annual value. (St. 1699-1700 c. 27.) The only material change in the form of the statute, which was probably only declaratory of the existing law, came in 1738 when it was provided that the income or profit which any person should receive from business or employment "and all profits which may or shall arise by money or other estate not particularly other- wise assessed" should be taxed at the same rate as other personal property (St. 1738-9 c. 1). This statute apparently required the taxation of money at interest upon its income and not upon its capital value. 88 Taxation in Massachusetts [part i authority excises were imposed with great frequency during the whole of the provincial period. In the original draft of the constitution of the common- wealth the only power or authority relating to taxation given to the general court was a clause substantially taken from the corresponding clause of the province charter; but in the form finally adopted some further slight verbal modifications were made in the clause relating to assessments, rates and taxes and the subsequent clause relating to duties and excises was added. Since the adoption of the constitution no change has been made in the provisions relating to taxation except the amendment relating to forest lands adopted in 19 12, 2 the income tax amend- ment adopted in 1915 3 and the various amendments restricting or extending the purposes for which taxes may be levied set forth in another section. 4 It is a general principle of constitutional law that the pro- visions of a written constitution are not grants of power from the people to the government but are limitations upon a power which would otherwise be absolute, and consequently no act of the legislative body is unconstitutional unless it violates some specific provision of the constitution. Nevertheless, although there is nothing in the constitution of Massachusetts ■ which in terms prohibits taxes that are disproportionate or excises that During the first two years under the Revolutionary Government the pro- vincial tax system was retained except that income from money at interest and "extraordinary" occupational incomes were assessed at three times their annual amount. (St. 1775-6, c. 6; 1776-7, c. 13.) In 1777 however the classified system of taxation was abandoned, probably because no schedule of values could keep pace with the rapid changes in valuation which accompanied the war, and provision was made for the assessment of all property, real and per- sonal, at its "current price" (St. 1777-8, c. 13). Income from money at interest and "extraordinary" occupational incomes were assessed at as high as ten times the annual amount before the war was over, apparently in an attempt to reach what we would now call excess profits due to war conditions. The first tax act under the constitution established the system of taxation prevalent during most of the nineteenth century. That is a tax at the same rate on all real and personal estate, at its market value, and on all occupational incomes at their actual amount. (St. 1780, c. 43.) In the following year how- ever it was provided that unimproved real estate should be assessed at two per cent of its value and all other real and personal estate at six per cent of its value; and this discrimination continued until 1828 (St. 1828, c. 143). From 1829 until the enactment of the income tax act in 1916 the so-called proportional system of taxation remained in force. 2 Infra, G. L. c. 61. 3 Infra, G. L. c. 62. 4 Infra, § 61. sect. 52 J The Constitution of Massachusetts 89 are either unreasonable or imposed upon subjects other than those designated, it has been uniformly held that the clause in question was intended to cover the whole subject of taxation and to exclude by plain implication any pecuniary imposition laid for the purpose of raising revenue for public uses not in accord- ance with its provisions. 5 52. Proportional Taxation under the Constitution of Massachusetts In spite of the variety of methods of proportional taxation that were practised in the colonial and provincial periods, the pro- vision in the constitution of Massachusetts giving authority to the legislature to levy proportional and reasonable taxes, taken in connection with the subsequent provision that "while the pub- lic charges of government or any part thereof shall be assessed on polls and estates in the manner that has been hitherto practised, in order that such assessments may be made with equality there shall be a valuation of estates within the commonwealth taken anew once in every ten years at least and as much oftener as the general court shall order" has been consistently construed by the courts as establishing the principle of uniformity of taxation of all classes of taxable property and as requiring that all property within the commonwealth which is owned and held in such a way that it ought to be available to its owner to increase his ability or enlarge his duty to assist in defraying the expenses of the government must be included in the aggregate of property upon which assessments are made * and that all such property 5 Portland Bank v. Apthorp, 12 Mass. 252 (1815) ; Commonwealth v. People's Five Cent Savings Bank, 5 Allen 428 (1862); Oliver v. Washington,, Mills, 11 Allen 268 (1865) ; Dorgan v. Boston, 12 Allen 223 (1866) ; Common- wealth v. Hamilton Manufacturing Co., 12 Allen 298 (1866) ; Commonwealth v. Provident Institution for Savings, 12 Allen 312 (1866); Providence Institu- tion for Savings v. Boston, 101 Mass. 575 (1869) ; Cheshire v. Berkshire County Commissioners, 118 Mass. 386 (1875); Connecticut Mutual Life Insurance Co. v. Commonwealth, 133 Mass. 161 (1882); Gleason v. McKay, 134 Mass. 419 (1883); Northampton v. Hampshire County Commissioners, 145 Mass. 108 (1887); Minot v. Winthrop, 162 Mass. 113 (1894); Day v. Lawrence, 167 Mass. 371 (1897); White v. Gove, 183 Mass. 333 (1903): O'Keeffe v. Somerville, 190 Mass. 110 (1906); Opinion of the Justices, 195 Mass. 607 (1908); Opinion of the Justices, 196 Mass. 602 (1908) ; Opinion of the Justices, 208 Mass. 616 ' (1911); Opinion of the Justices, 220 Mass. 613 (1915); Perkins v. Westwood, 226 Mass. 268 (1917). 1 Portland Bank v. Apthorp. 12 Mass. 252 (1815); Commonwealth v. People's Savings Bank, 5 Allen 428, 431 (1862) ;, Oliver v. Washington Mills, 11 Allen 268 (1865); Commonwealth v. Hamilton Manufacturing Co., 12 90 Taxation in Massachusetts [part i in a given taxing district must be assessed at the same rate. 2 In other words, a tax is proportional within the meaning of the constitution only when it bears the same ratio to the whole sum raised by taxation as the taxpayer's taxable estate bears to the whole taxable estate within the taxing district. 3 Exact proportion is of course impossible, but the aim of any statute must be equality, and a statute which tends directly and nec- essarily to produce -disproportion is therefore unconstitutional. 4 In course of time the increasing complexities of the in- dustrial life of the community made the inflexible rule of pro- portionality produce extremely disproportionate and unequal taxation, and various measures of relief were suggested; 5 but the supreme judicial court consistently held that any scheme of taxation which aimed at equality through means which were not proportional was not valid under the constitution. 6 The only relief possible was through amendments to the constitution. Attempts have frequently been made to strike out the word "proportional" from the constitution, but as yet have been un- successful. In 1919 an amendment was proposed and agreed to by the legislature which authorized the levy of taxes at different rates upon different classes of personal property, with a limita- Allen 298 (1866); Connecticut Insurance Co. v. Commonwealth, 133 Mass. 161 (1882); Gleason v. McKay, 134 Mass. 419, 424 (1883); Northampton v. Hamp- shire County Commissioners, 145 Mass. 108 (1887); Tremont & Suffolk Mills v. Lowell, 163 Mass. 283, 285 (1895); Opinion of the Justices, 195 Mass. 607 (1908). 2 For this reason it has been held that statutes are unconstitutional which provide that all reservoirs and dams used to maintain a supply of water for mill purposes shall be assessed at a valuation not exceeding that of land of like quality in the immediate vicinity, Cheshire v. Berkshire County Com- % missioners, 118 Mass. 386 (1875); which provide a uniform tax of three mills on the dollar on money, debts, bonds and stocks, Opinion of the Justices, 195 Mass. 607 (1908); which provide for the taxation of all personal property in the commonwealth at a uniform rate while real estate remains taxable at the local rate, Opinion of the Justices, 208 Mass. 616 (1911); or which provide for the taxation of certain classes of property by an assessment at a certain number of times its net income, Opinion of the Justices, 220 Mass. 613, 622 (1915). On the other hand a statute providing that taxes on national bank shares owned by non-residents of the state should be turned over to the commonwealth and that the assessors should omit their value in determining the valuation on which the rate of taxation is based is constitutional, Provi- ' dence Institution for Savings v. Boston, 101 Mass. 575 (1869). 3 Opinion of the Justices, 220 Mass. 613, 621 (1915). 4 Cheshire v. Berkshire County Commissioners, 118 Mass. 386 (1875). 5 For a full discussion of the evils of the proportional system of taxation and the efforts to find a remedy see infra pages 428 to 432 inc. 6 Opinion of the Justices, 220 Mass. 613, 621 (1915). sect. 53] The Constitution of Massachusetts 91 tion that the tax upon the same class of property should be uniform throughout the commonwealth; but the amendment was defeated in the following year. In the meantime the greater part if not the whole of the needed relief was secured by the adoption of the Forty-first Amendment 7 which gave the legis- lature almost unlimited discretion as to the taxation of wild or forest lands, and the Forty-fourth Amendment 8 which authorized the levy of a tax upon incomes which might be at different rates upon income derived from different classes of property, but was required to be levied at a uniform rate throughout the com- monwealth upon incomes derived from the same class of prop- erty. By authorizing the taxation of certain classes of property upon its income while other classes of property are taxed upon their capital value without the requirement of any relationship between the burden borne by the different classes of property thus taxed, the Forty-fourth Amendment has to a considerable extent abrogated the requirement of proportionality, but only to the extent expressly stated by the amendment. The power to levy an income tax cannot be employed either openly or covertly as an instrument to narrow or circumvent the require- ment for proportional taxes upon all property other than in- comes. 9 It is not necessary in order to meet the requirement that taxes shall be proportional that the rate shall be identical in all the municipal corporations throughout the state; uniformity in each city, town or other taxing district is all that is required. 10 As the constitution, expressly requires the taxation of all persons and property within the state, an exception in favor of persons not entitled to vote cannot be implied. 1 11 53. Power of the Legislature to Grant Exemptions Since the requirement of proportionality in taxation is con- strued to require the taxation of all property within the taxing district which is held in such a way that it ought to be available to its owner to increase his ability or enlarge his duty to assist in defraying the expenses of the government, the legislature 7 See infra, G. L. c. 61. * See infra, G. L. c. 62. 9 Duffy v. Treasurer & Receiver General, 234 Mass. 42, 53 (1919). 10 Providence Institution for Savings v. Boston, 101 Mass. 575 (1869). 11 Wheeler v. Wall, 6 Allen 558 (1863). 92 Taxation in Massachusetts [part i has no power to grant an exemption except in cases in which it can be demonstrated that the exemption will not result in the disproportionate taxation of other property. A statute aimed at encouraging a particular industry by relieving it in whole or in part from taxation, or exempting a certain class of property from taxation merely as a matter of public policy, is not constitutional in this commonwealth. 1 While the courts of the commonwealth have not hesitated to enforce the requirement of equality and proportion in tax- ation in such litigated cases as have come before them and to promulgate it when their opinion has been asked upon the con- stitutionality of proposed legislation, it must be admitted that certain exemption laws have been or are even now in force which are inconsistent with the doctrines of the court but which if obeyed by the assessors increased the burden upon owners of other property in such a trifling degree that no one took it upon himself to question the constitutionality of the exemp- tion. From 1790, a year after the first manufacturing corpora- tion received its charter, until well into the following century, there were numerous statutes granting exemptions to manu- facturing corporations. In 1806 the machinery of all salt works was exempted, and this exemption continued in force for twenty years. Although the requirement of proportion was carefully explained by the supreme judicial court in 1815, 2 machinery in cotton and woolen manufactories was exempted from taxation in 1818, and such machinery and sheep as well continued to be exempt for ten years. 3 In 1821 young domestic animals were exempted, 4 and this exemption is still in force. 5 In 1872 cities and towns were authorized to exempt from taxation for a period of ten years property used exclusively in the manufacture of beet sugar. 6 In 1878 land upon which certain kinds of trees 1 Cheshire v. Berkshire County Commissioners, 118 Mass. 386 (1875); Opinion of the Justices, 195 Mass. 607 (1908). The limitation upon the power of the legislature to grant exemptions depends entirely upon the specific pro- vision of the Massachusetts constitution. There is nothing in the Fourteenth Amendment to the federal constitution which prevents each state from adjust- ing its system of taxation as it sees fit as long as there is no mere arbitrary discrimination. Bell's Gap R. R. Co, v. Pennsylvania, 134 U. S. 232 (1889). 2 Portland Bank v. Apthorp, 12 Mass. 252 (1815). 3 These exemptions were abolished by St. 1828, c. 143. 4 St. 1821, c. 107, § 2. 6 G. L. c. 59 § 5 cl. 21, infra. 6 St. 1872, c. 327. This statute expired by its own limitation in 1882. sect. 53] The Constitution of Massachusetts 93 had been planted was given a limited exemption, 7 and this ex- emption remained in force until the adoption of a special system for the taxation of forest lands under the Forty-first Amendment. 8 Since 1894 domestic fowls of a limited value have been exempt from taxation. 9 There are doubtless other instances in which exemptions have been granted and enjoyed which cannot be recon- ciled with the constitution as interpreted by the courts. The exemptions which the legislature may constitutionally grant fall into four classes: (1) Property of persons who by reason of age, infirmity or poverty are unable to contribute fully toward the public charges. (2) Property of insignificant value and of such a character that it may be supposed to be owned by everyone alike. It is for this reason that wearing apparel, and a reasonable amount of household furniture and tools may be constitutionally exempted. 10 (3) Property devoted to a public or semi-public use. It would serve no useful purpose to tax property devoted to a public or semi-public use, even if owned by private parties, for the additional burden thereby caused would have to be eventually borne by the public. It is for this reason that the property of the state and of cities and towns and of public service corporations and of charitable and educational institutions may be exempted. 11 (4) Property taxed directly or indirectly in some other way. The requirement of proportionality does not go so far as to forbid the exemption from direct taxation of property which bears its just burden of taxation through some other form of tax. Thus the legisla- ture is not bound to tax a corporation for its property and the stockholders for their shares; 12 and if a reasonable excise tax is lawfully imposed upon a corporation, according to the amount of its property or business, it is in the power of the legislature, for the purpose of avoiding double taxation, to exempt its 7 St. 1878, c. 131. 8 G. L. c. 59 § 5 cl. 26; c. 61, infra page 425. » St. 1894, c. 220 now G. L. c. 59 § 5 cl. 21, infra page 211. 10 Day v. Lawrence, 167 Mass. 371 (1897); Opinion of the Justices, 195 Mass. 607 (1908). 11 Opinion of the Justices, 195 Mass. 607 (1908). The exemption of re- ligious institutions is hard to justify on strictly legal grounds, although the court in 195 Mass. 608 based it upon the constitutional provisions recognizing the importance of the public worship of God. This exemption however, like the laws requiring the observance of Sunday, stands on too firm an historical basis to be shaken. 12 Salem Iron Factory v. Danvers, 10 Mass. 514 (1813). 94 Taxation in Massachusetts [part i property held and used in the business for which the excise tax is paid, and to exempt the stockholders, as the owners of the beneficial interest in this property, from liability to a prop- erty tax upon it. 13 Bonds, notes and other credits may be exempted when the credits are secured by the mortgage or pledge of taxable property, and, it would seem to follow, when- ever the debtor has taxable property available for payment. 14 The constitutionality of an exemption granted for the purpose of avoiding double taxation is not affected by the fact that "one of the taxes is imposed by authority of another state. 15 Prob- ably the legislature could go as far as to exempt property merely because it was taxed in some other form by authority of another jurisdiction, as stock in a foreign corporation owned by residents of this commonwealth when the property of the corporation was taxed in other states in which it was located. 10 Even if there is a right to exempt this class of property wholly from taxation, a partial exemption conditional upon the property exempted contributing an arbitrary and disproportion al per- centage of its value is not constitutional. 17 If an exemption is one which the legislature may consti- tutionally grant, there is no requirement that it be granted with uniformity, and the legislature may establish such exceptions from an exemption law as it sees fit, provided they rest upon some conceivably rational basis and are not wholly arbitrary and discriminatory. 18 54. Excises under the Constitution of Massachusetts Duties and excises are divided naturally into two classes, namely those laid on the importation of foreign goods and those laid on domestic goods, privileges or transactions. Duties of the former class were introduced into England in the time of James I, but those of the latter did not appear in that country until 1643. Numerous statutes imposing duties and excises of both classes were enacted in Massachusetts during the colonial 13 Commonwealth v. People's Five Cents Savings Bank, 5 Allen 428, 437 (1862); Opinion of the Justices, 195 Mass. 607, 611 (1908). 14 Williams v. Brookline, 194 Mass. 44, 46 (1907). 15 Opinion of the Justices, 195 Mass. 607, 615 (1908). 16 See Opinion of the Justices, 220 Mass. 613, 625 (1915). 17 Opinion of the Justices, 220 Mass. 613, 626 (1915). 18 Massachusetts General Hospital v. Belmont. 233 Mass. 190 (1919); Mass. (1921) sect. 54] The Constitution of Massachusetts 95 period. The first of such statutes imposed small excises on wines and strong waters, which were gradually increased in amount and extended to other articles. A tonnage tax was also enacted. In April 1668 an excise was imposed upon "all cyder, rum, ale and beer sold in publick houses" licensed to sell such articles. In 1670 a duty was laid on all goods, wares and mer- chandise with certain exceptions imported from any foreign port or other jurisdiction of one penny for every twenty shillings value. In 1680 a duty was laid on cattle brought in from other colonies. 1 Under the provincial charter, although no authority was given in terms to impose duties and excises, the general court enacted numerous statutes providing for taxes of this class. These excises were "granted" as in England, for a fixed period, usually of one year. Statutes imposing duties on imports were enacted every year, and such duties formed an important source of income for the provincial government ; but excises on domes- tic transactions were also frequently laid. At first these excises were chiefly on the sale of wines or distilled liquors at retail, or on the brewing of beer and ale and the distillation of liquors, 2 but in 1737 an excise on the use of carriages was imposed 3 and in 1750 an excise upon the sale at retail of tea, coffee, arrack, snuff and china-ware. 4 In 1755 a stamp tax upon writs, legal papers and newspapers was enacted. 5 During the first eight years under the constitution of Mass- achusetts the state had and exercised the power of laying duties on imports, 6 but upon the adoption of the constitution of the United States this power passed to Congress, leaving in the state the power concurrently with Congress of laying excises on domestic transactions. During the war of the Revolution excises had been laid by the state with great freedom, not only upon the sale of liquors and tea and the use of carriages, but upon articles of various kinds manufactured within the state 1 Anc. Chart. 130. 2 St. 1692-93, c 5, § 7 (sale of liquors at retail) ; St. 1702, c. 7, § 4 (brewing of beer and ale, distilling spirits or strong liquors) ; St. 1715-16 c. 9 (keepers of coffee-houses, innholders and retailers of wines and liquors) ; St. 1737-38. c. 1, § 1 (lemons and limes used in making punch) 3 St. 1737-38, c. 1, § 15; St 1749-50, c. 21, §9. 4 St. 1749-50, c 21. 6 St. 1754-55. c. 18. e St. 1782, c. 33; St. 1783. c. 12. 96 Taxation in Massachusetts [part i such as clocks and watches and sugar, and upon sales at auc- tion. 7 After the war was over and the financial strain on the state grew less the only excises retained were those upon tavern keep- ers, retailers of liquor and sales at auction. 8 The occupation of tavern keeper and the selling of intoxicating liquors has been subjected to regulation, and when not wholly prohibited, to the payment of fees down to the present time; 9 but the license fee, although it yielded a considerable revenue, came to be looked upon as an incident of regulation, and was imposed as an exercise of the police power rather than of the power of tax- ation. Sales at auction were taxed amounts varying from one per cent to one tenth of one per cent of the value of the goods sold, the last named being the tax on the sale of municipal bonds and shares in domestic corporations. 10 The tax on sales by auction was abolished in 1849. 11 In 1812 an excise on the franchise of banking corporations was imposed of one half of one per cent of the capital stock, 12 and this tax remained until the state banks were driven out of existence during the civil war to make way for the national banks. Insurance companies were first taxed on their business in I860. 13 Savings banks were subjected to a franchise tax in 1862 14 and business corporations generally in 1864. 15 Foreign telegraph companies were sub- jected to an excise tax in 1864 ; 16 ships engaged in the foreign carrying trade in 1881 ; 17 and trust companies in 1888. 18 The inheritance tax first appeared on the statute books of this com- monwealth in 18 9 1. 19 In 1898 a special excise tax was imposed on street railway companies 20 and in 1902 on corporations own- 7 St. 1781, c. 17; St. 1782, c. 33; St. 1783, c. 12; St. 1789, c. 48. 8 Portland Bank v. Apthorp, 12 Mass. 252 (1815). 9 G. L. c. 138 §21. 10 R. S. c. 9, § 5. 11 The tax on sales by auction was restricted by St. 1839, c. Ill, and St. 1843, c. 21. By St. 1849, c. 138, it was repealed so far as it applied to sales of goods manufactured in the United States; and the statute as it remained being a discriminatory excise on the sale of imported goods was clearly un- constitutional. Supra § 13. For the existing statutes in regard to auctioneers' licenses, see G. L. c. 100 § 2. 12 St. 1812, c. 32. 13 G. S. c. 58, § 64. See St. 1860, c. 178 and G. L. c. 63 § § 20-29, inc. infra page 521. 14 St. 1862, c. 224. See G. L. c. 63 §§ 11-16 inc. infra page 515. 15 St. 1864, c. 208. See G. L. c. 63 § 30, infra page 529. 16 St. 1864, c. 208. See G L c 59 § 8 infra page 220. 17 St. 1881, c. 284. See G L. c 6S § 67. infra page 589. 18 St. 1888, c. 413. See G. L. c. 63 § § 53. 56, infra pages 574, 579. 19 St. 1891, c. 425. See G. L. c. 65, infra page 605. 20 St. 1898, c. 578. See G. L. c. 63 §§ 61-66 inc., infra page 584. sect. 55] The Constitution of Massachusetts 97 ing ships engaged in the foreign carrying trade. 21 In 1903 for- eign business corporations were first subjected to an excise tax, 22 and in 1907 an excise was imposed on express companies.- 3 In 1914 the stock transfer tax was established. 24 Four other stat- utes imposing excises have been held unconstitutional, 25 and in addition to the excises already mentioned there are a large number of statutes imposing license fees upon various acts and occupations; but as the primary purpose in each case is regulation such statutes are not an exercise of the power of taxation. 26 The power to lay excises in this commonwealth is subject to two limitations by the constitutional provision already quoted, 27 namely (1) excises may be imposed only upon prod- uce, goods, wares, merchandise and commodities, (2) excises must be reasonable. 55. What Constitutes a Commodity Much of the discussion over the power of the legislature to levy excises has turned upon the meaning of the word "com- modity" in the Massachusetts constitution. The word "com- modity" in a special sense signifies an article of trade or com- merce, but in a general sense denotes a privilege, convenience, advantage, benefit or profit. It was early held that "commodity" was to be taken in its general sense in the clause of the consti- tution relating to taxation, and consequently that it was within the power of the legislature to lay an excise upon a franchise derived from the state. 1 This interpretation has never been 21 St. 1902, c. 374. ■ See G. L. c. 63 § 67, infra, page 589. 22 St. 1903, c. 437, § 75. See G. L. c. 63 § § 39-43 inc. injra, page 560. 23 St. 1907, c. 580, repealed by St. 1918 c. 257 § 77. 24 St. 1914, c. 770. See G. L. c. 64, infra, page 600. 25 St. 1863, c. 236, imposing a tax upon dividends paid to non-resident stockholders was held unconstitutional in Oliver v. Washington Mills, 11 Allen 268 (1865); St. 1878, c. 275, subjecting partnerships the interests in which were transferable without the assent of the partners to the corporate franchise tax was held unconstitutional in Gleason v. McKay, 134 Mass. 419 (1883) ; St. 1904, c. 403, imposing an excise on the business of giving trading stamps in connec- tion with the sale of other articles was held unconstitutional in O'Keeffe v. Somerville, 190 Mass. 110 (1906); St. 1914, c. 761, imposing an excise on the privilege of registering bonds and thereby rendering them tax exempt was held unconstitutional in Perkins v. Westwood, 226 Mass. 268 (1917). 26 Supra § 4. For the present statutes relating to licenses and license fees from which any substantial revenue is intended to be derived see G. L. c. 138, c. 140. 27 Supra, § 51. 1 Portland Bank v. Apthorp, 12 Mass. 252 (1815). 98 Taxation in Massachusetts [part i questioned and it has been held in numerous cases that it is competent for the legislature to lay an excise upon the fran- chise of a domestic corporation 2 or upon the privilege of a foreign corporation to do business in this commonwealth. 3 While it is conceded that the legislature cannot constitu- tionally evade the limitations upon the taxation of property by imposing an excise upon the privilege of holding property, 4 it has been earnestly contended that the power of levying excises of all sorts as it was exercised in England and in Massa- chusetts during the provincial period was given to the general court by the constitution subject only to the limitation of reasonableness, and this view has been expressed obiter in the decisions of the supreme judicial court in litigated cases 5 and by three of the members of the court in an opinion to the legislature. 6 The view of the majority however, supported by actual decisions of the court, is that the enumeration of the permissible subjects of excise in the constitution creates a real limitation and that the meaning of "commodity" is confined to such undertakings as one may not lawfully follow in the exer- cise of a natural right without aid from the government and without affecting the rights or interests of others in such a way as properly to call for governmental regulation; and that conse- quently the legislature cannot constitutionally lay an excise upon such natural rights as the performance of simple labor or the making of simple contracts. 7 Applying this principle it has been held that the right to do business by means of a 2 Commonwealth v. People's Five-Cents Savings Bank, 5 Allen 428 (1862) ; Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866); Commonwealth v. Hamilton Manufacturing Co., 12 Allen 298 (1866) ; Commonwealth v. Provi- dent Institution for Savings, 12 Allen 312 (1866); Manufacturers' Insurance Co. v. Loud, 99 Mass. 146 (1868); Commonwealth v. Lancaster Savings Bank, 123 Mass. 493 (1878); Commonwealth v. Barnstable Savings Bank, 126 Mass. 526 (1879). 3 Attorney-General v. Bay State Mining Co., 99 Mass. 148 (1868) ; Connecti- cut Mutual Life Insurance Co. v. Commonwealth, 133 Mass. 161 (1882); Attorney-General v. Electric Storage Battery Co., 188 Mass. 239 (1905); Baltic Mining Co. v. Commonwealth, 207 Mass. 381 (1911). As to corporations en- gaged in interstate commerce see supra, § 23. 4 Opinion of the Justices, 208 Mass. 616 (1911) ; Opinion of the Justices, 220 Mass. 613 (1915). 5 Portland Bank v. Apthorp, 12 Mass. 252 (1815) ; Minot v. Winthrop, 162 Mass. 113 (1894). 6 See the opinions of Hammond, Loring and Sheldon, JJ., • in Opinion of the Justices, 196 Mass. 602 (1908). 7 See the majority opinions in the above (see also note 11, infra) and the cases cited in the two following notes. sect. 56 J The Constitution of Massachusetts 99 partnership in which the interest of each partner is transferable without the consent of the others 8 and the right to sell goods with the accompaniment of trading stamps 9 cannot be the sub- ject of excise; but an inheritance tax, 10 a tax on the sale of corporate stock, foreign or domestic, and a tax on the privilege of doing business by means of an unincorporated association arising above the level of a simple partnership with transferable shares 1X are valid excises on commodities. It has also been held that as an act of justice is not a matter of barter, the privilege of obtaining an exemption from direct taxation for bonds secured by property which is itself taxed can- not be made the subject of an excise. 12 56. Reasonableness of Excises An excise need not be proportional, but it must be reasonable. The power to determine what callings, franchises or privileges shall be subjected to an excise and the amount of such excise be- longs primarily to the legislature. The provision that it must be reasonable was not designed to give to the judicial department the right to revise the decisions of the legislature as to the policy and expediency of an excise. 1 The court cannot declare an excise invalid as unreasonable unless it is plainly and grossly oppres- 8 Gleason v. McKay, 134 Mass. 419 (1883). 8 O'Keeffe v. Somerville, 190 Mass. 110 (1906). 10 Minot v. Winthrop, 162 Mass. 113 (1894); Minot v. Treasurer and Receiver-General, 207 Mass. 588 (1911). 11 Opinion of the Justices, 196 Mass. 602 (1908). Held by all the justices that a tax on the sales of shares or stock certificates can be sustained only as a duty or excise and such a tax can be imposed upon the sale of shares of corporations. Held by Hammond, Loring and Sheldon, JJ., that it can be im- posed upon the sale of shares in unincorporated associations, because the con- stitution gave power to exercise every part of the system of taxation which had theretofore been exercised in England and in the province of Massachusetts Bay; and that power includes the right to tax a privilege which is the exercise of a natural right, provided the tax is reasonable. Held by Rugg, J., that the sale of such shares can be taxed because the device of voluntary unincorporated associations with transferable shares is not a natural right. Held by Knowlton, C. J., and Morton and Braley, JJ., that the sale of such shares is a natural right and untaxable and that a distinction between such associations and ordinary partnerships is based on an immaterial fact. See also Oliver v. Liverpool & London Life and Fire Insurance Co., 100 Mass. 531 (1868), and G. L. c. 63 § § 22, 23, infra page 524, as to the right to lay an excise on an unin- corporated company. 12 Opinion of the Justices, 220 Mass. 613 (1915) ; Perkins v. Westwood, 226 Mass. 268 (1917). 1 Connecticut Mutual Life Insurance Co. v. Commonwealth, 133 Mass. 161 (1882); Minot v. Winthrop, 162 Mass. 113, 123 (1894). 100 Taxation in Massachusetts [part i sive or unequal in its effect upon persons similarly situated. Discriminations and distinctions between different privileges and occupations are permissible, but a discrimination between differ- ent exercises of the same privilege or occupation must have some conceivably rational basis and not be purely arbitrary or founded upon an immaterial fact. 2 As far as the amount of the tax is concerned, an excise can- not be grossly oppressive or contrary to common right, but if the legislature has the power to withhold the privilege alto- gether it may put any price it wishes upon its exercise, and one who voluntarily assumes the benefit cannot complain of the burden; if however the privilege is one the exercise of which may be regulated but not forbidden altogether the legislature may not under the guise of taxation impose such a severe burden as to substantially amount to prohibition. 3 It would not be reasonable to impose an excise arbitrarily irrespective of the benefit which the privilege taxed conferred and some method must be resorted to in order to ascertain a fair and just basis on which to calculate the amount of the tax, so that there may be some proportion between the benefits received and the sum paid for their enjoyment. 4 The usual method is to proportion the excise to the value of the property to which the privilege taxed relates; and such a method is not unreasonable even when the property itself is exempt from taxation. 5 57. Money Bills Part II, Chapter I, Section III, Article VI of the constitu- tion of Massachusetts reads as follows: All money bills shall originate in the House of Representatives; but the Senate may propose or concur with amendments, as on other bills. This provision of the constitution was intended to establish in this commonwealth the practice under the British constitu- 2 Portland Bank v. Apthorp, 12 Mass. 252, 258 (1815) ; Oliver v. Washing- ton Mills, 11 Allen 268 (1865); Minot v. Winthrop, 162 Mass. 113, 123 (1894); O'Keeffe v. Somerville, 190 Mass. 110 (1906) ; Opinion of the Justices, 196 Mass. 602 (1908); American Uniform Co. Inc. v. Commonwealth. 237 Mass. 42 (1921). 3 Minot v. Winthrop, 162 Mass. 113 (1894); American Uniform Co. Inc. v. Commonwealth, 237 Mass. 42 (1921). 4 Commonwealth v. Provident Institution for Savings, 12 Allen 312 (1866). 5 G. L. c. 63 § 30, Development of the Franchise Tax, infra page 531. sect. 58] Purposes for which Taxes can be Levied 101 tion by which money bills are required to originate in the House of Commons. It has been held that the exclusive constitutional privilege of the House of Representatives to originate money bills is limited to bills that provide for the levy of a tax and thus transfer money from the people to the state, and does not in- clude bills that appropriate money from the treasury for par- ticular public uses. 1 It has also been held that the Senate has an equal right with the House of Representatives to originate an inquiry into the returns of taxable property made by the towns for the purpose of determining the proportionate share of each town in the state tax. 2 A provision very similar to the one now under consideration is found in the constitution of the United States, 3 and while it is applicable only to Congress, its interpretation throws some further light on the meaning of the corresponding clause in the constitution of Massachusetts. It has been held that the pro- vision in the federal constitution applies only to acts that levy taxes in the strict sense of the word, and not to acts for other pur- poses which may incidentally create revenue. 4 Under the prac- tice in Great Britain, the House of Lords has no power to amend a money bill, but must concur with or reject it as it stands; whereas under both the federal and state constitutions the Sen- ate may propose or concur with amendments. It has been held that under the federal constitution a general revenue bill origi- nating in the House of Representatives may be subjected in the Senate to such a radical amendment as striking out a provision for the levy of an inheritance tax and substituting a tax on the income of corporations. 5 THE PURPOSES FOR WHICH TAXES CAN BE LEVIED 68. Taxes can be Levied only for the Public Use The principle that money cannot be raised under the form of taxation to be devoted to a use not public is expressed in 1 Opinion of the Justices, 126 Mass. 557 (1878). - Opinion of the Justices, 126 Mass. 547 (1781). 3 Article 1, Section 7, Clause 1. * Twin City Bank v. Nebeker, 167 U. S. 196 (1897) ; Millard v. Roberts, 202 U. S. 429 (1906). 5 Flint v. Stone Tracy Co., 220 U. S. 107, 143 (1911). 102 Taxation in Massachusetts [part i various ways in the constitution of Massachusetts, 1 and indeed may be said to follow from the existence of the restrictions upon the power of taxation which are found in the grant of that power to the legislature, a grant of power which is intended to cover the whole subject of legislation for the purpose of revenue and to exclude any arbitrary imposition which could not rightly be dignified by the name of tax. The power to levy taxes is founded on the right, duty and responsibility of maintaining and administering the governmental functions of the state and of providing for the public welfare. To justify any exercise of the power requires that the expenditure which it is intended to meet shall be for some public service or some object which concerns the public welfare. The promotion of the interests of individuals, and the incidental benefit to the public which may result from their prosperity, does not justify the grant to them of public money raised by taxation to enable them either to use their property or to carry on their business to better ad- vantage. 2 While the principle itself is easily expressed and understood, its application is often very difficult. The test of a public use for the purpose of taxation is, however, much the same as that employed in ascertaining proper subjects for the power of em- inent domain, 3 so that considerable help can be derived from the decisions which determine whether a use is sufficiently pub- lic to justify- the exercise of eminent domain upon its behalf. 4 1 It is said in Lowell v. Boston, 111 Mass. 454 (1873), that the limitation is expressed in Article XI of Chapter 2, Sec. 1, by restricting the issuing of moneys from the treasury to purposes of "the necessaiy defence and support of the commonwealth; and for the protection and preservation of the inhabi- tants thereof," and in Article IV of Chapter 1, Sec. i by declaring the purposes for which the power of taxation may be exercised to be "for the public service, in the necessary defence and support of the government of the said common- wealth and the protection and preservation of the subjects thereof" and in the general provisions of Article X of the Declaration of Rights. Taxation for a use not public is also a deprivation of property without due process of law, in violation of the Fourteenth Amendment to the constitution of the United States. Loan Association v. Topeka, 20 Wall. 655 (1874); Cole v. LaGrange, 113 U. S. 1 (1884); Green v. Frazier, 253 U. S. 233 (1920). 2 Lowell v. Boston, 111 Mass. 454 (1873). 3 Lowell v. Boston, 111 Mass. 454, 462 (1873). 4 The following uses have been held public in this commonwealth so far as to justify the exercise of the power of eminent domain. Highways, though laid out for pleasure travel only, Higginson v. Nahant, 11 Allen 530 (1866), or to reach the house of a single inhabitant, Denham v. Bristol County Com- missioners, 108 Mass. 202 (1871), or to open up a single tract of land, Wheel- wright v. Boston, 188 Mass. 521 (1905); but not purely private ways, Flagg v. sect. 59] Purposes for which Taxes can be Levied 103 In many instances the purpose for which it is proposed to expend the public funds is both public and private. In such a case, if the dominating motive for the expenditure of the money is a purely public one, then the expenditure is legal, although the expenditure may result in the acquisition of property by the public authorities which may be incidentally devoted at certain times to uses which are not public. 5 If however the project is merely colorable, masking under the pretext of a pub- lic purpose a design to embark the public upon a private en- terprise, such an attempt would be a perversion of power and no public funds could be appropriated for it. 6 A use is not necessarily private because the expense is in part met by individuals. There is no rule that the expense of a particular undertaking must be borne either wholly by the public or wholly by private parties. Instances are not uncom- mon in which part of the cost of a public improvement is met by special assessments and part by general taxation, or in which the public pays a fee for the use of a public utility only partly sufficient to bear the expense of maintenance. A contribution of part of the cost of maintaining a public utility which the state might constitutionally operate at its own expense is equally unobjectionable. 7 59. What Constitutes the Public Use The power of the state to authorize the levy of taxes to raise money for the erection of public buildings, such as a state house, court house or town hall, is of course unquestioned. 1 Flagg, 16 Gay 175 (1860). Railroads, Boston Water Power Co. v. Boston & Worcester R R. Co., 23 Pick. 360 (1839), even a private railway, White v. Blanchard Bros. Granite Co., 178 Mass. 363 (1901), and canals, Hazen v. Essex Co., 12 Cush. 475 (1853). Parks, Holt v. City Council of Somerville, 127 Mass. 408 (1879), and restrictions against the disfigurement of public squares, Attorney- General v. Williams, 174 Mass. 476 (1899). Water-pipes for public supply, Smith v. Lincoln, 170 Mass. 488 (1898), and sewers, Hildreth v. Lowell, 11 Gray 345 (1858). Cemeteries, Balch v. Essex County Commissioners, 103 Mass. 106, (1869). Reclaiming a large tract of useless or noxious land, Talbot v. Hudson, 16 Gray 417 (1860); Dingley v. Boston, 100 Mass. 544 (1868); Moore v. San- ford, 151 Mass. 285 (1890). 5 French v. Quincy, 3 Allen 9 (1861); Worden v. New Bedford, 131 Mass. 23 (1881); Davis v. Rockport, 213 Mass. 279 (1913). 6 Spaulding v. Lowell, 23 Pick. 71, 80 (1839); Wheelock v. Lowell, 196 Mass 220, 224 (1907). 1 Opinion of the Justices, 231 Mass. 603 (1919). 1 Stetson v. Kempton, 13 Mass. 271 (1816) ; Minot v. West Roxbury, 112 Mass. 1 (1873); Wheelock v. Lowell, 196 Mass. 220 (1907). 104 Taxation in Massachusetts [part i So also public funds may be expended to construct a hall for po- litical rallies, conventions and other public meetings of citizens. A commodious and convenient place in which the citizens may- meet and exercise their right of assembling and of considering and discussing public affairs is for the public use in its consti- tutional sense. 2 The relief of the poor and needy has from the earliest times been recognized as a proper object for the expenditure of pub- lic money. Cities and towns have ample power to provide in any reasonable way for paupers, whether it be by furnishing out-of-door relief or by support in almshouses, or whether their need of relief is permanent or caused by a temporary condi- tion. 3 This power would of course extend to providing im- mediate relief for those who are left without food or shelter as a result of a disastrous fire or flood or other like calamity; but it does not warrant the raising of money by taxation in order to loan it to the owners of land which has been swept by a disastrous fire, in order to enable them to rebuild; for in such case the benefit would be primarily to the individuals, and the public advantage in having the burned district speedily rebuilt would be secondary. 4 The means of transportation for people at large is a matter of public interest. In earlier times turnpikes and toll bridges in private ownership afforded facilities for travel. Gradually these have been taken over by counties, cities and towns and the tolls abolished. The construction, maintenance and repair of public highways is a lawful object for the expenditure of public funds, 5 and this power extends to the lighting 6 of the 2 Wheelock v. Lowell, 196 Mass. 220 (1907). So also it has been held that public funds may be expended for repairing a town clock, Willard v. New- buryport, 12 Pick. 227 (1831) and even for building a market house, Spaulding v. Lowell, 23 Pick. 71 (1839). 3 Opinion of the Justices, 182 Mass. 605, 609 (1903). If a person falls into immediate need he must be relieved, no matter how much property he may have. Groveland v. Medford, 1 Allen 23 (1861). 4 Lowell v. Boston, 111 Mass. 454 (1873). 5 Opinion of the Justices, 204 Mass. 607, 609 (1910); Opinion of the Justices, 211 Mass. 624, 628 (1912). The real purpose for which public money is being spent may be inquired into; but if a highway is laid out for public travel the public funds may be expended therefor, even if the underlying motive was to open up a tract of land belonging to the town. Wright v. Quinn, Mass. (1921). 6 Opinion of the Justices, 150 Mass. 592 (1890) ; Spaulding v. Peabody, 153 Mass. 129 (1891). See also Dickinson v. Boston, 188 Mass. 595 (1905). sect. 59] Purposes for which Taxes can be Levied 105 public ways and keeping them sprinkled. 7 So also the owner- ship and operation of a ferry by a municipal corporation contravenes no constitutional limitation. 8 It was no violation of the constitutional rights of the taxpayers when the common- wealth in 1862 acquired the ownership and assumed the man- agement of the Troy and Greenfield Railroad. 9 It is equally unobjectionable when the public funds are used to aid in the construction of a steam railroad owned and operated by a private corporation whether such aid is in the form of a subsidy, a loan or a subscription to stock, since the primary purpose of such expenditure is to improve the means of public travel. 10 Under modern conditions local transportation by an electric rail- way may also so concern the welfare and convenience of all the inhabitants of a particular district that the legislature may constitutionally provide for the construction of a subway at the public expense for the use of a railway operated by a private corporation, 11 or authorize a deficit in the operating expenses of such a railway to be met by a contribution of public funds. 12 Money may be raised by taxation in order to enable a city or town to furnish to its inhabitants one of the necessities and conveniences of life, when the enterprise is of such a character that it concerns the welfare and convenience of all the inhab- itants of the city or town and cannot be successfully undertaken by private individuals without the aid of a franchise from the state, such as a grant of the right to maintain permanent struc- tures in the public streets, or the right to exercise eminent do- main, and when as a practical matter, having due regard to the reasonable convenience of the public, there can be no compe- tition among different parties furnishing such necessities and conveniences. For this reason a municipal corporation may be 7 Sears v. Boston, 173 Mass. 71 (1899) ; Phillips Academy v. Andover, 175 Mass. 118 (1900). 8 Attorney General v. Boston, 123 Mass. 460 (1877). See also Davies v. Boston, 190 Mass. 194 (1906). » St. 1862, Chap. 156. See Troy v. Greenfield R. R. Co. v. Commonwealth, 127 Mass. 43 (1879). 10 Portage County Supervisors v. Wisconsin Central R. R. Co., 121 Mass. 460 (1877): Kittredge v. North Brookfield, 138 Mass. 286 (1885); Sears v. Street Commissioners of Boston, 180 Mass. 274, 279 (1902). 11 Prince v. Crocker, 166 Mass. 347 (1896); Browne v. Turner, 176 Mass. 9 (1900); Boston v. Treasurer & Receiver General, 237 Mass. 403 (1921). 12 Opinion of the Justices, 231 Mass. 603 (1919); Chelsea v. Treasurer & Receiver General, 237 Mass. 422 (1921). 106 Taxation in Massachusetts [part i authorized to undertake such public utilities as the furnishing of a public water supply, 13 or the manufacture and distribution of gas and electric light for sale to its inhabitants. 14 It is not however within the power of the legislature to authorize a municipal corporation to engage in the business of selling a com- modity to its inhabitants, even though the commodity be one of the necessities of life, such as fuel, if the business is an ordi- nary private occupation which can be and ordinarily is carried on without the aid of a franchise from the state. 15 It would not be a public use of money for the government to expend it in the establishment of stores or shops for the purpose of carrying on a business of manufacturing and selling goods in competi- tion with individuals with a view either to the profit that could be made through the business, or to the indirect gain that might result to the purchasers if prices were reduced by govern- mental competition. 16 When however, in time of scarcity, it appears that agencies of government can obtain a commodity constituting one of the necessities of life when individuals can- not, a municipal corporation may be authorized to purchase and sell such commodity for the relief of the community as long as such conditions continue. 17 The state or a municipal corporation cannot enter upon a private business merely for the profit that is expected to be derived therefrom, 18 but when a municipal corporation has ac- quired property in good faith for public purposes, it may rent to private parties so much of such property as is not at the time 13 Opinion of the Justices, 150 Mass. 592 (1890); Watson v. Needham, 161 Mass. 404 (1894). 14 Opinion of the Justices, 150 Mass. 592 (1890). 15 Opinions of the Justices, 155 Mass. 598 (1892); Opinion of the Justices, 182 Mass. 605 (1903). A state statute authorizing a town to issue its bonds in aid of a private manufacturing enterprise is in violation of the federal consti- tution, as authorizing taxation which results in the taking of property without due process of law. Loan Association v. Topeka, 20 Wall. 655 (1874). The power of a town to erect a market-house was sustained on the ground that it was sanctioned by ancient usage. Spaulding v. Lowell, 23 Pick. 71 (1839). 16 See however Jones v. Portland, 245 U. S. 217 (1917), in which it was held that the establishment of a municipal ice-plant was not a violation of the constitutional rights of the taxpayers, and Green v. Frazier, 253 U. S. 233 (1920), in which the action of a state in engaging in the business of marketing farm products and of providing homes for the people was sustained. 17 Opinion of the Justices. 182 Mass. 605 (1903). See also the Forty-seventh Amendment to the constitution infra § 61. 18 Opinion of the Justices, 204 Mass. 607 (1910) ; Opinion of the Justices, 211 Mass. 624 (1912). sect. GO] Purposes for which Taxes can be Levied 107 needed for the public use, 10 and it may undergo a reasonable expense to make such property available for rental. 20 So also while a municipal corporation could not raise money in order to invest the same in the securities of private corporations for the profit to be derived therefrom, it may invest money which it has lawfully raised rather than leave it idle until required for the public use. 2 21 60. Gratuities, Bounties and Pensions Public funds cannot be constitutionally employed to make gifts or gratuities to private individuals. 1 On the other hand the legislature in authorizing the payment of public funds to individuals is not restricted to meeting only such obligations as could not be avoided without violating constitutional rights. The legislature is not forbidden to be just in some cases where it is not required to be by the letter of paramount law. 2 When- ever it can fairly be thought that some public good will be served by the grant of an unstipulated reward or by the payment of reimbursement or compensation which the state is not consti- tutionally bound to make, such grant or payment will constitute an expenditure of money for the public use. 3 A statute which provides that those dealing with the public shall be paid more than the goods furnished or services per- formed are reasonably worth would be objectionable as author- izing a gratuity; but the legislature is not bound to provide that laborers on the public works shall be engaged on the terms most favorable to the public with respect to wages and hours of labor that can be secured by open competition, for the leg- islature may deem that the superior efficiency of well paid labor serving during reasonable hours will justify the employment of men on less favorable terms than could be secured by the stress of competition. 4 So also the legislature may provide 19 French v. Quincy. 3 Allen 9 (1861) ; Worden v. New Bedford, 131 Mass. 23 (1881); Wheelock v. Lowell, 196 Mass. 220 (1907); Davis v. Rockport, 213 Mass. 279 (1913); Wright v. Walcott, Mass. (1921). 20 Davis v. Rockport. 213 Mass. 279 (1913). 21 Foote v. Salem, 14 Allen 87 (1867). 1 Lowell v. Boston, 111 Mass. 454 (1873); Mead v. Acton, 139 Mass. 341 (1885); Opinion of the Justices, 186 Mass. 603 (1904); Opinion of the Justices, 190 Mass. 611 (1906); Whittaker v. Salem. 216 Mass. 483 (1914). 2 Earle v. Commonwealth, 180 Mass. 579 (1902). 3 Infra notes 4, 5, 6. 12. 13, 17, 18, 19, and 20. 4 Atkin v. Kansas, 191 U. S. 207 (1907) ; Opinion of the Justices, 208 Mass. 619 (1911); Woods v. Woburn, 220 Mass. 416 (1915). 108 Taxation in Massachusetts [part i that laborers employed by contractors upon the public works may, if their wages are in arrears, recover from the city or town for whom the work is being done the amount due them from the contractor. 5 Public funds may be used to pay for injuries to property caused by the construction of public works although the injuries are of such a character that the owner of the property has no constitutional right to compensation. 6 So also the legislature may make municipal corporations liable in tort for injuries to persons or property for which there was no liability at common law. Examples of such legislation are the statutes which render a city or town liable for injuries from defective highways, 7 for injuries from mobs 8 and for unlawfully excluding children from the public schools. 9 With respect to bounties, pensions and other rewards for military service, the principle to be deduced from the decisions is that if the payment is made for the purpose of encouraging the spirit of loyalty and patriotism rather than merely as a gratuity to those who have deserved well of the state it will be constitutional. Thus it has been held that bounties paid to encourage enlistments during the progress of a war, 10 statues and memorials to those who served in war, 11 a preference in public employment to veterans of a war who are competent to perform the duties of such employment, 12 and even a bounty or bonus to all who served in a war, if granted for the purpose of promoting loyalty and patriotism, 13 may be constitutionally provided by the legislature. On the other hand the payment of bounties to those who had not received them during the war merely to equalize the compensation of those who served, 14 the right to public employment regardless of ability to perform the service, 15 and the construction of a building for the use of an 5 Callahan v. Boston, 175 Mass. 201 (1901). 6 Earle v. Commonwealth, 180 Mass. 579 (1902). 7 G. L. c. 84 § § 15-25 inc. 8 G. L. c. 269 § 8. 9 G. L. c. 76 § 16. 10 Freeland v. Hastings, 10 Allen 570 (1865). 11 Kingman v. Brockton, 153 Mass. 255 (1891). 12 Opinions of the Justices, 166 Mass. 589 (1896). 13 Opinion of the Justices, 211 Mass. 608 (1912). See also St. 1919 Chap. 283 providing for a bonus for those who served in the war with Germany. 14 Mead v. Acton, 139 Mass. 341 (1885); Opinion of the Justices, 186 Mass. 603 (1904); Opinion of the Justices. 190 Mass. 611 (1906). 15 Opinions of the Justices, 166 Mass. 589 (1896). sect. 61] Purposes for which Taxes can be Levied 109 association of soldiers of a former war 1G are beyond the consti- tutional power of the legislature. The same principles apply to the payment to individuals who have performed meritorious services to the public of a civil nature, when there is no legal obligation to make such pay- ment. There is no constitutional objection to reimbursing in- dividuals for money they have advanced on behalf of the pub- lic, 17 or for expenses they have incurred in the performance of public service or the defense of public rights. 18 Thus when one employed to work upon a public building belonging to a town has performed his work with such fidelity that the town has received a benefit and it is just and equitable that he should receive compensation in addition to what his contract called for, the constitution does not prohibit the payment to him by the town of such additional compensation. 19 Similarly the leg- islature may authorize a town to pay to the dependents of a person who died while holding office the salary for a period of time after his decease to which he would have been entitled if living, if it can fairly be thought that the public good will be served by such an unstipulated reward. 20 There is however a limit to this power. However meritorious a project may ap- pear to be either in its practical or ethical or sentimental as- pects, if it is in essence a gift to an individual rather than a furthering of the public interest, money raised by taxation can- not be appropriated for it. Hence a town cannot grant an employee a prolonged leave of absence from duty at half pay. 21 61. Special Constitutional Provisions Affecting the Purposes for which Taxes can be Levied There have been a number of constitutional amendments adopted from time to time, some of which restrict and others expand the limitation upon governmental expenditure included 16 Kingman v. Brockton, 153 Mass. 255 (1891). 17 Freeland v. Hastings, 10 Allen 570 (1865). 18 Nelson v. Milford, 7 Pick. 18 (1828) ; Bancroft v. Lynnfield, 18 Pick. 566 (1836); Babbitt v. Savoy, 3 Cush. 530 (1849); Hadsell v. Hancock, 3 Gray 526 (1855); Fuller v. Groton, 11 Gray 340 (1858); Lawrence v. McAlvin, 109 Mass. 311 (1872); Curran v. Holliston, 130 Mass. 272 (1881). 19 Friend v. Gilbert, 108 Mass. 408 (1871). 20 Opinion of the Justices. 175 Mass. 599 (1900). 21 Whittaker v. Salem, 216 Mass. 483 (1914). 110 Taxation in Massachusetts [part i in the general requirement that taxes can be levied only for the public use. In Massachusetts there are many charitable or educational institutions, such as hospitals, colleges and academies, which are maintained by trustees or by private educational or chari- table corporations by means of endowments provided by the generosity of private individuals. As it would clearly rest within the power of the legislature to establish and maintain with the public funds institutions owned and operated by the state and carrying on similar work, it was generally considered to con- stitute a public use of the public funds to assist the existing institutions of this character by grants or donations. 1 A fear of the evils which might flow from the unlimited subsidizing of private institutions, especially those maintained by particu- lar religious sects, led however to the restriction and finally to the prohibition of such a practice. The Eighteenth Amendment to the constitution of Massa- chusetts, adopted in 1855, in substance provided that money raised by taxation for the support of the public schools should be expended only upon schools conducted under the order and superintendence of the municipal authorities and not upon the schools of any religious sect. It was held that this provi- sion applied only to the schools which are part of our established system of common education, whether supported wholly by taxation or not, 2 and that it did not prohibit the appropriation of public funds in aid of higher educational institutions such as incorporated colleges or academies, even if under sectarian or ecclesiastical control. 3 Indeed, it was only by a bare majority that the supreme court held in an advisory opinion rendered in 1913 that the constitution prohibited the appropriation of public money for aiding directly any church, religious denomi- nation, or religious society. 4 1 Fee supra § § 52, 53 as to exempting such institutions from taxation. 2 The Eighteenth Amendment prohibited the adoption of a school managed by private parties as part of the common school system of a town and the maintenance of such school in part or in whole at the expense of the tax- payers, Jenkins v. Andover, 103 Mass. 94 (1869). A statute providing that a town which does not maintain a high school shall pay for the tuition of any child who resides in the town and attends the high school of another town is not in violation of the Eighteenth Amendment. Fiske v. Huntington, 179 Mass. 571 (1901). 3 Merrick v. Amherst, 12 Allen 500 (1866) ; Jenkins v. Andover, 103 Mass. 94 (1869); Opinion of the Justices, 214 Mass. 598 (1913). 4 Opinion of the Justices, 214 Mass. 598 (1913). sect. 61] Purposes for which Taxes can be Levied 111 In 1917 the Eighteenth Amendment was replaced by the Forty-sixth Amendment which prohibits the use of public money for any school, whether under public control or otherwise, in which any denominational doctrine is inculcated, or for any educational, charitable or religious institution or undertaking whatever not under public ownership and control, except free public libraries and except when necessary to carry out legal obli- gations already entered into. In 1910 the supreme judicial court in two advisory opinions held that the public funds could not be expended in order to acquire land adjacent to but outside the limits of a public way, and which was subdivided into lots of insufficient size and shape for adequate buildings, for the purpose of dividing the land so acquired into appropriate lots and selling or leasing it to private parties. 5 In the following year, by the adoption of the Thirty-ninth Amendment to the constitution, expenditures for such a purpose, under special act of legislature, was authorized. In 1912 the supreme judicial court, in an advisory opin- ion, held that it was not within the power of the legislature to authorize the use of public funds in order to purchase land for developing, building upon and renting and selling the same, for the purpose of providing homes for mechanics, laborers or other wage earners. 6 In 1915, by the adoption of the Forty- third Amendment, power was given to the legislature to expend the public funds to acquire land to provide homes for citizens, subject to the condition that no land or buildings should be sold for less than the cost thereof. Other constitutional amendments affecting the purposes for which taxes can be levied are the Forty-seventh, declaring that the maintenance and distribution at reasonable rates, during time of war, public exigency, emergency or distress, of a suffi- cient supply of food and other common necessaries of life and the providing of shelter are public functions; the Forty-ninth, declaring that the conservation, development and utilization of the agricultural, mineral, forest, water and other natural re- sources of the commonwealth are public uses ; and the Fifty-first, declaring that the preservation and maintenance of ancient landmarks and other property of historical or antiquarian inter- 5 Opinion of the Justices, 204 -Mass. 607, 616 (1910). 6 Opinion of the Justices, 211 Mass. 624 (1912). 112 Taxation in Massachusetts [part i est is a public use. All of the last named amendments were proposed by the Constitutional Convention of 1917 and rati- fied and adopted by the people. Of these the Forty-seventh and Fifty-first Amendments would not seem to constitute more than a declaration of the existing law; and until the Forty-ninth Amendment is acted upon and construed by the courts it is dif- ficult to estimate the extent of the power granted. It should be remembered that taxation for a private use, though expressly authorized by a state constitution, would be obnoxious to the Fourteenth Amendment to the federal constitution, and that the supreme court of the United States, although it would give a broad construction to the powers of the legislature of a state with respect to the taxation of the citizens of such state, would not be bound by the declaration of a state constitution that a purpose for which taxation was authorized constituted a public use. 62. The Purposes for which a City or Town may Levy Taxes The power of a city or town to raise money by taxation is not commensurate with the power to levy taxes which is conferred upon the legislature by the constitution of the commonwealth. 1 Towns and cities are corporations of limited powers and cannot raise money by taxation or expend money raised by taxation ex- cept for purposes expressly or by plain implication authorized by the legislature. 2 A tax levy which includes an unauthor- ized appropriation is pro tanto void. 3 The purposes for which a city or town may expend money are set forth in detail in chap- ter forty of the General Laws. If the object of an appropriation is within the scope of the corporate powers of a town, the town is the proper judge of the 1 Flood v. Leahy, 183 Mass. 232 (1903). 2 Stetson v. Kempton, 13 Mass. 272 (1816); Parsons v. Goshen, 11 Pick. 396 (1831); Spaulding v. Lowell, 23 Pick. 71 (1839); Tash v. Adams, 10 Cush. 252 (1852); Hood v. Mayor & Aldermen of Lynn, 1 Allen 103 (1861); Frost v. Belmont, 6 Allen 152 (1863); Freeland v. Hastings, 10 Allen 570 (1865); Minot v. West Roxbury, 112 Mass. 1 (1873); Coolidge v. Brookline, 114 Mass. 592 (1874); Cusick v. Brookline, 123 Mass. 91 (1877); Spaulding v. Peabody, 153 Mass. 129 (1891); Waters v. Bonvouloir, 172 Mass. 286 (1899). 3 It was held in Gerry v. Stoneham, 1 Allen 319 (1861), that an appropria- tion of $100 for an unauthorized purpose made the entire tax of the year void, but by St. 1859, c. 118, now G. L. c. 59 § 82, only the illegal portion of the tax is void. See infra page 311. sect. 63 J Purposes for which Taxes can be Levied 113 amount of the appropriation and of the details of carrying it out. 4 It is perfectly proper for the town to make reasonable provision for the future though present wants are exceeded and to make a profitable commercial use of what it has acquired in excess of present needs until the whole is required for public use. 5 The objects of an appropriation must be designated in the vote authorizing a tax or otherwise declared and made known at the time of an appropriation. 6 63. Constitutional Rights of the Taxpayers of a City or Town It is a well established principle of constitutional law that taxes may be levied only for the public uses of the district taxed. 1 The duty or obligation to pay taxes by the individual is founded on his participation in the benefits arising from their expendi- ture. 2 It would not be competent for the legislature to donate money, raised by taxation upon persons or property within this commonwealth, for the relief of residents of other states or of foreign countries who may be suffering from famine, flood or other disaster. It would be equally incompetent for the legis- lature to levy a tax on the property located in one city to pay for a public improvement established for the use of the people of another city, 3 or to require one city or town to pay the entire cost of a public improvement established for the use of the whole commonwealth, 4 or to levy a tax upon the whole commonwealth for a public improvement established for the benefit of a single city or town. 5 It has however been held that such a result may be effected by indirect means, and that a statute which author- izes the levy of a tax by the state upon certain classes of prop- erty and provides for the distribution of the proceeds of the tax among the cities and towns of the state in accordance with a * Haven v. Lowell, 5 Met. 35 (1842); Friend v. Gilbert, 108 Mass. 408 (1871). 5 French v. Quincy, 3 Allen 9 (1861); Foote v. Salem, 14 Allen 87 (1867); Worden v. New Bedford, 131 Mass. 23 (1881). 6 Freeland v. Hastings, 10 Allen 570 (1865). 1 Duffy v. Treasurer & Receiver General, 234 Mass. 42 (1919). 2 Thomas v. Gay, 169 U. S. 264, 276 (1898). 3 Hampshire v. Franklin, 16 Mass. 76 (1819); Norwich v. Hampshire County Commissioners, 13 Pick. 60 (1832) ; Opinion of the Justices, 234 Mass. 612, 620 (1920). 4 Merrick v. Amherst, 12 Allen 500 (1866). 6 Kingman, Petitioner, 153 Mass. 566 (1891). 114 Taxation in Massachusetts [part i rule of apportionment which bears no relation to the location of the property from which the tax was derived, while it goes to the verge of, does not overstep the limits of constitutional power, even if it necessarily results in the taxation of property situated in certain cities and towns, almost wholly for the use and benefit of other cities and towns. 6 In fact the supreme court has expressly held that the distribution of public monies by way of expenditures either directly by state officers or in- directly through county, city, town or district officers need not be according to any principle of apportionment or equality other than such as commends itself to the wisdom of the general court. 7 So also the legislature has a wide discretion in the appor- tionment of public burdens among the different subdivisions of the state, and a statute imposing the cost of maintaining a particular public improvement upon the counties, cities or towns that may in the opinion of the legislature be benefited by the establishment of the improvement is unquestionably con- stitutional. 8 A town may be compelled to pay the whole or part of the cost of a state institution within its limits if the town receives most of the benefit from its establishment 9 or if, as in the case of public highways, such provision is a fair and convenient way of distributing a general public burden among the cities and towns of the state. 10 The apportioning of a public burden among certain specified cities and towns is not a betterment assessment and the principles applicable to the 6 Duffy v. Treasurer & Receiver General, 234 Mass. 42 (1919); Dane v. Treasurer & Receiver General, 237 Mass. 50 (1921). 7 Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921). See also, Lowell v. Oliver, 8 Allen 247, 255 (1864). 8 Norwich v. Hampshire County Commissioners, 13 Pick. 6b (1832) ; Attorney General v. Cambridge, 16 Gray 247 (1860) ; Hingham etc. Turnpike Co. v. Norfolk County, 6 Allen 353 (1863); Salem etc. Bridge Co. v. Essex County, 100 Mass. 282 (1868); Dow v. Wakefield, 103 Mass. 267 (1869); Carter v. Cambridge and Brookline Bridge Proprietors, 104 Mass. 236 (1870); Scituate v. Weymouth, 108 Mass. 128 (1871); Northampton Bridge Case, 116 Mass. 442 (1875) ; Sunderland Bridge Case, 122 Mass. 459 (1877) ; Brayton v. Fall River, 124 Mass. 95 (1878); Kingman, Petitioner, 153 Mass. 567 (1891); Adams, Petitioner, 165 Mass. 497 (1896); Prince v. Crocker, 166 Mass. 347 (1896); Kingman, Petitioner, 170 Mass. Ill (1898); Browne v. Turner. 176 Mass. 9 (1900). 9 Merrick v. Amherst, 12 Allen 500 (1866); Hanscom v. Lowell, 165 Mass. 419 (1896); Attorney-General v. Williams, 174 Mass. 476 (1899); Hodgdon v. Haverhill, 193 Mass. 406 (1907). 10 Freeland v. Hastings, 10 Allen 570, 580 (1865). sect. 63] Purposes for which Taxes can be Levied 115 levy of betterment assessments are irrelevant to such appor- tioning. The cities and towns affected are not entitled to be heard at any stage of the proceedings upon the share of the bur- den which they are to bear; 11 and in apportioning the burden the population of the cities to be assessed, their extent and their ability to bear the burden may be considered, as well as the benefit accruing to each. 12 It would only be in a case of a purely arbitrary and unreasonable imposition of a burden upon a par- ticular section of the state that the court would have any occa- sion to interfere. Even in such a case the city or town would have no standing in court to ask for relief, and the court would act only at the instance of an aggrieved taxpayer, who was being made to bear a disproportionate burden of taxation. 13 Apart from the right to be free from arbitrary taxation for the benefit of another portion of the state, the inhabitants of a city or town have some vague and shadowy rights of local self-government of which the legislature cannot constitutionally deprive them 14 and it may be that there are purposes of suf- ficiently public nature that the legislature may authorize local taxation in their behalf and yet of such distinctly local interest that compulsory expenditure by the very town affected would be beyond the power of the legislature to enforce. It would certainly be an extreme exercise of legislative power to require a municipality against its wishes and without its consent to establish a municipal lighting plant at the expense of its tax- payers to furnish light to its own inhabitants. But improve- ments which benefit the health, morals or safety of such portion 11 Chelsea v. Treasurer & Receiver General, 237 Mass. 422 (1921). 12 Commonwealth v. Newburyport, 103 Mass. 129, 134 (1864); In re' Metropolitan Park Commissioners, 209 Mass. 381 (1911); Boston, Petitioner, 221 Mass. 468 (1915); Opinion of the Justices, 234 Mass. 612, 616 (1920); Boston v. Treasurer & Receiver General, 237 Mass. 403 (1921). 13 Chelsea v. Treasurer & Receiver General, 237 Mass. 422 (1921). 14 Commonwealth v. Plaisted, 148 Mass. 375, 384 (1889) ; Mount Hope Cemetery v. Boston, 158 Mass. 509 (1893); Higginson v. Boston, 212 Mass. 583 (1912); Woods v. Woburn, 220 Mass. 416, 421 (1915). The distinction between undertakings carried on by a municipal corporation in its private and proprietary capacity and those carried on in its public and governmental capacity has been frequently recognized by the Supreme Court of the United States. Tippecanoe County Commissioners v. Lucas, 93 U. S. 108, 115 (1876); Meri- wether v. Garrett, 102 U. S. 472. 518. 530 (1880) ; Mobile v. Watson, 116 U. S. 289, 305 (1886) ; Essex Board v. Shinkle, 140 U. S. 334, 342 (1891) ; New Orleans v. Water Works Co., 142 U. S. 79, 91 (1891); Covington v. Kentucky, 173 U. S. 231, 240 (1899); Worcester v. Worcester St. Ry. Co., 196 U. S. 539, 551 (1905); Monterey v. Jacks, 203 U. S. 360 (1906); Hunter v. Pittsburgh, 207 U. S. 161, 179 (1907). 116 Taxation in Massachusetts [part i of the public as dwells in a particular municipality may un- questionably be required to be constructed and maintained at the expense of the municipality in which they will be situated. 15 SPECIAL ASSESSMENTS 64. The Origin and Development of Special Assessments The system of general taxation which has grown up under our customs, laws and constitutions consists of the assessment at definitely fixed intervals of a sum sufficient to meet the public expenses of each political subdivision upon all the persons or all the property contained therein at a uniform rate, and no attempt to assess each taxpayer for the benefit he receives either from the public expenditures as a whole or from the different items of such expenditures is required. In some instances how- ever an expenditure for a particular public purpose is assessed upon those who occasion the expenditure, as when the expense of supervising public service corporations is assessed upon the corporation supervised, 1 or the expense of repairing the roads is met in part by the license fees imposed upon motor vehicles. 2 So also it frequently happens that a particular public improve- ment, while enhancing the general public convenience to a certain extent, is so peculiarly advantageous to a definite terri- tory which does not happen to coincide with one of the existing political subdivisions of the state that it is deemed more just to assess the cost of the improvement upon the benefited area than to include it in the general tax levy upon the entire com- munity. 3 For example, the cost of maintaining a bridge is some- 15 Higginson v. Boston, 212 Mass. 583 (1912). 1 See for example, G. L. c. 25 § 11. 2 See G. L. c. 90 § 34. The limits of the power of the legislature to levy a tax upon a particular class of persons or property or upon particular acts, occupations or privileges to meet an expenditure for a particular public purpose, at least when there is no direct relation between the subject of the tax and the subject of the expenditure, have never been clearly defined. In Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921), it was held that the statutes questioned in that case did not constitute a tax on particular property for a particular public purpose and it was not decided whether such a tax would be constitutional if no relation between the tax and the expendi- ture was shown. 3 See Webster v. Fargo, 181 IT. S. 395 (1901), in which it is said that it is within the power of the state to create special taxing districts and to charge the cost of a local improvement upon the property within such districts according either to valuation, area or frontage. sect. 64] Special Assessments 117 times imposed upon certain designated counties or towns, 4 and in other cases quasi corporations called districts are created to support the schools, to furnish a water supply or to provide for the extinguishment of fires in the territory embraced in the district. 5 Although the funds in such instances are raised by a tax assessed upon all property within the district at a uniform rate and such a tax constitutes a general tax rather than a spe- cial assessment, 6 yet it represents a departure from the funda- mental principle of general taxation by imposing the expense of a particular item or branch of public enterprise upon the territory actually benefited by it. One step farther takes us to the true special assessment or betterment in which the cost of a particular improvement is assessed in whole or in part upon the territory benefited by the improvement in pro- portion to the benefit received by each parcel of land within such territory. The special assessment is no modern innovation. As early as 1658 a public way was laid out by the general court of the colony of Massachusetts Bay and power was given to impose the cost on "all such as shall have benefit of the way." 7 A pro- vincial statute enacted in 1692 provided that the damages for land taken for the enlargement and regulation of narrow and crooked lanes and passages in Boston should be paid by the neighborhood or town "in proportion to the benefit or con- veniency any shall have thereby." 8 The statute enacted in 1760 providing for rebuilding that part of Boston which had been laid waste by fire required a jury to assess the damages and ben- efits from new streets laid out therein, the damages to be paid by the persons benefited or by the town of Boston or by both in such proportions as the jury should find reasonable. 9 In 1709 4 Norwich v. Hampshire County Commissioners, 13 Pick. 60 (1832); Hing- ham & Quincy Bridge & Turnpike Co. v. Norfolk County, 6 Allen, 353 (1863); Salem Turnpike & Chelsea Bridge Co. v. Essex County, 100 Mass. 282 (1868); Dow v. Wakefield, 103 Mass. 267 (1869); Carter v. Cambridge & Brookline Bridge Proprietors, 104 Mass. 236 (1870); Scituate v. Weymouth, 108 Mass. 128 (1871); Northampton Bridge Case, 116 Mass. 442 (1875); Brayton v. Fall River, 124 Mass. 95 (1878); Kingman, Petitioner, 153 Mass. 567 (1891); Williams v. Eggleston, . 170 U. S. 310 (1898). 5 See for example G. L. c. 40, § § 41, 44; c. 41, § § 113 to 119 inc.; c. 48, S §60-80 inc. 6 Williams College v. Williamstown, 219 Mass. 46 (1914). 7 Mass. Col. Rec, part 1, 327. s St. 1692-3, c. 1. 9 St. 1760-1, c. 3. 118 Taxation in Massachusetts [part i and again in 1796 it was enacted that persons receiving any benefit from common sewers should pay to the persons who had built the sewers such a proportional part of the cost of making and repairing the same as should be assessed upon them by the selectmen of the town. 10 Provision was made in 1727 that damages caused by the laying out of particular and private ways, should in some instances be paid by the persons benefited, and these provisions are still in force. 11 In 1799 sidewalks in Boston were authorized to be built at the expense of the abut- ters. 12 The statutes authorizing the compulsory joint drainage of swamps and meadows and providing for the assessment of the cost upon the estates benefited were of early origin and are still upon the statute books. 13 Many of these statutes were enacted before the legislative power was restricted by a written constitution and all of them before constitutional law had reached the stage of development in which it had become necessary that each legislative enact- ment be classified and subjected to certain well defined limi- tations applicable only to the class into which it had been thrust. Subjected to modern critical analysis not all of these statutes appear to be an exercise of the power of taxation; some of them seem to fall within the police power and others are very close, at least, to the power of eminent domain in imposing the obli- gation of paying the land damages caused by a particular im- provement upon the persons who were responsible for its construction. Nevertheless these statutes, although difficult or impossible to classify, paved the way for the true special assessment in its present form, which unquestionably is imposed under the power of taxation, 14 although pecuniary impositions under the police power have also a recognized place in our juris- prudence. 15 io St. 1709-10, c. 5, §3; St. 1796, c. 47, §2. 11 St. 1727-8, c. 1, §2; G. L. c. 82, §24. 12 St. 1791, c. 31, § 1; G. L. c. 83, § 26. is St. 1702, c. 11; G. L. c. 252, § 14. 14 Dorgan v. Boston, 12 Allen 223 (1866); Harvard College v. Aldermen of Boston, 104 Mass. 470, 482 (1870) ; Codman v. Johnson, 104 Mass. 491, 492 (1870) ; Prince v. Boston, 111 Mass. 226, 231 (1872); Boylston Market Association v. Boston. 113 Mass. 528, 530 (1873); Howe v. Cambridge, 114 Mass. 388, 391 (1874); Worcester County v. Worcester, 116 Mass. 193 (1874); Bigelow v. Boston, 123 Mass. 50, 52 (1877) ; Somerville v. Dickerman, 127 Mass. 272, 275 (1879); Boston v. Boston & Albany R. R. Co., 170 Mass. 95. 98 (1898); White v. Gove, 183 Mass. 333, 335 (1903) ; Wheatland v. Boston, 202 Mass. 258, 262 (1909). 1 5 Infra § 71. sect. 65] Special Assessments 119 A special assessment, though justified as an exercise of the taxing power and itself undoubtedly a form of taxation, is not necessarily a "tax" when that word is used without qualification in a statute or contract, and whether the word "tax" so used is intended to include special assessments must be gathered from the surrounding circumstances. 16 65. The Constitutionality of Special Assessments In view of the early development of special assessments in this, commonwealth and their long and unquestioned usage, it it not surprising that when objection to the constitutionality of this form of taxation was finally made it was not sustained by the courts. The supreme court of Massachusetts held that none of the requirements of the constitution were violated by a tax levied for public purposes of a local character although imposed only on a certain-town or district or on persons resid- ing or owning property in a particular locality, and that an assessment made on persons in respect of their ownership of certain property which receives a peculiar benefit from the ex- penditure of the money raised by the tax, or by reason of their residence in the vicinity of a proposed public improvement and the special advantage or convenience which will accrue to them and their property therefrom, will not be held invalid, although it does not operate on all persons and property in the commu- nity in the same manner as taxes levied for general purposes. 1 16 A special assessment is a tax within the meaning of the statute regu- lating actions at law to recover back taxes (G. L. c. 60 § 98), Barrett v. Cambridge, 10 Allen 48 (1865); Knowles v. Boston, 129 Mass. 551 (1880); Wheatland v. Boston, 202 Mass. 258 (1909) ; or of the statute restricting the effect of partial invalidity (G. L. c. 59 § 82) ; Lynde v. Maiden, 166 Mass. 244 (1896). It is not however a tax within the meaning of statutes giving exemption from taxation, whether general laws, Boston Seamen's Friend Society v. Boston, 116 Mass. 181 (1874) ; Worcester Agricultural Society v. Worcester, 116 Mass. 189 (1874); Phillips Academy v. Andover, 175 Mass. 118 (1900) ; or particular charters, Boston Asylum and Farm School v. Street Commissioners of Boston, 180 Mass. 485 (1902). A special assessment is how- ever included within an exemption from "all civil impositions, taxes and rates." Harvard College v. Aldermen of Boston, 104 Mass. 470 (1870). A special assessment is included in a covenant to pay "all taxes and assesments," Cod- man v. Johnson, 104 Mass. 491 (1870) ; "all taxes and duties," Blake v. Baker, 115 Mass. 188 (1874); Simonds v. Turner, 120 Mass. 328 (1876); "all taxes, rates, charges and assessments," Walker v. Whittemore, 112 Mass. 187 (1873); "the rates, taxes and duties of every kind," Curtis v. Pierce, 115 Mass. 186 (1874) ; or in a covenant to convey "a good title, free from all mortgage en- cumbrances, taxes and mechanics' liens," Williams v. Monk, 179 Mass. 22 (1901). See however Smith v. Abington Savings Bank, 165 Mass. 285 (1896). 1 Dorgan v. Boston, 12 Allen 223 (1866). 120 Taxation in Massachusetts [part i Although special assessments are not in themselves unconstitu- tional, the opportunity for unfairness and oppression offered by their use is so much greater than is offered by general taxation that the constitutional provisions applicable to the power of tax- ation have been more liberally construed in favor of the individ- ual in passing upon taxation of the former class, and safeguards have been thrown about the owners of land subjected to special assessment which cannot be invoked against general taxation. The principal requirements of a valid special assessment are as follows: (1) The use for which the money is raised must be public. (2) The improvement for which the assessment is levied must beneficially affect a well defined and limited area. (3) The assessment must not exceed the actual benefit to each parcel assessed. (4) The owner of the land assesfld must be given an oppor- tunity for a hearing on the extent ol the benefit. (5) The total assessment must not exceed the cost of the improvement. 66. The Use must be Public The well established principle that public funds raised by taxation cannot be devoted to any use not public x is not limited in its application to funds raised by general taxation, but applies to special assessments as well. 2 Public highways, sewers and parks are unquestionably for the public use, and it has been held that the - benefit from the location of a railroad station may be the basis of a special assessment. 3 A private street in which the public has no right of passage cannot be paid for by assessments upon the abutters. 4 There is one species of pecuniary imposition which resembles in form a special assessment but which does not require the public use for its justification. Under a branch of the police power of the state, when property in which several persons have a common interest cannot be fully and beneficially enjoyed in 1 See supra § 58. 2 Morse v. Stocker, 1 Allen 150 (1861) ; Lowell v. Boston, 111 Mass. 454 (1873); Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902). 3 Sears v. Street Commissioners of Boston, 180 Mass. 274, 279 (1902). 4 Morse v. Stocker, 1 Allen 150 (1861). sect. 67] Special Assessments 121 its existing condition and the parties interested therein cannot agree upon a scheme for the more advantageous use of the prop- erty, the law often provides a way in which they may compel one another to submit to measures necessary to secure its bene- ficial enjoyment, making just compensation to any of the pro- prietors whose control of the property or interest therein has been modified by the new arrangement, which compensation those of the proprietors who are benefited are obliged to pay. The exercise of this power in most instances is upon property held in common, but the principle is the same if applied to a tract of land affected by common necessities and interests al- though divided into parcels held by individual owners in sever- alty. A familiar instance is the draining of swamps and meadows, the condition of which is not such as to menace the public health, but merely renders them incapable of beneficial use. When a tract of low, marshy land is divided into several 'parcels held by different owners and a general improvement of the whole cannot be effected without the harmonious co-opera- tion of all the owners, the common necessity is met and the common interest secured by the intervention of the state, and the individual rights of each owner are subjected to such modi- fications as seem most adapted to secure the best advantage of all. Those who are damaged are compensated by those who are benefited. Land is actually taken and pecuniary imposi- tions are levied although the use is not public; but neither the power of eminent domain nor the power of taxation is exercised. No land outside the tract affected by the common interest is taken or assessed and it is settled that the compulsory improve- ment of the tract in the manner described is a valid exercise of the police power. 5 67. The Improvement must be Local A public improvement to be the basis of a special assess- ment must have an actual and beneficial effect upon a well de- fined and limited area. The only departure permissible from the system of general taxation by which all the property in a given territorial unit is assessed at a uniform rate is the local special assessment justified by the local character of the improvement. 5 Lowell v. Boston, 111 Mass. 454 (1873); Wurts v. Hoagland, 114 U. S. 606 (1885). 122 Taxation in Massachusetts [part i The general benefit to all the property in a city or town arising from a particular public improvement must be met by general taxation, 1 and a system by which for example all the real estate within a city or town was assessed for the maintenance of the sewers 2 or all the personal property for the expenses of the police department would conflict with the provisions of the constitution requiring reasonable and proportional taxation. Not all classes of public improvements and undertakings are proper objects of special assessments; but it has been held constitutional to levy a special assessment to cover the whole or part of the cost of the construction and alteration of public streets, 3 the construction of sewers for house sewage 4 and drains for surface water; 5 the construction of sidewalks, 6 of parks 7 and even of railroad stations. 8 Ordinarily local benefit is not derived from a public improvement unless it is constructed, but there may be improvements of such a nature that the mere formal laying out confers a benefit, and the construction may confer another benefit. 9 Local benefit to be the basis of an assessment need not be of a permanent character and assess- ments have been sustained for watering a street 10 or for main- taining a sewer. 11 It is no objection to the validity of an! assessment that the owner of the land assessed has no legal right to have the improvement for which he is assessed main- 1 Upham v. Worcester, 113 Mass. 97 (1873) ; Baker v. Boston Elevated Railway Co, 183 Mass. 178, 182 (1903). 2 Sears v. Street Commissioners of Boston, 173 Mass. 350 (1899). 3 Dorgan v. Boston, 12 Allen 223 (1866) ; Jones v. Aldermen of Boston, 104 Mass. 461 (1870). 4 Downer v. Boston, 7 Cush. 277 (1851); Butler v. Worcester, 112 Mass. 541 (1873). 5 Beals v. James, 173 Mass. 591 (1899). 6 Lowell v Hadley, 8 Met. 180 (1844); Howe v. Cambridge, 114 Mass. 388 (1874). 7 Holt v. Somerville, 127 Mass. 408 (1879) ; Foster v. Park, Commissioners, 133 Mass. 321 (1882). 8 Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902). 9 Foster v. Park Commissioners of Boston, 133 Mass. 321 (1882) ; New England Hospital v. Street Commissioners of Boston, 188 Mass. 88 (1905). 10 Sears v. Aldermen of Boston, 173 Mass. 71 (1899); Phillips Academy v. Andover, 175 Mass. 118 (1900); Stark v. Boston, 180 Mass. 293 (1902) ; Corcoran v. Aldermen of Cambridge, 199 Mass. 5 (1908) ; Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 11 Carson v. Sewerage Commissioners of Brockton, 175 Mass. 242 (1900) ; sustained 182 U. S. 398 (1901). See also Swigart v. Baker, 229 U. S. 187 (1913) holding that the cost of maintenance of irrigation works may be specially assessed. sect. 68] Special Assessments 123 tained forever. 12 A landowner may be assessed for the recon- struction of a public improvement which had been worn out by use although he had been assessed for the original construc- tion. 13 In many instances in which an assessment is levied for the construction of a street or a sewer, the principal object of the public authorities in laying out the street or the sewer is to benefit the territory assessed, but it is no reason for invalidating an assessment, that the general public benefit was the main object of the improvement and the local benefits were only incidental. There is no requirement that either the whole cost of a public improvement or none at all must be borne by those benefited, or that the entire benefit must be assessed. 14 It is only when the general public benefit is the sole result of the improvement that a special assessment cannot constitutionally be levied. 15 When an improvement confers both a general and a local benefit, it is of course only the local benefit that can be specially assessed; the general benefits are not subjects of com- pensation from the landowner to the public in any form of proceeding. 16 68. The Assessment is Limited by the Cost of the Improvement A special assessment is a tax and the benefit is estimated only as a means of apportioning the tax and providing a fixed limit of the amount to be assessed upon each estate. The fact of such benefit from the improvement furnishes a justification for the imposition of a tax upon a particular class of estates instead of a levy in the general way of ordinary taxation, but such benefit would not of itself warrant the exaction of money by way of compensation therefor. The estates are assessed not for the benefit conferred but for the cost of the public im- provement. The essential point in the proceeding is the ex- 12 Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902). See infra, § 72. 13 Sayles v. Pittsfield Board of Public Works, 222 Mass. 93 (1915). « Opinion of the Justices, 231 Mass. 603, 612 (1919). 15 Briggs v. Whitney, 159 Mass. 97 (1893); Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902). 16 Upham v. Worcester, 113 Mass. 97 (1873) ; Baker v. Boston Elevated Railway Co., 183 Mass. 178, 182 (1903). As to the distinction between general and local benefits, see further infra, page 672. 124 Taxation in Massachusetts [part i penditure for a public service for which taxation in some form is required. 1 In ascertaining the cost which is to be the basis of an assess- ment and the benefit in accordance with which the whole or part of the cost is to be assessed there is no objection to joining different features of what are really part of the same public improvement. 2 While it is not unconstitutional to assess a betterment before the work is completed, based on the esti- mated cost of the work, there is no impropriety in waiting until after the completion of the work, 3 and an assessment is valid in the absence of statutory prohibition, although made several years after such completion. 4 There is no constitutional objection to the enactment of a statute authorizing the levying of an as- sessment for a public improvement completed before the enact- ment of the statute, 5 even if changes of ownership in the lands assessed have intervened, 6 and the reassessment of an assess- ment held void for irregularity or error 7 is equally unobjection- able. If after a public improvement has been constructed under an act authorizing the assessment of betterments the statute is repealed before the betterments are collected, the repeal of the statute does not violate any constitutional rights of the city or town. 8 69. The Assessment must not Exceed the Benefit It has long been a mooted point among constitutional law- yers in the country at large whether a special assessment can be con- stitutionally imposed upon a parcel of land in accordance with a rule which excludes all inquiry upon the question of actual 1 Chase v. Aldermen of Springfield, 119 Mass. 556 (1876). 2 Lincoln v. Street Commissioners of Boston, 176 Mass. 210 (1900) ; Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902). See also Arnold v. Cambridge, 106 Mass. 352 (1871); American Unitarian Association v. Common- wealth, 193 Mass. 470 (1907). 3 Prince v. Boston, 111 Mass. 226 (1872). 4 Fairbanks v. Mayor & Aldermen of Fitchburg, 132 Mass. 42 (1882) ; Hester v. Collector of Brockton, 217 Mass. 422 (1914). 5 Hall v. Street Commissioners of Boston, 177 Mass. 434 (1901). See also Seattle v. Kelleher, 195 U. S. 356 (1904). 6 Morse v. Street Commissioners of Boston, 197 Mass. 292 (1908). . 7 Warren v. Street Commissioners of Boston, 187 Mass. 290 (1905). See also Lombard v. West Chicago Park Commissioners, 181 U. S. 42 (1901). s Stone v. Street Commissioners of Boston, 192 Mass. 297 (1906). sect. 69J Special Assessments 125 benefits and which may result in the assessment of an amount in substantial excess of such benefits. Many eminent author- ities, among them the supreme court of the United States, hold that it is no violation of the general prohibitions of the Fourteenth Amendment to the United States constitution or of similar provisions of the constitutions of the states if the legislature designates a certain area as benefited by a public improvement and directs that the whole or a part of the cost of the improvement be assessed upon the various parcels of land situated within the designated area in proportion to the size, frontage or value of the respective parcels, 1 unless it plainly appears that the so-called assessment is an abuse and not an exercise of the taxing power and a mere act of confiscation under the guise of law. 2 It cannot be denied that the earlier decisions of the supreme judicial court of Massachusetts, perhaps without treating the question as one requiring especial consideration, sustained as- sessments levied in proportion to frontage, or area or value and which were not limited to the benefits actually received by each parcel of land assessed. 3 In the last twenty-five years however it has become definitely settled that the requirement of reason- able and proportional taxation in the constitution of the com- monwealth protects an owner of land from being obliged to pay a special assessment in excess of the benefit actually re- ceived by his land. 4 Even an assessment of the whole or a 1 French v. Barber Asphalt Paving Co., 181 U. S. 324 (1901). 2 Norwood v. Baker, 172 U. S. 269 (1898). The Supreme Court of the United States will interfere with special assessments on the ground of violation of constitutional rights secured by the Fourteenth Amendment only when the action of the state authorities is found to be arbitrary, or wholly unequal in operation and effect. Embree v. Kansas City Road District, 240 U. S. 242 (1916); Witherell v. Ruecking Construction Co., 249 U. S. 63 (1919); Hancock v. Muskogee, 250 U. S. 454 (1919) ; Branson v. Bush. 251 U. S. 182 (1919) ; Gold- smith v. Prendergast Construction Co., 252 U. S. 12 (1920); Kansas City Southern Ry. Co. v. Road Improvement District, U. S. (1921). 3 Lowell v. Hadley, 8 Met. 180 (1844) ; Downer v. Boston. 7 Cush. 277 (1851); Springfield v. Gay, 12 Allen 612 (1866); Workman v. Worcester, 118 Mass. 168 (1875) ; Keith v. Boston, 120 Mass. 108 (1876) ; Dickinson v. Worcester, 138 Mass. 555 (1885). 4 Boston v. Boston & Albany R. R. Co., 170 Mass. .95 (1898) ; Weed v. Boston, 172 Mass. 28 (1898) ; Sears v. Aldermen of Boston. 173 Mass. 71 (1899) ; Sears v Street Commissioners of Boston, 173 Mass. 350 (1899); Carson v. Sewerage Commissioners of Brockton, 175 Mass. 242 (1900); Dexter v. Boston, 176 Mass. 247 (1900); Lorden v. Coffey. 178 Mass. 489 (1901); Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902); Stark v. Boston, 180 Mass. 293 (1902); Smith v. Mayor & Aldermen of Worcester, 182 Mass. 232 (1902); 126 Taxation in Massachusetts [part i specified portion of the cost of a public improvement upon the parcels benefited in proportion to the benefits actually received cannot be sustained unless it can be inferred from the statute authorizing such assessment that the actual benefit to each parcel assessed is not to be exceeded. 5 While some statutes have required the assessing board to determine the actual benefit to each parcel assessed, the courts have recognized that the accurate ascertainment of the exact amount of benefit may be no easy matter and have sanctioned the adoption of rules-of-thumb which reach reasonably correct results, especially when such rules are authorized by the legis- lature itself and have been employed for many years without objection. Assessments proportioned to the area, the valuation or the frontage of the parcels of land affected by a public im- provement were all sustained as valid before the broader con- struction of the constitutional provisions bearing upon the question was adopted, 6 and it is still held that in thickly settled localities where the different parcels of land are of the same general character such methods of assessment may be treated as reasonably accurate schemes of ascertaining the actual bene- fit. 7 In the absence of evidence that assessments by such methods work actual injustice the court will not assume that they are invalid or set them aside at the complaint of an owner who is not himself aggrieved; 8 but such an assessment cannot White v. Gove, 183 Mass. 333 (1903) ; Harwood v. Street Commissioners of Boston, 183 Mass. 348 (1903); Cheney v. Beverly, 188 Mass. 81 (1905); Hodgdon v. Haverhill. 193 Mass. 327 (1907); Corcoran v. Aldermen of Cambridge, 199 Mass. 5 (1908); O'Connell v. First Parish in Maiden, 204 Mass. 118 (1910). 5 Lorden v. Coffey, 178 Mass. 489 (1901). The court will be loth to infer that it was not intended to limit the assessment to the actual benefit in a statute requiring proportionate assessment and will sustain the assessment if possible. Hall v. Street Commissioners of Boston, 177 Mass. 434 (1901); Cheney v. Beverly, 188 Mass. 81 (1905). 6 In addition to the cases cited supra, note 3, see Boston v. Shaw, 1 Met. 130 (1840); Wright v. Boston. 9 Cush. 223 (1852); Butler v. Worcester, 112 Mass. 541 (1873); Howe v. Cambridge, 114 Mass. 388 (1874); Snow v. Fitch- burg, 136 Mass. 183 (1883). 7 Sears v. Aldermen of Boston. 173 Mass. 71 (1899) ; Smith v. Mayor & Aldermen of Worcester, 182 Mass. 232 (1902) ; White v. Gove, 183 Mass. 333 (1903); Cheney v. Beverly, 188 Mass. 81 (1905); Hodgdon v. Haverhill, 193 Mass. 327 (1907); Sayles v. Pittsfield Board of Public Works. 222 Mass. 93 (1915). For a method of fixing the rate of assessment for the maintenance of a sewer that was held valid, see Carson v. Sewerage Commissioners of Brockton, 175 Mass. 242 (1900). 8 Corcoran v. Aldermen of Cambridge. 199 Mass. 5 (1908) ; O'Connell v. First Parish in Maiden, 204 Mass. 118 (1910). sect. 69J Special Assessments 127 be constitutionally enforced upon an estate which is assessed more than it is in fact benefited. An assessment made in accord- ance with a method which is plainly likely to result in dispro- portionate taxation may be treated as invalid in any proceeding in which it comes before the court, and the application of one of the customary methods to a whole municipality which con- tains districts of divergent characteristics falls within the scope of this principle. 9 When an assessment is authorized to be laid in accordance with one of the customary methods and under such circum- stances that in ordinary cases it will be just and equitable, and provision is made for appeal, and for abatement to constitutional proportions if in any case injustice is wrought by the original assessment, the statute authorizing such assessment is consti- tutional and a person who is assessed in excess of the benefit cannot treat the assessment upon him as invalid but is confined to the statutory remedy of application for abatement. 10 If however the assessment itself is laid in such a way as to in- evitably result in disproportionate taxation in cases that may be so frequently expected to arise that it can fairly be said that the assessment was imposed without regard to the limitations of the constitution, there is considerable doubt whether a pro- vision for- appeal and abatement will save the whole assessment from being treated as unconstitutional and void. 11 When the legislature itself designates a district as benefited by a certain public improvement and authorizes the assessment of the cost upon the land within the district according to value, area or frontage, the statute is constitutional unless it actually works injustice. The determination of the district to be assessed may however be left by the legislature to the decision of a local board of commissioners, and may be made to consist of such lands, and such only, as the commissioners may decide to have been benefited. 12 When however the legislature passes a law of general future application allowing an assessment to be made upon a district determined by a local board in propor- 9 Dexter v. Boston, 176 Mass. 247 (1900); White v. Gove, 183 Mass. 333 (1903); Smith v. Boston, 194 Mass. 31 (1907). 10 Stark v. Boston, 180 Mass. 293 (1902). 11 White v. Gove, 183 Mass. 333 (1903) ; Corcoran v. Aldermen of Cam- bridge, 199 Mass. 5 (1908). 12 Bauman v. Ross, 167 U. S. 548, 590 (1897). 128 Taxation in Massachusetts [part i tion to value, area or frontage, the law itself is unconstitutional unless it can be inferred from something contained therein that the assessment authorized is limited to what can constitutionally be imposed. There is however no objection to a statute which authorizes a local board to impose "just," "reasonable" or "equi- table" assessments, and if the board makes the assessment according to value, area or frontage in a district in which such a method is suitable, the assessment itself, in the absence of evidence of actual injustice, is valid. 13 70. The Owner is Entitled to a Hearing It is now well settled that no statute is constitutional which authorizes the final and conclusive determination of the amount of the assessment upon each parcel of land without giving the owner of such land an opportunity for a hearing. 1 The right to a hearing is not satisfied by granting the taxpayer an oppor- tunity to file written objections, and he must be allowed to appear in person and support his contentions by argument and proof. 2 It is not however necessary that the owner be heard when the assessment is made in the first instance if he is given an opportunity for application for abatement or for appeal. 3 It is sometimes provided that the application for abatement may be heard by a jury, but it is well settled that there is no constitutional right to a jury trial in such cases, 4 or even to a hearing before a judicial tribunal. The hearing may be before the board which made the original assessment, 5 or before another board which while acting judicially in this instance is not a court and is composed of executive officers. The findings of fact of such boards are conclusive and cannot be contested in courts 13 Howe v. Cambridge, 114 Mass. 388 (1874); Carson v. Sewerage Com- missioners of Brockton, 175 Mass. 242 (1900). 1 Sears v. Street Commissioners of Boston. 173 Mass. 350 (1899); Okla- homa Ry. Co. v. Severus Paving Co., 251 U. S. 104 (1919). 2 Londoner v. Denver, 210 U. S. 373 (1903). 3 Butler v. Worcester, 112 Mass. 541 (1873) ; Weed v. Boston. 172 Mass. 28 (1898); Sears v. Street Commissioners of Boston, 173 Mass. 350 (1899); Hodge v. Muscatine County, 196 U. S. 281 (1905). * Palmer v. McMahon, 133 U. S. 660 (1890); Bauman v. Ross. 167 U. S. 548, 593 (1897) ; Howe v. Cambridge, 114 Mass. 388 (1874) ; Chapin v. Worcester, 124 Mass. 464 (1878); Grace v. Newton Board of Health, 135 Mass. 490, 494 (1883). 5 Corcoran v. Aldermen of Cambridge, 199 Mass. 5 (1908); Hibben v. Smith, 191 U. S. 322 (1903); Farncomb v. Denver, 252 U. S. 7 (1920). 6 Stark v. Boston, 180 Mass. 293 (1902). sect. 71] Special Assessments 129 of law. The law must entrust the final disposition of such questions to some one and it is at least as satisfactory to en- trust it to a tribunal of experts responsible to the people as to a court or jury. In a state such as Massachusetts, in which it is held that the assessment cannot constitutionally exceed the benefit, the owner of land assessed is entitled to a hearing upon the amount of benefit which his land received. He is not entitled to be heard upon the necessity of the proposed improvement or upon its cost, 7 or upon the rate of assessment. 8 71. Assessments under the Police Power There is one form of pecuniary imposition which, although it to some extent assumes the form and characteristics of a special assessment, is not an exercise of the taxing power and is not subject to the constitutional limitations which apply to that branch of sovereignty. It is well settled that when an owner of land suffers it to fall into such a condition that it endangers the health and safety of the community and thereby constitutes a public nuisance, the state may, in the exercise of what is commonly called the police power, compel him to abate the nuisance at his own expense. As an incident to this power and as a convenient means of putting it to practical accomplishment, if the owner declines to abate the nuisance the state may do the work itself and recover the cost from the owner, and as a means of collecting the cost may make it a lien on the land and enforce the lien in the same manner as liens for taxes are enforced. In such a case whether an estate is benefited to the extent of the cost assessed upon it is of no im- portance. 1 It is perhaps as an exercise of this power that owners or occu- pants of houses abutting upon public ways are compelled to clear the sidewalks of snow at their own expense although such requirement seems to go beyond the usual exercise of that branch of the police power, especially if the fee of the street 7 Collins v. Mayor & Aldermen of Holyoke, 146 Mass. 298 (1888); Allen v. Charlestown, 111 Mass. 123 (1872); Prince v. Boston, 111 Mass. 226 (1872); Holt v. Somerville, 127 Mass. 408 (1879). 8 Carson v. Sewerage Commissioners of Brockton, 175 Mass. 242 (1900). 1 Nickerson v. Boston, 131 Mass. 306 (1881). See also Salem v. Eastern R. R. Co., 98 Mass. 431 (1868); Cambridge v. Munroe, 126 Mass. 496 (1879). 130 Taxation in Massachusetts [part i is in the public. It is perhaps best classified as one of the many instances in which established custom and general con- venience justify the infliction of a trivial burden regardless of the strict letter of the constitution. 2 Assessments for the cost of the construction of sidewalks have been justified as an exercise of the police power :i and it has indeed been a very common practice to assess each owner the entire cost of the sidewalk in front of his premises regardless of benefits; but to take a man's land by eminent domain for a public way and then compel him to construct a sidewalk at his own expense merely because the public would otherwise find the walking muddy seems to be going a little too far to escape unconstitutionality unless the assessment is made under the protection of the limitations which apply to special assess- ments under the taxing power. Compulsory joint improvement of land in which several persons have a common interest can only be effected by the assessment of the cost of the work and of the land damages upon the persons benefited, but as has already been explained, such assessment is made under the police power and is not subject to the limitations which control the power of taxation. 4 It is however to be noted that such an undertaking is wholly for the benefit of the owners affected, and if an assessment of the cost proportioned to the benefits would exceed the actual benefit the improvement would not be attempted at all. 72. Rights of the Owner of Land Assessed When a public improvement has been established and con- structed and a part or the whole of the cost has been assessed upon adjoining land specially benefited by the improvement a serious question may arise if the public authorities subsequently discontinue the improvement or devote the land occupied by it to a different use of a character which is not beneficial to neighboring land. If the purpose for which the land was origi- 2 Goddard, Petitioner, 16 Pick. 504 (1835). See G. L. c. 85 § 6, infra page 727. authorizing towns to assess upon abutting estates the whole or part of the cost of removing snow from sidewalks. An ordinance requiring street railway companies to sprinkle the streets between and near the rails is a valid exercise of the police power. Pacific Gas etc. Co. v. Sacramento. 251 U. S. 22 (1919). 3 See French v. Barber Asphalt Paving Co., 181 U. S. 324. 363 (1901). 4 Supra § 66, and Lowell v. Boston, 111 Mass. 454, 469 (1873). sect. 72] Special Assessments 131 nally taken and the benefits assessed was merely colorable, and the assessment in effect a fraud upon the taxpayers, no doubt the courts would furnish some form of redress; but when, after a park has been built and betterments assessed in good faith and the park enjoyed for many years, the public authorities under legislative sanction determine to erect a public building upon the park, the owners of the land assessed have no legal rights in the continuance of the park as an open space which will entitle them to have the erection of the building restrained. 1 1 Thayer v. Boston, 206 Fed. Rep. 969 (1913). PART II COMMENTARIES ON THE GENERAL LAWS RELATING TO TAXATION STATEMENT SHOWING THE SOURCES FROM WHICH PUBLIC REVENUES ARE RAISED IN MASSACHUSETTS AND THE DISPOSITION MADE OF THESE REVENUES WITH AN ABSTRACT OF THE TAX LAWS The taxes authorized by law for state, county and municipal pur- poses are the following: (1) Poll tax of two dollars per annum on each male resident of the commonwealth, assessed directly by the cities and towns and re- tained by them for their own use, except that in determining the valua- tion of each city and town for the purposes of the state tax, polls are included at one-tenth of a mill each in every one thousand dollars of state tax. (2) Tax on real estate and tangible personal property, assessed by the cities and towns, each city and town assessing what is required for its own use and for its share of the county and state tax. (3) Income tax, assessed by the state at the rate of six per cent on the income from certain specified classes of intangible property, three per cent on the excess of gains over losses from the sale of intangible property, one and one-half per cent upon business income and one and one-half per cent upon the income from annuities, the whole amount derived from the income tax in excess of the cost of collection being distributed to the cities and towns. A part is distributed in proportion to the amounts paid by them as salaries for the higher paid school teachers, as an inducement to increasing the salaries of their school teacKers, and of the remainder a gradually diminishing part is paid in proportion to the intangibles formerly taxed in each city or town and a gradually increasing part in proportion to the value of the real estate and tangible personal property in each city or town. (4) Tax on domestic business corporations, an excise tax, assessed by the state, of five dollars per thousand upon the value of the aggre- gate capital stock in excess of property locally taxed and property that is non-taxable or situated outside the state, and two and one- half per cent upon the net income derived from business carried on within the state; one-sixth of this tax is retained by the state and the remainder distributed to the cities and towns where the business of the corporations is carried on. 133 134 Taxation in Massachusetts [part h (5) Tax on foreign business corporations doing business in this commonwealth, similar to the tax on domestic business corporations and distributed in the same way. (6) Tax on insurance companies, an excise tax assessed by the state and based upon the premium income, and in case of life in- surance, upon the net value of the policies; retained wholly by the state. (7) Tax on savings banks, including savings departments of trust companies, of one-half of one per cent of the average deposits, except- ing so much of the deposits as are invested in real estate, mortgages of real estate, tax-exempt bonds and the stock of trust companies; an excise tax assessed and retained wholly by the state. (8) Tax on national bank stock, a property tax assessed by the cities and towns at the local rate upon the aggregate value of the shares of each bank in the place where it is located and distributed among the cities and towns in accordance with the residence of the stockholders, the portion attributable to stockholders who are non-resi- dents of the state being paid to the state. (9) Tax on trust companies, an excise tax assessed by the state on the value of the aggregate capital stock of each company, deducting property locally taxed, and distributed to the cities and towns in ac- cordance with the residence of the stockholders, the amount attrib- utable to stockholders who are not residents of the state being re- tained by the state. (10) Tax on street railway companies, an excise tax assessed by the state, based upon the value of the aggregate capital stock of each company, deducting property locally taxed, and the whole being dis- tributed to the cities and towns in proportion to the length of the tracks operated by each company in each town. (11) Tax on railroad, telephone and telegraph companies, an ex- cise tax assessed by the state and based upon the value of the aggre- gate capital stock of each company, deducting property locally taxed; the portion of the tax attributable to the shares of non-residents being retained by the state and the remainder distributed among all the cities and towns of the state in proportion to the total assessed value of property actually taxed in each city or town. (12) Tax on gas, electric light and water companies, an excise tax assessed by the state, based upon the aggregate value of the capital stock of each company, deducting property locally taxed ; the portion of the tax attributable to the shares of non-residents is retained by the state and the balance distributed to the towns where the business of the corporations is carried on. (13) Tax on other public service companies, an excise tax as- sessed by the state and based upon the aggregate value of the capital stock deducting property locally taxed, distributed to the cities and towns in accordance with the residence of the shareholders in the re- spective companies and the portion of the tax attributable to non-resi- dents being retained by the state. ABSTRACT OF THE TAX LAWS 135 (14) Inheritance tax, an excise tax assessed by the state on the passing of property of deceased persons by will or the laws regulating intestate succession, graded in proportion to the amount of the legacy or distributive share and the distance of relationship of the beneficiary to the deceased, the maximum being ten per cent; the whole of this tax is retained by the state. (15) Stock transfer tax, a stamp tax on the sale of shares of two cents on each one hundred dollars of face value; all this tax is retained by the state. (16) Motor vehicle tax, an excise tax on the use of motor vehicles, assessed by the state and proportioned according to the horsepower or capacity of the vehicle; the whole of this tax is retained by the com- monwealth and used for the maintenance of state highways. (17) Tax on boxing matches, an excise tax of five per cent of the gross receipts of licensed boxing matches, collected by the state and distributed to the cities and towns in which the matches are held. (18) Miscellaneous revenue. In addition to the foregoing there is a large amount of miscellaneous revenue derived from fees, costs, interest, sale of property and the rendering of various forms of serv- ices ; but none of such revenue is derived from taxation, using the word in its proper sense. The rate of the excise tax levied under paragraphs 9, 10, 11, 12 and 13 is the average local tax rate on real and tangible personal property throughout the state for the preceding three years, and in 1920 amounted to $21.34 per thousand. State Taxes. The expenses of the state government at the present time, exclusive of the payments on the war bonus account which are met by special taxes, but including interest on the public debt, amount to a little over $40,000,000 annually. This amount is raised primarily by the excise taxes described above, which are levied in accordance with rates fixed by statutes of a permanent character re- maining in force until amended or repealed by the legislature, although the amount received from these sources varies from year to year in accordance with business conditions or the amount of use which is made by individuals or corporations of the franchises or privileges taxed. Each year near the close of the session of the legislature the amount by which the appropriations of the legislature required to be expended during the year will exceed the estimated receipts from the excise taxes, license fees and other sources of revenue during the year is determined, and the amount thus ascertained is assessed on the cities and towns in the state in proportion to their valuation in real estate and tangible personal property and is in turn assessed by them as a direct tax on these two classes of property in the same manner as the local taxes are assessed and the proceeds turned over to the state. This direct tax is known as the " state tax " and is what is called in parliamentary language a deficiency bill. In the year 1920 the principal revenues of the state other than the so-called state tax were in round numbers as follows: 136 Taxation in Massachusetts [part ii Corporation Taxes: Domestic business corporations (share of the state) . . $2,253,000 Foreign business corporations (share of the state) 496,000 National bank tax (share of the state) 816,000 Public service corporations and trust companies (share of the state) 580,000 Savings banks 2,220,000 Insurance companies 2,160,000 Miscellaneous 12,000 Total corporation taxes $ 8,537,000 Inheritance taxes 4,375,000 Stock transfer taxes 264,000 Motor vehicle fees 3,270,000 Total derived by the state from taxation $16,446,000 Revenue other than taxes 6,225,000 Total $22,671,000 As this fell short of the required amount by over $17,000,000, in order to avoid too great an increase in the state tax over the preced- ing year a special tax on the income of corporations was levied for the year 1920 only, which produced a revenue of $3,165,000, and the state tax was fixed at $14,000,000. In addition to these taxes there are the special taxes imposed in 1919 for a period of five years to meet the bonds issued to raise money for the bonuses paid to the soldiers who served in the World War, assessed as an additional state tax, additional poll tax, additional in- heritance tax, additional income tax and additional tax on corpora- tions; these taxes produced $4,300,000 in 1920. Excluding the revenue from the war bonus tax, and about $1,500,000 of the other revenue used for special purposes not likely to recur annually, the remainder, amounting to approximately $38,- 500,000, was expended in substantially the following proportions: Classification Percentages Legislative 2.3 Judiciary 2.3 Administrative by elective officials 2.4 Other general administrative and miscellaneous 4.0 Militia and ' expenses of wars 5.5 Agriculture and conservation 2.5 Banking, insurance, corporations and taxation" 2.6 Education 10.3 Civil service, labor and industrial relations 1.8 Mental diseases, institutions 21.0 Correction 3.4 Public welfare (charitable) 11.4 Public health 4.1 Public safety and public utilities 1.4 Public works 15.8 Interest and debt 9-2 County Tax. No excise taxes are collected by or distributed to the counties. The revenue of each county is raised in part by miscel- ABSTRACT OF THE TAX LAWS 137 laneous fees and charges and the remainder by a county tax, the amount of which is determined each year by a resolve of the legis- lature, and which is assessed upon the cities and towns within the county in proportion to their valuation as established for the purposes of the state tax, and assessed in turn by the cities and towns as part of their direct tax on polls, real estate and tangible personal property. In 1920 the revenues of the counties of the state were as follows: County tax $4,644,356 Miscellaneous 2,364,164 $7,008,520 This sum is expended for highways and bridges, courts and regis- tries and county buildings and institutions. Municipal Taxation. Each city or town receives from the state a distributive share of the state income tax and of the excise taxes upon business corporations, domestic and foreign, from public service corporations and trust companies. It also receives its share of the tax on national bank stock, miscellaneous revenue from various sources, such as license fees, interest on bank deposits, sale of property, special assessments and the like and in many instances revenue from public service enterprises, such as public water supply or gas or elec- tric lighting plants. After ascertaining the amount required to be raised for municipal purposes and for the town's share of the state and county tax, and for assessments placed upon the town by the state for metropolitan parks and similar purposes, and deducting therefrom the estimated receipts from income and corporation taxes and miscellaneous revenue, the bal- ance is raised by a direct tax upon all the taxable real estate and tangible personal property within the town at a rate fixed by divid- ing the aggregate valuation of such property by the amount to be raised. In 1920 the total amount required to be raised for maintenance and the requirements of the public debt and for assessments by the state, other than the state and county tax, in all the cities and towns of the state amounted to approximately $165,161,000. This amount was raised as follows: The amount distributed among the cities and towns on account of the 1920 income tax amounted to approximately $ 16,400,000 The amount distributed among the cities and towns on account of the 1920 corporation tax amounted to approximately 15,261,000 This item was made up as follows: Domestic business corporations $10,237,000 Foreign business corporations 2,381,000 Street railways 200,000 Public service corporations and trust companies 1,490,000 National banks (banks located in other towns) 953,000 Tax on polls and on real estate and tangible personal property 123,500,000 Miscellaneous revenue 10,000,000 165,161,000 138 Taxation in Massachusetts [part n This sum was expended in substantially the following proportions: Classification Percentages General Government 4.17 Protection of persons and property 12.40 Health and sanitation 7.07 Highways 9.87 Charities 5.81 Soldiers' benefits 2.15 Schools 22.79 Libraries 1 .38 Recreation 2.11 Pensions 80 Unclassified 1.17 Public service enterprises 6.83 Cemeteries 56 Administration of trust funds .01 Interest 11.50 Debt from revenue 9.11 Transfers to sinking funds from revenue 2.27 100.00 Summary State Taxes: Corporation taxes and other excises $ 16,446,000 Direct state tax 14,000,000 Special corporation tax 3,165,000 War bonus tax 4,300,000 $37,911,000 County Taxes 4,644,000 Municipal Taxes: Income tax, distribution $ 16,400,000 Income tax, cost of collection 400,000 Corporation taxes 15,261,000 Polls and property 123,500,000 155,561,000 Federal Taxes collected in Massachusetts in fiscal year $198,116,000 ending June 30, 1921 258,896,000 Total raised by taxation $457,012,000 The increase in taxation in this commonwealth in the last ten years is shown by the following table: 1910 1920 Direct state tax $ 5,500,000 $ 14,000,000 Other taxes for state purposes 8,218,000 23,911,000 County taxes 2,700,000 4,644,000 Cities and towns: Polls and property 60,400,000 123,500,000 Corporation taxes and other sources 9,000,000 32,061,000 Total under state authority $85,818,000 $198,116,000 Internal revenue taxes under authority of the United States collected in Massachusetts 7,397,000 258,896,000 $93,215,000 $457,012,000 THE PROVISIONS OF THE GENERAL LAWS RELATING TO TAXATION CHAPTER 4 STATUTES Meaning of Certain Words in Construing Statutes Section 7. In construing statutes the following words shall have the meanings herein given, unless a contrary intention clearly appears. Third, " Assessor " shall include any selectman acting as assessor and any person chosen in accordance with law to perform the duties of an assessor. Thirty-fifth, "Valuation," as applied to a town, shall mean the valuation of such town as determined by the last preceding apportion- ment made for the purposes of the state tax. CHAPTER 6 CERTAIN OFFICERS UNDER THE GOVERNOR AND COUNCIL * Board of Appeal Section 21. The state treasurer, the state auditor and a member of the council designated by the governor, shall constitute the board of appeal from decisions of the commissioner of corporations and taxation. CHAPTER 14 DEPARTMENT OF CORPORATIONS AND TAXATION This chapter provides for a department of corporations and taxation in charge of a commissioner and consisting of divisions, each under the charge of a director, the divisions authorized relating respectively to the income tax, corporations, inheri- 139 140 Taxation in Massachusetts [G.L.c. 14 tance taxes, local taxation, accounts and such other divisions as the commissioner determines. It provides for the compensa- tion and duties of these and other officers and employees in the department, and in section 9, authorizes the commissioner to divide the commonwealth into income tax districts. The office of tax commissioner was created in 1865 by the same statute that established the franchise tax upon domestic corporations, and for many years the principal functions of the tax commissioner related solely to this tax 1 and to the appor- tionment of the state tax. 2 Formerly the treasurer of the com- monwealth acted as tax commissioner and the deputy tax commissioner was commissioner of corporations ; but in 1890 the treasurer ceased to act as tax commissioner and the tax com- missioner thereafter acted as commissioner of corporations. Be- fore 1898 the tax commissioner had little to do with the assessment of local taxes by the assessors of the various cities and towns, except when their valuation of the real estate and machinery of domestic corporations conflicted with his valuation for the purposes of the corporate franchise tax. 3 In 1898 the tax commissioner was given power to visit any city or town within the commonwealth to inspect the work of the assessors and advise them as to their duties, and ten years later he was given power to appoint three supervisors of assessors who were to furnish the local assessors with information concerning tax- able property within their jurisdiction and to direct the assessors to make use of such information as he might deem necessary. 4 This last statute was of great importance during the years preceding the adoption of the income tax, when the taxing authorities were engaged in a well organized but inevitably futile effort to enforce the law which required the taxation of intangible personal property at its capital value. 5 The duties of the commissioner have been increased in many other ways in recent years, such as the furnishing of books and blanks to the local assessors, which was formerly the duty of the secretary of the commonwealth, 6 and in 1907 important 1 G. L. c. 63, infra page 505. 2 G. L. c. 58 § § 9, 10, infra page 167. 3 G. L. c. 59 § 74, infra page 303 ; c. 63 § 57, infra page 580. 4 G. L. c. 58 § § 1-8 inc., infra page 165. 5 See infra page 428. 6 G. L. c. 59 § 45 ; infra page 213. Department of Public Utilities 141 G. L. c. 25] duties in relation to the inheritance tax which were formerly in the hands of the treasurer were given to the tax commissioner. 7 In 1916 the adoption of the income tax act, 8 which inci- dentally relieved the tax commissioner to a great extent of his duties in connection with the supervision of local taxation, imposed an important new set of duties upon him, involving the entire administration of the income tax law. In 1919, in connection with the reorganization of the execu- tive and administrative departments of the commonwealth made necessary in order to comply with the Sixty-sixth Amendment to the constitution of the commonwealth, the office of tax com- missioner was abolished, and a commissioner of corporations and taxation substituted, having all the duties of the tax commis- sioner, and control over the division of accounts as well. 9 CHAPTER 25 DEPARTMENT OF PUBLIC UTILITIES Assessment of Expenses of Department upon Corporations and Municipalities Section 11 provides for the assessment, on or before July first in each year, of the expenses of the department of public utilities in regulating gas, electric and water companies and mu- nicipal lighting plants upon the corporations and municipali- ties maintaining the same, such assessment to be apportioned among the corporations according to gross earnings and among the municipalities according to expenses, and to be collected from corporations in the same manner as the corporation tax and from cities and towns in the same manner as the state tax. Section 16 provides for the assessment of the expenses of the department in inspecting gas and gas meters upon gas com- panies and municipalities maintaining gas plants in the same manner as is provided in section 11. 7 G. L. c. 65, infra page 605. 8 St. 1916, c. 269; see infra page 428. » St. 1919, c. 350, § § 52, 53. 142 Taxation in Massachusetts [G.L.c. 29-33 CHAPTER 29 STATE FINANCE It is provided in section 50 that the amount necessary to provide for serial payments on any bonds or scrip of the com- monwealth shall be included in the state tax; and in section 51 that the state treasurer shall assess upon the metropolitan districts amounts required to meet serial payments on bonds issued for the benefit of the district. CHAPTER 32 RETIREMENT SYSTEMS AND PENSIONS It is provided in section 37 that the funds of state, county, city, town or teachers' retirement systems established under the preceding sections of the law, so far as they are invested in personal property, and the portions of members' wages de- ducted or to be deducted under such sections, the rights of members to an annuity or pension and all their rights in the funds of the retirement system, shall be exempt from taxation. In section 41 a like exemption is given to the property of associations of employees of any employer formed for the pur- pose of providing annuities, pensions or endowments, and to the wages deducted and to rights of members in the fund. CHAPTER 33 MILITIA It is provided in section 6 that assessors shall annually file with their respective town clerks lists of persons liable to en- rollment in the militia and in section 17 that keepers of boarding houses and masters of dwelling houses shall upon application furnish information to the assessors regarding persons therein liable to enrollment. Every able-bodied male citizen and every able-bodied male of foreign birth who has declared his inten- tion to become a citizen, resident within the commonwealth and between the ages of 18 and 45, is required to be enrolled. County Finances 143 G.L.c. 35, §§ 30,31J CHAPTER 35 COUNTY FINANCES Determination of Amount of County Tax Section 30. The amount which the county commissioners shall levy as the county tax shall be as authorized annually by the gen- eral court, and as computed by adding together the amounts of the annual appropriation and of any new special appropriation, so far as the money therefor is to be raised by taxation, and deducting therefrom so much of the probable receipts from all sources, except loans, and of the unappropriated balance in the county treasury at the closing of the treasurer's books for the previous year as the gen- eral court deems advisable. Section 31. The county commissioners shall apportion and assess all county taxes among and upon the several towns according to the latest state valuation, and shall, by their clerk, certify the assessments to the assessors thereof, and prescribe the time of pay- ment. The several amounts so apportioned and assessed shall be collected and paid like the state tax into the respective town treas- uries, and the commissioners in their warrants shall require the select- men or assessors of each town to pay, or to issue their warrants requiring the treasurer thereof to pay, to the county treasurer the amount so assessed, at such times as shall be fixed in the warrant of the commissioners. The selectmen or assessors of each town shall return a certificate of the name of the treasurer of such town, with the sum which he may be required to collect, to the county treasurer within the time fixed by the warrant of the county commissioners. Each county is annually granted authority to levy a tax by a resolve of the legislature, the amount of the tax and the different items of appropriation being fixed in the resolve. The method of fixing the county tax was provided for by statute in 1897; but prior to that enactment it had been the practice since 1781 to grant the county taxes by annual resolve based on an estimate by the county commissioners and their prede- cessors of the probable needs of the county. 1 1 See St. 1781, c. 22 § 1. For the procedure for collecting from a de- linquent town its share of the county tax see G. L. c. 59, § 28, infra page 254. 144 Taxation in Massachusetts [G.L.c. 36 §§22, 31 A CHAPTER 36 REGISTERS OF DEEDS Noting Instruments Affecting Tax Deeds Section 22. If an assignment, release, partial release, discharge or disclaimer affecting title to land created by a sale or taking for payment of a tax or assessment is recorded, the register shall make a note of reference thereto on the margin of the record of the deed or instrument of sale or taking, if in his registry and referred to in such conveyance. Section 31 A (St. 1921, chap. 207). Within .sixty days after the recording of any deed in which the grantee is described as a trustee, or of any declaration of trust, the register in whose office such deed or declaration is recorded shall send by mail to the commissioner of corporations and taxation a notification of the recording thereof, stating the name of the grantor and of the grantee or the trustee, and the date of recording. CHAPTER 40 POWERS AND DUTIES OF CITIES AND TOWNS Street Sprinkling Assessments Section 16. A town may sprinkle or spread upon its public ways, or parts thereof, any liquid or material suitable for laying or preventing dust and preserving the surface of such ways or for san- itary purposes, may appropriate money therefor, and determine that with respect to the whole or any part of such ways the whole or any part of such expense shall be assessed upon the estates abutting thereon. Section 17. If a city determines that the public ways or any portion thereof shall be sprinkled in whole or in part at the expense of the abutters, such expense for a municipal year, and the pro- portion thereof to be borne by abutters, and the rate to be assessed upon each linear foot of frontage upon such ways, shall be estimated and determined by the board of aldermen and assessed upon the estates abutting on such ways in proportion to the number of linear feet of each estate upon such ways or portion thereof sprinkled. The amount of such assessments upon each estate shall be determined by said board, or, if said board so designates, by the board of public works, board of street commissioners, superintendent of streets or Powers and Duties of Cities and Towns 145 G.L.c. 40, §§16,17,18] other officer; and such board or officer shall, as soon as may be after the first day of April, cause a list of such ways or portions thereof to be made, specifying each estate and the number of linear feet thereof abutting thereon, the amount per linear foot, the amount on each estate of such assessment, and certify and commit said list to the assessors of taxes. In a town such assessment shall be made by the assessors. Section 18. The assessors shall include such assessment in the tax list and warrant committed by them to the collector of taxes for that municipal year, and it shall be included in the next annual tax bill, or if the estate so assessed is otherwise exempt from taxation, it shall be rendered as a tax bill. Such assessment shall be a lien upon the estate, and shall be levied, collected, reassessed, paid,, appor- tioned, .and bear interest and become payable, in the same manner as, and shall be a part of, the tax for that year on such estate; but in cities the assessors shall make no abatement thereof except upon the recommendation of the board or officer by whom the list was certified to them. The constitutionality of imposing upon abutting property even part of the cost of sprinkling streets was sustained with some hesitation by the supreme judicial court when it was first questioned, and the court declared that it was a grave question whether the benefit to be derived from a regular sprinkling of the streets was of such a character that it could be the subject of a betterment assessment. 1 The assessment may not in any event exceed the benefit .to the property assessed, and if land is owned or used in such a way that the sprinkling of the streets upon which it abuts is of little or no benefit to it, the assessment will not be sustained. 2 The assessment of the cost or a portion thereof in propor- tion to the linear feet of frontage of abutting lots has been at- tacked as an arbitrary method of apportioning the cost, since it is not based on the actual benefit. It has however been held that the statutes which authorize such a method of assessment are capable of a construction which violates no constitutional principle. 3 Assessment in proportion to frontage may be the 1 Sears v. Aldermen of Boston, 173 Mass 71 (1899). 2 Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 3 Statutes now included in G. L. c. 40, § 17, were sustained in Sears v. Aldermen of Boston, 173 Mass. 71 (1899); Phillips Academy v. Andover, 175 146 Taxation in Massachusetts [G. L. c. 40 §§ 16, 17, 18 fairest method in districts which are thickly settled and in which the lots are used for similar purposes and are generally similar in size and depth, and a provision for appeal and abate- ment is ample protection in the peculiar cases in which such an assessment in fact exceeds the benefit. It has been held that the provisions in the statutes relating to the abatement of street watering assessments plainly imply that the owner of land so assessed is entitled to a hearing before the board or officer authorized to abate or to recommend the abatement of such an assessment, and that it is the duty of such board or officer to abate or recommend the abatement of such assessment if disproportionate or in excess of the benefit actually conferred upon the land assessed. Accordingly, the statutes are consti- tutional and the remedy by petition for abatement is exclusive. 4 A street watering assessment is not included in the statutory exemption of educational or charitable institutions or other like organizations from general taxation, and if the grounds of an academy or a cemetery or other tract of land devoted to a quasi public use actually receive benefit from the sprinkling of the streets upon which it abuts, it may be assessed therefor. 5 In determining the cost of watering streets, the value of the water furnished by the city from its own water supply may be considered. 6 If the officer of the city whose duty it, is to determine the amount of the assessment on each estate fails to do so, but the assessors have before them the requisite data and make the assessment accordingly, it is not such an irregu- larity as to require the assessment to be quashed. 7 Mass. 118 (1900); Corcoran v. Aldermen of Cambridge, 199 Mass. 5 (1908), and Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). A special act applicable to Boston was sustained in Stark v. Boston, 180 Mass. 293 (1902). 4 Stark v. Boston. 180 Mass. 293 (1902); Corcoran v. Aldermen of Cam- bridge, 199 Mass. 5 (1908). If however property is owned or held in such a way that it can derive no benefit from street watering, the validity of a street- watering assessment can be attacked in a bill in equity to remove a cloud upon the title consisting of a sale for non-payment of the assessment. Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 5 Phillips Academy v. Andover, 175 Mass. 118 (1900); Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 6 Corcoran v. Aldermen of Cambridge, 199 Mass. 5 (1908). 7 Corcoran v. Aldermen of Cambridge, 199 Mass. 5 (1908). For other de- cisions relative to street watering assessments see Ward v. Aldermen of Newton, 181 Mass. 432 (1902); Hodgdon v. Haverhill, 193 Mass. 327 (1907). For the statute authorizing street watering assessments in Boston see St. 1899, c. 366. Powers and Duties of Cities and Towns 147 G. L. c. 40 § 53] Restraint of Illegal Appropriations Section 53. If a town or any of its officers or agents are about to raise or expend money or incur obligations purporting to bind said town for any purpose or object or in any manner other than that for and in which such town has the legal and constitutional right and power to raise or expend money or incur obligations, the supreme judicial or superior court may, upon the petition of not less than ten taxable inhabitants of the town, determine the same in equity, and may, before the final determination of the cause, restrain the unlawful exercise or abuse of such corporate power. In the early history of this commonwealth the customary method of contesting the validity of appropriations of money by a town was to refuse to pay the tax by which the money was to be raised and thus oblige the collector to enforce pay- ment by distress, and then to bring an action of trespass against the assessors of the town for including the questioned amount in the tax warrant; and if the objection to the validity of the appropriation was sustained the assessors were liable for the full value of the property distrained. 1 In 1823 a statute was enacted exempting assessors from liability for assessing taxes wrongly, except for their own want of integrity and fidelity, 2 and it then became the recognized method of contesting the validity of an appropriation by a town to pay the tax under protest and then to bring an action against the town itself for money had and received; and it was held that the inclusion of a single improper item in the annual tax-warrant invalidated the whole assessment of that year.' 3 In 1859 a statute was enacted limiting the recovery in such cases to the illegal portion of the tax, 4 and this statute for all practical purposes effectually put an end to the method of contesting the validity of an appropriation by action against the town. In the meanwhile, in 1847 the legis- lature had provided a more appropriate means of contesting the validity of an expenditure by a city or town by enacting 1 Stetson v. Kempton, 13 Mass. 272 (1816); Libby v. Burnham, 15 Mass. 144 (1818); Inglee v. Bosworth, 5 Pick. 498 (1827); See also G. L. c. 59 § 87, infra page 314. 2 St. 1823 c. 138 § 5. 3 Goodrich v. Lunenburg, 9 Gray 38 (1857) ; Gerry v. Stoneham, 1 Allen 319 (1861). * St. 1859 c. 118 § § 3, 4. 148 Taxation in Massachusetts [G. L. c. 40 § 53 that "when a town votes to raise by taxation or pledge of its credit, or to pay from its treasury, any money, for a purpose other than those for which it has the legal right and power, the supreme judicial court may, upon the suit or petition of not less than ten taxable inhabitants thereof, briefly setting forth the cause of complaint hear and determine the same in equity." This statute, though of great service, was limited in its scope to actual appropriation, expenditure or pledge of the town's credit, and could not be invoked to prevent the town from embarking upon an undertaking which might lead to tax- ation in the future but for which no immediate appropriation or pledge of credit had been made 5 and it had no application to action by a town official purporting to be taken in behalf of the town and of a kind which the town could have legally authorized, but which was in fact in excess of the statutory authority of the official, or in violation of his instructions from the town. In 1898 the statute was altered to its present form so as to apply to the appropriation or expenditure of money or the incurrence of obligations purporting to bind the town, either by the town itself or by any of its officers or agents in excess of its or their authority. 6 There are some limits to the application of the statute, even in its present form. It cannot be invoked against the common- wealth or its officers 7 and there is grave doubt if it applies to an independent board of public officers appointed by the governor but authorized to expend the money of a city or town. 8 The ten taxable inhabitants -do not represent the town and cannot rescind or compel the town to rescind a contract entered into by the town under such circumstances as to render it 5 Carlton v. Salem, 103 Mass. 141 (1869); Mead v. Acton, 139 Mass. 341 (1885). 6 Thus a petition under the statute will now lie to restrain the town treasurer from paying town officers greater salaries than they are entitled to receive, Faulkner v. Sisson, 183 Mass. 524 (1903); Welch v. Emerson, 206 Mass. 129 (1910); to prevent the mayor from constructing sidewalks and paving streets in excess of his statutory authority. Draper v. Mayor of Fall River, 185 Mass. 142 (1904) ; to prohibit the board of health from expending money in obedience to a vote of the city council in excess of its authority, Goddard v. Lowell, 179 Mass. 496 (1901); or in disobedience to a vote within its authority, Oliver v. Gale, 182 Mass. 39 (1902). » Hodgdon v. Haverhill, 193 Mass. 406 (1907). 8 Codman v. Crocker, 203 Mass. 146 (1909). Powers and Duties of Cities and Towns 149 G. L. c. 40 § 53] voidable at the election of the town. 9 Petition under the statute cannot be used to collaterally impeach an action or adjudication of public officers which stands until directly overthrown; it is not the proper method of trying title to office 10 or of question- ing the acts of the proper authorities in laying out highways when the subject-matter is within their jurisdiction. 11 The court on a petition under the statute cannot consider the quali- fications of public officials or the good faith of their conduct. 12 The proceedings on a petition under this statute are in equity and are governed by equitable doctrines. An injunction will not be granted for technical error when there is no real violation of law; 13 and will be refused if the petitioners have been guilty of laches. 14 Laches will be attributed to the petitioners if they have allowed work to be done on the credit of the town and debts incurred without interfering until the money is about to be paid; 15 but laches cannot be attributed to parties merely because they knew of the proposed unlawful expenditure and did not interfere if no such action had been taken by the town as to warrant the granting of an injunction under the statute. 16 If without laches on the petitioners' part the money has been actually paid, the court will order it repaid to the town by persons who received it with notice of the ille- gality 17 or by the official who turned it over without lawful authority. 18 When the petition is granted petitioners are entitled to costs, to be paid in some instances from the fund in contro- versy, 19 and to include counsel fees based not upon the actual 9 Seward v. Revere Water Co. 201 Mass. 453 (1909). 10 Prince v. Boston, 148 Mass. 285 (1889). 11 Fisk v. Springfield, 116 Mass. 88 (1874). A petition under the statute is not the proper method of contesting the constitutionality of a statute authorizing the construction of a public work by a city or town on the ground that proper provision had not been made for compensation to owners of land injuriously affected. Prince v. Crocker, 166 Mass. 347 (1896); Higginson v. Boston, 212 Mass. 583 (1912). 12 Hodgdon v. Haverhill, 193 Mass. 406 (1907). 13 Freeland v. Hastings, 10 Allen 570 (1865). 14 Tash v. Adams, 10 Cush. 252 (1852) ; Fuller v. Melrose, 1 Allen 166 (1861). 15 Tash v. Adams, 10 Cush. 252 (1852); Fuller v. Melrose, 1 Allen 166 (1861). 16 Copeland v. Huntington, 99 Mass. 425 (1868) ; Mead v. Acton, 139 Mass. 341 (1885). ** Welch v. Emerson, 206 Mass. 129 (1910). " Frost v. Belmont, 6 Allen 152 (1863). 19 Pope v. Halifax, 12 Cush. 410 (1853) ; Frost v. Belmont, 6 Allen 152 (1863). 150 Taxation in Massachusetts [G.L.c. 41 §§1, 4 charge but of an amount equal to the compensation paid to public officers for work of a similar character. 20 It has been held that it does not lie within the general equity jurisdiction of the courts to restrain the illegal expenditure of public money at the suit of a taxpayer and if a case does not come within the provisions of the statute a court of equity will grant no relief. 21 Whether if the statute had not been enacted a writ of mandamus would lie at the instance of a private per- son having no other interest than as a taxpayer to prevent the illegal expenditure of public money by a city or town is a question open to some doubt; but it has been held that the statute clearly shows the intent of the legislature to cover the whole subject-matter and to exclude any remedy by writ of mandamus. 22 CHAPTER 41 OFFICERS AND EMPLOYEES OF CITIES, TOWNS AND DISTRICTS Election of Assessors and Collectors Section 1. Every town at its annual meeting shall in every year when the term of office of any incumbent expires, and except when other provision is made by law, choose by ballot from its inhabitants the following town officers for the following terms of office: . . . One or more collectors of taxes for the term of one year, unless the town votes otherwise or votes to authorize its treasurer to act as collector. ... Three or five assessors for the term of three years. Three or more assistant assessors, if the town so votes, for the term of three years. . . . In any case where three or more members of a board are to be elected for terms of more than one year, as nearly one-third as may be shall be elected annually. Section 4. A town which does not choose selectmen or assessors shall forfeit such amount, not less than one hundred nor more than five 20 Frost v. Belmont, 6 Allen 152 (1863). 21 Carlton v. Salem, 103 Mass. 141 (1869); Baldwin v. Wilbraham. 140 Mass. 459 (1886); Steele v. Municipal Signal Co., 160 Mass. 36 (1894); Prince v. Crocker, 166 Mass. 347, 358 (1896); Sylvester v. Webb, 179 Mass, 236 (1901). 22 Findlay v. Boston, 196 Mass. 267 (1907). Officers and Employees of Cities and Towns 151 G.L.c. 41 §20] hundred dollars, as the county commissioners of the county where the town is situated may order. It is not permissible for a town to bid off the office of collector to the person who offers the most favorable terms, but it may give the office to the lowest bidder whom the town will accept; in other words the town may in selecting a collector consider the terms upon which it can have the duties of the office per- formed provided it does not wholly throw off its obligation of selecting a proper officer and depend entirely upon the bids. 1 Towns may elect more than one collector and divide the taxes among the collectors so chosen. 2 A person who has been previously elected selectman and assessor may be chosen col- lector; there is nothing inherently incompatible in the offices. 3 The swearing of the collector and his mode of election may be proved by parol. 4 In cities which have adopted the commission form of gov- ernment, both the assessment and the collection of taxes are under the control of a commissioner of finance, elected directly by the people of the city. 5 Duties of Selectmen in Regard to Assessors Section 20. Selectmen shall, upon the receipt and approval of the bond of a collector of taxes or treasurer, give written notice thereof to the assessors. The selectmen shall be assessors of taxes and overseers of the poor in towns which have not authorized the election of such officers; and before acting as assessors they shall take the oath required of assessors. ' . . . It was provided by the colony law of 1651 "for preventing such inconveniences as have fallen out upon former assessments" that a meeting should be called in each town in the fifth month of every year, and that the inhabitants so assembled should choose one of the freemen of the town to be a commissioner for the town, who, together with the selectmen, should in the following month make a true estimation of all the real and per- 1 Alvord v. Collin. 20 Pick. 418 (1838); Spencer v. Jones, 6 Gray 502 (1856): Howard v. Proctor, 7 Gray 128 (1856). 2 Belgrade v. Sidney, 15 Mass. 523 (1819). 3 Howard v. Proctor, 7 Gray 128 (1856). 4 Howard v. Proctor, 7 Gray 128 (1856). 6 G. L. c. 43, § 67. 152 Taxation in Massachusetts [G.L.c. 41 §20 sonal estate of the persons in the town. The commissioners for the several towns in each county were required to meet at the shire town on the first Wednesday of the seventh month to correct and perfect the assessment lists and then speedily commit them for collection to the proper officers. 1 Under the provincial government, which began in 1691, it was the practice to enact laws of limited duration, and most of the statutes providing for the election of officers charged with the duty of assessing taxes provided in terms that they should be in force for a short period of years. These statutes were sometimes continued for an additional period as they were about to expire and sometimes re-enacted in the same or in a modified form. By the first provincial statute on the subject, enacted in 1692, the selectmen of each town were empowered to assess the inhabitants and others resident within such town and the lands and estates lying within the bounds of such town for both county and town charges, 2 but by the end of the century it became the practice to authorize the election of assessors dis- tinct from the selectmen, if the town so desired. 3 In 1730 more elaborate provision was made for defining the duties of assess- ors and securing the performance of such duties. Assessors were to be elected in each town to assess the province, county and town taxes. If no assessors were elected the selectmen were to act as assessors; and if neither assessors nor selectmen were chosen by the town the justices of the court of general sessions of the county were empowered to choose three freeholders within the county to act as assessors for the delinquent town. 4 These provisions were retained in substance in the permanent statute relating to assessors and their duties enacted soon after inde- pendence was established, 5 and have remained in force ever since, the county commissioners taking the place in this as in other matters of the court of sessions. 6 A town may manifest its intention that the selectmen shall act as assessors either by failing to elect assessors or by voting 1 Anc. Chart. 69. From the earliest period the office of assessor has been elective. 11 Plym. Col. Rec. 42, 2 Mass. Col. Rec. 152. 2 St. 1692-3, c. 28 3 St. 1699-1700, c. 26; St. 1706-7, c. 3. 4 St. 1730, c. 1. 5 St. 1785, c. 50 § § 1, 2. 6 See G. L. c. 41, § 27, providing for the appointment by county com- missioners of persons to act as assessors if assessors or selectmen acting as such should fail to perform their duties. Officers and Employees of Cities and Towns 153 G. L. c. 41 § 20] expressly that the selectmen shall act as assessors. 7 The stat- utes authorizing this procedure have continued in force; 8 but in 1920 additional alternative methods of dispensing with the election of assessors at town meeting were introduced. One section of the statute provided that in towns which accepted the section the selectmen should appoint assessors for a term of not more than three years. 9 This section applied only to assessors, was subject to acceptance in the ordinary way, and no provision was made for rescinding the acceptance. Assessors appointed under this section are independent of the direction and control of the selectmen, but may be removed by the select- men for cause. At the same time, by another section of the statute, which was applicable to other town officers besides selectmen and could be acted upon only by referendum vote on the official ballot and affirmative action upon which might be rescinded after three years' trial, provision was made for sub- mitting to the voters of a town two questions: — (1) whether the selectmen should act as assessors, and (2) whether the selectmen should appoint assessors. 10 If a town votes under this section to authorize the appointment of assessors, the select- men are directed to appoint three or five assessors, who are to act as such, subject however to the supervision of the select- men, 11 and are to hold office until removed by the selectmen. 12 It will thus be seen that a town may cause its selectmen to act as assessors either by failing or refusing to elect assessors or by voting by referendum under the special provisions of the 1920 act that the selectmen shall act as assessors; and it may cause its selectmen to appoint the assessors either by accepting the section of the statute which authorizes such procedure or by voting by referendum under the special provisions of the 1920 act that the selectmen shall act as assessors. In cities, under modern conceptions of the centralization of executive authority, assessors are usually appointed by the mayor, subject to confirmation by the board of aldermen or body having equivalent powers, and are ordinarily subject to 7 Commonwealth v. Wentworth, 145 Mass. 50 (1887). 8 G. L. c. 41, § 20. 9 St. 1920, c. 591, § § 31, 32, now G. L. c. 41, § 25. 10 St. 1920, c. 591, § § 36-47 inc., now G. L. c. 41, § 21. 11 G. L. c. 41, § 26. 12 G. L. c. 41, § 22. 154 Taxation in Massachusetts [G.L.c. 41 §24 removal by the mayor for cause. 13 The appointment and re- moval of assessors is not subject to the provisions of law relating to the civil service. 14 Term of Assessors and Number to be Chosen Section 24. Each assessor in every city or town except Boston shall be elected or appointed to hold office for three years, or until his successor is duly elected or appointed. There shall be three, five, seven or nine assessors in each city, and as nearly one third of the number as may be shall be elected or appointed annually. Originally, assessors, like other town officers, were elected for the term of one year, but in the larger towns it began ta be realized that the office of assessor required more technical skill and experience than could be acquired in a single year. In 1878 provisions first appeared to secure greater permanency in boards of assessors, which now apply in every case in which assessors are chosen at all, 1 -but there is nothing to prevent towns from still providing by vote that the selectmen shall act as assessors and electing the selectmen for terms of a single year. Whether the term of assessors is limited to one year or more for the entire membership, or only one member is elected or appointed annually, each board of assessors is charged with the duties prescribed by law, which cannot be performed by their predecessors and cannot arise until the date named for performance, and when their power is once properly exercised it is exhausted. 2 It is not requisite to the validity of the acts of a board of assessors that all the assessors elected concur therein; the act of the majority is the act of the board. 3 If after the designated number of assessors has been elected, one dies or refuses to qualify and the vacancy is not filled by the town, the remaining members may exercise the full powers of the board. 4 In proceedings to enforce the payment of a tax, assessed by persons who acted under color of an election by the town as evidenced by its records and who took the official oath as assess- ors, it is not open to the person assessed to offer evidence that 13 Ayers v. Hatch, 175 Mass. 489 (1900) ; Johnson v. Mayor of Quincy, 198 Mass. 411 (1908). 14 Ayers v. Hatch. 175 Mass. 489 (1900). 1 St. 1878, c. 255. 2 J. L. Hammett Co. v. Alfred Peats Co., 217 Mass. 520 (1914). 3 Sprague v. Bailey. 19 Pick. 436 (1837). See also, G. L. c. 4 §6, cl. 5. * George v. School District in Mendon, 6 Met. 497 (1843). Officers and Employees of Cities and Towns 155 G. L. c. 41 §§ 24A, 25A, 28] in the election of assessors there was a failure to comply with the election laws; for the persons who appeared of record as assessors were at least assessors de facto and it is well settled that the validity of acts of de jacto officials cannot be called in question in suits or proceedings to which they are not parties. 5 Assistant Assessors Section 24 A (St. 1921, chap. 208). If in the case of any city there is no provision of law for the election or appointment of assist- ant assessors and, in the judgment of the assessors, assistant assess- ors are necessary, or if, in the judgment of the assessors, the pro- visions of law with regard to the election or appointment of assistant assessors in any city, or action taken thereunder, have not provided in any year for a sufficient number* of assistant assessors, the mayor subject to confirmation by the city council, or the assessors, as the city council may determine, may appoint as assistant assessors such number of registered voters of the city as the appointing authority may deem necessary. Such appointments shall expire at the end of the calendar year in which they are made. Section 25 A (St. 1921, chap. 14). In towns which accept this section the assessors may appoint and remove citizens of the town as assistant assessors, who shall, subject to the supervision of the assessors, act as assistant assessors of the town and shall have all necessary powers therefor. In this section, the word towns shall not include cities. Section 28. Assistant assessors shall, in their respective dis- tricts, assist the assessors in making lists of persons liable to be assessed for poll taxes in such districts, in publishing and transmit- ting lists of persons so assessed, in estimating the value of the real and personal estate in such districts, and in the performance of such other duties as the assessors require. Provision was first made for the appointment of assistant assessors in 1809 and there has been no substantial change in the statutes relating to their duties since that date. 1 The recent statutes which provide under some circumstances for the appoint- ment of assessors by the selectmen make like provisions for assistant assessors; 2 and in 1921, as appears above, provision 5 Sudbury v. Heard, 103 Mass. 543 (1870). 1 St. 1809, c. 127. 2 G. L. c. 41, §§25, 26. 156 Taxation in Massachusetts [G.L.c. 41, §§29,30 was made for the appointment of assistant assessors by the assessors under some circumstances. Oath of Assessors Section 29. Any person chosen to assess taxes or to determine or to assist in determining the value of property for the purpose of taxation shall, before entering upon the performance of his duties, take the following oath: I, having been chosen to assess taxes and estimate the value of property for the purpose of taxation for the town (or city) of for the year (or years) ensuing, do swear that I will truly and im- partially, according to my best skill and judgment, assess and appor- tion all such taxes as I may during that time assess; that I will neither overvalue nor undervalue any property subject to taxation, and that I will faithfully perform all the duties of said office. If he neglects to take such oath before entering upon the perform- ance of his duties, he shall forfeit not more than fifty dollars. The oath of the assessors is to be construed in the light of all the other provisions of law for the assessment of taxes ; and when a statute requires property to be valued in a certain way, the assessors are bound to follow the statute, even if they know that in fact an overvaluation will result. 1 Penalty for False Valuation Section 30. Any person chosen to determine the valuation of property for the purpose of taxation who, in order that the tax payers may escape payment of their just proportion of any state or county tax or in order to evade any law limiting municipal indebtedness or the rate of taxation to a percentage of valuation or for any other fraudulent or corrupt purpose, knowingly fixes the valuation of any property at a smaller or greater amount than its full and fair cash value, or who causes an abatement to be made otherwise than is provided by law, shall be punished by a fine of not more than one thousand dollars, or by imprisonment for not more than six months, or both. The " full and fair cash value" at which assessors are required to fix the valuation of property is a phrase difficult to define, 1 Sears v. Nahant, 215 Mass. 329 (1913). Officers and Employees of Cities and Towns 157 G.L.c. 41 §37] and its application is somewhat dependent upon the class of property to be valued. 1 The phrase is used in other portions of the tax statutes with the same significance as here and its meaning is discussed elsewhere in this work. 2 The liability of an assessor in a civil action brought by a person claiming to be wrongfully assessed is also discussed in another chapter. 3 It has been held that an assessor is not liable in an action brought against him by the town for assessing taxes in such a way that the town suffers financial loss, at least when there has been no want of integrity and fidelity on his part, but only ordinary negligence. 4 A civil action by a town against a person chosen as assessor does not lie on account of his failure to take the oath of office. 5 Collection of Taxes by Treasurer Section 37. A town treasurer acting as collector of taxes may appoint deputies, who shall give bond to the satisfaction of the select- men for the faithful performance of their duties; and such collector and deputies shall have the powers of collectors of taxes. A treas- urer acting as collector may issue his warrant to the sheriff of the county or his deputy, or to any constable of the town, directing them to distrain the property or take the body of any person de- linquent in the payment of taxes, and may proceed in the same man- ner as collectors. The statutes do not require a collector to perform all his duties in person, and he may, under certain conditions, appoint deputies. 1 A treasurer who acts as collector is given like powers by the above statute. A treasurer who acts as collector may issue his warrants to the sheriff of the county or his deputy or to any constable of the city or town requiring them to collect any or all taxes due; 2 and a collector may issue his warrant to like officers requiring them to collect a particular tax by dis- tress or arrest; 3 and a town may vote to give its collector the 1 Massachusetts General Hospital v. Belmont, 233 Mass. 190, 205 (1919). 2 G. L. c. 59 § 38, infra page 267. 3 G. L. c. 59 § 87, infra page 314. 4 First Parish in Sherburne v. Fiske, 8 Cush. 264 (1851) ; Lincoln v. Chapin, 132 Mass. 470 (1882). 5 First Parish in Sherburne v. Fiske, 8 Cush. 264 (1851). 1 G. L. c. 60 § 92, infra page 395. 2 G. L. c. 60 § 90, infra page 393. 3 G. L. c. 60 § 34, infra page 340. 158 Taxation in Massachusetts [G.L.c. 41 §§38,39 power of a treasurer in this regard. 4 A constable so employed must look to the collector and not to the town for his compen- sation. 5 Authorization to use Powers of Treasurer Section 38. A town may authorize its collector of taxes to use all means of collecting taxes which a town treasurer may use when appointed a collector of taxes. It has been held that the vote authorized in the statute is justified by an article in the warrant "to elect all necessary town officers for the ensuing year." x The means referred to in the statute is doubtless the issuance of warrants to the sher- iff of the county or his deputy or any constable of the town requiring them to collect any or all taxes due. 2 In the absence of such a vote the collector has the power of delegating to a sheriff or constable only the duty of collecting taxes assessed upon designated persons. 3 Constable as Collector of Taxes Section 39. If a person appointed to collect taxes in a town refuses to serve, or if no person is elected or appointed a collector of taxes, the constables of the town shall be the collectors of taxes. It was provided by the colonial statutes 1 that taxes should be collected by the constable of the town in which they were assessed and the same provision was made in the earlier stat- utes of the provincial period; 2 but before many years the election of a collector distinct from the constable was authorized and the constable continued to collect taxes only when no collector was chosen. 3 In 1745 it was provided that if no constable or collector was elected by a town the sheriff of the county might collect the taxes. 4 These provisions have remained substantially 4 G. L. c. § 38 infra page 158. 5 Murphy v. Clinton, 182 Mass. 198 (1902). 1 Sherman v. Torrey, 99 Mass. 472 (1868). 2 G. L. c. 60 § 90, infra page 393. 3 Smith v. Keniston, 100 Mass. 172 (1868). 1 Anc. Chart. 69. 82. 2 St. 1692-3. c. 28. 3 St. 1699-1700, c. 26; St. 1710-11, c. 5; St. 1730, c. 1. * St. 1745-46, c. 19. Municipal Finance 159 G.L.c. 41 §40] unchanged to the present time. 5 In 1815 it was first enacted that a town might appoint its town treasurer collector of taxes. 6 When no person is chosen collector and the town has not voted that the treasurer act as collector, or a person chosen as collector declines to serve, the constables of the town become collectors ex officio without further formality and without taking any additional oath, 7 even although the person chosen collector is not summoned in writing to accept the office and his refusal to accept does not appear of record. 8 Temporary Collector Section 40. If the office of treasurer or collector of taxes is vacant, or if the treasurer or collector is unable to perform his duties, the selectmen may in writing appoint a temporary treasurer or collector, who shall be sworn, give bond in like manner as the treas- urer or collector chosen by the town, and hold such office until another is qualified or the disability is removed. If a treasurer or collector does not, within ten days after his election or appointment, give bond, the selectmen may declare the office vacant and appoint another. The appointment of a collector pro tempore must be made by at least a majority of the selectmen and if it is not so made a subsequent ratification by the whole board is ineffectual. 1 When a collector has died and the selectmen appoint a successor without designating him as a collector pro tempore, the ap- pointment is merely inoperative so far as it exceeds the select- men's authority, but it is valid as a temporary appointment until another election is had by the town. 2 CHAPTER 44 MUNICIPAL FINANCE Establishment of Tax Limit Section 29. The tax limit heretofore established by ordinance under section nineteen of chapter seven hundred and nineteen of the acts of nineteen hundred and thirteen, in cities other than Boston, 5 See G. L. c. 59 § 53, infra page 280. 6 St. 1815, c. 130, § 1. 7 Colman v. Anderson, 10 Mass. 105 (1813) ; Hays v. Drake, 6 Gray 387 (1856). • 8 Hays v. Drake, 6 Gray 387 (1856). 1 Phelon v. Granville, 140 Mass. 386 (1886). 2 Blackstone v. Taft, 4 Gray 250 (1855). 160 Taxation in Massachusetts [G. L. c. 44 § 29 shall have the force of law until it is annulled or modified by the action of the city council or other governing body. The mayor, or in cities having a commission form of government the commissioner or director of finance, may request a change in the tax limit as then existing or the fixing of a limit; and when such request is submitted in writing to the city council, it shall immediately order a public hearing to be held not less than seven days thereafter relative to the fixing of a tax limit, and after such hearing the council may, be- tween January first and May first only, by ordinance passed by a two thirds vote, fix a limit or abolish a limit previously established, and such ordinance shall remain in force until further modified, as above provided. In 1885 it was provided by statute that in any city, except Boston, the rate of taxation for municipal purposes, exclusive of the requirements of the city debt, should not exceed twelve dollars on each thousand dollars of the average assessed valu- ation of the taxable property in such city for the preceding three years. 1 In Boston the tax limit was placed at ten and one-half dollars per thousand. 2 The statute of 1913 referred to in the present statute pro- vided that within ninety days after the passage of the act the city council of every city, except Boston, should hold a public hearing in regard to establishing a tax limit for the city, and that every city might provide by ordinance that the taxes assessed on property therein, exclusive of the state tax and other amounts assessed upon the city by the commonwealth, the county tax and sums required by law to be raised on account of the city debt, should not in any year thereafter exceed a number of dollars specified in the ordinance on every thou- sand dollars of the average of the assessors' valuation of the taxable property therein for the preceding three years, such valuation being first reduced by the amount of all abatements allowed therein previous to the thirty-first day of December in the year preceding such assessment, and that the tax limit so established should have the force of law until modified by the city council. A method of modification was provided, which was superseded by the present method, adopted in 1915. 3 1 St. 1885, c. 312, § l. 2 St. 1885, c. 178, § 1. 3 St. 1915, c. 18. Municipal Finance 161 G.L.c. 44 §29] In Boston the tax limit is still fixed by statute 4 and can be modified only by the legislature itself. The distinction between the tax limit and the tax rate is to be carefully kept in mind. The tax limit does not concern itself with state and county expenditures, or with the require- ments of the city debt, all of which affect the tax rate. On the other hand, the tax rate is based on the valuation of the current year and the tax limit on the average valuation of the three preceding years. The object of the statute authorizing cities to establish a tax limit is to protect the taxpayers from a sudden increase in current municipal expenditures through the acts of a bare majority in the city council, whether intended to be met by an increase in the tax rate or by an increase in valuations. The following illustrative example will show how the proper tax limit of a city would be determined if it was desired that there should be no increase in the burden on real estate by reason of an increase in current municipal expenditures dis- proportionate to the growth of the city as evidenced by the increase in valuation of real estate and tangible personal prop- erty. Reasonable limit of total Annual Municipal Expenditures $ 2,500,000 Deduct : Debt Requirements (Interest, Serial Bonds and Sinking Fund) $250,000 Corporation taxes and other estimated receipts 350000 Income Tax 250,000 Polls 25,000 From Reserve Fund 25,000 Total Deductions $ 900,000 To be raised by direct tax for purposes other than debt $ 1,600,000 Total average valuation for preceding three years $80,000,000 Tax Limit $20.00 per thousand. On these figures, assuming a normal increase in real estate valuations, the tax rate would be determined as follows: Total Municipal Expenditures $2,500,000 State, county and (if in metropolitan district) metropolitan taxes . : : 450,000 Total requirements $ 2,950,000 Estimated receipts (as in previous table) $ 650,000 To be raised by direct tax $ 2,300,000 Total valuation $85,000,000 Tax rate (with allowance for overlay) $27.10 per thousand. 4 See Sp. Acts 1919, cc. 173, 206, 249, 252. 162 Taxation in Massachusetts [G.L.c. 48 §69 Expenses of Auditing Municipal Accounts Section 41. The expenses incurred under sections thirty-five to forty, inclusive, shall be paid primarily by the commonwealth; and the state treasurer shall issue his warrant requiring the assessors of the cities and towns concerned and of the towns in which such district is located to assess a tax to the amount of said expense, and such amount shall be collected and paid to the state treasurer in the same manner and subject to the same penalties as state taxes. Any balance due shall be assessed in the succeeding years in the same manner as other state taxes. Sections thirty-five to forty, referred to in the foregoing statute, provide for the auditing of municipal accounts or the installation of an accounting system by the state director of accounts. Interest on Debts Incurred by a City or Town in Aid of a Railroad Section 57. A city or town owing debts incurred in aid of a railroad corporation shall annually raise by taxation an amount sufficient, with the income, if any, derived from its stock or securi- ties, to pay the interest on such debts. CHAPTER 48 FIRES, FIRE DEPARTMENTS AND FIRE DISTRICTS Taxation by Fire Districts Section 69. Such districts may, at meetings called therefor, raise money by taxation for the purchase of engines and other articles necessary for the extinguishment of fires, for hydrant and water service, for the purchase of land, for the erection and repairs of necessary buildings, for the erection and maintenance of street lamps within their limits, for the payment of a proper charge of an insur- ance company for acting as surety on an official bond which may be given to such district by any of its officers, and for other incidental expenses of the fire department. The prudential committee of such district may accept an insurance company as sufficient surety upon such bond. Fire Departments and Fire Districts 163 G. L. c. 48 § 73] Section 73. The clerk shall certify to the assessors of the town all votes of the district authorizing interest to be added to taxes and all sums of money voted to be raised, which shall be assessed and collected in the same manner as town taxes, and shall be paid over to the district treasurer. The assessors, treasurer and collector of a town in which such district is organized shall have the same powers and perform the same duties relative to the assess- ment and collection of the money voted by the fire district as they have and exercise relative to the assessment, collection and abatement of town taxes, and the sums so voted shall be assessed upon the property, real and personal, within the district. A fire district is a territorial subdivision of the state, bounded and organized under the authority of the legislature for the governmental purpose of providing protection against fire within its limits, maintaining street lights, and other subsidiary mat- ters. Although composed of a part of one or more towns, it is in substance a quasi municipal corporation of definitely re- stricted powers. 1 It may raise money by taxation for its legit- imate uses. The kind of taxation which a fire district is authorized to levy belongs in its essential characteristics to the class of general taxes rather than special assessments. 2 It is to be noted that in the statutes quoted above the taxes of the district are to be assessed upon the property, real and personal, within the district, and not upon the real estate within the dis- trict and the personal property of those residing within its limits. The effect of this proviso is to exempt the tangible property of a resident of the district which is kept outside the district from district taxes, even although it is kept in the town in which the district is situated. 3 Intangible property however such as stocks and bonds having no location except where the owner lives is taxable for district taxes if the owner lives in the district, 4 except so far as exempted by the provisions of the Income Tax Act. There is an exception in favor of shares in a national bank which being taxable only in such way as the legislature under permission of Congress has authorized are 1 Prout v. Pittsfield Fire District, 154 Mass. 450 (1891); Williams College v. Williamstown, 219 Mass. 46 (1914). 2 Williams College v. Williamstown,- 219 Mass. 46 (1914). 3 Dwight v. Springfield Centre Fire District, 11 Met. 374 (1846). 4 Dwight v. Springfield Centre Fire District, 11 Met. 374 (1846). 164 Taxation in Massachusetts [G.L.c. 51 not subject to district taxes. 5 As the statutes do not contem- plate annual appropriations for the expenses of districts and the levy of an annual tax therefor, but appropriations are made and taxes levied when expenses are to be incurred, a person who is a resident of a district on the first day of April but who moves away with his property before the meeting at which an appropriation is voted and a tax authorized occurs, is not liable for the tax so authorized. 6 District taxes being general taxes rather than special assessments, a statutory exemption from taxation includes taxes levied by a fire district. 7 In addi- tion to the districts organized in accordance with the above statutes there are a number of water districts, established for the purpose of furnishing a water supply to the inhabitants of the more thickly populated sections of certain towns. As such districts generally require to take their water supply by eminent domain and often outside the limits of the district and as even towns and cities have no general power to exercise the power of eminent domain to acquire a water supply, it has been the policy of the commonwealth to grant charters to water districts only by special statute, so that the legislature can in each case weigh the merits of various conflicting claims to the desired body of water. CHAPTER 51 VOTERS The chapter relating to voters imposes certain obligations upon the local boards of assessors. Thus, section 4 requires the assessors each year in April or May to visit every building within their respective cities and towns and to make a list of male persons twenty years of age or older liable for a poll tax. Section 4 also provides for the correction of the original lists. Section 5 provides for the transmission to the registrars of voters and collectors of taxes of additions and corrections in the lists. Sections 6 and 7 require the assessors to provide street lists of persons assessed for poll taxes. Section 8 provides for 5 Little v. Little, 131 Mass. 367 (1881); Rich v. Packard National Bank, 138 Mass. 527 (1885). 6 Savary v. School District in Georgetown, 4 Gray 254 (1878). 7 Williams College v. Williamstown, 219 Mass. 46 (1914). General Provisions Relative to Taxation 165 . G. L. c. 58 § 1-8] the establishment by a male resident not assessed for a poll tax of his right to be assessed and section 11 for the assessment and collection of a poll tax upon such a person. CHAPTER 56 VIOLATION OF ELECTION LAWS Penalty for False Entry by Assessor Section 1. An assessor or assistant assessor who knowingly enters on any list of assessed polls, or causes or allows to be entered thereon, the name of any person as a resident of a building, who is not a resident thereof, shall be punished by imprisonment for not more than six months. CHAPTER 58 GENERAL PROVISIONS RELATIVE TO TAXATION Supervision of Local Taxation Sections 1 to 8 inclusive relate to the supervision of local tax- ation by the commissioner of corporations and taxation. 1 Section 1 gives the commissioner in general terms power to inspect the work of the local assessors and to require of them action which will tend to produce uniformity throughout the com- monwealth in matters of assessment and valuation. It also authorizes him to furnish the local assessors with printed instructions and blank forms; to prosecute them for violation of the tax laws, to appear before the county commissioners or the court when passing upon the abatement of taxes and to give his opinion to assessors and collectors or to obtain an opinion from the attorney general upon questions relating to the assess- ment and collection of taxes. Sections 2 and 3 require the commissioner to forward to the assessors lists of corporations liable to local taxation and all other information relative to assessment of property that has come into the possession of his department. Section 4 provides that when it appears that the failure of the assessors to value property in accordance with law is due to improper methods the commissioner shall direct them as to the proper methods, 1 As to the appointment of the commissioner and his subordinates see G. L. c. 14, supra page 139. 166 Taxation in Massachusetts [G. L. c. 58 §§ 1-8 and on their failure to comply with his directions shall notify the mayor or the selectmen of their city or town. Section 5 provides that the commissioner shall give instructions for pre- paring notices in regard to bringing in lists of taxable property and prescribe forms for such lists; and section 6 provides that the commissioner may collect and tabulate information in regard to the sale price and actual value of real estate in the several towns. Section 7 provides that the commissioner shall secure infor- mation as to unpaid taxes and section 8 provides that when it appears that local taxes have not been collected within three years after the commitment of the warrant to the collector, or if collected have not been turned over to the town treasurer, he shall cause suit to be brought upon the collector's bond. The assessment and collection of local taxes was carried on by the local authorities until 1861 without any supervision or control from the state, and until 1898 the tax commissioner had little to do with the assessment of local taxes except in case of a conflict between the valuation by the local assessors of real estate and machinery of domestic corporations and his valua- tion of the same property as a deduction from the corporate franchise tax. 2 In 1898 the tax commissioner was given power to visit any city or town within the commonwealth to inspect the work of the assessors and to advise them as to their duties. In 1907 a commission on taxation was appointed 3 and re- ported the need of greater uniformity in the administration and enforcement of the law throughout the commonwealth, and, as a result, in the following year the tax commissioner was given power to appoint three supervisors of assessors who were 2 See G. L. c. 59, § 74 infra page 303; c. 63, § 57, infra page 580. In 1861 provision was made for the furnishing of blank books with printed tables by the secretary of the commonwealth to be used in the assessment of taxes (St. 1861, c. 167, see new G. L. c. 59, § 45, infra page 243) and the assessors were required to file with the secretary tables of aggregates. In 1864 the assessors were required to file with the secretary of the commonwealth a state- ment of the cause of any diminution in the valuation of their town (St. 1864. c. 210, now G. L. c. 59, § 84, infra page 313) . In 1865 the assessors were required to file with the tax commissioner a statement of the amount of taxes assessed during each year (St. 1865, c. 283). In 1874 the assessors were required to file with the tax commissioner a statement showing the amount of exempted property in their town (St. 1874. c. 227, now G. L. c. 59, § 86, infra page 313) . In 1882 the tax commissioner was authorized to prescribe forms for lists of taxable property (St. 1882. e. 217. now G. L. c. 58, § 5, supra page 165). 3 Under c. 129 of the Resolves of 1907 General Provisions Relative to Taxation 167 G.L.c. 58 §§9,10] to furnish the local assessors with information concerning tax- able property within their jurisdiction and to direct the assess- ors to make such use of the information so furnished as the tax commissioner should deem necessary. The supervisors of assessors proved of great assistance to the local assessors, es- pecially in the years prior to the enactment of the income tax law when the effort was being made to tax intangible personal property at its capital value, and their power to advise is still of importance; but the ultimate responsibility is with the assessors, and if they, notwithstanding the directions of the commissioner refuse to increase the valuation of any property, he has no means of compelling them to do so. 4 In 1912, as the result of the disclosure of lax methods of some local collectors in enforcing payment of taxes, the statutes now appearing as sections 7 and 8 were enacted. Apportionment of the State Tax Section 9 (as amended by St. 1921, chap. 379, § 1). In nineteen hundred and twenty-two and in every third year thereafter, the com- missioner shall, on or before April first report to the general court an equalization and apportionment upon the several towns, of the number of polls, the amount of property, and the proportion of every one thousand dollars of state or county tax, including polls at one tenth of a mill each, which should be assessed upon each town. Section 10 (as amended by St. 1921, chap. 379, § 2). To aid in making the equalization and apportionment required by the pre- ceding section, and to assist the general court to determine the amount of state tax to be imposed upon the several towns, the com- missioner shall prepare and submit to the general court abstracts showing the amount of the corporate franchise value of domestic corporations, of the excise value as determined by the commissioner of domestic business and foreign corporations, and of the value of the shares of banks, the shares of which are subject to taxation under section one of chapter sixty -three, represented by the taxes distributed according to law to each town. He may require from state and town officers such further returns and statements relative to the amount and value of taxable property in the several, towns as he deems necessary. He shall to the best of his judgment and discretion pre- pare said equalization and apportionment upon the basis of the 4 See also as to revision of valuation on recommendation of the com- missioner, G. L. c. 59, § 76, infra page 306. 168 Taxation in Massachusetts [G. L. c. 58 §§ 9, 10 returns and statements provided for and authorized, and of any other information in his possession. He shall give notice of so much of said equalization and apportionment as may be prepared upon the basis of such other information in his possession to the assessors of any town affected thereby, and upon their request shall give his reasons therefor, and such information as he may properly divulge. The state tax is actually assessed by an annual act of the legislature, the amount to be assessed being determined by deducting the estimated receipts of the commonwealth in the form of taxes on corporations, inheritance taxes and other sources, from the total appropriations made by the legislature and required to be expended during the year, the tax being commonly reckoned in even millions of dollars. The annual act of the legislature for the assessment of the state tax is thus what in parliamentary language is usually called a "deficiency bill." x The amount being thus determined, the proportion of each city or town is ascertained by reference to the latest triennial apportionment, the apportionment being prepared by the com- missioner but enacted into law by the legislature. 2 The annual statute apportioning the tax first assesses each city or town for its proportionate amount, then directs the treasurer of the com- monwealth to send his warrant to the assessors of each city or town requiring them to assess the sum charged and add the same to their county, city or town taxes, and to pay or cause their respective city or town treasurers to pay the same to him, and provides for enforcement of the tax by warrant of distress against the cities or towns. 3 The annual tax act is an inheritance from the provincial period, and statutes very similar in form to those enacted now 1 Providence Institution for Savings v. Boston, 101 Mass. 575, 589 (1869). 2 The latest apportionment prior to the publication of the present edi- tion of this work was in 1919 (St. 1919, c. 343). This apportionment was notable as being the first to reflect the exclusion of intangible personal property from local taxation which resulted from the enactment of the income tax law in 1916. To determine the share of any city or town in the state tax of any year, the figure set against its name in the third column of the apportionment should be multiplied by as many thousands as there are million dollars in the state tax. Thus if the figure in the third column (headed "Tax of $1000 in- cluding polls at one tenth of a mill each") is $1.95 for a certain town and the total state tax is fourteen million dollars, the share of the town in question would be 14,000 X $1.95 or $27,300,00. * See for. example St. 1921, c. 492. General Provisions Relative to Taxation 169 G.L.c. 58 §§9,10] appeared every year among the provincial statutes. These stat- utes, however, authorized the assessment of local taxes as well as of the state tax and contained all the provisions for assess- ment, abatement and exemptions now found in the general laws. It was not until after the Revolution that any of these subjects began to be covered by permanent enactments; and the annual tax acts contained all the law on the subject of assessments until the Revised Statutes of 1836. Since that year the annual tax acts have related only to the state tax. Until comparatively recent times the apportionment of the state tax was based upon the aggregate valuations of the respec- tive cities and towns as determined by their own boards of assessors, and until 1861 no provision was made for the assist- ance of the legislature in making the apportionment by any administrative officer. In 1861 provision was made for the fur- nishing of uniform assessment books to the local assessors by the secretary of the commonwealth, and for the publication of copies of such books by him when filled out and returned by the assessors, for the benefit of the legislature. 4 In 1881 it was made the duty of the tax commissioner in every third year, by the use of such books and other returns as he might re- quire, to prepare an apportionment and equalization for the purposes of the state tax. 5 The state tax continued to be act- ually assessed and apportioned by an annual act of the legis- lature; but the legislature followed the tax commissioner's apportionment as a matter of course. Under this statute the duties of the tax commissioner were purely ministerial, and involved merely an arithmetical calculation, of which the valu- ation of the respective local assessors was the basis. It was charged however that the assessors of certain towns, for the purpose of reducing the share of their town in the state tax, intentionally undervalued the property which they as- ssessed, and in 1911 a statute was enacted to meet this abuse which provided that the tax commissioner might make the apportionment upon the basis of the assessors' returns "and of any other information in his possession." 6 This statute com- pletely changed the functions of the tax commissioner with * St. 1861, c. 167. s St. 1881, c. 163. « St. 1911, c. 366. 170 Taxation in Massachusetts [G.L.c. 58 §10A respect to the apportionment of the state tax, and gave him power to make the apportionment without regard to the valuation of the local assessors, without notice to them and without any obligation to state the reasons for his decision. This power he exercised in a number of instances in the apportion- ment of 1913, summarily increasing the valuation of certain towns without notice to the town, and in many instances his appor- tionment was accepted by the legislature and enacted into law before the townspeople were aware of what had happened. The power of the tax commissioner in this direction was somewhat curtailed in 1914 by the enactment of the statute which now appears as the last sentence of secti6n 10 and which provides that when the tax commissioner bases his apportion- ment on information other than the assessors' valuation, he shall notify the assessors and, upon request, give his reasons therefor. 7 The statutes do not in terms give a town whose valuation has been raised a right to a hearing and an opportunity to contest in a judicial tribunal the correctness of the "other information" upon which the increase, in valuation was based. It may how- ever be assumed that in case of an arbitrary and unwarranted increase in the valuation of the town the constitutional rights of the taxpayers of the town would be protected by the courts at some stage of the proceedings even after the apportionment has been actually made by the legislature. The method of col- lecting from a town its proportion of the state tax provided by the annual tax acts is a warrant of distress; 8 but this warrant can be issued only after the filing of an information in the supreme judicial court against the town, notice to the town and a hearing, so that the town has an opportunity to be heard in case* of an arbitrary and unwarranted increase in its valuation or the imposition upon it of a disproportionate share of the state tax in any other manner. 9 Disputed Corporation Taxes as Offset to State Tax Section 10 A (St. 1921, chap. 375, §2). The state treasurer shall allow, as an offset to any amount due the. commonwealth from any town on November fifteenth in any year by way of the state tax, a 7 St. 1914, c. 689. 8 See § 4 of the annual tax acts. 9 Chelsea v. Treasurer & Receiver General, 237 Mass. 422 (1921). General Provisions Relative to Taxation 171 G.L.c. 58 §§11-17] sum equal to eighty per cent of the amount of any taxes to be dis- tributed to such town under sections twenty to twenty-four A, in- clusive, that have been paid to the commonwealth on or before November first of that year, but which by reason of pending questions of abatement or otherwise cannot be immediately distributed. Adjustment of Veterans' Exemptions Sections 11 and 12 contain provisions for equalizing the burden upon towns in the commonwealth arising from statutes which exempt from taxation certain limited amounts of prop- erty owned by veterans of certain designated wars. Section 11 provides that one- third of the total amount of taxes so ex- empted shall be charged against the towns of the commonwealth in the same proportions as the state tax, and that one-third of the amount so exempted in each town shall be a credit to the town against the other requirements of the state. This section also provides for notice to the respective towns of the charges and credits and affords an opportunity of appeal to the board of appeal. Section 12 directs the commissioner of corporations and taxation to certify the charges and credits under section 11 to the state treasurer, and provides that he shall withhold them out of sums payable to the towns by the commonwealth, or pay them over, as the case may be. Reimbursement for Loss of Taxes on Land Used for Public Institutions Sections 13 to 17 inclusive contain elaborate provisions which were first enacted in 1910 for the annual payment by the com- monwealth to the towns in which the land is situated of certain amounts in lieu of taxes on land owned by the commonwealth and used for a public institution, 1 or for afish hatchery, game pre- serve, state military camp ground or state forest. 2 The object of these statutes is the equitable one of not throwing the burden of the exemption upon the towns in which institutions estab- 1 G. L. c. 63, §58, infra page 582. Under G. L. c. 58, § 13, this pro- vision was limited to public institutions under the department of mental diseases, the department of public welfare or the department of correction; but by St. 1921 c. 486 § 15 this limitation was stricken out. 2 By St. 1921 c. 282 provision was made that with respect to land used for a state forest there should be deducted from the valuation used for purposes of reimbursement the value of all forest products removed from the land since the first day of April on which it was last assessed, 172 Taxation in Massachusetts [G. L. c. 58 § 18 lished for the benefit of the whole state are located. It is to be noted that these provisions apply only to land and do not include buildings. The statutes provide that the valuation of this land shall be made in every fifth year by the com-« missioner of corporations and taxation, with a right of appeal to the board of appeal; land acquired during one of the five year periods retains its assessed valuation until the next valua- tion under these statutes is made. The amount of reimburse- ment is determined by multiplying each thousand dollars of valuation or fraction thereof by the average tax rate throughout the commonwealth as determined for the purposes of the cor- porate franchise tax. 3 Distribution of the Income Tax Section 18. From the taxes collected by the commonwealth on incomes under chapter sixty-two, the state treasurer shall annually on or before November fifteenth distribute to each city, town and district the percentages hereinafter specified of an amount obtained by subtracting, from the average amount of the tax levied upon personal property in such city, town or district in the years nineteen hundred and fifteen and nineteen hundred and sixteen, the average amount, computed by the commissioner, that would be produced by a tax upon the personal property actually assessed in each city, town or district for the years nineteen hundred and seventeen and nineteen hundred and eighteen at an average of the same rates of taxation as prevailed therein in the years nineteen hundred and fifteen and nineteen hundred and sixteen, to wit: Seventy per cent for nineteen hundred and twenty-one, sixty per cent for nine- teen hundred and twenty-two, fifty per cent for nineteen hundred and twenty-three, forty per cent for nineteen hundred and twenty- four, thirty per cent for nineteen hundred and twenty-five, twenty per cent for nineteen hundred and twenty-six, ten per cent for nineteen hundred and twenty-seven. The amount so collected in any of said years in excess of the sum necessary to make said payments shall be distributed in proportion to the amount of the state tax imposed upon each town in that year, after deducting a sum sufficient to reimburse the commonwealth for the expenses incurred in the collection and distribution of said tax and for abated taxes repaid under said chapter during said year, . 3 G. L. c. 63, § 58, infra page 582. General Provisions Relative to Taxation 173 G.L.c. 58 §19] which shall be retained by the commonwealth, and a sufficient sum to be distributed for school purposes under Part I of chapter seventy. In nineteen hundred and twenty-eight and thereafter all the taxes so collected shall, after making said deduction, be distributed and paid to the several towns in proportion to the amount of the state tax imposed upon each of them in each year. Section 19. Annually on or before August first the commissioner shall, upon the basis of the information then in his possession, notify the assessors of each town of the amount such town is to receive in any distribution of the tax upon incomes. Said assessors, in deter- mining the rate of taxation to be levied upon taxable property for the year, shall include in the estimated receipts lawfully applicable to the payment of expenditures the aforesaid amount. It was provided in the original Income Tax Act, by the es- tablishment of a formula designed to bring about such a result as nearly as practicable, that each town should receive a share of the proceeds of the income tax equal to the sum which it would have received if the statutes authorizing the taxation of intangible personal property by the towns had remained in force. 1 The balance, if any, was to be distributed in proportion to the contribution of the various cities and towns to the state tax. It was specifically provided that this measure of distribu- tion should remain in force but a single year, and thereafter the distribution among the cities and towns should be as the legislature might determine. This sufficed for the distribution during the year 1917, the first year of the tax, when the act was more or less in the nature of an experiment. In the fol- lowing year, a similar provision was made for the distribution of the income tax, which was in terms applicable only to the tax collected in the year 1918. 2 In 1919, however, as the result of a report of a special recess committee, 3 the statute was enacted 4 which is now in force providing for the permanent distribution of the proceeds of the income tax, which, in substance, after first establishing a formula for determining the amount which the towns would have received if the old method of taxing 1 St. 1916, c. 269, § 23. 2 St. 1917, c. 317. A similar provision for 1919 was made by St. 1918, c. 219, but was repealed by the permanent statute (St. 1919, c. 314) before it went into effect. 3 1919 Senate Document, No. 313. * St. 1919, c. 314. 174 Taxation in Massachusetts [G. L. c. 58 § 19 intangible personal property had remained in force, provided for the gradual change of the method of distribution, extending through a ten-year period, from a distribution based primarily on what the towns would have received if the old method had remained in force, with the excess distributed in proportion to each town's share of the state tax, to a distribution based wholly upon each town's proportion of the state tax. At the end of the ten-year period, in 1928, and thereafter, the entire proceeds of the income tax, unless in the meantime diverted for other pur- poses, will be distributed in proportion to the share of each city and town in the state tax. As since 1919 the state tax has been apportioned without regard to intangible personal property, 5 the result of this legis- lation has been to provide that the proceeds of the income tax, which is primarily a tax on intangible personal property, shall be distributed to the various cities and towns in proportion to their wealth in real estate and tangible personal property, and as some towns contain much wealth of the latter class and little intangible personal property of the classes subject to the income tax, and other towns contain little wealth in real estate and tangible personal- property and much taxable intangible prop- erty, the effect of the law is to give to some towns a much larger share in the proceeds of the income tax than their inhabitants contribute, and to other towns much less, and thus in effect to tax the inhabitants of the latter class of towns for the use and benefit of the former. The supreme judicial qourt however held that although the law went to the verge of the limits of consti- tutional power it did not exceed them and sustained the act. 6 It is to be noted that the provisions for distribution in the act now under consideration are subject to another act passed in the same year providing for the use of approximately four million dollars from the proceeds of the income tax as a school fund to be used for reimbursing cities and towns for amounts paid by them as salaries to school teachers when such salaries were in accordance with a certain scale established by the statute. 7 5 See supra page 167. 6 Duffy v. Treasurer & Receiver General. 234 Mass. 42 (1919). See also Dane v. Treasurer & Receiver General, 236 Mass. 280 (1920); Dane v. Treasurer & Receiver General, 237 Mass. 50 (1921), sustained, Dane v. Jackson. U. S. (1921). 7 See G. L. c. 70, § § 1-4 inc., infra page 664. General Provisions Relative to Taxation 175 G. L. c. 58 § 20] Distribution of Tax on Business Corporations Section 20. One sixth of every tax paid by any domestic busi- ness or foreign corporation under sections thirty to fifty-one, inclusive, of chapter sixty-three, shall be retained ,by the commonwealth. The remainder shall be distributed, credited and paid to the town of the commonwealth where the business of the corporation is carried on. If the corporation maintains an office, store or factory in more than one such town, said remainder shall be distributed, credited and paid to such towns in proportion to the value of the tangible property of the corporation in each of them on April first, or on such other day as the commissioner shall determine, which value shall be determined in such manner as he shall deem just; provided, that if the corporation does not conduct its business in Massachusetts and does not own any tangi- ble property in any town of the commonwealth, other than furniture and equipment reasonably necessary for the use of the clerk or other executive officers of the corporation, all said tax shall be retained by the commonwealth. Under the original corporate franchise tax act it was pro- vided that such proportion of the tax on each corporation sub- ject to the tax as corresponded to the proportion of its stock owned by persons residing in this commonwealth should be distributed to the several cities and towns in which such persons resided, according to the number of shares owned by persons resident in each city or town. 1 This provision formed an im- portant part of the original scheme of the corporate franchise tax, the purpose of which was to give to the towns a share of this tax corresponding to that which under the former system they had received from the tax on the shares of these corpora- tions, or, in other words, to measure the share of each town in the excise tax by the number of shares which under the former system would have been taxable in that town. 2 Such proportion of the tax on each corporation as corresponded to the number of shares owned by persons not residing in this commonwealth was retained by the commonwealth. In course of time other provisions were adopted for the dis- tribution of the tax on public service companies, 3 but the method 1 St. 1864, c. 208, § 8. 2 Worcester v. Board of Appeal, 184 Mass. 460, 466 (1904). 3 G. L. c. 58, § § 22, 23 and 24, infra pages 177, 178. 176 Taxation in Massachusetts [G. L. c. 58 § 20 of distribution of the tax on domestic business corporations re- mained unchanged until 1908. In that year it was provided that one-half of the tax upon domestic business corporations which would under the statutes previously in force have been paid to the towns in which the stockholders dwelt should be credited to the town in which the business of the corporation was carried on. 4 In 1910 the whole of the portion of the tax on each corporation proportionate to the shares held by resi- dents of the commonwealth was made distributable to the towns in which the business of the corporation was carried on. 5 The effect of this change was of course to decrease the proportion of the corporation tax distributed to residential towns and to increase the proportion distributed to manufacturing and commercial towns to a marked degree, but the constitutionality of the statutes which effected the change was not open to question, because it was clearly within the discretion of the legislature to determine whether the situs of the stock of a cor- poration, for purposes of taxation, should be the domicile of the stockholders or the place where the business of the corpor- ation was carried on. 6 The share of the commonwealth in the tax on domestic busi- ness corporations, representing the proportion of the stock held by non-residents, amounted each year to approximately one- sixth of the whole; and after the domicile of the stockholders had ceased to be a measure in the distribution of the tax among the cities and towns, in order to avoid the clerical work necessary to ascertain the domicile of the stockholders now required merely to fix the share of the commonwealth, it was provided that the share of the commonwealth should in each year constitute one- sixth of the whole. 7 In 1919 foreign business corporations doing business in Mass- achusetts were subjected to a tax similar to that imposed on domestic corporations, and the method of distribution being the same, 8 foreign corporations were included in the foregoing section of the statutes. * St. 1908, c. 614. 5 St. 1910, c. 456. 6 Supra, Part I, §'§ 44, 45. 7 St. 1919 c. 355, I, § 13. 8 St. 1919, c. 355. II, § 31. General Provisions Relative to Taxation 177 G.L.c. 58 §§21,22] Distribution of Tax on Trust Companies Section 21. Such proportion of the tax paid by each cor- poration, company or association under sections fifty-three to sixty, inclusive, of chapter sixty-three, except railroad, street railway, elec- tric railroad, telephone, telegraph, gas, electric light, gas and electric light and water companies, as corresponds to the proportion of its stock owned by persons residing in this commonwealth, shall be distributed, credited and paid to the several towns in which, from the returns or other evidence, it appears that such persons resided on April first preceding, according to the number of shares so held in such towns respectively. If stock is held by a fiduciary, the bene- ficiary shall be regarded as the shareholder for the purpose of dis- tribution under this section, and if a town is a shareholder, the distribution shall be the same as if the stock were owned by a resident thereof. This statute is the section of the original 1864 statute re- lating to the distribution of the corporate franchise tax, as amended from year to year ; but in course of time other provision has been made for almost every class of corporations and the only corporations now subject to its provisions are trust com- panies, and possibly a few banks established under the provi- sions of statute not now in force and a few corporations organized by a special act prior to 1831. Distribution of Tax on Street Railway Companies Section 22. The tax paid by each electric railroad and street railway company under sections fifty-three to sixty, inclusive, of chapter sixty-three shall be apportioned among the several towns in proportion to the length of tracks operated by such company in said towns respectively. The share of the tax paid by a street railway or an electric railroad company in respect of its tracks upon locations granted by the board having charge of metropolitan parks, of the Wachusett mountain state reservation or of the Greylock reservation shall be apportioned to the commonwealth, and credited by the state treasurer to the sinking fund of the loan to which the expenditure for the road, boulevard, park or reservation in which the tracks are located was charged. 178 Taxation in Massachusetts [G.L.c. 58 §§23,24 Prior to 1898 the tax paid by street railway companies was distributed to the towns in which the stockholders dwelt, in the same manner as the tax on business corporations, but in 1898 the present method of distributing the tax in proportion to the mileage of tracks in the respective towns was adopted. 1 Distribution of Tax on Railroad, Telephone and Telegraph Companies Section 23. The corporate franchise tax paid by railroad, telephone and telegraph companies shall be distributed, credited and paid to the towns of the commonwealth or shall be retained by the commonwealth in the manner following: Such part of said tax paid by each of said corporations as is paid on account of shares of its stock owned by non-residents of Massachusetts shall be retained by the commonwealth. The remainder of said tax shall be distributed, credited and paid to the several towns in proportion to the total assessed value of property actually taxed in each town for the pre- ceding year. The tax on the franchises of railroad, telephone and telegraph companies was originally distributed in the same manner as the tax on other corporations, that is to the towns of the residence of the stockholders, and, in the case of stock owned by persons not residents within the commonwealth, retained by the com- monwealth. In 1916 the present method was adopted. 1 It is based on the ground that railroads, telephone and telegraph companies derive their income from people of all parts of the commonwealth, and that the most practical method of dis- tributing the tax with approximate justice is to allow all the cities and towns of the commonwealth to share in its distri- bution. 2 Distribution of Tax on Gas, Electric Light and Water Companies Section 24. The corporate franchise tax paid by gas, electric light, gas and electric light and water companies shall be distributed, credited and paid to the towns of the commonwealth or shall be retained 1 St. 1898. c. 578. § 4. 1 St. 1916, c. 299, § 1. 2 See Report of Special Commission on Taxation Appointed under Chapter 134, Resolves of 1915, p. 21. General Provisions Relative to Taxation 179 G. L.c. 58 §§24A,25] by the commonwealth in the manner following : Such part of said taxpaid by each of said corporations as is paid on account of shares of its stock owned by non-residents of Massachusetts shall be retained by the commonwealth. The remainder of such tax shall be distributed, cred- ited and paid to the town of the commonwealth where the business of the corporation is carried on; and if any such corporation carries on its business in more than one such town, this part of the tax paid by it shall be distributed, credited and paid to such towns in pro- portion to the value of the works, structures, real estate, machinery, poles, underground conduits, wires and pipes of the corporation in each of them on April first, as determined from the returns or in any other manner. Until 1916 the tax on the stock of gas, electric light and water companies was distributed to the towns in which the stockholders dwelt, the stock of non-residents being credited to the commonwealth, but in 1916 upon the recommendation of a special commission appointed in the preceding year, 1 the present method was adopted. 2 Distribution of Interest on Overdue Corporation Taxes Section 24 A (St. 1921, chap. 375 § 1). Interest received by the commonwealth on overdue taxes from corporations under section seventy of chapter sixty-three, shall be distributed, credited and paid to the several towns in the same manner and proportions as the prin- cipal of such taxes is distributed, credited and paid. Determination of Amounts to be Distributed Section 25 (as amended by St. 1921, chap. 375, § 3). The com- missioner, subject to appeal to the board of appeal, shall ascertain and determine the amount due to. each town under sections twenty to twenty-four A, inclusive, notify the treasurer of each town thereof and certify the amount, as finally determined, to the state treasurer, who shall thereupon pay the same. This statute is in substantially the same form as when origi- nally enacted in 1865. 1 A decision by the board of appeal, while final and conclusive as between two towns upon the question of 1 Report of Special Commission on Taxation Appointed under Chapter 134, Resolves of 1915, p 22. 2 St. 1916, c. 299. § 2. 1 St. 1865, c. 283, § 15. 180 Taxation in Massachusetts [G. L. c. 58 § 26 the right of either town to a share in the corporation tax, is not binding upon individual stockholders or others who are not parties to the proceedings, upon the question of the domicile of a stockholder, or conversely upon the town in a controversy with a stockholder, even if the domicile of such stockholder was the very question in issue before the board of appeal. 2 Returns of Bank Stock held by Fiduciaries and Partnerships Section 26. A guardian who holds, or whose ward holds, shares of stock in any corporation the tax on whose shares is distrib- uted in whole or in part according to the residence of the shareholder, including banks located in the commonwealth liable to taxation, and an executor, administrator, trustee or other person who holds in trust any such stock, shall annually, between April first and tenth, return under oath to the commissioner the names and residences, on the first day of that month, of themselves and of all such wards or other persons to whom any part of the income from such stock is payable, the number of shares of stock so held and the name and location of the corporation. A partnership shall annually, between April first and tenth, make a like return, stating the amount of such stock owned by the firm, the names and residences of all the partners and the proportional interest or ownership of each partner in said stock. If a guardian, executor, administrator, trustee or partnership neg- lects to make the returns required by this section on or before April tenth of each year, the commissioner shall give notice by mail, postage prepaid, to such fiduciary or partnership of such default. If such fiduciary or partnership omits to file said return within thirty days after such notice of default has been given, he or it shall forfeit to the commonwealth not less than five nor more than ten dollars for each day for fifteen days after the expiration of said thirty days, and not less than ten nor more than two hundred dollars for each day thereafter during which such default continues, or any other sum, not greater than the maximum forfeiture, which the court may deem just and equitable. Such forfeiture may be recovered as pro- vided in chapter sixty-three. 2 Babcock v. Slater, 212 Mass. 434 (1912). General Provisions Relative to Taxation 181 G.L.c. 58 §§27,28] This section dates back to the original corporate franchise tax act of 1864 1 and makes possible what is sometimes known as the "secondary allocation" of the corporate franchise tax; that is stock standing in the name of a fiduciary is credited to the town in which the beneficiary lives rather than to the domicile of the fiduciary. The changes in recent years in the laws relating to the distribution of the corporation tax 2 have made this law inapplicable to all corporations except those engaged in banking. It applies however to the direct tax on national bank stock as well as to the corporate franchise tax on trust companies. Repayment by the State of Illegal Corporation and Inheritance Taxes Section 27. If it shall appear that a legacy and succession tax or a tax or excise upon a corporation, foreign or domestic, which has been paid to the commonwealth, was in whole or in part illegally exacted, the commissioner may, with the approval of the attorney general, issue a certificate that the party aggrieved by such exaction is entitled to an abatement, stating the amount thereof. The treas- urer shall pay the amount thus certified to have been illegally exacted, with interest, without any appropriation therefor by the general court. No certificate for the abatement. of any tax shall be issued under this section unless application therefor is made to the com- missioner within the time prescribed by law for beginning legal proceedings to obtain a repayment of the tax. This section shall be in addition to and not in modification of any other remedies. This section was first enacted in 1919 to cure a defect in the tax laws previously existing. Until this statute was enacted the commonwealth had no power to refund an inheritance or corporation tax admittedly illegal without requiring the taxpayer to go through the form of instituting legal proceedings. The case thus instituted could be allowed to go to judgment by agree- ment and the judgment collected from the state treasury. This statute without depriving the commonwealth of any substan- tial right avoids unnecessary trouble and expense for the tax- payers. Assessment of Deposits with State Treasurer Section 28. The commissioner shall annually assess upon every corporation or organization required by law to make deposits in 1 St. 1864, c. 208. § 4. 2 G. L. c. 58, § 20, supra page 175. 182 Taxation in Massachusetts [G.L.c. §§ 29,30 trust with the state treasurer one twentieth of one per cent of the average of such deposits by it for the year last preceding such assess- ment. Such assessment shall be collected in the same manner as taxes upon corporations. This statute originated in 1891 as a charge by the treasurer and receiver general of $2500 annually upon the corporations making the deposits for such extra clerical assistance as was required for the care and custody of the deposits. 1 In 1901 it was put into its present form. 2 Annual Reports of Commissioner Section 29 requires the commissioner of corporations and tax- ation to make an annual report to the legislature, in addition to his report relative to the apportionment of the state tax, con- taining (1) a statement of the transactions of his office for the preceding year, with tables of exempt property; (2) a table of the aggregate valuation of the counties, cities and towns; (3) a table of the amounts of property omitted from the regu- lar assessment and assessed in December as omitted property; (4) a statement of the amount of income assessed under the income tax act, and the probable amount of taxes therein. 1 Section 30 authorizes the commissioner after the lapse of five years to destroy certain returns required to be filed with him, i St. 1891, c. 233. 2 St. 1901, c. 281. 1 Other duties of the commissioner are as follows: Determination of value of machinery, poles, etc., of telephone and telegraph companies, Chap. 59, § § 39, 42, infra page 270. Furnishing books to assessors, Chap. 59, § 45, infra page 273. Abatement of taxes on telephone and telegraph companies. Chap. 59, § 73, infra page 302. Recommending revision of tax, Chap. 59, § 76, infra page 306. Duties relative to taxation of forest lands, Chap. 61, § § 4, 15 infra page 426. Duties relative to plates, etc. for stock transfer stamps, and contracts thereunder, Chap. 64, § 4, infra page 600. Power to make rules and regulations, and prescribe forms, etc. in taxation of stock transfers, Chap. 64 § 7, infra, page 600. Duties under income tax, Chap. 62, § § 35-53, infra pages 491 to 501 inc. Duties relative to corporation taxes, Chap. 63, § § 44-51, 67, 69, 71, infra pages 569 to 573, 589, 591, 593. Duties under inheritance tax. Chap. 65, infra pages 605 to 663 inc. Duties as commissioner of corporations, Chap. 156, § 3. Duty to petition for appointment of administrator of deceased person in certain cases, Chap. 193, § 3. Assessment of Local Taxes 183 G.L.c. 59] CHAPTER 59 ASSESSMENT OF LOCAL TAXES The Origin and Development of the Statutes The method of assessing the direct and general tax now in force in Massachusetts has come down to us from the first set- tlement of the colony with few radical alterations. State, county and town taxes, the two former apportioned upon the different towns and assessed with the town tax by the local assessors by an equal assessment upon polls and estates, have been familiar from the earliest times. 1 It was provided in 1651 that "the lands and estates of all men shall be rated for all town charges . . . where the lands and estates shall lie, and their persons where they dwell." All persons were to be assessed and rated at one shilling and eight pence by the head. The estates of all merchants, shopkeepers and factors were to be "assessed by the rule of common estimation, according to the will and doom of the assessors." "All such persons as by the advantage of their arts and trades are more enabled to help bear the public charge than common labourers and workmen, as butchers, bakers, brewers, victualers, smiths, carpenters, tay- lors, shoemakers, joiners, barbers, millers and masons with all other manual persons and artists, such are to be rated for re- turns and gains, proportionable to other men for the produce of their estate." 2 In 1665 it was provided that "gentlemen merchants strangers" bringing goods into the colony and making "their escapes without any payment to support the government of the place" might be assessed "according to the cargoes they shall bring into the country." 3 It will thus be seen that there was established during the colonial period a poll tax, a tax on real estate "where the lands shall lie," a tax on personal property where the owners dwelt, and a tax on non-residents doing business in the colony; and on this same basis, subject to certain exceptions and qualifica- tions which will be noted later, the present system of taxation 1 Colony Ordinance, 1651, Anc. Chart., p. 69; Newburyport v. Essex County Commissioners, 12 Met. 211, 217 (1846). 2 Anc. Chart., pp. 69, 70. 3 Anc. Chart., p. 73. As to the methods of valuation employed during the colonial and provincial periods, see supra page 87. 184 Taxation in Massachusetts [G.L.c. 59 is established. Not only can the general system of taxation be traced back to the colonial legislation without any funda- mental alteration, but the same is true of the method of appoint- ing assessors, 4 of collecting taxes, 5 of appointing collectors, 8 of fixing exemptions 7 and of granting abatements. 8 Students of history will remember that Parliament main- tained its independence and finally secured supremacy over the royal power more than in any other one way by refusing to "grant" to the king any permanent source of revenue, and that since the time of Magna Charta each assessment of taxes in England has been levied by authority of a special act of Parlia- ment. The same system was employed in Massachusetts under the provincial government, and the general court each year enacted a statute which contained not only authority for the assessment of the annual province tax, fixed the amount thereof and apportioned it upon the various towns, but included all the statutory provisions in force in the province relating to exemptions from taxation and to the assessment, abatement and collection of direct taxes of every kind, for the province, counties, towns or subordinate districts, the amount of the local taxes being of course fixed by the appropriations of the respective towns. These provisions were enacted year after year without any alteration until some evil made itself felt and was rectified in the tax act of the ensuing year and in the acts of the years that followed. These statutes continued the system already established, namely a tax equally assessed on polls, on real estate where it lay, on personal estate where the owner dwelt and on incomes from a trade or profession. In 1742 appeared the first exception to the rule that personal property is taxed where the owner dwells, and thereafter merchants, traders and factors were assessed in the towns in which their shops were located. 9 Other exceptions came later. 10 In 1785 a statute relating to assessors and their duties made 4 G. L. c. 41, § § 24-27 inc., supra, page 154. 5 G. L. c. 60, infra pages 319 to 425 inc. 6 G. L. c. 41, § § 1, 39, supra pages 150, 158. 7 G. L. c. 59, § 5, infra pages 193 to 217 inc. 8 G. L. c. 59, § § 59-74 inc., infra pages 282 to 304 inc. 9 Infra page 239. 10 Machinery employed in manufacture in 1830; horses and cattle in 1821; no others before the Revised Statutes. Assessment of Local Taxes 185 G. L. c. 59] permanent provision for the abatement of taxes " and conse- quently the clauses relating to abatement were omitted from the subsequent tax acts. It was further provided in the same statute that all county, town, district, plantation, precinct and parish taxes should be assessed by the local assessors in accord- ance with the rules contained in the latest tax act, 12 and the periodic tax acts were no longer passed annually and no longer in terms referred to the local taxes, but it was not until the Revised Statutes were enacted in 1836 that the general pro- visions relating to the assessment of taxes were embodied in a statute intended to be permanent. Since that date the periodic tax act, now passed annually, has contained only the assessment and apportionment of the state tax. The county taxes have been imposed by authority of fixed and general laws, but the state, county and town taxes have all been actually assessed by the local assessors in accordance with statutes remaining in force indefinitely until amended or repealed by the legislature and defining with precision what property is taxable and what is exempt and where and to whom taxable property should be assessed. The statutes relating to the assessment of taxes have expanded from a few paragraphs in the Colonial Laws and eleven pages in the Revised Statutes to twenty-three pages in the Gen- eral Laws as the more complex life of the community required the introduction of greater detail in the directory provisions of the statutes and the development of modern industries made necessary numerous exceptions to the old and simple method of taxing "lands where they lie and persons where they dwell," but the underlying principles have remained unaltered. There have however been introduced in recent years excep- tions to the long established rules which have in some instances effected considerable changes in the application of the tax laws, although the old statutes embodying the underlying principles have never been repealed. Thus the tendency, already noted, to tax tangible personal property at the place at which it was kept rather than at the domicile of the owner culminated in 1918 in the enactment of a statute providing that all tangible personal property, except ships and vessels, should be taxed to the owner in the town where it was situated on the first day of April. " St. 1785, c. 50, § 9. " St. 1785, c. 50, § 8. 186 Taxation in Massachusetts [G. L. c. 59 § 1 The taxation of intangible personal property for obvious reasons did not trouble the colonial lawmakers; 13 but when this class of property came into existence in such quantities as to constitute an important part of the taxable property of the commonwealth, the difficulties inherent in attempting to tax it at its capital value as personal property in the town in which the owner lived led eventually to the removal of this class of property from the jurisdiction of the local assessors, first in 1864 by the enactment of the corporate franchise tax 14 and the exemption of shares in domestic corporations from local tax- ation, and finally in 1916 by the enactment of the income tax, 15 which provided for the taxation of all other forms of taxable intangible property upon its income by the state and exempted all such property from local taxation. These statutes made indeed a radical change in the taxing system of the commonwealth, but to understand their meaning and intent and their relation to the other provisions of the law, the framework of the law of taxation, which has come down to us substantially unaltered for nearly three centuries, must also be appreciated and understood. The Poll Tax Section 1. In the year nineteen hundred and twenty-four and annually thereafter a poll tax of two dollars shall be assessed on every male inhabitant of the commonwealth above the age of twenty, whether a citizen of the United States or an alien. Poll taxes were in force in most of the American colonies, and before the Revolution a large proportion of the public rev- enues was raised by poll taxes. Under modern conditions, how- ever, poll taxes are not considered an equitable form of taxation, and in some states they have been prohibited by constitutional provision. In Massachusetts the poll tax is still in force, but is of less relative importance than formerly. It was provided in the colonial statutes that a list should be made of all the male persons in each town from sixteen years old and upwards and every such person (except magistrates and 1:1 The first mention of intangible property in the Massachusetts tax acts is in St. 1694-5 c. 2, in which "money at interest" is specifically included in the subjects of taxation. 14 Chapter 63, infra page 531. 15 Chapter 62, infra page 428. Assessment of Local Taxes 187 G.L. c. 59 §1] elders of churches) should be assessed and rated one shilling and eight pence by the head. 1 During the colonial period from thirty-five to forty per cent of the total revenues from direct taxation was raised by poll taxes. The annual tax acts of the provincial period required the assessors to assess all ratable male polls above the age of sixteen years at a certain rate the poll, the amount varying from year to year. 2 During the provincial period and in the early tax acts enacted after independence was established it was the general rule to levy one third of the direct taxes upon polls. In the tax acts enacted after 1814 the assess- ors were required to assess one-sixth of the whole sum to be raised on the polls, provided the tax on each poll did not exceed one dollar and a half, 3 and this provision was retained in the Revised Statutes; but the poll tax was limited to persons from sixteen to seventy years of age. In 1843 the poll tax was further limited to persons from twenty to seventy years of age, 4 but in the following year the exemption of persons over seventy, except paupers and persons under guardianship, was stricken out, 5 and since that time there has been no specific age limit to the assessment of the poll tax; but persons who by reason of age are unable to contribute fully to the public charges are exempt from taxation upon their polls. 6 In 1876 it was provided that women who registered as voters should be subject to the poll tax 7 and in 1879 that the whole state and county taxes should be assessed upon the polls to an amount not in excess of one dollar for each tax upon each poll. 8 In 1901 the statute imposing a poll tax upon women voters was repealed, and a uniform poll tax of two dollars upon every male inhabitant above the age of twenty years was established. 9 In 1919, in order to make partial provision for the payment of 1 Anc. Chart., p. 70. 2 For example, in the act of 1715-16 (St. 1715-16, c. 11, §2) the poll tax was five shillings; in the act of 1777-78 (St. 1777-8 c. 13, § 2), the poll tax was twenty shillings. 3 For example. St. 1821, c. 107, §3; St. 1830 c. 151. §3. 4 St. 1843, c. 87; Opinion of the Justices, 5 Met. 591. 595 (1843). 5 St. 1844, c. 145. 6 G. L. c. 59, §5, cl. 18. 7 St. 1876, c. 225, §§1, 7. 8 St. 1879. c. 299. § 1. St. 1901, c. 424, § 1. As to the registration of persons liable to the poll tax see supra page 164. As to where poll taxes are assessed see injra page 220. 188 Taxation in Massachusetts [G.L.c. 59 §2 a "bonus" to residents of the commonwealth who served in the army or navy of the United States during the war with Ger- many, an additional poll tax of three dollars was imposed for a five year period, making the total poll tax on each person liable thereto five dollars for each year from 1919 to 1923 inclusive. 10 Each town was made responsible to the state for three dollars for each person living within its limits liable to the poll tax, whether the tax was collected or not. Persons entitled to receive the bonus, and veterans of the Spanish war and the Philippine in- surrection are entitled to have the additional poll tax abated. 11 It was early held that the polls of aliens may within the intent of the constitution be ratable polls when they were made liable by the legislature to be rated to public taxes. 12 It was held in 1842 that the polls of minors who are in the service of a manufacturing corporation and receiving salaries therefrom cannot legally be assessed to such corporation as their "mas- ter." 13 The assessment of half a poll tax upon an individual is, it seems, illegal. 14 A poll tax may be constitutionally levied without notice to the persons assessed, since a notice would be of no advantage to them. 15 What Property is Subject to Taxation Section 2. All property, real and personal, situated within the commonwealth, and all personal property of the inhabitants of the commonwealth wherever situated, unless expressly exempt, shall be subject to taxation. Although this section of the General Laws and the two sec- tions immediately following it purport to establish what prop- erty is subject to taxation in this commonwealth, no property can be lawfully taxed unless the statutes further define where and to whom it is to be assessed. Accordingly the subsequent sections which purport merely to fix the place of assessment and the person who should be assessed for property made taxable i° St. 1919, c. 283. « St. 1920, c. 608. By St. 1918, c. 49 as amended by St. 1919, c. 9 persons in the army or navy were exempt from the entire poll tax during the war. These statutes were repealed by St. 1921, c. 226. 12 Opinion of the Justices, 7 Mass. 523 (1811). 13 Boston & Sandwich Glass Co. v. Boston, 4 Met. 181 (1842). 14 Southampton v. Easthampton, 8 Pick. 380 (1829). " Hagar v. Reclamation District, 111 U. S. 701 (1884). Assessment of Local Taxes 189 G. L. c. 59, § 2] by the previous sections do in fact establish what property is taxable. 1 For example, although the statute has stood in sub- stantially its present form for many years and the property of non-residents and of foreign corporations situated within the commonwealth is clearly included within its provisions, until 1903 in the case of foreign corporations and 1909 in the case of non-residents there was no authority for taxing such property in any particular city or town within the commonwealth unless the property was of such a character as to fall within one of the exceptions to the general rule that personal property is assessed in the domicile of its owner, and consequently all other such property escaped taxation in this commonwealth alto- gether. 2 Legislation enacted in 1909 3 to a great extent remedied this condition ; but it is still true that certain property situated within the commonwealth and not exempted from taxation is not taxable, because no statute declares where and to whom it shall be assessed. 4 Conversely it has been held that property which the statutes declared should be assessed to the owner in a certain place is taxable accordingly, although not included within the provisions of the statute which declared generally what property should be taxable in the commonwealth. 5 Until 1909 the statutes authorized the taxation of tangible property of inhabitants of this state even if permanently lo- cated in another state, 6 but it may be doubted whether in prac- tice much revenue was raised by taxation upon such property. 1 G. L. c. 59, § § 9 to 19 inc., infra. 2 Boston Investment Co. v. Boston, 158 Mass. 461 (1893). 3 St. 1909, c. 516, § 2, now G. L. c. 59, § 18, clause first, infra page 239. 4 See the following cases holding that certain classes of property situated within the commonwealth were not taxable because the statutes in force at the time did not provide where and to whom they were to be assessed. Hoadley v. Essex County Commissioners, 105 Mass. 519 (1870). (The excess of the value of shares in an unincorporated association over the value of the property). Boston Investment Co. v. Boston. 158 Mass. 461 (1893). (Money of a foreign corporation deposited in a national bank in this commonwealth). City National Bank v. Charles Baker Co., 180 Mass. 40 (1901) (Property in the hands of the receiver of an insolvent corporation). Williams v. Boston, 208 Mass. 497 (1911) (The equitable rights of a person holding a contract for the purchase of land who has made partial payment). So also at the present time money and intangible property of non-residents kept within the commonwealth and used in connection with a business carried on here or otherwise subject to the taxing jurisdiction of this commonwealth (see supra, Part I, § § 44, 45) is not actually taxed. 5 Leonard v. New Bedford, 16 Gray 292 (1860). 6 Bemis v. Aldermen of Boston, 14 Allen 366 (1867); Spinney v. Lynn, 172 Mass. 464 (1899). 190 Taxation in Massachusetts [G.L.c. 59 §3 When decisions of the supreme court of the United States held that a state had no power to tax tangible personal property perma- nently located outside its limits, 7 the Massachusetts statutes were amended accordingly, 8 and the section of the statutes now under consideration must be construed in the light of the statute exempting from taxation merchandise, machinery and animals owned by inhabitants of this commonwealth but situated in another state. 9 Intangible personal property belonging to an inhabitant of this commonwealth but situated in another state is still subject to taxation by authority of this commonwealth; but all intangible personal property which is subject to direct taxation in the hands of the owner by the laws of this common- wealth is reached by means of the income tax and is not subject to taxation under this chapter. Property of such a nature that it cannot be lawfully sold, such as intoxicating liquors, is none the less taxable; 10 and the property of a person is taxable although he is not qualified to vote for the officers by whom the taxes are assessed. 11 What is Real Estate for the Purpose of Taxation Section 3. Real estate for the purpose of taxation shall include all land within the commonwealth and all buildings and other things erected thereon or affixed thereto. Mortgages upon buildings or other things, which with the land upon which they are erected or to which they are affixed are taxable as real estate as defined herein, shall be deemed mortgages of real estate for the purpose of taxation, and shall be taxed under sections eleven to fourteen, inclusive. All buildings erected on or affixed to land are taxed as real estate regardless of any private agreements which may make the buildings personal property as between the parties inter- ested. 1 A building affixed to land must be taxed to the owner of the land, and cannot be taxed to anyone else, even if taxed as 7 Supra, Part 1, § 43. 8 St. 1909, c. 516, § 1. ■ 9 G. L. c. 59, §4, clause 19. 10 Dunbar v. Aldermen of Boston, 101 Mass. 317 (1869). » Wheeler v. Wall, 6 Allen 558 (1863). 1 Flanders v. Cross, 10 Cush. 514 (1852); Milligan v. Drury, 130 Mass. 428 (1881). Assessment of Local Taxes 191 G.L.c. 59 §4] real estate.- The tax on land and buildings is one and indivis- ible, 3 and the separate valuation of the buildings- 4 is required merely to secure a more specific valuation of each portion of what really constitutes but one item of real estate. 5 Machinery, on the other hand, is not taxable as real estate, but is taxable only as personal property, even if so attached to the building in which it stands as to constitute real estate as between grantor and grantee. 6 Water power for mill purposes is not a distinct subject of taxation and cannot be taxed independently of the land to which it belongs. 7 As under the mill acts the power may be used by the person who first appropriates it, it is not treated as property until it is appropriated, and when it is appropriated and used for power it is as between different owners and mu- nicipalities taxed merely as adding to the value of the property to which it is applied; 8 but power raised in this state and applied in another state may be taxed as an element of value of the land upon which the power is raised. 9 When a mill privilege is situated partly in this state and partly in another state, it is proper in assessing the privilege in this state to take as its value the same proportion of the entire value as the fall in the river in this state bears to the entire fall in the river be- longing to the privilege. 10 What Personal Property is Subject to Taxation Section 4. Except as provided in the following section and in chapters sixty-two and sixty-three, personal estate for the purpose of taxation shall include: 2 McGee v. Salem, 149 Mass. 238 (1889). 3 Phinney v. Foster, 189 Mass. 182 (1905). 4 G. L. c. 59, § 46, infra page 277. 5 Massachusetts General Hospital v. Somerville, 101 Mass. 319, 327 (1869), Tremont & Suffolk Mills v. Lowell, 163 Mass. 283 (1895). 6 Hamilton Manufacturing Co. v. Lowell, 185 Mass. 115 (1904). 7 Boston Manufacturing Co. v. Newton, 22 Pick. 22 (1839); Lowell v. Middlesex County Commissioners, 6 Allen 131 (1863); Pingree v. Berkshire County Commissioners, 102 Mass. 76 (1869); Farmington River Water Power Co. v. Berkshire County Commissioners, 112 Mass. 206 (1873); Fall River v. Bristol County Commissioners, 125 Mass. 567 (1878) ; Lowell v. Middlesex County Commissioners, 152 Mass. 372 (1890); Essex Co. v. Lawrence, 214 Mass. 79 (1913). 8 Boston Manufacturing Co. v. Newton, 22 Pick. 22 (1839). 8 Blackstone Manufacturing Co. v. Blackstone, 200 Mass. 82 (1908). 10 Blackstone Manufacturing Co. v. Blackstone, 211 Mass. 14 (1912). 192 Taxation in Massachusetts [G.L.c. 59 §4 First, Goods, chattels, money and effects, wherever they are; ships and vessels at home or abroad, except as provided in section eight of this chapter and in section sixty-seven of chapter sixty-three. Second, Money at interest, and other debts due the person to be taxed more than he is indebted or pays interest for; but not including in such debts due him or indebtedness from him any loan on mortgage of real estate, taxable as real estate, except the excess of such loan above the assessed value of the mortgaged real estate. Third, Public stocks and securities, bonds of railroads and street railways and stocks in turnpikes, bridges and moneyed corporations within or without this commonwealth. This section first appeared in the annual tax act of 1777-8 r as a part of the directions to the assessors to be included in the warrant from the treasurer of the state and was continued in the periodic tax acts until the Revised Statutes and has been repeated in the subsequent revisions and codifications of the tax law although under the legislation now in force it is somewhat misleading. Thus the apparent meaning of the first clause is of course limited by the inability of a state to tax property not within its jurisdiction, and the broad phraseology of the statute must be construed in connection with recent decisions and legislation referred to elsewhere so as not to include tangible property per- manently located in another state. 2 So also the vitality has been almost entirely removed from the second and third clauses by the enactment of the income tax and the almost complete removal of intangible property from the sphere of local taxation. 3 It is believed that the second i St. 1777-8, c. 13, § 2. 2 Supra, Part 1, § 43. 3 G. L. c. 62, infra page 428. Prior to the enactment of the income tax act it was held that under clause second money deposited in a bank but at the immediate command of the taxpayer was "money" and not a "debt due," Gray v. Street Commissioners of Boston, 138 Mass. 414 (1885) ; that not every debt was taxable to some one as there might be a considerable balancing of indebtedness, Gray v. Boston, 15 Pick. 376 (1834) ; that a claim disputed in toto was not a "debt," Lowell v. Street Commissioners of Boston, 106 Mass. 540 (1871) ; Powers v. Worcester, 210 Mass. 471 (1912) ; but that a claim disputed oijly as to amount was a "debt" as to the amount admitted to be due, Deane v. Hathaway, 136 Mass. 129 (1883) ; that money at interest was not taxable unless it was a debt, Williams v. Boston, 208 Mass. 497 (1911); that bonds secured by mortgage of real estate were not taxable although the bond-holder did not himself hold the mortgage, Knight v. Boston, 159 Mass. 551 (1893) ; but that bonds secured by mortgage of real estate in part outside the common- Assessment of Local Taxes 193 G.L.c. 59 §5] and third clauses of the act are now in force only in the following respects: (1) These clauses are material in governing the dis- tribution of the tax on national bank stock; 4 (2) If an owner of intangible property of the classes which would be taxable under these clauses but for the income tax act fails to include the income derived therefrom in his income tax return, he is made liable to taxation under these clauses; 5 (3) Intangible prop- erty taxable under these clauses, so far as it is in the form of "securities" is treated for the purposes of the corporate franchise tax as securities which if owned by a natural person resident in this commonwealth would be liable to taxation. 6 Exemptions from Taxation GENERAL PRINCIPLES AND THE HISTORY AND DEVELOPMENT OF THE STATUTES The exemption of any property from taxation results in in- creasing the burden of taxation upon the other property in the same taxing district, and unless an exemption can be justified on some rational ground, it will result in disproportionate taxation. As the constitution permits only proportional taxation, all prop- erty within the commonwealth which is owned and held in such a way that it ought to be available to its owner to increase his ability and enlarge his duty in defraying the expenses of the government must be subjected by law to the annual tax levy. A statute exempting property from taxation is unconstitutional unless it applies only to property already taxed in some other wealth, or in part secured by exempt real estate were taxable for their full value, Brooks v. West Springfield, 193 Mass. 190 (1906); Sweetser v. Manning, 200 Mass. 378 (1909). Under the third clause it was held that bonds issued by a state or city to aid in the construction of a public work by a private corporation were "public stocks," Hall v. Middlesex County Commissioners, 10 Allen, 100 (1865), but that bonds issued by a public service corporation were not "public stocks," Hale v. Hampshire County Commissioners, 137 Mass. Ill (1884). Shares in an unincorporated association though transferable like shares in a corpora- tion were not taxable under this clause, Hoadley v. Essex County Commis- sioners, 105 Mass. 519 (1870). A savings bank was not taxable for stock in which money received on deposit was invested, Worcester County Institution for Savings v. Worcester, 10'Cush. 128 (1852). Stocks bought by a stock- broker on a margin for customers were taxable to the broker, Chase v. Boston, 180 Mass. 458 (1902). 4 G. L. c. 63, § § 5-7 inc., infra page 513. 5 G. L. c. 62, § 49, infra page 500. 6 G. L. c. 63, § 30, infra page 541. 194 Taxation in Massachusetts [G.L.c. 59 §5 way, or to property devoted to a public or semi-public use, or to property of insignificant value and of such a character that it may be supposed to be owned by everyone alike. 1 It is in accordance with the policy of our law that all the property of the inhabitants should contribute in fair and just proportion to the public burdens. To this rule there are except tions carefully defined by statute; but the burden of proof is on every party who claims exemption from taxation to show that his case comes within some one of these exceptions. Any doubt arising must operate most strongly against the person claiming the exemption. 2 So also one claiming an exemption must come into court with clean hands. No person or corpora- tion can claim an exemption upon property held in violation of law or in excess of the authority granted to him or it by the legislature. 3 Under the colonial laws 4 the following exemptions were established: (1) Lands lying common for the free feed of cattle, to the use of the inhabitants in general, whether belonging to towns or particular persons. (2) The polls of magistrates and elders of churches. (3) All cattle of all sorts under a year old. (4) All hay and corn in the husbandman's hand "because all meadow, arable ground and cattle are ratable as aforesaid." (5) The polls of "such persons as are disabled by sickness, lame- ness or other infirmity." (6) Estates of land in England. (7) The estates of ordained ministers "provided this freedom shall extend only to such estate as is their own proper estates, and under their own custody and improvement." Under the annual tax acts of the provincial period the gov- ernor, lieutenant-governor and their families, the president, fel- lows and students of Harvard College, settled ministers and grammar-school masters were exempted from being taxed for 1 Opinions of the Justices, 195 Mass. 607 (1908), and see supra, Part I, §53. 2 Redemptorist Fathers v. Boston, 129 Mass. 178 (1880) ; Third Congrega- tional Society v. Springfield, 147 Mass. 396 (1888); Milford v. Worcester County Commissioners, 213 Mass. 162 (1912); Boston Lodge of Elks v. Boston. 217 Mass. 176 (1914); Sullivan v. Ashfield, 227 Mass. 24 (1917). See how- ever Masonic Education, etc., Trust v. Boston, 201 Mass. 320, 326 (1909). 3 Evangelical Baptist, etc., Society v. Boston, 204 Mass. 28 (1910). See however Rural Cemetery v. Worcester County Commissioners, 152 Mass. 408 (1890), infra page 206. * Anc. Chart., pp. 69-73 Assessment of Local Taxes 195 G. L. c. 59, § 5] their polls and for their estates in their own hands and under their actual management and improvement; and other persons who through age, infirmity or extreme poverty were not in the judgment of the assessors capable to pay towards the public charges might be exempted from the tax on their polls and so much of their estates as the assessors saw fit. In addition to these exemptions the few charitable and edu- cational corporations which existed in the province had been granted certain exemptions in their respective charters, and it had been the uniform practice to exempt without special authority churches, schoolhouses, turnpikes and other property devoted to the public use. 5 Machinery in cotton and woollen manufactories was ex- empted from taxation in 1818, and a like exemption was granted to the owners of sheep. 6 These exemptions were established for the purpose of encouraging cotton and woollen manufacture and constituted a violation of the requirement of proportional tax- ation in the constitution of Massachusetts. No one seems to have taken it upon himself to challenge the validity of an assess- ment which was based upon the statutes authorizing such exemp- tions, but in 1828 the exemption was repealed by the legislature 7 and at the same time professors and students of the various colleges, ministers of the gospel and masters of schools and acad- emies were required to be assessed upon their polls and estates "in the same manner as the other citizens of this common- wealth." In the tax acts of the early years of the last century it was provided "that all persons who have the management of the estates of Harvard, Williams and Bowdoin colleges respectively shall not be assessed for the same." 8 In 1821 first appeared the express exemption of houses of religious worship and the exemption in much its present form of young cattle, household furniture, wearing apparel, farming utensils and the necessary tools of mechanics. 9 In the tax act of 1830 the estates of Har- vard, Williams and Amherst colleges, the academies estab- 5 Infra pages 217, 218. e St. 1818, c. 147. 7 St. 1828, c. 143. 8 See Harvard College v. Kettell, 16 Mass. 204 (1819). « St. 1821, c. 107. 196 Taxation in Massachusetts [G.L.c. 59 §5, CI. 1,2 lished by law, the Massachusetts General Hospital, the Berkshire Medical Institution and the Boston Athenaeum were exempted. 10 In the Revised Statutes of 1836 the exemption of literary, be- nevolent, charitable and scientific institutions was put into general form, the exemption of property of the United States and of the commonwealth was recognized, and the other ex- emptions (consisting principally of household furniture, clothes, tools, young cattle and the estates of persons unable to pay, houses of religious worship and tombs and rights of burial) were continued. 11 The development of the exemption laws since the enactment of the Revised Statutes is discussed in detail in the following pages. Exemptions Continued. — Property of the United States and of the Commonwealth Section 5. The following property and polls shall be exempt from taxation: First, Property of the United States. Second (as amended by St. 1921, chap. 389). Property of the commonwealth, except real estate of which the commonwealth is in possession under a mortgage for condition broken, lands in Boston known as the commonwealth flats, if leased for business purposes, lands and flats lying below high water mark in Provincetown harbor, belonging to the commonwealth of Massachusetts and occupied by private persons by license of the division of water ways and public lands of the department of public works, together with all wharves, piers and other structures which have been built thereon subsequent to the twenty- second day of May, nineteen hundred and twenty, and those which may hereafter be built on said lands and flats, in conformity with permits or licenses granted therefor by said division, which shall be taxed to the persons holding such permits or licenses, buildings erected by lessees under section twenty-six of chapter seventy five, and property taxable under chapter five hundred and seventy five of the acts of nineteen hundred and twenty. The exemption from taxation under authority of the state of property of the United States is of course merely a necessary recognition of the limits of the state's constitutional power. The 10 St 1830, c. 151, § 6. 11 R. S. c. 7, §5. Assessment of Local Taxes 197 G. L. c. 59, § 5, CI. 3] principles which require the exemption from state taxation not only of the property of the United States but of its agencies and instrumentalities as well, are discussed in another portion of this work. 1 The exemption of the property of the commonwealth from taxation applies to property from which revenue is derived as well as to property held for governmental purposes, 2 unless the property is within the exact terms of the exception to the exemption. 3 The tax upon land leased for building purposes under the foregoing statute is upon the land itself and not merely upon the leasehold interest, although the lien is upon the leasehold interest only. 4 The last two stated exceptions to the exception from the exemption contained in clause second refer to fraternity houses on the grounds of the Massachusetts Agricultural College, and to structures on the reservation of the Metropolitan District Commission at Nantasket. Exemptions Continued. — Literary and Charitable Institutions Third, Personal property of literary, benevolent, charitable and scientific institutions and of temperance societies incorporated in the commonwealth, the real estate owned and occupied by them or their officers for the purposes for which they are incorporated, and real estate purchased by them with the purpose of removal thereto, until such removal, but not for more than two years after such purchase, except as follows: (a) If any of the income or profits of the business of the insti- tution or corporation is divided among the stockholders or members, or is used or appropriated for other than literary, educational, benev- olent, charitable, scientific or religious purposes, its property shall not be exempt. (b) A corporation coming within the foregoing description shall not be exempt for any year in which it wilfully omits to bring in to 1 Supra, Part 1, §§26-30 inc. 2 Corcoran v. Boston, 185 Mass. 325 (1904). 3 Thus a person who occupies part of the commonwealth flats for business purposes under a bond for a deed on which he has paid all but the last instalment is not exempt with respect to such property, Corcoran v. Boston, 193 Mass. 586 (1907) ; and a lessee who does not use the premises for business purposes but sublets them for business purposes is not exempt, Boston Fish Market Corporation v. Boston, 224 Mass. 31 (1916). * Boston Molasses Co. v. Commonwealth, 193 Mass. 387 (1907). 198 Taxation in Massachusetts [G.L.c. 59 §5, CI. 3 the assessors the list and statement required by section twenty-nine. (c) Real or personal property of such an institution or cor- poration, occupied or used wholly or partly as or for an insane asylum, insane hospital, or institution for the insane or for the treatment of mental or nervous diseases, shall not be exempt unless at least one fourth of all property so occupied or used, wholly or partly, on the basis of valuation thereof, and one fourth of the income of all trust and other funds and property held for the benefit of such asylum, hospital or institution and not actually occupied or used by it for such purposes, is used and expended entirely for the treatment, board, lodging or other direct benefit of indigent insane persons, or indigent persons in need of treatment for mental diseases, as resident patients, without any charge therefor to such persons either directly or indi- rectly. (d) Real estate acquired after May fourth, nineteen hundred and eleven, by any association or private corporation formed or in- corporated for the care of the insane, shall not be exempt under the preceding paragraph unless the city council of the city, or the inhab- itants of the town, in which it is situated, have by vote lawfully taken consented to the acquisition of such real estate, to be so exempt. Benevolent or charitable institutions within the meaning of this statute are such as come within the provisions of the stat- ute of charitable uses 1 and such as are organized in aid of the general welfare as an outgrowth of the conditions of modern society and are within the intent and spirit of the statute. 2 A benevolent or charitable institution may be defined as an insti- tution established consistently with existing laws, for the bene- fit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works, or otherwise lessening 1 The statute of charitable uses is an English statute enacted in the reign of Queen Elizabeth (St. 43 Eliz. c. 4) which enumerates the different classes of lawful public charities, and is regarded as the foundation of our law of charities, although it is well settled that any purpose is charitable in the legal sense of the word which is within the principle and reason of the statute, although not expressly named in it. The statute itself and the objects which have been upheld as charities are set forth in Jackson v. Phillips, 14 Allen 539, 551 (1867). 2 Massachusetts Society for the Prevention of Cruelty to Animals v. Boston, 142 Mass. 24 (1886). Assessment of Local Taxes 199 G.L.c. 59, §5, CI. 3] the burdens of government. 3 A society acting for the mutual benefit of its own members is not entitled to exemption, 4 but an organization the object of which is charitable and the num- ber to be benefited by which is indefinite is within the exemption even if the gift is limited to a class. 5 A literary or scientific institution within the meaning of the statute is one that disseminates knowledge to the public or to its own pupils as its principal object and an institution es- tablished primarily to provide a dwelling place for its members is not exempt even if {he members are engaged in study. 6 The real estate of a corporation such as is described in this clause of the statute to be exempt from taxation must be both owned by the corporation and occupied by the corporation or its officers. Land occupied by such a corporation but owned by another, 7 or owned by the corporation and occupied by another, 8 even though used for charitable purposes, is not exempt. Land 3 Jackson v. Phillips, 14 Allen 539, 556 (1867). Institutions which have been held entitled to exemption as charitable include a society maintaining a building used for sheltering and caring for abused and diseased animals, Massachusetts Society for the Prevention of Cruelty to Animals v. Boston, 142 Mass. 24 (1886) ; a society maintaining a home for working girls at moderate cost, Franklin Square House v. Boston, 188 Mass. 409 (1905); a society main- taining a building as a memorial to soldiers of the Revolution, Molly Varnum Chapter, D. A. R. v. Lowell, 204 Mass. 487 (1910) ; a corporation maintaining a hospital at which patients unable to pay were cared for free of charge, New England Sanitarium v. Stoneham, 205 Mass. 335 (1910); a Young Men's Chris- tian Association, Little v. Newburyport, 210 Mass. 414 (1912). The building of a lodge used primarily for social and festive purposes is not exempt, al- though many charitable functions are also performed by the lodge, Boston Lodge of Elks v. Boston, 217 Mass. 176 (1914). Corporations which are given a special and limited exemption by other clauses of this section of the General Laws are not entitled to an exemption under clause third, even if they are benevolent or charitable institutions in the broad sense. Trustees of the Greene Foundation v. Boston, 12 Cush. 54 (1853); Milford v. Worcester County Commissioners, 213 Mass. 162 (1913). 4 Young Men's Protestant etc. Society v. Fall River, 160 Mass. 409 (1894). A charitable corporation does not lose its exemption by confining its benefits to its own members if anyone can become a member on payment of a moderate fee. Little v. Newburyport, 210 Mass. 414 (1912). , 5 Masonic Education & Charity Trust v. Boston, 201 Mass. 320 (1909). 6 New England Theosophical Corporation v. Boston, 172 Mass. 60 (1898); Phi Beta Epsilon Corporation v. Boston, 182 Mass. 457 (1903). 7 Bates v. Sharon, 175 Mass. 293 (1900). 8 Thus if one charitable institution allows its real estate to be used free of charge by another charitable institution the property is taxable. St. James Educational Institute v. Salem, 153 Mass. 185 (1891). Model apartment houses leased by a charitable institution to tenants for a small rent are not exempt, because not occupied by the institution. Chapel of the Good Shepherd v. Boston, 120 Mass. 212 (1876); Charlesbank Homes v. Boston, 218 Mass. 14 (1914). This principle doe? not apply to a college dormitory or to a building used as a home for girls, although the occupants 200 Taxation in Massachusetts [G. L. c. 59 § 5, CI. 3 leased for profit or held for sale by a charitable institution is not exempt even if the proceeds are used for charitable purposes, 9 but the payment of rent by an officer of the corporation to the cor- poration for the occupation of a parcel of its land by him is not conclusive against the exemption of such land. If the dominant purpose of his occupation is to aid in the objects of the institution the land is exempt whether he pays rent or not, 10 and the rule is the same of any other occupation of the land whether profitable or not. An occupation the dominant purpose of which is to accomplish some one of the objects for which the corporation was established is within the exemption. 11 When a building owned by a corporation of the exempted class is occupied in part by the corporation and in part leased for profit it is proper to tax only the leased portion and a propor- of the rooms in the building pay rent, Franklin Square House v. Boston, 188 Mass. 409 (1905). 9 Salem Lyceum v. Salem, 154 Mass. 15 (1891) (hall leased for lectures); Lynn Workingmen's Aid Association v. Lynn, 136 Mass. 283 (1884) (land be- ing sold on instalments to worthy working people). 10 Thus dwelling houses belonging to a college or academy and situated on or near the college or academy grounds and occupied by the officers or instruc- tors of the college or academy are exempt whether the occupants pay rent or not, if the proximity of the officers and professors and their families is advantageous in promoting discipline and freer relations with the students and this advantage is the principal object of their occupying the houses. Phillips Academy v. Andover, 175 Mass. 118 (1900); Harvard College v. Assessors of Cambridge, 175 Mass. 145 (1900) ; Amherst College v. Assessors of Amherst, 193 Mass. 168 (1906); Thayer Academy v. Assessors of Braintree, 232 Mass. 402 (1919). The same is true of a building occupied by a janitor or person having charge of the care of the grounds whose living on the premises may be ad- vantageous. Massachusetts General Hospital v. Somerville, 101 Mass. 319 (1869); Wheaton College v. Norton, 232 Mass. 141 (1919); Thayer Academy v. Assessors of Braintree, 232 Mass. 402 (1919). When however dwelling homes belonging to a college are occupied by professors primarily for the benefit and convenience of the professors, the houses are taxable. Pierce v. Cambridge, 2 Cush. 611 (1849); Williams College v. Williamstown, 167 Mass. 505 (1897); Amherst College v. Assessors of Amherst, 173 Mass. 232 (1899). 11 With respect to educational institutions it has been held that the follow- ing classes of property owned by the institution are exempt: a farm on which the students work, the products being consumed by the students so far as required and the rest sold, Wesleyan Academy v. Wilbraham, 99 Mass. 599 (1868); Mt. Hermon Boys' School v. Gill, 145 Mass. 139 (1887); a building used by an association of students to obtain food at cost, Harvard College v. Assessors of Cambridge, 175 Mass. 145 (1900); athletic fields, playgrounds and woodland to be used by the students for exercise and recreation, Emerson v. Milton Academy, 185 Mass. 414 (1904) ; Amherst College v. Assessors of Amherst, 193 Mass. 168 (1906); Wheaton College v. Norton, 232 Mass. 141 (1919). A parcel of land purchased by a college to prevent its acquisition by undesirable neighbors is not exempt, Wheaton College v. Norton, 232 Mass. 141 (1919). Assessment of Local Taxes 201 G.L.c. 59, §5, CI. 3] tionate part of the land covered by the building. 12 Land which an educational institution has acquired with the intent to use for additional buildings in the future is not exempt, unless it is proceeding diligently to erect a building thereon at once. 13 The "purpose of removal" referred to in the statute means the removal of the whole institution, not the use of additional land. 14 So also a building belonging to a charitable institution and used for charitable purposes does not continue to be exempt after such use has ceased. 15 When property is held in trust, the court will consider the equitable and not the legal title in passing upon the question of exemption. A charitable corporation holding property merely as trustee for purposes which of themselves do not exempt the property from taxation stands no better than an individual trustee; for this property is not its property in the sense con- templated by the statute; 16 but property held in trust by indi- viduals for a corporation of the exempt class to be used for the purposes for which the corporation was established is itself exempt. 17 This principle however does not extend so far as to authorize the taxation of the equitable interest of persons who have contracted to buy the land of an exempt corporation and have made a partial payment of the purchase price. 18 Personal property held as an accumulating fund which the statutes now require to be taxed to the trustee 19 is not so taxable if the property of the beneficiary is exempt under the statute now under consideration. 20 With respect to the exceptions to the exemption contained in paragraphs (a), (b), (c) and (d), it has been held that an exception from an exemption is not unconstitutional if it rests upon a rational classification, although it excludes a very few institutions from a privilege which others enjoy. 21 12 Cambridge v. Middlesex County Commissioners, 114 Mass. 337 (1874). 13 As to the latter situation see New England Hospital for Women and Children v. Boston, 113 Mass. 518 (1873) decided before the statute specifically exempted property acquired for purposes of removal. 14 Wheaton College v. Norton, 232 Mass. 141 (1919). 15 Babcock v. Leopold Morse Home, 225 Mass. 418 (1917). 16 Salem Marine Society v. Salem, 155 Mass. 329 (1892). 17 Watson v. Boston, 209 Mass. 18 (1911); Little v. Newburyport, 210 Mass. 414 (1911). 18 Williams v. Boston, 208 Mass 497 (1911). 19 G. L. c. 59, § 18, infra page 237. 20 Williston Seminary v. Hampshire County Commissioners, 147 Mass. 427 (1888). 21 Massachusetts General Hospital v. Belmont, 233 Mass. 190 (1919). 202 Taxation in Massachusetts . [G. L. c. 59 § 5, CI. 3 The exception contained in paragraph (a) is one of obvious propriety and has never been considered by the court. The exception in paragraph (b) is not applied unless it is shown that the failure to file a list was wilful; 22 and the failure is not wilful if the corporation had reason to suppose from the previous action of the assessors that a list was not required. 23 So also if a list is actually filed, which is insufficient both in substance and form, the right to exemption is not lost, if no wilful omission appears. 24 The exceptions contained in paragraphs (c) and (d) ap- pear to have arisen from a decision in 1910 that a sanitarium which contained both free and paying patients was exempt al- though the paying patients largely predominated. 25 In 1911 it was provided that no property thereafter acquired for an insane hospital should be exempt 26 and in 1914 that no hospital for the care of mental diseases should be exempt unless one fourth of the hospital was used for free patients. 27 It was held that .the last named statute was constitutional, 28 that it applied to an institution caring for persons who though not insane required building up of the nervous system; 29 and that it did not require a physical line of demarcation between the portions of the hos- pital devoted to free and to paying patients or a fractional use of the property based on the number of patients, but that it signified that, on a fair basis of computation, having reference both to numbers of patients, so far as property is used in common by both classes, and to definite property, so far as there is a strict separation between the use by the two classes, one fourth in value should be employed for free patients. 30 22 Wheaton College v. Norton, 232 Mass. 141 (1919). 23 Masonic Education & Charity Trust v. Boston, 201 Mass. 320 (1909); Wheaton College v. Norton, 232 Mass. 141 (1919). 24 Thayer Academy v. Assessors of Braintree, 232 Mass. 402 (1919). 25 New England Sanitarium v. Stoneham, 205 Mass. 335 (1910). 26 St. 1911, c. 400, § 1, now G. L. c. 59, § 5, cl. 3, par. (d). 27 St. 1914, c. 518, now G. L. c. 59. §5, cl. 3, par. (c). 28 Massachusetts General Hospital v. Belmont, 233 Mass. 190 (1919). 29 New England Sanitarium v. Stoneham, 233 Mass. 171 (1919). 30 Massachusetts General Hospital v. Belmont, 233 Mass. 190 (1919). Assessment of Local Taxes 203 G.L.c. 59, §5, CI. 4, 5, 6] Exemptions Continued. — Agricultural and Horticultural Societies Fourth, Real ' and personal estate of incorporated agricultural societies and the portions of real estate and buildings of incorporated horticultural societies used for their offices, libraries and exhibitions. Although the exemption of agricultural societies is much broader than that of horticultural societies, it has never been suggested that there was unconstitutional discrimination or pref- erence. 1 The exemption of agricultural societies under this clause applies only to general taxation, and does not extend to special assessments for local improvements. 2 Exemptions Continued. — Associations of Veterans Fifth (as amended by St. 1921, chap. 474). The real and personal estate belonging to incorporated organizations of veterans of any war in which the United States has been engaged, to the extent of one hundred thousand dollars, if actually used and occupied by such association, and if the net income from said property is used for charitable purposes; but it shall not be exempt for any year in which such association wilfully omits to bring in to the assessors the list and statement required by section twenty-nine. This exemption was established in 1882, 1 but it then applied only to posts of the Grand Army of the Republic. In 1920 it was extended to include associations of veterans of other wars, 2 and in 1921 the exemption was increased so as to extend to property of one hundred thousand dollars in value. Exemptions Continued. — Militia Units Sixth, Real estate owned by or held in trust for a regiment, corps, company or other organized unit of the volunteer militia and used exclusively for military purposes, and tangible personal prop- erty owned by such an organized unit of the volunteer militia and used by it or its members exclusively for military purposes, for any 1 Massachusetts General Hospital v. Belmont, 233 Mass. 190, 202 (1919). 2 Worcester Agricultural Society v. Worcester, 116 Mass. 189 (1874) and see infra page 675. 1 St. 1882, c. 217, §2. 2 St. 1920, c. 175. 204 Taxation in Massachusetts [G.L.c. 59 §5, CI. 7, 8, 9 year in which the trustee or a competent officer of the organization owning such property brings in to the assessors the list and statement required by section twenty-nine. • The exemption of the property of militia units was first established by statute in 19 15. 1 Exemptions Continued. — Fraternal Orders Seventh, Personal property 'of a fraternal society, order or asso- ciation, operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system, and providing life, sick, accident or other benefits for the members of such society, order or association, or their dependents. In 1894 it was held that a mutual relief or benefit society was not exempt under the general provisions of law relating to charitable and benevolent institutions, 1 but in 1911 exemption from taxation on personal property was granted to fraternal beneficiary societies licensed in accordance with law 2 and in 1917 the statute was put into its present form. 3 Exemptions Continued. — Retirement, Annuity, Pension or Endowment Associations Eighth, Personal property of any retirement association exempted by section thirty-seven of chapter thirty-two. Ninth, Property of any annuity, pension or endowment asso- ciation exempted by section forty-one of said chapter. These exemptions were first established in 19 10. 1 The ex- emption granted by clause eighth applies to retirement systems for the state, counties and cities and towns and for teachers in the public schools. The exemption granted by clause ninth applies to associations of employees of any private employer. In either case the exemption extends to the portion of the wages of a member deducted or to be deducted, the right of a member 1 St. 1915. c. 40. 1 Young Men's Protestant etc. Society v. Fall River, 160 Mass. 409 (1894). 2 St. 1911, c. 628, §30. 3 St. 1917, c. 204. i St. 1910, cc. 559, §3, 619, §7; St. 1911, cc. 532, §7, 634, §7; St. 1913, c 882, §8. Assessment op Local Taxes 205 G.L.c. 59, §5, CI. 10, 11] to an annuity, pension or endowment, and all his rights in the funds of the association. - Exemptions Continued. — Churches and Religious Organizations Tenth, Personal property owned by or held in trust within the com- monwealth for religious organizations, whether or not incorporated, if the principal or income is used or appropriated for religious, be- nevolent or charitable purposes. Eleventh, Houses of religious worship owned by, or held in trust for the use of, any religious organization, and the pews and furniture; but the exemption shall not extend to portions of such houses appropriated for purposes other than religious worship or instruction. The exemption granted by clause tenth was not established until 1918 ; x prior to then it had been held that the property of a corporation established for the purpose of holding a fund in trust for the support of a minister was taxable. 2 The exemption granted by clause eleventh dates back to early times. Not every corporation which conducts or is inter- ested in religious services is however a religious organization within the meaning of this statute; it seems to be strictly con- fined to churches and ecclesiastical bodies owning houses of religious worship and using and occupying them as such. 3 The real estate of a religious organization other than a house of worship is taxable, although the income from it is used to support religious worship, 4 or it is occupied by the minister as a dwelling house free of rent. 5 The land upon which a church stands and land necessary or incidental to the use of the church as a place of public worship is exempt; but surrounding land not reasonably necessary for 1 St. 1918, c. 106. 2 Trustee of Ministerial Fund v. Gloucester, 19 Pick. 542 (1837); Trustees of the Greene Foundation v. Boston, 12 Cush. 54 (1853). 3 Salem Marine Society v. Salem, 155 Mass. 329 (1892) ; Evangelical Baptist etc. Society v. Boston, 204 Mass. 28 (1910). 4 South Congregational Meeting House v. Lowell, 1 Met. 538 (1840) (stores in ground floor of church) ; First Universalist Society v. Salem, 185 Mass. 310 (1904). 5 Third Congregational Society v. Springfield. 147 Mass. 396 (1888); First Universalist Society v. Salem, 185 Mass. 310 (1904). 206 Taxation in Massachusetts [G.L.c. 59 §5, CI. 12. 13 the use of the church as such is not exempt. 6 Land which has been bought for church purposes is exempt only if the work of construction has been begun and is being prosecuted without unreasonable delay. 7 When the religious use has been perma- nently abandoned the exemption is lost. 8 Exemptions Continued. — Cemeteries Twelfth, Cemeteries, tombs and rights of burial, so long as dedicated to the burial of the dead. Thirteenth, Personal property held by cities, towns, religious societies and cemeteries, whether incorporated or unincorporated, or by the commonwealth or by any corporation, for the perpetual care of graves, cemetery lots and cemeteries, for the placing of flowers upon graves, for the care or renewal of gravestones, monuments or tombs, and for the care and maintenance of burial chapels; but this exemption shall not apply to any such personal property held by a cemetery corporation which distributes any of the income or profits of its business among its stockholders or members, nor shall such property be exempt for any year in which the holder thereof, other than the state treasurer, omits to bring in to the assessors the list and statement required by section twenty-nine. The statutory exemption of cemeteries, granted by clause twelfth, dates back to 1841. 1 To justify an exemption under this statute land must be actually and lawfully used for the burial of the dead; there must be consent of the municipal authorities 2 and actual dedication by the owner. 3 It has been held that land irrevocably dedicated by statute to burial purposes and exempted by special statute from public 6 Redemptorist Fathers v. Boston, 129 Mass. 178 (1880); All Saints' Parish v. Brookline, 178 Mass. 404 (1901). 7 Trinity Church v. Boston, 118 Mass. 164 (1875); All Saints' Parish v. Brookline, 178 Mass. 404 (1901). s Old South Society v. Boston, 127 Mass. 378 (1879). i St. 1841, c. 114, § 7. 2 Under G. L. c. 114, §34. 3 Woodlawn Cemetery v. Everett, 118 Mass. 354 (1875). In Rural Cemetery v. Worcester County Commissioners, 152 Mass. 408 (1890) it was held that when a cemetery corporation was authorized to buy and hold a certain limited amount of land and its charter provided that it should not be taxed for such land, and it subsequently bought additional land for buildings appurtenant to the cemetery, and a statute enacted later authorized the purchase of such additional land, such additional land was not taxable after the enactment of the later statute. In Sweetser v. Manning 200 Mass. 378 (1909) it was held that a mortgage on a cemetery was taxable as a debt. Assessment of Local Taxes 207 G.L.c. 59, §5, CI. 14, 15] taxation is exempt from a special assessment for a local improve- ment which can confer no benefit on the land while it is used for cemetery purposes; 4 but that a cemetery belonging to a corporation which is under no legal obligation to maintain it as a place of burial is not exempt from a special assessment for an improvement which benefits the land even while it is in use as a cemetery. 5 In 1912 it was held that the personal property of a cemetery corporation was not exempt from taxation under the laws then in force; 6 and in the following year the statute now contained in clause thirteenth was enacted. 7 Exemptions Continued. — Water Companies Fourteenth, Any real or personal property of a water company whose charter exempts such property from taxation, but not of any other water company unless exempted by clause sixteenth. In 1906 it was held that the real estate of a water company was exempt from taxation even in the absence of a statute specifically granting an exemption to companies of this charac- ter, 1 under the general principle that the general tax acts do not apply to property appropriated to a public use. 2 As this de- cision left a private water company more favorably situated than a city or town holding land for its water supply in another municipality, in the following year legislation was enacted pro- viding for the taxation of water companies. 3 Exemptions Continued. — Credit Unions Fifteenth, Property other than real estate owned by a credit union incorporated under chapter one hundred and seventy-one; also the capital stock thereof. This exemption was first granted in 1915 when the statute authorizing the establishment of credit unions was enacted. 1 4 Mount Auburn Cemetery v. Cambridge, 150 Mass, 12 (1889). 5 Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 6 Milford v. Worcester County Commissioners, 213 Mass. 162 (1912). 7 St. 1913, c. 578. See also St. 1914, c. 523. 1 Milford Water Co. v. Hopkinton, 192 Mass. 491 (1906). 2 Infra pages 217, 218. 3 St. 1907, c. 329. See also St. 1908, c. 193. 1 St. 1915, c. 208, § 1. 208 Taxation in Massachusetts [G.L.c. 59, §5, CI. 16 Exemptions Continued. — Personal Property of Corporations Sixteenth (as amended by St. 1921, chap. 486, § 16). Property, other than real estate, poles, underground conduits, wires and pipes, and other than machinery used in manufacture or in supplying or distributing water, owned by Massachusetts savings banks or co- operative banks, by Massachusetts corporations subject to taxation under chapter sixty-three or by foreign corporations subject to tax- ation under section thirty-nine or fifty-eight of said chapter. The exemption contained in clause sixteenth is granted be- cause the property exempted is reached indirectly by excise taxes upon the corporations owning the property, the amount of the excise taxes being in part at least dependent upon the value of such property, so that if the same property were subject to the general property tax it would in effect be taxed twice. 1 It is interesting to note that the exemption from local tax- ation of the personal property of domestic business corporations, other than machinery, although it has existed since 1813, was not based upon any express provision of the statutes until 1919, but rested upon judicial construction of the general provisions of the tax laws. Since the personal property of domestic corpo- rations was indirectly reached by the tax upon the stock in the hands of the individual stockholders and the statutes did not expressly require the taxation of the personal property of cor- porations it was held that such property was exempt; 2 and the same construction was put upon the statutes after the tax on the shares was replaced by the tax upon the corporate franchise. 3 Foreign corporations were not taxable on personal property until 1893, 4 except with respect- to the classes of property which when held by individuals were taxed where situated rather than at the domicile of the owner; 5 and in 1919, when foreign cor- porations doing business in Massachusetts were subjected to an 1 Opinion of the Justices, 195 Mass. 607, 611 (1908). 2 Salem Iron Factory v. Danvers, 10 Mass. 514 (1813). 3 Fall River v. Bristol County Commissioners, 125 Mass. 567 (1878). * Boston Investment Co. v. Boston, 158 Mass. 461 (1893); Coffin v. Artesian Water Co., 193 Mass. 274 (1906). 5 Blackstone Manufacturing Co. v. Blackstone, 13 Gray 488 (1859) and see G. L. c. 59, § 18, infra page 237. Assessment of Local Taxes 209 G. L. c. 59, § 5, CI. 17] excise tax, and their personal property reached indirectly, such property was exempted from local taxation. 6 Exemptions Continued. — Women and Children Seventeenth, Property, to the amount of one thousand dollars, of a widow, of an unmarried woman above the age of twenty-one, of a person above the age of seventy-five, or of any minor whose father is deceased, who are legal residents of the commonwealth, whether such property be owned by such persons separately, or jointly, or as tenants in common; provided, that the whole estate, real and personal, of such person does not exceed in value the sum of one thousand dollars, exclusive of property otherwise exempt under this section and exclusive of the value of the mortgage interest held by persons other than the person to be exempted in such mort- gaged real estate as may be included in such whole estate; but if, the value of such whole estate being less than one thousand dollars, the combined value thereof and of such mortgage interest exceeds one thousand dollars, the amount so exempted shall be one thousand dollars. If the property of a person entitled to such exemption is taxable in more than one town, or partly without the commonwealth, only such proportion of the one thousand dollars exemption shall be ' made in any town as the value of the property taxable in such town bears to the whole of the taxable property of such person. No property shall be so exempt which the assessors shall adjudge has been conveyed to such persons to evade taxation. A person aggrieved by any such judgment may appeal to the county commis- sioners within the time and in the manner allowed by section sixty- four. This exemption has been in force, in varying forms, since 1358 and is justified on the ground that the persons to whom the exemption is granted are less able to bear their share of the burdens of government than the remaining classes of citizens. In the codification of the General Laws an unintentional change was made in the meaning of this clause without any change in its phraseology, by adding to the section which contains the ex- emptions clauses relating to deposits in savings banks, shares in domestic corporations and to property subject to the income tax, which had previously been located in other chapters of the 6 St. 1919, c. 355, § 27. 210 Taxation in Massachusetts [G.L.c. 59, §5, CI. 18, 19, 20 laws. The effect was to establish an exemption for a woman or minor of the specified classes with respect to tangible property to the value of one thousand dollars, if such person owned no other such property, although she held many thousand dollars invested in stocks and bonds or deposited in savings banks, since such property is now "otherwise exempt under this section." Exemptions Continued. — The Poor and Aged Eighteenth, The polls and any portion of the estates of persons who by reason of age, infirmity and poverty are in the judgment of the assessors unable to contribute fully toward the public charges. If a tax is assessed upon a person such as described in this clause, it is within the power of the assessors to abate it of their own motion as a tax which should not have been assessed. 1 Exemptions Continued. — Tangible Property Situated in other States Nineteenth, Merchandise, machinery and animals owned by inhabitants of this commonwealth but situated in another state. This class of property was nominally subject to taxation in Massachusetts until 1909, when, in consequence of a decision of the supreme court of the United States that a state had no power to tax tangible personal property permanently located in another state, 1 the statutes were modified to conform to the decision. 2 The statutory provisions now in force would be more logically arranged if this class of property was not included among the classes of property subjected to taxation instead of, as at present, being subjected to taxation in one section and exempted in another. Exemptions Continued. — Clothing, Furniture and Tools Twentieth, The wearing apparel and farming utensils of every person; his household furniture used in the dwelling which is the place of his domicile not exceeding one thousand dollars in value; and the necessary tools of a mechanic not exceeding three hundred dollars in value. 1 Gordon v. Sanderson, 165 Mass. 375 (1896). 1 Supra, Part 1, §43. 2 St. 1909, c. 516, § 1. Assessment of Local Taxes 211 G.L.c. 59, §5, CI. 21] The exemption granted by clause twentieth has existed since 1821. x It is one of those exemptions which are justified on the ground that they apply only to property of insignificant value and of such a character that it may be supposed to be owned by everyone alike. 2 The exemption of household furniture was not in terms limited to the furniture used in the place of dom- icile of the taxpayer until 19 18, 3 although it was previously considered doubtful if a non-resident was entitled to the exemp- tion. 4 The words u household furniture " as used in this clause mean all furniture appertaining to a dwelling house and bought and kept for use in the household, and the fact that a large portion of the furniture is kept in sleeping rooms used solely by occa- sional guests or permanent boarders does not take it out of the exemption. 5 The burden of proof is on one claiming exemption under this clause to show that its value does not exceed one thousand dollars. 6 It has been ruled that the " farming utensils " which are exempt under this clause are confined to the following: all hand tools for farming, plow, harrow, cultivator, planter, mowing machine, tedder, horse rake, reaper, potato digger, ensilage cut- ter, spray pump and tank, churn, wagon, cart or sled used prin- cipally for farm purposes, chains, manure spreader. 7 A lawn mower is not a " farming utensil." 8 Exemptions Continued. — Young Animals and Fowls Twenty-first, Mules, horses, and neat cattle less than one year old, swine and sheep less than six months old and domestic fowls not exceeding fifteen dollars in value. 1 St. 1821, c. 107, § 2. 2 Day v. Lawrence, 167 Mass. 371 (1897); Opinion of the Justices, 195 Mass. 607 (1908). 3 St. 1918, c. 42. 4 Sullivan v. Ashfield, 227 Mass. 24 (1917). 8 Day v. Lawrence. 167 Mass. 371 (1897). ■ Sullivan v. Ashfield, 227 Mass. 24 (1917). 7 Op. of Atty. Gen. Sept. 28, 1906. 8 Sullivan v. Ashfield, 227 Mass. 24 (1917). . 212 Taxation in Massachusetts [G.L.c. 59, §5, CI. 22 Exemptions Continued. — Certain Veterans of the Civil War, their Wives and Widows Twenty-second, Property of the following classes of persons who are legal residents of the commonwealth to the amount of two thou- sand dollars in the case of each person; provided, that only two thousand dollars of the combined estate of any veteran and his wife shall be exempted; and provided, further, that the whole estate, real and personal, of the person so exempted or the combined property of a veteran and his wife does not exceed five thousand dollars, exclusive of the value of the mortgage interest held by persons other than the person to be exempted in such mortgaged real estate as may be included in -said whole estate or combined property ; but if, said whole estate or combined property being less than two thousand dollars, the sum total thereof and of such mortgage interest exceeds two thousand dollars, the amount so exempted shall be two thousand dollars: (a) Soldiers and sailors, who served in the military or naval service of the United States in the war of the rebellion, in the Spanish war, in the Philippine insurrection or in the World war, and were hon- orably discharged or honorably released therefrom, and, by reason of injury received or disease contracted while in such service and in the line of duty, lost the sight of both eyes, or of one eye, the sight of the other having been previously lost, or who lost one or both feet, or one or both hands. (b) Soldiers and sailors who served and were honorably discharged or honorably released as aforesaid, and who, as the result of disabilities contracted while in such service and in the line of duty, have become permanently incapacitated for the performance of manual labor to an extent equivalent, in the judgment of the assessors, to the loss of a hand or foot. (c) Wives or widows of soldiers or sailors who would be entitled to exemption under either of the two preceding paragraphs. If the property of a person entitled to such exemption is taxable in more than one town, or partly without the commonwealth, only such proportion of the two thousand dollars exemption shall be made in any town as the value of the property taxable in such town bears to the whole of the taxable property of such person. The certificate of the granting of a pension by the United States to a soldier or sailor for an injury or disability shall, while the pension continues, be sufficient evidence of the receiving of the injury or disability; Assessment of Local Taxes . 213 G. L. c. 59, § 5, CI. 23, 24, 25] but the assessors may receive other evidence thereof. A person ag- grieved by the judgment of the assessors may appeal to the county commissioners within the time and in the manner allowed by section sixty-four. Twenty-third, Soldiers and sailors who served in the military or naval service of the United States in the war of the rebellion and were honorably discharged therefrom shall be assessed for, but shall be exempt at their request from the payment of, a poll tax, and, if they are not entitled to exemption under the preceding clause, their property, and the property of their wives and widows, shall be exempt from taxation to the amount of one thousand dollars in the case of each person; provided, that the combined exemption of such a soldier or sailor and his wife shall not exceed one thousand dol- lars, and provided, further, that the combined estate, real and per- sonal, of the person so exempted and of the husband or wife of such person does not exceed in value the sum of five thousand dollars, exclusive of the value of the mortgage interest held by persons other than the person to be exempted in such mortgaged real estate as may be included in said combined estate; but if; said combined estate being less. than five thousand dollars, the sum total thereof and of such mortgage interest exceeds one thousand dollars, the amount so exempted shall be one thousand dollars. If the property of a person entitled to such exemption is taxable in more than one town, or partly without the commonwealth, only such proportion of the one thousand dollars exemption shall be made in any town as the value of the property taxable in such town bears to the whole of the taxable property of such person. The widows of soldiers and sailors who served as aforesaid and who lost their lives in the war of the rebellion shall be entitled to exemption as specified in the preceding clause. No exemption shall be made under this clause of the property of a person not a legal resident of the commonwealth. Exemptions Continued. — Government, State and Municipal Bonds Twenty-fourth, Bonds, notes or certificates of indebtedness of the United States. Twenty-fifth, Bonds or certificates of indebtedness of the com- monwealth issued since January first, nineteen hundred and six, and bonds, notes and certificates of indebtedness of any county, city, town, fire district, water district, light district or improvement district, in the commonwealth, issued on or after May first, nineteen 214 Taxation in Massachusetts [G. L. c. 59, § 5, CI. 26-30 hundred and eight, stating on their face that they are exempt from taxation in Massachusetts. The state has no power to tax evidences of indebtedness issued by the United States. The lack of power to tax is not limited to bonds issued by the United States itself but extends to bonds issued by territories and dependencies of the United States and municipalities therein and incorporated agencies of the United States, when expressly exempted from 'state taxa- tion by Congress. 1 State and municipal bonds in the hands of residents of the commonwealth were formerly subject to taxation; but bonds issued in recent years have been exempted as a matter of policy, since the bonds could be sold at a lower rate of interest if made non-taxable, and the saving in interest more than offset the amount lost in taxes. Exemptions Continued. — Classified Forest Lands Twenty-sixth, Land classified under chapter sixty-one, except from the taxes provided for in said chapter. The exemption of forest lands is discussed more fully in connection with the statutes providing for the taxation of such property. 1 Exemptions Continued. — Intangible Property Otherwise Taxed Twenty-seventh, Property the income of which is taxed under chapter sixty-two, or would be taxable thereunder if the property yielded income, except as provided in sections forty-nine to fifty- three, inclusive, of said chapter. Twenty-eighth, Deposits in savings banks and other institutions the income of which is exempted from taxation by clause first of subsection (a) of section one of chapter sixty-two. Twenty-ninth, Shares in partnerships, associations or trusts, ex- cept as provided in sections forty-nine to fifty -three, inclusive, of chap- ter sixty-two, in the case of shares the income of which is taxable under said chapter. Thirtieth, Capital stock and personal property of co-operative banks. 1 Supra, Part 1, § 27. 1 Chapter 61, infra page 426. Assessment of Local Taxes 215 G. L. c. 59, § 5, CI. 31-33] Thirty-first, Stock in domestic business corporations, as defined in section thirty of chapter sixty-three. Thirty-second, Stock in other corporations, domestic or foreign, subject to taxation under section fifty-eight of said chapter, in those years for which the corporations pay their corporate franchise taxes. It has never been the intent of the legislature to authorize the continuance of local taxation upon a class of intangible property which is reached by taxation in some other way, and, by reason of the inherent difficulties in subjecting intangible property to local taxation, gradually all classes of intangible property which are taxed at all have been reached by some other form of tax than the local direct tax and have been with- drawn from the sphere of local taxation. The exemptions established by clauses twenty-seven and twenty-nine were established in 1916 as one of the necessary incidents of the income tax act. 1 Deposits in savings banks have been exempted from taxation since 1862, because the de- posits are indirectly taxed by the excise tax on the bank which is graded in proportion to the deposits. 2 Co-operative banks are exempt with respect to capital stock and personal property doubtless because their capital is invested almost entirely in mortgages on real estate which itself is taxed. Stock in domestic corporations and in foreign public service corporations paying a franchise tax to this commonwealth has been exempt since 1864, as the tax on the franchise is indirectly a tax on the stock. 3 Exemptions Continued. — Intangible Property Held by a Fiduciary Thirty-third (as amended by St. 1921, chap. 202), Intangible property held by any fiduciary in this commonwealth, except shares of stock taxable under section one of chapter sixty-three. Exemptions Continued. — Special Statutes and Charters In addition to the exemptions from taxation established by the General Laws, the legislature has sometimes by special act exempted a designated corporation from taxation upon the whole 1 G. L. c. 62, infra page 428. 2 G. L. c. 63, § § 11-16 inc., infra pages 515 to 520 inc. 3 G. L. c. 63, infra pages 531 to 533 inc. 216 Taxation in Massachusetts [G. L. c. 59, § 5 or a part of its property. It is not unusual in such a case for the legislature to limit the value of the property which it thus exempts from taxation and questions have arisen when a par- ticular piece of property which was within the limit when ac- quired by the corporation has subsequently increased in value until it has risen above it. When the exemption applies to the lands and tenements of which a given amount of property may be composed it follows them no matter how much they may increase in value; 1 but when the exemption is a general one, of property to a certain value, all above that amount however and whenever acquired is liable to taxation. 2 The distinction is a narrow one and may possibly have been drawn with a view to avoiding the effect of an unsatisfactory decision without di- rectly overruling it. An exemption granted to a particular institution is applic- able to property in towns other than that in which the insti- tution is located. 3 When the amount of property which a corporation to which a special exemption has been granted may lawfully hold is limited by charter, the exemption extends to property held by virtue of a subsequent statute increasing the amount of property which the corporation may acquire. 4 An exemption applicable to all of the property of a corporation while it maintains a certain building for the public use is not lost with respect to other property used for commercial purposes if the original use of the building is maintained. 5 When the char- ter of a charitable corporation provides that no part of its funds shall be exempted from taxation, property which would be exempt if in the hands of an individual would not be taxable in the hands of the corporation. 6 An agreement between two towns relating to the exemption of the property of one of the towns or its inhabitants is not valid, 7 unless sanctioned by the legislature. 8 1 Hardy v. Waltham, 7 Pick. 108 (1828) ; Harvard College v. Aldermen of Boston, 104 Mass. 470 (1870). 2 Evangelical Baptist etc. Society v. Boston, 192 Mass. 412 (1906). 3 Harvard College v. Kettell, 16 Mass. 204 (1819). 4 Rural Cemetery v. Worcester County Commissioners, 152 Mass. 408 (1890). 5 Old South Association v. Boston, 212 Mass. 299 (1912). 6 Greenfield v. Franklin County Commissioners, 135 Mass. 566 (1863). 7 Dillingham v. Snow, 5 Mass. 547 (1809). 8 Capen v. Glover, 4 Mass. 305 (1808). Assessment of Local Taxes 217 G. L. c. 59, § 5] An exemption from taxation contained in a special charter does not in itself carry exemption from special assessments for local improvements; 9 but an exemption from "all civil imposi- tions, taxes and rates " does include such an exemption. 10 An exemption "from all public taxes" will include special assess- ments when the land assessed is irrevocably devoted to a use which will necessarily preclude it from ever deriving any benefit from the improvement for which the assessment was made. 11 Exemptions Continued. — Property Devoted to Public Use There is another large class of exempt property, namely, property devoted to the public use, which, although not specifi- cally exempted by statute, is not taxed because it is believed by the courts that the legislature did not intend to subject it to tax- ation. This exemption is based upon the uniform practice since the earliest establishment of the colony, 1 and upon the inapplic- ability to such property of the statutes relating to the collection of taxes, since in almost every case the discontinuance of public works is carefully restricted by statute and it is not to be sup- posed that the legislature intended such statutes to be rendered nugatory by the sale of such works for non-payment of taxes. In the absence of express provisions it has not been thought that the legislature intended to overturn the practice which had received general acquiescence for such a long period. The exemption applies whether the property is owned by a county, city or town, 2 or by a private corporation, 3 but the property of a private corporation is not exempt unless the cor- poration is under legal obligation to serve the public and the property is such as has been or could have been acquired by eminent domain, or is irrevocably dedicated to the public use. 4 9 Boston Asylum v. Street Commissioners of Boston, 180 Mass. 485 (1902). 10 Harvard College v. Aldermen of Boston, 104 Mass. 470 (1870). 11 Mount Auburn Cemetery v. Cambridge, 150 Mass. 12 (1889). 1 Worcester v. Western Railroad Corporation, 4 Met. 564, 566 (1842). 2 Wayland v. Middlesex County Commissioners, 4 Gray 500 (1855) (reser- voir) ; Somerville v. Waltham, 170 Mass. 160 (1898) (gravel-pit); Miller v. Fitchburg, 180 Mass. 32 (1901); Chelsea v. Treasurer & Receiver General 237 Mass. 422 (1921). 3 Worcester v. Western Railroad Corporation, 4 Met. 564 (1842) (railroad) ; Milford Water Co. v. Hopkinton, 192 Mass. 491 (1906) (waterworks; see how- ever G. L. c. 59, § 6, supra page 218). 4 Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866) (gas works); Connecticut Valley St. Ry. Co. v. Northampton, 213 Mass. 54 (1912) (street railway bridge); Collector of Boston v. Rising Sun Street Lighting Co., 229 Mass. 494 (1918) (street lights). . 218 Taxation in Massachusetts [G. L. c. 59, § 6 It is doubtful if a municipal corporation can ever tax property owned by itself, whatever use the land may be put to; 5 and it certainly cannot tax such property when the property itself or the income therefrom is devoted to a particular public use; 6 but one municipal corporation may tax the property of another within its jurisdiction leased or used for profit; 7 unless the in- come therefrom is devoted to a particular public use, in which case it may be that such property is exempt. 8 It was held in an early case that a railroad corporation was not taxable for the land within its location devoted to railroad purposes which it was authorized to take by eminent domain. 9 This decision was ratified by implication by the legislature in a statute providing that land taken or purchased for railroad, depot or station purposes outside the limits of the route of the railroad fixed in accordance with law should not be exempt from taxation. 10 When an easement only is taken for the public use and the easement is not such as to exclude the owner of the fee from substantial enjoyment of the land, his interest in the land is taxable; 11 but when the easement taken is substantially ex- clusive and leaves the owner of the fee no rights of any real value, the land itself is exempt from taxation. 12 The exemption arising from the devotion of land to the public use extends to special assessments for local improve- ments 13 as well as to general taxation. Payment in Lieu of Tax on Property Held for Certain Municipal Purposes Section 6. Property held by a city, town or district, including the metropolitan water district, in another city or town for the purpose 5 Rossire v. Boston, 4 Allen 57 (1862). 6 Burr v. Boston, 208 Mass. 537 (1911); Massachusetts General Hospital v. Boston, 212 Mass. 20 (1912); Collector of Norton v. Oldfield, 219 Mass. 374 (1914). 7 Essex County v. Salem, 153 Mass. 141 (1891). See also Wayland v. Middlesex County Commissioners, 4 Gray 500, 502 (1855). 8 Burr v. Boston, 208 Mass. 537 (1911) semble. 9 Worcester v. Western Railroad Corporation, 4 Met. 564 (1842); Boston & Maine R. R. v. Cambridge, 8 Cush. 237 (1851). 10 St. 1853, c. 351, § 3. now G. L. c. 160, § 87, infra page 740. 11 Hunt v. Boston, 183 Mass. 303 (1903). 12 Lancy v. Boston, 186 Mass. 128 (1904). 13 Worcester County v. Worcester, 116 Mass. 193 (1874); Boston v. Boston & Albany R. R. Co., 170 Mass. 95 (1898). Assessment of Local Taxes 219 G.L.c. 59, §§6,7] of a water supply, the protection of its sources, or of sewage disposal, if yielding no rent, shall not be liable to taxation therein; but the city, town or district so holding it shall, annually in September, pay to the city or town where it lies an amount equal to that which such city or town would receive for taxes upon the average of the assessed values of the land, which shall not include buildings or other struc- tures except in the case of land taken for the purpose of protecting the sources of an existing water supply, for the three years last pre- ceding the acquisition thereof, the valuation for ea^h year being re- duced by all abatements thereon. Any part of such land or buildings from which any revenue in the nature of rent is received shall be subject to taxation. If such land is part of a larger tract which has been assessed as a whole, its assessed valuation in any year shall be taken to be that proportional part of the valuation of the whole tract which the value of the land so acquired, exclusive of buildings, bore in that year to the value of the entire estate. Section 7. The assessors of a city or town where land is acquired by such other city, town or district for water supply or sewage dis- posal shall, within one year after such acquisition, determine the average valuation of such land under the preceding section, and certify the amount so determined to such other city, town or district. The mayor or selectmen, the commissioners or prudential committee of a district, or the metropolitan district commission, within six months after receipt of said certificate, may appeal from such determination to the superior court for the county where the land lies; and the court shall determine the valuation in the manner provided in the preceding section, and sections sixty-five and sixty-six, so far as ap- plicable, shall govern such appeal. If land within any city or town shall have been taken from it for said purposes, and for any one of the three years prior to the taking shall have been used for any public purpose, and for that reason no taxes shall have been collected thereon, the city or town and the board or officer having charge of the land so taken may within six years after the taking agree as to the value of the land upon which the annual payment is to be made as aforesaid from the time of the taking, and if they cannot agree the board or officer shall notify the city or town thereof, and thereupon the value shall be determined by the superior court under said sections sixty-five and sixty-six, and said notice shall be deemed to be the notice referred to in said 220 Taxation in Massachusetts [G.L.c. 59, §§8, 9 section sixty-five. This and the preceding section shall apply to property held for the purposes of the metropolitan water supply, except property situated in Ashland, Boylston, Holden, Hopkinton, Sterling or West Boylston. The words "revenue in the nature of rent" in section six are not construed so broadly as to justify the taxation of all property held by a city or town in connection with its water supply from the ownership of which it derives pecuniary advan- tage, and consequently a reservoir used by a city to supply mill owners with water in place of water taken by the city is not subject to taxation under section six. 1 Excise Tax on Certain Ships or Vessels Section 8. Individuals or partnerships owning an interest in any ship or vessel which has during the period of its business in the year preceding April first been engaged in interstate or foreign carry- ing trade shall annually, within thirty days after said date, make a return on oath to the assessors of the town where such individuals reside or where such partnerships are taxable under clause seventh of section eighteen, respectively, setting forth the name of the ship or vessel, their interest therein, and the value of such interest. If the assessors are satisfied of the truth of the return they shall assess an excise tax of one third of one per cent upon such interest; and the person or partnership making such returns shall be exempt from any tax upon said interest other than that assessed under this section. Whether the tax imposed by this statute is really intended as an excise, or was made assessable in this way, with an ex- emption of the vessels themselves, for the encouragement of the business, and because the vessels are not within the com- monwealth and so not within the constitutional provision re- quiring proportional taxation, is not clear. 1 Place of Assessment of Poll Taxes Section 9. The poll tax shall be assessed upon each person liable thereto in the town of which he is an inhabitant on April first in 1 Miller v. Fitchburg, 180 Mass. 32 (1901). 1 Opinion of the Justices, 195 Mass. 607, 611 (1908). Assessment of Local Taxes 221 G.L.c. 59, §10] each year, except in cases otherwise provided for by law. The poll tax of minors liable to taxation shall be assessed to, and in the place of the residence of, the parents or guardians having control of the persons of such minors; but if a minor has no parent or guardian within the commonwealth, he shall be personally taxed for his poll,* as if he were of full age. The poll tax of every other person under guardianship shall be assessed to his guardian in the place where the guardian is taxed for his own poll. In a city each inhabitant liable to assessment shall be assessed in the ward where he dwells; but no tax shall be invalid by reason of a mistake of the assessors in ascertaining the ward where a person should be assessed. Section 10. A person liable to a poll tax, who is in a town on April first, and who, when inquired of by the assessors thereof, refuses to state his legal residence, shall for the purpose of taxation be deemed an inhabitant thereof. If he designates another town as his legal residence, said assessors shall notify the assessors of such other town, who shall thereupon tax him as an inhabitant thereof; but he shall not be exempt from the payment of a tax legally assessed upon him in his legal domicile. The history of poll taxes in this commonwealth is discussed in another portion of this work; 1 in the following pages are set forth rules for determining the place of which a person is an inhabitant within the meaning of section nine and other pro- visions of the tax law. RULES FOR DETERMINING DOMICILE In general terms, one may be designated as an inhabitant of that place which constitutes the principal seat of his residence, of his business, pursuits, connections and attachments and of his political relations. It embraces the fact of residence in a place with the intent to make it one's home. 2 To determine in any given case of what city or town a person is an inhabitant is in most instances easy and simple; but per- plexing questions not infrequently arise and have resulted in a mass of litigated cases. The principles of law involved are well settled, but the application of these principles to the facts has sometimes caused trouble. 1 G. L. c. 59, § 1, supra page 186. » Lyman v. Fiske, 17 Pick. 231 (1835). 222 Taxation in Massachusetts [G. L. c. 59, §§ 9, 10 Inhabitancy, residence and domicile are synonymous terms; and their meaning is the same in fixing the rights and obliga- tions of individuals for the purposes of taxation as for acquiring a settlement, exercising the right to vote, enforcing rights in court and other similar purposes. 3 "Domicile" is the term most frequently used to express the meaning intended as "inhabi- tancy" is cumbersome and "residence" as used colloquially or even sometimes by the courts and the legislature, unless coupled with the word " legal," has a rather broader meaning. Every man must have a domicile; and he can have but one at any given time. 4 His domicile is the place in which he lives with the intent to make it his home, and domicile thus embraces both act and intent. 5 One intends however certain things to which the law gives their necessary legal consequences, and a person who lives in a place for an indefinite period without the intent of returning to his former home acquires a domicile there regardless of his personal sentiments or his desire to retain his legal residence in his old home town.- A person cannot have one domicile for the general purposes of life, and another for the purposes of taxation. 6 A person who owns dwelling houses in more than one town and occupies each of them a substantial portion of the year may however as a practical matter elect in which town he shall be taxed, for his own intent in such a case is almost always decisive; and if he forms such intent while actually living in one of the houses he thereby acquires a domi- cile in the town in which it is situated. 7 Motive, as distinguished from intent, is immaterial. One may change his domicile from 3 Lee v. Boston, 2 Gray 484 (1854); Borland v. Boston, 132 Mass. 89 (1882); Stoughton v. Cambridge, 165 Mass. 251 (1896). 4 Abington v. North Bridgewater, 23 Pick. 170 (1839) ; McDaniel v. King, 5 Cush. 469 (1850) ; Hallett v. Bassett, 100 Mass. 167 (1868) ; Borland v. Boston, 132 Mass. 89 (1882). 5 Putnam v. Johnson, 10 Mass. 488 (1913); Harvard College v. Gore, 5 Pick. 370 (1827) ; Lyman v. Fiske, 17 Pick. 231 (1835) ; Holmes v. Greene, 7 Gray 299 (1856) ; Thayer v. Boston, 124 Mass. 132 (1878) ; Viles v. Waltham, 157 Mass. 542 (1893). 6 Mead v. Boxborough, 11 Cush. 362 (1853); Kirkland v. Whately, 4 Allen 462 (1862); Whitney v. Sherborn, 12 Allen 111 (1866); Wilbraham v. Ludlow, 99 Mass. 587 (1868); Dickinson v. Brookline, 181 Mass. 195 (1902); Babcock v. Slater, 212 Mass. 434 (1912); Feehan v. Tax Commissioner, 237 Mass. 169 (1921). 7 Thayer v. Boston, 124 Mass. 132 (1878) ; Gardiner v. Brookline, 181 Mass. 162 (1902); Barron v. Boston, 187 Mass. 168 (1905); Emery v. Emery, 218 Mass. 227 (1914). Assessment of Local Taxes 223 G. L. c. 59, §§ 9, 10] one town to another merely to diminish the amount of his taxes if the act and intent are both present. 8 A domicile once established remains until a new one is ac- quired, 9 and consequently one who has abandoned his original home with intent never to return does not lose his domicile until he has acquired a new one by arriving at a different place with the intent to stay there an indefinite period. 10 If there is any exception to this rule it is the case of an inhabitant of this commonwealth who has left it intending never to return and is upon the first day of April without the commonwealth in good faith and with reasonable despatch actually upon his way to his new home. 11 Domicile once acquired is presumed to con- tinue and the burden of proof is on him who seeks to establish a change. 12 Domicile is not lost by absence for a merely temporary pur- pose with intent to return. 13 An intent to return at a re- mote and indefinite period will not however control an actual dwelling at a different place with all the characteristics of a per- manent home and place of abode. 14 In some cases domicile may be acquired without physical presence; as in the case of a minor supported by his parents, or of a married woman. The domicile of a married woman follows that of her husband, except in cases where the wife brings suit for divorce founded on the husband's wrong. 15 A minor until s Draper v. Hatfield, 124 Mass. 53 (1878) ; McConnell v. Kelley, 138 Mass. 372 (1885); Gardiner v. Brookline, 181 Mass. 162 (1902). 9 Jennison v. Hapgood, 10 Pick. 77 (1830); Abington v. North Bridgewater, 23 Pick. 170 (1839); Kilburn v. Bennett, 3 Met. 199 (1841); Sullivan v. Ash- field, 227 Mass. 24 (1917). 10 Otis v. Boston, 12 Cush. 44 (1853) ; Buckley v. Williamstown, 3 Gray 493 (1855); Wilson v. Terry, 9 Allen 214 (1864); Adams v. Nantucket, 11 Allen 203 (1865). See however, Carnoe v. Freetown, 9 Gray 357 (1857). 11 Briggs v. Rochester, 16 Gray 337 (1860); Colton v. Longmeadow, 12 Allen 598 (1866); Borland v. Boston, 132 Mass. 89 (1882). 12 Kilburn v. Bennett, 3 Met. 199 (1841); Chicopee v. Whately, 6 Allen 508 (1863); Thayer v. Boston, 124 Mass. 132 (1878); Sullivan v. Ashfield, 227 Mass. 24 (1917). 13 Commonwealth v. Walker, 4 Mass. 556 (1808) ; Granby v. Amherst, 7 Mass. 1 (1810) ; Jennison v. Hapgood, 10 Pick. 77 (1830) ; Sears v. Boston, 1 Met. 250 (1840); Opinion of the Justices, 5 Met. 587 (1843); Cabot v. Boston, 12 Cush. 52 (1853); Lee v. Boston, 2 Gray 484 (1854); Cochrane v. Boston, 4 Allen 177 (1862). 14 Thorndike v. Boston, 1 Met. 242 (1840) ; Sleeper v. Paige, 15 Gray 349 * (1860); Hallett v. Bassett, 100 Mass. 167 (1868). 15 Burtis v. Burtis, 161 Mass. 508 (1894); Stoughton v. Cambridge, 165 Mass. 251 (1896). 224 Taxation in Massachusetts [G.L.c. 59, §§9,10 emancipated retains the domicile of his father. 16 A man has been in some instances allowed to acquire a domicile by sending his wife to a place he intends to make his home. 17 One who has acquired a domicile and left it for a temporary purpose would not lose it by the departure of his wife without his knowledge or consent. 18 A person's obligation to pay taxes is fixed on the first day of April and if he changes his domicile after that date but before the taxes are actually assessed he is none the less assessable in his original domicile. 19 If he changes his domicile after an appropriation is voted and expenses incurred by the town in which he resides but before the first day of April he is not liable for any part of the appropriation. 20 A question of domicile not uncommonly requires for its solu- tion an inquiry into the habits, character, pursuits, domestic relations and in general the whole history of the person assessed from his youth to the time of the assessment, and any evidence having a legitimate bearing upon the facts which establish dom- icile is admissible. 21 Upon the question of intent the person 16 Opinion of the Justices, 5 Met. 587 (1843). When the domicile of a minor under guardianship is at issue the intent of the guardian is to be re- garded. Kirkland v Whately, 4 Allen 462 (1862). 17 Williams v. Roxbury, 12 Gray 21 (1858); Bangs v. Brewster, 111 Mass. 382 (1873). So also, when a man is absent from his former home the greater part of the time, but his wife remains, there is evidence that he has not lost his domicile. Feehan v. Tax Commissioner, 237 Mass. 169 (1921). 18 Lee v. Lenox, 15 Gray 496 (1860). 19 Harman v. New Marlborough, 9 Cush. 525 (1852). 20 Dow v. First Parish in Sudbury, 5 Met. 72 (1842) ; Jackman v. School District in Salisbury, 5 Gray 413 (1855). 21 Evidence that a man had a permanent position in a certain town is admissible, Cole v. Cheshire, 1 Gray 441 (1854). Evidence that the selectmen put a man's name on the voting list without application from him is inad- missible, Fisk v. Chester, 8 Gray 506 (1857). Evidence that a man was in a town only occasionally and for short visits is admissible, Wilson v. Terry, 9 Allen 214 (1864). Evidence that a man endeavored to conceal his residence from the assessors is admissible on the question whether he removed in good faith, Draper v. Hatfield, 124 Mass. 53 (1878). Evidence of the amount of a man's property may be excluded at the discretion of the court, Thayer v. Boston, 124 Mass. 132 (1878). Evidence that a man attended town meetings, took part in discussions there and voted is admissible, but not private discussions of town affairs, Weld v. Boston, 126 Mass. 166 (1879). Evidence that a man de- clined nomination to the common council on the ground that he had no interest in the affairs of the city is inadmissible, Pickering v. Cambridge, 144 Mass. 244 (1887). Evidence that a man paid a tax in a town in the preceding years is admissible, Babcock v. Slater, 212 Mass. 434 (1912). Evidence that a man voted, paid taxes and was enrolled in the military census in a certain town is material, but not conclusive, Feehan v. Tax Commissioner, 237 Mass. 169 (1921). Assessment of Local Taxes 225 G.L.c. 59, §§9,10] assessed may testify himself, 22 and he may introduce in his own favor declarations made by himself at the time he was removing or performing some other act affecting his domicile. 23 Such declarations accompanying an act are admitted on general prin- ciples of the law of evidence as part of the res gestae; but mere declarations not accompanying an act are not admissible in his favor. 24 Past declarations of the person assessed as to his dom- icile or intentions may be used against him whether they ac- companied an act or not, as admissions against interest. 25 One may if he wishes change his domicile without notifying the assessors of either his new or his old domicile; 26 such a notice is usually given in cases where the change is merely one of intent as a matter of self-protection. That a man is wrongly assessed in another town is no reason that he should not be assessed in the town of his real domicile, 27 and if he is obliged to pay both taxes it is his own fault in not contesting both. When the boundary line between two towns passes through a dwelling house, the occupant is taken to be a resident of that town in which he performs those functions which characterize a home, such as sleeping, eating, sitting and receiving visitors, sleeping being the most preponderating circumstance. 28 It has been held that a partnership may be said to have a 22 Fisk v. Chester, 8 Gray 506 (1857); Wright v. Boston, 126 Mass. 161 (1879). 23 Thorndike v. Boston, 1 Met. 242 (1840); Kilburn v. Bennett, 3 Met. 199 (1841); Cole v. Cheshire, 1 Gray 441 (1854); Monson v. Palmer, 8 Allen 551 (1864); Viles v. Waltham, 157 Mass. 542 (1893); Gardiner v. Brookline, 181 Mass. 162 (1902). 2 * Salem v. Lynn. 13 Met. 544 (1847); Wilson v. Terry, 9 Allen 214 (1864); Wright v. Boston, 126 Mass. 161 (1879); Weld v. Boston, 126 Mass. 166 (1879); Pickering v. Cambridge, 144 Mass. 244 (1887). 25 Deeds given by or to the person assessed dated about the time of the assessment in which he is described as of the town in which he was assessed are admissible against him as implied admissions, Weld v. Boston, 126 Mass. 166 (1879) ; Babcock v. Slater, 212 Mass. 434 (1912) ; but copies of such deeds are not admissible without notice to the plaintiff to produce the originals, Bourne v. Boston, 2 Gray 494 (1854); Draper v. Hatfield, 124 Mass. 53 (1878). Evi- dence that plaintiff said he wanted no trouble and would pay half the tax if the town would abate the rest is offer of compromise merely and inad-« missible. Draper v. Hatfield, 124 Mass. 53 (1878). 26 Barron v. Boston, 187 Mass. 168 (1905). 27 Harman v. New Marlborough, 9 Cush. 525 (1852). A person taxed for the same property in two towns is not able to throw the burden of the con- test on the towns. See Welch v. Boston, 208 Mass. 326 (1911); G. L. c. 60, § 98, infra page 408. 28 Abington v. North Bridgewater, 23 Pick. 170 (1839); Chenery v. Wal- tham, 8 Cush. 327 (1851). 226 Taxation in Massachusetts [G.L.c. 59, §11 domicile in the place where its business is carried on. 28 The domicile of a corporation is the state in which it is organized rather than that in which its principal place of business is sit- uated, so that a foreign corporation cannot have a domicile in this commonwealth. 30 There is difficulty in ascribing a domicile in any particular city or town in this commonwealth to a do- mestic corporation, and although it has sometimes been inti- mated that the domicile of a corporation was the place with which it was chiefly identified or where its principal place of business was situated and while the difficulties of ascribing a domicile to a corporation are not insuperable, 31 yet partly on account of such difficulties and partly on account of the double taxation which would result, a domestic corporation, it has long been held, is not a resident of any town or city in this common- wealth so as to be taxable for its personal property there. 32 Where and to Whom Real Estate is Assessed Section 11. Taxes on real estate shall be assessed, in the town where it lies, to the person who is either the owner or in possession thereof on April first, and the person appearing of record, in the rec- ords of the county, or of the district, if such county is divided into districts, where the estate lies, as owner on April first, even though deceased, shall be held to be the true owner thereof, and so shall the person so appearing of record under a tax deed not invalid on its face. Real estate held by a religious society as a ministerial fund shall be assessed to its treasurer in the town where the land lies. Buildings erected on land leased by the commonwealth under section twenty-six of chapter seventy-five shall be assessed to the lessees, or their assignees, at the value of said buildings. Except as provided in the three following sections, mortgagors of real estate shall for the purpose of taxation be deemed the owners until the mortgagee takes possession, after which the mortgagee shall be deemed the owner. Taxes on real estate are not assessed upon the real estate itself, regardless of ownership, but are assessed upon indi- 2 » Ricker v. American Loan & Trust Co., 140 Mass. 346 (1885). 30 Boston Investment Co. v. Boston, 158 Mass. 461 (1893). 31 The domicile of a corporation organized by special statute to maintain a cemetery in a certain place is the town in which the cemetery is located, and not the town in which the officers of the corporation perform their duties and the meetings of the corporation are held. Collector of Boston v. Mount Auburn Cemetery, 217 Mass. 286 (1914). 32 G. L. c. 63, § 30, infra page 529. Assessment of Local Taxes 227 G.L. c. 59, §11] viduals by reason of their ownership; and although such taxes constitute a lien upon the. land, the primary liability is upon the person to whom they have been assessed. 1 Even in the case of the unimproved woodland of a non-resident, the tax cannot be sustained as one upon the land itself and the naming of the owner be regarded as immaterial. 2 It is not however the policy of the law to require the assessors to tax the different estates and interests which may exist in a certain parcel of land to the respective owners thereof, but instead one person or set of per- sons is assessed the entire tax on each parcel of land; 3 and such person must be either the owner of the fee or the person in pos- session of the land. There may be some circumstances under which an easement in gross may be assessable to the holder; 4 and when one estate or interest in a piece of land is exempt from taxation and the others are not it may be proper to assess the latter es- tates at their own value and not at the value of the land itself; 5 but ordinarily the land itself is assessed at its whole value and not the different estates therein. The assessors should however take into consideration easements or restrictions which add to or detract from the fair cash value of the land, when they are brought to their attention, and are bound to assess the land ac- cordingly. 6 The " owner " is the legal owner of the fee, and even a mere trustee without power of control or management and under cov- enant to convey as directed, if he holds the legal title to land, is the person to be assessed for it. 7 A tax assessed to one who is neither owner nor in possession is void. 8 A tax on real estate cannot be legally assessed to an " owner unknown " when the assessors can with reasonable diligence ascertain who is in actual possession or by reference to the record have means of knowing 1 Webber Lumber Co. v. Shaw, 189 Mass. 366 (1905); Equitable Trust Co. v. Kelsey, 209 Mass. 416 (1911). 2 Stone v. New England Box Co., 216 Mass. 8 (1913). 3 Parker v. Baxter. 2 Gray 185, 189 (1854); Worcester v. Boston, 179 Mass. 41, 48 (1901). * Flax Pond Water Co. v. Lynn, 147 Mass. 31 (1888). 5 Supra page 196. 6 Lodge v. Swampscott. 216 Mass. 260 (1913). 7 Miner v. Pingree, 110 Mass. 47 (1872); Hough v. North Adams, 196 Mass. 290 (1907); Dunham v. Lowell, 200 Mass. 468 (1904). 8 Sargeant v. Bean, 7 Gray 125 (1856) ; Rossire v. Boston, 4 Allen 57 (1862) ; Desmond v. Babbitt, 117 Mass. 233 (1875); Stone v. New England 3ox Co., 216 Mass, 8 (1913). 228 Taxation in Massachusetts [G.L.c. 59, §11 who has the legal title. 9 When there is no person in apparent occupation of a lot of land, it is the duty of the assessors to make inquiry as to its ownership. If with reasonable diligence they cannot obtain trustworthy information they would be justi- fied in taxing it as the property of an unknown proprietor; but they would not thereby acquire thd right to tax it to a person who was neither owner nor occupant. 10 The tax should be assessed to the owner of record and the holder of an unrecorded deed should not be considered. 11 When there has been a sale for non-payment of a previous tax, the tax should be assessed to the record holder of the tax title, although the right of redemption has not been lost. 12 A tax deed good on its face but invalid by reason of an error in the assessment or elsewhere not apparent on the face of the deed is sufficient to justify an assessment to the holder; 13 but an assesssment based upon a tax deed invalid on its face is not an assessment to the person appearing of record as the owner and is invalid. 14 It was formerly held that a tax on real estate must be assessed to living owners ; and assessment to a person deceased who owned the land at his death is illegal and void. 15 Since 1889 however the statutes have permitted the assessment of land to the person appearing of record to be the owner, even if deceased. A cor- poration, domestic or foreign, is taxable for its real estate like an individual owner in the city or town in which the land lies. 16 The tax is assessed to the person who was owner or occupant on the first day of April, and it is immaterial that the assess- ment was in fact made at a subsequent date and that the prop- 9 Oakham v. Hall, 112 Mass. 535 (1873); McDonough v. Everett, 237 Mass. 378 (1921). 10 Desmond v. Babbitt, 117 Mass. 233 (1875). 11 Tucker v. Deshon, 129 Mass. 566 (1880). 12 Butler v. Stark, 139 Mass. 19 (1885). When a city or town is the purchaser at a tax sale, the land should be subsequently assessed to the owner of the right of redemption. Infra page 372. 13 Roberts v. Welsh, 192 Mass. 278 (1906) ; Solis v. Williams, 205 Mass. 350 (1910); Conners v. Lowell, 209 Mass. Ill (1911). This was expressly pro- vided by St. 1915, c. 237, §23, now included in §11. In Welsh v. Briggs, 204 Mass. 540 (1910), it was held that if land owned by A and standing in his name in the registry of deeds is assessed to B as the owner of it and is sold for taxes and is bought by C, and afterward the land in question is assessed as the land of C, sold for taxes and bought by D, D gets a good title. 14 Conners v. Lowell, 209 Mass. Ill (1911). 15 Sawyer v. Mackie, 149 Mass. 269 (1889). 16 Tremont Bank v. Boston, 1 Cush. 142 (1848) ; Dunnell Manufacturing Co. v. Pawtucket, 7 Gray 277 (1856). Assessment of Local Taxes 229 G.L.c. 59, §11] erty changed hands in the interval. 17 Even when land has been taken by eminent domain after the first day of April, the owner is personally liable for the tax. 18 If land is conveyed on the first day of April and the deed then recorded, it may be assessed to either the grantor or the grantee, as there is no point of time, less than the day, at which trie tax can be regarded as laid, and it will be sustained by ownership or possession during any part of the day. 19 Land owned in common must be assessed as one parcel to the tenants in common instead of one undivided half to each; 20 but by statute when there is more than one record owner an assessment may be made in the name of one or more of them and shall be deemed to be made in the name of the owner of the land. 21 Parcels of land owned in severalty by different own- ers must of course be separately assessed, 22 and when lots are owned or occupied by the same person, if .they are separated either physically, or by the use to which they are devoted, or by their mode of occupation, a tax laid upon an entire valua- tion would not be a lien upon each separate parcel. 23 Even a va- cant piece of land owned by one individual may be assessed in lots instead of as a whole when it appears that a plan dividing it into lots has been made and recorded by the owners and that some of the lots have been sold. 24 To justify an assessment to the person in possession there must be an unqualified seisin of the freehold in him or an exclusive occupation under a lease or other agreement or perhaps such an occupation purporting to be under a lease; 25 and the enjoyment of a non-exclusive easement in the land or con- structive occupation such as is had by the lessor is not sufficient. 26 « Kearns v. Cunniff, 138 Mass. 434 (1885). 18 Richardson v. Boston, 148 Mass. 508 (1889). is Hill v. Bacon, 110 Mass. 387 (1872). 20 Sullivan v. Boston, 198 Mass. 119 (1908); Curtiss v. Sheffield, 213 Mass. 239 (1913). 21 G. L. c. 60, § 56, infra page 366. And see also McLoud v. Mackie, 175 Mass. 355 (1900). 22 Jennings v. Collins, 99 Mass. 29 (1868). 23 Jennings v. Collins, 99 Mass. 29 (1868). 24 Sullivan v. Boston, 198 Mass. 119 (1908). 25 Flax Pond Water Co. v. Lynn, 143 Mass. 31 (1888) (exclusive easement); Southworth v. Edmands, 152 Mass. 203 (1890) (husband as head of family); Bates v. Sharon, 175 Mass. 293 (1900) (life-tenant). 28 Lynde v. Brown, 143 Mass. 337 (1887) ; Kerslake v. Cummings, 180 Mass. 65 (1901); Hamilton Mfg. Co. v. Lowell, 185 Mass. 115 (1904). 230 Taxation in Massachusetts [G. L. c. 59, § 12 The provisions for the taxation of mortgaged land contained in the statute at the head of this section are mandatory, and the assessment of such land in any other way is void. 27 The provision as to the taxation of real estate held by a reli- gious society as a ministerial fund first appeared in the Revised Statutes of 1836 and has remained since its first enactment with- out material modification. It was held that a ministerial fund was taxable prior to the enactment of this statute and that the statute was not intended to create any new liability, but only to give a more specific and practical direction as to the mode of assessment. 28 The statute makes it clear that such property is not exempt as belonging to a charitable corporation; 29 and such property is taxable whether held by a religious society proper or by an auxiliary corporation. 30 Mortgaged Land Section 12. If any person has an interest in real estate, not exempt from taxation under section five, as holder of a duly recorded mortgage given to secure the payment of a fixed and certain amount of money, the amount of his interest as mortgagee shall be assessed as real estate in the town where the land lies; and the mortgagor shall be assessed only for the value of such real estate after deducting the assessed value of the interest therein of such mortgagee. If such estate is situated in two or more towns, the amount of the mortgagee's interest to be assessed in each town shall be proportioned to the assessed value of the mortgaged real estate in the respective towns, deducting therefrom the taxable amount of prior mortgages, if any, thereon. The effect of this statute is to make the interest of a mort- gagee for all purposes of taxation real estate subject to local taxation. It applies to corporations which are mortgagees as well as to natural persons. 1 Prior to the enactment of the income 27 Rossire v. Boston, 4 Allen 57 (1862); Davis v. Boston, 129 Mass. 377 (1880). 28 Trustees of Ministerial Fund v. Gloucester, 19 Pick. 542 (1837) ; Trustees of the Greene Foundation v. Boston, 12 Cush. 54 (1853). 29 Trustees of Ministerial Fund v. Gloucester, 19 Pick. 542 (1837) ; Trustees of the Greene Foundation v. Boston, 12 Cush. 54 (1853) ; Third Congregational Society v. Springfield, 147 Mass. 396 (1888). 30 Trustees of the Greene Foundation v. Boston, 12 Cush. 54 (1853). 1 Firemen's Fire Insurance Co. v. Commonwealth, 137 Mass. 80 (1884). Assessment of Local Taxes 231 G. L. c. 59, § 13] tax and the exemption of bonds and notes from local taxation it was held that bonds secured by mortgage of real estate were taxable only upon the excess of the value of the bonds over the value of the real estate although the bondholder did not himself hold the mortgage; 2 but to entitle the bondholder to such an exemption the mortgaged real estate must have been taxable in this commonwealth, and bonds secured by mortgage on real estate situated in whole or in part outside the common- wealth 3 and any indebtedness secured b> mortgage on real estate situated within the commonwealth but exempted by law from taxation were taxable for their full value. 4 When the taxation of bonds and notes was placed upon an income basis, the principles under which so much of the indebtedness evidenced by such securities as was secured by mortgage of taxable real estate was exempted were retained in force. 5 Determination of Value of Mortgage Interest Section 13. If the holder of such mortgage fails to file in the assessors' office a sworn statement of all his estate liable to taxation under the preceding section, including a statement of the full amount remaining unpaid upon such mortgage and of his interest therein, the amount stated in the mortgage shall be conclusive as to the extent of such interest; but his interest in such real estate shall not be assessed at a greater sum than the fair cash valuation of the land and the structures thereon or affixed thereto; and the amount of a mortgage interest in an estate divided after the creation of such mort- gage need not be apportioned upon the several parts of such estate, except as provided in sections seventy-nine to eighty-one, inclusive. Whenever, in any case of mortgaged real estate, such statement is not brought in, no tax on such real estate for the year then current shall be invalidated for the reason that a mortgagee's interest therein has not been assessed to him. The provisions of this and the preceding and the subsequent sections were first enacted in 1881 x for the purpose of abolishing what it was contended by some was a certain kind of double 2 Knight v. Boston, 159 Mass. 551 (1893). 3 Brooks v. West Springfield, 193 Mass. 190 (1906). 4 Sweetser v. Manning, 200 Mass. 378 (1909). 5 G. L. c. 62, § 1, subsection (a), clause third, injra page 440. 1 St. 1881, c. 304. 232 Taxation in Massachusetts [G. L. c. 59, § 14 taxation, in assessing mortgaged real estate at its full value and the mortgage debt as personal property as well. 2 In 1882 how- ever it was provided that such mortgagor and mortgagee might bring in to the assessors a sworn statement respecting their in- terest in the real estate, and that if none was brought in the tax should not be invalidated for the reason that the mort- gagee's interest therein had not been assessed to him. 3 Since the enactment of this last mentioned statute the provisions of the three sections now under consideration have been rarely- regarded by the assessors and the result intended by them has been practically reached by the failure on the part of the asses- sors to assess to the mortgagee either as real or personal property the sum represented by the mortgage. 4 Ownership of Mortgaged Property for Purposes of Taxation Section 14. Mortgagors and mortgagees referred to in the two preceding sections shall for the purpose of taxation be deemed joint owners until the mortgagee takes possession ; and until such possession is taken by a first mortgagee, an assessor or the collector of taxes, upon application, shall give to any such mortgagee or mortgagor a tax bill showing the whole tax on the mortgaged estate and the amount included in the valuation thereof as the interest of each mortgagee and of the mortgagor respectively. If the first mortgagee is in pos- session, he shall be deemed sole owner; and any other mortgagee in possession shall be deemed joint owner with prior mortgagees. Unless either the mortgagor or the mortgagee complied with the statutory provision made for their benefit x they need not " be deemed joint owners " and a tax otherwise lawfully assessed is not invalid because the mortgagee is not recognized in the assessment. 2 2 Supra, Part 1, § § 33, 53. 3 St. 1882, c. 175, now G. L. c. 59. § 34, infra page 263. See also Abbott v. Frost, 185 Mass. 398 (1904); Sullivan v. Boston, 198 Mass. 119 (1908). 4 Worcester v. Boston, 179 Mass. 41 (1901). 1 G. L. c. 59, § 34, infra page 263. 2 Abbott v. Frost, 185 Mass. 398 (1904). Assessment of Local Taxes 233 G. L. c. 59, § 15] Obligation to Pay Taxes as Between Landlord and Tenant Section 15. If a tenant paying rent for real estate is taxed therefor, he may retain out of his rent the taxes paid by him, or may recover the same in an action against his landlord, unless there is a different agreement between them. As taxes on real estate may be assessed to either the owner or the occupant, the primary incidence of the burden of tax- ation as between landlord and tenant lies in the discretion of the assessors, although in the absence of statute the burden of the tax would fall upon the owner so far as he had not guarded himself by the terms of the lease. 1 In the periodic tax acts of the provincial period and of the first decades after independence was established and in the Revised Statutes of 1836 it was pro- vided that in the absence of contract between landlord and ten- ant specifically covering the matter of taxes, the taxes should be paid by both parties in equal portions, but in the General Statutes the whole burden was put upon the landlord and has there remained. The statute does not apply if there is a different arrangement, and the existence of a " different arrangement " may be shown by the acquiescence of the parties or implied from the provisions of the lease taken as a whole. 2 Ordinarily when a lease of any importance is entered into the parties make specific provision for the payment of taxes by either the lessor or the lessee. If the lessee covenants to pay the taxes assessed in respect of the premises or payable in re- spect of the premises during the term, he is liable for the whole of the tax assessed as of April first although his term may expire 1 Walker v. Whittemore, 112 Mass. 187, 189, (1873); Boston Molasses Co. v. Commonwealth, 193 Mass. 387, 391 (1907). 2 In Derumple v. Clark, Quincy 38 (1763), it was held that when it appeared that a tenant had paid the taxes for five years and had not deducted them from the rent and that it was the custom of the town that the tenant pay the taxes, there was sufficient evidence of a contract to that effect. In Phinney v.Foster, 189 Mass. 182 (1905), it appeared that the plaintiff leased certain land to defendant. It was provided in the lease that defendant might erect buildings thereon which were to remain his property, and plaintiff was to pay all taxes on the "premises." A tax was assessed on land and buildings which plaintiff was obliged to pay to prevent a sale. It was held that he might recover that portion of the tax which was assessed upon the buildings. "Premises" included the land only and the provision of the lease was restrictive of the lessor's general obligation. The lease taken as a whole showed a "different agreement" within the meaning of the statute. 234 Taxation in Massachusetts [G.L.c. 59, §15 soon after that day, 3 and the rule is the same if the lease is terminated at the election of the lessor on account of the total destruction of the building by fire. 4 The lessee in such a case is not entitled to any apportionment of the tax for the current year, notwithstanding a provision in the lease that the rent shall be suspended or apportioned if the building is destroyed. 5 When part of an estate is leased and the lessee covenants to pay the taxes thereon, he is bound to pay a proportional part of the taxes assessed on the entire estate, although the assessors never apportioned the tax upon the different portions of the estate and were never requested by the owner to make such apportionment. 6 When the whole estate is leased to different tenants, the lessor may prove a usage of the city in which the land is situated to apportion taxes among the different tenants in the building according to the amount of rent paid by each. 7 If a lessee who has covenanted to pay taxes assigns the lease, the lessor can hold the original lessee to the covenant by reason of privity of contract, and so long as the assignee of the lease remains in possession of the property he can also be held on the covenant by the lessor, by reason of privity of estate. If the lessor compels the original lessee to pay the tax, the ultimate liability can be thrown by the lessee upon the assignee or re- assignee who is in possession of the property on the day as of which the tax was assessed. 8 The obligation to pay taxes does not however run with the land unless there has been an assign- ment of the lessee's entire interest in the property. A covenant by a lessee to pay taxes is not a covenant of indemnity, and if the lessee does not pay the tax, the lessor may 3 Wilkinson v. Libbey, 1 Allen 375 (1861) ; Amory v. Melvin, 112 Mass. 83 (1873); Baker v. Horan, 227 Mass. 415 (1917). This rule applies although by reason of a change in the tax day the lessee is obliged to pay taxes for more years than are included in his term. Welch v. Phillips, 224 Mass. 267 (1916). An agreement by the lessee to pay the "annually recurring municipal tax" includes all taxes collected by the municipal tax collector, whether for the purposes of the state, the county or the municipality. Boston Fish Market Corporation v. Boston, 224 Mass. 31 (1916). 4 Wood v. Bogle, 115 Mass. 30 (1874) ; Sargent v. Pray, 117 Mass. 267 (1875); Carnes v. Hersey, 117 Mass. 269 (1875). See also Paul v. Chickering, 117 Mass. 265 (1875). 5 Minot v. Joy, 118 Mass. 308 (1875). 6 Wall v. Hinds, 4 Gray 256 (1855). 7 Codman v. Hall, 9 Allen 335 (1864); Amory v. Melvin, 112 Mass. 83 (1873). s Mason v. Smith, 131 Mass. 510 (1881). 8 Dunlap v. Bullard, 131 Mass. 161 (1881). Assessment of Local Taxes 235 G L.c. 59, §15] recover the amount of the tax with interest without showing that he has paid the tax himself or redeeemed the property from a sale for non-payment thereof, 1 . but he cannot, it has been held, recover the additional costs and expenses he has been put to by the lessee's breach of covenant. 11 If it is provided in a lease that the lessee may erect buildings upon the demised premises, and that such buildings shall not become real estate and shall belong to the lessee, although the contract is binding upon the parties, the buildings are never- theless taxable only as real estate and in connection with the land upon which they stand, 12 and the whole premises may be taxed to either the owner or the occupant. If under such cir- cumstances the lessee is bound to pay the tax on the buildings and does not pay it, the lessor can protect his property only by paying the entire tax or buying in the property at the tax sale. If he pays the tax he is entitled to recover from the lessee what the latter should have paid, 13 and if he buys in the property he is entitled to retain possession of the buildings, at least until they are redeemed by the lessee in the manner provided by law. 14 If the lessee agrees to pay the tax on the buildings and is assessed as occupant for land and buildings he can recover from the lessor the amount of the tax on the land. 15 LIFE-TENANT AND REMAINDERMAN It is well established that when real property is held by one for life with remainder to others in fee, or when real or personal property is held in trust, the income to be paid to certain bene- ficiaries for life or other term and the principal to be paid to others at the conclusion of the term, the annual taxes upon the property are to be paid by the life-tenant, or, in the case of trust property, from the income, without any right of reimburse- ment from the remainderman or from the principal of the trust 10 Sargent v. Pray, 117 Mass. 267 (1875) ; Richardson v. Gordon, 188 Mass. 279 (1905). 11 Sargent v. Pray, 117 Mass. 267 (1875). See also the following decisions on peculiar facts relating to agreements betwen lessor and lessee in regard to the payment of taxes: Bowditch v. Chickering, 139 Mass. 283 (1885); Stimson v. Crosby, 180 Mass. 296 (1902). 12 G. L. c. 59, § 3, supra page 190. 13 Phinney v. Foster, 189 Mass. 182 (1905), supra, note 2. 14 Milligan v. Drury. 130 Mass. 428 (1881). 15 Boston Molasses Co. v. Commonwealth, 193 Mass. 387 (1907), 236 Taxation in Massachusetts [G. L. c. 59, §§ 16, 17 fund. 16 Even when a person entitled to the income dies shortly after the day as of which the tax is assessed, the tax for the ensuing year is wholly chargeable upon his income. 17 Ordinarily, from the necessity of the case, a tax on vacant land must be paid from principal. When however the trust property consists of several parcels of real estate, and the taxes and other current expenses of one of the parcels exceed the in- come therefrom, but the property as a whole produces a net income, the tax upon the unprofitable parcel should be paid from the general income of the trust estate. 18 On the other hand, when a trustee forecloses a mortgage and sells the mortgaged land and is obliged to pay off several years' unpaid taxes before making the sale, the money so paid enures to the permanent benefit of the estate, and should be deducted from the principal 19 Real Estate of a Deceased Person Section 16. The undivided real estate of a deceased person may be assessed to his heirs or devisees, without designating any of them by name, until they have given notice to the assessors of the division of the estate and of the names of the several heirs or devisees; and each heir or devisee shall be liable for the whole of such tax, and when paid by him he may recover of the other heirs or devisees their re- spective proportions 'thereof. Section 17. The real estate of a person deceased, the right or title to which is doubtful or unascertained by reason of litigation concerning the will of the deceased or the validity thereof, may be assessed in general terms to his estate, and said tax shall constitute a lien upon the land so assessed and may be enforced by sale of the same or a part thereof, as provided for enforcing other liens for taxes on real estate. It was held in 1889 that a tax could not be assessed to a per- son who was in fact deceased although there was no record in 16 Watts v. Howard, 7 Met. 478, 482 (1844) ; Holmes v. Taber, 9 Allen 246 (1864) ; Plympton v. Boston Dispensary, 106 Mass. 544 (1871) ; Bridge v. Bridge, 146 Mass. 373 (1888); Jordan v. Jordan, 192 Mass. 337 (1906). " Holmes v. Taber, 9 Allen 246 (1864). See Reams v. Cunniff, 138 Mass. 434 (1885), holding that a judgment of the probate court made after May 1. confirming the report of commissioners filed before that date assigning a parcel of land to a widow for life in lieu of dower, does not relate back to the date of the assignment so as to make her liable to the remainderman for the taxes of that year paid by him. 18 Jordan v. Jordan, 192 Mass. 337 (1906). 19 Stone v. Littlefield, 151 Mass. 485 (1890). Assessment of Local Taxes 237 G. L. c. 59, § 18] this commonwealth of his death; 1 but a statute was immediately enacted permitting the assessment to the owner of record even if deceased. 2 When it appears of record that the real estate of a deceased person has become vested in devisees who are not his heirs under a will duly probated and allowed, the tax could not be lawfully assessed to the " heirs " of the deceased. 3 Where and to Whom Personal Property is Assessed Section 18. All taxable personal estate within or without the commonwealth shall be assessed to the owner in the town where he is an inhabitant on April first, except as provided in chapter sixty -three and in the following clauses of this section: A certain date in each year, formerly May first, now April first, is fixed as the date for the valuation of the property of persons, partnerships and corporations liable to local taxation. 1 The questions of ownership, of exemption, of occupancy, and of domicile all relate to the date when the status of the property is ascertained for the current year. The assessment, of course, may be made at a later date, but it must be levied on the person who was owner or occupant on April first. 2 In deciding who is the owner of personal property the court is not bound by the disclaimer of a person alleged to be the owner, but may infer that his control over the property as shown by his actions constitutes ownership for purposes of taxation. 3 The principle that all taxable personal estate of inhabitants of the commonwealth should be assessed to the owner in the town of which he was an inhabitant, in accordance with the doctrine of mobilia sequuntur personam, was established at the first settlement of the colony, and has never been repealed ; but the statute which still so boldly asserts the principle has been shorn of substantially all its force and effect and is now but an empty shell. Tangible personal property situated outside the 1 Sawyer v. Mackie, 149 Mass. 269 (1889). 2 See G. L. c. 59, § 11, supra page 226. 3 Tobin v. Gillespie, 152 Mass. 219 (1890). 1 The date of valuation was changed from April 1 to May 1 by St. 1909, c. 440. This statute was inadvertently repealed by St. 1913! c 835, § 503; but by St. 1914, c. 198, § § 1, 2, it was again provided that April 1 should be the tax day. 2 J. L. Hammett Co. v. Alfred Peats Co., 217 Mass. 520 (1914). 3 Raymond v. Worcester, 172 Mass. 205 (1898). 238 Taxation in Massachusetts [G.L.c. 59, §18 state this commonwealth now has no power to tax; 4 tangible personal property situated within the commonwealth (except ships and vessels) is now taxed in the town where it is situated; 5 intangible personal property has been gradually withdrawn from the scope of local taxation. The only application of the statute set forth at the head of this section at the present time is to ships and vessels not engaged in the foreign or interstate carry- ing trade, to taxable intangible property yielding income which the owner has failed to return to the income tax officials 6 and to the distribution of the tax on national bank stock. 7 Prior to 1918, and while the domicile of the owner continued to be the determining factor in the place of taxation of personal property, there were special provisions of statute regulating the place of taxation of personal property of persons under guardianship and personal property held in trust, such property being made taxable at the domicile of the ward or of the bene- ficiary, unless his domicile was outside the state, in which case it was taxable at the domicile of the guardian or trustee. 8 The enactment of the income tax act deprived these provisions of much of their importance, 9 and in 1918, when physical location was made the test of the taxing situs of tangible personal prop- erty, these statutes were repealed, 10 and tangible personal prop- erty belonging to persons under guardianship or held in trust became subject to the provisions of law applicable to the taxation of tangible personal property generally, and is taxable in the place where it is situated on the first day of April unless it falls within one of the provisions of section eighteen requiring its taxation elsewhere. With reference to the person to whom such property is to be assessed, a distinction is to be noted between guardians and trustees. A trustee is the legal owner of the trust property, and there is no difficulty in assessing him as such. 11 In the case of * Supra, Part I, § 43. 5 G. L. c. 59, § 18, cl. 1, infra page 239. 6 G. L. c. 62, § 49, infra page 500. » G. L. c. 63, § § 5-7 inc., infra page 513. 8 St. 1909, c. 490, Part I, § 23, clauses 4, 5, 6 and § 24. See the first edition of this work, pages 235 to 240 inc. 9 See G. L. c. 59, § 5, cl. 33, supra page 215, by which intangible personal property held by any fiduciary in this commonwealth is exempted from direct taxation. io St. 1918, c. 129. 11 Gray v. Lenox, 215 Mass. 598 (1913); Welch v. Boston, 221 Mass. 155 (1915). Assessment of Local Taxes 239 G. L. c. 59, § 18, CI. 1]. a person under guardianship, on the other hand, the legal title to the property is in the ward and not in the guardian, 12 and the property should be assessed to the ward. 13 There is now no provision in the statutes for the assessment of personal prop- erty (other than machinery and personal property leased for profit) to the person in possession or control. A trustee in bankruptcy, or a trustee under a voluntary assignment for the benefit of creditors, may be taxed for the goods of the bankrupt or the assignor in his hands; for title passes to such a trustee or assignee and he may be taxed as owner ; and the fact that a trustee in bankruptcy was appointed by a court of the United States does not exempt him from taxation by authority of a state; 14 but a receiver of a corporation ap- pointed by a court is not taxable for the goods of the corpora- tion in his hands unless an assignment has been executed for the purpose of making him an owner. 15 Tangible Personal Property First, All tangible personal property, including that of persons not inhabitants of the commonwealth, except ships and vessels, shall, unless exempted by section five, be taxed to the owner in the town where it is situated on April first. This statute marks the final step in the change of the prin- ciple of situs in taxing tangible personal property from the old rule of mobilia sequuntur personam by which the situs of all personal property was deemed to be at the domicile of the owner to the present practice of basing situs almost wholly on the physical location of the property. The original rule was that every person was to be assessed for his personal property in the town of which he was an inhab- itant. It soon however became the subject of complaint in Boston and other commercial towns that many wealthy inhab- itants removed into towns in the vicinity, although they contin- ued their business in the town of their former residence, and 12 Granby v. Amherst, 7 Mass. 1 (1810); Manson v. Felton, 13 Pick. 206 (1832). 13 In Payson v. Tufts, 13 Mass. 493 (1816) it was held that personal property of a ward might be assessed to the guardian ; but at that time a person might be taxed for personal property in his possession. 14 Supra, Part 1, §28. 15 City National Bank v. Charles Baker Co., 180 Mass. 40 (1901). 240 Taxation in Massachusetts [G. L. c. 59, § 18, CI. 1 the town in which the business was carried on, although it fur- nished protection to the business, derived no taxes therefrom. 1 This injustice was remedied in 1742 in the annual tax act of that year by providing that goods, wares and merchandise and other stock in trade belonging to merchants, traders or factors should be taxed in the town in which the business of the owner was carried on. 2 In 1753 the requirement was added that the owner must maintain a store, shop or wharf in order to justify the taxation of his goods in a town other than that of his dom- icile. These provisions were continued in the annual tax acts without change for many years. 3 In 1814 stock employed in manufactories was also made taxable where it was located, 4 and with some minor changes the statute remained in force until the more comprehensive provisions of the 1918 statute rendered it no longer necessary. In 1821 it was provided that horses and cattle should be taxed in the town where they were kept throughout the year rather than at the domicile of the owner; 5 and in 1830 provision was made for the taxation of machinery employed in manu- facture in the town in which the manufacturing was carried on. 6 In 1903 the merchandise of foreign corporations was made taxable where it was situated, 7 and in 1909 the same rule was applied to merchandise, machinery and animals of individuals not resident in the commonwealth. 8 Finally in 1918 the present statute was enacted, and all tangible personal property made taxable where it was situated on the first day of April in each year. 9 It is not however to be supposed that property is to be deemed 1 Araesbury etc. Mfg. Co. v. Amesbury, 17 Mass. 461 (1821). 2 St. 1742-3, c. 31, § 8. s St. 1753-4, c. 10, §8. 4 See Amesbury etc. Mfg. Co. v. Amesbury, 17 Mass. 461 (1821); Hittinger v. Westford, 135 Mass. 258 (1883); Boston Loan Co. v. Boston. 137 Mass. 332 (1884). For the interpretation of the statute in detail see the first edition of this work, pages 225 to 230 inc. 5 St. 1821. c. 107, §3; and see Hicks v. Westport, 130 Mass. 478 (1881); Pierce v. Eddy, 152 Mass. 494 (1891). 6 See G. L. c. 59, § 18, cl. 2, infra page 241. 7 St. 1903, c. 437, §71; and see Tobey v. Kip, 214 Mass. 477 (1913); Sullivan v. Ashfield, 227 Mass. 24 (1917) ; Atlantic Maritime Co. v. Gloucester, 228 Mass. 519 (1917) ; Collector of Boston v. Rising Sun Street Lighting Co., 229 Mass. 494 (1918). 8 St. 1909, c. 516, §2. 9 St. 1918, c. 129, § 1. Assessment of Local Taxes 241 G. L. c. 59, § 18, CI. 2] to be situated in a town within the meaning of the statute merely because it is within the town for a temporary purpose on the first day of April, and property is undoubtedly taxable in the town where it is ordinarily kept, rather than where it happens to be on the taxing day. 10 Machinery and Personal Property Leased for Profit Second, Machinery employed in any branch of manufacture, or in supplying or distributing water, including machines used or oper- ated under a stipulation providing for the payment of a royalty or compensation in the nature of a royalty for the privilege of using or operating the same, and all tangible personal property within the commonwealth leased for profit, shall be assessed where such machin- ery or tangible personal property is situated, to the owner or any person having possession of the same on April first. This statute, originating in 1830, 1 remained in much the same form until 1887, providing simply that machinery em- ployed in any branch of manufacture should be assessed where located to the owner in possession on the taxing day. In 1887 the provision as to royalty was added 2 and in 1889 the pro- vision as to personal property leased for profit. 3 The statute of 1918 making all tangible property taxable where located 4 deprived this statute of much of its importance; as applied to individuals it differentiates the classes of property to which it relates from other tangible personal property only by making the property to which it relates taxable to the person in posses- sion rather than to the owner, if the assessors so elect. To be taxed under this clause the property must not only be machinery (though not necessarily machinery affixed to the buildings) 5 but it must also be employed in some branch of 10 See the following decisions under earlier statutes. Hittinger v. Boston, 139 Mass. 17 (1885) ; Ingram v. Cowles, 150 Mass. 155 (1889) ; Pierce v. Eddy, 152 Mass. 594 (1891); Atlantic Maritime Co. v. Gloucester, 228 Mass. 519 (1917). i St. 1830, c. 151, §2. 2 St. 1887, c. 125. 3 St. 1889, c. 446. In 1894 (St. 1894, c. 304) a provision was added to enable the town of the owner's domicile to contest with the town where the machinery was located as to its situs for taxation. This was rendered unnecessary by St. 1918, c. 129, making all tangible property taxable where located and stricken out. * St. 1918, c. 129, now G. L. c. 59, § 18, cl. 1, supra page 239. 5 Lowell v. Middlesex County Commissioners, 152 Mass. 372 (1890) ; Troy Cotton & Woolen Manufactory v. Fall River, 167 Mass. 517 (1897). It should 242 Taxation in Massachusetts [G.L.c. 59, §18, CI. 2 manufactures, and machinery not so employed is not taxable under this clause. 6 Furthermore it must be employed in an established place of business, and not be merely portable prop- erty moving from place to place. 7 This clause is still of great importance in connection with the taxation of corporations. It was provided in 1832 that all machinery employed in manufacture and belonging to any cor- poration or person should be assessed where situated, and that in assessing the shares of a manufacturing corporation the value of the machinery locally taxed should be deducted. 8 This last provision is still in force in respect to the corporate franchise tax, 9 and although the statutes do not now in terms require the local assessment of the machinery of a domestic corporation, it is well settled by long practice and plain implication that the clause now under consideration, so far as it relates to machinery, unlike the other clauses of this section, applies to domestic cor- porations; and the land, buildings and machinery of mills and factories are valued for taxation in the same manner whether the owner is a natural person or a corporation. 10 Where the whole manufacturing plant of land, buildings and machinery belonging to one corporation and locally taxable is of more value if kept together and used for mill purposes than if the machinery is removed from the buildings or if the buildings and machinery are removed from the land, each of these items should be valued for taxation as it is used in connection be remembered that machinery is taxable as personal property even if affixed to the building so as to constitute real estate as between vendor and vendee. G. L. c. 59, § 3, supra page 190. 6 Machinery employed in manufacture does not include pipes and mains for distributing water, Dudley v. Jamaica Pond Aqueduct Co., 100 Mass. 183 (1868); Coffin v. Artesian Water Co., 193 Mass. 274 (1906), machinery used in cutting ice, Hittinger v. Westford, 135 Mass. 258 (1883), or in quarrying and breaking stone, Wellington v. Belmont, 164 Mass. 142 (1895), or in printing a news- paper, Barron v. Boston, 187 Mass. 168 (1905). It does include mains, pipes and meters used in distributing gas, Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866) ; and since the enactment of St. 1907, c. 329, the machinery of water companies has been specifically made subject to local taxation. 7 Ingram v. Cowles, 150 Mass. 155 (1889). 8 Infra pages 531, 539. 9 G. L. c. 63, §30, 3 (a), infra page 539. 10 Troy Cotton & Woolen Manufactory v. Fall River, 167 Mass. 517 (1897). The matter is not left so wholly to implication by the General Laws as it was under the statutes previously in force, as all personal property of domestic corporations, except machinery employed in manufacture, is now expressly exempt from local taxation. Assessment of Local Taxes 243 G.L.c. 59, §18, CI. 3] with the others; 11 but the machinery should be assessed sep- arately from the land and buildings, and the owner is entitled to an abatement if the land and buildings are overassessed, even if the land, buildings and machinery taken together are not. 12 The provision as to personal property leased for profit for- merly applied to foreign corporations 13 though doubtless not under the present law, as there is no provision for the deduction of the value of such property from the corporate excise tax. Property must be actually leased to come within this portion of the statute. 14 Personal Property of Deceased Persons Third, Personal property of deceased persons, before. the appoint- ment of an executor or administrator, shall be assessed in general terms to the estate of the deceased, and the executor or administrator subsequently appointed shall be liable for the tax so assessed as though assessed to him. Prior to the enactment of the Revised Statutes of 1836 there was no special provision for the taxation of the personal prop- erty of deceased persons, and it was held that a tax could not legally be assessed to a person after his decease, but the assess- ment should be made upon his estate in the hands of his next of kin or executor or administrator or whoever else might be in possession of it. 1 Recognizing the difficulties thus imposed upon the assessors, the commissioners on the Revised Statutes pre- pared the provision that was enacted therein, to the effect that personal estate of deceased persons in the hands of their execu- tors or administrators and not distributed should be assessed to the executor or administrator in the town where the deceased last dwelt, until the executor or administrator gave notice to the assessors that the estate had been distributed. In 1849 it was questioned by the court whether the estate of a deceased person could be assessed to a person named as executor in the" will before the will had been admitted to probate even if it was 11 Troy Cotton & Woolen Manufactory v. Fall River, 167 Mass. 517 (1897). 12 Hamilton Mfg. Co. v. Lowell, 185 Mass. 114 (1904). 13 Lamson Consolidated Store Service Co. v. Boston, 170 Mass. 355 (1898). 14 Rising Sun Street Lighting Co. v. Boston, 181 Mass. 211 (1902). 1 Cook- v. Leland, 5 Pick. 236 (1827). 2 Smith v. Northampton Bank, 4 Cush. 1 (1849). 244 Taxation in Massachusetts [G.L.c. 59, §18, CI. 3 subsequently admitted and the executor duly confirmed, 2 and in 1852 it was provided by statute that the estate in the hands of an executor or administrator should be liable for taxes assessed upon the personal estate of a deceased person before the appoint- ment of such executor or administrator. 3 The General Statutes consolidated the pertinent clause of the Revised Statutes and the statute of 1852 omitting the words " in the hands of their executors or administrators and not distributed. " The next change occurred in 1878 when it was provided that the personal property held by an executor or administrator should be taxable to him for three years after his appointment, unless the same had been distributed and notice of such distribution given to the assessors, stating the names and residences of and the amounts paid to the several parties interested and resident in this state, 4 and furthermore that after personal property had been assessed to an executor, administrator or trustee, an amount not Iqss than that for which he was last assessed should be deemed to be the amount for which he was assessable unless a true list of his tax- able property was brought in. 5 In 1912 it was provided that the notice of distribution should be under oath, and that after notice of final distribution had been given, no list need be filed. 6 During the period between 1878 and the enactment of the income tax in 1916 the assessment of the estates of deceased persons usually amounted more to a contest of wits between the executors or administrators of the deceased and the assessors of the town in which he last dwelt than to an attempt in good faith by all parties to determine the real amount of taxable property belonging to the deceased or to his estate on the assess- ment day. The disclosure incidental to proceedings in the probate court not infrequently revealed the fact that persons who had been paying a very moderate amount of taxes left mil- lions of dollars in taxable intangible property; and the repre- sentatives of the deceased frequently - endeavored to withhold the real extent of the estate so that they could distribute the property or convert it into non-taxable securities before it could be taxed, while on the other hand the assessors often watched eagerly for some failure on the part of the executors to comply 3 St. 1852, c. 234. * St. 1878, c. 189, § 2. c St. 1878, c. 189, § 3. o St. 1912, c. 238, § 1. Assessment of Local Taxes 245 G. L. c. 59, § 18, CI. 3] with the technical requirements of the tax laws which by way of penalty would leave the entire estate subject to taxation for at least one year. 7 The enactment of the income tax in 1916 and the with- drawal of intangible property from local taxation ended this unfortunate condition of affairs; and in 1918 the statute which provided that tangible property should be assessed where lo- cated 8 put a final end to the struggles over the taxation of the estates of deceased persons so far as local taxation was concerned. The requirement of notice of distribution was re- pealed and the statute was reduced to its present form, applicable only to the estates of deceased persons before the appointment of an executor or administrator. 9 After the appointment of an executor or administrator he is taxable as owner under the general provisions of the tax laws in the town in which the property is situated. Some of the decisions under the earlier law are still applic- able, in spite of the change in the statutes. Personal property of a deceased person is taxable to the executor until it is dis- tributed. What effects a distribution is a matter of the substan- tive law of probate,.and it is held that if adistribution has actually taken place, the estate is no longer taxable to the executor or administrator although his accounts showing such distribution have never been allowed by the probate court, provided that the executor or administrator and the distributees are different persons so that the distribution is an actual rather than a sym- bolic act. 10 When however the property of the deceased is bequeathed in whole or in part to trustees who are the same persons as the executors under the will, it is well settled that no transmutation of the property from the executors to the trustees can take place until the accounts of the executors show- ing the distribution of the property by themselves as executors to themselves as trustees are allowed by the probate court, 11 7 As to the requirements during this period, see the first edition of this work, pages 240 to 247 inc., also, Cody v. Spear, 214 Mass. 241 (1913) ; Sears v. Nahant, 215 Mass. 329 (1913). s St. 1918, c. 129. 9 The special requirement that a tax on an executor or administrator should not be less than in the preceding year (supra, note' 5) was also repealed in 1918. St. 1918, c. 50, §1. 10 Carleton v. Ashburnham, 102 Mass. 348 (1869); Williams v. Acton, 219 Mass. 520 (1914). 11 Hall v. Cushing, 9 Pick. 395, 409 (1830) ; Conkey v. Dickinson, 13 Met. 51 (1847). 246 Taxation in Massachusetts [G.L.c. 59, §18, CI. 5 and consequently, as the taxation of personal property depends upon ownership and not possession, property which executors have gone through the form of distributing to themselves as trustees without the sanction of the probate court is still taxable to them as executors. 12 A valid tax cannot be assessed upon a person who is already deceased 13 or upon the " estate " of a person deceased after the appointment of an executor or administrator. 14 A tax assessed to an executor on the personal property of the deceased is the debt of the executor and not of the deceased and consequently an action to recover the tax may be brought against the exec- utor more than one year after the date of his appointment. 15 Personal Property of Joint Owners Fourth, Personal property of joint owners or tenants in common, other than partners, may be assessed to one or more of such owners, and any person so assessed shall be liable for the whole tax. In 1882 it was provided that personal property of joint own- ers or tenants in common, other than partners, should be assessed to such owners according to their respective interests in the cities and towns in which they respectively resided. 1 In 1918 the statute was put into its present form. 2 Conduits, Wires, Pipes and Poles Fifth, Underground conduits, wires and pipes laid in public ways, except such as are owned by a street railway company, and poles, underground conduits and pipes, together with the wires thereon or therein, laid in or erected upon private property or in a railroad location by any corporation, except poles, underground conduits, wires and pipes of a railroad corporation laid in or erected upon the location of such railroad, and except poles, underground conduits, 12 Hardy v. Yarmouth, 6 Allen 277 (1863); Welch v. Boston, 211 Mass. 178 (1912); Sears v. Nahant, 215 Mass. 329 .(1913). 13 Cook v. Leland, 5 Pick. 236 (1827). 14 Wood v. Torrey, 97 Mass. 321 (1867). 15 Dallinger v. Davis, 149 Mass. 62 (1889). G. L. c. 260, § 11, providing that actions founded on contracts made or acts done by an executor or ad- ministrator should be brought within one year from the time the cause of action accrues probably has no application to an action to recover a tax, which is not based upon any contract made or act done by an executor or administrator. 1 St. 1882. c. 165. 2 St. 1918, c. 129, § 1, cl. 4. Assessment of Local Taxes 247 G.L.c. 59, §18, CI. 5] wires and pipes laid in or erected upon any right of way owned by a street railway company, shall be assessed to the owners thereof in the towns where laid or erected. Prior to 1902 the only special provision which could be in- voked to authorize the local taxation of underground pipes and similar structures used for the distribution of some commodity to the public was that relating to the taxation of machinery used in manufacture; 1 and the taxability of pipes under that clause depended upon whether the commodity was manufactured or was distributed in its natural state. 2 In 1902 it was provided that underground conduits, wires and pipes laid in public streets by any corporation except a street railway company should be assessed to the owners thereof in the cities and towns in which they were laid ; but after a decision 3 that water pipes and the mains for distributing water to the public laid through private land were not taxable under this statute and so, being owned by a foreign corporation and considered by the assessors to be personal property, under the laws then in force escaped all taxation in this commonwealth, the statute was amended to include poles, pipes and underground conduits laid in private land. Pipes, rails and wires laid in public highways remain personal property and belong to the corporation which maintains them; 4 but it would seem that such objects when erected in or upon private land might be real estate for the purposes of taxation whatever the agreement might be with the owner of the land. 5 The statute, however, by constituting them one of the exceptions to the general rule for the taxation of personal property, de- clares by inference that such objects are personal property for the purposes of taxation. For the same reason it was inferred by the court that the statute had no reference to what is un- questionably real estate, and it was held that the " rights of way " of street railway companies which are impliedly exempted from local taxation by the statute are their rights in public 1 G. L. c. 59, § 18, el. 2, supra page 241. 2 Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866); Dudley v. Jamaica Pond Aqueduct Co., 100 Mass. 183 (1868). 3 Coffin v. Artesian Water Co., 193 Mass. 274 (1906). 4 French v. Jones, .191 Mass. 522 (1906). 5 G. L. c. 59, § 3, supra page 190. 248 Taxation in Massachusetts [G.L.c. 59, §18, CI. 6, 7 ways only. 6 In 1913 the legislature recast the law into its pres- ent form. 7 It has been held however that the exception in favor of street railways, like that in favor of railroads, although it has been extended to cover any right of way owned by them, applies only to poles and wires upon their location, and does not include the poles and wires of a transmission line laid across private land by virtue of an easement acquired for the purpose ; and such structures are consequently subject to local taxation. 8 Partnership Property Sixth, Partners, whether residing in the same or different towns, may be jointly taxed under their firm name, in the place where their business is carried on, for all the personal property employed in such business, except ships or vessels. If partners have places of business in two or more towns, they shall be taxed in each of such places for the proportion of property employed therein. If so jointly taxed, each partner shall be liable for the whole tax. Seventh, Ships or vessels, other than those in the interstate or foreign carrying trade as to which return is made under section eight, owned by a partnership, shall be assessed to the several part- ners in their places of residence, if within the commonwealth, pro- portionally to their interests therein; but the interests of the several partners residing without the commonwealth shall be assessed to the partnership in the place where its business is carried on. The statute relating to the taxation of partnership property has received no material modification since it appeared in the Revised Statutes of 1836, except for the introduction of the exception relating to ships and vessels in 1859. " Place " in the first sentence of the statute means city or town; in the second sentence a specific spot within a city or town. 1 " Place of business " is to be taken in its ordinary and popular sense ; it does not necessarily mean a place where the buying or selling of goods is carried on, or a place in the exclusive occupation and control of the partnership; 2 but it does exclude a place where the partners' work is carried on under the exclusive control 6 Connecticut Valley St. Ry. Co. v. Northampton, 213 Mass. 54 (1912). 7 St. 1913, c. 458. 8 Northern Massachusetts St. Ry Co. v. Westminster, 227 Mass. 547 (1917). 1 Palmer v. Kelleher, 111 Mass. 320 (1873). 2 Barker v. Watertown, 137 Mass. 227 (1884); Duxbury v. Plymouth County Commissioners, 172 Mass. 383 (1899). Assessment of Local Taxes 249 G.L.c. 59, §18, CI. 6, 7] and direction of another. 3 An unincorporated association doing business in the manner of corporations, the personal property of which is held in trust for beneficiaries whose interests are rep- resented by transferable shares, is a partnership and not a trust if the control of the property is in the hands of the shareholders rather than of the trustees, and the personal property of such an association is taxable to the trustees in the city or town in which the business is carried on. 4 If the total value of the shares is greater than the total value of the property of the asso- ciation on account of the expectation of future profits this ex- cess escapes taxation under our statutes 5 except so far as it is reached indirectly by the income tax. A partnership continues to exist for the purposes of taxa- tion after it has been dissolved until the affairs of the firm are wound up or until all the firm property has been disposed of; 6 but- partners who have withdrawn from a firm are not personally liable for the tax assessed in the firm name although they have not notified the assessors of their withdrawal. 7 The status of a partner who has withdrawn from a firm and allowed his share to remain for a certain period is that of a creditor, 8 unless it appears that it was the intent of the partner that the obligations of a partnership should continue. 9 If a partnership is dissolved after the first day of April in a year by the withdrawal of some of the partners, such partners are equally responsible for taxes assessed during the year with those who continued the business. 10 The statute has no application to a partnership which has no place of business in the commonwealth, and the property of such a partnership if within the commonwealth must be taxed in accordance with the other provisions of law. 11 Difficult questions may arise when the same items of property 3 Little v. Cambridge, 9 Cush. 298 (1852); Cloutman v. Concord, 163 Mass. 444 (1895). 4 Hoadley v. Essex County Commissioners, 105 Mass. 519 (1870); Ricker v. American Loan & Trust Co., 140 Mass. 346 (1885); Williams v. Boston, 208 Mass. 497 (1911); Williams v. Milton, 215 Mass. 1 (1913); Foster v. Boston, 215 Mass. 31 (1913). See also injra pages 616, 618. 5 Hoadley v. Essex County Commissioners, 105 Mass. 519 (1870). 6 Oliver v. Lynn, 130 Mass. 143 (1881). 7 Washburn v. Walworth, 133 Mass. 499 (1882). s Williams v. Brookline, 194 Mass. 44 (1907). 9 Stearns v. Brookline, 219 Mass. 238 (1914). 10 Hurter v. Larrabee, 224 Mass. 218 (1916). 11 Bemis v. Aldermen of Boston, 14 Allen 366 (1867). 250 Taxation in Massachusetts [G.L.c. 59, §19 of a partnership appear to be taxable in the same year in two different towns, under different clauses of this section, since there is nothing in the statutes to indicate which clause is intended to prevail in case of a conflict. Thus if tangible personal property belonging to a partnership and employed in its business was kept in a town in which the partnership had no place of busi- ness, such property would be taxable under clause first in the town where it was kept and under clause sixth in the town in which the business of the partnership was carried on. Obviously it could not be taxed in both places, and if the tax rates of the two towns differed widely, the place of taxation might be of great importance. The decisions under the earlier statutes throw very little light on this problem. 12 Clause seventh, relating to ships and vessels, was first enacted in 1859 shortly after a decision that ships belonging to a part- nership and employed in its business were to be taxed to the partners jointly in the town where their business was carried on and not separately at their places of residence. 13 There is nothing in this statute from which it can be inferred that joint owners of ships or vessels who are not partners in mercantile or other business are liable to be taxed jointly at a place where they do not reside instead of being severally assessed in their re- spective places of residence proportionally to their interests in the property. 14 Personal Property Mortgaged or Pledged Section 19. Personal property mortgaged or pledged shall for the purpose of taxation be deemed the property of the party in pos- session thereof on April first. This statute, so far as it relates to mortgaged or pledged property, has remained without material change since its enact- ment in the Revised Statutes of 1836. While intangible prop- erty remained locally taxable it was held that the statute ap- plied only to tangible personal property, and that stocks and 12 See Lee v. Templeton, 6 Gray 579 (1856); Ricker v. American Loan & Trust Co., 140 Mass. 346 (1885) ; Cotton v. Boston, 161 Mass. 8 (1894); Williams v. Boston, 208 Mass. 497 (1911). 13 Peabody v. Essex County Commissioners, 10 Gray 97 (1857). 14 Stinson v. Boston, 125 Mass. 348 (1878). Assessment of Local Taxes 251 G.L.c. 59, §21] bonds pledged or mortgaged were taxable to the pledgor or mort- gagor. 1 The statute is not limited in its application to the local property tax, but establishes as a general rule the principle that in the administration of the tax laws the person in possession as pledgee of pledged property shall be treated as the owner. 2 The statute has no application to the place in which pledged property is to be taxed, but merely fixes the person to whom it is to be assessed. The place is fixed by other provisions of stat- ute, and ordinarily would be where the property was kept, 3 Warrants for Assessment of State Tax Section 20. When a state tax is to be assessed, or an assessment is required to reimburse the commonwealth under section forty-one of chapter forty-four, for expenses incurred under sections thirty-five to forty, inclusive, of said chapter, the state treasurer shall send his warrants for the assessment thereof by mail to the assessors of the several towns. The method of apportioning the state tax upon the different cities and towns of the commonwealth is set forth in another portion of this work. 1 . The Taxes which the Assessors are Required to Assess Section 21. The assessors shall assess state taxes including all lawful assessments by the commonwealth for which they receive war- rants under the preceding section, county taxes duly certified to them, town taxes voted by their respective towns and all taxes duly voted and certified by fire, water, light and improvement districts therein. Such district taxes shall be subject to the law relative to the assess- ment and collection of town taxes, so far as applicable. Except as otherwise provided, all taxes shall be assessed as of April first. Assessors are public officers whose duties are defined by stat- ute in great detail, 1 and it is not within the power of a town to 1 Waltham Bank v. Waltham, 10 Met. 334 (1845) ; Hall v. Middlesex County Commissioners, 10 Allen 100 (1865); Chase v. Boston, 180 Mass. 458 (1902); Chase v. Boston, 193 Mass. 522 (1907). See however under the Income Tax Act, G. L. c. 62, § 1, subsection (f), infra page 446. v 2 Boston Loan Co. v. Commonwealth, 224 Mass. 181 (1916). 3 Boston Loan Co. v. Boston, 137 Mass. 332 (1884). 1 G. L. c. 58, § § 9, 10, supra page 167. 1 The provision as to "all lawful assessments by the commonwealth" was added by the commissioners who prepared the General Laws to make it clear 252 Taxation in Massachusetts [G.L.c. 59, §22 impose additional duties upon them, either with or without additional compensation. 2 No one but the assessors can assess a tax, and even if a town has collected a tax which the assessors did not assess it is not estopped to deny that the tax was duly assessed; 3 but if the assessors assess a tax and the town receives the money the town cannot set up an informality in the assessment to avoid its effect. 4 If the assessors intentionally neglect to assess a per- son they know to be taxable, such person cannot be taken to have been duly assessed. 5 Although the assessors as a board are obliged to assess all the taxes, there is no valid objection to their apportioning the town among them, if the board as a whole ratifies and accepts the findings of the individual members in their respective localities. 6 It is not requisite to the validity of the acts of a board of assessors that all the assessors concur therein ; a board of assess- ors like other public boards may act through the vote of a majority; 7 and if there is a vacancy in the board, the remaining members may act until the vacancy is filled. 8 Omission of Shares in National Banks Section 22. Assessors of towns where a bank is located the shares of which are subject to taxation under section one of chapter sixty-three shall, for the purpose of ascertaining the rate at which that metropolitan assessments and assessments for state highways and the like were included. See Commissioners' Report, Notes to Chap. 59. As to state taxes see G. L. c. 58, § § 9, 10, supra page 167. As to county taxes see G. L. c. 35, § § 30, 31, supra page 143. As to district taxes see G. L. c. 48, § § 69, 73, supra page 162. As to other duties of assessors see G. L. c. 59, § § 83-86 inc., infra pages 313, 314. 2 Thus in Cox v. Segee, 206 Mass. 380 (1910), it, was held that a town by-law requiring the assessors to report to the town the abatements and reasons there- for, and the total valuation, the rate and amount raised was invalid; and in Gile v. Perkins, 207 Mass. 172 (1911), it was held that after a valuation had been made for one year and before it could be made for the next, a town had no authority to pay its assessors for making a new and elaborate valuation for the purpose of publishing the same and saving part of the labor of making a valuation for the ensuing year. 3 Plymouth v. Wareham, 126 Mass. 475 (1879) (Name added to tax list by collector's clerk without the knowledge of the assessors). * Boston v. Dedham, 4 Met. 178 (1842). 5 Berlin v. Bolton, 10 Met. 115 (1845). 6 Welsh v. Briggs, 204 Mass. 540 (1904). » Sprague v. Bailey, 19 Pick. 436 (1837). 8 George v. School District in Mendon, 6 Met. 497 (1843); Cooke v. Scituate, 201 Mass. 107 (1909). Assessment of Local Taxes 253 G. L. c. 59, § 23, 24] taxes shall be assessed, omit from the valuation upon which the rate is to be based the value of all shares thereof held by non-residents of said towns, and no tax of any town shall be invalidated by reason of any excess, in consequence of this section, of the amount of such tax over the amount to be raised. It was held in 1869 that this statute was not obnoxious to the provision of the Massachusetts constitution requiring pro- portional taxation or to the acts of Congress establishing national banks which prohibited the assessment of their shares at a greater rate than other moneyed capital, for the reason that the omission of such shares when held by non-residents from the valuation upon which the local rate was based did not as a matter of fact result in the slightest change of rate or propor- tion in the tax which the non-resident holders were obliged to pay. 1 The reason for the enactment of the statute is that the act of Congress forbids the taxation of shares in a national bank owned by non-residents of a state elsewhere than in the city or town in which such bank is located, and the tax is assessed accordingly; but to harmonize the system of taxing national banks with that of taxing corporations generally in this com- monwealth, the amount so collected from non-residents is turned over to the commonwealth. 2 Amount of Annual Assessment — Fixing of Tax Rate Section 23 (as amended by St. 1921, chap. 348). The assessors shall annually assess taxes to an amount not less than the aggregate of all amounts appropriated, granted or lawfully expended by their respective towns since the last preceding annual assessment and not provided for therein, of all amounts required by law to be raised by taxation by said towns during said year, of all amounts necessary to satisfy final judgments against said towns and of all abate- ments granted on account of the tax assessment of any year in excess of the overlay of that year, and not otherwise provided for; but such assessments shall not include liabilities for the payment of which towns have lawfully voted to contract debts. The assessors may deduct the amount of all the estimated receipts of their respective towns, 1 Providence Institution for Savings v. Boston, 101 Mass. 575 (1869). As to taxation of shares in national banks see G. L. c. 63, § § 1-10 inc., infra. pages 505 to 514 inc. 2 G. L. c. 58, § § 20-24 inc., supra pages 175 to 178 inc. 254 Taxation in Massachusetts [G.L.c. 59, §§23,24 except from loans or taxes, lawfully applicable to the payment of the expenditures of the year from the amount required to be assessed; but such deduction shall not exceed the amount of the corporation tax received from the commonwealth on or before May first of the current year on account of the assessments of the previous year and of such other receipts as have been received during the preceding financial year. Section 24. The assessors of a town owing debts incurred to obtain funds for subscriptions for the capital stock and securities of a railroad corporation shall annually assess, in addition to the other amounts required by law, an amount sufficient to pay the excess of such interest payable by such town over any income received from such stock or securities. The principle of the foregoing sections is comparatively simple. The statutes do not contemplate the acquirement of a surplus by a town, and the assessors are expected to compute the amount actually required to meet the appropriations voted by the town, the overlay, interest charges, burdens imposed by the legislature and judgments of the courts, deducting the antic- ipated receipts of the town from other sources, and to assess the amount so computed and no more as the annual town tax. The statutes require the assessors to assess not less than this amount, and do not in terms forbid them to assess more except so far as the authority for an overlay of five per cent is an im- plied limitation against the assessment of a greater amount; 1 but an assessment for a larger amount than required for the legitimate expenditures of the town would be beyond the stat- utory powers of a town 2 and might moreover constitute taxa- tion for a purpose not public which the legislature itself could not constitutionally authorize. 3 When however the town has on hand large amounts of money consisting of the unexpended balances of appropriations of previous years, the balance of the overlay of previous years, receipts from the income tax, corporation taxes and other sources in excess of the estimated receipts from such sources, amounts derived from the assessment of omitted property, 4 or funds in the treasury of any other origin which may lawfully be expended, the assessors are not bound to 1 As to overlay see G. L. c. 59, § 25, infra page 255. 2 Freeland v. Hastings, 10 Allen 570, 576 (1865). 3 Supra, Part 1, § 58. 4 Under G. L. c. 59, § 75, infra page 304. Assessment of Local Taxes 255 G. L. c. 59, § 25] consider these amounts in assessing the tax for the ensuing year, and they may be and commonly are left in the treasury to con- stitute a " reserve fund " or " excess and deficiency account " available for appropriation for unforeseen expenditures arising after the tax rate has been fixed and before the beginning of the next fiscal year. The town may however, if it sees fit, ap- propriate money from the reserve fund for the current expendi- tures of the town prior to the fixing of the tax rate, and thus reduce the assessment for the current year. The distinction between the tax rate and the tax limit is explained elsewhere in this work. 5 The tax rate is fixed by de- ducting from the amount to be raised (including overlay) the estimated receipts from income taxes, corporation taxes and other sources and the sum to be raised from poll taxes, and dividing the balance by the aggregate valuation of real estate and tangible personal property taxable within the town. There are two provisions of section twenty-three that are not to be taken literally. The statute says that the assessors may deduct the estimated receipts " except from loans or taxes. " By " taxes " only the taxes collected directly by the town are meant; taxes which are paid to the state and distributed to the towns, such as income taxes and corporation taxes, may of course be deducted in computing the amount to be assessed. In respect to the receipts from the income tax, the assessors are governed by the estimate of the commissioner of corporations and taxation rather than by the actual receipts of the preceding year. 6 Overlay Section 25. The assessors in any city or town, except Boston, may add to the amount to be assessed not more than five per cent thereof, although the limit of taxation as fixed in any city may by such overlay be exceeded, such amount to be used only for avoiding fractional divisions of the amount to be assessed in the apportionment thereof and for abatements granted on account of polls or property assessed in the year in which the overlay is made or of taxes in the warrant of which the overlay is a part; but any balance in the over- lay account, in excess of the amount of the warrant remaining to be collected or abated, shall be transferred to a reserve fund to be used for extraordinary or unforeseen expenses. 5 G. L. c. 44, § 29, supra page 159. c G. L. c. 58, § 19, supra page 172. 256 Taxation in Massachusetts [G. L. c. 59, § 26 Prior to 1785 it had been the common practice of assessors, either to suit their convenience in calculating the apportionment of the tax, or with a view to meeting abatements or defalca- tions and mistakes, to add to the amount of the tax required by the votes of the town a sum sufficient in their judgment to answer these purposes. 1 This was however done without any statutory authority; and in order to remove doubts as to the power of assessors to do this, and at the same time to limit their discretion, it was provided in the statute of 1785 relating to the duties of assessors that the assessors might make an over- lay not exceeding five per cent of the amount of the tax and in no case exceeding forty pounds. The latter limitation was removed in 1828. After 1785 the assessors could not lawfully make an overlay exceeding five per cent; 2 but the overlay might equal five per cent of the whole tax they were authorized to assess and not merely of the town tax. 3 Prior to 1859 an ex- cessive overlay rendered the whole tax void; 4 but under the statutes in force since then a tax illegal in part is illegal only to the amount of the part that is illegal, and accordingly an ex- cessive overlay does not render the whole tax void. 5 Prior to 1913 there was no provision in the statutes re- specting the use to be made of the funds raised by the overlay; in that year provision was made for the use of the overlay for abatements granted on account of polls assessed, 6 and in 1918 the statute was placed in its present form, 7 the limitation to polls being considered to have been unintentionally made. 8 Inclusion of State, County and Town Taxes in one Assessment Section 26. The assessors may include state, county, city and town taxes, or any two of them, in the same assessment. i Alvord v. Collin, 20 Pick. 418 (1838) ; Cone v. Forrest, 126 Mass. 97 (1879). 2 Libby v. Burnham, 15 Mass. 144 (1818); Alvord v. Collin, 20 Pick. 418 (1838); Cone v. Forrest, 126 Mass. 97 (1879). 3 Alvord v. Collin, 20 Pick. 418 (1838). 4 Alvord v. Collin, 20 Pick. 418 (1838). 5 St. 1859, c. 118, now G. L. c. 59, § 82, infra page 311; Cone v. Forrest, 126 Mass. 97 (1879). « St. 1913, c. 649; St. 1913, c. 823. 7 St. 1918, c. 257, § 37. This statute also contains a provision applicable to the City of Boston. 8 See Preliminary Report of Commissioners to Consolidate the General Laws, p. 105. Assessment of Local Taxes 257 G.L.c. 59, §§27,28] During the colonial and provincial periods there appear to have been separate assessments in each town of the colony or province tax, the county tax and the town tax; but in 1785 it was provided that whereas the county tax might often be so small that it would be inconvenient to make a separate list of each person's proportion of it, in such case the assessors of any town, district or plantation might lawfully add their proportion of the county tax to any of their other taxes. The state tax could not under that statute be united with the town and county tax; 1 but under the Revised Statutes of 1836 pro- vision was made authorizing the inclusion of the state tax with the county and town taxes in one assessment. It is now the universal practice to include these taxes in one assessment; and the tax rate of each town, as commonly quoted, includes state and county taxes. Remedy if Assessors Fail to Act Section 27. If assessors neglect to assess a state, county, city, town or district tax required by law, the county commissioners shall forthwith appoint other persons in accordance with section twenty- seven of chapter forty-one. Section 28. If a state or county tax is not assessed, and paid by the town, within the time prescribed, and remains unpaid at the expiration of five months after the receipt of a warrant from the state treasurer or of a certificate from the county commissioners requiring its assessment, the amount of the tax may be recovered of the town in contract by the state treasurer or the treasurer of the county respectively. Assessors who neglect to assess the taxes required by law are liable to a fine as well as to removal. 1 Under the present statutes the share of each town in the state and county taxes is dependent to a considerable extent upon the determination of the commissioner of corporations and taxation of its valuation, although the state tax is of course actually assessed by the legislature. 2 A town may question the correctness of the commissioner's valuation either in an action 1 Alvord v. Collin. 20 Pick. 418, 424 (1838). 1 See G. L. c. 59, § 93, infra page 319. 2 See G. L. c. 58, § § 9, 10, supra page 167. 258 Taxation in Massachusetts [G. L. c. 59, § 29 brought under section twenty-eight by the state or a county to recover the town's share in the state tax or in an information brought by the state treasurer under the provisions of the annual act imposing the state tax, and may in such proceedings contest the constitutionality of any other burden imposed upon the town as a part of the state tax. 3 The Notice to Taxpayers to Bring in Lists Section 29. Assessors before making an assessment shall give seasonable notice thereof to all persons subject to taxation in their respective towns. Such notice shall be posted in one or more public places in each town, or shall be given in some other sufficient manner, and shall require the said persons to bring in to the assessors, before a date therein specified, in case of residents a true list, containing the items required by the commissioner in the form prescribed by him under section five of chapter fifty-eight of all their polls and personal estate not exempt from taxation, except intangible property the income of which is included in a return filed the same year in accordance with sections twenty -two to twenty-five, inclusive, of chap- ter sixty-two, and in case of non-residents and foreign corpora- tions such a true list of all their personal estate in that town not exempt from taxation, and may or may not require such list to include their real estate subject to taxation in that town. It shall also require all persons, except corporations making returns to the commissioner of insurance as required by section thirty-eight of chapter one hundred and seventy-six, to bring in to the assessors before a date therein specified, which shall not be later than June first following, unless the assessors for cause shown extend the time to July first, true lists, similarly itemized, of all real and personal estate held by them respectively for literary, temperance, benevolent, charitable or scientific purposes on April first preceding, or at the election of any such corporation on the last day of its fiscal year last preceding said April first, and to state the amount of receipts and expenditures for said purposes during the year last preceding said days. The notice shall contain the provisions of section thirty- four. The requirement of furnishing a list of taxable property was first imposed upon taxpayers in Massachusetts by the annual 8 Chelsea v. Treasurer & Receiver General, 237 Mass. 422 (1921). Assessment of Local Taxes 259 G. L. c. 59, § 29] tax act of 1715 j 1 and it was continued in the annual and special tax acts without material change until 1735. The obligation was upon the inhabitants of the town to bring in " true and perfect lists of their polls and ratable estates. V In 1735 the failure to file a list was for the first time made a cause for re- fusing an abatement. 2 The development of this phase of the law relating to lists is discussed at length elsewhere in this work. 3 The permanent statute o^ 1785 4 contained the customary pro- vision for notices and lists and remained in force through the subsequent revisions without material change until 1877 when it was made optional with the assessors to require the lists of property to include real estate. 5 In 1882 the provision of statute relating to the taxation of mortgaged land was adopted 6 and the requirement that the provisions of this statute be included in the notice, now appearing at the end of the section under consideration, was imposed. In 1881 and 1888 the provisions for the return of lists of property held for literary, charitable and similar purposes were enacted. 7 In 1898 it was held that the inhabitants of the city or town by which the tax was assessed were the only persons who had to file lists on or before the des- ignated date, because they were the only persons whom the assessors were required to notify to bring in lists, 8 but in 1903 the statute was put in substantially its present form, requiring all persons, firms and corporations subject to taxation to file lists. 9 The only changes since then have been to set back one month all the points of time fixed in the statute 10 and the amend- i St. 1715-16, c. 11, §§4, 5. 2 St. 1735-6, c. 13, § 5. 3 G. L. c. 59, § 61, infra page 287. * St. 1785, c. 50, § 9. 6 St. 1877, c. 160. 6 St. 1882, c. 175, § 1, now G. L. c. 59, § 34, infra page 263. 7 St. 1888, c. 323. 8 Hopkins v. Reading, 170 Mass. 568 (1898). It was held in Otis Co. v. Ware, 8 Gray 509 (1857), that the statute although it applied in terms to "in- habitants" included a corporation holding taxable real estate in the town. In Greenfield v. Franklin County Commissioners, 135 Mass. 566 (1883), it was held that the statute had no application to a corporation established under a special statute which provided that its funds for the purposes of taxation should be divided among eight designated towns and that the assessors of each should be notified of the apportionment; for the notice of the apportionment required by the charter was a substitute for the list required by the general statute. 9 St. 1903, c. 157. 10 St. 1909, c. 440; St. 1914, c. 198, §5. 260 Taxation in Massachusetts [G. L. c. 59, § 29 ments recommended by the commissioners who consolidated the laws, making clear what is meant by a list and omitting in- tangible property subject to the income tax from the property to be included in the list. 11 A list is a catalogue, inventory or schedule, itemized in sufficient detail to convey a reasonable understanding of the ex- tent and nature of the subject to which it refers. 12 Absolute precision in the description of property included in the list is not required, 13 but a description may be so vague and uncertain as not to constitute a valid list. 14 Mere reference to an old list is not sufficient, 15 but if the assessors receive without objection a list referring to- the list of a previous year for descriptions and values they may be held to have waived the insufficiency of the list. 16 All persons who hold property liable to taxation are bound to bring in a list, whether they hold it in their own right or in a representative capacity, as executors, administrators or trus- tees, 17 and a list filed by a person in one capacity cannot be treated as a list which he should have filed in another capacity. 18 The filing of lists by any or all of the taxpayers is not a condition precedent to the levy of a valid tax, and consequently * St. 1918, c. 257, §36. a2 Boston Rubber Shoe Co. v. Maiden, 216 Mass. 508 (1914) ; and note the present wording of the statute. 13 In Charlestown v. Middlesex County Commissioners, 1 Allen 199 (1861), the list of a railroad company described its taxable real estate as "all of its real estate except that embraced in its location, that is to say, 348,310 square feet of land and wharf with the buildings thereon — the same lying between Prison Point and Warren avenue, valued at $350,000." It was held a sufficient list. In Troy Cotton & Woolen Manufactory v. Fall River, 167 Mass. 517 (1897), it appeared that the petitioner filed a list describing under the head of real estate the mill buildings and machinery as "One stone mill and cloth room with water power, 21,744 mule spindles, 21,952 ring frame spindles." The mill had the machinery commonly found in such mills, and the word "spindle" signified not a piece of machinery but a unit of the capacity of the mill and its appliances. This meaning was understood by the assessors, who asked for no further explanation. It was held that the list was sufficient compliance with the statute. 14 Pingree v. Berkshire County Commissioners, 102 Mass. 76 (1869); Boston Rubber Shoe Co. v. Maiden, 216 Mass. 508 (1914). 15 Winnisimmet Co. v. Assessors of Chelsea, 6 Cush. 477 (1850). 16 Great Barrington v. Berkshire County Commissioners, 112 Mass. 218 (1873). 17 Vaughn v. Street Commissioners of Boston, 154 Mass. 143 (1891). 18 Sears v. Nahant, 221 Mass. 437, 443 (1915). In that case it was held that a list filed by petitioners as trustees could not be taken as a list in theif capacity as executors. As there is now no distinction between trustees and executors in the method of taxation it is doubtful if this decision is still law. Assessment of Local Taxes 261 G.L.c. 59, §31] one taxpayer cannot refuse to pay his tax because other tax- payers have not brought in lists. 11 18 Furnishing of Blank Lists Section 30. The assessors shall furnish a blank list prescribed by the commissioner under section five of chapter fifty-eight to any person liable to taxation. The provision for the preparation of forms by the tax com- missioner for lists of property held for literary, charitable and similar purposes originated in 1882, and the provision for other property in 1894. In 1909 the statute was amended by requiring the tax commissioner to prepare instructions for drawing up the assessors' notice. Until 1909 it was open to argument whether the use of the tax commissioner's forms in filing lists of taxable property was optional, but in that year a statute was enacted which made the use of such forms a condition precedent to an abatement. 1 Verification of List by Oath of Taxpayer Section 31. The assessors shall in all cases require a person bringing in a list to make oath that it is true. The oath may be ad- ministered by any of the assessors or by their secretary or head clerk, or by any notary public, whose jurat shall be duly authenti- cated by his seal, or, in this commonwealth, by a justice of the peace. So much of this section as relates to administering the oath shall not apply to Boston. In the statute of 1785 and in the Revised Statutes the re- quirement of an oath was optional with the assessors; but the enactment of a statute in 1853 1 which provided that no abate- ment should be made unless the list was sworn to led the com- missioners who drew up the General Statutes to change " may " to " shall " in the first line of this section. There was no further change until 1891 when the provisions for the administration of the oath by the secretary or the head clerk of the assessors were added, and it was also provided that if the person bringing is White v. New Bedford, 160 Mass. 217 (1893). 1 St. 1909, c. 517, § 2, now G. L. c. 59, § 61, infra page 287. 1 St. 1853, c. 319, now contained in G. L. c. 59, § 61, infra page 287, and see also Porter v. Norfolk County Commissioners, 3 Gray 265, 369 (1855). 262 Taxation in Massachusetts [G. L. c. 59, § 32 in such list was absent from the place in which the tax was to be assessed during the whole period when such oath might be made, the oath might be administered by a notary public." In 1916 it was provided that except in the city of Boston the oath might in all cases be administered by a notary public, or in this commonwealth by a justice of the peace; but in Boston the oath cannot be administered by a notary or justice unless the taxpayer is absent from the city during the whole period when the oath may be made. 3 It has been held that the statute is mandatory and that a list to have any legal effect must be sworn to in the manner prescribed in the statute. 4 It was held in decisions made prior to 1909 that the exact wording was immaterial if it sufficiently appeared that the person bringing in the list took oath that the list contained a statement of all his taxable property, 5 but it would seem that the statute of 1909 prohibiting an abatement unless the list was upon one of the tax commissioner's forms 6 would render an oath taken in different words from those pre- scribed by the commissioner of no legal effect. In the case of a non-resident, a casual presence in the city of Boston not shown to have been during business hours or under such circumstances that the taxpayer might reasonably have sought the assessors would not invalidate a list sworn to by him before a notary public. 7 A corporation owning taxable property in Boston, but having its principal offices and place of business in another town, might in any case file a return sworn to before a notary public, because such a corporation would be in the legal sense continuously absent from Boston. 8 Lists not Open to Public Inspection Section 32. Such lists shall be open to the inspection of the assessors, their assistants and clerks and of the commissioner and his deputies, the director of the division of local taxation and the 2 St. 1891, c. 381. 3 St. 1916, c. 130; St. 1916, c. 294. 4 Amherst College v. Assessors of Amherst, 193 Mass. 168 (1906). 5 Charlestown v. Middlesex County Commissioners, 1 Allen 199 (1861); Lanesborough v. Berkshire County Commissioners, 131 Mass. 424 (1881). « St. 1909, c. 517, § 2, now contained in G. L. c. 59, § 61, infra page 287. 7 Sears v. Nahant, 215 Mass. 329 (1913). This case was decided when the law as to administration of the oath was in force in the whole state, but the decision would seem applicable to Boston now. 8 Massachusetts General Hospital v. Belmont, 233 Mass. 190, 210 (1919). Assessment op Local Taxes 263 G. L. c. 59, § 34] supervisors of assessors; but so much of the lists as shows the details of the personal estate to that of no other person except by order of a court. The lists shall be preserved by the assessors until the com- missioner orders them destroyed. Lists of Property in Storage Warehouses Section 33. All persons engaged in the business of storing or keeping merchandise in storage warehouses shall, within ten days after a request therefor by the assessors of the town where said property is so stored or kept, permit said assessors to copy from their records a list of the names and addresses of all persons who appear, on April first in such year, to have any such property stored or kept in any such warehouse; but such persons shall not be required to furnish lists of persons having property stored in warehouses which is composed of imported goods in original packages and owned by the importer, or of goods that have been received for export trade. Failure to comply with this section shall be punished by a fine of not more than five hundred dollars or by imprisonment for not more than ninety days. Statement of Amount Secured by Mortgage Section 34. A mortgagor or mortgagee of real estate may bring in to the assessors of the town where it lies, within the time prescribed by the notice under section twenty-nine, a sworn statement of the amount secured thereon or on each separate parcel thereof, with the name and residence of every holder of an interest therein as mort- gagor or mortgagee. If such property is situated in two or more places, or if a recorded mortgage includes two or more estates or parts of an estate as security for one sum, such statements shall include an estimate of the interest of the mortgagee in each estate or part thereof. The assessors shall, from such statement or otherwise, ascertain the proportionate interests of the mortgagor or mortgagee respectively in said estates, and shall assess the same accordingly. If, in any year, such statement is not brought in, the tax for that year on such real estate shall not be invalid merely for the reason that the interest of the mortgagee therein has not been assessed to him. The occasion of the enactment of this statute and the effect it produced have already been discussed. 1 The assessors may 1 G. L. c. 59, § 12, supra page 230. 264 Taxation in Massachusetts [G. L. c. 59, § 35 if they see fit make a separate assessment of the interests of the mortgagor and the mortgagee, although no statement under this section was filed. 2 Lists to be Taken as True. — Inquiries by Assessors Section 35. Assessors shall receive as true, except as to valu- ation, the list brought in by each person, unless, on being thereto required by the assessors, such person refuses to answer on oath all necessary inquiries as to the nature and amount of his property. This statute as it appeared in 1785 provided that if the assessors suspected any falsehood in a list they might require the person bringing it in to make oath that it was true ; and such list, being exhibited on oath, should be a rule for that person's proportion of the tax which the assessors might not exceed un- less they discovered some error therein, in which case they might assess such articles as appeared to be kept back. 1 In the Revised Statutes of 1836 it was altered so as to provide that the assessors should receive as the true valuation of the property of each individual the list if any brought in by him unless he should on being thereto required by the assessors refuse to make oath that the same was true. 2 It was held in 1846 that " valua- tion " in this statute, construed in connection with the other provisions of the statutes relating to taxation and the general system of assessment, did not mean " appraisement " or " value," but " schedule " and that the assessors were not bound by the estimate of value contained in a list. 3 Accordingly > in the next revision, the statute was modified so as to express this interpre- tation in more apt phraseology; 4 and as by this time the list was required to be supported by oath in every case, refusal to answer on oath necessary inquiries was made the condition upon which the list need not be taken as true. This statute for the first time authorized assessors to in- terrogate a person after he had filed a list, so that they might correct the list or disregard it if it appeared by an examination of the party that by mistake, oversight or erroneous view of the 2 Sullivan v. Boston, 198 Mass. 119 (1908). 1 St. 1785, c. 50, §9. 2 R. S. c. 7, § 22. 3 Newburyport v. Essex County Commissioners, 12 Met. 211 (1816). 4 G. S. c. 11, §25 (1860). Assessment of Local Taxes 265 G.L.c. 59, §35] law he had not sworn to a true list of his property. If the stat- ute is taken literally the assessors are bound by the list if the person bringing it in answers all questions put to him by the assessors, even although his answers disclose taxable property omitted from the list; but the courts have not permitted such an absurd result and it has been held that assessors are not bound by a sworn list if it appears by an examination of the person bringing it in that it is not true. 5 Even if the assessors know a list to be false they must take it as true unless by in- quiries, giving the person assessed a chance to answer and ex- plain, additional property is disclosed. 6 What is to happen if a person who has knowingly filed a false list upon additional inquiries sticks to his original falsehood, although his ownership of property not included in his list can be conclusively estab- lished by other evidence, has never been decided. It has been said on the one hand that the law can safely trust the question of amount of property owned to the oath of the individual, as it is something peculiarly within his knowledge and a false statement would be clearly punishable; 7 on the other hand it has been intimated that the object of the statute is merely to give a man who has seasonably filed a list an opportunity to be heard before he is arbitrarily assessed for additional prop- erty. 8 At any rate, refusal to answer the assessors' inquiries does not make a man an outlaw, and although his list is no longer binding he cannot be taxed on property he does not own and he may have an abatement if he is over-assessed. 9 Thus one who has filed a list and then refuses to answer questions is in a better position than one who has filed no list at all. 10 In calling upon a person who has brought in a list to answer inquiries the assessors need not follow the exact language of the statute. It is sufficient if they notify the taxpayer that they are not satisfied with the list and desire additional in- formation. 11 5 Hall v. Middlesex County Commissioners, 10 Allen 100 (1865). 6 Moors v. Street Commissioners of Boston, 134 Mass. 431 (1883); Chase v. Boston, 193 Mass. 522 (1907); National Fireproofing Co. v. Revere, 217 Mass. 63 (1914). 7 Newburyport v. Essex County Commissioners. 12 Met. 211 (1846). 8 Moors v. Street Commissioners of Boston, 134 Mass. 431 (1883). 9 Wright v. Lowell, 166 Mass. 298 (1896). 10 G. L. c. 59, § 61, infra page 287. 11 Cody v. Spear, 214 Mass. 241 (1913). 266 Taxation in Massachusetts [G.L.c. 59, §§36,37 Doom of the Assessors in Absence of List Section 36. Assessors shall ascertain as nearly as possible the particulars of the personal estate, and of the real estate in possession or occupation, as owner or otherwise, of any person not bringing in such list, and shall estimate its just value, according to their best information and belief. Section 37. Such estimate shall be entered in the valuation book, and, except as provided in section sixty-one, shall be conclusive upon any person not seasonably bringing in such list, unless he shows a reasonable excuse for the omission. The meaning of section thirty-six is that, if a person liable to taxation does not furnish the assessors with a list, he shall be liable to be assessed for such property as in the judgment of the assessors he owns or possesses ; not merely that the assess- ors' valuation shall be conclusive on the property he really owns. 1 If the assessors are unable to ascertain the particular kinds or items of such taxable personal property as they think belongs to a person subject to taxation who has not brought in a list, it may be assessed in a lump sum as " personal prop- erty " or " personal estate " without any enumeration of par- ticulars. 2 Section thirty-seven has not been materially changed since its first enactment in 1785. There is nothing in this statute which prevents assessors from abating a tax although no list has been carried in; 3 but later enactments which appear in other sections of the statutes now in force prohibited any abatement unless a list was at some time filed, and if the list was not filed within the time designated in the assessors' notice prohibited an abatement unless there was reasonable excuse for delay or the tax exceeded by more than fifty per cent the proper amount. 4 If however the assessors refuse to abate a tax assessed under the provisions of the preceding section and find that there was no reasonable excuse for delay in filing the list the person assessed iHarwood v. North Brookfield, 130 Mass. 561 (1881). 2 Tobey v. Wareham, 2 Allen 594 (1861); Noyes v. Hale, 137 Mass. 266 (1884); Lamson Consolidated Store Service Co. v. Boston, 170 Mass. 354 (1898). 3 Winnisimmet Co. v. Assessors of Chelsea, 6 Cush. 477 (1850); Sears v. Nahant, 205 Mass. 558 (1910). 4 G. L. c. 59, § 61, injra page 287. Assessment of Local Taxes 267 G. L. c. 59, § 38] is without remedy unless he can convince the county commis- sioners or the superior court that the rinding of the assessors as to reasonable excuse was wrong. 5 The Annual Valuation of Taxable Property Section 38. The assessors of each city and town shall at the time appointed therefor make a fair cash valuation of all the estate, real and personal, subject to taxation therein, and, in cities, the assessors may, in any year, divide the city into convenient assessment districts. In the colonial statutes and in the annual tax acts of the provincial period provision was made for the valuation of do- mestic animals at fixed amounts 1 regardless of their actual value, and it was not until 1777 that the assessors were directed to assess the inhabitants " according to the just value of their whole personal estate." 2 In 1853 the requirement was added that the valuation be a " fair cash " valuation and in 1889 the assessors of cities were authorized to divide wards into assess- ment districts. The fair cash value of property is ordinarily the equivalent of its fair market value; 3 the fair cash value of property having a market is best ascertained by finding the price at which it will sell in the market. 4 The statute refers to the price which some one will pay, and not the intrinsic value of the property or the price at which the court thinks people ought to have been will- ing to buy or sell the property. 5 In valuing property commonly bought and sold, such as active bank stocks, or cotton or coal, all that is necessary is to ascertain the market price of such ar- ticles on the tax day, with perhaps a correction to offset the fleeting results of a temporary panic or boom as the result of 5 G. L. c. 59, § 64, infra page 293. 1 Anc. Chart. 70; St. 1776-7, c. 13. § 3. See also supra page 87. 2 St. 1777-8, c. 13, § 2. 3 Frequently in support of principles of valuation of general application decisions in tax cases and in eminent domain cases are cited indifferently; the fair cash value of the one is the equivalent of the fair market value of the other. Massachusetts General Hospital v. Belmont, 233 Mass. 190, 206 (1919). For the principles of valuation as applied in eminent domain proceedings see Nichols, Eminent Domain, 2d. ed., § § 217-223 inc. and § § 444-459 inc. 4 National Bank of Commerce v. Bedford, 155 Mass. 313, 315 (1892); National Bank of Commerce v. New Bedford, 175 Mass. 257, 262 (1900); Massachusetts General Hospital v. Belmont, 233 Mass. 190, 206 (1919). 5 National Bank of Commerce v. New Bedford, 175 Mass. 257, 262 (1900). 268 Taxation in Massachusetts [G. L. c. 59, § 38 a little latitude which the adjective " fair " injects into the requirements of the statute. 6 In the case of real estate, valuation for purposes of taxation is no such simple matter. The dominant intention of the stat- ute is that property shall, for purposes of taxation, be assessed at its fair cash value considered with reference to all the uses to which it is adapted and to which it may be put by any owner. 7 The fair cash value of a tract of land is ascertained by a con- sideration of all those elements which make it attractive for valuable use to one under no compulsion to purchase but yet willing to buy for a fair price. An actual sale is the best test of value but is not conclusive. No two pieces of real estate are exactly alike, so that the price at which one lot is sold is no sure test of the value of another, and the price at which even the lot under consideration has sold is not necessarily de- cisive as to its fair cash value, for either the buyer or the seller may have been under peculiar compulsion. With respect to land values, the assessors must however be guided chiefly by their knowledge of sales and must exercise their best judgment in comparing the availability of the piece of land which they are assessing with other similar parcels in the neighborhood with the prices paid for which they are familiar. In assessing buildings, the assessors may be guided by the sale of similar buildings, but they may also be assisted by knowl- edge of the original cost, with allowance for depreciation, re- placement cost, and the rents derived from the building, if leased for a use to which it is fairly adapted. All of these elements may be considered, but no one of them is de- cisive. 8 The real test is the fair cash value, and other factors are important only as throwing light on that value. In valuing large factories or the plants of public service corporations, which are not commonly bought and sold for 6 National Bank of Commerce v. New Bedford, 175 Mass. 257, 262 (1900). The market value of stock in a corporation owning only real estate and ma- chinery and owing no debts is not conclusive of the value of the real estate and machinery. Chicopee v. Hampden County Commissioners, 16 Gray 38 (1860). 7 Tremont & Suffolk Mills v. Lowell, 163 Mass. 283, 288 (1895) ; Troy Cotton & Woolen Manufactory v. Fall River, 167 Mass. 517, 523 (1897); Blackstone Manufacturing Co. v. Blackstone, 200 Mass. 82, 39 (1908); Lodge v. Swampscott, 216 Mass. 260, 263 (1913). 8 Essex Co. v. Lawrence, 214 Mass. 79 (1913). Assessment of Local Taxes 269 G. L. c. 59, § 38] cash, the assessors must very largely be guided in reaching the fair cash value by knowledge of original cost and replacement cost, with allowance for depreciation, and productive power, but the real test is still the cash value, assuming a purchaser could be found. 9 More difficult questions arise in the case of structures which serve the purpose for which they are used, but would have little or no value for sale. The law contemplates the taxation of railroad stations and other property of public service com- panies, with respect to which there is no right of sale in the ordinary sense. 10 So also there are classes of private property which have a market or cash value small or almost negligible as compared with their cost or their utility to their owners. A church, a private school, a clubhouse, or even a private dwell- ing of unusual design is often impossible to dispose of except at a great sacrifice when no longer needed by the parties who erected it. Such property cannot be taken for public use without compensation based on the usefulness of the property to the owner; but the court has held that in dealing with property of this class for purposes of taxation, the full amount which could have been secured for the property in the market by competition among probable buyers cannot be increased by considerations of value to the owner alone. 11 In determining the value of the property, real and personal, used in a particular commercial enterprise, the assessors may take into consideration the use to which the property is put, as one of the uses to which it is adapted, and value the par- ticular articles of property accordingly; but after this has been done and the entire taxable estate assessed by means of the assessment of the component parts, the assessors cannot also assess an additional sum on the enterprise as a whole, as a going concern or as a money-producing instrumentality. 12 The valuation of tangible personal property which the tax- payer has acquired for his personal use, such as household fur- niture, is extremely difficult. Such property is seldom sold except under circumstances which negative a determination of 9 Essex Co. v. Lawrence, 214 Mass. 79 (1913) ; Massachusetts General Hos- pital v. Belmont, 233 Mass. 190, 207 (1919). 10 Supra pages 217, 246. Infra page 270. 11 Massachusetts General Hospital v. Belmont, 233 Mass. 190, 209 (1919). 13 National Fireproofing Co. v. Revere, 217 Mass. 63 (1914). 270 Taxation in Massachusetts [G. L. c. 59, §§ 39-42 inc. fair market value. To the owner furniture may be as useful as if new, while if sold to a second hand dealer it might bring but a fraction of its original price. In the absence of a better test, an allowance for depreciation from the original cost based on the expected life of the articles is as satisfactory a method as any; and in case of motor vehicles also such a test is com- monly adopted, although such articles have a ready market, and in the absence of special circumstances in regard to the use or condition of a particular automobile, is probably as sat- isfactory a test as can be devised. Valuation of Property of Telephone and Telegraph Companies Section 39. The valuation at which the machinery, poles, wires and underground conduits, wires and pipes of all telephone and tel- egraph companies shall be assessed by the assessors of the respec- tive towns where such property is subject to taxation shall be determined annually by the commissioner, subject to appeal to the board of appeal from decisions of the commissioner of corporations and taxation, as hereinafter provided, and shall by him be certified to the assessors on or before June fifteenth. A board of assessors aggrieved by a valuation made by the commissioner under this section may, within ten days after notice of his valuation, apply to said board of appeal. Said board shall hear and decide the subject matter of such appeal and give notice of its decision to the commissioner and to the assessors; and its decision as to the valuation of the property shall be final and conclusive, except as provided in section seventy- three, relative to abatements. The assessors shall, in the manner provided by law, assess the machinery, poles, wires and underground conduits, wires and pipes of all telephone and telegraph companies as certified and at the value determined by the commissioner or by the board of appeal, and such assessment by a board of assessors shall be deemed to be a full compliance with the oath of office of each assessor and a full performance of his official duty with relation to the assessment of such property, except as provided in the following section. Section 40. Every board of assessors shall, as and when re- quired by the commissioner, furnish him with any and all information in its knowledge or possession relating to any property, the value of which he is required to determine by the preceding section. Assessment of Local Taxes 271 G. L. c. 59, § 43] Section 41. Every telephone or telegraph company owning any property required to be valued by the commissioner under section thirty-nine shall annually, on or before a date determined by the commissioner but in no case later than June first, make a return to the commissioner signed and sworn to by its treasurer. This return shall be in the form and detail prescribed by the commissioner and shall contain all information which he shall consider necessary to en- able him to make the valuations required by section thirty-nine, and shall relate, so far as is possible, to the situation of the company and its property on April first of the year when made. Property returned to the commissioner as herein provided need not be included in the list required to be filed by a telephone or telegraph company under sec- tion twenty-nine. Section 42. If any company, or any treasurer thereof, shall in any year refuse or neglect to make the return required by the pre- ceding section, the commissioner shall estimate the value of the prop- erty of the company, and in such case the value determined by the commissioner shall not be less than twice the value determined in the previous year. The Valuation List of the Assessors Section 43. The assessors shall make, on the books furnished under section forty-five, a list of the valuation and the assessment thereon, in the following manner: In separate columns the valuation of the stock in trade of each person, the number and value of his live stock and the valuation of machinery used in manufacture. In another column, marked "AH other ratable estate," the aggregate valuation of all the other personal estate shall be entered. The total amount of the taxable personal property shall be shown, but without other detail or specification than is provided herein. Before the taxes are committed for collection they shall deposit the books, or an attested copy thereof, in their office or, if there is no office, with their chairman, for public inspection. Compliance by the assessors with the provisions of this and the following sections is not necessarily essential to the validity of a tax. All those provisions which are intended for the secur- ity of the citizen, for ensuring an equality of taxation and to enable everyone to know with reasonable certainty for what polls and for what real and personal estate he is taxed and for 272 Taxation in Massachusetts [G.L.c. 59, §43 what all those who are liable with him are taxed are conditions precedent, and if they are not observed he is not legally taxed; but many regulations are made by statute, designed for the in- formation of assessors and other officers and intended to promote method, system and uniformity in the modes of procedure, the compliance or non-compliance with which in no respect affects the rights of taxpaying citizens. Such provisions may be con- sidered directory merely, and non-compliance with them does not affect the validity of the tax. 1 The colonial statutes required the assessors to prepare an- nually a written list of the persons and estates assessed; and the annual provincial tax statutes required the assessors to make a list of the assessment, " setting forth in distinct columns against each particular person's name how much he or she is assessed at for polls, and how much for houses and lands and how much for personal estate and income by trade or faculty. " It was not until 1785 that the assessors were required to deposit copies of the lists in their office for public inspection before committing them to the collector. It was held in 1817 that this requirement was mandatory and that the deposit of the list was essential to the validity of the tax; 2 but more recently it was intimated by the court that the portion of the statute relating to such deposit was merely directory. 3 At any rate if the validity of a tax sale is questioned after the lapse of many years on the ground that there is no record of the deposit of the valuation list, the jury may be justi- fied in presuming that the assessors complied with the law in this particular, 4 and unless it affirmatively appears that the assessors had an office of their own, the leaving of the valuation and assessment list with their chairman is sufficient. 5 There is no implied requirement that the list be deposited a sufficient length of time before it is committed to the collector to allow 1 Torrey v. Millbury, 21 Pick. 64 (1838). And see also Sprague v. Bailey, 19 Pick. 346 (1837); Reynolds v. New Salem, 6 Met. 340 (1843); Tobey v. Wareham, 2 Allen 594 (1861); Westhampton v. Searle, 127 Mass. 502 (1879); Noyes v. Hale, 137 Mass. 266 (1881); Bemis v. Caldwell, 143 Mass. 299 (1887). As to contesting the validity of a tax by impeaching the election of the assessors who assessed it, see Sudbury v. Heard, 103 Mass. 543 (1870). 2 Blossom v. Cannon, 14 Mass. 177 (1817). 3 Westhampton v. Searle, 127 Mass. 502 (1879). 4 Blossom v. Cannon, 14 Mass. 177 (1817). 5 Westhampton v. Searle, 127 Mass. 502 (1879). Assessment of Local Taxes 273 G.L.c. 59, §§44,45] the inhabitants to inspect it before such committal; and a tax is not rendered invalid because the list was not deposited until the day before it was so committed. 6 The provisions of the statutes as to the form of warrants and tax lists and the place where the lists shall be deposited are intended for the benefit of the taxpayer, so far as they are not meant merely for statistical purposes. As to all other per- sons they are directory merely and not conditions precedent. Failure of the assessors to comply with them might be a good excuse to the collector for not collecting the tax; but if he has collected the tax without objection from the taxpayers such failure would not justify him in refusing to turn the money over to the town. 7 The valuation list made and kept by the assessors in the performance of their official duty is evidence of the facts stated therein in all cases relating to the assessment and collection of the tax; 8 but by itself and when recently made it is not evidence in a controversy between private parties as to the location 9 or ownership 10 of land, or to show that a certain resident of the town was a person of no financial responsibility. 11 The valuation and assessment lists are public records within the meaning of the statute relating to the forgery of public records, and the offense of forgery of public records may consist of the alteration of a material part of the assessment list, by which another may be defrauded. 12 Contents of the Valuation List Section 44. The list shall exhibit the valuation and assessment of the polls and estates of the inhabitants assessed ; and the valuation and assessment of the estates of non-resident owners, and shall con- tain the names of the non-resident owners of the property assessed, or such description of them as can be given, their places of abode, if « Tobey v. Wareham, 2 Allen 594 (1861). ' Sandwich v. Fish, 2 Gray 298 (1854). 8 Thus, on a question of adverse possession, valuation lists are admissible to show that a person did or did not pay taxes on the property in question. Enfield v. Woods, 212 Mass. 547 (1912). 6 Commonwealth v. Hefroh, 102 Mass. 148 (1869). 10 Commonwealth v. Quinn, 222 Mass. 505 (1916). 11 Commonwealth v. Quinn, 222 Mass. 505 (1916). 12 Commonwealth v. Segee, 218 Mass. 501 (1914). 274 Taxation- in Massachusetts [G.L.c. 59, §§44,45 known, the description of their estate, the true value of such estate, and the tax thereon. Section 45. The commissioner shall provide each city and town, on or before April first annually, suitable books for the use of the assessors in the assessment of taxes, which shall contain blank col- umns, with uniform headings for a valuation list, and blank tables for aggregates, in the following form; provided, that in lieu of the valuation list provided for in this section and the preceding two sections, the assessors of any city may, with the assent of the com- missioner, prepare a valuation list upon books furnished by the city and in such form as the commissioner shall approve, and that, for the separate listing of poll taxes under section four of chapter sixty, such portion of the books furnished by the commissioner as he shall determine may contain only the first three columns of said form. Valuation List fob the April 1, 19 a 5 ■ . 1 3 a S3 i a 73 9 _fi B S3 CO S3 9 o ■ E 41 a 41 S3 -W S3 E S3 1 Names and Residences of A JB J3 'a 73 41 ■ 3 41 1 41 S3 2fi a o S3 E 4? a. 08 I "3 , Persons assessed. \ (.Give street and number of P. o >> a a £> a E 41 41 * fel — . U 43 2 & a residence.) S3 M at 4-> M ■ a 8 j3 S3 — 41 3 41 2-3 o S3 •si *S h 41 ,2 ■ S3 o $4 a -0 s . — £ °3 . 41 03 <9 JO o 1 s- a) 41 O 41 c3g 41 S3 -1 S3 5 41 £ o M aS s S3 a a £* 3 3 -^ — 03 S3 O S3 s3>" S3 S3 41 2 H > > fe > > «? H • >> £> 73 O 41 02 S '54 "c3 S3 £3 O Jj > J* Number of acres or feet o 41 E B 41 ■ 41 73 1 in each lot of land. "43 41 fi S3 S3 & 41 41 a ^2 >>o a S3 -»-> o id ■ a 73 S3 41 a >>"0 8 J3 Q S3 41 4i G U- O 41 3 ■ M 4> "s3 41 a 3| d o . *1 ■ i-1 3 JB O . 73 .S3 B 9 >> OJ3X! « 8 73 .t? 41 43 Acres. Feet. 43 S S3 73 o 8 41 _3 "3 . S3 > 41 •tf S3 M a o M S3 41 -3 E 41 a C a 41 — S3 41 p^ -3 73 TZ S3 3 2 * S3~" 8*8 S J3 "si OS'S B B S3 O S3 g O * « > Q > H «3 H H G.L.c. 59, §§44,45] Assessment of Local Taxes 275 table of aggregates. Fob the of of Polls, Property, Taxes, etc., as assessed April 1, 19 a o "o a j. o B E a o £ "o a a "o a H a 03 E 08 a O X a 1 S CO a to ■ o S £ 03 OJ n •2-S 5 5 OT3 c 5-3 03 CO 03 03 co J3 ° • _ CU t. h *- % t- Si i— otal v sessed 1, 19 z ■ Z Z z H > > H Individuals. Individuals. t On prop- erty. Excluding resi- dent bank stock. Buildings, exclud- ing land. * All others. *A11 others For poll tax only. Resident bank stock. Land, excluding buildings. Total. 1 Total Total. Total. Total. Taxf orstate, county and city or town purposes, including overlayings. Dollars. On personal estate On real estate. On polls. Total. Cts. a H 03 o: m o .3 Z Eg 3 GO Z •° CO C CO 3 to z ^°c5 3~ OS l"S eg 3 co z M 9 O CD s§ 3^3 Z S-8 *- 03 II 0) 3 "oS . *0 co C co 03 „, 4) ■ 3 * Number. Value. * Firms, corporations, associations, institutions, trustees, etc. t On property; the total of the first two columns. Each parcel of real estate assessed must be described in the valuation list. It is not however intended that the description should be as accurate in detail as is required for the purposes of a conveyance. It is enough if it fairly designates, for the infor- mation of those interested, the property intended to be taxed. 1 1 Thus it, was held in Westhampton v. Searle, 127 Mass. 502 (1879), that an entry in the valuation list of "two houses, one barn" and the number of acres of mowing, tillage, pasture, wood and unimproved lots was not so imperfect 276 Taxation in Massachusetts [G.L.c. 59, §§44,45 Oral testimony may be admitted to aid an imperfect description, and to show to what particular property an ambiguous desig- nation was intended to apply, but it cannot be introduced to correct a description which does not taken by itself apply to the land alleged to be intended. A tax which does not appear on the assessors' books cannot be established by oral testimony. 2 When separate and distinct parcels belong to the same owner they are considered as distinct subjects of taxation and must be separately valued and assessed. 3 When an entire tract of land belongs to a single owner, the mere fact that he has divided the land into small lots for the purposes of sale 4 or has erected more than one house upon it 5 would not require the assessors to make a separate valuation of each lot; but where lands are separated either by the use or purpose to which they are de- voted, or by the mode of their occupation, or are discon- nected in location, even if they are all owned or occupied by the same person, a valid assessment cannot be laid upon an entire valuation of all the lots. 6 Lands owned in severalty by different persons cannot be included in a joint assessment to the owners however they are used. 7 The requirement that buildings be valued separately from the land is imposed only for the purpose of securing a more specific description and valuation of each class and parcel of property of which the real estate consists 8 and does not make the tax on all real estate of an individual other than an integral tax; and while a failure to assess separate parcels separately would result in the loss of a lien on any of the parcels and would justify the assessors in abating the tax, as improperly assessed, if the person assessed was taxable on any one of the parcels he could not treat the assessment as void in an action as to invalidate the tax; and in Roberts v. Welsh, 192 Mass. 278 (1906), that a description of a house and lot referring to the house by its number on the street and the lot by designation stating the number of square feet was suffi- cient; and in Larsen v. Dillenschneider, 235 Mass. 56 (1920), that a description by reference to a lot by number on a plan on file in the assessors' office was sufficient. 2 Massachusetts General Hospital v. Somerville, 101 Mass. 319, 328 (1869). 3 Hayden v. Foster, 13 Pick. 492 (1833). 4 Jennings v. Collins, 99 Mass. 29 (1868). - 6 Bemis v. Caldwell, 143 Mass. 299 (1887). 6 Jennings v. Collins, 99 Mass. 29 (1868). See also Hayden v. Foster, 13 Pick. 492 (1833). 7 Jennings v. Collins, 99 Mass. 29 (1868). s Massachusetts General Hospital v. Somerville, 101 Mass. 319, 32S (1869). Assessment of Local Taxes 277 G. L. c. 59, § 46] by the collector to recover the tax or in an action to recover back the tax after payment upon duress or under protest. 9 The classification of certain kinds of personal property ap- pears to be intended chiefly for statistical purposes, and a per- son assessed for his personal estate generally without any classification or itemization whatever cannot on that account defeat the tax, especially if he has failed to file any list of his taxable property. 1 10 Directions to Assessors in Making Lists Section 46. The assessors shall enter in the books so furnished the valuation and assessment of the polls and estates of the persons assessed, as directed in the headings of the various columns and as follows: Stock in trade shall include all goods, wares and merchandise at home or abroad, of ratable estate, whether paid for or otherwise. Machinery shall include steam engines. In cotton and linen factories state number of spindles and looms used in each. In woollen factories state number of sets of cards used in each. State the value of each building described including therein water wheels but excluding land and water power and machinery used in the building. The requirement that machinery shall be valued separately is partly for statistical purposes and partly because machinery has to some extent a local character which makes it a subject of local taxation. It is not taxed as real estate but as personal property. The land, buildings and water power are real estate and are taxed accordingly. 1 The statute does not mean that water power even if appurtenant to mills cannot be taxed at all, but that in valuing the buildings the value of the water power and the machinery should not be included. Water power appur- tenant to and used in connection with land is valued and taxed with the land. 2 The provision as to stock in trade at home and 9 Schwartz v. Boston, 151 Mass. 226 (1890). And see also G. L. c. 60 § 98, infra page 400. 10 Tobey v. Wareham, 2 Allen 594 (1861) ; Noyes v. Hale, 137 Mass. 266 (1884); Lamson Consolidated Store Service Co. v. Boston, 170 Mass. 354 (1898). 1 Hamilton Manufacturing Co. v. Lowell, 185 Mass. 114 (1904). 2 Lowell v. Middlesex County Commissioners, 152 Mass. 372 (1890). 278 Taxation in Massachusetts [G.L.c. 59, §§47,48 abroad should be construed in connection with the statute ex- empting from taxation merchandise owned by inhabitants of this state situated in another state. 3 . Tables of Aggregates Section 47. The assessors shall fill up the table of aggregates by an enumeration of the necessary items included in the lists of valuation and assessments, and shall annually, on or before October first, deposit in the office of the commissioner an attested copy of the same, containing: First, The number of residents assessed on property, specifying the number of individuals and the number of firms, corporations, associations, institutions, trustees, and so forth. Second, The num- ber of non-residents assessed on property, specifying the number of individuals and the number of firms, corporations, associations, insti- tutions, trustees, and so forth. Third, The whole number of persons assessed, specifying the number assessed for a tax on property and the number assessed for a poll tax only. Fourth, The number of polls assessed. Fifth, The tax on each poll. Sixth, The value of personal estate assessed, specifying the value of the same excluding resident bank stock, and the value of resident bank stock. Seventh, The value of real estate assessed, specifying the value of buildings exclusive of land and of land exclusive of buildings. Eighth, The total valuation of assessed estate in the town. Ninth, The tax for state, county and city or town purposes, including overlayings, speci- fying the amount assessed on personal estate, on real estate and on polls. Tenth, The rate of total tax per one thousand dollars. Also the number of the following kinds of animals assessed. Eleventh, horses. Twelfth, cows. Thirteenth, sheep. Fourteenth, neat cattle, other than cows. Fifteenth, swine. Sixteenth, the number of dwelling houses assessed. Seventeenth, the number of acres of land assessed. Eighteenth, the number and value of fowl assessed. Section 48. Annually on or before January fifteenth, assessors shall report to the commissioner in the form prescribed for tables of aggregates by the two preceding sections the facts as to any and all assessments made between December tenth and twentieth pre- ceding, both inclusive, under section seventy-five. 3 G. L. c. 59, § 5, cl. 19, supra page 210. Assessment of Local Taxes 279 G.L.c. 59, §§49-52 inc.] Further Requirements as to Valuation List Section 49. The assessors, except those of Boston, on or before October first, nineteen hundred and twenty-two, and in every third year thereafter, shall deposit in the office of the commissioner, in books to be by him provided for the purpose, a copy of the assessors' valuation books of those years, to be by them certified under oath. This shall not excuse, in such years, the filing of a separate copy of the table of aggregates under section forty-seven. Section 50. The books provided by the commissioner for the use of assessors shall contain a copy of this section, of the seven preceding sections and of sections eighty-four and ninety-four, and such certificates as are required by law to be signed by the assessors, with such explanatory notes as he considers necessary to secure uni- formity of returns under the several headings. Section 51. The assessors shall enter upon the valuation list, in the appropriate columns after the enumeration of the persons and estates liable to taxation therein contained, a statement and descrip- tion of all the property and estate and the fair ratable value thereof, situated in their respective towns, or which would be taxable there but for the provisions of the third, fourth and eleventh clauses of section five, with the names of the persons or corporations owning the same and the purpose for which it is used, which are exempted from taxation by the provisions of law aforesaid, with a reference to the law by which such exemption is allowed. Section 52. The assessors, or other persons authorized to assess taxes, shall, at the end of said valuation list, subscribe and take the following oath: We, the assessors (or other persons so authorized, as the case may be,) of , do severally and solemnly swear that the fore- going list is a full and true list of the names of all persons known to us, who are liable to taxation in , (here insert the name of the city or town,) during the present year, and that the real and personal estate contained in said list, and assessed upon each person in said list, is a full and accurate assessment upon all the property of each person, liable to taxation, at its full and fair cash value, according to our best knowledge and belief. Failure to take and subscribe the foregoing oath shall not invalidate a tax otherwise legally assessed ; but whoever assesses taxes in a town without having taken and subscribed the same shall be punished by a fine of ten dollars. 280 Taxation in Massachusetts [G.L. c. 59, §§53-56 inc. The penalty for failure to comply with section forty-nine is a fine of not more than two hundred dollars. 1 The oath at the end of the valuation list was amended in 1853 when assessors were required to assess property at its " fair cash value " to accord with the statute ; and in other particu- lars it was made more specific. Collector's List and Warrant Section 53. The assessors shall, within a reasonable time, com- mit the tax list with their warrant to the collector of taxes, and, if there is a fire, water, light or improvement district in the town, they shall commit to him a separate list and warrant for the district taxes. If no collector has been chosen, they shall commit such list with their warrants, to a constable; or, if there is no constable, to the sheriff or his deputy; but the assessors of a town shall not commit a tax list to the collector until the bonds of such collector and of the town treasurer have been given and approved as required by law. Section 54. The tax list committed to the collector shall be, in substance, as follows: Names and Residences. (Give street and number of residence.) No. of Polls. Poll Tax. Tax on Real Estate. Tax on Personal Property. Total. Time when paid. NON-RESIDENTS. Names. Residences, if known. Tax. Section 55. The warrant shall specify the duties of the collector as prescribed by law in the collection of taxes, the times when and the person to whom he shall pay them, shall be substantially in the form heretofore used, and need not be under seal. Section 56. If a warrant issued for the collection of taxes is lost or destroyed, the assessors may issue a new warrant therefor, which shall have the same force and effect as the original warrant. While the colonial statutes required the issuance of a war- rant to the constable directing him to collect a tax, 1 it was not until 1701 that the form of the warrant was prescribed by stat- 1 G. L. c. 59, § 94, infra page 319. 1 Anc. Chart, p. 71. Assessment of Local Taxes 281 G.L.c. 59, §§53-56 inc.] ute. a In 1785 the form was again fixed by statute, 3 and no other form has since been substituted by specific enactment; but as the warrant is supposed to specify the duties of the collector as prescribed by law in the collection of taxes, the form of the warrant ordinarily used has changed from time to time as the statutes relating to the collection of taxes have been amended and altered. 4 The warrant should be signed by all, or by a majority, of the assessors, for if it is signed by one for or in behalf of the others it is always open to question in subsequent proceedings whether the others did in fact assent to the issuance of the warrant and authorize it to be signed in their behalf, and a failure to establish such assent and authority would be fatal to the validity of any action taken under the warrant. 5 The form established in 1785 concluded with the words " given under our hands and seals " but it was held in 1827 that a warrant concluding " given under our hands " and actually sealed was valid; 6 and it was provided in the Revised Statutes that a seal should no longer be necessary. The tax list must accompany the warrant, proceed from the same source and be committed to the collector as part of the documents constituting his authority for the collection of the taxes of the year, but there is no requirement that the warrant be physically annexed to the list. 7 An additional tax assessed in accordance with the statute 8 upon property omitted from the annual assessment is properly entered on the tax list of the collector although it is entered in a separate book or on a separate piece of paper with a new warrant. 9 There is no obligation upon the collector to return the warrant to the assess- ors after he has completed the collection of the tax by virtue of the authority contained in it. 10 The provisions of the statute relating to the form of the tax 2 St. 1701-2, c. 8. 3 St. 1785, c. 50. § 6. This form may still be used in spite of the changes in the statutes, Westhampton v. Searle, 127 Mass. 502, 506 (1879). 4 For the form now in use, see infra, Appendix, Form No. 4. 5 Reynolds v. New Salem, 6 Met. 340 (1843). e Bradford v. Randall, 5 Pick. 495 (1827). 7 Barnard v. Graves, 13 Met. 85 (1847). 8 G. L. c. 59, § 75, infra page 304. * Noyes v. Hale, 137 Mass. 266 (1884). 10 Howard v. Proctor, 7 Gray 128 (1856). 282 Taxation in Massachusetts [G.L.c. 59, §§57,58 list and the inclusion of different items of taxation in distinct columns are probably merely directory; 11 and the requirement that the warrant shall specify the duties of the collector is clearly only directory. A collector might be excused from ex- ecuting a defective warrant, but if he proceeds to collect the tax in compliance with all the requirements of the statutes his action cannot be attacked directly or collaterally upon the ground that his warrant did not state these requirements with sufficient accuracy or fulness. 12 When a collector acts in pursuance of a warrant from the assessors, and the assessors have jurisdiction of the subject- matter and the warrant is regular on its face, the collector is not bound to examine into the legality of the previous pro- ceedings and is protected by the warrant from liability for executing it in the manner prescribed by law. 13 When the same persons are selectmen and assessors, the issuance of a warrant by them as assessors when the office of collector is vacant to a person who has not received an appoint- ment as temporary collector is not in itself such an appointment, for in such case the warrant was not issued by the selectmen in their capacity of selectmen, and the statutes do not contem- plate the issuance of a warrant to a person who has not already been elected or appointed collector. 1 14 Interest and Discount on Taxes Section 57. Taxes shall be payable in every city, town and dis- trict in which the same are assessed, and bills for the same shall be sent out, not later than October fifteenth of each year, unless by ordi- nance, by-law or vote of the city, town or district, an earlier date of payment is fixed. On all taxes remaining unpaid after the expira- tion of seventeen days from said October fifteenth, or after such longer time as may be fixed by any city, town or district which fixes an earlier date for payment, but not exceeding thirty days from such 11 Blackburn v. Walpole, 9 Pick. 97 (1829). 12 King v. Whitcomb, 1 Met. 328 (1840); Barnard v. Graves, 13 Met. 85 (1847); Westhampton v. Searle, 127 Mass. 502 (1879); Leominster v. Conant, 139 Mass. 384 (1885). 13 See on this subject injra page 396, and upon the effect of informalities in the tax list and warant upon liability on the collector's bond, G. L. c. 60 § 13, injra page 326. 14 Phelon v. Granville, 140 Mass. 386 (1886). Assessment of Local Taxes 283 G.L.c. 59, §§57,58] earlier date, interest shall be paid at the following rates computed from the date on which the taxes become payable: At the rate of six per cent per annum on all taxes and, by way of penalty, at the additional rate of two per cent per annum on the amount of all taxes in excess of two hundred dollars assessed to any taxpayer, in any one city or town, if such taxes remain unpaid after the expiration of three months from the date on which they became payable, but if, in any case, the tax bill is sent out later than the day prescribed, interest shall be computed only from the expiration of such seventeen days or said longer time. In no case shall interest be added to taxes paid prior to the expiration of seventeen days from the date when they are payable, nor shall any city or town so fix an earlier date of pay- ment and longer time within which taxes may be paid without interest as would permit the payment of any taxes without interest after November first of the year in which they are due. Bills for taxes assessed under section seventy-five shall be sent out not later than December twenty-sixth, and such taxes shall be payable not later than December thirty-first. If they remain unpaid after that date, interest shall be paid at the rates above specified, computed from December thirty-first until the day of payment, but if, in any case, the tax bill is sent out later than December twenty-sixth, said taxes shall be payable not later than ten days from the date of the bill, and interest shall be computed from the fifteenth day following the date when the tax becomes due. In all cases where interest is payable it shall be added to and become a part of the tax. Section 58. Towns shall not allow any discount on taxes. It was not until 1873 that interest was under any circum- stances collected from a delinquent taxpayer. Under the con- ditions prevailing in the earlier times, when the taxes for each year were turned over to a collector upon the best terms that the town could make and the fees and charges were retained by the collector, the recovery of interest was denied, the court saying that to allow interest in such a case would be giving a bounty upon the negligence of collectors. 1 In more recent times in cities and the larger towns, when the collector is usually a salaried official and taxes are frequently so large that the use of the money required to pay them for as long a period as it proves possible to delay payment is worth a considerable sum 1 Danforth v. Williams, 9 Mass. 324 (1812). 284 Taxation in Massachusetts [G.L.c. 59, §§57,58 to the person assessed, the imposition of interest after a certain date is the only practical means of enforcing prompt payment of taxes and of throwing the loss caused by delay upon the delinquent taxpayer. Until 1913 the statutory provision for interest on overdue taxes was applicable only if the city or town so voted, and if no such action had been taken no interest could be recovered even after demand; 2 the collection of taxes being governed wholly by statute, the general principles which allow interest on an overdue obligation after demand would have no application. In 1913 it was provided that in every city or town taxes should be payable not later than the fifteenth day of October, and that on taxes remaining unpaid after the first of November interest should be paid from October 15. 3 The effect of this statute was not only to make interest recoverable in every case without a vote of the city or town, but also to create a liability for seventeen days' interest as soon as the tax became delinquent. Other changes were made in 19 15, 4 1916 5 and 19 18, 6 and in 1920 7 the statute was placed in its present form. Even when the collector is not paid a fixed salary but obtains his compensation from commissions upon the sums collected, the town is entitled to insist upon the collection of the sums of interest due from individual taxpayers and the turning over of such sums to its treasurer by the collector; 8 but when the collector undertakes to pay over the amount of the whole tax list on a certain date and carries out his agreement although he has not collected all the taxes, he is entitled to retain the interest he subsequently collects from the delinquent taxpayers. 9 2 Thus if a city council made provision for interest but failed to specify when the taxes were due, no interest could be lawfully collected, Kelly v. O'Rourke, 232 Mass. 168 (1919). 3 St. 1913, c. 688, § 1 ; and see as to unpaid taxes of previous years, St. 1913, c. 824. 4 St. 1915, c. 237, § 21, provided that interest might be at a rate not less than 6 nor more than 10 per cent as the city council or town should vote. 5 St. 1916, c. 103, provided that tax bills should be sent out on or before Octo- ber 15 and if not paid within fifteen days should bear interest from the time when sent out; it also made provision for interest on bills sent out late and bills for omitted assessments. 6 St. 1918, c. 190 provided that interest should be added after the bill was overdue seventeen days. 7 St. 1920, c. 460 added the provision as to the additional interest of 2% when the tax remains unpaid for three months. 8 Needham v. Morton, 146 Mass. 476, 480 (1888). • Needham v. Morton, 146 Mass. 476 (1888). Assessment of Local Taxes 285 G.L.c. 59, §59] In 1815 it was enacted that a town might provide for the allowance of discount on taxes paid voluntarily before they were due; 10 and this provision remained in force until 1913, when the provision now in force was adopted. 11 Abatement by Assessors Section 59. A person aggrieved by the taxes assessed upon him may, within six months after the date of his tax bill, apply to the assessors for an abatement thereof ; and if they find him taxed at more than his just proportion, or upon an assessment of any of his property in excess of its fair cash value, they shall make a reasonable abatement. A tenant of real estate paying rent therefor and under obligation to pay more than a moiety of the taxes thereon may apply for such abatement. The most advantageous means of contesting an illegal or excessive tax, provided the person assessed has complied with the necessary preliminary steps, is to petition the assessors for its abatement, and, if necessary, to pursue the procedure pro- vided by statute for appeal from their decisions; for in one proceeding the question whether the tax is to stand in whole or in part or not at all can be settled without unnecessary delay. 1 There is no other method of contesting a tax on the ground that it is excessive in amount, provided the assessors have juris- diction of the subject-matter, 2 act with integrity and fidelity 3 and commit a warrant to the collector that is regular on its face. 4 The proceedings before the assessors are informal, and the application for an abatement need not be in writing. 5 No per- son can apply for an abatement unless the tax was assessed upon him, except a tenant of real estate under the conditions prescribed by the statute; consequently the purchaser of a parcel of land upon which there is a lien for an unpaid tax cannot apply to have the tax abated. 6 10 St. 1815, c. 130, § § 2, 4. 11 St. 1913, c. 688. §3. 1 Milford Water Co. v. Hopkinton, 192 Mass. 491, 498 (1906); Welch v. Boston, 211 Mass. 178 (1912). 2 See G. L. c. 60, § 98, infra page 405. 3 See G. L. c. 59, § 87, infra page 314. 4 See supra page 282, and infra page 326. 5 Page v. Melrose. 186 Mass. 361 (1904). 6 Hough v. North Adams, 196 Mass. 290 (1907); Dunham v. Lowell, 200 Mass. 468 (1909). 286 Taxation in Massachusetts [G. L. c. 59, § 60 If there is a change in the composition of the board of assess- ors between the assessment of a tax and the hearing upon its abatement, 7 the abatement is to be passed upon by the new board. Assessors have no power to abate a tax after their term of office has expired. 8 Assessors have a right to abate on their own motion and with- out the filing of any petition a tax on a person not properly as- sessable or one whom they consider unable to contribute to the public charges. 9 An application for abatement must be filed within six months of the date of the tax bill. If the bill was not dated but the postmark on the envelope shows when it was sent out the date is sufficiently established and the application for abatement must be made within six months from that date. 10 A postal card sent by the collector to the person assessed, stating the amount due, for what, from whom and to whom due and when and where to be paid is a tax bill within the meaning of the statute. 11 Record of Abatements ' Section 60. Every board of assessors shall keep a record of all abatements of taxes. The record of abatement of the whole or any part of any tax shall show plainly the following details, viz: First, The name or title in which the tax stands assessed. Second, The year in which the tax was assessed. Third, The total amount of the tax. Fourth, The date when the abatement was made. Fifth, The sum abated on poll tax. Sixth, The sum abated on personal estate. Seventh, The sum abated on real estate. Eighth, The total sum abated. Ninth, In case of an abatement to put into effect a statutory exemption, exact reference to the statutory provision under which the exemption was granted and in all other cases a statement of the cause or reason for the abatement. » Carleton v. Ashburnham, 102 Mass. 348 (1869). 8 Cheshire v. Howland, 13 Gray 321 (1859). 9 Gordon v. Sanderson, 165 Mass. 375 (1896). 10 Amherst College v. Assessors of Amherst, 193 Mass. 168 (1906). 11 Amherst College v. Assessors of Amherst, 193 Mass. 168 (1906). Assessment of Local Taxes 287 G.L.c. 59, §61] If the record of an abatement is made as a part of the record of a meeting of the board of assessors it shall be signed by the clerk or secretary of the board for that meeting; otherwise by a majority of the board. Effect of Failure to File List Section 61. A person shall not have an abatement, except as otherwise provided, unless he has brought in to the assessors the list of his estate as required by section twenty-nine. A tenant of real estate paying rent and under obligation to pay more than a moiety of the taxes thereon, may have an abatement although no such list was brought in. If such list is not filed within the time specified in the notice required by section twenty-nine, no part of the tax assessed on the personal estate shall be abated unless the applicant shows to the assessors a* reasonable excuse for the delay or unless such tax exceeds by more than fifty per cent the amount which would have been assessed on such estate if the list had been seasonably brought in, and in such case only the excess over such fifty per cent shall be abated. If the applicant was not required by said notice to include his real estate in said list, and has not done so, he shall, if he seeks an abatement of the tax on his real estate, file with his application a list of his real estate, with an estimate of the fair cash value of each parcel. In Boston, said list shall be verified as provided by section two of chapter two hundred and ninety-four of the General Acts of nineteen hundred and sixteen. In other cities, and in towns, it shall be verified as provided in section thirty-one of this chapter. Except as provided by section seventy-one, no abatement of a tax assessed on personal estate shall be made until such list is in the possession of the assessors. The statutes do not make it obligatory to bring in a list or make it a criminal offense to refuse to do so. A person may at his option decline giving in his list and leave the assessors to ascertain the amount of his taxable property; but if he does so he tacitly submits himself to their valuation and assessment and of necessity waives all those exceptions which he could take only on condition of handing in a list. He submits him- self to what is called in some of the earlier statutes the doom of the assessors. He may find an advantage in this, because the assessors according to their best information and belief may assess him for less property than he is liable for. The statute 288 Taxation in Massachusetts [G.L.c. 59, §61 was founded upon the equitable consideration that he shall not take this chance and afterward, if it is unfavorable, have all the same benefit as if he had given in a true statement for the information of the assessors in the first instance. 1 In the colony laws there does not seem to have been any provision for the furnishing of lists by the taxable inhabitants, and it was provided that if a taxpayer could satisfy the assessors that he was " overvalued " he could be " eased " by them, and in the early part of the provincial period the law as to the right of abatement seems to have continued substantially the same. But as early as 1715 the annual or special tax acts provided that the assessors before making the assessment should call upon the inhabitants to bring in true and perfect lists of their polls and ratable estates and imposed a fine upon any one who should bring in a false list; and this form of legislation con- tinued for a number of years. The bringing in of such list how- ever was not made a condition precedent to a right to an abatement. In 1735 it was provided that if any person neglected to bring in a list it should be lawful for the assessors to assess such person in their sound judgment and discretion, and it was subsequently provided that their estimate should be conclusive upon him unless he had a reasonable excuse for his omission. 2 Probably the assessors, at least before the com- mittal of their warrant to the tax collector, could have abated a tax if they saw fit, although no list was filed; 3 and the law continued without substantial change in this regard until 1853 when it was enacted that no abatement should be made of the taxes assessed upon any individual until he should have filed with the assessors a list subscribed by him of his estate liable to taxation and made oath that it was a full and accurate list of the same according to his best knowledge and belief. Under this statute it was held that the discretion of assessors to abate taxes was cut down so that they could no longer abate taxes unless a list was filed. 4 Such list however might be filed any time before the abatement. 5 If filed after an appeal from the 1 Lincoln v. Worcester, 8 Cush. 55 (1851). For a learned and exhaustive study of the development of the statutes upon this subject, see the opinion of Hammond J., in Sears v Nahant, 205 Mass. 558 (1910). 2 See G. L. c. 59, § 37, supra page 266. 3 Winnisimmet Co. v Assessors of Chelsea, 6 Cush. 477, 481 (1850) ; Sears v. Nahant, 205 Mass. 558 (1910). 4 Porter v. Norfolk County Commissioners, 5 Gray 365 (1855). 6 Porter v. Norfolk County Commissioners, 5 Gray 365 (1855). Assessment of Local Taxes 289 G.L.c. 59, §61] assessors' decision it was too late and the assessors never had jurisdiction to abate the tax. 6 In 1865 the power of the assessors to abate the taxes of inhabitants who were dilatory in filing lists was still further restricted. Thereafter if a person assessed had not filed his list within the time specified in the assessors' notice and did not have reasonable excuse for the delay, his tax could not be abated by the assessors below a sum equal to the proper amount plus fifty per cent. That the assessors had no jurisdiction to abate a tax in any degree, no matter what excuse there was for delay in filing the list, if the list was not filed before they acted upon the petition for abatement (or, perhaps, before the petition was filed), was the rule before 1865 ; 7 and it was not modified by the legislation of that year. 8 In 1898 it was held that the inhabitants of the town in which the tax was assessed were the only persons required to file lists within the time specified by the assessors, and accord- ingly a list filed by a non-resident taxpayer before the petition for abatement was seasonably filed. 9 In 1903 the statute was amended so as to require assessors to give notice to all persons subject to taxation in their respective cities and towns to bring in lists, 10 and since the enactment of that statute non-residents who are subject to taxation in any city or town have the same obligations in regard to lists as taxable inhabitants. 11 The obligation to return a list extends to corporations 12 and to all persons whether in a representative or an individual capacity who hold property liable to taxation. 13 The requirement of an oath is mandatory and the filing of a sworn list is a necessary condition precedent to an abatement. 14 6 Otis Co. v. Ware, 8 Gray 509 (1857). 7 Winnisimmet Co. v. Assessors of Chelsea, 6 Cush. 477 (1850) ; Porter v. Norfolk County Commissioners, 5 Gray 365 (1855); Otis Co. v. Ware, 8 Gray 509 (1857). 8 Charlestown v. Middlesex County Commissioners, 101 Mass. 87 (1869); Amherst College v. Assessors of Amherst, 193 Mass. 168 (1906). 9 Hopkins v. Reading, 170 Mass. 568 (1898). A non-resident was bound to file a list before the petition for abatement was acted on. Otis Co. v. Ware, 8 Gray 509 (1857). 1( > St. 1903, c. 157. 11 Atlantic Maritime Co. v. Gloucester, 214 Mass. 348 (1913). 12 Otis Co. v. Ware, 8 Gray 509 (1857); Atlantic Maritime Co. v. Gloucester, 214 Mass. 348 (1913). 13 Vaughn v. Street Commissioners of Boston, 154 Mass. 143 (1891). 14 Amherst College v. Assessors of Amherst, 193 Mass. 168 (1906). 290 Taxation in Massachusetts [G. L.c. 59, §61 There were a number of decisions prior to 1894 in which more or less informal statements were sustained as sufficient lists. 15 In 1894 the statute now found in section five of chapter fifty-eight was enacted requiring the tax commissioner to pre- scribe forms for lists 16 and in 1909 it was made clear that the use of the tax commissioner's forms was a condition precedent to an abatement. 17 If a person files a list in good faith, but omits certain items of property accidentally or in the belief that it is not taxable, he is not precluded from an abatement; 18 but a list is not a " true list " within the meaning of section twenty-nine if a large amount of property is wilfully omitted on the ground that it is not taxable when it is well established that it is taxable. 19 If a taxpayer includes in his list certain items that are not tax- able he is not estopped from asking that the tax on such items be abated; 20 and he is not precluded by filing a list in a certain town from contending that he is not taxable in such town at all. 21 The courts have never attempted a comprehensive definition of what would constitute reasonable excuse for delay in bringing in a list. 22 The assessors cannot waive the statutory require- 15 Charlestown v. Middlesex County Commissioners, 1 Allen 199 (1861); Great Barrington v. Berkshire County Commissioners, 112 Mass. 218 (1873); Lanesborough v. Berkshire County Commissioners, 131 Mass. 424 (1881). Mere reference to an old list was not however sufficient. Winnisimmet Co. v. Assessors of Chelsea, 6 Cush. 477 (1850). 16 Supra page 165. 17 G. L. c. 59, § 29, supra page 258. The requirement that a person seek- ing an abatement of the tax on his real estate should file a list of his real estate, with an estimate of the value of each parcel, was expressly repealed by St. 1918, c. 50, § 2, and has never been re-enacted, but in some mysterious manner it has reappeared in the General Laws. 18 Great Barrington v. Berkshire County Commissioners, 112 Mass. 218 (1873); Wright v. Lowell, 166 Mass. 298 (1896); Blackstone Manufacturing Co. v. Blackstone, 200 Mass. 82 (1908). 19 Sears v. Nahant, 215 Mass. 329 (1913). 20 Dunnell Manufacturing Co. v. Pawtucket, 7 Gray 277 (1856) ; Hardy v. Yarmouth, 6 Allen 277 (1863) ; Charlestown v. Middlesex County Commissioners, 109 Mass. 270 (1872); Milford Water Co. v. Hopkinton, 192 Mass. 491 (1906); Powers v. Worcester, 210 Mass. 471 (1912). See also Troy Cotton and Woolen Manufactory v. Fall River, 167 Mass. 517 (1897), holding that if a manufac- turing corporation can in any event be estopped from contending that the valuation is excessive, it can only be when it has made representations of the value of its property to the assessors, intending that they should act thereon, and they have been actually misled thereby. 21 Welch v. Boston, 211 Mass. 178 (1912); Sears v. Nahant, 221 Mass. 437, 442 (1915). 22 In Hopkins v. Reading, 170 Mass. 568 (1898) it was held that absence Assessment of Local Taxes 291 G.L.c. 59, §61] ment that a list be brought in, 23 although reliance on assurances by the assessors that a formal list was not required might under some circumstances constitute a reasonable excuse for delay. 24 But the mere fact that the assessors knew the facts concerning the property in question 25 or entered into a discussion with the owner concerning its liability to taxation 26 is not a reasonable excuse for not bringing in the list within the required period. It must be remembered that an excuse for delay, however good, is no justification for not filing a list at all, 27 and that even if there is a reasonable excuse for delay, if the list is not brought in as soon as the cause of delay ceases to operate, the right to abate- ment is lost. 28 The meaning of the statute is that if a person liable to taxation does not furnish the assessors with the list, he shall be liable to be assessed for such property as in the judgment of the assessors he owns or possesses; not merely that the assessors' valuation shall be conclusive on the property he really owns. 29 Even if a list is duly filed the assessors are not bound by the valuation contained therein. It was so held in 1846 when the statute left it in doubt; 30 and in the next re- vision of the statutes all possible doubt was removed. 31 It is of course open to a person taxed who has filed a list to contest the assessors' valuation of his property. If the list is duly filed and no questions are asked the person bringing it in, the assess- ors cannot add items of taxable property to those contained in from the state was a reasonable excuse for delay. When an executor is not appointed in season to bring in his list within the time prescribed, there is sufficient excuse for delay as a matter of law. Collector of West Bridgewater v. Dunster, 231 Mass. 291 (1918). So also in Parsons v. Lenox, 228 Mass. 231 (1917), insufficient knowledge by an executor of the affairs of his testator was held a reasonable excuse. In Sears v. Nahant, 221 Mass. 437 (1915) however it was held that the advice of counsel that a party was not taxable was not a reason- able excuse, if the contention of the assessors to the contrary was clearly ex- plained to the party and was in accordance with the law. 23 Boston Rubber Shoe Co. v. Maiden, 216 Mass. 508 (1914); Parsons v. Lenox, 228 Mass. 231 (1917). 24 Lowell v. Middlesex County Commissioners, 3 Allen 546 (1862); Charles- town v. Middlesex County Commissioners, 101 Mass. 87 (1869). 25 Boston Rubber Shoe Co. v. Maiden, 216 Mass. 508 (1914). 26 Atlantic Maritime Co. v. Gloucester, 214 Mass. 348 (1913). 27 Charlestown v. Middlesex County Commissioners, 101 Mass. 87 (1869). 28 Parsons v. Lenox, 228 Mass. 231 (1917). 29 Harwood v. North Brookfield, 130 Mass. 561 (1881). 30 Newburyport v. Essex County Commissioners, 12 Met. 211 (1846). » G. S. c. 11, § 25. 292 Taxation in Massachusetts [G. L.c. 59, §61 the list. 32 If the person bringing in the list refuses to answer on oath questions relating to his property, or his answers dis- close additional taxable property, the assessors are not bound by the list; 33 but a person who has filed a list is not precluded from an abatement by refusal to answer the questions if he is on the facts entitled to one. 34 If a person is assessed who is not liable to taxation and has filed no list he has other remedies than a petition for abate- ment; 35 but if he chooses to avail himself of the latter proceed- ing he must file a list. Inasmuch however as he would not be in the class described in the assessors' notice to bring in lists within a specified period, any time before filing his petition for abatement would be seasonable for bringing in the list. In recent years the statute has been amended so that inno- cent persons should not suffer from the default of others in respect to filing lists. The exemption of a tenant of real estate under obligation to pay more than a moiety of the taxes thereon was introduced in 1888. It has been held that it does not apply to a tenant who is also part owner of the land, for the neglect to file a list is his own. 36 A corporation which is notified by the commissioner of corporations and taxation that he has valued its real estate less than the local assessors may apply to the assessors for an abatement and appeal if necessary, though it has filed no list. 37 While corporations are bound to furnish lists, the difference in the law relating to taxation of corporations results in a difference in the contents of the lists. In case of a national bank a list showing the name of each shareholder with his resi- dence and number of shares is sufficient to entitle it to maintain a petition for abatement. 38 It has been held that when a cor- poration is required by its charter to apportion its funds for the purpose of taxation among eight towns and to notify the 32 Moors v. Street Commissioners of Boston, 134 Mass. 431 (1883); Chase v. Boston, 193 Mass. 522 (1907) ; National Fireproofing Co. v. Revere, 217 Mass. 63 (1914). 33 Hall v. Middlesex County Commissioners, 10 Allen 100 (1865) ; Wright v. Lowell, 166 Mass. 298 (1896). 34 Wright v. Lowell, 166 Mass. 298 (1896). 35 Infra pages 400 to 412 inc. 36 Ashley v. Bristol County Commissioners, 166 Mass. 216 (1896). . 37 Lowell v. Middlesex County Commissioners, 146 Mass. 403, 410 (1888); Essex Co. v. Lawrence, 214 Mass. 79, 87 (1913). 38 National Bank of Commerce v. New Bedford, 155 Mass. 312 (1892). Assessment of Local Taxes 293 G. L. c. 59, §§ 62-64 inc.] assessors of the respective towns of the apportionment, it is not obliged to also file lists. 39 A tax on a person who has filed a list is not invalid because other persons taxable in the city or town did not file lists of their property. 40 Payment of Costs by Petitioner Section 62. A person applying for an abatement shall pay the legal costs accruing before it is made. Even if the petition for abatement is granted, the petitioner is not entitled to receive back the costs paid in accordance with the provisions of this section. Notice of Decision Section 63. Assessors shall, within ten days after their decision on an application for an abatement, give written notice thereof to the applicant. Although this section first appeared in the statute author- izing appeals to the superior court, it is applicable to the action of the assessors whatever course the petitioner may subsequently take. Proceedings before the assessors are informal and the re- quirement of a written notice of their decision by implication authorizes other steps before them to be oral. 1 Appeal to County Commissioners Section 64. A person aggrieved by the refusal of assessors to abate a tax may, within thirty days after receiving the notice pro- vided in the preceding section, appeal therefrom by filing a complaint with the clerk of the county commissioners, or of the board authorized to hear and determine such complaints, for the county where the property taxed lies, and if on hearing the board finds that the prop- erty has been overrated, it shall make a reasonable abatement and an order as to costs. If the list required to be brought in to the assessors was not brought in within the time specified in the notice required by section twenty-nine, the tax shall not be abated unless 39 Greenfield v. Franklin Countv Commissioners, 135 Mass. 566 (1883). *° White v. New Bedford, 160 Mass. 217 (1893). 1 Page v. Melrose, 186 Mass. 361 (1904). 294 Taxation in Massachusetts [G. L. c. 59, § 64 the appellate board finds good cause for the delay or unless the assessors have so found as provided in section sixty-one. No costs shall be allowed to a complainant who has failed to file a list as required by law. Soon after the first settlement of the colony it was provided that a person whose tax the assessors refused to abate might appeal to the county court, 1 and with the change from the court of sessions to the county commissioners the right of appeal has been maintained to the present time. The proceedings before the county commissioners partake only partially of the nature of an appeal. If the assessors had no jurisdiction to abate the tax, 2 or no option to refuse to abate it, 3 the proceedings before the county commissioners must ter- minate as they should have terminated before the assessors; but, if the abatement depends on a disputed valuation, the county commissioners consider the whole matter afresh. 4 If a list is duly filed and no questions are asked the person bringing it in, the assessors cannot lawfully assess him on prop- erty not included in the list; 5 and the only controversy that can arise in such a case must relate to the valuation of the property so included. The county commissioners should estimate the fair cash value of the property, irrespective of the value placed by the assessors upon similar property in the same city or upon the same property in previous years. 6 If the petitioner shows that one item of his property is over-assessed the city or town cannot offer evidence that other items were under-assessed; for the county commissioners have no authority to increase the taxes upon any piece of property. 7 In general in proceedings for the abatement of a tax the same rules of evidence are enforced i Anc. Chart, pp. 69, 70 (1641). 2 Otis Co. v. Ware, 8 Gray 509 (1857). 3 Chase v. Boston, 193 Mass. 522 (1907). 4 National Bank of Commerce v. New Bedford, 155 Mass. 312 (1892). 5 Chase v. Boston, 193 Mass. 522 (1907); National Fireproofing Co. v. Revere, 217 Mass. 63 (1914). 6 Lowell v. Middlesex County Commissioners, 152 Mass. 372 (1890). See also Chicopee v. Hampden County Commissioners, 16 Gray 38 (1860). As to what constitutes fair cash value for purposes of taxation, see supra page 267. 7 Lowell v. Middlesex County Commissioners, 3 Allen 546 (1862); Mass- achusetts General Hospital v. Belmont, 238 Mass. 396 (1921). The tax on a parcel of land and the buildings thereon being however a unit (supra page 191) an excess in the valuation of one may be balanced by a deficiency in the other, Massachusetts General Hospital v. Belmont, 238 Mass. 396 (1921). Assessment of Local Taxes 295 G. L. c. 59, § 64] as are employed in any other proceedings in which the valuation of property is in issue. 8 In the case of a tax upon the real estate and machinery of a domestic corporation, the valuation put upon it by the tax commissioner in fixing the franchise tax is not conclusive upon the corporation. The franchise tax and the local tax are not necessarily complementary. The right to have an excessive tax abated is a general one and is not taken away by the fact that a public officer having a different end in view has adopted the valuation sought to be revised. 9 A person assessed is not required to pay his tax as a condition precedent to an appeal to the county commissioners. 10 If a tax- payer is found to be overrated and an abatement is made, either by the assessors or by the county commissioners, the abatement is not in itself a judgment for money and it is not returned to a court and cannot be entered in any court, either by the taxpayer or by the authority- which makes the abatement. If the tax has not been paid it gives no right to ask for the payment of money, but merely the right to discharge the tax by the pay- ment of less than the amount assessed. If the tax has been paid, the taxpayer has the right to be reimbursed out of the treasury of the city or town to the amount of the abatement, and he is also entitled to a certificate of the abatement. But this certifi- cate cannot be entered in court and no court can make up a judgment upon the certificate alone. If the city or town should refuse to reimburse him he might maintain an action at law against it based upon the breach of the statutory obligation to reimburse, and obtain judgment upon establishing in court all the facts essential to his right of recovery of which the making 8 Thus in Haven v. Essex County Commissioners, 155 Mass. 467 (1892), it was held that on a petition for abatement of a tax on real estate evidence of sales of neighboring land similarly situated is admissible, but not the mere opinion of assessors or appraisers. Evidence as to the value of land in a remote part of the state resembling land in question only as being on seashore is inadmissible, even in the guise of cross-examination or of giving reasons for witness's opinion. In National Bank of Commerce v. New Bedford, 175 Mass. 257 (1900) it was held that IB determining the value of shares of stock, newspapers purporting to contain stock quotations are inadmissible. The fact that an expert may use hearsay as a ground of opinion does not make the hearsay admissible. In Massachusetts General Hospital v. Belmont, 233 Mass. 190 (1919) it was held that returns by a corporation showing a valuation upon its real estate are admissible against it. 8 Tremont & Suffolk Mills v. Lowell, 178 Mass. 469 (1901). 10 Milford v. Worcester County Commissioners, 213 Mass. 162 (1912). 296 Taxation in Massachusetts [G. L.c. 59, §64 of the abatement is one. 11 In this respect there is a difference between abatements by the assessors or the county commissioners and abatements by the superior court, 12 for in the latter case prepayment is always required, and the abatement itself oper- ates as a judgment. To entitle a taxpayer to prosecute an appeal from the re- fusal of the assessors to abate his tax, he must have brought in his list within the time prescribed by the assessors or be able to show good cause for his delay. 13 There is a marked distinction, which is often overlooked, between the rights of a taxpayer who has failed without reasonable excuse to bring in his list within the prescribed period, on petition to the assessors, and his rights under like conditions on appeal. If the assessors are satisfied that the taxpayer was overassessed they are bound to make an abatement, even if without reasonable excuse he failed to sea- sonably bring in his list, and to reduce his assessment to the true value of his taxable property, plus fifty per cent as a penalty for his delay in bringing in his list. But if for any reason the applicant fails to convince the assessors that he has been over- assessed, no matter how arbitrary or unreasonable their attitude may be or how grossly the assessment exceeds the fair value of his taxable property, if he can show no good cause for his failure to bring in his list within the designated period, he is wholly precluded from prosecuting an appeal. 14 Decisions of the county commissioners on questions of fact are final, 15 but decisions on questions of law are subject to review. The proper remedy of the party aggrieved is to apply to the supreme judicial court for a writ of certiorari, which is the established method for correcting errors in law of a body acting judicially but whose procedure is not in accordance with the course of the common law and which is highly appropriate to review the proceedings of county commissioners upon the abatement of taxes. 16 11 Boott Cotton Mills v. Lowell, 159 Mass. 383 (1893). 12 See G. L. c. 59, § 65, infra page 297. 13 Porter v. Norfolk County Commissioners, 5 Gray 365 (1855) ; Charles- town v. Middlesex County Commissioners, 101 Mass. 87, 92 (1869) ; Sears v. Nahant, 205 Mass. 558 (1910). As to what constitutes "good cause" for delay, see the decisions on "reasonable excuse," G. L. c. 59, § 61, supra page 287. 14 Sears v. Nahant, 205 Mass. 558 (1910). 15 Lowell v. Middlesex County Commissioners, 3 Allen 546, 549 (1862). 16 Newburyport v. Essex County Commissioners, 12 Met. 211 (1846). Lincoln v. Worcester, 8 Cush. 55, 61 (1851). A writ of mandamus will not lie Assessment of Local Taxes 297 G. L. c. 59, § 65] Certiorari is a discretionary writ and the proceedings will not be quashed by a certiorari for a technical irregularity not doing manifest injustice. The writ will not be granted because improper evidence was admitted by the county commissioners unless they have used it as a test. 17 Either the person assessed or the city or town, if aggrieved by an improper ruling of law, may apply for certiorari. The certiorari is heard by a single justice. It is a proceeding at law and not in equity. To take the case to the full bench an appeal does not lie, but unless the presiding justice reports the case the remedy of a dissatisfied party is to file a bill of exceptions. 18 Appeal to the Superior Court Section 65. A person aggrieved as aforesaid may, instead of pursuing the remedy provided in the preceding section, but subject to the same conditions, appeal to the superior court for the county where the property taxed lies by entering a complaint in said court within thirty days from the giving of the notice required by section sixty-three, which shall be heard and determined as other court cases by the court sitting without a jury. In 1890 a person aggrieved by the refusal of the assessors to abate a tax upon him was given the additional remedy of an appeal to the superior court and this proceeding has in prac- tice almost superseded the concurrent right of appeal to the county commissioners. The rights of the parties are the same, whichever method of appeal is employed, 1 though the proce- dure is different. The statute as originally enacted provided that the appeal should be entered in the superior court on the first return day after the expiration of thirty days from the notice of the assess- ors' decision, but this unnecessary limitation of the exercise of the right to a single day was done away with in connection to compel county commissioners to revise their decision. Gibbs v. Hampden County Commissioners, 19 Pick. 298 (1837). 17 Lowell v. Middlesex County Commissioners, 152 Mass. 372 (1890). 18 Brockton v. Plymouth County Commissioners, 183 Mass. 42 (1903). 1 Sears v. Nahant, 205 Mass. 558 (1910). Decisions as to "good cause for delay" are applicable to either form of appeal. Conversely a corporation which is authorized to appeal to the county commissioners under G. L. c. 63, § 57, although it has filed no list, may appeal to the superior court, as a "person aggrieved as aforesaid." Essex Co. v. Lawrence, 214 Mass. 79, 87 (1913). 298 Taxation in Massachusetts [G. L. c. 59, § 66 with the preparation of the General Laws, and entry may be now made on any day within thirty days from the receipt of the assessors' notice. 2 The proceeding is an appeal, and no service of process upon the assessors or upon the inhabitants of the town is required or necessary. 3 The town, and not the assessors, should be named as the party respondent. 4 No answer by the respondent is nec- essary. 5 The finding of the court, in the absence of questions of law, is conclusive. 6 The remedies given by statute to a person assessed whose tax the assessors refuse to abate are exclusive, and a writ of mandamus to compel the assessors to abate a tax or a writ of certiorari to quash the refusal of a board of assessors to abate a tax, based on alleged errors of law in the assessors' proceedings, will not lie. 7 Provision for Speedy Trial Section 66. The complaint shall be heard at the first sitting of the court in such county for the trial of civil causes after its entry, unless, at the request of the respondent, further time is allowed by the court. The superior court or the supreme judicial court, if the case is carried thereto, shall at the request of the town advance the case so that it may be heard and determined with as little delay as possible. The provision for early trial is for the benefit of the city or town, can be waived by the city or town and does not go to the jurisdiction of the court, so as to preclude a trial at a later sitting. 1 2 St. 1918, c. 257, § 39, and see Preliminary Report of Commissioners to Consolidate the General Laws, p. 106. 3 Cheney v. Dover, 205 Mass. 501 (1910) ; Thayer Academy v. Assessors of Braintree, 232 Mass. 402 (1919). 4 Cheney v. Dover, 205 Mass. 501 (1910). Prior to these decisions, the assessors were frequently made parties respondent. If a complaint is brought against the assessors, it may be amended by substituting the town as the appellee. Thayer Academy v. Assessors of Braintree, 232 Mass. 402 (1919). 5 In National Bank of Commerce v. New Bedford, 175 Mass. 257 (1900), Holmes, C. J., speaks of the "tardily filed answer" and says that "the reason for the delay seems to have been that the respondent had not filed an answer;" but it would seem to follow from the reasoning in Cheney v. Dover, 205 Mass. 501 (1910), that an answer was not necessary. Cases have been heard without an answer; for example, Sears v. Nahant, 205 Mass. 588 (1910). 6 Hollis v. Lynn, 237 Mass. 135 (1921). 7 Sears v. Assessors of Nahant, 208 Mass. 208 (1911). 1 National Bank of Commerce v. New Bedford, 175 Mass. 257 (1900). Assessment of Local Taxes 299 G.L.c. 59, §§67,68] Reference to Commissioner Section 67. The court may appoint a commissioner to hear the parties and report the facts, with or without the evidence. Such report shall be prima facie evidence of the facts therein found. The court shall allow such commissioner reasonable compensation to be paid by the county. When a case has been referred to a commissioner, heard in the superior court upon his report, and taken on exceptions to the supreme judicial court, the judgment of the commissioner in matters of fact is not open to revision. The only questions open are the questions of law whether upon the evidence reported the commissioner's findings were warranted and whether upon the findings so far as warranted the petitioner was entitled to an abatement; 1 and when the commissioner's report is the only evidence the question is solely whether the report warranted the finding of the superior court. 2 Judgment and Costs Section 68. If, on hearing, the court finds that the complain- ant has complied with all the provisions of law and has paid the tax for which he has been assessed, it may grant him a reasonable abatement, and shall render judgment against the town for the amount thereof, and for all charges and interest on the amount of the abatement from the date of the payment of the tax. The court may also, if the complainant has filed a list of his estate as required by section twenty-nine, allow him costs in its discretion. If no abatement is granted, judgment shall be rendered for the town for its expenses and costs, to be taxed by the court. Payment of the tax not only does not preclude the taxpayer from invoking the jurisdiction of the court, but is made by this statute an express condition of the granting of an abate- ment. 1 It is not however generally considered that the tax must be paid before the complaint is filed; it is sufficient if it is paid before the case is heard. The provisions of law, compli- ance with which is also made a condition precedent, are doubt- 1 Page v. Melrose, 186 Mass. 361 (1904). 2 Hollis v. Lynn, 237 Mass. 135 (1921). 1 National Bank of Commerce v. New Bedford, 155 Mass. 312 (1892), 300 Taxation in Massachusetts [G.L.c. 59, §69 less only those contained in the sections relating to proceedings for abatement. It is customary, ex majore cautela, to pay the tax under protest, but a protest is not necessary. 2 The statute which requires payment under protest as a condition precedent to the recovery back of a tax applies only to actions at common law. 3 In the requirement of prepayment it would seem that there is a difference between proceedings before the county commis- sioners and those before the superior court. An abatement by the former, if the tax has not been paid, gives the person assessed the right to discharge the tax by payment of less than the amount assessed, 4 and if the tax has been paid special statutory provision is made for paying it back; 5 whereas no other effect is provided for an abatement by the latter than the usual outcome of a successfully prosecuted action at law — a judgment for a speci- fied sum. The original statute of 1890 made no provision for the re- payment of interest on the sum abated, but in 1895 the require- ment of interest was inserted. 6 When an abatement is refused the town may recover its expenses and costs of the applicant, but the town cannot recover the sums which it has paid to its counsel for defending the case as part of such expenses. 7 Reimbursement, Interest and Costs Section 69. A person whose tax has been abated shall, if the tax has been paid, be reimbursed by the town to the amount of the abatement allowed, with interest from the time of payment of said tax and all charges paid therewith except legal costs paid as pro- vided in section sixty-two. This section has no application to proceedings before the superior court. It was enacted in substantially its present form many years before appeals to the superior court were authorized, 2 Thayer Academy v. Assessors of Braintree, 232 Mass. 402 (1919). 3 G. L. c. 60, § 98, infra page 406. So also the other requirement of that statute, that no suit shall be brought to recover back a tax unless brought within three months after payment of the tax has no application to proceedings for abatement. Thayer Academy v. Assessors of Braintree, 232 Mass. 402 (1919). 4 Boott Cotton Mills v. Lowell, 159 Mass. 383 (1893). 5 G. L. c. 59, § 69, infra page 300. 6 See Tremont & Suffolk Mills v. Lowell, 165 Mass. 265 (1896). 7 Sears v. Nahant, 215 Mass. 324 (1913). Assessment of Local Taxes 301 G.L.c. 59, §70] and there are special provisions in the statute relating to appeals to the superior court applicable to the same subjects. 1 The county commissioners have no authority to allow a tax- payer who has prevailed before them in his petition for abate- ment the costs of prosecuting the petition. The provision as to charges is intended only to enable a party to receive back any of the legal charges and fees which he may have been obliged to pay the collector by reason of the enforcement of payment of the tax after the application for an abatement had been made and does not authorize the recovery of a compensa- tion in the form of costs for time and trouble in prosecuting the application for abatement. 2 It was held in the absence of express provision that a person who paid his tax and secured an abatement was not entitled to interest upon the amount abated except from the date of de- mand; 3 but in 1894 the provision that interest be paid from the time of payment was inserted. This statute did not apply to proceedings in the superior court and there was no provision for interest upon abatements made there until the following year. 4 There is some doubt whether the provision as to interest applies to abatements made by the assessors themselves. Al- though the statute is broad enough to cover abatements by the assessors, it is the practice in Boston and some other cities not to pay interest on abated taxes unless the abatement was made by a higher tribunal than the assessors. Certificate of Abatement Section 70. A person whose tax has been abated shall be en- titled to a certificate thereof from the assessors, clerk of the commis- sioners or other proper officer. This statute also has no application to abatements by the superior court. The certificate provided for by this section cannot be entered in court and no court can make up a judgment 1 Tremont & Suffolk Mills v. Lowell, 165 Mass. 265 (1896). 2 Lowell v. Middlesex County Commissioners, 3 Allen 546 (1862); Charles- town v. Middlesex County Commissioners, 109 Mass. 270 (1872). " Lowell v. Middlesex County Commissioners, 3 Allen 550 (1862); Boott Cotton Mills v. Lowell, 159 Mass. 383 (1893). 4 See as to this statute Tremont & Suffolk Mills v. Lowell, 165 Mass. 265 (1S96). 302 Taxation in Massachusetts [G.L.c. 59, §§71-73 inc. upon it alone. 1 It would seem however that it might be offered in evidence whenever it was material. Its primary purpose is however to satisfy the collector that the tax has been abated. Abatement of Uncollectible Taxes Section 71. If a collector is satisfied that a poll tax or tax upon personal property, or any portion of said tax, committed to him or to any of his predecessors in office for collection, cannot be collected by reason of the death, absence, poverty, insolvency, bank- ruptcy or other inability of the person assessed to pay, he shall notify the assessors thereof in writing, on oath, stating why such tax cannot be collected. The assessors shall act on such notifi- cation within thirty days after its receipt and, after due inquiry, may abate such tax or any part thereof, and shall certify such abatement in writing to the collector; and said certificate shall dis- charge the collector from further obligation to collect the tax so abated. But no poll tax shall be abated under this section within the calendar year in which assessed. Section 72. Whenever the commissioner deems any lands to have been assessed at a valuation insufficient to meet the charges and expenses of collecting the tax thereon, he may in writing author- ize the assessors to abate the tax of their own motion as a tax which ought not to have been assessed. The authorization shall form a part of the assessors' records of abatements. Inasmuch as the polls and any portion of the estates of per- sons who by reason of age, infirmity and poverty are in the judgment of the assessors unable to contribute fully toward the public charges are exempt from taxation, the assessors under their general power to abate taxes which were improperly assessed and without a petition from the person assessed or notice from the collector may abate the tax on such a person after it has been committed to the collector. 1 Abatement of Taxes on Telephone and Telegraph Companies Section 73. Any company aggrieved by the taxes assessed on it relating to any property valued in accordance with section thirty- 1 Boott Cotton Mills v. Lowell, 159 Mass. 383 (1893). 1 Gordon v. Sanderson, 165 Mass. 375 (1896). Assessment of Local Taxes 303 G. L. c. 59, § 74] nine may, within six months after the date of its tax bill, apply- to the commissioner for an abatement thereof ; and if the commissioner finds that the company is taxed at more than its just proportion, or upon an assessment of any of its- said property in excess of its fair cash value, he shall make a reasonable abatement. No company which has not duly filed the return required by section forty-one shall have an abatement unless it shall furnish to the commissioner a reasonable excuse for the delay, or unless such tax exceeds by more than fifty per cent the amount of the tax which would have been assessed on such property if the return had been seasonably filed, and in such case only the excess over such fifty per cent shall be abated. Whenever any application for abatement hereunder is made, the commissioner shall give notice thereof to the assessors of the town in which is located any of the property with reference to which an abatement of the tax is asked for, and such assessors may appear before the commissioner and be heard by him with relation to the subject of the abatement. The commissioner shall, within ten days after his decision on an application for abatement hereunder, give written notice thereof to the applicant and to the assessors. A company aggrieved by the refusal of the commissioner to abate a tax hereunder may prosecute an appeal from his decision in the manner and to the tribunals provided for a person aggrieved by the refusal of assessors to abate a tax, and all laws relating to such an appeal from a refusal of assessors to abate a tax shall apply in proceedings hereunder. This statute makes provision for the abatement of taxes on the structures of telephone and telegraph companies which, though taxed locally, are valued for purposes of local taxation by the commissioner of corporations and taxation. Notice to Commissioner of Abatement of Local Taxes on Corporations Section 74. Whenever an abatement is finally made to any corporation taxable under chapter sixty-three upon any tax assessed by the assessors of any town, upon or in respect of works, structures, real estate, machinery, poles, underground conduits, wires and pipes, the assessors, commissioners or court granting such abatement shall forthwith notify the commissioner thereof, and shall state in such notice what sum was determined by such assessors, commissioners or 304 Taxation in Massachusetts [G. L. c. 59, § 75 court to have been the full and fair cash value of such works, struc- tures, real estate, machinery, poles, underground conduits, wires and pipes on the first day of April on which the tax so abated was originally assessed. Omitted Assessments Section 75. If the real or personal estate of a person, to an amount not less than one hundred dollars and liable to taxation, has been omitted from the annual assessment of taxes, the assessors shall between December tenth and twentieth following, both inclusive, assess such person for such estate. The taxes so assessed shall be entered on the tax list of the collector, who shall collect and pay over the same. Such additional assessment shall not render the tax of the town invalid although its amount, in consequence thereof, shall exceed the amount authorized by law to be raised. This statute as originally enacted in 1868 provided in sub- stance that the assessors might add to the tax list after it had been committed to the collector and before the first day of August real or personal estate to an amount not less than five hundred dollars which they should " discover " to have been omitted from the last annual assessment. Previous to its enactment, while no time other than a reasonable one was fixed for com- mitting the tax list and warrant to the collector and the assessors' might continue to add property to the list up to the moment of its commission, after the warrant had left their hands they had no authority to make any further assessment, even with the consent of the person assessed. 1 The various amendments to the statute have related principally to the time in which the additional assessment might be made; in 1873 the time was extended to the fifteenth of September and the amount reduced to one hundred dollars; in 1886 it was provided that the assess- ment might be made any time after the rate had been fixed, whether before or after the commission of the warrant, and before the sixteenth of December; and in 1888 the time for the additional assessment was limited to " between the fifteenth and twentieth days of December." In 1911 the period was extended to " between the tenth and twentieth days, both inclu- sive, of December." 1 Opinion of the Justices, 18 Pick. 575 (1836). Assessment of Local Taxes 305 G. L. c. 59, § 75] In the various forms in which the statute appeared prior to the enactment of the Revised Laws in 1902 the assessors were authorized to tax only such property as they should "dis- cover " to have been omitted; and it was held in 1884 that the assessors could not be said to have discovered that there had been an omission until they were satisfied of the fact as a board, and consequently property might be assessed under this statute, although one of the assessors knew of its existence be- fore the list and warrant were committed to the collector if he communicated the facts to his associates afterward. 2 In the Revised Laws and subsequent enactments all allusion to dis- covery has been discarded and the statute does not now require property to be newly discovered in the sense of coming for the first time to the knowledge of the assessors in order that it may be legally assessed as omitted property. If the assessors, through want of knowledge of facts or ignorance of the law or as to their duty or for any other honest reason have failed to include prop- erty in the annual assessment, it is omitted property within the meaning of the statute. 3 The tax on omitted property is not a new and separate tax but is a part of the annual assessment, made as of the first day of April. 4 It should be assessed upon a person deceased if he was living on the first day of April; 5 and a person properly taxable within the town for any property who is subjected to an additional assessment under this statute upon property that he does not own or that is not taxable has no remedy but an application for abatement. 6 There is no requirement that property subjected to an assess- ment under this statute be itemized or specified. 7 The property included in the additional assessment is " entered on the tax list of the collector " within the meaning of the statute although contained in a separate book or written on a separate piece of paper. 8 Whether or not a new warrant is necessary, it is within the implied powers of the assessors to issue one if they see fit. 9 2 Noyes v. Hale, 137 Mass. 266 (1884). 3 Sears v. Nahant, 215 Mass. 329 (1913). 4 Harwood v. North Brookfield, 130 Mass. 561 (1881); Noyes v. Hale, 137 Mass. 266 (1884). 5 Noyes v. Hale, 137 Mass. 266 (1884). 6 Harwood v. North Brookfield, 130 Mass. 561 (1881). 7 Noyes v Hale, 137 Mass. 266 (1884). 8 Noyes v. Hale, 137 Mass. 266, 273 (1884). • Noyes v. Hale, 137 Mass. 266, 273 (1884). 306 Taxation in Massachusetts [G.L.c. 59, §§76,77 Under the provisions of this statute, the discovery of a large amount of property located in a small town, after the tax rate had been fixed, would subject the owner to the payment of an onerous tax and might result in the collection of more money by taxation than the needs of the town would require; but the legislature having imposed no limit the court cannot create one. 10 The danger of such an assessment may have been intended as one of the inducements to the owners of taxable property to furnish lists. Revision of Valuation Section 76. If the commissioner deems any property subject to taxation not properly valued, he may recommend to the assessors a revision of its valuation, and they may make an assessment upon the additional value in the manner and within the time provided by the preceding section and subject to its provisions'. This statute 1 originated with a report of the Commission on Taxation appointed in 1907, 2 was omitted in the codification of the tax laws in 1909 and was re-enacted in 1910 3 at the recommendation of the tax commissioner. As enacted it did not contain any limitations as to time ; but it was held that the limitations of the preceding section were applicable, and that a revaluation could not be made after the twentieth of Decem- ber in any year. 4 In the codification of the General Laws the wording of the statute was modified to conform to this decision. Reassessment of Taxes Section 77. Every tax except a poll tax, which is invalid by reason of error or irregularity in the assessment and which has not been paid, or which has been recovered back, may be reassessed by the assessors for the time being, to the just amount to which, and upon the estate or to the person to whom, it ought at first to have been assessed, whether such person has continued an 10 Noyes v. Hale, 137 Mass. 266, 272 (1884). See for example, Sears v. Assessors of Nahant, 205 Mass. 558 (1910), and Cheney v. Assessors of Dover, 205 Mass. 501 (1910). In the latter case an assessment on the personal estate of one person was more than twice the amount of the entire appropriation of the town for a year. Such extreme cases are of course not so likely to arise since the enactment of the income tax law. 1 St. 1908, c. 550, § 4. 2 Under c. 129 of the Resolves of 1907. 3 St. 1910, c. 260, § 1. 4 Gannett v. Cambridge, 218 Mass. 60 (1914). Assessment of Local Taxes 307 G. L c. 59, § 78] inhabitant of the same city or town or not. An alienation of the real estate assessed shall not defeat a re-assessment, if made within two years after the tax first assessed was committed to the collector; but the lien provided by section thirty-seven of chapter sixty shall terminate as therein provided. Section 78. * Taxes reassessed under the preceding section shall be committed to, and collected and paid over by, the collector for the time being, in the same manner as other taxes, except that the name of the person to whom they were originally assessed shall be stated in the tax list; and the bond of such collector shall apply to such reassessed taxes. In the early part of the last century, in the absence of any statute relating to re-assessment, it was held that when an entire assessment was invalid by reason of an error or irregu- larity in the assessment, whether the tax list had been committed to the collector or not, the assessment was a nullity and could be treated as such and a re-assessment could be made in the proper form; 1 if however the entire assessment was not invalid, but was objectionable because it included the polls and estates of various persons who were not properly taxable in the place where the assessment was made, a re-assessment could not law- fully be made. 2 One who could pick a flaw in the assessment so far as it related to him or in the proceedings of the town in making the appropriations for which the tax was levied could wholly escape taxation for the year. In consequence of deci- sions holding an entire tax invalid because of an irregularity which affected only a trivial portion of the amount assessed, a statute was enacted in 1859 which put an end to almost all wrangling over technical defects in the assessment of taxes by pro- viding that if a tax was partially invalid only the illegal excess could be recovered back and all proceedings for the collection of the tax by sale or levy should be valid ; 3 that an action to recover back a tax could be brought only within three months after the payment; 4 and that a tax invalid by reason of an, error or irregularity in the assessment might be re-assessed in proper 1 Pond v. Negus, 3 Mass. 230 (1807) ; Libby v. Burnham, 15 Mass. 144, 147 (1818). 2 Inglee v. Bosworth, 5 Pick. 498 (1827). 3 St, 1859, c. 118, § 4, now G. L. c. 59, § 82, infra page 311; G. L. c. 60, § 98, injra page 400. 4 St. 1859, c. 118, § 3, now G. L. c. 60, § 98, infra page 400. 308 Taxation in Massachusetts [G.L.c. 59, §78 form. The latter provision is the statute now under considera- tion. A re-assessment may be made after the expiration of the year in which the original assessment was levied, by an entirely new board of assessors, 5 but whenever made it must be based upon the valuation of the year in which the tax was first assessed and upon the votes of the town and the warrants of the state and county requiring it. 6 A re-assessment may be used to cure any description of error in regard to either amount, estate or person, 7 but the power to re-assess gives no authority to vacate a valid tax, 8 and when the original assessment is valid a re- assessment is invalid. 9 When however a re-assessment is made by the assessors at the request of persons interested, although the original assessment is valid, such persons cannot object to the re-assessment on the ground that the assessors had no au- thority to make it. 10 A re-assessment may be made when the interests of the persons assessed are several and the assessment has been made to them jointly, but there must be a distinct and separate judgment of the assessors fixing the value of the interest of each and the amount of tax to be assessed separately to each. 11 When the error which necessitates a re-assessment is such as to invalidate the entire assessment a new list and a new warrant are indispensable; 12 but when the error is in an individual assess- ment the assessors may change and add to the original list after it has been committed to the collector without issuing a new warrant. 13 It was provided in 1881 that taxes on real estate might be re-assessed any time within two years from the time the tax s Hubbard v. Garfield, 102 Mass. 72 (1869). 6 Hubbard v. Garfield, 102 Mass. 72 (1869); Davis v. Boston, 129 Mass. 377 (1880). See also, Market National Bank v. Belmont, 137 Mass. 407 (1884). * Hubbard v. Garfield, 102 Mass. 72 (1869) ; Hunt v. Perry, 165 Mass. 287 (1896). 8 Farnsworth v. Boston, 121 Mass. 173 (1876). 9 Oakham v. Hall, 112 Mass. 535 (1873) ; Deane v. Hathaway, 136 Mass. 129 (1883). k> Burr v. Wilcox, 13 Allen 269 (1866). 11 Jennings v. Collins, 99 Mass. 29 (1868); Hunt v. Perry, 165 Mass. 287 (1896). 12 Hubbard v. Garfield, 102 Mass. 72 (1869). 13 Hubbard v. Garfield, 102 Mass. 72 (1869) ; Hunt v. Perry, 165 Mass. 287 (1896). Assessment of Local Taxes 309 G.L.c. 59, §§ 79-81 inc.] first assessed was committed to the collector, notwithstanding an alienation of the land; but it is elsewhere provided that there shall be no lien for taxes re-assessed if the property is alienated before the re-assessment. 14 Accordingly when real estate wrongly assessed has been alienated 15 within two years, the re-assessment must be imposed within the two years, and can be collected only by distress of the goods of, or arrest of, or suit against the person who owned or occupied the land at the date of the original assessment and who was assessed in the re-assessment. In 1915 authority was granted for the re-assess- ment of taxes in case a tax title was adjudicated invalid on ac- count of irregularity in the proceedings subsequent to the assess- ment, the re-assessment to be to the owner of record at the time of adjudication. This statute was in the form of an amendment to the statute now under consideration. 16 In 1918 this amend- ment was repealed on the ground that it was probably uncon- stitutional, 17 and as a substitute, provision made for the pres- ervation of the lien in the case of an unsuccessful attempt to sell for taxes. 18 There is nothing in the statutes authorizing re-assessment which makes a re-assessment obligatory upon the assessors when a person is assessed more than his due proportion, so that such person may treat the tax as void if it is not re-assessed. 19 The re-assessment, to be valid, must of course be imposed upon the persons who should properly have been assessed in the first place, and if it is not so imposed it stands in no better position than an original assessment. 20 Apportionment of Taxes on Real Estate Subsequently Divided Section 79. If real estate is divided by sale, mortgage, upon a petition for partition or otherwise after a tax has been assessed thereon 14 G. L. c. 60, § 37, infra page 349. 15 As to what constitutes alienation within the meaning of these statutes see infra page 351. ™ St. 1915, c. 237, § 17. 17 See Preliminary Report of Commissioners to Consolidate the General Laws, p. 111. 18 St. 1918, c. 257, §§ 46, 47, now contained in G. L. c. 60, § 37, infra, page 349. 19 Cone v. Forest, 126 Mass. 97 (1879). 20 Oakham v. Hall, 112 Mass. 535 (1873); Davis v. Boston, 129 Mass. 377 (1880). 310 Taxation in Massachusetts [G. L. c. 59, §§ 79-81 inc. and such division has been duly recorded in the registry of deeds, the assessors, at any time before said real estate has been advertised for sale for non-payment of taxes, upon the written request of the owner or mortgagee of any portion thereof, shall apportion said tax, with costs and interest upon the several parcels thereof, in proportion to the value of each, and only the portion of said tax, interest and costs so apportioned upon any such parcel shall continue to be a lien upon it; and the owners or mortgagees shall be liable only for the tax apportioned upon the parcel owned in whole or in part by them respectively. Section 80. Assessors shall send notice of the request for such apportionment and of the time appointed therefor, by mail, to every person interested in said real estate whose address is known to them. Section 81. A person aggrieved by any action of the assessors in making such apportionment may within seven days thereafter appeal in like manner as in case of an overassessment, and the de- cision upon such appeal shall be final. Prior to 1878 there was no provision for apportioning a tax upon real estate divided after the assessment, and in such case a re-assessment could not legally be made, as the original assess- ment would be valid. It was held however that if a reassess- ment in the nature of an apportionment was requested by the owners of the land and the owners made an express promise to pay the tax thus re-assessed, they could not afterward set up the lack of authority of the assessors to make the re-assessment and could be held on their promise in an action by the collector. 1 Since the enactment of the statute relating to apportionment in 1878 2 persons who request an apportionment are not person- ally liable for their portion of the tax, as the procedure is wholly statutory and the only method provided by the statute for enforcing such tax is through the lien on the fractional parcel. 3 The right to an 'apportionment of a tax upon real estate sub- sequently divided does not continue after the lien as to such parts of the real estate as have been alienated has expired. 4 i Burr v. Wilcox, 13 Allen 269 (1866). 2 St. 1878, c. 182. The statute has not been amended since its enactment except by St. 1913, c. 599, § 1, which limited the right to an apportionment to the time before the land was advertised for sale for non-payment of taxes. Pre- viously it could be apportioned any time before the sale took place. 3 Rogers v. Gookin, 198 Mass. 434 (1908). 4 Salisbury Beach Associates v. Assessors of Salisbury, 225 Mass. 399 (1917). Assessment op Local Taxes 311 G. L. c. 59, § 82] Persons who orally request the assessors to apportion a tax and after receiving the bill apply for an abatement of their por- tion on the sole ground that the tax was too high cannot sub- sequently in proceedings to enforce payment of the tax as appor- tioned object to the validity of the apportionment on the ground that their own request was not in writing, or that notice of their request was not given to other persons interested in the land originally assessed. 5 Assessment Partially Invalid Section 82. If, by reason of an erroneous or illegal assessment or apportionment of taxes, a person is assessed more than his due proportion, the tax and assessment shall be valid except as to the illegal excess. This statute has no reference to a mere over-assessment of a taxpayer, whether caused by assessing him for property which he does not own or which is not taxable or by overvaluing taxable property which he owns. In such cases the taxpayer has always had his remedy by petition for abatement but has never been permitted to treat the assessment as invalid or illegal, unless he had no property subject to taxation within the city or town and consequently was not within the jurisdiction of the assessors. 1 This statute applies to an assessment levied to meet appropria- tions which include proposed expenditures for purposes for which the town cannot lawfully expend money, or which in some other particular is illegal as to a portion of the amount sought to be levied; and in such cases but for the provisions of this statute the assessment would be wholly invalid. It was at first held in a case more hotly contested on the merits than on the form of procedure that when an assessment was partially invalid by reason of including an appropriation for a purpose for which the town could not lawfully spend money, a person who was compelled to pay the tax could re- cover back only that portion of it which represented his share of the illegal appropriation; 2 but subsequently the court held that in case of partial invalidity, whether due to the assessment exceeding the amount required to be raised, 3 to the inclusion of 5 Rogers v. Gookin, 198 Mass. 434 (1908). - 1 Infra page 400. 2 Torrey v. Millbmy, 21 Pick. 64 (1838). 3 Joyner v. School District in Egremont, 3 Cush. 567 (1849). 312 Taxation in Massachusetts [G. L. c. 59 § 82 items of appropriation for which the town could not lawfully expend money, 4 or to non-compliance with the statutes relating to the* apportionment of the state tax, 5 the entire tax might be recovered back. The result of these decisions was that a town might lose the entire tax of a year by reason of illegally appropriating a hundred dollars to celebrate the fourth of July or for some similar trivial irregularity, and by suit brought any time within six years after the tax was paid. To remedy this situation a statute was enacted in 1859 a portion of which ap- pears above. Other portions provided for the re-assessment of taxes erroneously assessed, 6 and limited the time to three months in which an action to recover back taxes might be brought; 7 so that since 1859 there has been little to be gained by picking flaws in proceedings for the assessment of taxes which do not cause substantial injustice. 8 It is perfectly obvious from a study of the causes which led to the passage of the statute in question 9 that it did not change the unit of taxation, or allow recovery in an action at common law in case of over-asssessment. It assumes that the tax of which it speaks would have been void altogether and recovered as a whole but for its enactment, and proceeds to modify that consequence, but does not create a liability which did not previously exist. 10 Even before 1859 a taxpayer could not recover from a town his proportionate share of money illegally paid out by the town. 11 The action at common law which could be maintained against a town was based upon a tax for an illegal purpose and not upon illegal payments of money previously lawfully raised by taxation. 4 Gerry v. Stoneham, 1 Allen 319 (1861). 5 Goodrich v. Lunenburg, 9 Gray 38 (1857); Gerry v. Stoneham, 1 Allen 319 (1861). 6 G. L. c. 59, § 77, supra page 306. 7 G. L. c. 60, § 98, infra page 400. 8 Since 1847 a means has been provided by statute for contesting the expen- diture of money by a city or town for an alleged illegal purpose by petition in equity brought by ten taxable inhabitants. G. L. c. 40, § 53, supra page 147. 9 It was said in Cone v. Forest, 126 Mass. 97 (1879), that the statute was probably passed in consequence of the decision in Goodrich v. Lunenburg, 9 Gray 38 (1857). 10 Schwartz v. Boston, 151 Mass. 226 (1890). 11 Withington v. Harvard, 8 Cush. 66 (1851). Assessment of Local Taxes 313 G. L. c. 59, §§ 83-85 inc.] Return by Assessors of Property of Corporations Locally Taxable Section 83. Assessors shall annually, on or before the first Monday of July, return to the commissioner the names of all domestic and foreign corporations, except banks of issue and deposit, having a capital stock divided into shares, organized for the purposes of business or profit and established in their respective towns or owning real estate therein, and a detailed statement of the works, structures, real estate, machinery, poles, underground conduits, wires and pipes owned by each of said corporations and situated in such town, with the value thereof, on April first preceding, and the amount at which the same is assessed in said town for the then current year. An assessor neglecting to comply with this section shall be punished by a fine of one hundred dollars. The object of this provision is to assist the commissioner in the assessment of the corporate franchise tax ; but the failure of the assessors to make the returns does not affect the validity of the tax. The commissioner, in such case, may ascertain the necessary facts otherwise. 1 In the consolidation of the laws of 1921 the provisions as to domestic and foreign corporations were made the same, to accord with the new method of taxing foreign corporations. Other Returns Required of Assessors Section 84. If the assessors of a town ascertain that the aggre- gate valuation thereof has been diminished since April first of the preceding year, they shall return with the table of aggregates, or with the books, which they are required by sections forty-seven, forty- eight and forty-nine to deposit in the office of the commissioner, a statement, on oath, of the causes which in their opinion have pro- duced such diminution. Section 85. Assessors shall annually, on or before September first, make a return to the commissioner, in such form as he may pre- scribe, of the value of property exempted from taxation under clauses twenty-second and twenty-third of section five, together with the amount of taxes which would have been assessed on such property but for said exemption. 1 Commonwealth v. New England Slate and Tile Co., 13 Allen 391 (1866). 314 Taxation in Massachusetts [G.L.c. 59, §§86,87 Section 86. Assessors shall annually, on or before October first, forward to the commissioner a statement showing the whole amount of exempted property entered upon the valuation lists of their respective towns in accordance with section fifty-one, and the amount in each class, and stating separately the aggregate amount belonging to each class embraced in clause third of section five, and shall also forward such lists and statements required by section twenty-nine relative to real and personal property exempt from taxation under said clause as have been received by them. The penalty for failure to comply with section eighty-four is a fine of not more than two hundred dollars. 1 No penalty appears to have been provided for failure to comply with sec- tions eighty-five or eighty-six. Personal Liability of Assessors Section 87. Assessors shall not be responsible for the assess- ment of a tax assessed by them in pursuance of a vote for that pur- pose, certified to them by the clerk or other proper officer of a city, town or district, except for the want of integrity and fidelity on their own part. Until the close of the first quarter of the last century the customary and recognized method of contesting the validity of a tax was to refuse to pay it, and when the collector attempted to enforce payment by distress or imprisonment, to bring an action of trespass against the assessors. This action filled the place now occupied by the action for money had and received against the city or town and was subject to the same restrictions; the action would not lie if the objection to the tax was merely that it was an over-assessment; 1 but a partial invalidity of the tax justified an action for the full amount. 2 The action had one advantage over its modern substitute, for the damages were not limited to the amount of the tax and interest but covered all loss to which the plaintiff was put — in case of dis- tress the value of the goods distrained minus any surplus re- turned to the owner, thus including both the costs of distress 1 See G. L. c. 59, § 94, infra page 319. 1 Dillingham v. Snow, 5 Mass. 547 (1809); Little v. Greenleaf, 7 Mass. 236 (1810). 2 Stetson v. Kempton, 13 Mass. 272 (1816); Libby v. Burnham, 15 Mass. 144 (1818). Assessment of Local Taxes 315 G. L. c. 59, § 87] and the difference between the value of the goods and the price that they brought at a forced sale. 3 The assessors could not be held liable for taxing a person at his own request; 4 and if they relied for their justification upon the action of a town meeting which the return of the warrant showed to be legally warned, a person assessed was not permitted to show that the return was not true in fact. 5 The vote of the town authorizing the assessment of a tax was however no defense, if the purpose was one for which money could not lawfully be expended by a town. 6 The fact that the vote of the town was unanimous was no defense against a person who was not himself present at the meeting. 7 In view of this onerous liability, and the meagre emoluments of the office, it is not surprising that the legislature was obliged to impose a severe penalty upon any person chosen to serve as assessor who failed to take the oath of office, 8 and in 1823 a statute limiting the personal liability of assessors was enacted. It exempted them from all responsibility for the assessment of taxes which they were properly required to assess " except for their own integrity and fidelity." This statute did not receive a liberal construction, and was held not to include taxes assessed for school districts, 9 nor to protect assessors from their mistakes in assessing individuals who by their residence or otherwise were not liable to be assessed, because the assessors were not, within the meaning of the statute, " required " to assess such persons. 10 The statute was'however held to protect the assessors not only from errors in judging of the validity of the require- ments of their towns, but also from accidental mistakes in the assessment. 11 In 1836, when the Revised Statutes were enacted, the remedy 3 Libby v. Burnham, 15 Mass. 144 (1818); Inglee v. Bosworth, 5 Pick. 498 (1827). • 4 Pease v. Whitney, 8 Mass. 93 (1811). 5 Saxton v. Nimms, 14 Mass. 315 (1817) ; Thayer v. Stearns, 1 Pick. 109 (1822). 6 Stepson v. Kempton, 13 Mass. 272 (1816). 7 Stetson v. Kempton, 13 Mass. 272 (1816). 8 St. 1875, c. 50, § 1. This provision was not repealed until 1918 (St. 1918, c. 291. §12). 9 Little v. Merrill, 10 Pick. 543 (1830); Baker v. Allen, 21 Pick. 382 (1838). 10 Gage v. Currier, 4 Pick. 399 (1826); Inglee v. Bosworth, 5 Pick. 498 (1827); Freeman v. Kenney, 15 Pick. 44 (1833); Baker v. Allen, 21 Pick. 382 (1838). 11 Ingraham v. Doggett, 5 Pick. 451 (1827). 316 Taxation in Massachusetts [G.L.c. 59, §87 by action of contract against the town had been judicially rec- ognized and established, and the exemption of assessors from personal liability was thereupon extended by the codification which then took place to substantially its present form, so as to include all the corporations for which assessors were required to assess taxes and to protect assessors from liability for accidental errors in taxing those who were not liable to be taxed. 12 While acting within their appropriate sphere they were given the same protection and immunities which judicial officers have, 13 and when a tax was duly voted by a town or district and certified by its clerk, an action against the assessors could not be main- tained in the absence of proof of want of integrity and fidelity on their part. 14 Assessors however are still liable for assessing taxes on be- half of a town or district which has no legal existence, 15 even in pursuance of a vote certified to them by one acting as clerk of the town or district, 10 and in an action against the assessors the burden is on them of showing that the town or district was legally established. 17 Exemption in such a case does not come within the literal meaning of the statute, and the person assessed would have no other remedy, for he could not recover the tax from a corporation which did not exist. Assessors are liable also when an assessment made by them is not authorized by law or not made in pursuance of any vote of the town 18 and they may be liable if the collector dies and they commit to his successor, as unpaid, taxes which have in fact been paid; 19 but their liability in such a case, if they acted in good faith, is open to question although the statute does not in terms apply to such a situation. In an action against persons acting as assessors for causing a person to be arrested for non-payment of a tax, if the town 12 Baker v. Allen, 21 Pick. 382 (1838). 13 Baker v. Allen, 21 Pick. 382 (1838). 14 Howard v. Stevens, 3 Allen 409 (1862). 15 Withington v. Eveleth, 7 Pick. 106 (1828) rBassett v. Porter, 4 Cush. 487 (1849) ; Dickinson v. Billings, 4 Gray 42 (1855) ; Durant v. Eaton, 98 Mass. 469 (1868); Judd v. Thompson, 125 Mass. 553 (1878). 16 Judd v. Thompson, 125 Mass. 553 (1878). 17 Bassett v. Porter, 4 Cush. 487 (1849) ; Dickinson v. Billings, 4 Gray 42 (1855). 18 Eames v. Johnson, 4 Allen 382 (1862). 19 Lawrence v. Kimball, 1 Met. 524 (1840). Assessment of Local Taxes 317 G. L. c. 59, § 88] records do not show that the assessors were duly sworn, parol evidence is admissible to prove the fact. 20 In an action brought by a town against its assessors for assess- ing taxes in such a way that the town suffers financial loss, the assessors are not liable, at any rate, when there has been no want of integrity and fidelity on their part, but only ordinary negligence. 21 A civil action does not lie in favor of a town against persons chosen as assessors for failure to take the oath of office. 22 Compensation of Assessors Section 88. Each assessor shall be paid by his town three dollars and fifty cents a day for every whole day in which he is employed in that service, and such additional compensation as the town allows. An assessor is entitled to his statutory compensation at all events, and more if the town votes it; but if the town votes a gross sum as the salary or compensation of the assessors, and this sum is in excess of the statutory compensation, the sum so voted constitutes the entire compensation of the assessors, and they are not entitled to the statutory per diem payment in ad- dition, unless such plainly appears to be the intent of the vote. 1 If the sum voted does not equal the statutory amount, the vote may be disregarded. A town cannot lawfully vote to com- pensate its assessors for work performed in connection with the assessment of taxes but of a character not required by the stat- utes. 2 A town cannot be charged as trustee of an assessor of taxes for the compensation fixed by statute. 3 The assessors are public officers, and in such case the town enters into no contract with them for their services. When however the salary of an assessor is fixed by vote of the town or by other lawful means so as to create a contractual obligation, the amount so payable may be attached by trustee process. 4 20 Pease v. Smith, 24 Pick. 122 (1834). 21 First Parish in Sherburne v. Fiske, 8 Cush. 264 (1851) ; Lincoln v. Chapin, 132 Mass. 470 (1882). 22 First Parish in Sherburne v. Fiske, 8 Cush. 264 (1851). 1 Moody v. Newburyport, 3 Met. 431 (1841) ; Welch v. Emerson, 206 Mass. 129 (1910). 2 Gile v. Perkins, 207 Mass. 172 (1911). In this case the town attempted to have a decennial valuation prepared and published between two annual assess- ments. 3 Walker v. Cook. 129 Mass. 577 (1880). 4 Hooker v. McLennan, 236 Mass. 117 (1920). 318 Taxation in Massachusetts [G. L. c. 59, §§ 89-92 inc. Penalties for Evasion of Taxation Section 89. Whoever in any way directly or indirectly proposes or agrees to an assessment on any specific or limited amount less than that for which he may lawfully be taxed, with the purpose of making, or as an inducement to make, any particular place his residence or place of business, and an assessor guilty of making or assenting to any such proposal, shall be punished by a fine of one thousand dollars. Section 90. Whoever avoids taxation by wilfully and design- edly changing or concealing his residence, or by any other act with the intent so to avoid taxation, shall be punished by a fine of twice the amount of the last tax paid by him, or, if he has paid no tax in the commonwealth, by a fine of not less than one hundred nor more than five thousand dollars; and he may be indicted either in the county where any of the acts or things made criminal by this section are done or in the county where he is liable to taxation. Section 91. Whoever, with intent to defeat or evade any provi- sion of law as to the assessment or payment of taxes, delivers or discloses to an assessor or assistant assessor a false or fraudulent list, return or schedule of property, as and for a true list of his estate not exempt from taxation, shall be punished by a fine of not more than one thousand dollars or by imprisonment for not more than one year. Section 92. Keepers of taverns and boarding houses and masters and mistresses of dwelling houses, upon application of an assessor or assistant assessor of the town where their house is situated, shall give the names of all persons residing therein liable to be assessed for taxes. Every such keeper, master or mistress refusing to give such information, or knowingly giving false information, shall be punished by a fine of twenty dollars. Sections eighty-nine and ninety were never strictly enforced, and, it is to be suspected, were constantly violated, in the years when it was attempted to tax intangible property on its capital value. Since the enactment of the income tax law and the legisla- tion of 1918 changing the method of taxing tangible personal property, they are of little importance. A man may lawfully change his domicile from one town to another merely because he wishes to diminish the amount of his taxes. Section ninety does not deprive any man of the liberty of residing where he pleases or of changing his residence Collection of Local Taxes 319 G.L.c. 59, §§93,94] as frequently as he desires; if he really intends to change his residence and does change it the motive which prompts him to do it is not material. 1 The statute merely subjects him to a penalty if he escapes taxation by designedly changing or con- cealing his residence for that purpose. The wish to change residence for the purpose of reducing taxes does not tend to show any want of a real intention to change, but rather the contrary. 2 The " other act," the commission of which wilfully and de- signedly for the purpose of avoiding taxation results in such avoidance, and which is made indictable by this statute, has never been defined by the supreme court. It is plain that a mere failure to act, such as neglecting to return a list of taxable property or to file a probate account, would not come within the provisions of this section. Filing a false list is specially covered by section ninety-one; and it would be open to argument at least that " avoiding taxation " when coupled with provisions relating to concealed residence means avoiding it altogether, so that no other intentional act merely misleading the assessors as to the amount of taxable property of a person subject to taxation would be covered by the statute now under considera- tion. Penalties for Neglect by Assessors Section 93. An assessor who neglects to assess a state, county or district tax required by law shall be punished by a fine of not more than two hundred dollars. Section 94. An assessor who neglects to comply with sections forty-six, forty-seven, forty-eight, forty-nine or eighty-four shall be punished by a fine of not more than two hundred dollars. CHAPTER 60 COLLECTION OF LOCAL TAXES Definitions Section 1. Terms used in this chapter shall, unless other meaning is clearly apparent from the context, or unless inconsistent with the manifest intent of the legislature, be construed as follows: 1 Lyman v. Fiske, 17 Pick. 231 (1835); Draper v. Hatfield, 124 Mass. 53 (1878); Thayer v. Boston, 124 Mass. 132 (1878). 2 Thayer v. Boston, 124 Mass. 132 (1878). 320 Taxation in Massachusetts [G. L. c. 60, § 1 " Collector," a person receiving a tax list and a warrant to collect the same. " Publication," as applied to any notice, advertisement or other instrument, the publication of which is required by law, shall mean the act of printing it for three successive weeks in a newspaper pub- lished in the town, if any, otherwise in the county, where the land or other property to which the notice or other instrument relates is sit- uated. The last publication shall be made at least one week prior to the date stated for the occurrence of the event to which the publica- tion relates. " Registry of deeds," the registry of deeds for the county or dis- trict where the land taxed lies. " Service," as applied to any notice, summons, demand or other paper, shall, except as otherwise provided in section sixteen, mean delivering it or a copy to the person for whom it is intended, or leaving it or a copy at his last and usual place of abode or of business, or sending it or a copy by mail postpaid addressed to him at his last and usual place of abode or of business or, if such notice, summons or other paper relates to taxes on land, posting it or a copy conspicuously in some convenient and public place and sending a copy by mail postpaid addressed to the person for whom it is intended at the town where such land lies. Such service shall be sufficient whether made by the then collector of taxes or by any predecessor. The affidavit of the collector, deputy collector, sheriff, deputy sheriff or constable serving the notice, summons, demand or other paper of the manner of service shall be kept on file in the office of the collector, and shall be prima facie evidence that the same was so served. The provisions for the assessment of taxes contained in chapter fifty-nine and the provisions for the collection of taxes contained in chapter sixty constitute together the whole system of legislation for local taxes, each chapter being essential to the system. When practicable the provisions of each chapter should be so interpreted as not to clash with the efficient action of the other, to the end that there may be harmony in the working of the whole. 1 1 Curtiss v. Sheffield, 213 Mass. 239, 242 (1913). Collection of Local Taxes 321 G.L.c 60, §2] General Duties of Collectors Section 2 (as amended by St. 1921, chap. 124). Every collector of taxes, constable, sheriff or deputy sheriff, receiving a tax list and warrant from the assessors, shall collect the taxes therein set forth, with interest, and pay over said taxes and interest to the town treas- urer according to the warrant, and shall make written return thereof with his tax list and of his doings thereon at such times as the assess- ors shall in writing require. He shall also give to the treasurer an account of all charges and fees collected by him. In towns, not cities, he shall, on or before the fifth day of each month, pay over to the town treasurer all money received by him during the preceding month on account of taxes and interest. It is the duty of a collector or other officer to whom a tax list and warrant are committed to collect the taxes included in the list and warrant, and the law provides, as will be seen, five different methods for such collection — arrest, distress, suit, sale of land and injunction — besides the right of withholding the amount of taxes from money due to the delinquent from the city or town. While all these remedies might not be avail- able in every case, it is now well settled that they are cumula- tive * and that even the usual and effective means of collecting a tax upon real estate by the sale of the land is not exclusive of the right to resort to personal remedies against the individuals assessed. 2 The earliest statutes provided as a general means for the collection of all taxes, whether assessed upon persons by reason of their ownership of land or for other causes, a distress of the goods and upon failure to find sufficient chattels for the levy, an arrest of the person. 3 The power to sell real estate first appeared in 1731 as the only available means for collecting taxes upon the unimproved lands of non-resident proprietors. 4 1 Boston v. Turner, 201 Mass. 190 (1909). 2 Hayden v. Foster, 13 Pick. 492. 495 (1833); Sherwin v. Boston Five Cents Savings Bank, 137 Mass. 444 (1884) ; Richardson v. Boston, 148 Mass. 508 (1889); Dunham v. Lowell, 200 Mass. 468 (1909). 3 Colonial Laws of 1672 (Whitmore's ed.) 24; Prov. Laws, 1692-93, c. 27, §2; c. 28, §6; c. 41, §7; 1693-94, c. 20, §17; 1698, c. 5, §1; 1699-1700, c. 26, §§13-15; 1730, c. 1, §§12-15; 1756-57, c. 11; St. 1785, c. 50, §6; c. 70, §§2, 5, 8, 10, 14; R. S., c. 8, § § 7, 11. 4 Prov. Laws, 1731-2, c. 9; 1745-6, c. 9; St. 1785, c. 70, §7; St. 1794, c. 68; R. S. c. 8, § 19. Rising v. Granger, 1 Mass. 47 (1804)'. 322 Taxation in Massachusetts [G. L. c. 60, § 2 It was later extended to lands the owners of which had removed and to some cases of taxes assessed to persons in possession who were not owners. 5 In 1822 taxes on real estate in Boston were made a lien in all cases 6 and two years later the lien was made general throughout the commonwealth. 7 In 1789 collectors were given the right to maintain an action at law to recover a tax when a person duly assessed died or removed from the town, or being an unmarried woman, married, without paying the tax, 8 and in 1859 the collector's right of action was extended to all cases in which the taxes remained unpaid for one year after commitment to him; 9 the period was reduced to three months in 1888. 10 The right to have a foreign corporation or non-resident per- son failing to pay a tax enjoined from carrying on business was first given in 1902 ; X1 and the power to withhold money due from the city or town to a delinquent taxpayer in 1878. 12 Besides the methods of collection directly provided by statute the charters of some cities permit the establishment of further and additional methods ; and an ordinance providing such means is, if reasonable, valid. 13 A common law assignment of a person in failing circum- stances, in trust for the payment of taxes and debts, creates a situation which justifies the courts upon the general principles of equity jurisprudence in intervening to prevent the failure or maladministration of the trust and in allowing the collector to maintain a bill in equity to compel such a trustee to pay a tax lawfully assessed upon the assignor. 14 The collector of the mu- nicipality has also been allowed to intervene in equitable pro- ceedings for the purpose of securing the payment of a tax. 15 While there appears to be some conflict in the decisions of » St. 1785, c. 70, § § 6, 15. e St. 1821, c. 107, §9; St. 1822, c. 108, §9. » St. 1823, c. 133, § 9; R. S. c. 8, § 18. See also Curtiss v. Sheffield, 213 Mass. 239 (1913). s St. 1789, c. 4. 9 St. 1859, c. 171. io St. 1888, c. 390, § 24. . J1 St. 1902, c. 349. 12 St. 1878, c. 266, § 8. 13 Cheever v. Merritt, 5 Allen 563 (1863). 14 Boston v. Turner, 201 Mass. 190 (1909). 15 Waite v. Worcester Brewing Co., 176 Mass. 283 (1900); City National Bank v. Charles Baker Co., 180 Mass. 40 (1901). Collection of Local Taxes 323 G. L. c. 60, § 3] the inferior federal courts as to whether unpaid taxes are debts upon which to base involuntary bankruptcy proceedings, it would seem that under the Massachusetts statutes the collector's re- lation to the person assessed is such that he should be allowed to prove taxes in bankruptcy proceedings. 16 It goes without saying at the present time that taxes must be collected in money, though for many years taxes imposed for the construction of highways might be " worked out " by the labor of persons assessed. 17 If the collector for his own conven- ience or that of the taxpayer receives a check in payment of a tax, it is merely a conditional payment, and if the check is not paid the tax can be collected according to law. 18 Tax Bill Section 3. The collector shall forthwith, after receiving a tax list and warrant, send notice to each person assessed, resident or non- resident, of the amount of his tax; if mailed, it shall be postpaid and directed to the town where the assessed person resided on April first of the year in which the tax was assessed, and, if he resides in a city, it shall, if possible, be directed to the street and number of his residence. If he is assessed for a poll tax only, the notice shall be sent on or before September second of the year in which the tax is assessed. An omission to send the notice shall not affect the validity either of a tax or of the proceedings for its collection. This requirement of notice is distinct from the demand which is necessary before the collector takes steps to enforce the pay- ment of a tax, 1 and should not be confused with the demand. The notice required by this section is what is ordinarily re- ferred to as the tax bill. The statute requiring notice is merely directory and consequently not of importance in litigation arising out of a collector's actions. It is to be observed that the notice, if sent by mail, should be addressed to the town in which the person assessed resided on the first day of April, even if the collector is aware that he has removed and knows his new address. 16 Boston v. Turner, 201 Mass. 190 (1909). « R. S. c. 25. § 11. « Houghton v. Boston, 159 Mass. 138 (1893). 1 G. L. c. 60, § 16, infra page 328. 324 Taxation in Massachusetts [G.L.c. 60, §§4-8 inc. Collection of Poll Taxes Section 4. A board of assessors, from time to time in any year after their preparation of the whole or any part of the lists of male persons liable to be assessed a poll tax as provided in section four of chapter fifty-one, may and, on written request from the collector of taxes, shall assess the poll taxes of all persons whose names are contained in said lists and deliver to the collector tax lists containing the names and addresses of all persons so assessed, and the number of polls assessed to each with the amount of the respective taxes thereon. The assessors shall also deliver to the collector their war- rants in the customary form for the collection forthwith of all taxes contained in said lists; but no such list or warrant shall be issued to any collector until, conformably to law, he has given bond and has otherwise qualified himself for the performance of his duties. Poll taxes so committed to the collector shall be subject to the laws re- lating to poll taxes committed by warrant under section fifty-three of chapter fifty-nine. Section 5. A collector of taxes receiving from the assessors a list and warrant under the preceding section shall forthwith proceed to collect the poll taxes from the persons entered on such list. All laws relating to the collection of taxes, to the duties and powers of collectors, to money collected as taxes, interest, charges and fees, to the accounting for and turning over of money so collected, and to the crediting thereof to the collector, shall apply to the collection of poll taxes from the persons whose names appear on such lists. Collector's Books, Records, Accounts and Vouchers Section 6. The collector shall make and keep in the book con- taining the tax list committed to him, against the name of every person assessed for a tax, entries showing the disposition thereof, whether re-assessed, abated or paid, and the date of such disposition. Section 7. He shall also keep a cash book, in which he shall enter all sums paid to him, as received, specifying the total amount of tax, abatements allowed, all interest charged, the total amount re- ceived and the date of receipt, the date and amount of every pay- ment and disbursement made by him, and to whom paid, with such other matters as the town requires. Section 8. All books kept by the collector shall be furnished by, and be the property of, the town, and shall be at all reasonable Collection of Local Taxes 325 G.L.c. 60, §§9-12 inc.] times open to examination by the auditor of such town or any other agent thereof duly authorized therefor. The collector shall, on demand by the mayor, aldermen or selectmen, exhibit to them or to any persons whom they designate, at any time during ordinary business hours, the books, accounts and vouchers relating to taxes committed to him for collection and to his receipts and payments on account of taxes; and they, or the persons designated by them, shall have full opportunity to examine said books, accounts and vouchers, and to make copies and extracts therefrom. Section 9. A collector, within three months after his resignation of, or retirement or removal from, the office of collector, shall de- posit with the clerk of the town where he held such office all his accounts, records and papers, except his warrant, which relate to the assessment and collection of taxes therein, and, when all the taxes which have been committed to him have been collected or abated, or, in any event, at the end of three years from the date of their commitment to him, he shall so deposit all such accounts, records and papers and his warrant. Section 10. The executor or administrator of a collector or former collector shall, within three months after his appointment, deposit all accounts, records, papers or unsettled tax lists coming into his possession, relating to the assessment and collection of taxes, with the clerk of the town to which they pertain; and any other person into whose possession, upon the death, resignation, retirement or removal from office of a collector such accounts, records, papers or unsettled tax lists may come, shall forthwith deposit them with the clerk of such town. Section 11. If the collector has an office for the deposit of records and the transaction of his official business, the accounts, rec- ords and papers otherwise required to be deposited with the town clerk shall be deposited in said office. Section 12. A town clerk, or collector, having knowledge of any accounts, records or papers relating to taxes in his town which should be in his custody, shall demand them of any person having them, who shall forthwith deliver them to him. The penalties for violation of the last three sections are set forth in another portion of the statutes. 1 1 G. L. c. 60, § § 100-102 inc., injra page 412. 326 Taxation in Massachusetts [G.L.c. 60, §13 Bond of Collector Section 13. The collector shall give bond to the town for the faithful performance of his duties, in a sum and with sureties ap- proved by the selectmen or by the mayor and aldermen. The form of the bond shall be approved by the commissioner. The statutes elsewhere provide that the selectmen shall upon approval of the collector's bond give written notice thereof to the assessors; 1 that the assessors shall not commit a tax list to the collector until his bond has been approved; 2 and that unless the collector gives bond within ten days after his election or appointment the selectmen may declare his office vacant and appoint another in his place. 3 It is no defence to an action on a collector's bond based on a shortage in his accounts that the shortage was due to theft of money from the collector without fault on his part. 4 In such an action it is not open to the sureties on the collector's bond to show that the principal was not lawfully appointed collector, at least when the action is based on failure to account for money actually collected, as they are estopped by the recitals in the bond; 5 and the sureties of a tax collector who has actually col- lected the taxes cannot set up informalities in the tax list as an excuse for his not turning over the money to the town. 6 Ordinarily when the same person holds the office for several successive years and gives a new bond each year, the bonds are substitutional and not cumulative, and after a new bond has been approved after a new election, there is no further liability on the old bond for subsequent defaults. 7 When however there has been a shortage for several successive years and the collector applies money collected during one year to taxes collected by him the previous year and not turned over to the town, the sureties on the bond for the later year are liable for the deficit in that year thus caused, if the amount so paid was received in good faith by 1 G. L. c. 41, § 20, supra page 151. ? G. L. c. 59, § 53, supra page 280. 3 G. L. c. 41, § 40, supra page 159. 4 Hancock v Hazard, 12 Cush. 112 (1853). & Great Barrington v. Austin, 8 Gray 444 (1857); Wendell v. Fleming, 8 Gray 613 (1857). 6 Sandwich v. Fish, 2 Gray 298 (1854). 7 Newburyport v. Davis, 209 Mass. 126 (1911). Collection of Local Taxes 327 G. L. c. 60, § 13] the town. 8 Negligence of the town officials in failing to dis- cover the defalcations of the collector does not discharge the sureties on his bond. 9 Failure to disclose past irregularities known to the town to persons about to become sureties would avoid their liability ; 10 but this ground of defense does not extend to a case in which the information is no more than indefinite rumors of ' misconduct not pertaining to financial matters; 11 and the send- ing of the annual town book to the sureties containing the reports of the auditor and the treasurer, the false statements in which led the sureties to take no action against the collector, does not discharge the sureties. 12 False statements made by the collector himself to induce persons to become his sureties do not affect the right of the town to hold the sureties. 13 Payments made by the collector on negotiable orders drawn by the selectmen on the town cannot be credited to the collector when he has negotiated the same orders again; 14 but when the treasurer without knowledge of the sureties allows the collector to keep money collected to pay his own debts, it may operate to discharge the sureties. 15 A material alteration in the bond without the consent of the sureties avoids their liability. 16 If a collector voluntarily gives a bond to the town to secure his faithful discharge of the duties of his office and the bond is accepted, it is a valid bond without any further evidence of the approval by the selectmen of the sum or the sureties. 17 If a bond fails to comply with the provisions of the statute the sureties may nevertheless be liable on it at common law. 18 When a collector has been removed, he and his sureties are liable for taxes committed to him which he failed to collect through remissness, although his successor has also given bond 8 Cqlerain v. Bell. 9 Met. 499 (1845); Sandwich v. Fish, 2 Gray 298 (1854); Egremon't v. Benjamin, 125 Mass. 15 (1878); Hudson v. Miles, 185 Mass. 582 (1904). 9 Winthrop v. Soule, 175 Mass. 400 (1900) ; Hudson v. Miles, 185 Mass. 582 (1904); Newburyport v. Davis, 209 Mass. 126 (1911). 10 Hudson v. Miles, 185 Mass. 582 (1904). 11 Hudson v. Miles, 185 Mass. 582 (1904). 12 Winthrop v. Soule. 175 Mass. 400 (1900). 13 Hudson v. Miles. 185 Mass. 582 (1904). 14 Cheshire v. Howland, 13 Gray 321 (1859). 15 Johnson v. Mills, 10 Cush. 503 (1852). 16 Doane v. Eldridge, 16 Gray 254 (1860). 17 Wendell v. Fleming, 8 Gray 613 (1857). 18 Sweetser v. Hay, 2 Gray 49 (1854); Hudson v. Miles, 185 Mass. 582 (1904). 328 Taxation in Massachusetts [G. L.c. 60, §§14,15 obliging him to collect these same taxes. 19 In a suit upon a bond given by a collector of taxes it is sufficient if the suit be author- ized by the town treasurer; the authority or consent of the town so far as the same is necessary may be presumed. 20 The aldermen cannot be compelled to approve the bond of a collector unless the sureties are satisfactory to them; but they cannot refuse to approve a bond on the ground that they do not recognize the person presenting it as collector if he was in fact lawfully elected to that office. 21 Special Collector Section 14. In towns, not cities, if, at the expiration of three years from the date of the commitment of tax lists and warrant to a collector of taxes, any taxes remain uncollected and recovery cannot be made upon the bond of the collector of the amount of such uncol- lected taxes, the selectmen shall appoint the collector of taxes for the current year or some other person as special collector thereof. He shall furnish a satisfactory bond for the faithful performance of his duties, in such sum as the selectmen require, in a form to be approved by the commissioner. Fees Section 15. The collector shall, unless removed from office or unless his tax list has been transferred to his successor, complete the collection of the taxes committed to him, notwithstanding the ex- piration of his term of office. The following charges and fees, and no other, when accrued, shall severally be added to the amount of the tax and collected as a part thereof: 1. For an arrest, one dollar and actual traveling expenses incurred in making such arrest; 2. For a summons, twenty cents; 3. For the written demands provided for by law, twenty-five cents ; 4. For a warrant to distrain or arrest, fifty cents; 5. For preparing advertisement of sale, fifty cents for each parcel of real estate included in the advertisement; 6. For advertisement of sale in newspapers, the cost thereof; 7. For posting notices of sale, fifty cents for each parcel of real estate or lot of goods included in the notice; 19 Colerain v. Bell, 9 Met. 499 (1845). 20 Blackstone v. Taft, 4 Gray 250 (1855). 21 Keough v. Aldermen of Holyoke, 156 Mass. 403 (1902). Collection of Local Taxes 329 G. L. c. 60, § 15] 8. For distraining goods, one dollar and the cost thereof ; 9. For selling goods distrained, the cost thereof; 10. For affidavit, twenty-five cents for each parcel of land included therein ; 11. For recording affidavit, fifty cents for each parcel of land ..eluded therein; 12. For preparing deed, two dollars; 13. For each hour's time actually expended in selling as certified by him under section fifty-one, thirty cents; 14. For service of demand and notice under section fifty-three, if served in the manner required by law for the service of subpoenas on witnesses in civil cases, fifty cents and travel as allowed by chap- ter two hundred and sixty-two. The collector shall pay over to the town treasurer, or account to him for, all charges and fees collected by him or by a constable, sheriff or deputy sheriff under his direction; but the town shall reimburse or credit him for all expenses incurred by him hereunder, including the lawful charges and fees of constables, sheriffs and deputy sheriffs paid or credited by him for collecting taxes. Before the charges and fees of a collector were fixed by stat- ute, it was held that he was entitled to the same fees as a sheriff for similar services in collecting executions. 1 If however at any intermediate stage in the proceedings the tax is paid to the col- lector he is not entitled to the fees for the steps that would have been necessary to complete the collection of the tax by process of law. 2 A sale for non-payment of taxes is void if fees in excess of those allowed by law are charged; if, for example, the sale was advertised in two newspapers instead of one newspaper and the expense of the advertisement added to the amount of the tax the sale would be invalid. 3 So also the inclusion of the proper fee for the performance of an act which under the circumstances of the case was not required by law invalidates the sale. 4 Until 1918 it was a subject of much dispute whether the fees established by this section belonged to the city or town or to the collector, but in that year legislation was enacted making 1 Howard v. Proctor, 7 Gray 128 (1856). 2 Converse v. Jennings, 13 Gray 77 (1859). 3 Shurtleff v. Potter, 206 Mass. 286 (1910). 4 Koch v. Austin, 225 Mass. 215 (1916). 330 Taxation in Massachusetts [G.L.c. 60, §16 it clear that the fees belonged to the city or town and not to the collector. 5 The town may however if it sees fit pay the collector on a fee or commission basis. Demand Section 16. The collector shall, before selling the land of a res- ident, or non-resident, or distraining the goods of any person, or arresting him for his tax, serve on him a statement of the amount thereof with a demand for its payment. If the heirs of a deceased person, co-partners or two or more persons are jointly assessed, service need be made on only one of them. Such demand for the tax upon land may be made upon the person occupying the same on April first of the year in which the tax is assessed. No demand need be made on a mortgagee, unless he has given notice under section thirty- eight, in which case no demand need be made on the owner or occu- pant. Demand shall be made by the collector by mailing the same to the last or usual place of business or abode, or to the address best known to him, and failure to receive the same shall not invalidate a tax or any proceeding for the enforcement or collection of the same. The law requires as the foundation for an arrest for non- payment of taxes or for the distraint of personal property or the sale of real estate, 'a demand for their payment. Formerly this demand had to be on the taxpayer in person. The Revised Statutes added a provision that it could be made at the place of usual abode, and under this provision it was held that when a non-resident was taxed as such a demand at his last place of abode in the place where the tax was assessed was sufficient. 1 The General Statutes added the qualification " if to be found within their precincts." The statute as it thus stood was re- enacted in the Public Statutes and again in the codification of the statutes relating to the collection of taxes in 1888. In 1889 however came enactments which provided that demand should be made by causing a statement of the amount of the tax with a demand for its payment to be given to the person assessed, or to be sent to him postpaid through the mail directed to the city or town where he resided on the first day of May in the year in which the tax was assessed. Under this statute it was held 5 St. 1918, c. 257, § 45. i King v. Whitcomb, 1 Met. 328 (1840). Collection of Local Taxes 331 G.L.c. 60, §17] that a demand sent by mail to a person assessed addressed to him in the town to which he had removed after the first day of May did not comply with either alternative and was invalid, although actually received by the person assessed. 2 The Re- vised Laws and the later codifications provide merely that the col- lector shall "serve " the statement and demand, and " service " is defined in the section on definitions 3 in such a way as to avoid the effect of the aforementioned decision. In 1918 the obligation to make a demand was extended to the case of non-resident owners of real estate as a consequence of a decision that a sale for non-payment of a tax which included a fee for demand on a non-resident was invalid, 4 it being thought that it was often impossible for the collector to know whether the person assessed was a resident or not, and at the same time it was provided that failure of the person assessed to receive the demand should not invalidate the proceedings. 5 If a demand for payment of a tax assessed upon two persons jointly is made upon both of them, it may properly be made upon the persons assessed upon different days. 6 A demand made upon a person after his decease, and after his death has appeared on the records of the probate court is invalid. 7 When land has been properly assessed to " the heirs " of a person de- ceased, if the probate records show who such heirs severally were, it is the duty of the collector to find at least one of such heirs, make a demand upon him and designate him by name in the tax deed if the tax is not paid. 8 If a fee for a demand is added to the tax when no demand was required by law, a sale which includes such fee is invalid. 9 Time of Making Levy Section 17. If taxes remain unpaid for fourteen days after demand therefor, the collector shall, within two years after October 2 Hunt v. Holston, 185 Mass. 137 (1904). 3 G. L. c. 60, § 1, supra page 319. 4 Koch v. Austin, 225 Mass. 215 (1916). « St. 1918, c. 57. 6 Howard v. Proctor, 7 Gray 128 (1856). 7 Fuller v. Fuller, 228 Mass. 441 (1917)'. « Conners v. Lowell, 209 Mass. Ill (1911). 9 Koch v. Austin, 225 Mass. 215 (1916). 332 Taxation in Massachusetts [G. L. c. 60, §§ 18-21 inc. first in the year of the assessment, levy the tax, together with all incidental charges and fees, in the manner provided by law. Summons Section 18. The collector may, before making a demand for the payment of a tax due from any person, serve a summons on him, stating therein the amount due and that unless the same, with twenty cents more for the summons, is paid within ten days, he will proceed to collect it according to law. The summons was not authorized by general legislation until 1888, 1 although under certain city charters it had previously been the practice to issue summonses under conditions similar to those now established by general law. 2 Levy without Demand Section 19. If the assessors are of opinion that the credit of a person taxed is doubtful or that he is about to leave the common- wealth, they may, by a special warrant, direct the collector forthwith, without demand or notice, to compel payment by distress or imprison- ment, whether the tax is payable immediately or at a future day, by instalments or otherwise. Obligation to Exhibit Certificate of Abatement Section 20. If a person claims the benefit of an abatement, he shall exhibit to the collector demanding his taxes the certificate of such abatement authorized by section seventy of chapter fifty-nine; and he shall be liable for all costs and officer's fees incurred before exhibiting such certificate. Effect of Misnomer Section 21. If, in the assessors' lists or in their warrant and list committed to the collector, there is an error in the name of a person taxed, the tax assessed to him may be collected of the person intended to be assessed, if he is taxable and can be identified by the assessors. 1 St. 1888, c. 390, § 28. 2 Cheever v. Merritt, 5 Allen 563 (1863). Collection of Local Taxes 333 G. L. c. 60, § 22] This statute was particularly intended to facilitate the col- lection of a tax from a person who ought to have been assessed, where there is no party affected except the one who was required to pay the tax; 1 but it has been successfully invoked in a liti- gation involving the validity of a tax sale, 2 and there is no doubt that it is applicable to such cases though subject perhaps to a less liberal construction than in direct proceedings to collect a tax. The statute applies to any case of insufficient or incorrect statement of the name; 3 but it must appear that the person from whom it is sought to collect the tax is the person intended and is taxable. 4 The truth of these matters can be proved by parole evidence. 5 Partial Payment of Tax Section 22. After the delivery of a tax, including assessments for betterments or other purposes but not including a poll tax, to a collector for collection, the owner of the estate or person assessed or a person in behalf of said owner or person may, if the tax or assess- ments are upon real estate, at any time up to the date when adver- tisements may be prepared for the sale of the same, and if it is a per- sonal tax, at any time up to the date when a warrant or other process may be issued for the enforcement and collection thereof, tender to the collector not less than twenty-five per cent of the tax, which shall be received, receipted for and applied toward the pay- ment of the tax. The acceptance of any partial payment in accordance with this section shall not invalidate any demand made for a tax, prior to the acceptance of such partial payment; provided that the amount stated in the demand was the amount due at the date when the demand was made. If in any court it shall be determined that the tax is more than the amount so paid, judgment shall be entered 1 Sargent v. Bean, 7 Gray 125 (1856). 2 Westhampton v. Searle, 127 Mass. 502 (1879). 3 Thus the statute has been held applicable when the owner was assessed by his last name only, Tyler v. Hardwick, 6 Met. 470 (1843) ; when an assess- ment was to the treasurer of a corporation instead of to the corporation, Trustees of Greene Foundation v. Boston, 12 Cush. 54 (1853); when an assess- ment was to the owner by name "and Son" and the son had no interest in the property, Westhampton v. Searle, 127 Mass. 302 (1879) ; when the names of the owners of two adjoining lots were transposed, Hurd v. Melrose, 191 Mass. 576 (1906). * Sargent v. Bean, 7 Gray 125 (1856); Wood v. Torrey, 97 Mass. 321 (1867). 6 Westhampton v. Searle, 127 Mass. 502 (1879). 334 Taxation in Massachusetts [G. L. c. 60, § 23 for such excess and interest upon the amount thereof to the date of the judgment, and on the amount paid to the date of payment, with costs if otherwise recoverable. The part payment authorized by this section shall not affect a right of tender, lien or other provision of law for the recovery of the amount of such tax, or interest or costs thereon, remaining due, but if the part payment is more than the tax, as finally determined, the excess, without interest, shall be repaid to the person who paid it. Prior to 1899 a collector had no authority, except in certain instances, to receive less than the full amount of a tax, although he might consider it advantageous for all parties that the person assessed pay in instalments or there was a dispute as to the amount only and it was admitted that something was due. Statement of Existing Liens Section 23. The collector of taxes for any city, or for any town having more than five thousand inhabitants as determined by the last preceding national or state census, shall, on written application by any person, and within two days thereafter, furnish to any such applicant a written statement of all taxes and other assessments which at the time constitute liens on the parcel of real estate speci- fied in such application and are payable on account of such real estate. Such statement shall be itemized and shall show the amounts then payable on account of all such taxes and assessments so far as such amounts are fixed and ascertained, and if the same are not then ascertainable, it shall so be expressed in the statement. Any town officer or board doing any act towards establishing any such tax, assessment, lien or charge upon any real estate in the town shall transmit a notice of such act to its collector. Such collector shall charge one dollar for each statement so issued, and the money so received shall be paid into the town treasury. This provision is extremely useful to persons about to pur- chase land, as it gives them an official statement of the existing liens upon it; but not too much reliance should be placed by prospective purchasers or their attorneys upon such statements unless the collector and his clerks are known to be accurate and reliable. The collector is a public officer and if he accidentally omits an existing lien from the statement so that the purchaser Collection of Local Taxes 335 G. L. c. 60, §24] is eventually obliged to discharge it, the purchaser cannot hold the municipality liable for the collector's negligence x nor can he escape payment on the ground that the city is estopped from enforcing the lien. 2 He cannot even recover damages from the collector personally unless that official was himself negligent. 3 COLLECTION BY DISTRESS Seizure of Personal Property. — Exemptions Section 24. If a person refuses or neglects to pay his tax for fourteen days after demand, the collector shall without unnecessary delay levy the same by distress or seizure and sale of his goods, except tools or implements necessary for his trade or occupation, beasts of the plough necessary for the cultivation of his improved land, military arms, uniforms and equipments, utensils for housekeeping necessary for upholding life, and bedding and apparel necessary for himself and family. Distress is defined by Bouvier as the taking of a personal chattel out of the possesion of a wrongdoer into the custody of the party injured to procure satisfaction for the wrong done. It was resorted to in advance of judicial proceedings and in Mass- achusetts it has been superseded by attachment on mesne process except in the case of beasts at large doing damage, debts due the commonwealth, and taxes. As has been previously stated, distress was the original and primary method to enforce the collection of taxes. In a farming community the simplest and most obvious thing to do, if a resident failed to pay his taxes, was to seize and sell his cattle ; but in the more complicated con- ditions of city life distress of goods is not so available and con- venient a remedy. It should be remembered that there is no lien for taxes on personal property 1 and that distress is not the enforcement of a lien. The property seized must be, except as hereinafter stated, the property of the person taxed when it is seized; 2 and it 1 Dunbar v. Boston, 112 Mass. 75 (1873); Alger v. Easton, 119 Mass. 77 (1875). 2 Rossire v. Boston, 4 Allen 57 (1862). 3-Moynihan v. Todd, 188 Mass. 301 (1905). i Fuller v. Day, 103 Mass. 481 (1870) ; McGee v. Salem, 149 Mass. 238 (1889). 2 Fuller v. Day, 103 Mass. 481 (1870). 336 Taxation in Massachusetts [G. L. c. 60, §§ 25, 26 need not have been the property on account of which the tax was assessed. If a person dies without paying his tax, his goods cannot be subsequently seized on distress, but the collector must employ the other methods of collection established by law for such cases. 3 Formerly provision was made for distress of stock in corporations ; but it has been held that the adoption of the uniform stock transfer act repealed the statutory authority for distress. 4 Whether securities negotiable by delivery, such as coupon bonds, can be taken on distress is open to some doubt, though there are precedents for such action. 5 Upon a distress of goods or arrest of the person it is the duty of the collector to make an official return and if properly made it is prima facie evidence of the facts stated therein. 6 If it is impeached by evidence of facts which would equally well justify the collector, the variance is immaterial. 7 Detention, Notice and Sale Section 25. The collector shall keep the goods distrained, at the expense of the owner, for four days at least, and shall, within seven days after the seizure, sell them by public auction for pay- ment of the tax and charges of keeping and sale, first posting notice of the sale in some public place in the town at least forty-eight hours prior thereto. Section 26. The collector may once adjourn such sale for not more than three days, and he shall forthwith post a notice of such adjournment at the place of sale. If the collector holds two tax warrants each of them including an unpaid assessment upon one individual, the collector may make one sale for the whole amount due under both. 1 If the collector buys the goods distrained himself, the owner may avoid the sale. 2 The notice of sale may be given either before or after the four 3 Wilson v. Shearer, 9 Met. 504 (1845). 4 Warr v. Collector of Taunton, 234 Mass. 279 (1920). 6 Sears v. Nahant, 221 Mass. 435 (1915). Barnard v. Graves. 13 Met, 85 (1847). 7 Barnard v. Graves, 13 Met. 85 (1847). 1 Howard v. Proctor, 7 Gray 128 (1856). 2 Pierce v. Benjamin, 14 Pick. 356 (1833). Collection of Local Taxes 337 G.L.c. 60, §26] days have expired, 3 and it need not state the name of the person taxed or the amount of the tax. 4 A general description of the property to be sold and of the place where the sale is to take place is sufficient. 5 If the collector does not hold the sale within the prescribed seven days the proceedings are void ab initio; but if he actually sells the goods within the prescribed period the sale is valid although his warrant did not limit the time in which he was to make the sale. 7 When the collector distrains several chattels and sells them separately it is his duty to stop the sale as soon as enough has been realized to pay the tax and charges and to return the remaining goods to the owner. 8 If goods distrained are sold in an unlawful manner and the collector fails to realize the full amount of the tax, payment of the balance by the owner and acceptance of a receipt for the whole tax is not a waiver of his right of action against the collector for the unlawful sale. 9 When the assessment of a tax is wholly void, or the pro- ceedings for its collection are not conducted in accordance with law, and the person assessed refuses to pay the tax and allows his property to be sold by the collector, and the purchaser takes possession of the property, the person assessed may recover back the property from the purchaser by writ of replevin, 10 or he may maintain an action of tort against the purchaser, in the nature of trover for conversion of his personal property. ' If however there is no actual interference with the owner's possession, an invalid sale of his property for non-payment of taxes inflicts no injury upon him and he consequently has no redress at law. 11 3 Barnard v. Graves, 13 Met. 85 (1847). 4 Barnard v. Graves, 13 Met. 85 (1847). 5 In Barnard v. Graves, 13 Met. 85 (1847), a description of the property distrained as "one valuable horse" was held sufficient; and in Rawson v. Spencer, 113 Mass. 40 (1873) a description of the property as "about 18,907 feet of oak and walnut lumber" was held sufficient. 6 Pierce v. Benjamin, 14 Pick. 356 (1833); Noyes v. Haverhill, 11 Cush. 338 (1853). 7 King v. Whitcomb, 1 Met. 328 (1840). 8 Cone v. Forest, 126 Mass. 97 (1879). 9 Pierce v. Benjamin, 14 Pick. 356 (1833). 10 Fuller v. Day, 103 Mass. 481 (1870); McGee v. Salem, 149 Mass. 238 (1889). 11 Noyes v. Haverhill, 11 Cush. 338 (1853). 338 Taxation in Massachusetts [G. L. c. 60, §§ 27-29 inc Distress of Stock or Produce to Collect Tax on Land Section 27. If a person is taxed for land in his occupation, but of which he is not the owner, the collector, after demand for payment, may levy the tax by distress and sale of the cattle, sheep, horses, swine or other stock or produce of such estate, belonging to the owner thereof, which, within nine months after such assessment has been committed to him, may be found upon the premises, in the same manner as if such stock or produce were the property of the person so taxed; but such demand for payment need not be made if the person on whom the tax is assessed resided within the precinct of the collector at the time of the assessment, and subsequently removes therefrom and re- mains absent three months. Return of Surplus to Owner Section 28. The collector shall upon demand give a written account of every sale on distress or seizure and charges, and pay to the owner any surplus above the taxes, interest and charges of keeping and sale. COLLECTION BY ARREST AND IMPRISONMENT When Arrest is Authorized Section 29. If a person refuses or neglects to pay his tax for fourteen days after demand and the collector cannot find sufficient goods on which it may be levied, he may take the body of such person and commit him to jail until he pays the tax and charges of com- mitment and imprisonment, or is discharged according to law; but a person committed for non-payment of a poll tax shall not be de- tained in jail more than seven days. Arrest was one of the earliest methods adopted in Massa- chusetts of enforcing the payment of taxes and is still in fre- quent use. The statutory provision authorizing arrest and com- mitment to jail has been little modified in recent years except that the limitation in favor of persons committed for non-pay- ment of a poll tax was added in 1893. Arrest is not the primary method of enforcing payment and can be resorted to only after the collector upon reasonable search Collection of Local Taxes 339 G.L.c. 60, §30,31] has failed to find sufficient goods to levy upon; 1 but if he asks the delinquent to show the goods and the latter fails to do so the collector has made sufficient search to satisfy the statute. 2 If the delinquent shows sufficient goods he cannot be arrested although more than fourteen days have elapsed since the de- mand. 3 In an action against a collector for unlawful arrest his return is prima facie but not conclusive evidence in his favor. 4 In such an action evidence of the plaintiff's manner of life in jail is admissible in his favor on the question of damages if it is not contended that he was treated with unusual severity; 5 and evidence that he was confined in the only place of detention in the town is admissible in favor of the collector. 6 Notwithstanding the hardship, the words of the statute are too plain to allow the court to discover an exception in favor of non-residents, and they are equally with residents subject to arrest. 7 The abolition of imprisonment for debt did not affect imprisonment for non-payment of taxes. 8 Certificate of Arrest. — Discharge Section 30. A collector who commits a person to jail shall give to the keeper thereof a certificate signed by him, stating that he has committed the person for non-payment of his tax for fourteen days after demand therefor, and for want of goods and chattels whereof to make distress, and setting forth the amount said person shall pay for said tax, interest, charges and fees. Section 31. On request of a person committed to jail for non- payment of a tax, the jailer shall forthwith inform the court having authority to examine poor debtors that the debtor desires to take the oath for the relief of poor debtors. The court shall thereupon ap- i Lothrop v. Ide, 13 Gray 93 (1859); Hall v. Hall, 3 Allen 5,(1861). 2 Kerr v. Atwood, 188 Mass. 506 (1905). 3 Lothrop v. Ide, 13 Gray 93 (1859). * Lothrop v. Ide, 13 Gray 93 (1859) ; Kerr v. Atwood, 188 Mass. 506 (1905). In Snow v. Clark, 9 Gray 190 (1857), the officer's return stated that he made diligent search for goods to levy on, and arrested the plaintiff. It was held sufficient as it was obvious from the return taken as a whole that the officer failed to find the goods. 5 Hall v. Hall, 3 Allen 5 (1861). 6 Kerr v. Atwood, 188 Mass. 506 (1905). 7 Snow v. Clark, 9 Gray 190 (1857). 8 Appleton v. Hopkins, 5 Gray 530 (1855). 340 Taxation in Massachusetts [G. L. c. 60, §§ 32-34 inc. point a time and place for the examination of the debtor, and shall direct the jailer to cause the debtor to be present at the examination. The notice required by section twenty-three of chapter two hundred and twenty-four to be given to the creditor may be given to any one of the assessors or to the collector of the town where the tax was assessed, any of whom may appear at the examination and do all things which a creditor might do upon an arrest or execution. If a debtor is unable to pay such tax, he may be discharged in the same manner as if committed upon an execution. Section 32. The collector shall be liable for the tax and the charges of imprisonment of a person discharged, unless he arrested and committed such person within one year after the tax was committed to him for collection, or unless he shall be exonerated therefrom by the town to which the tax is due. The " charges of imprisonment " for which the collector may be liable if the person assessed is discharged from jail do not include the support of the prisoner while in custody. 1 Collector may Require Aid Section 33. A collector who is resisted or impeded in the ex- ercise of the duties of his office may require any suitable person to aid him. Warrant to Officer. — Release and Re-arrest Section 34. If a tax assessed upon a person remains unpaid for fourteen days after demand therefor, the collector may issue his warrant to the sheriffs of the several counties, or their deputies, or to any constable or deputy collector of taxes, directing them and each of them to distrain the property or take the body of the person assessed and to proceed as required of collectors in like cases; but a collector of- taxes who issues a warrant for the arrest of a person for non-payment of taxes, or the officer to whom he commits the warrant, may at his discretion, after the service of the warrant, allow such person to go free for a period not exceeding fourteen days after said service, at which time, if said person does not pay his tax with all fees and charges due thereon, including one dollar for service of said warrant and five cents for each mile traveled by said officer in the 1 Townsend v. Wallcutt, 3 Met. 152 (1841). Collection of Local Taxes 341 G.L.c. 60, §34] performance of said collection, said officer shall then arrest the said person on the aforesaid warrant, and commit him to the jail of the county where he makes the arrest. The warrant shall run throughout the commonwealth, and any officer to whom it is directed may serve it and apprehend the person in any county. A warrant issued under this section may be signed by the collector or his deputy; and, if the warrant is sealed by an impression seal, a facsimile of the signature of the collector shall have the same validity as his written signature. This statute should be carefully distinguished from section ninety of the same chapter. 1 The latter section provides that when the same person is serving as treasurer and collector he can issue a warrant to a sheriff or constable requiring him to collect any or all taxes, thus in a general way transferring to such officer all the active duties of a collector; the section now under consideration relates to a tax on a specified individual which has remained unpaid for fourteen days after demand and until 1888 applied only to a person assessed who had removed from the town without paying the tax. It is to be noted that under this section a collector can delegate to officers of purely local authority in other matters the power to make distress or arrest anywhere within the commonwealth, a power which it is doubtful that he may himself exercise. 2 When a collector issues a warrant under this section it should contain recitals justifying its issuance, for such recitals would furnish the officer with conclusive evidence for his pro- tection in acting under it. 3 But recitals are not necessary for the validity of the warrant, and the officer is protected if he can prove the facts necessary to constitute his authority when his proceedings are called into question. 4 If the warrant does not contain the necessary recitals, the officer is justified in refusing to serve it although the circumstances in fact made its issuance lawful; 5 but if he actually collects money by virtue of the warrant the absence of recitals in the warrant is no excuse for failing to turn the money over to the collector. 6 1 See infra page 393. 2 Beard v. Seavey, 191 Mass. 503 (1906). 3 Williamstown v. Willis, 15 Gray 427 (1860); Cheever v. Merritt, 5 Allen 563 (1863). 4 Cheever v. Merritt, 5 Allen 563 (1863); Sherman v. Torrey, 99 Mass. 472 (1868). 5 Williamstown v. Willis, 15 Gray 427 (1860). 6 Williamstown v. Willis, 15 Gray 427 (1860). 342 Taxation in Massachusetts [G.L.c. 60, §35 The clause of this section which permits an officer to allow a delinquent to remain at liberty for fourteen days after the service of the warrant was first inserted in 1908; until then the officer had no option but to make the arrest even if he thereby prevented the person assessed from getting together the nec- essary funds to pay the tax. This provision unlike the rest of the section applies to action by the collector himself. COLLECTION BY SUIT Action by the Collector Section 35. If a tax remains unpaid for three months after commitment to the collector, he may maintain an action in his own name against the person assessed therefor in the same manner as for his own debt. The first provision authorizing a collector to maintain an action at law to recover a tax appeared in the statutes in 1785 and applied only when a person duly assessed died or removed from the town or, being an unmarried woman, married, without paying the tax. In 1859 neglect to pay the tax for one year was added to the other conditions which justified an action at law. In 1888 the period was reduced to three months and the provision as to removal was dropped. In 1889 all conditions except the non-payment of the tax for three months were omit- ted and the statute was extended to include re-assessments. In the Revised Laws the statute was put into the concise word- ing in which it stands at present without any apparent change in its meaning. No right of action for the collection of a tax exists at common law ; and no action can be maintained except upon the conditions prescribed by the statute. 1 No cause of action arises in favor of the collector until three months have expired, 2 and conse- quently the action is not barred by limitations until six years and three months have elapsed from the time the tax was com- mitted to him. 3 The " action " which the statute provides may be maintained 1 Crapo v. Stetson, 8 Met. 106 (1844); Harrington v. Glidden, 179 Mass. 486 (1901). 2 Ricker v. Brooks, 155 Mass. 400 (1892). 3 Harrington v. Glidden, 179 Mass. 486 (1901). Collection of Local Taxes 343 G. L. c. 60, § 35] by the collector is not restricted to the ordinary forms of actions at law, but the word is used in its comprehensive sense as mean- ing the pursuit of a right in a court of justice without regard to the form of legal proceedings, and consequently includes a bill in equity or other process provided the person assessed can be properly made a party defendant. 4 Until 1889 the statute specifically provided for an action of contract and for trustee process, only. In 1889 it was enacted that the collector might " sue or otherwise proceed in court " and it is not to be supposed that the present statute was intended to diminish his rights and powers. It is well settled that a tax upon real estate may be collected by suit, as well as one upon personal property, although occasions do not often arise when it is desirable to resort to this remedy to collect a tax upon real estate, as the sale of the land is con- sidered a more effective means. 5 When land properly assessed is subsequently divided and the tax apportioned, a person who pur- chases a portion of the land after the assessment is not personally liable for the tax. 6 The principle that when assessors are acting within their jurisdiction their acts cannot be collaterally impeached is ap- plicable in actions by a collector for the amount of the tax. 7 If a taxpayer complains that he is over-assessed his only remedy 4 Thus in Boston v. Turner, 201 Mass. 190 (1909) it was held that a col- lector may maintain a bill in equity to enforce a trust against the common law assignee of the person assessed, when the assignment was in trust for the pay- ment of claims. In Felker v. Standard Yarn Co., 148 Mass. 226 (1889) it was held that a collector may maintain a bill in equity against the officers of a corporation for the amount of a tax on the corporation when they have been guilty of conduct which under the statutes renders them personally liable for the " debts " of the corporation. In Warr v. Collector of Taunton, 234 Mass. 279 (1920), it was held that a collector might maintain a bill in equity under G. L. c. 214, § 3, cl. 8 to reach and apply in payment of a tax stock in domestic corporations belonging to the person assessed. 5 Thus it was said by the court in Richardson v. Boston, 148 Mass. 508 (1889) that when land was taken by the commonwealth after the date as of which the tax was assessed, the tax could be collected of the owner by suit. See also Hayden v. Foster, 13 Pick. 492, 495 (1833); Sherwin v. Boston Five Cents Savings Bank, 137 Mass. 444 (1884); Dunham v. Lowell, 200 Mass. 468 (1909). 6 Rogers v. Gookin, 198 Mass. 434 (1908). 7 In an action of contract to recover a tdx the persons assessed cannot defend by impeaching the validity of the election of the assessors, if the tax was assessed by persons who acted under color of an election by the town as evidenced by its records and who took an official oath as assessors. Sudbury v. Heard, 103 Mass. 543 (1870). . 344 Taxation in Massachusetts [G. L. c. 60, § 36 is a petition for abatement, and the same principles which prevent a person legally assessable from going behind the assessment and asking the court to revise the amount in an action of tres- pass against the assessors 8 or in an action of contract for money had and received against the city or town 9 preclude him from making a similar contest when he is the defendant in an action of the kind now under discussion. 10 There are certain exceptions and qualifications to this principle which have been developed and enunciated most thoroughly in actions of contract against a city or town, in which the principle itself has been most frequently called into play; 11 but the exceptions and qualifi- cations are equally applicable to actions in which the collector is the plaintiff. 1 12 Collection from the Estates of Deceased Persons and of Insolvents and Bankrupts Section 36. If a person assessed for a tax dies or becomes insolvent before the payment thereof, or if a tax is assessed upon the estate of a deceased person, the executor, adminsistrator or assignee shall, if a demand has been made on him therefor, forthwith on receipt of any money applicable to the payment of the tax, pay the same, and in default shall be personally liable therefor as for his own tax. When a person assessed dies without paying his tax and an executor or an administrator is appointed, the collector cannot maintain an action brought more than one year after the date of the executor's or administrator's bond, for the collector having the like remedy as for his own debts is subject to the general provisions of law applying to other creditors; 1 but when the tax is assessed upon the property of the deceased after his death, 8 G. L. c. 59, § 87, supra page 314. 9 G. L. c. 60. § 98, infra page 405. 10 Davis v. Macy, 124 Mass. 193 (1878); Pierce v. Eddy, 152 Mass. 594 (1891); Harrington v. Glidden, 179 Mass. 486 (1901); Attorney General v. Laycock. 221 Mass. 146 (1915); Collector of West Bridgewater v. Dunster, 231 Mass. 291 (1918). 11 Infra page 400. 12 Ingram v. Cowles, 150 Mass. 155 (1889); Harrington v. Glidden, 179 Mass. 486 (1901). Thus a non-resident may contest his liability to a tax on the only property within the town claimed to be taxable. Tobey v. Kip, 214 Mass. 477 (1913). i Rich v. Tuckerman, 121 Mass. 222 (1876). Collection of Local Taxes 345 G. L. c. 60, § 36] suit may be brought more than one year after the date of the bond, 2 for the tax is the debt of the executor or administrator and not of the deceased. 3 An executor to be subject to the terms of this statute must have been appointed by a court of this commonwealth; 4 and the " assignee " referred to therein is an assignee under the insol- vency laws only; 5 but a collector may proceed in equity against a common law assignee for the benefit of creditors under the provisions of the preceding section. 6 Under the state insolvency laws, taxes constituted a pre- ferred claim, 7 and a common law assignment for the benefit of creditors was not valid against subsequent insolvency unless the legal preferences were recognized. 8 The state insolvency laws are suspended while the national bankruptcy law is in force. The state statutes relating to the distribution of insolvent estates of deceased persons and to the settlement of estates by receivers are however still in force and under these statutes taxes constitute a preferred claim. 9 It has been held that, even in. the absence of statute, when an estate is in the hands of a re- ceiver appointed by a court of equity, taxes should receive priority. 10 Thus to a certain extent the commonwealth and counties, cities and towns therein have a prerogative right to priority in the payment of taxes over the claims of other per- sons, although this right does not extend so far as to constitute a lien on the property of the person assessed except as provided by the express wording of statutes, 11 or to entitle the collector to follow the property of a person assessed in the hands of a common law assignee for the benefit of creditors, 12 except in equity when 2 Dallinger v. Davis, 149 Mass. 62 (1889). 3 Whiton v. Balch, 203 Mass. 576 (1909). * Whiton v. Balch, 203 Mass. 576 (1909). 5 Scollard v. Edwards, 194 Mass. 77 (1907). 6 Boston v. Turner, 201 Mass. 190 (1909). 7 See G. L. c. 216, § 118, cl. 3, infra, page 749. See also the following cases relating to the collection of taxes under the state insolvency laws: Loud v. Holden, 14 Gray 154 (1859); Bent v. Hubbardston, 138 Mass. 99 (1884); Ricker v. Brooks, 155 Mass. 400 (1892). 8 G L. c. 203, §41. 9 G. L. c. 206, § 31, infra, page 749 c. 198, § 1, infra, page 748. Waite v. Worcester Brewing Co., 176 Mass. 283 (1900); Equitable Trust Co. v. Kelsey, 209 Mass. 416 (1911). 10 Jones v. Arena Publishing Co., 171 Mass. 22 (1898). 11 Fuller v. Day, 103 Mass. 481 (1870); McGee v. Salem, 149 Mass. 238 (1889). 12 Scollard v. Edwards, 194 Mass. 77 (1907). 346 Taxation in Massachusetts [G. L. c. 60, § 37 the obligation to pay taxes is one of the conditions of the assign- ment. 13 Under the United States Bankruptcy Act, taxes due to the United States, state, county, district or municipality are pre- ferred claims and are not released by the bankrupt's discharge. It is to be noted that the trustee is bound to pay all taxes owed by the bankrupt whether they have been proved or not; 14 and this obligation includes taxes assessed prior to the bankruptcy although not payable until afterward. 15 The United States court is not bound by a decision of the state court upon the amount or validity of a tax but may decide such questions upon its own view of the law and facts. 16 Interest should be paid on taxes, although ordinary debts do not carry interest after bankruptcy. 17 A tax may be assessed upon a trustee appointed by the United States court for property of a bankrupt in his hands. 18 Although the statute makes no provision for the payment of such taxes it is not construed as exempting the trustee and he is taxable under the provisions of the state statute. 19 Such- a tax however should be collected through the medium of the United States court, as it would not be permissible for the collector to distrain property in the custody of the court or to arrest the body of one of its officers for a tax assessed upon him in his official capacity. 20 Although a tax is not strictly speaking a debt, the collector under our statutes is so far a creditor that he may be permitted to petition a person assessed into bankruptcy. 21 COLLECTION BY SALE OR TAKING OF LAND The customary method of collecting taxes upon real estate is to sell the land itself if the person assessed fails to pay the is Boston v. Turner, 201 Mass. 190 (1909). 14 In re Harvey, 122 Fed. Rep. 745 (1903) ; In re Prince & Walter, 131 Fed. Rep. 546 (1904); In re Fisher & Co., 148 Fed. Rep. 907 (1906). 15 New Jersey v. Anderson, 203 U. S. 483 (1906); In re Flynn, 134 Fed. Rep. 145 (1905). « New Jersey v. Anderson, 203 IT. S. 483 (1906). " Matter of Kallak, 147 Fed. Rep. 276 (1906). 18 In re Tyler, 149 U. S. 164 (1893) ; Swartz v. Hammer, 194 U. S. 441 (1904). ™ G. L. c. 59, § 18, supra, page 237. 20 Swartz v. Hammer, 194 TJ. S. 441 (1904). 2i In re Fisher & Co., 148 Fed. Rep. 907 (1906); Boston v. Turner, 201 Mass. 190 (1909). Collection of Local Taxes 347 G. L. c. 60, § 37] tax within a reasonable time — in practice generally about a year — from the demand, and such sales for non-payment of taxes have directly or indirectly given rise to an immense amount of litigation. It should be remembered in the first place that the land itself is not taxed, but the owner or occupant is taxed by reason of his ownership or occupancy. 1 Originally taxes upon real estate were collected as other taxes were, by distress or arrest, and the power to sell was first introduced in 1731 as the only available means for collecting the taxes assessed upon the unimproved lands of non-resident proprietors. 2 The tax lien was later ex- tended to lands the owners of which had removed from the town and to some cases of assessments to persons in possession who were not owners. 3 In 1822 taxes on real estate in Boston were made a lien in all cases 4 and two years later the lien was made general throughout the commonwealth. 5 It hardly needs to be stated that the lien lies only upon the parcel taxed and is not a means of enforcing payment of all taxes assessed upon its owner. 6 Such taxes could be enforced upon the land only by attachment or execution in an ordinary civil action by the collector. The sale of land for non-payment of taxes is such an ex- treme interference with the ordinary rights of private property that the law guards the rights of the owner with the utmost care. For many years it was held that the due performance by the col- lector of every step in the proceedings, even in the most minute particulars, was a condition precedent to the validity of the sale, and that a deviation from the statutory requirements was neither substantial nor misleading and did not harm the owner in the slightest degree was no ground for overlooking it. 7 1 Sherwin v. Boston Five Cents Savings Bank, 137 Mass. 444 (1884); Rich- ardson v. Boston, 148 Mass. 508 (1889); Dunham v. Lowell, 200 Mass. 468' (1909). 2 Prov. Laws, 1731-32, c. 9. 3 St. 1785, c. 70, § § 6, 15. 4 St. 1821, c. 107, § 9. 5 St. 1823, c. 133, §9; R. S. c. 8, §18. See further as to the history of tax liens, Curtiss v. Sheffield, 213 Mass. 239 (1913). 6 Hayden v. Foster, 13 Pick. 492 (1833); Jennings v. Collins, 99 Mass. 29 (1868); Barnes v. Boardman, 149 Mass. 106 (1889). 7 Hayden v. Foster, 13 Pick. 492 (1833); Charland v. Home for Aged Women, 204 Mass. 563 (1910). A presumption of validity was however allowed when the validity of a tax sale was contested for the first time many years after it had taken place. Colman v. Anderson, 10 Mass. 105 (1813); 348 Taxation in Massachusetts [G. L. c. 60, § 37 The result of the application of these principles was that a tax title was extremely precarious; 8 it might be attacked for the omission of or an error in any one of the formal steps re- quired by law, and even if the purchaser enjoyed undisturbed possession, his title was almost unmarketable. Registration of a tax title in the land court was so difficult as to be almost impossible. Moreover there was the uncertain period in which the land might be redeemed, not limited even to six years unless the purchaser had positive proof that the owners of certain interests in the land were notified. On the other hand an owner of the property who had no actual knowledge that it had been sold might lose his right of redemption by mere lapse of time, and without the institution of proceedings against him or the adjudication of any court. The law as to tax titles was thus in a very unsatisfactory condition, until finally in 1915 it was provided that no tax title should be held to be invalid by reason of any errors or irregularities in the proceedings of the collector which were neither substantial nor misleading, 9 and at the same time a radical change in the system of tax sales was made, so that instead of conveying a title which became absolute by mere lapse of time if the owner failed to exercise his right to redeem within a specified period, a tax sale thereafter transferred an interest which did not ripen into a title until the purchaser, by special proceedings in the land court, foreclosed the owner's right of redemption. 10 The earlier practices and decisions in respect to tax titles have thus become almost entirely obsolete. The statute which authorized the court to disregard errors which were neither substantial nor misleading applied only to the proceedings of the collector ; but the court has never required proof of such strict compliance with the proceedings which oc- Pejepscut Proprietors v. Ransom, 14 Mass. 145 (1817); Piatt v. Glover, 136 Mass. 115 (1883). The lapse of time establishes presumptively but not con- clusively the performance of the essential acts. McDonough v. Everett, 237 Mass. 378 (1921). 8 It was said by Sewall, J., as early as 1813 in the case of Colman v. Ander- son, 10 Mass. 105, 111, "The title under which the tenant has been permitted to succeed, so far as to obtain a verdict in support of it, is of that kind almost proverbially denominated a collector's title as expressing a case of doubt and difficulty." In the report of the Special Commission on Liens, Mortgages and Tax Titles (1915, House Doc. No. 1600) it is said (at page 17) that at that time only about two tax titles out of one hundred were, when tested, found to be valid. 9 St. 1915, c. 237. § 17. now in G. L. c. 60, § 37, infra page 349. ™ St. 1915, c. 237; see G. L. c. 60, § § 64-67 inc.. infra pages 379, 380. Collection of Local Taxes 349 G. L. c. 60, § 37] curred prior to the receipt of the tax list and warrant by the collector as with those which occurred after its receipt by the collector. Thus technical defects in the appointment of the assessors or the collector do not invalidate a sale; it is sufficient that they are officers de facto. If they exercised their office unopposed it will be assumed that they were duly chosen and sworn. 11 A person assessed cannot question the amount of his tax in proceedings involving the validity of the tax sale, 12 nor will the sale be held invalid because the assessors failed to comply with merely directory provisions of the statutes. 13 If an assessment is so far valid that the person assessed can be compelled to pay it, it is a sufficient basis for the sale of his land. 14 On the other hand, if the land was improperly assessed it cannot be lawfully sold, even if the land was assessed in the way it was assessed at the owner's express request. 15 Extent and Duration of Lien Section 37. Taxes assessed upon land, including those assessed under sections twelve, thirteen and fourteen of chapter fifty-nine, shall with all incidental charges and fees be a lien thereon from April first in the year of assessment. Such lien shall terminate at the expiration of two years from October first in said year, if the estate has in the meantime been alienated and the instrument alienating the same has been recorded, otherwise it shall continue until a re- corded alienation thereof; but if while such lien is in force a tax sale or taking has been made, and the deed or instrument of taking has been duly recorded within thirty days, but the sale or taking is in- valid by reason of any error or irregularity in the proceedings sub- 11 Blossom v. Cannon, 14 Mass. 177 (1817) ; Welsh v. Briggs, 204 Mass. 540 (1910). 12 Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 13 As to what constitutes directory provisions see, G. L. c. 59 § 43, supra 14 Cone v. Forest, 126 Mass. 97 (1879) ; Westhampton v. Searle, 127 Mass. 502 (1879); Leominster v. Conant, 139 Mass. 384 (1885); Bemis v. Caldwell. 143 Mass. 299 (1887); Southworth v. Edmands, 152 Mass. 203 (1890). The only apparent exception to this doctrine is the rule that an invalid tax on a particular parcel of real estate cannot be the foundation of a valid sale, al- though the owner was properly assessed upon other parcels and could be compelled to pay the entire amount assessed upon him by distress, arrest or suit. Schwartz v. Boston, 151 Mass. 226 (1890); Sullivan v. Boston, 198 Mass. 119 (1908). This exception is however only apparent, for an owner so assessed could have the tax improperly assessed upon one parcel belonging to him abated, if he took the proper course of action. * 5 Curtiss v. Sheffield, 213 Mass. 239 (1913). 350 Taxation in Massachusetts [G. L. c. 60, § 37 sequent to the assessment, the lien shall continue for ninety days after a release, notice or disclaimer, under sections eighty-two to eighty-four, inclusive, has been duly recorded, or for ninety days after the sale or taking has been finally adjudged invalid by a court of competent jurisdiction. There shall be no lien for taxes re-assessed if the property is alienated before the reassessment. Said taxes, if unpaid for fourteen days after demand therefor, may, with said charges and fees, be levied by sale of the real estate, if the lien thereon has not terminated No tax title shall be held to be invalid by reason of any errors or irregularities in the proceedings of the collector which are neither substantial nor misleading. Several separate parcels of real estate taxable to one person are not an integral subject of taxation so that one parcel can be sold for taxes on the whole. Whether the contiguous land of one owner is a single parcel or several separate parcels is a ques- tion of fact, not always easy to decide; but if the lands are assessed as separate parcels the tax upon them cannot be treated as a single one for purposes of collection by sale. 1 Even if the assessors assess the lands of one owner as a unit, if the lands are in fact separated by the use or purpose to which they are de- voted, or by their mode of occupation, or are disconnected in location, a tax laid generally cannot be made a lien upon each separate parcel. 2 The lien for the payment of taxes is upon the land itself rather than upon the estate or interest of the person assessed. A sale of land for non-payment of taxes gives a paramount title, free from the ownership or encumbrance of rights previously existing which had been carved out of the property by an owner or acquired in it by prescription or otherwise. 3 Thus if a tax sale of mortgaged land takes place, the mortgage is wiped out, even if the land was assessed to the mortgagor. 4 So also as 1 Hayden v. Foster, 13 Pick. 492 (1833); Barnes v. Boardman, 149 Mass. 106 (1889); Phelps v. Creed, 231 Mass. 228 (1918). 2 Jennings v. Collins, 99 Mass. 29 (1868); Boston Rubber Shoe Co. v. Maiden, 216 Mass. 508 (1914). As to what constitutes a separate parcel in proceedings to assess damages to land by a taking for the public use, see Wel- lington v. Boston & Maine Railroad. 158 Mass. 185 (1893), 164 Mass. 380 (1895); Lincoln v. Commonwealth, 164 Mass. 368 (1895). 3 Langley v. Chapin, 134 Mass. 82 (1883); Hunt v. Boston, 183 Mass. 303 (1903); Weeks v. Grace, 194 Mass. 296 (1907); Davis v. Allen, 224 Mass. 551 (1916). 4 Parker v. Baxter, 2 Gray 185 (1854); Coughlin v. Gray, 131 Mass. 56 (1881). Collection of Local Taxes 351 G.L.c. 60, §37] between taxes of successive years, the latest is paramount. 5 For practical reasons an exception was made to the literal appli- cation of this rule in 1905 when it was provided that the land should be sold subject to and with the benefit of easements and restrictions upon or appurtenant to it. 6 The lien comes into existence on the first day of April in the year that the tax is assessed, and constitutes an encumbrance at once, although the tax is not committed to the collector or even actually assessed until later in the year. 7 The lien con- tinues until the tax is paid or the land is alienated; 8 and it continues for two years from the first day of October in the year in which the tax is assessed whether the land is alienated or not. If there has been no alienation the lien is equally ef- fective after the expiration of two years as before. 9 After notice of a tax sale has been given no subsequent alienation can defeat the lien. 10 There can be no lien for taxes re-assessed if the property is alienated before the re-assessment. A sale of mortgaged land under a power in the mortgage constitutes such alienation; 11 but a mere entry to foreclose a mortgage does not, even when the mortgagee remains in possession. 12 The provision that there might be a re-assessment within ninety days after a tax title had been conceded or adjudicated to be invalid was first added in 1915, 13 but in such way as to impose a possible personal liability on the purchaser of land subject to an invalid tax lien. This probably unconstitutional 5 Chadwick v. Cambridge, 230 Mass. 580 (1918). 6 St. 1905, c. 193, now G. L. c. 60, § 45, infra page 357. So also a sale for non-payment of taxes not accompanied by even momentary possession, fol- lowed by a quitclaim of the tax title to the record owner, occurring during a period of twenty years' adverse possession by another did not, at least prior to the statute validating a conveyance by a disseizee (St. 1891, c. 354; G. L. c. 183, § 7) defeat the acquisition of title by the disseizor. Harrison v. Dolan, 172 Mass. 395 (1899). 7 Cochran v. Guild, 106 Mass. 29 (1870) ; Hill v. Bacon, 110 Mass. 387 (1872) ; Newcomb v. Wallace, 112 Mass. 25 (1873); Davis v Bean, 114 Mass. 358 (1874). 8 Hayden v. Foster, 13 Pick. 492 (1833). 9 Abbott v. Frost, 185 Mass. 398 (1904) overruling suggestion in Sherwin v. Boston Five Cents Savings Bank, 137 Mass. 444 (1884) that after two years only the interest in the property of the person assessed could be sold. 10 Abbott v. Frost, 185 Mass. 398 (1904). " Davis v. Boston, 129 Mass. 377 (1880). 12 Market National Bank v. Belmont, 137 Mass. 407 (1884); Sherwin v. Boston Five Cents Savings Bank, 137 Mass. 444 (1884). See also as to re- assessment, G. L. c. 59, § § 77, 78, supra page 306. 13 St. 1915, c. 237, § 17. 352 Taxation in Massachusetts [G.L.c. 60, §§38-40 inc. feature of the law was omitted in the recent consolidation of the General Laws. 14 Demand on Mortgagee or at Designated Place Section 38. If a mortgagee of land situated in the place of his residence, before September first of the year in which the tax is assessed, gives written notice to. the collector that he holds a mortgage on land, with a description of the land, the demand for payment shall be made on the mortgagee instead of the mortgagor. Section 39. If a mortgagee or an owner of land causes a notice, designating a place in the town where such land lies at which all papers relative to taxes on such land which are to be served on him may be left, to be recorded in January of any year in the office of the clerk of such town and, during said month, to be delivered to the collector thereof, the collector shall serve at such place any notice, summons, demand for payment or other paper relating to the taxes on such land which is to be served by him. The collector shall not advertise the sale of such land for two months after the time of a demand so made. These two sections illustrate the effort that is made through- out the statutes relating to the sale of land for non-payment of taxes to make it impossible for a mortgagee or a non-resident owner of land to lose his land without his knowledge by reason of the default of some one else in the payment of taxes. It will be seen that such a person if he exercises reasonable diligence is amply protected. Publication and Posting of Notice of Sale Section 40. The collector shall give notice by publication of the time and place of sale of land for non-payment of taxes. Such notice shall contain a substantially accurate description of the several rights, lots or divisions of the land to be sold, which shall be furnished to the collector by the assessors upon demand of the collector, the amount of the tax assessed on each, and the names of all owners known to the collector. Such notice of the sale of the undivided real estate of a deceased person assessed to his heirs or devisees or assessed in general terms to his estate shall contain the names of all 14 St. 1918, c. 254, §46. See Preliminary Report of Commissioners, p. 111. Collection of Local Taxes 353 G.L.c. 60, §§41,42] the heirs or devisees interested in such real estate, if the probate records of the county where the land lies disclose their identity. Section 41. If land to be sold is situated in a town the name of which has been changed by law within three years preceding the sale, the collector shall designate such town in his notices of the sale by both its former and existing name. Section 42. The collector shall, three weeks before the sale, post a notice similar to that required by section forty in some con- venient and public place. The " publication " referred to in this section is of course the publication in a newspaper as denned in the first section of this chapter. 1 The requirements of this section are pretty rigidly enforced. The object of the notice is to inform the owner, whether his land is taxed to him or to an occupant, as well as the public generally, that it is to be sold. The notice should be sufficiently definite to enable the owner and those who attend the sale as prospective purchasers to identify the premises, so that either the owner may prevent the sale by the payment of the tax, or, if a sale takes place, bidders will be attracted and will compete for the purchase of the land. The formalities of a technical survey are not required and a slight misdescription will not invalidate the sale, but the purpose of the statute plainly is that the taxpayer and the bidder alike, with the description as published in hand, can from its contents substantially locate the land which it is proposed to sell. 2 A description in the notice which fails to comply with these requirements renders the whole proceed- ings void. 3 Similarly sales have been invalidated because the notice stated incorrectly the year for which the tax was assessed, 4 or the amount of the tax, 5 or, when land was to be sold for the 1 Supra page 319. The advertisement must be printed in English in a .newspaper printed in English. Connors v. Lowell, 209 Mass. Ill (1911). 2 Williams v. Bowers, 197 Mass. 565 (1908). A description by reference to a lot by number on a plan recorded in the assessors' office is sufficient, although the plan was not recorded in the registry of deeds. Larsen v. Dillen- schneider, 235 Mass. 56 (1920). 3 Farnum v. Buffum, 4 Cush. 260 (1849) ; Williams v. Bowers, 197 Mass. 565 (1908). A description is insufficient although it refers to lots on a recorded plan if it merely states that the land to be sold is a certain number of feet, being part of such lots. McDonough v. Everett, 237 Mass. 378 (1921). 4 Knowlton v. Moore, 136 Mass. 32 (1883). 5 Alexander v. Pitts, 7 Cush. 503 (1851); Shurtleff v. Potter, 206 Mass. 286 (1910). 354 Taxation in Massachusetts [G. L. c. 60, § 43 taxes of two successive years, stated the total amount due as a lump sum. 6 How far these decisions are affected by the statute of 1915 providing that no error in the proceedings of the col- lector shall affect the validity of a tax title unless it is sub- stantial or misleading is an interesting question which cannot yet be answered authoritatively. Even before the statute it was held that if a notice states incorrectly something it is not required to state at all, if it is otherwise not misleading, the error does not invalidate the sale. 7 If the notice advertises that the sale will be conducted in a manner not authorized by law, but in fact the sale is carried out in a lawful manner, the sale is none the less invalid; for a valid notice is a condition precedent to the validity of the sale. 8 It was held in an early decision that a tax sale was not invalid because the notice failed to state the hour of the sale; 9 but in view of the authorized forms it would seem that the law would be otherwise now unless it was thought that such an irregularity was neither substantial nor misleading. Posting of the notice of a sale in some convenient and public place, as well as its publication in a newspaper, is a condition pre- cedent to the validity of the sale ; and unless there is satisfactory affirmative evidence that the notice was duly posted the sale is invalid. 10 Conduct of the Sale Section 43. If the taxes are not paid, the collector shall, at the time and place appointed for the sale, sell by public auction, for the amount of the taxes and necessary intervening charges, the smallest undivided part of the land which will bring said amount, or the whole for said amount, if no person offers to take an undivided part; and may at such sale require of the purchaser an immediate deposit of such sum as he considers necessary to insure good faith in payment of the purchase money, and, on failure of the purchaser to make such deposit forthwith, the sale shall be void and another sale may be made as provided in this chapter. e Lancy v. Snow, 180 Mass. 411 (1902). » Alvord v. Collin, 20 Pick. 418 (1838). s Wall v. Wall, 124 Mass. 65 (1878). See also Sanford v. Sanford, 135 Mass. 314 (1883), to same effect. St. 1878, c. 229, validating such sales already made was held unconstitutional in Foster v. Foster, 129 Mass. 559 (1880). 9 Colman v. Anderson, 10 Mass. 105. 115 (1813). 10 Farnum v. Buffum, 4 Cush. 260 (1849). Collection of Local Taxes 355 G. L. c. 60, § 44] Section 44. The collector may adjourn the sale from time to time not exceeding seven days in all, and shall give notice of every adjournment by a public declaration thereof at the time and place appointed for the sale. Under the Revised Statutes of 1836 the collector was au- thorized to sell only such portion of the land as was sufficient to pay the taxes and charges, unless the land was so situated that it could not be conveniently divided without injury to the residue. If he was obliged to sell more than enough to satisfy the taxes and charges, it was provided that he should pay over the residue of the proceeds to the owner. In this state of the law it was held that a tax sale was void when a portion of the land only was sold and it did not appear by the collector's deed or otherwise that the parcel could not have been further divided and the necessary sum raised by a still smaller portion without causing injury to the residue of the property. 1 By the General Statutes the collector might sell enough of the land or of its rents and profits to pay the tax and charges, or sell the whole or any portion of the land and return the surplus to the owner. This provision was continued in the Public Stat- utes and in the codification of 1888 without substantial change, and while it was in force it was held to be wholly optional with the collector whether to sell the whole or a part of an estate. 2 Under these statutes the practice grew up of selling an undivided portion of the estate and was followed more or less extensively until 1878 when the supreme court decided that such a sale was unauthorized by the statutes then in force. 3 The legis- lature at once passed an enactment attempting to validate sales already made in accordance with this practice, but the statute was held to be unconstitutional. 4 Controversies occasionally arose regarding the disposition of the surplus. It was held that a tax sale was not invalid because the collector expressed a wish that no one would bid more than the amount of the tax and charges on account of the incon- venience of disposing of the surplus. 5 It was also held that the 1 Crowell v. Goodwin, 3 Allen 535 (1862). 2 South worth v. Edmands, 152 Mass. 203 (1890). a Wall v. Wall, 124 Mass. 65 (1878). * Forster v. Forster, 129 Mass. 559 (1880). 5 Southworth v. Edmands, 152 Mass. 203 (1890). 35G Taxation in Massachusetts [G. L. c. 60, § 44 collector need not at his peril divide the surplus among the holders of different interests and estates in the land or mortgages and liens upon it, but that the " owner " within the meaning of the statute was the holder of the legal title at the time of the sale or a mortgagee to whom it had been assessed. 6 The holders of the various legal and equitable interests in the land might follow the proceeds in equity. 7 In 1900 the statute was put in substantially its present form, and the collector sells the smallest undivided interest that will bring enough to pay the tax and charges or the whole if neces- sary. In no case is there any surplus to return to the owner. Any doubt which may have existed upon this point was removed by the phraseology adopted in the General Laws. If no one offers to take an undivided portion the first person who makes a bid to take the whole gets the title. Land cannot be sold for a greater amount than is due. While the validity of a tax sale cannot be questioned merely because the tax as assessed and committed to the collector was excessive in amount 8 or levied in part for an unlawful purpose, 9 yet if the collector sells the land for a tax in excess of that assessed, 10 or includes items of interest 1X and costs 12 not warranted by law, the sale is void. When land is advertised to be sold at the same time and place for the taxes of two successive years, the property may be lawfully sold separately for each of the two taxes; 13 or sold singly for both. 14 When a tax sale is valid the purchaser gets not only a new and paramount title, but a seisin at the moment of conveyance ; and formerly possession was presumed to follow the title. 15 Since the enactment of the General Laws however it has been provided that the purchaser shall not have right of possession until two years after the sale. 16 Whether the sale is valid or not, if it 6 Worcester v. Boston, 179 Mass. 41 (1901). * Cummins v. Christie. 179 Mass. 74 (1901). 8 Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 9 G. L. c. 59, § 82, supra page 311. 10 Shurtleff v. Potter, 206 Mass. 286 (1910). So also, if part of a tax has been paid and the collector sells for the whole tax instead of for the balance, the sale is void. Hurd v. Melrose, 191 Mass. 576 (1906). » Kelly v. O'Rourke, 232 Mass. 168 (1919). 12 Koch v. Austin, 225 Mass. 215 (1916). 1 3 Keen v. Sheehan, 154 Mass. 208 (1891). i* Lancy v. Snow, 180 Mass. 411 (1902). 1 5 Perrv v. Lancy, 179 Mass. 183 (1901). i 6 St. 1918, c. 247, § 49, now G. L. c. 60, § 45, infra page 357. Collection of Local Taxes 357 G. L. c. 60, § 45] appears to be valid on its face the purchaser gets such a title as to be the record owner to whom subsequent taxes should be assessed. 17 The validity or effect of a sale for non-payment of taxes may under some circumstances be affected by the conduct or relations of the parties. It would seem that if the owner was present at the sale and expressed a wish that it should proceed he might be afterward estopped from contesting the validity of the sale; but if there were several owners and not all were present such conduct on the part of those who were present could have no effect; they could not waive the rights of the others; and the sale cannot be good in part and bad in part, and if not wholly valid is wholly invalid. 18 If a person who is bound to pay the taxes purchases the land at the sale, his act simply amounts to the payment of the taxes and gives him no better or more paramount title than he had before. 19 A mortgagee in possession cannot obtain a tax title that will defeat or diminish the mortgagor's right to redeem from the mortgage; 20 and if a mortgagor acquires a tax title it enures to the benefit of the mortgagee. 21 A life tenant or one who purchases his estate cannot by buying the tax title acquire any adverse rights against the remaindermen; but such a pur- chaser may afterward acquire an independent title by a con- veyance from the grantees at the sale for non-payment of the tax of a subsequent year, 2 22 The Collector's Deed Section 45. The collector shall execute and deliver to the purchaser a deed of the land, stating the cause of sale, the price for which the land was sold, the name of the person on whom the de- mand for the tax was made, the places where the notices were posted, the name of the newspaper in which the advertisement of the sale was published, and the residence of the grantee, and shall contain W Welsh v. Briggs, 204 Mass. 540 (1910). 18 Reed v. Crapo, 127 Mass. 39 (1879). 1 9 Home Savings Bank v. Boston, 131 Mass. 277 (1881); Hurley v. Hurley, 148 Mass. 444 (1889); Solis v. Williams, 205 Mass. 350 (1910). 20 Walsh v. Wilson, 130 Mass. 124 (1881). 21 Coughlin v. Gray, 131 Mass. 56 (1881); Holbrook v. Brown, 214 Mass. 542 (1913); Federal Trust Co. v. Bristol County St. Ry. Co., 218 Mass. 367 (1914). 22 Solis v. Williams, 205 Mass. 350 (1910). 358 Taxation in Massachusetts [G. L. c. 60, § 45 a warranty that the sale has in all particulars been conducted accord- ing to law. The deed shall convey the land to the purchaser, subject to the right of redemption. The title thus conveyed shall, until redemption or until the right of redemption is foreclosed as herein- after provided, be held as security for the repayment of the purchase price, with all intervening costs, terms imposed for redemption and charges, with interest thereon, and the premises conveyed shall also be subject to and have the benefit of all easements and restrictions lawfully existing in, upon or over said land or appurtenant thereto when so taken. Such deed shall not be valid unless recorded within thirty days after the sale, and if so recorded it shall be prima facie evidence of all facts essential to the validity of the title thereby con- veyed, and this provision shall apply to deeds executed before as well as since July first, nineteen hundred and fifteen. No sale hereafter made shall give to the purchaser any right to possession of the land until the expiration of two years after the date of the sale. The section relating to the collector's deed has not been materially modified since 1785 except to make it conform to the various changes of the substantive law relating to the estate transferred by the sale. In 1901 a provision was added at the end of the section that at the expiration of five years from the date of record a collector's deed should be prima facie evi- dence of the facts recited therein ; in the following year this pro- vision was stricken out and it was replaced in much its present form in 191 1. 1 In 1905 the clause exempting easements and restrictions from the destructive effect of a tax sale was inserted — a beneficial provision, for as the law previously stood an owner might rid himself of restrictions by a collusive tax sale of which the persons for whose benefit the restrictions were im- posed would probably be unaware until too late. In 1915 provision was made for altering the form of the deed in accord- ance with the change in the substantive law by which foreclosure of a tax title was made necessary before an absolute title passed 1 It was said by the court in Conners v. Lowell, 209 Mass. Ill (1911), that adherence to the somewhat strict rules which had been established as to tax deeds had assumed a new importance in view of the sweeping provision of the statute (St. 1911, c. 370) that such deeds when recorded were prima facie evidence of all acts essential to their validity. The statute means that when there is no affirmative extrinsic evidence affecting the regularity of the assessment and levy, the recitals in the collector's deed are to be taken as true. Isbell v. Greylock Mills, 231 Mass. 233 (1918). Collection of Local Taxes 359 G.L.c. 60, §45] to the purchaser. 2 When the General Laws were enacted this section was redrafted so as to make it clear that a tax title is a new and paramount title ; that the deed is prima facie evidence of all facts essential to the validity of the title and not merely of those facts which are necessarily recited therein; and that the purchaser has no right of possession until two years have elapsed from the date of the sale. 3 A tax deed, when not in the language of the statute, must set out either in precise phrase or by fair intendment to a reason- able certainty a statement of performance of all those acts which are essential to the existence of a legal cause of sale; 4 but if the conditions precedent to a valid sale have actually been complied with, the statement in the deed of the cause of sale need be made only with reasonable certainty. 5 A slight and immaterial mis- nomer of the owner will not invalidate the deed; 6 but a failure to state the residence of the grantee or the name of the newspaper in which the notice of the sale was published was held to be fatal under the strict requirements of the earlier statute; 7 such omis- sions would not necessarily now be thought substantial or mis- leading. » 2 St. 1915, c. 237. 3 In the statute as it previously stood it provided that the deed should con- vey merely all the right and interest of the owner. It had been held that this provision was not intended to cut down the effect of a sale as passing a para- mount title, Langley v. Chapin, 134 Mass. 82 (1883), but merely to declare that the effect of the sale was not diminished by an intervening alienation; but the phraseology was misleading and was widely changed. The provision in the statute of 1911 that a deed was prima facie evidence of the facts essential to its validity was held in Welch v. Haley, 224 Mass. 261 (1916) to apply only to facts necessarily recited in the deed; and the phraseology of the statute was changed to avoid the effect of this decision. Prior to 1915 a purchaser at a tax sale undoubtedly had the right to take possession of the property imme- diately, Perry v. Lancy, 179 Mass. 183 (1901) but since 1915, when it was pro- vided that a tax title was only security until the right of redemption was foreclosed, it was open to some doubt whether the purchaser was entitled to possession at once. The statute makes it clear that he is not. 4 Harrington v. Worcester, 6 Allen 576 (1863); Reed v. Crapo, 127 Mass. 39 (1879); Langdon v. Stewart, 142 Mass. 576 (1886); Downey v. Lancy, 178 Mass. 465 (1901). A deed as invalid as not correctly stating the name of the person on whom the demand was made, if the person designated was dead at the time of the alleged demand and the fact of his death appeared in the probate records. Fuller v. Fuller, 228 Mass. 441 (1917). 5 Adams v. Mills. 126 Mass. 278 (1879); Pixley v. Pixley, 164 Mass. 335 (1895); Charland v. Home for Aged Women, 204 Mass. 563 (1910); Connors v. Lowell, 209 Mass. Ill (1911). 6 Lancy v. Snow, 180 Mass. 411 (1902). 7 Lunenburg v. Walter Heywood Chair Co., 118 Mass. 540 (1875) ; Knowl- ton v. Moore, 136 Mass. 32 (1883); Conners v. Lowell, 209 Mass. Ill (1911). 360 Taxation in Massachusetts [G.L.c. 60, §46 The deed to be valid must be acknowledged, and recorded within thirty days of the sale, 8 and must contain a description of the land sufficiently accurate for identification; 9 but a slight error which does not make the description uncertain does not invalidate the deed. 10 If the deed by mistake conveys less than the whole parcel it cannot be sustained as a valid conveyance of the land actually described in the deed, for the collector has now no authority to sell less than than the whole or an undivided part of the whole. 11 So also a sale cannot be lawfully made of any larger estate than was advertised. 12 The grantee of the deed must be the purchaser at the sale; even if the purchaser assents to a change and the collector com- plies, the deed is invalid, for the collector cannot lawfully convey a title in any other way that that which the law prescribes. 13 To establish a valid title, the purchaser must pay the amount bid within twenty days of the sale. 14 Reimbursement of Purchaser at Invalid Sale Section 46. If it subsequently appears that, by reason of error, omission or informality in the assessment or the sale, the purchaser has no claim upon the property sold,»he may within six months after the date of the deed, offer by writing given to the collector to sur- render and discharge his deed or to assign and transfer to the town all his right, title and interest in the premises, as the collector shall elect. Such offer shall contain a specific statement of the reason why the holder has no claim on the land sold, with the evidence on which he relies, and if such evidence consists of any public record or of facts shown therein, such offer shall contain a specific reference thereto. Upon such surrender and discharge or assignment and trans- s Tilson v. Thompson, 10 Pick. 359 (1835); Powers v. Radding, 225 Mass. 110, 114 (1916). » Hill v. Mowry. 6 Gray 551 (1856); Todd v. Lunt. 148 Mass. 322 (1889); Roberts v. Welsh. 192 Mass. 278 (1906); Conners v. Lowell, 209 Mass. Ill (1911). A description of land by its lot number on a plan recorded in the registry of deeds, and referring to the volume and number of the plan, is suffi- cient. Welch v. Haley, 224 Mass. 261 (1916) ; and the same rule applies when the plan referred to is recorded in the assessors' office, though not in the reg- istry of deeds. Larsen v. Dillenschneider, 235 Mass. 56 (1920). 10 Roberts v. Welsh, 192 Mass. 278 (1906); Welsh v. Briggs, 204 Mass. 540 (1910). 11 Roberts v. Welsh, 192 Mass. 278 (1906). 12 Conners v. Lowell, 209 Mass. Ill (1911). 13 Spring v. Cambridge, 199 Mass. 1 (1908). 14 G. L. c. 60, § 49, infra, page 363. Collection of Local Taxes 361 G. L. c. 60, § 46] fer, the town shall pay to the purchaser the amount which he paid, with interest at the rate of eight per cent per annum, which payment shall be in full for all damages for any defects in the proceedings or under the warranty in such deed. No town and no treasurer or col- lector thereof shall pay or be liable for any amount due under this section unless such statement is filed. Prior to the enactment of this statute a purchaser of a tax title which subsequently proved invalid had no remedy against the city or town; and whatever right such purchaser now has depends upon the statute. 1 A person who is named as grantee in the collector's deed and who paid the consideration is a " purchaser " within the meaning of the statute, although he was not the purchaser at the sale and was not entitled to receive the deed; 2 but the owner of the property sold cannot be such a " purchaser," for a sale to him amounts to no more than a payment of the taxes. 3 A mortgagee may become a " purchaser " before foreclosure but not after- ward. 4 A purchaser who has conveyed away his interest in the prem- ises cannot maintain the action provided by this section. While the statute presupposes that the deed is invalid, the city or town is not obliged to repay the money without obtaining the deed. 5 To entitle the purchaser to maintain the action the error, omission or informality must be such a one as to legally avoid the sale; 6 mere concession by the purchaser that he has no claim upon the property sold is insufficient. The action however can be maintained without evidence of ouster or disturbance. 7 The offer to surrender must contain a specific statement of the defect in the title, and a statement that there are many errors, omissions and informalities in the assessment, deed and sale of the property is insufficient. 8 So also a statement naming every possible defect that might render any tax title invalid without specifying the ones upon which the purchaser relies is 1 Lynde v. Melrose, 10 Allen 49 (1865) ; Williams v. Dedham, 207 Mass. 412 (1911). 2 Spring v. Cambridge, 199 Mass. 1 (1908). 3 Home Savings Bank v. Boston, 131 Mass. 277 (1881). 4 Home Savings Bank v. Boston, 131 Mass. 277 (1881). 5 Spring v. Cambridge, 199 Mass. 1 (1908). 6 Lynde v. Maiden, 166 Mass. 244 (1896). 7 Spring v. Cambridge. 199 Mass. 1 (1908). 8 Lynde v. Maiden, 166 Mass. 244 (1896). 362 Taxation in Massachusetts [G. L. c. 60, § 47 not a compliance with the statute. 9 As there is no provision of law requiring the collector to make the receipt of an offer to surrender a matter of record, it is advisable for persons filing such an instrument to adopt some certain means of proving the fact of filing and the date of the offer in case it becomes necessary to establish these circumstances in court. The city or town cannot set off taxes due on estates which the plaintiff owned at the date of the writ from the claim for reimbursement under this section. 10 The interest under this sction should be computed to the date of the judgment. 11 It was formerly at the rate of ten per cent, but it was reduced to eight per cent in 1909. The remedy against the city or town provided by this section of the statute is exclusive, and a purchaser of a defective tax title who has made no offer to surrender his deed to the city or town within two years of the sale cannot maintain an action against the collector for breach of the warranty that the sale was in all particulars conducted according to law. 12 If the purchaser of a defective tax title seasonably offers to surrender or assign it, it is the duty of the collector to elect between the surrender and an assignment within a reasonable time, and failure to do so is equivalent to a refusal, and the purchaser can recover from the city or town the amount pro- vided by statute. 13 Statement of Purchaser's Residence Section 47. Whoever has a title to land under a sale for non- payment of taxes or other assessment and is a resident of the town where such land lies shall file with the treasurer thereof and in the registry of deeds a statement of his residence and place of business, with the street and number, if any. Such person, who is not a resident of such town or who removes therefrom, shall appoint an agent residing therein, or in the town where the tax deed is recorded, au- thorized to release such land. He shall also file the statement above required in which he shall also state the name of such agent and his residence and place of business, with the street and number, if any. 9 Rogers v. Cambridge, 227 Mass. 378 (1917). i° Home Savings Bank v. Boston, 131 Mass. 277 (1881). 11 Slocum v. Boston, 129 Mass. 567 (1880). 12 Williams v. Baker. 209 Mass. 92 (1911). 13 Spring v. Cambridge, 212 Mass. 296 (1912). Collection of Local Taxes 363 G.L.c. 60, §§48,49] Whenever a person holding a tax title changes his residence or place of business or agent, he shall file a new certificate. Tender of pay- ment to, and service of process upon, such agent shall be a sufficient tender to, or service upon, the holder of such tax title. The repeal of this section was recommended by the com- mission which prepared the consolidation of the General Laws, on the ground that by reason of the change in the method of establishing tax titles it had become obsolete; 1 but the legislature declined to follow this recommendation and it would seem that the statute may still be of some service. Failure on the part of a purchaser to file the statement of his residence required by the statute does not render the sale invalid or preclude the assessors from asssessing the land to such purchaser for subsequent taxes; 2 but it does result in a limitation of the purchaser's rights as against the owner, to the extent at least of justifying a court of equity in permitting a redemption after the expiration of two years from the sale if the other circumstances are such that justice requires such action and proceedings to foreclose the tax title have not been insti- tuted in the land court. 3 So also, failure of the purchaser to file the statement may, with other grounds, excuse the owner from making tender to the purchaser. 4 Purchase by the City or Town Section 48. If at the time and place of sale no person bids for the land offered for sale an amount equal to the tax and charges, and if the sale has been adjourned one or more times, the collector shall then and there make public declaration of the fact; and, if no bid equal to the tax and charges is then made, he shall give public notice that he purchases for the town by which the tax is assessed said land as offered for sale at the amount of the tax and the charges and expenses of the levy and sale, which amount shall be allowed him in his settlement with such town. Section 49. If the purchaser fails to pay the collector within twenty days after the sale the amount bid by him, the sale shall be 1 Preliminary Report, p. 115. 2 Conners v. Lowell, 209 Mass. Ill (1911). 3 Davidson v. Stafford, 210 Mass. 145 (1911) ; Glazier v. Everett, 224 Mass. 184 (1916). * McNeil v. O'Brien, 204 Mass. 594 (1910). 364 Taxation in Massachusetts [G. L. c. 60, § 50 void, and the town shall be deemed to be the purchaser of the land, under the preceding section. Section forty-eight was modified in the enactment of the General Laws so as to make it clear that the collector cannot bid in the land for less than the tax and charges. 1 The ad- journment of the sale which justifies the collector in purchasing the land for the town must apparently be to a different day; an adjournment for a " spell " on the same day is insufficient. 2 If the purchaser at the tax sale does not pay the collector within the specified time the collector has no option but must make a deed to the city or town. A deed to the purchaser under such circumstances is void. 3 To establish a valid tax title in an individual purchaser it must appear affirmatively that he paid the amount bid within twenty days of the sale ; but the dates of execution and acknowl- edgment of the tax deeds may in themselves warrant an inference that such payment was made. 4 Recitals in Deed to Town Section 50. If the town becomes the purchaser, the deed to it, in addition to the statements required by section forty-five, shall set forth the fact that no sufficient bid was made at the sale or that the purchaser failed to pay the amount bid, as the case may be, and shall confer upon such town the rights and duties of an individual purchaser. The deed to a city or town is void if it does not contain the statements required by law in deeds from the collector to individual purchasers. 1 By a deed from a collector to a city or town the municipality takes the same title as would an indi- vidual purchaser at a tax sale, and it was formerly held that after the sale and deed the former owner had no right of posses- sion against the municipality. 2 Under the present law however i St. 1918. c. 257, § 50. 2 Oakham v. Hall, 112 Mass. 535 (1873). When that case was decided however adjournments could lawfully be made only from day to day. 3 Holt v. Weld, 140 Mass. 578 (1886). 4 Welsh v. Briggs, 204 Mass. 540 (1910). 1 Harrington v. Worcester, 6 Allen 576 (1863). 2 Coughlin v. Gray, 131 Mass. 57 (1881). Collection of Local Taxes 365 G.L.c. 60, §§51-53 inc.] the city or town would have no right of possession until after the expiration of two years from the sale. 3 Sale of Parcels of Small Value Section 51. If unimproved and unoccupied land does not exceed four thousand square feet in area, or is laid out in lots or parcels no one of which exceeds such area, and the taxes unpaid for any one year do not exceed fifty cents on such land, or on any such lot or parcel thereof, the collector may give notice of the sale by publication of an advertisement stating the name of the owner of record of each lot on April first of the year of assessment, the tax due thereon and the number of such lot on a street, way or plan, without further description thereof. The collector may convey in one deed to the same purchaser or convey to the town any number of the lots so advertised and sold, and said deed shall state the name of said owner of record of each lot conveyed therein, on April first of said year, the amount of the taxes and costs due for each lot, and the number on the street, way or plan of each lot respectively, and need contain no further description of the lot, owner or amount due. The cost of the sale shall be apportioned equally among all the lots sold, and the cost of the deed shall be apportioned equally among all the lots conveyed thereby. Management of Lands Bought by Town Section 52. Deeds to a city shall be placed in the custody of its collector, and to a town in the custody of its treasurer. Cities and towns may make regulations for the possession, management and sale of such land and for the assignment of tax titles, not incon- sistent with law or with the right of redemption. Taking of Land for Non-payment of Taxes Section 53. If a tax on land is not paid within fourteen days after demand therefor and remains unpaid at the date of taking, the collector may take such land for the town, first giving three weeks' no- tice of his intention to exercise such power of taking, which notice may be served in the manner required by law for the service of subpoenas on witnesses in civil cases or may be published, and shall conform to 3 G. L. c. 60, § 45, supra page 357. 366 Taxation in Massachusetts [G.L.c. 60, §§54-56 inc. the requirements of section forty. He may also post a similar notice under section forty-two. Section 54. The instrument of taking shall be under the hand and seal of the collector and shall contain a statement of the cause of taking, a substantially accurate description of each parcel of land taken, the name of the person to whom the same was assessed, the amount of the tax thereon, and the incidental expenses and costs to the date of taking, and shall be recorded in the registry of deeds; and title to the land so taken shall thereupon vest in the town, subject to the right of redemption. Such title, and also the title conveyed by a deed or taking under sections seventy-nine to eighty-one, inclu- sive, shall, until redemption or until the right of redemption is fore- closed as hereinafter provided, be held as security for the repayment of said taxes with all intervening costs, terms of redemption and charges, with interest thereon. Section 55. If land has been so taken there shall be allowed to the collector and added to the tax the charges and fees fixed by section fifteen. The taking of land by a city or town for the non-payment of taxes as an alternative method of collection was introduced in 1878, and the statutes which authorize this procedure have re- mained in force without much modification, except to conform to the change in the character of title acquired by a sale from an absolute title to security becoming absolute on foreclosure which took place in 1915. 1 The same accuracy is required in proceedings for the taking of land for non-payment of taxes as in the case of sales from the same cause. 2 Naming of One Record Owner Sufficient Section 56. The assessment, sale or taking may be made in the name of one or more of the record owners at the date of assessment, and if so made, shall, subject to section forty-three, be deemed to be in the name of the owner thereof. Every such sale or taking shall be of the whole estate and not of the undivided interest of any joint owner thereof. It is to be noted that this section, in spite of its collocation in the statutes, applies to the assessment as well as to the col- i St. 1915, c. 237, § 2. 2 Hurd v. Melrose. 191 Mass. 576 (1906). Collection of Local Taxes 367 G. L. c. 60, § 57] lection of taxes, and must be construed in connection with section eleven of chapter fifty-nine. 1 Under the tax statutes, taken as an entire system, when land is owned by tenants in common, the assessment of a tax on the undivided interest of one of the tenants in common is invalid; 2 but an assessment of the tax on the entire parcel may be made on one of the tenants in com- mon; 3 and when there are various easements, estates and inter- ests in or on a parcel of land, an assessment to the general owner is sufficient. 4 The statute however cannot be construed to authorize the assessment of a parcel of land to a person who is not an occupant and whose interest in the land is not of record. 5 Under the law as it stood before 1915, the statute authorized the extinction of the record title of a person to an interest in land although he was not assessed and no demand was made upon him, 6 but under the present system the holders of all interests in the land are notified before the right of redemption is finally lost. 7 Affidavit of Collector Section 57. The affidavit of the collector, deputy collector or disinterested person reciting the proceedings required by law in the sale of land for taxes, with copies of the advertisement and notices annexed thereto, recorded within three months after such sale in the registry of deeds, shall be competent evidence of demand, notice and service. This statute does not require an affidavit, but makes it competent evidence. That the proceedings required by law were faithfully carried out may be proved by any other com- petent evidence, if the affidavit given effect by this section was not filed or turned out to be insufficient. 1 1 Supra page 226. * Curtiss v. Sheffield, 213 Mass. 239 (1913). 3 McLoud v. Mackie, 175 Mass. 355 (1900). 4 Hunt v. Boston, 183 Mass. 303 (1903). 5 Kerslake v. Cummings, 180 Mass. 65 (1901). 6 McLoud v. Mackie, 175 Mass. 355 (1900); Hunt v. Boston, 183 Mass. 303 (1903). 7 G. L. c. 60, § 66, infra page 380. 1 Southworth v. Edmands, 152 Mass. 203 (1890). 368 Taxation in Massachusetts [G. L. c. 60, §§ 58, 59 Rights of Mortgagors and Mortgagees Against Each Other Section 58. If proceedings have been commenced for the taking or sale of land for a tax assessed thereon, or if the owner of land has neglected to pay such tax within the year for which it is assessed, the holder of a mortgage thereon may pay such tax, charges and expenses to the collector; and the amount so paid may be added to the mortgage debt. Section 59. If a tax on land is assessed to a mortgagor and mort- gagee separately, any part thereof remaining unpaid on January first following its assessment may be paid by either party. If a mort- gagee pays a tax, interest or costs thereon which by law or by the terms of the mortgage was payable by the mortgagor, the amount so paid shall be added to the mortgage debt. If it is by law or by the terms of the mortgage payable by the mortgagee, and is paid by the mortgagor, the amount so paid shall be deducted from the mort- gage debt unless the parties have, in writing, otherwise agreed. For the purposes of taxation a mortgagor of real estate is taken to be the owner as long as he remains in possession, and prior to 1881 the mortgagor was assessed for the full value of the land and the mortgagee for the full value of the mortgage deb't as personal property. In 1881 provision was made for the assessment of the mortgage to the mortgagee and of the equity of redemption to the mortgagor. In the following year it was provided that the separate assessment need not be made if no statement of the amount of the mortgage was filed with the assessors and since then mortgaged land has been generally assessed to the mortgagor while in possession and the mort- gagee's interest has not been assessed. 1 In the absence of special provision in the mortgage the obligation to pay the tax assessed in such manner rests upon the mortgagor and the statute printed first at the head of this section establishes a way for the mortgagee to protect his interest in the land and enforce upon the mortgagor the obligation of ultimately paying the tax. In the absence of an agreement by the mortgagor to pay the tax, if the mortgagee was obliged to pay a tax assessed on the mortgagor to protect his security it is very doubtful if an action i See G. L. c. 59, § § 11-14, inc., supra pages 226 to 232 inc. Collection of Local Taxes 369 G.L.c. 60, §59] would lie against the mortgagor to recover the amount so paid; 2 and at any rate a personal judgment against a mortgagor who failed to pay the taxes on the mortgaged property would in most cases be of little value, so that the statutory method is much more effective. Section fifty-eight, in the form in which it stood prior to the enactment of the General Laws, was however of limited value to a mortgagee, because it gave the right to the mortgagee to pay the taxes and add the amount paid to the mortgage debt only when the mortgagor failed to pay within three months after demand, and demand had been made upon the mortgagee by the collector. In the General Laws the rights of the mortgagee are much better protected. In many instances mortgagees protect themselves with respect to taxes by conditions in the mortgage. Thus it is customary to incorporate in a mortgage as one of its essential conditions a provision that the mortgagor shall pay all taxes assessed on the mortgaged property. It was held that the statute of 1881 did not affect the conditions of existing mortgages 3 and that with regard to mortgages given since its enactment, the condi- tion of the mortgage was valid and the statutory remedies for the enforcement of the mortgagor's obligation to pay taxes were not exclusive of rights secured by the mortgage itself. 4 In other words, the provisions of section fifty-eight point out a plain method of protecting his interest which a mortgagee can pursue if he desires ; but the remedy is cumulative ; the statute was intended for the greater security of the mortgagee and can- not be construed to take away or limit his right to protect his interest in any other manner. When a mortgage is conditioned upon the payment of taxes by the mortgagor, the tax should be paid before interest upon it begins to run, 5 and if it is not so paid, the mortgagee may 2 Swan v. Emerson, 129 Mass. 289 (1880). s Hammond v. Lovell, 136 Mass. 184 (1883). 4 Thus a mortgagee may buy in the property at a tax sale, Home Savings Bank v. Boston, 131 Mass. 277 (1881). or foreclose for non-payment of the tax, Stevens v. Cohen, 170 Mass. 551 (1898), or follow the property in equity if it is turned into money with the tax added to the mortgage debt, Worcester v. Boston, 179 Mass. 41 (1901), or be subrogated in equity, upon payment of the tax, to the collector's lien or to his rights against the personal property of the mortgagor in the hands of a receiver, Equitable Trust Co. v. Kelsey, 209 Mass. 416 (1911). 5 Silva v. Turner, 166 Mass. 407 (1896). When a mortgagor agrees to 370 Taxation in Massachusetts [G. L. c. 60, § 60 proceed to foreclose without waiting for the collector to begin to levy on the land. 6 Under such a mortgage the mortgagee can add the amount paid for taxes, or paid to redeem the land from a tax sale, to the amount of the mortgage in proceedings of every description to enforce his rights in the mortgage; 7 but if he sells the land under a power in the mortgage subject to out- standing tax titles he cannot deduct from the proceeds money subsequently paid for redeeming the tax titles. 8 A mortgagee cannot, by purchasing the mortgaged land at a tax sale, defeat the right of the mortgagor to redeem the land from the mortgage upon payment of the amount due thereon, which amount would of course include the sum paid by the mortgagee at the tax sale. 9 As between successive mortgagees, a senior mortgagee who has been obliged to pay a tax assessed to a junior mortgagee while the latter was in possession cannot recover the sum so paid from the person assessed; 10 and a junior mortgagee who pays the tax to prevent foreclosure by a senior mortgagee cannot require the senior mortgagee to repay him the sum so paid if the senior mortgagee forecloses the mortgage on account of another breach of condition by the mortgagor. ii Payment of Taxes by Person Other than the Owner Section 60. If a person other than the owner of the fee rightfully pays the taxes assessed on land to the collector or treasurer, before a taking or sale, the collector or treasurer shall give him a certificate of such payment stating the name of the person to whom the land is taxed, of the person paying the tax, and a substantially accurate description of the land. Such certificate being recorded in the registry of deeds within thirty days from its date shall be notice to all persons of such payment and of the lien therefor. A person whose tax is paid by another shall upon repaying the same have the same right pay the tax, it is due at least by November 1, in Boston, Silva v. Turner, 166 Mass. 407 (1896). 6 Stevens v. Cohen, 170 Mass. 551 (1898). » Stevens v. Cohen, 170 Mass. 551 (1898); Worcester v. Boston, 179 Mass. 41 (1901); Equitable Trust Co. v. Kelsey, 209 Mass. 416 (1911). 8 Skilton v. Roberts, 129 Mass. 306 (1880). 9 Walsh v. Wilson, 130 Mass. 124 (1881); Ccughlin v. Gray, 131 Mass. 56 (1881). 10 Swan v. Emerson, 129 Mass. 289 (1880). 11 Pearmain v. Massachusetts Hospital Life Insurance Co., 206 Mass. 377 (1910). Collection of Local Taxes 371 G. L. c. 60, § 60] to recover it from the town, if illegally assessed, which he would have had if the tax had been paid by him under written protest. This subject divides itself naturally into two parts. (1) When one is obliged to pay taxes assessed on another to save his own property from levy and sale. (2) When one by mistake or by the dishonest act of an agent pays the tax on another's property. In the first case, so far as the rights of the parties at common law are concerned, it is not sufficient that the property is assessed to another and that as between the collector and the parties the other party is the one primarily liable for the tax. One who takes a quitclaim deed of property upon which a tax is assessed to the vendor without covenants against incumbrances made or suffered by the vendor and pays the tax to avoid a sale by the collector cannot call upon the vendor to reimburse him, 1 and a senior mortgagee who after foreclosure is obliged to pay a tax, assessed on the property to a junior mortgagee while the latter was in possession, cannot recover the amount of the tax from the junior mortgagee. 2 When however the parties have agreed between themselves that one of them is to pay the tax on the property, and the one who has agreed to pay the tax fails to pay it, and the other party is obliged to pay the tax to save his interest in the property from being wiped out by the sale of the land for non-payment of the tax, he can recover the amount so paid in an action at law against the party who agreed to pay the tax. 3 He is also entitled by proceedings in equity to be subrogated to the rights of the collector against the land, or if the other party is insolvent, to the collector's right to prove the tax against such party as a preferred claim. 4 When there are different estates and interests in a parcel of real estate and there is no express agreement among the holders of the different interests in regard to the payment or apportion- ment of the tax, and the general owner or the occupant to whom the tax on the property is assessed does not pay the tax and the collector is about to levy on the land, the holder of one of the other estates or interests may be obliged to pay the tax to protect 1 Swan v. Emerson, 129 Mass. 289 (1880). 2 Swan v. Emerson, 129 Mass. 289 (1880). 3 Phinney v. Foster. 189 Mass. 182, 188 (1905). 4 Equitable Trust Co. v. Kelsey, 209 Mass. 416 (1911). 372 Taxation in Massachusetts [G. L. c. 60, § 60 his interest. In such a case he should in justice be allowed to call upon the holders of the other interests for reimbursement or contribution, 5 and as the failure to pay the tax would gen- erally indicate impecuniosity on the part of the person assessed, in most cases the rights of the person paying the tax would not be fully protected without some greater security than a mere personal right of action against the delinquent. Accordingly we find the matter regulated by statute; a tenant may sue his landlord or withhold rent; 6 a mortgagee may add the sum paid to the mortgage; 7 a co-tenant in addition to his general right to sue for contribution is given a lien on the land. 8 In 1902 provision was made which is now contained in section sixty that if any person other than the owner of the fee rightfully paid a tax on land — that is anyone having an interest in the land other than the general ownership — he was entitled to receive and record a certificate of such payment which should be " notice to all persons of such payment and of the lien therefor." This statute seems on its face to recognize the existence of a lien in all cases of payment of a tax by the holder of an interest other than the fee, as well as in those specifically provided for; but it was probably not intended to establish a lien in cases other than those created by other provisions of law, and its effect is doubt- less only to provide a means for recording notice of liens whose establishment was not otherwise provided for. 9 In any event it does not cover the case of a remainderman who is obliged to pay the tax upon the default of a life-tenant, for the remain- derman is himself the owner of the fee ; but on general equitable principles, if a remainderman pays off an encumbrance he has an equitable lien on the land for contribution. 10 If the land is actually sold for non-payment of the tax, the holder of any interest in the land is permitted to redeem; 11 and although the statutes make no provision for adjusting the rights 5 For the general principle on which this right is based, see Amory v. Lowell, 1 Allen 504 (1861); Davis v. Bay State League, 158 Mass. 434 (1893). 6 G. L. c. 59, § 15, supra page 233. 7 G. L. c. 60, § § 58, 59, supra page 368. 8 G. L. c. 60, §§ 85, 86, infra page 391. See also Foote v. Cotting, 195 Mass. 55, 63 (1907). For the right of an heir who has paid a tax assessed on the undivided real estate of a deceased person to contribution see G. L. c. 59, § 16, supra page 236. 9 See decision in Salisbury Beach Associates v. Behan, Land Court (1920). 10 Amory v. Lowell, 1 Allen 504 (1861). 11 G. L. c. 60, § 62, infra, page 374. Collection of Local Taxes 373 G L.c. 60, §61] of the different owners in such a case, the one who pays the money for redemption is fully protected. He is entitled to hold the tax title for his own benefit until the persons who should have paid all or part of the tax reimburse him for a proportion- ate part of his expenditure. 12 It is well settled that when one who has no interest in land assessed for taxes and is under no obligation to pay the taxes thereon, without the request of the owner pays such a tax, either from mistake or through the dishonest act of his agent, he cannot maintain an action at law against the owner of the land for the amount so paid. 13 This rule rests upon well established principles of law, that one is entitled to choose his own cred- itors, and that one who voluntarily pays another's debts cannot recover the money so paid from the debtor. In equity however there may be a different rule. In a recent case it was held, not without emphatic dissent, that when the same individual was trustee of two trusts and used the money of one trust to pay taxes on a parcel of land belonging to the other trust, in a suit in equity brought by the succeeding trustee of the first trust against the succeeding trustee of the second, the plaintiff was entitled to a charge on the land for the amount of the tax paid, or to a decree against the defendant for the repayment of the money. 14 How far the principle of this de- cision would be extended beyond the peculiar facts of the case remains however open to question. Collection of Taxes Subsequent to Sale or Taking Section 61. Whenever a town shall have purchased or taken real estate for payment of taxes the lien of the town on such real estate for all taxes assessed subsequently to the assessment for pay- ment of which the estate was purchased or taken shall continue, and it shall be unnecessary for the town to take or sell said real estate for non-payment of said subsequent taxes, costs and interest; and on either redemption from, or foreclosure of, the right of redemption W Hurley v. Hurley, 148 Mass. 444 (1889). 13 Massachusetts Mutual Life Insurance Co. v. Green, 185 Mass. 306 (1904) (mistake); Foote v. Cotting 195 Mass. 55 (1907) (dishonest act of agent). One who is wrongfully in possession of land cannot when he is ousted on writ of entry charge the rightful owner for taxes paid. Curtis v. Gay, 15 Gray 36 (1860). 14 Newell v. Hadley, 206 Mass. 335 (1910) ; Bremer v. Williams, 210 Mass. 256 (1911). 374 Taxation in Massachusetts [G. L. c. 60, § 62 under such taking or purchase, said subsequent taxes, costs and inter- est shall be paid to the town, and the payment shall be made a part of the terms of redemption. In 1918 it was held that when a city or town becomes a purchaser at a tax sale of land sold by its collector of taxes, it receives a title subject to the later and paramount lien that may arise from taxes assessed after those for the collection of which the sale was made. 1 To avoid the effect of this decision, the foregoing statute was enacted in the following year. 2 Redemption from Tax Sale Section 62. Any person having an interest in land taken or sold for non-payment of taxes, including those assessed under sections twelve, thirteen and fourteen of chapter fifty-nine, or his heirs or assigns, may, within two years after the taking or sale, redeem the same by paying or tendering to the collector, if the estate has been taken or purchased by the town, the amount of the tax, all inter- vening taxes, charges and fees, and interest on the whole at the rate of eight per cent per annum; or by paying or tendering to the pur- chaser, or his legal representatives or assigns, the original sum and intervening taxes paid by him and interest on the whole at said rate. In each case he shall also pay for examination of. title and a deed of release not more than three dollars in the aggregate ; and in addition thereto the actual cost of recording the tax deed or evidence of taking. He may redeem the land by paying to the collector the sum which he would be required to pay to the purchaser, with one dollar additional. No person shall knowingly collect or attempt to collect for the redemption of any such land a sum of money greater than that authorized by this section. This section of the statute brings out clearly the fact that the real purpose of a tax sale is to enable the city or town to collect quickly the money needed to perform its many public functions and to throw upon the purchaser the duty, accom- panied by suitable pecuniary rewards, of making the unwilling and delinquent taxpayer eventually yield up the amount of the 1 Chadwick v. Cambridge, 230 Mass. 580 (1918). 2 St. 1919, c. 263. Collection of Local Taxes 375 G. L. c. 60, § 62] tax by the imposition of increasing pecuniary penalties finally amounting to forfeiture; in other words that a tax title in spite of its paramount nature is, until the right of redemption is finally lost, in reality a lien, and that the holder of the right of redemption is really the owner of the land. Prior to the enactment of the General Laws of 1921 the right to redeem was in terms granted only to the owner of the land; but the decisions recognized that an owner within the meaning of the statute was not necessarily the true owner, the holder of a perfect title, or even the owner of the fee; but that the term included anyone having a legal interest in the land or in possession under claim of ownership. 1 In the consolidation of the General Laws, the phraseology of the section was modified to conform to the interpretation put upon it by the court. 2 The right to redeem depends upon ownership of an interest in the land at the time the redemption is sought, rather than at the time the la.nd was assessed, 3 and a person whose title is extinguished or transferred after the sale is not subsequently entitled to redeem. 4 The right of redemption, or ownership subject to a tax title, is treated by the law as an interest in land which may be conveyed or devised and which descends in the same manner as other property. 5 The effect of payment or tender of the amount due, to the purchaser or his legal representatives or assigns, by a person en- titled to redeem the land is at once as between the parties to defeat the legal estate of the purchaser and to leave the title where it would have been if the sale had never taken place. 8 If the holder of the tax title intentionally eludes the owner and thus prevents tender being made, tender is excused, and the tax 1 Rogers v. Rutter, 11 Gray 410 (1858) ; Hillis v. O'Keefe, 189 Mass. 139 (1905); Rogers v. Lynn, 200 Mass. 354 (1909); Union Trust Co. v. Reed, 213 Mass. 199 (1912). 2 St. 1918, c. 257, § 53. At the same time a provision that the redeeming owner should be credited with rents and profits received by the purchaser was stricken out as no longer applicable as the purchaser cannot now take possession until the two year period of redemption has expired. 3 Davidson v. Stafford, 210 Mass. 145 (1911). 4 Da Silva v. Turner, 166 Mass. 407 (1896). 5 O'Day v. Bowker, 143 Mass. 59, 62 (1886). It was however held prior to 1915 that a right of redemption was not an interest in real estate attachable in an action at law. Adams v. Mills, 126 Mass. 278 (1879). At present as the tax title is only security the opposite result might be reached. 6 Rand v. Robinson, 11 Cush. 289 (1853); Perry v. Lancy, 179 Mass. 183 (1901). 376 Taxation in Massachusetts [G. L. c. 60, § 62 title is defeated to the same extent as if tender had been actually made. 7 When the purchaser of a tax title conveys it to a third party before the owner undertakes to redeem, the owner, if he has notice of the conveyance, should make his tender to the grantee of the purchaser. 8 It was formerly held that if the owner re- mained in possession tender should be made to the purchaser himself, notwithstanding a duly recorded deed which the pur- chaser had made to a third party while disseised. 9 Since 1891 however title can pass notwithstanding the disseisin of the grantor, 10 and it would seem that tender should be made to the purchaser's grantee whenever the owner of the tax title has actual knowledge of the conveyance or the deed has been recorded. If the purchaser of the tax title conveys only a portion of the land, a person who seeks to redeem that portion must pay the amount assessed on the whole with interest and charges in order to redeem. 11 What relief the court would gr.ant the owner of an entire parcel which the purchaser at a sale for non-payment of taxes subdivided and conveyed away to several grantees so that the owner would be obliged to tender the entire sum to each is not clear, but it is safe to assume that some means would be found to protect the owner. 12 The interest which the law requires to be paid upon the charges of the sale need not be paid upon the charges incident to the redemption of the land. 13 An attempt by the purchaser to knowingly collect more for redemption of land than the stat- ute authorizes may be ground for permitting redemption more than two years after the sale. 14 A tax title is not merged with another claim on the land and a person who buys the tax title does not thereby lose any other rights he may have in the land if the tax title is redeemed. 15 A person who redeems a tax title cannot treat the transaction as * Perry v. Lancy, 179 Mass. 183 (1901) ; Hillis v. O'Keefe, 189 Mass. 139 (1905); McNeil v. O'Brien 204 Mass. 594 (1910). 8 Faxon v. Wallace, 101 Mass. 444 (1869). » Faxon v. Wallace, 98 Mass. 44 (1867). 10 St. 1891, c. 354, now G. L. c. 183, § 7. 11 McNeil v. O'Brien, 204 Mass. 594 (1910). 12 McNeil v. O'Brien, 204 Mass. 594 (1910). 13 Hawks v. Davis, 185 Mass. 119 (1904). 14 Davidson v. Stafford, 210 Mass. 145 (1911). For the penalty for such ?onduct see G. L. c. 60, § 104, infra page 412. 15 Jenks v. Liverpool, London & Globe Insurance Co., 206 Mass. 591 (1910). Collection of Local Taxes 377 G.L.c. 60, §63] a purchase and hold the paramount title to the property if it appears that he had no right to redeem. 16 There were formerly provisions of statute allowing a mort- gagee and other person having an interest in the property but who was not the person named in the tax list as the owner, to redeem within two years after actual notice of the sale; but these provisions were stricken out in 1915 as unnecessary in view of the protection afforded such persons in proceedings to fore- close a tax title. 17 . Prior to the enactment of the General Laws of 1921 an owner of land sold for non-payment of taxes might under some cir- cumstances enforce his rights either to redeem from a valid sale or to set aside an invalid one, by writ of entry, 18 and until 1849, when the right to redeem by bill in equity was granted, writ of entry was his only remedy to enforce a right of redemption ; but a writ of entry will not lie even though the purchaser has recorded his deed and refuses to give the owner a deed of release, if the owner is left in possession; 19 so that under the law as it is at present, the writ of entry is not an available remedy for the owner unless the purchaser has taken possession after the expira- tion of two years from the sale and it appears that the sale was invalid or that the owner had paid or tendered the amount required to redeem within the statutory period. Recording Certificate of Payment to Collector Section 63. The collector shall receive any money paid to him instead of the purchaser and give to the person paying it a certificate specifying the amount paid, the name of the person to whom and the real estate on which the tax was originally assessed, and the registry of deeds and the book and page of the records therein where the collector's deed is recorded; and the recording of the certificate 16 Jenks v. Liverpool, London & Globe Insurance Co., 206 Mass. 591 (1910). 17 St. 1915, c. 237, § 16. For decisions under the provisions as to redemp- tion within two years from actual notice see the first edition of this work, pages 371-374 inc. 18 Blossom v. Cannon, 14 Mass. 177 (1817) ; Tilson v. Thompson, 10 Pick. 359 (1835); Farnum v. Buffum, 4 Cush. 260 (1849); Alexander v. Pitts, 7 Cush. 503 (1851); Rand v. Robinson, 11 Cush. 289 (1853); Hill v. Mowry, 6 Gray 551 (1856) ; Crowell v. Goodwin, 3 Allen 535 (1862) ; Harrington v. Worcester, 6 Allen 576 (1863); Wall v. Wall, 124 Mass. 65 (1878); Langdon v. Stewart, 142 Mass. 576 (1886); Barker v. Mackay, 175 Mass. 485 (1900); Perry v. Lancy, 179 Mass. 183 (1901). 19 Field v. Hawley, 126 Mass. 327 (1879). 378 Taxation in Massachusetts [G. L. c. 60, § 63 in said registry shall extinguish all right and title acquired under the collector's deed. The collector shall on demand pay over all money so paid, to the person entitled thereto as determined by him, except that he shall retain one dollar for the use of the town and shall account to it therefor. If the amount so paid is less than the purchaser was entitled to, the balance with interest at eight per cent per annum may after demand therefor be recovered in contract by the purchaser against the person paying such amount, if the action is commenced within three months after such payment to the collector. In 1848 it was first provided that when a purchaser of land sold for non-payment of taxes or any agent duly appointed by him could not be found upon reasonable search, the person en- titled to redeem might pay the amount required for redemption to the town or city treasurer, who should give a certificate show- ing the fact of payment and designating the land on which the tax was assessed. Upon filing this certificate in the registry of deeds where the land lay, together with an affidavit of himself or some disinterested person; that upon reasonable search neither the owner nor his agent could be found, which affidavit was given the force of prima facie evidence of the facts recited there- in, all right and title acquired under the collector's deed was released and discharged. These provisions remained without substantial change until 1902. While they were in force and since the statute has been in its present form it has been held that the remedy given by them is not exclusive and that persons whose sole reason for not redeeming from a tax sale during the statutory period was that they were unable to find the purchaser are not precluded by the statute now under consideration from relief in equity. 1 In 1902 the method of redemption described above was ex- tended to all cases, whether the purchaser at the tax sale could be found or not, and the affidavit prescribed by the earlier stat- ute became unnecessary and was no longer required; while the collector of taxes instead of the city or town was substituted as the person to whom tender could be made. 2 There are distinct 1 Clark v. Lancy, 178 Mass. 460 (1901); Barry v. Lancy, 179 Mass. 112 (1901); Perry v. Lancy, 179 Mass. 183 (1901); Rogers v. Nichols, 186 Mass. 440 (1904); McNeil v. O'Brien, 204 Mass. 594 (1910); Davidson v. Stafford, 210 Mass. 145 (1911). 2 Rogers v. Nichols, 186 Mass. 440 (1904). Collection of Local Taxes 379 G. L. c. 60, § 64] limitations upon the effectiveness of the remedy furnished by this statute, even in its present form. Compliance with its terms would still leave the tax deed outstanding upon the record, and although its legal effect would be neutralized by the certificate provided for in the statute, it might constitute a practical impair- ment of the ease of transferring title. Moreover it might be impossible to ascertain the precise amount due without confer- ring in person with the purchaser and the owner could protect himself with certainty only by depositing with the collector the largest amount which could under any circumstances be required. Hence it remains highly desirable that the person entitled to redeem should be able to find the purchaser and get from him a correct statement of the amount necessary for re- demption. 3 Tax Title Absolute only after Foreclosure Section 64. The title conveyed by a tax collector's deed or by a taking of land for taxes shall be absolute after foreclosure of the right of redemption by decree of the land court as provided in this chapter. The land court shall have exclusive jurisdiction of the foreclosure of all rights of redemption from titles conveyed by a tax collector's deed or a taking of land for taxes, in a proceeding provided for in sections sixty-five to seventy-five, inclusive. Sections sixty-four to seventy-five inclusive set forth the procedure for the foreclosure of the right of redemption from a sale for non-payment of taxes adopted in 1915 as a substitute for the time-honored method of sale of the absolute title subject to right of redemption, which had proved so unsatisfactory. The object of the new method was two-fold, namely, first, to protect the owners and persons having an interest in property by making sure that as far as it could be done they would receive actual notice of the sale before the right of redemption was lost; and secondly, to free the law of tax titles from the extremely tech- nical state into which it had fallen from the tendency of courts to alleviate the harshness of the law by requiring an accuracy almost impossible of attainment in the procedure of collectors. It is perhaps too early to determine definitely how successful the 3 Davidson v. Stafford, 210 Mass. 145 (1911). 380 Taxation in Massachusetts [G. L.c. 60, §§65-67 inc. effort has been; but it is at least notable that it has not yet proved necessary to bring any clause of the statute of 1915 be- fore the supreme court for interpretation. Petition for Foreclosure -Notice -Default Section 65. After two years from a sale or taking of land for taxes, whoever then holds the title thereby acquired may bring a petition in the land court for the foreclosure of all rights of redemption thereunder. Such petition shall be made in the form to be prescribed by said court and shall set forth a description of the land to which it applies, with its assessed valuation, the petitioner's source of title, giving a reference to the place, book and page of record, and such other facts as may be necessary for the information of the court. Two or more parcels of land may be included in any petition brought by a town, whether under a taking or as purchaser of such title or titles. Section 66. Upon the filing of such a petition the court shall forthwith cause to be made by one of its official examiners an exam- ination of the title sufficient only to determine the persons who may be interested in the same, and shall upon the filing of the examiner's report notify all persons appearing to be interested, whether as equity owners, mortgagees, lienors, attaching creditors or otherwise, of the pendency of the petition, the notice to be sent to each by registered mail and return of receipt required, the addresses of respond- ents, so far as may be ascertained, being furnished by the petitioner. Such other and further notice by publication or otherwise shall be given as the court may at any time order. The notice, to be addressed " to all whom it may concern," shall contain the name of the petitioner, the names of all known respondents, a description of the land and a statement of the nature of the petition, shall fix the time within which appearance may be entered, and shall contain a statement that unless the party notified shall appear within the time fixed a default will be recorded, the petition taken as confessed, and the right of redemption forever barred. Section 67. After the return day fixed, to be at least twenty days after the time of the actual issuance of notice, the court shall, if satisfied that the notice has been properly given, on motion of the petitioner enter an order defaulting all persons failing to appear, and decreeing that the petition as to them be taken as confessed. Collection of Local Taxes 381 G L.c. 60, §§ 68-70 inc] Redemption by Leave of Court Section 68. Any person claiming an interest, within ten days after entering his appearance or within such further time as may on motion be allowed by the court, shall; if he desires to redeem, file an answer setting forth his right in the premises, together with all matters which in equity and good conscience entitle him to redeem, and an offer to redeem upon such terms as may be fixed by the court. Thereupon the court shall hear the parties, and, if good cause is shown therefor, may make a finding allowing the party to redeem, within a time fixed by the court, upon payment to the petitioner of an amount sufficient to cover the original sum, costs, interest at the rate of eight per cent per annum, and all subsequent taxes, costs and interest to which the petitioner may be entitled under section sixty-one or sixty-two, together with the costs of the proceeding and such coun- sel fee as the court deems reasonable. The court may impose such other terms as justice and the circumstances warrant. The redemption provided by this section is not an absolute right, the two years from the sale having expired, and the priv- ilege of redemption in the discretion of the court is analogous to the right to redeem by proceedings in equity which previously existed and which has not been taken away. 1 It may be assumed that the decisions under the statute allowing redemption in equity are of some value as precedents in construing the statute now under consideration. Decree Barring Redemption Section 69. If a default is entered under section sixty-seven, or on motion for failure to file answer, or if redemption is not made within the time and upon the terms fixed by the court under the preceding section, or if at the time fixed for the hearing the person claiming the right to redeem does not appear to urge his claim, or if upon hearing the court determines that the facts shown do not entitle him to redeem, a decree shall be entered which shall forever bar all rights of redemption. Procedure for Contesting Validity of Tax Title Section 70. If a person claiming an interest desires to raise any question concerning the validity of such a title, he shall do so 1 G. L. c. 60, § 76, infra page 383. 382 Taxation in Massachusetts [G. L. c. 60, §§ 71-74 inc. by answer filed in the proceeding within ten days after filing his appearance, or within such further time as may on motion be allowed by the court, or else be forever barred from contesting or raising the question in any other proceeding. He shall also file specifications setting forth the matters upon which he relies to defeat the title; and unless such specifications are so filed, all questions of the valid- ity or invalidity of the title, whether in form of deed or proceedings relating to the sale or taking, shall be deemed to have been waived. Upon the filing of the specifications the court shall hear the parties, and shall enter a decree in conformity with the law on the facts found. Section 71. Any party may claim a jury trial within ten days after filing his answer, but unless so claimed the right to jury trial shall be deemed to be waived. Upon such a claim issues shall be framed therefor in accordance with the practice in the land court. Section 72. Questions of law may be reported by the court or taken to the supreme judicial court for revision by any party aggrieved, in the same manner as in other proceedings in the land court. Deposit of Costs Section 73. The petitioner, at the time of filing his petition, shall deposit with the recorder a sum sufficient to cover the costs of the proceedings as estimated by the court, and the fees chargeable by the court as the case proceeds shall be computed in accordance with section thirty-nine of chapter two hundred and sixty-two, so far as applicable, except that the charge for examination of title shall be the actual amount allowed the title examiner by the court. The money paid into court as aforesaid by the petitioner shall be disbursed directly by the recorder for necessary expenses incurred, and the balance of fees chargeable in each finished case shall be paid over quarterly to the commonwealth. Recording Notice of Petition Section 74. Notice of filing the petition for foreclosure and notice of the final disposition thereof shall be recorded in the registry of deeds, as provided for in land registration proceedings. Collection of Local Taxes 383 G.L.c. 60, §§75,76] Practice and Procedure in Foreclosure Cases Section 75. Practice and procedure under sections sixty-four to seventy-four, inclusive, not therein otherwise provided for, shall conform as nearly as possible to the land court practice, rules, reg- ulations and procedure in relation to matters of land registration. Relief in Equity Section 76. The superior court shall have jurisdiction as to redemption in all cases of taking or sale of land for non-payment of taxes if relief is sought before proceedings for foreclosure of the right of redemption have been begun in the land court, and may grant such right of redemption or other relief as justice may require, fixing the terms therefor, or may refuse the same. The proceedings shall be begun by a bill as in equity, and memoranda, both of the beginning and of the final disposition thereof, shall be recorded or filed in the registry of deeds, similar to those required by sections fifteen and sixteen of chapter one hundred and eighty-four in the case of unregistered land, and to those required by sections eighty-six and eighty-seven of chapter one hundred and eighty-five in the case of registered land. The redemption of land from a valid sale for non-payment of taxes, within or without the period allowed by statute for redemption, is not within the general powers of a court of equity. 1 It was held in 1845 that even when the purchaser at a tax sale had by fraud and deception prevented the owner from redeeming within the statutory period the owner could have no relief in equity. 2 In 1849 however it was provided by statute that " in all cases of sales of real estate for the payment of taxes the supreme judicial court shall have full equity powers." In 1856 the clause " provided relief be sought within five years from such sale " was added to the statute and it appeared in substantially the same form in the General Statutes, the Public Statutes and the codification of 1888. While these statutes were in force it was held that jurisdiction was confined to the supreme judicial court, and that the superior court by general grant of equity powers had not been authorized to deal with redemption from 1 Barker v. Mackay, 168 Mass. 76, 79 (1897). 2 Mitchell v. Green, 10 Met. 101 (1845). 384 Taxation in Massachusetts [G.L. c. 60, §76 tax sales. 3 In 1900 the superior court was given equal power with the supreme judicial court to give relief in equity from tax sales. In 1905 the period within which relief might be sought was extended to six years. In 1915 .the phraseology of the section was modified considerably, the provisions for re- cording added, and the period for instituting proceedings estab- lished as any time before foreclosure proceedings were begun in the land court. The effect of the statute of 1845 was two-fold. In the first place it permitted an owner who was entitled by law to redeem the land, the statutory period not having expired, instead of pursuing his remedy of writ of entry or other proceeding upon the law side of the court, to effect the redemption by proceedings in equity, and to this extent it was merely* a change in remedy. In the second place it gave an owner whose right to redeem at law had been lost by the expiration of the statutory period the privilege of redeeming the land at equity during a subsequent term of years provided the circumstances made it just and equi- table that he be allowed to do so; and to this extent it was a change in substantive rights. The provision for foreclosure of tax titles adopted in 1915 constitutes an alternative method of establishing an equitable right to redeem, and deprived this stat- ute of some of its importance, but it is still in force, and in case the purchaser of a tax title makes no move to foreclose, may be of great service. What circumstances render it just and equitable that an owner should be allowed to redeem after the period for redemp- tion at law has expired cannot be stated with exactness ; but de- ception or evasion by the purchaser, 4 mistake or ignorance of facts by the owner 5 or his minority 6 or absence from the state 7 present grounds for relief upon which courts have acted favorably. » Barker v. Mackey, 168 Mass. 76 (1897). 4 Widersum v. Bender, 172 Mass. 436 (1899); Barry v. Lancy, 179 Mass. 112 (1901); Solis v. Williams, 205 Mass. 850 (1910); Holbrook v. Brown, 214 Mass. 542 (1913). Other grounds recognized have been a misstatement of the amount required for redemption, Davidson v. Stafford, 210 Mass. 145 (1911); a reasonable doubt as to the validity of the assessment under which the sale was made, Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914); failure of a non-resident purchaser' to file name and address of his agent under G. L. c. 60, §47, Davidson v. Stafford. 210 Mass. 145 (1911). * 5 O'Callaghan v. Lancy, 187 Mass. 474 (1905). 6 O'Day v. Bowker, 143 Mass. 59 (1886). 7 Clark v. Lancy, 178 Mass. 460 (1901). Collection of Local Taxes 385 G. L. c. 60, § 76] To maintain a bill in equity for redemption from a tax sale a person must have some title or interest in the land, and if he has lost his rights or conveyed them away he is not entitled to redeem. In general it may be said that to redeem in equity a person must have an interest sufficient to authorize redemption at law. 8 If the bill is seasonably brought, additional parties defendant may be added later; 9 but such parties cannot benefit by the decree unless they can show that their equities are supe- rior to those of the purchaser of the tax titled The right to maintain a bill in equity may be lost by failure to institute it seasonably, although the owner was unaware of the sale, 11 or was a minor. 12 Redemption in equity may be secured only in the direct method provided by statute; 13 and the possible right of the owner to redeem at equity must be recognized as an interest in the land court as long as the right to redeem in equity is out- standing. 14 If the bill to redeem is maintained the court will order the purchaser to make a deed of quitclaim to the owner upon payment of the amount due. 15 When land is sold for non-payment of taxes but by reason of some illegality in the proceedings the sale is void and conveys no title, but the purchaser causes the deed to be recorded and refuses to release to the owner, and the owner is in possession and cannot try his title by writ of entry, he may maintain a bill in equity to remove the cloud upon his title and to compel the purchaser to give him a deed of release; 10 and he has the same right although the purchaser is a city or town 17 or although the sale is void because the statute upon which the assessment was based is unconstitutional. 18 The right to maintain a bill 8 Rogers v. Rutter, 11 Gray 410 (1858); O'Day v. Bowker, 143 Mass. 50 (1886). 9 Clark v. Lancy, 178 Mass. 460 (1901); Solis v. Williams, 205 Mass. 550 (1910). 10 Union Trust Co. v. Reed. 213 Mass. 199 (1912). 11 Gladwin v. French, 112 Mass. 186 (1873). 12 O'Day v. Bowker, 143 Mass. 59 (1886). 13 Dewey v. Donovan, 126 Mass. 335 (1879). 14 Lancy v. Abington Savings Bank, 177 Mass. 431 (1901). 15 Simonds v. Towne, 4 Gray 603 (1855). 16 Russell v. Deshon, 124 Mass. 342 (1878) ; Davis v. Boston, 129 Mass. 377 (1880); Knowlton v. Moore, 136 Mass. 32 (1883); Smith v. Smith, 150 Mass. 73 (1889); Barker v. Mackay, 168 Mass. 76 (1897); White v. Gove, 183 Mass. 333 (1903); Solis v. Williams. 205 Mass. 350 (1910). 17 Davis v. Boston, 129 Mass. 377 (1880). 18 White v. Gove, 183 Mass. 333 (1903). 386 Taxation in Massachusetts [G.L. c. 60, §77 in equity under such circumstances is not derived from the statute set forth at the beginning of this section but rests upon the general equity jurisdiction of the court, and consequently it is not subject to the limitations imposed by that statute. 19 A bill in equity to set aside an invalid tax sale is subject to general equitable principles and when the defect in the assessment was due to the owner's request, and the land has been correctly re- assessed, relief will not be granted unless the owner pays the taxes as re-assessed. 20 An owner may join in one proceeding in equity a bill to remove a cloud on his title and a bill to redeem, both based on the same tax sale and rely on the former if the tax title is held invalid and on the latter if held valid; 21 or he may amend a bill to redeem so that it will become a bill to remove a cloud from his title. 22 If a collector of taxes is about to sell land for a tax which the owner contends is invalid the owner cannot maintain a bill in equity to enjoin the collector from making the sale. 23 The prompt and unembarrassed collection of taxes is considered to be of so much importance to the public that the owner is left under such circumstances to his remedy at law to prevent the sale, by paying the tax under protest and suing to recover it back. If he is unable or unwilling to pay the tax and the sale takes place he may then avoid its effect if the tax is illegal by bringing a bill in equity to remove the cloud upon his title, or, if he has been disseised by the purchaser, by a writ of entry to recover possession. Disposition of Land Bought or Taken by Town Section 77. After foreclosure by a town of the rights of re- demption under a tax title or taking, as hereinbefore provided, the land shall thereafter be held and disposed of like any land belonging to it and held for municipal purposes, and shall not while so held be assessed for taxes. 19 Smith v. Smith, 150 Mass. 73 (1889) ; Barker v. Mackay, 168 Mass. 76 (1897). 20 Curtiss v. Sheffield, 213 Mass. 239 (1913). 21 Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 22 Phelps v. Creed, 231 Mass. 228 (1918). 23 Loud v. Charlestown, 99 Mass. 208 (1868) ; Hunnewell v. Charlestown, 106 Mass. 350 (1871); Norton v. Boston, 119 Mass. 194 (1875); Greenhood v. MacDonald, 183 Mass. 342 (1903); Webber Lumber Co. v. Shaw, 189 Mass. 366 (1905). Collection of Local Taxes 387 G. L. c. 60, § 78] Section 78. Before foreclosure or redemption, taxes on land taken or purchased by a town shall be assessed to the person to whom they would be assessed if the land had not been so taken or purchased. In case of a sale under the following section, such taxes shall be deducted from the proceeds thereof, before any surplus is disposed of as therein provided. In case of foreclosure, any such taxes of which the lien has not expired shall be credited to the col- lector as if collected by him. Prior to 1915 the statutes provided that after land had been taken or purchased by a city or town taxes should be assessed on the land as though it had not been so taken or purchased and should be deducted from the proceeds of the final sale; and after the right of redemption had expired the collector was di- rected to make a final sale of the land, and after deducting taxes, interest, charges, the expenses of sale and subsequent taxes, to deposit the balance with the city or town treasurer to be paid to the person entitled to the land if demanded within five years, otherwise to be retained by the city or town. 1 The stat- utes required a formal notice of sale, and under these statutes it was held that the power of a city or town to dispose of land taken or purchased by it for non-payment of taxes was restricted to a sale by auction in the manner prescribed by the statute after the period of redemption had passed, and a sale in any other way conveyed no title. 2 But although the deed conveyed no title, the payment of the consideration and its acceptance by the city or town effected a payment of the taxes for which the land was sold or taken, and discharged the lien, whether the parties intended such a result or not. 3 If the collector was unable to sell the land, he was required to file an affidavit stating the fact, and the land thereafter remained in the possession and custody of the town until sold. 4 The statute which established the system of making tax titles absolute by foreclosure provided a different method of dealing with land bought or taken by the town which is now embodied in the statutes at the head of this section, but the 1 St. 1909, c. 490, Part II, § § 67, 68. 2 Walsh v. Wilson, 130 Mass. 124 (1881). 3 Langley v. Chapin, 134 Mass. 82 (1883) ; Rogers v. Lynn, 200 Mass. 354 (1909). 4 St. 1909, c. 490, Part II, § 69. 388 Taxation in Massachusetts tG.L. c. 60, §79 earlier statutes have never been repealed ■ and they are still in force with respect to land taken or purchased by a town prior to July 1, 1915. 6 It was held in 1918 that the title created by a sale made after July 1, 1915, was paramount to the title acquired by a city or town by taking or purchase for the taxes of previous years, 7 and in the following year the statute was enacted providing that when a city or town had taken or purchased land for non-pay- ment of taxes, it was not required to sell the land for the taxes of subsequent years which had already been assessed, but the lien for such taxes should continue and such taxes should be paid to the town if the land should be subsequently redeemed. 8 Sale of Lands of Low Value Held by City or Town under Tax Titles Section 79. After two years from the taking or purchase by a town of any lands for non-payment of taxes, the commissioner may, and on written application of its collector shall, inquire into the value of such lands. If the commissioner is of opinion that such lands are of insufficient value to meet the taxes, interest and charges, and all subsequent taxes and assessments thereon, together with the expenses of a foreclosure under section sixty-nine, he shall make affi- davit of such finding, which shall be recorded in the registry of deeds for the district where the town is situated. Upon the recording thereof the collector may sell all the parcels included therein, severally or together, at public auction to the high- est bidder, first giving notice of the time and place of sale by posting a notice of the sale in some convenient and public place in the town fourteen days at least before the sale. If the sale under this section shall not be made within two years after the right of redemption under section sixty-two from the tax sale or taking has expired, it shall be made by the collector for the time being when he deems best, or at once upon service on him of a written demand by any person interested therein. The collector shall execute and deliver to the highest bidder a deed, without covenant except that the sale has in all particulars 5 G. L. c. 282. G St. 1915, c. 237, § 20. St. 1909, c. 490, Part II, § 68 was amended by St. 1918, c. 257, §56. 7 Chadwick v. Cambridge, 230 Mass. 580 (1918). 8 St. 1919, c. 263, now G. L. c. 60, § 61, supra page 373. Collection of Local Taxes 389 G.L.c. 60, §§80, 81] been conducted according to law. Title taken pursuant to a sale under this section shall be subject to sections sixty-four to seventy -eight, inclusive. If the amount received from the sale is more than the taxes, inter- est and charges, and subsequent taxes and assessments, on all lands included in the sale, together with the expenses thereof, the balance shall be deposited with the town treasurer to be paid to the person entitled thereto, if demanded within five years, otherwise it shall inure to the town. If such surplus results from the sale of several parcels for a lump sum, it shall be held as aforesaid for the several owners in proportion to the prices at which the several parcels were originally taken- or purchased by the town. Section 80. If no person bids at such a sale, or if the person to whom the land is sold does not within ten days pay to the collector the sum bid by him, the collector shall make an affidavit of the fact, which shall be recorded in the registry of deeds within thirty days after the date on which the land was offered for sale, after which said affidavit shall be in the custody of the town treasurer, and the same, or a copy thereof, certified by the register of deeds, shall be prima facie evidence of the facts therein stated. Section 81. The collector shall, within thirty days after the recording of said affidavit, take possession of said land in behalf of the town. In many cities and towns there are tracts of land of little or no value, consisting of lots sold in the course of an unsuccess- ful or perhaps fraudulent land development, woodland from which the wood has been cut and other equally worthless parcels, the taxes upon which no one is willing to pay; and since the cost of selling the land is often greater than its value, no one is willing to bid it in, and in the hands of the city or town such land is more of a liability than an asset. The foregoing statute was first enacted in 1915 * as a means of solving the difficulty, by enabling land purchased or taken by a city or town for non-payment of taxes to be sold for less than the amount due, and to authorize the grouping together in one sale at a lump sum of small parcels of little value. As originally drawn the act contained several defects, which were rectified in 191S. 2 Under the 1918 statute, the value is 1 St. 1915, c. 56. 2 St. 1918, c. 257, § 52. This statute did not go into effect until 1921, St. 1920 § 2. The amendments were (1) to provide means for bringing the matter 390 Taxation in Massachusetts [G.L.c. 60, §§82-84 inc. to be compared with the expenses of a sale if the sale or taking occurred prior to July 1, 1915, otherwise with foreclosure. The General Laws authorize comparison with the expenses of fore- closure only; but the 1918 statute has not been repealed. 3 Proceedings if Tax Title is Deemed Invalid Section 82. If a collector has reasonable cause to believe that the title to land sold for non-payment of taxes or of assessments, a lien for which is enforceable by a sale of land, is invalid by reason of an error, omission or informality in the assessment or sale, he may, within two years after the date of the deed of such land, give notice to the record owner thereof, requiring him, within thirty days there- after, to release any interest which he may have in such land under said deed, and to receive from the town the amount paid therefor with interest at ten per cent or to file with the collector a written statement that he refuses to release such interest. Such statement, if recorded in the registry of deeds, shall release the town from any liability upon the warranty in said deed. Section 83. If, within thirty days after such notice, such owner does not comply therewith, the collector shall cause a copy thereof, with an affidavit by himself or by a disinterested person of the serv- ice thereof and of the facts in the case, to be recorded in the registry of deeds. A note of reference to the record of said copy shall be made on the margin of the record of the collector's deed therein referred to; and from the time of such record the interest payable by reason of a breach of warranty in such deed shall cease, and all right and title acquired under such deed shall be held to be released. The collector shall give notice of such proceedings to the town treasurer, who shall, on reasonable demand, pay over out of any funds in his hands the amount due in respect of said deed to the person entitled thereto. Section 84. If the invalidity of a title described in section eighty- two was caused by an error, omission or informality in the assessment, the collector, after obtaining from the holder of the deed a release to the attention of the commissioner and requiring him to act; (2) to make the statute conform to the foreclosure proceedings authorized by St. 1915, c. 237; (3) to dispense with publication; (4) to make it clear the several parcels could be sold at one sale for a lump sum; (5) to provide that the deed should be without covenants, and not a quitclaim deed. 3 G. L. c. 282. Collection of Local Taxes 391 G.L.c. 60, §§85,86] of his interest or after causing a copy of the notice to be filed and recorded as provided in the preceding section, shall forthwith notify the board by which the tax or assessment was laid, which shall forthwith reassess it as provided in section seventy-seven of chapter fifty-nine. If such invalidity was caused by an error, omission or informality in the proceedings of the collector, he shall, after obtain- ing such release or after filing and recording such copy, forthwith col- lect the unpaid tax or assessment in conformity to law. If the collector has reasonable cause to believe that a tax title, held by a town under a sale or taking for non-payment of tax, is invalid by reason of any error, omission or informality in the assessment, sale or taking, he may disclaim and release such title by an instrument under his hand and seal, duly recorded in the registry of deeds. A defect in the collector's deed, consisting of an incorrect • recital of the cause of sale, is an " error, omission or informality in the . . . sale " within the meaning of the last sentence of section eighty-four of the statute and justifies the filing of a disclaimer under that statute. 1 The deed is the culminating act or finishing touch of the sale without which it would be incomplete. The assessors may re-assess a tax under the first sentences of the statute whether the title is held by a city or town and the collector has disclaimed under the last sentence, or by a third party and the collector has given notice of invalid- ity under the two preceding sections. 2 Lien of Co-Tenants Section 85. A tenant in common or joint tenant, who pays the entire tax assessed upon land held jointly or in common, shall have a lien upon the interest of each of his co-tenants, to secure the payment to him of the proportion of such tax payable by each of said co-tenants respectively, with the costs of enforcing the same; but any person whose tax has been so paid by his co-tenant shall have the same right to recover it back if illegally assessed as he would have had if the tax had been paid under a protest by him in writing. Section 86. Such lien may be enforced in the manner provided in chapter two hundred and fifty-four for enforcing liens on build- 1 Nickerson v. Hyde Park. 209 Mass. 3«5 (1911). 2 Nickerson v. Hyde Park, 209 Mass. 365 (1911). 392 Taxation in Massachusetts [G. L. c. 60, § 8b ings and land under written contracts for the erection, alteration, repair or removal of buildings or structures; but shall be dissolved, unless the person desiring to avail himself thereof, or some one in his behalf, subscribes and makes oath to a certificate setting forth a description, sufficiently accurate for identification, of the property intended to be covered by the lien, the names of the several co-tenants and the interest of each therein, the amount of the tax paid, and the amount due from each co-tenant, and within thirty days after the day of payment of said tax records such certificate in the registry of deeds, and unless a bill in equity to enforce the lien is commenced within sixty days after the date of recording said certificate. Such lien shall have priority over all liens and encumbrances arising after the riling of the certificate required by this section, but shall not be valid against a mortgage actually existing and duly recorded prior to the recording of said certificate, or against any lien existing under section one or section three of chapter two hundred and fifty-four prior to the filing of the certificate. No person except the co-tenant who paid the tax, or a person claiming by, through or under him, shall be made a party plaintiff in a bill brought under this section. When, after land held by tenancy in common has been sold for non-payment of taxes, one of the co-tenants pays the purchaser the precise amount necessary to redeem the land and takes a deed of release, in the absence of evidence to the contrary such a trans- action will be taken to be a redemption and the tax lien discharged, unless the co-tenants of the person making the payment refuse to contribute their share. 1 If a co-tenant purchases the tax title from a third party to whom the original purchaser has con- veyed, whether he would acquire a paramount title is a question not free from difficulty. When there has been a deed of the tax title to one co-tenant put on record, it is not necessary for him to take the statutory steps to preserve the lien for contribution; for he already has the record title, and unless his co-tenants make or tender con- tribution they have no interest in the property which they can enforce, either at law or in equity. 2 One owner in common who pays the taxes may have the lien enforced against the widow of his co-tenant, although the 1 Hurley v. Hurley, 148 Mass. 444 (1889). 2 Hurley v. Hurley, 148 Mass. 444 (1889). Collection of Local Taxes 393 G.L.c. 60, §§87-90 inc.] real estate of her husband has never been set off to her in the statutory manner. 3 Decision of Town whether to Sell or Take Section 87. A city or town may, by ordinance or by-law, re- spectively, direct whether its collector shall exercise the power of sale or the power of taking to enforce the lien for taxes; and in default of such ordinance or by-law the collector may exercise either power at his discretion; but the passage of any such ordinance or by-law shall not render invalid any proceedings then pending. MISCELLANEOUS PROVISIONS Commission of Tax List to Sheriff Section 88. When the tax list and warrant of the assessors is committed to the sheriff or his deputy, he shall forthwith post, in some public place in the town, an attested copy of said list and warrant; and shall make no distress for a tax within thirty days thereafter. Section 89. If a person pays his tax within said thirty days, the officer shall receive from him for his fees five per cent on the sum assessed; but if a tax remains unpaid after said thirty days, he shall collect it by distress or imprisonment, or by sale of land as a collector would do. The officer may also levy his fees for service and travel in the collection of each person's tax, as in other cases of distress and commitment, or sale of land. Section 90. If a town appoints its treasurer as the collector of taxes, he may issue his warrants to the sheriff of the county, or his deputy, or to any constable of the town, returnable in sixty days, requiring them to collect any or all taxes due. Such warrants shall be substantially in the same form, and shall confer the same powers as warrants by assessors to collectors. Sections eighty-eight and eighty-nine evidently have refer- ence t.o action under that portion of section fifty-three of chap- ter fifty-nine which provides that if no collector has been chosen and there is no constable the assessors shall commit their tax list and warrant to the sheriff or his deputy. 1 Section ninety should not be confused with section thirty- 3 Naylor v. Nourse, 231 Mass. 341 (1918). 1 Supra page 280. 394 Taxation in Massachusetts [G.L.c. 60, §91 four of the same chapter, which relates to the employment of a sheriff or constable to enforce the collection of a particular tax which has remained unpaid for fourteen days after demand; 2 whereas this statute relates to the delegation of all or part of the collector's functions. If this statute does not authorize a constable to make an arrest outside of his own town, it at any rate does not limit the powers of officers under warrants given for a special purpose by authority of section thirty-four. 3 A town may authorize its collector of taxes to use all means of collecting taxes which a town treasurer may use when ap- pointed a collector of taxes, although the treasurer and the collector are different persons, 4 and after such a vote the col- lector may issue general warrants to the officers designated above; but a collector may issue such warrants only in rela- tion to taxes assessed for the year to which the vote applied, and cannot lawfully commit the taxes of previous years to a sheriff or constable by general warrant. 5 Restraint of Foreign Corporations and Non-Residents Section 91. When any foreign corporation or non-resident per- son, doing business in the commonwealth, shall for sixty days neglect, refuse or omit to pay a tax lawfully assessed and payable, any court having jurisdiction ir. equity may on petition of the collector of taxes of the town where the tax is assessed restrain said corporation or person from doing business in the commonwealth until said tax, with all incidental costs and charges, shall have been paid. Service of process upon any such petition may be made by any officer duly quali- fied to serve process, by leaving a duly attested copy thereof at the place where the business is carried on. This statute was first enacted in 1902 and proved useful in enforcing the collection of taxes assessed upon foreign corpora- tions which were desirous of continuing to do business in this commonwealth but which had covered their tangible property with such a network of perhaps fraudulent assignments that an officer might hesitate to seize it on distress or attachment. Under the present system of taxing foreign corporations, the utility of 2 Supra page 340. 3 Beard v. Seavey, 191 Mass. 503 (1906). 4 G. L. c. 41, § 38, supra page 158. 5 Smith v. Keniston, 100 Mass. 172 (1868). Collection of Local Taxes 395 G.L.c. 60, §§ 92,93] this provision is less apparent. There is however no doubt that a state may constitutionally impose such a liability as this as a condition upon which a foreign corporation not engaged in interstate commerce is permitted to do business within its limits. The statute has not been used frequently, if at all, against non-resident persons, and there may be greater doubts of its constitutionality as applied to them, for one state cannot con- stitutionally exclude residents of other states from doing busi- ness within its limits, or impose greater liability upon them than is imposed upon its own citizens. 1 The provision that service may be made by leaving a copy of the petition at the place where the business is carried on is reasonable and valid, and is not repealed by a subsequent gen- eral enactment concerning the service of process upon foreign corporations. 2 Appointment of Deputy Collectors Section 92. The board of aldermen or selectmen may empower any officer authorized to collect taxes to appoint such deputies as he deems expedient. Any such deputy may be a woman. Such depu- ties shall give bond for the faithful performance of their duties in such sum as the aldermen or selectmen may prescribe and shall have the powers of collectors. The appointment of employees of the collector of taxes of any city, except Boston, 1 is not subject to the regulations of the board of civil service commissioners. 2 Withholding Money Due Persons Owing Taxes Section 93. The treasurer or other disbursing officer of any town may, and if so requested by the collector, shall, withhold payment of any money payable to any person whose taxes are then due and wholly or partly unpaid to an amount not exceeding the unpaid tax with inter- est and costs. The sum withheld shall be paid or credited to the collec- tor, who shall, if required, give a written receipt therefor. The person taxed may in such case have the same remedy as if he had paid such 1 Supra, Part I, § 17. 2 Scollard v. American Felt Co., 194 Mass. 127 (1907). 1 St. 1913, c. 672. 2 G. L. c. 31, § 5. 396 Taxation in Massachusetts [G.L.c. GO, §§94,95 tax after a levy upon his goods. The collector's rights under this section shall not be affected by any assignment or trustee process. Apart from the provisions of this section a city or town has not the power to set off the amount of unpaid taxes against a claim against it for money due the person assessed. 1 Collector's Accounts to be Exhibited. Bi-Monthly Section 94. The aldermen or selectmen may require the collector once in- two months to exhibit to them a true account of all money received on the taxes committed to him, and to produce the treas- urer's receipts for all money paid into the treasury by him. Personal Liability of Collector Section 95. The collector shall be credited with all sums abated; with the amount of taxes assessed upon any person committed to jail for non-payment of his tax within one year from the receipt of the tax list by the collector, and who has not paid his tax; with any sums which the town may see fit to abate to him, due from persons committed after the expiration of a year; with all sume withheld by the treasurer of a town under section ninety -three ; and with the amount of the taxes and charges where land has been purchased or taken by the town for non-payment of taxes. When a collector is credited with the amount of taxes assessed upon any person committed to jail for the non-payment of his tax, who has not paid his tax, said collector shall also be paid* and credited with the fees and charges which have become a part of said taxes and to which he or the officer acting under his warrant is entitled. In an action by the town against the collector, insolvency or poverty of a person assessed is no defense to the collector, if he allows a year to elapse without arresting such person; 1 but if the collector is removed within a year of the time that the tax list is committed to him, such insolvency or poverty can be shown in justification. 2 A collector de facto who has not been legally appointed is accountable to the town only for the taxes actually collected by him. 3 If the warrant is insufficient the 1 Pierce v. Boston, 3 Met. 520 (1842) ; Commonwealth v. Phoenix Bank, 11 Met. 129 (1846). 1 Colerain v. Bell, 9 Met. 499 (1845). 2 Colerain v. Bell, 9 Met. 499 (1845). 3 Lincoln v. Chapin, 132 Mass. 470 (1882). Collection of Local Taxes 397 G.L.c. 60, §95] collector is justified in not serving it, but if he proceeds to col- lect any part of the tax he is accountable therefor. 4 The defal- cation of a collector may be the subject of set-off in an action by him against the town; 5 and it is a fiduciary debt not affected by his discharge in bankruptcy. 6 If a treasurer and collector pays his private debts with the money he has collected, using the town's checks drawn by himself, the persons who receive such checks must refund the amount thereof to the town, whether the checks are payable directly to the creditor 7 or to the treas- urer and indorsed by him. 8 An action of tort by an individual citizen against the collector for arresting his person or distraining bis property in enforcing the payment of a tax is not an effectual means of contesting the validity of the proceedings for assessing the tax. If the col- lector is acting in pursuance of a warrant from the assessors, and the assessors have jurisdiction of the subject-matter and the process is regular on its face, the collector is not bound to ex- amine into the legality of the previous proceedings and cannot be affected by the existence of any fact not disclosed by the war- rant which deprives them of jurisdiction in the particular case, and he is protected by the warrant from liability for its execu- tion. 9 A warrant that is bad on its face is no protection to the col- lector; 10 but a warrant will not be vitiated by slight and tech- nical defects; 11 and it is not required to be in a precise and elab- orate form. 12 It need not recite the facts necessary to authorize its issuance; 13 and it is not invalid for omitting to state the steps * Williamstown v. Willis, 15 Gray 427 (1860). 5 Donelson v. Colerain, 4 Met. 430 (1842). 8 Morse v. Lowell, 7 Met. 152 (1843). 7 Newburyport v. Fidelity Insurance Co., 197 Mass. 596 (1908). 8 Newburyport v. Spear, 204 Mass. 146 (1910). 9 Sprague v. Bailey, 19 Pick. 436 (1837) ; Upton v. Holden, 5 Met. 360 (1842) ; Howard v. Proctor, 7 Gray 128 (1856); Eames v. Johnson, 4 Allen 382 (1862); Hubbard v. Garfield, 102 Mass. 72 (1869); Rawson v. Spencer, 113 Mass. 40 (1873) ; Cone v. Forest, 126 Mass. 97 (1879). A tax-warrant otherwise valid on its face, addressed to one as "constable and collector" who is authorized to act as collector at the time of its delivery to him, although not at the time it bears date, will protect him from liability for acts as collector under it. Hays v. Drake, 6 Gray 387 (1856). !<> Eames v. Johnson, 4 Allen 382 (1862). 11 Barnard v. Graves, 13 Met. 85 (1847). 12 For a fuller discussion of the form and requirements of the warrant see G. L. c. 59, § 55, supra page 280. 13 Cheever v. Merritt, 5 Allen 563 (1863); Sherman v. Torrey, 99 Mass. 472 (1868). 398 Taxation in< Massachusetts [G. L. c. 60, § 95 that the collector is required to take. 14 If its direction to the collector is to act in violation of law, he is not liable to the person assessed if he collects the tax in accordance with law, in disregard of the warrant. 15 When the collector issues a warrant to a deputy sheriff or a constable, the warrant should recite the facts necessary to au- thorize its issuance, but if it does not the officer may prove the facts if he can. 16 The proper function of an action of tort against the col- lector is to act as a remedy for a violation of the provisions of law relating to the collection of taxes, and it is the only remedy for such violation ; for a tax lawfully assessed but extorted from the taxpayer by unlawful methods cannot be recovered from the city or town. 17 The collector is personally liable for arresting a person who exhibits sufficient. goods on which he can levy; 18 or for distraining and selling goods in excess of the requirements of the case; 19 or for any interference with individual rights which constitute a substantial departure from the requirements of the statutes prescribing his duties. 20 In an action based on the collector's illegal acts his return is only prima facie evidence of his doings and may be controlled by a greater weight of evi- dence contradicting it. 21 If however it is impeached by evidence of facts which would equally well justify the collector, the vari- ance is immaterial. 22 It would seem that when a collector by duress enforces pay- ment of an invalid tax, at least when the circumstances are such that he is not protected by his warrant, the person paying it might recover it back in an action of contract for money had and received. As such a remedy would be less effective than 14 King v. Whitcomb, 1 Met. 328 (1840); Westhampton v. Searle, 127 Mass. 502 (1879); Leominster v. Conant, 139 Mass. 384 (1885). 15 Barnard v. Graves, 13 Met. 85 (1847). " Cheever v. Merritt, 5 Allen 563 (1863); Sherman v. Torrey, 99 Mass. 472 (1868). If the warrant contains no sufficient recitals and there was no authority in fact for its issuance, a sheriff who receives and detains in the county jail a person arrested by a constable is personally liable. Smith v. Keniston, 100 Mass. 172 (1868). « Dunbar v. Boston, 112 Mass. 75 (1873). 18 Lothrop v. Ide, 13 Gray 93 (1859) ; Hall v. Hall, 3 Allen 5 (1861). " Cone v. Forest, 126 Mass. 97 (1879); Warr v. Collector of Taunton, 234 Mass. 279 (1920). 20 Pierce v. Benjamin, 14 Pick. 356 (1833) ; Wilson v. Shearer, 9 Met. 504 (1845); Barnard v. Graves, 13 Met. 85 (1847). 21 Lothrop v. Ide, 13 Grav 93 (1859). 22 Barnard v. Graves, 13 Met. 85 (1847). Collection of Local Taxes 399 G.L.c. 60, §§96,97] an action of tort against the collector, because the damages would include only the amount of the tax and interest, and less certain than an action of contract against the city or town be- cause a judgment might be more difficult to enforce, it does not seem to have been employed against city or town collectors; but it has been held that such an action would lie against an officer of the state who by duress enforced payment of a tax levied by virtue of an unconstitutional statute. 23 A collector cannot be held personally liable on a contract signed by him as collector, when the parties contemplated that the obligation was the town's. 24 Removal of Collector Section 96. If a collector becomes insane, absconds or removes from the town or in the judgment of the aldermen or selectmen is about to so remove or is otherwise unable to discharge his duty, or if he refuses on demand to exhibit to the aldermen or selectmen his books, vouchers and accounts of collections as provided in this chap- ter, the aldermen or selectmen may remove him from office. Commission of Uncollected Taxes to Collector's Successor Section 97. If a collector dies or is removed from office or if the term of office of a collector who is paid by a fixed salary expires before the collection of the taxes committed to him is completed, the assessors shall commit to his successor the list of taxes uncollected with their warrant. If the collector is his own successor he shall complete the collection of the taxes as a part of the duties of his new term of office and not as a part of the duties of his former term of office. Whether taxes have been collected by a collector prior to his death is a fact which may be proved by any competent evi- dence. Proof that payment had been entered on the collector's books, or that the collector had given the taxpayer a receipt, or evidence of witnesses who saw the payment would be com- petent evidence; but admissions by the collector that the tafrx had been paid would not be competent. 1 23 Cunningham v. Munroe, 13 Gray 471 (1860). An action against the col- lector is the recognized method of contesting the legality of a federal tax. 24 Rogers v. French. 214 Mass. 337 (1913). J Lawrence v. Kimball, 1 Met. 524 (1840). 400 Taxation in Massachusetts [G. L. c. 60, § 98 Remedies for Taxes Illegally Assessed Section 98. No action to recover back a tax shall be main- tained, except as provided in sections sixty and eighty-five, unless commenced within three months after payment of the tax nor unless such tax is paid either after an arrest of the person paying it, a levy on his goods, a notice of a sale of his land, a written protest signed by him, or a withholding of money due him under section ninety- three. In an action founded on an error or irregularity in the assess- ment or apportionment of a tax, only the amount in excess of the tax for which the plaintiff was liable shall be recoverable; and no sale, contract or levy shall be avoided solely by reason of such error or irregularity. ACTION AT COMMON LAW TO RECOVER BACK A TAX The method of contesting the validity of a tax so familiar in recent years of paying the tax under protest and bringing an action of contract against the city or town for money had and received to recover it back is of comparatively recent origin. Up to the end of the eighteenth century it was generally considered that a corporation, whether municipal or private, could not be bound except by writing under its corporate seal, and for that and other more or less technical reasons could not be liable in an action based upon a tort or a simple or an implied contract. It was the practice when one had a grievance against a corporation to bring an action against the individual officers or agents of the corporation who committed the wrong; in case of taxes il- legally assessed and collected by distress or imprisonment to bring an action of trespass against the assessors. 1 When corpo- rations of the modern type began to become really important factors in the life of the people, to have exempted them wholly from liability except upon agreement under the corporate seal would have led to such undesirable results that the academic notion of corporate powers yielded swiftly to more practical views, and the technical difficulties were readily swept away. 1 In Stetson v. Kempton, 13 Mass. 272 (1816)), an action of trespass was maintained against the assessors of a town for assessing; a tax in accordance with an invalid vote of the town, whereby plaintiff's property was distrained and sold, the court saying: " If they (the assessors) are not liable to an action for causing an arrest, or the seizure of property, for the non-payment of an illegal tax, it is difficult to find any remedy for an injured citizen in cases of this nature." As to liability of assessors for assessing an illegal tax see supra page 314. Collection of Local Taxes 401 G. L. c. 60, § 98] In 1807 a private corporation was first held liable in Massa- chusetts on an implied contract, 2 and three years later in tort, 3 and soon afterward we find actions of assumpsit 4 and trespass on the case 5 being maintained against municipal corporations. In 1823 a statute was enacted materially restricting the personal liability of assessors for wrongfully assessing a tax, 6 and almost immediately thereafter it was held that an action of assumpsit for money had and received could be maintained against a parish to recover the amount of a tax illegally assessed against a person who was not a member of the parish and collected by distress and sale of his property. 7 This was probably the authority upon which since that time many similar actions have been brought against cities and towns; 8 and it has been uniformly held that when a tax is wholly void and has been paid under duress an action lies to recover it back. 9 The action however is strictly an action for money had and received and not one for damages. When a tax illegally assessed is collected by distress and sale of the property of a person so assessed, he can recover only the amount of the tax and interest, although the value of the property sold may have been far greater than what it brought at the forced sale, and the costs of the distress as well as the amount of the tax were deducted from the proceeds. 10 When the property distrained is not actu- ally seized, and the sale is void on its face, the owner can recover nothing as neither his possession nor ownership in the property has been interfered with. 11 2 Gray v. Portland Bank, 3 Mass. 364 (1807). 3 Riddle v. Proprietors of the Locks and Canals, 7 Mass. 169 (1810). 4 Fiske v. Needham, 11 Mass. 452 (1814); Taft v. Montague, 14 Mass. 281 (1817); Jones v. Lancaster, 4 Pick. 149 (1826). In the two cases first cited the plaintiffs did not recover; but it was assumed that the defendant was liable to the action if the facts warranted it. 5 Baker v. Boston, 12 Pick. 184 (1835); Thayer v. Boston, 19 Pick. 511 (1837); Anthony v. Adams, 1 Met. 284 (1840). 6 St. 1823, c. 138, now G. L. c. 59, § 87, supra page 314. 7 Sumner v. First Parish in Dorchester, 4 Pick. 361 (1826). 8 Lincoln v. Worcester, 8 Cush. 55, 60 (1851). 9 Preston v. Boston, 12 Pick. 7 (1831), and other cases too numerous to. cite. The most recent is Williams v. Acton, 219 Mass. 520, 524 (1914). 10 Dow v. First Parish in Sudbury, 5 Met. 73 (1842); Shaw v. Becket, 7 Cush. 442 (1851). 11 Noyes v. Haverhill, 11 Cush. 338 (1853). 402 Taxation in Massachusetts [G. L. c. 60, § 98 ACTION AT COMMON LAW IN CASE OF OVER- ASSESSMENT There is an important limitation upon the right to main- tain an action of contract at common law to recover a tax illegally assessed; the action does not lie unless the entire tax assessed against the plaintiff is void. If the taxpayer's complaint is merely that the tax assessed upon him is excessive in amount, whether such excess is due to the over-valuation of property which he owns and which is subject to taxation, or the inclusion in the tax assessed against him of property which he does not own or which is not subject to taxation, or some error or irreg- ularity in the assessment of part of his property, his only remedy is a petition for abatement in the statutory form. This propo- sition was established within two years of the time when it was first decided that such an action would lie at all, 12 and there are few legal doctrines that have been more frequently re- iterated. This doctrine is not based upon technicalities, nor is its principal service a trap for unwary litigants. The statutes have provided a procedure for the abatement of taxes, have carefully guarded the rights of the public by requiring the filing of a sworn list as preliminary to an abatement and the bringing of the petition within six months of the date of the tax bill, have arranged for speedy hearing and disposition of the application and have endeavored to secure a tribunal better qualified to pass upon the questions involved than a jury. If the taxpayer's remedy by action of contract at common law was concurrent with that by petition for abatement he might by bringing suit any time within six years from the time of payment, after the assessors had been changed and perhaps some of them had died, and evidence had been lost, and without filing a sworn list, transfer the duty and business of forming a valuation and assess- ing and levying taxes from the domestic tribunal to which the law has committed it to a court of justice settling facts on evi- dence by a jury, and with very inadequate means for the per- formance of that duty to the satisfaction of anybody. The existence of the statutory provisions for abatement, with their carefully drawn restrictions and conditions, is almost equivalent to a declaration of the legislative intention that another unre- 12 Osborn v. Danvers, 6 Pick. 98 (1828). Collection of Local Taxes 403 G.L.c. 60, §98] stricted remedy shall not exist. The decision that such action will not lie is not based upon the mere form of the remedy- where a real grievance is shown, but it results from a view of the fundamental principles on which the whole system of public taxation is founded. 13 There are however some limitations and qualifications upon this rule. Real estate and personal property are treated as separate objects of taxation, so that a person who is not taxable for any real estate but is wrongly assessed upon a parcel of land which he does not own or which is exempt from taxation may pay the tax under protest and recover it back notwith- standing that he is rightly taxed on personal property in the same city or town; 14 but separate parcels of real estate are not considered as separate objects of taxation for this purpose even if they are separately assessed, and a person who is rightly taxed upon one parcel cannot maintain an action to recover back a tax upon another parcel in the same city or town on which he was improperly assessed. 15 The same rule applies to personal property. An inhabitant of a city or town who is properly taxable on his poll or on some items of personal estate cannot maintain an action of contract to recover back a tax upon certain other items of personal estate for which he should not have been taxed; 16 and a non-resident who is wrongly taxed on certain items of personal property in a city or town is left to his remedy by petition for abatement if he owns any personal property which is properly taxed in the city or town in question; 17 but a non-resident who has no 13 Lincoln v. Worcester, 8 Cush. 55 (1851). 14 Preston v. Boston, 12 Pick. 7 (1831); Middlesex Railroad v. Charles- town, 8 Allen 330 (1864); Hicks v. Westport, 130 Mass. 478 (1881); Ingram v. Cowles, 150 Mass. 155 (1889). 15 Boston Water Power Co. v. Boston, 9 Met. 199 (1845); Howe v. Boston, 7 Cush. 273 (1851); Lincoln v. Worcester, 8 Cush. 55 (1851); Salmond v. Hanover, 13 Allen 119 (1866) ; Massachusetts General Hospital v. Somerville, 101 Mass. 319 (1869) ; Chapel of the Good Shepherd v. Boston, 120 Mass. 212 (1876); Richardson v. Boston, 148 Mass. 508 (1889); Schwartz v. Boston, 151 Mass. 226 (1890); St. James Educational Institute v. Salem, 153 Mass. 185 (1891); Bates v. Sharon, 175 Mass. 293 (1900); All Saints Parish v. Brookline. 178 Mass. 404 (1901); Lancy v. Boston, 186 Mass. 128, 132 (1904); Sullivan v. Boston, 198 Mass. 119 (1908). 16 Watson v. Princeton, 4 Met. 599 (1842) ; Bates v. Boston, 5 Cush. 93 (1849); Lincoln v. Worcester, 8 Cush. 55 (1851); Middlesex Railroad v. Charles- town, 18 Allen 330 (1864); Wellington v. Belmont, 164 Mass. 142 (1895). 17 Hicks v. Westport, 130 Mass. 478 (1881); Norcross v. Milford, 150 Mass. 237 (1889); Sullivan v. Ashfield, 227 Mass. 24 (1917). 404 Taxation in Massachusetts [G. L. c. 60, § 98 personal property in the city or town that is properly taxable there is not barred by his ownership of real estate in the city or town from maintaining an action of contract to recover a tax improperly assessed to him in respect to personal prop- erty. 18 The same principles apply to a fiduciary as to a person assessed in his individual capacity. A fiduciary cannot main- tain a common law action to recover a portion of a tax assessed upon him, upon the ground that the tax is excessive; 19 and this rule applies when the entire tax assessed upon him as a fiduciary is invalid, if he is properly taxable in any amount however small in his individual capacity; 20 but if he is not properly taxable in the city or town either as a fiduciary or in his individual capac- ity he may recover in an action at common law a tax assessed upon him as fiduciary. 21 A tax on a partnership is on the other hand a separate tax, and although if the partnership holds any taxable property of the class assessed its only remedy for over- assessment is a petition for abatement, 22 it is not barred from recovering a tax that is wholly invalid by reason of the owner- ship of taxable property by the partners individually. 23 An omitted assessment on newly discovered property is part of the annual tax though assessed at a different time, and a person whose original tax was valid cannot recover back such an assessment in an action of contract although none of the newly discovered property assessed was really taxable to him. 24 With regard to betterment assessments that have been paid under protest, any ground of objection which does not go to show the whole proceeding to be a nullity is not a proper basis for an action of contract to recover back the money paid; 25 but when such an assessment is void the person assessed is not pre- cluded from recovering it back by reason of his ownership of 18 Preston v. Boston, 12 Pick. 7 (1831;. 19 Sears v. Nahant, 221 Mass. 435 (1915). 20 Bourne v. Boston, 2 Gray 494 (1854); Harrington v. Glidden, 179 Mass. 486 (1901). 21 Williams v. Acton, 219 Mass. 520 (1914). 22 Oliver v. Lynn, 130 Mass. 143 (1881). 23 Little v. Cambridge, 9 Cush. 298 (1852); Oliver v. Lynn, 130 Mass. 143 (1881); Spinney v. Lynn, 172 Mass. 464 (1899). 24 Harwood v. North Brookfield, 130 Mass. 561 (1881). 25 Wright v. Boston, 9 Cush. 233 (1852); Stark v. Boston, 180 Mass. 293 (1902). For a discussion of the irregularities in assessing a betterment assess- ment that will render it void see infra page 690. Collection of Local Taxes 405 G. L. c. 60, § 98] real estate in the same city or town properly subject to general taxation. 26 When there has been an over-valuation of a parcel of land, and the land is sold after the date as of which the tax is assessed but before it is paid, the purchaser is without any means to secure a reduction of the tax, for he cannot maintain an action of contract to recover back the portion of the tax attributable to the over-valuation 27 since such an action is not the remedy for over-valuation and he cannot apply for an abatement, be- cause not being the person assessed he is not a person aggrieved within the meaning of the statute. 28 ACTION AT COMMON LAW IN CASE OF INFORMALITY The action of contract to recover back a tax furnishes a con- venient remedy when the assessment has not been made in accordance with law. A taxpayer is not however necessarily en- titled to have a tax declared invalid and to recover it back from the city or town because every provision of the statutes relating to the assessment of taxes was not complied with. All those provisions which are intended for the security of the citizen, for securing an equality of taxation and to enable everyone to know with reasonable certainty for what polls and for what real and personal estate he is taxed, and for what all those who are liable with him are taxed are mandatory. They are conditions precedent to a valid tax and if they are not observed the citizen is not legally assessed. But many regulations are made by statute, designed for the information of the assessors and other officers and intended to promote method, system and uni- formity in the modes of procedure, the compliance or non- compliance with which in no respect affects the rights of taxpaying citizens. These may be considered merely direc- tory, and the non-compliance with them does not make the tax invalid. 29 If the illegality affects only part of the assessment, as when the tax is levied in part to raise 26 Dexter v. Boston, 176 Mass. 247 (1900) ; Smith v. Boston, 194 Mass. 31 (1907). 27 Sullivan v. Boston, 198 Mass. 119 (1908). 2 « Dunham v. Lowell. 200 Mass. 468 (1909). 29 Torrey v. Millbury, 21 Pick. 64 (1838). See also, Sprague v. Bailey, 19 Pick. 436 (1837); Tobey v. Wareham, 2 Allen 594 (1861); Westhawipton v. Searle, 127 Mass. 502 (1879); Noyes v. Hale, 137 Mass. 266 (1884); Bemis v. Caldwell, 143 Mass. 299 (1887). 406 Taxation in Massachusetts [G. L. c. 60, § 98 money for unauthorized purposes, the taxpayer can recover only the illegal excess. 30 When however there is no lien on a piece of real property or the lien has expired and the collector by mistake in his rights threatens to enforce the payment of a tax assessed upon a former owner of the property by a sale of the property, one who has purchased it since the assessment may instead of resisting the collector or resorting to other rem- edies pay the tax under written protest and bring suit to recover the amount paid. 31 This result has been reached as an inference from the statute relating to payment under protest and it seems a just conclusion; for a person so threatened is not permitted to apply for an abatement of a tax which was not assessed upon him and unless he may protect himself in this way he must run the risk of letting the estate be sold and having the sale subse- quently declared invalid; but when a person who has been legally assessed is compelled to pay the tax by unlawful methods employed by the collector he cannot recover the tax in an action of contract against the city or town. 32 PAYMENT UNDER DURESS OR PROTEST Upon general principles of common law it was early held that a person who voluntarily paid an illegal tax could not maintain an action to recover it back, even though he paid it under protest; 33 but that a person who had paid a tax to a collector upon demand when the collector held a warrant au- thorizing him to seize the goods or arrest the body of the person on whom the demand was made and such person had no oppor- tunity to contest the validity of the warrant in court before it was executed, could not be said to pay voluntarily, and, if the tax was invalid, might maintain an action to recover it back, whether it was paid under protest or not. 34 In IS 59 the statute was enacted which in substance now stands as the first sentence of section ninety-eight. 35 The effect 30 G. L. c. 59, § 82, supra page 311. « McGee v. Salem, 149 Mass. 268 (1889). 32 Dunbar v. Boston, 112 Mass. 75 (1873). 33 Benson v. Monroe, 7 Cush. 125 (1851) ; Lee v. Templeton, 13 Gray 476 (1859) ; Cunningham v. Boston, 15 Gray 468 (1860) ; Cook v. Boston, 9 Allen 393 (1864). 34 Preston v. Boston, 12 Pick. 7 (1831) ; Boston & Sandwich Glass Co. v. Boston, 4 Met. 181 (1842); George v. School District in Mendon, 6 Met. 497, 506 (1843); Joyner v. School District in Egremont, 3 Cush. 567, 572 (1849). 35 St. 1859, c. 118. Collection of Local Taxes 407 G. L. c. 60, § 98] of this statute was to limit the effect of payment on the demand of a collector who held a warrant so that the payment would be thereafter deemed voluntary unless the proceedings to enforce payment had actually begun; but to make a protest in writing equivalent to actual duress and in all cases sufficient basis for action. After the passage of the statute a person who paid with- out protest and before steps had been taken by the collector to enforce payment had no standing in court; 36 but a person who paid under protest on the collector's demand might recover back the tax although he was not included in the collector's warrant, and apart from the statute could not maintain the action on account of the absence of duress. 37 The protest must be made in writing by the person paying the tax, and an oral protest is not validated by the action of the collector in inscribing it upon his records. 38 Payment " after protest " is accomplished by handing the collector the amount of a tax and a written protest simultaneously 39 or by writing the protest across the face of the tax-bill and handing it to the collector. 40 The provision in regard to protest and the requirement that action be brought within three months of payment protects a city or town from sudden and unexpected assaults upon its financial structure, by rendering it certain that money paid without protest and allowed to remain in the treasury without objection for a definite period cannot be recalled. The statute is a beneficial one and has been liberally construed. Compliance with its requirements is a condition precedent, to a right of action; 41 its provisions extend to special assessments as well as to general taxation, 42 and apply to a tax levied under an un- 36 Barrett v. Cambridge, 10 Allen 48 (1865); Knowles v. Boston, 129 Mass. 551 (1880). 37 McGee v. Salem, 149 Mass. 238 (1889). 38 Knowles v. Boston, 129 Mass. 551 (1880). ™ Carleton v. Ashburnham, 102 Mass. 348 (1869). *o Borland v. Boston, 132 Mass. 89 (1882) ; Thayer Academy v. Braintree, 232 Mass. 402 (1919). 41 Wheatland v. Boston, 202 Mass. 258 (1909). The requirement of pro- test does not apply however when the tax is paid by one having an interest in the property to protect his interest, and the owner of the fee repays him. In such case if the tax is illegal the owner of the fee may sue to recover it back, although the original payment was not under protest. G. L. c. 60, § § 60, 85, supra, pages 370, 391. 42 Barrett v. Cambridge, 10 Allen 48 (1865); Knowles v. Boston, 129 Mass. 551 (1880); Wheatland v. Boston, 202 Mass. 258 (1909). 408 Taxation in Massachusetts [G.L. c. 60, §98 constitutional statute as well as to one that is invalid on other grounds. 43 The statute has however no application to the stat- utory proceeding in the superior court in the nature of an appeal from the refusal of the assessors to abate a tax, and a tax may be recovered under such proceedings although not paid under protest and although the proceedings were not instituted until more than three months after payment of the tax. 44 ACTION OF TORT AGAINST THE CITY OR TOWN This subject is easily disposed of. A city or town is not liable in an action of tort for the conduct of its assessors in wrongfully assessing a tax upon an individual not subject to taxation by them, and of its collector for arresting the person so taxed or seizing and selling his property to enforce payment of the tax. 45 The assessors and collector though elected by the inhabitants of the town are not the agents of the town for whose actions it is responsible, but public officers whose duties are prescribed by law. 46 The remedy of recovering back the amount of the tax by action of contract is considered sufficient; and if a person wrongly assessed is put to inconvenience and additional expense by the action of the collector in enforcing the tax, it is a consequence that he might have avoided by paying the tax under protest and suing to recover it back. 47 BILL IN EQUITY In many jurisdictions a recognized method of contesting the validity of a tax'is to bring a bill in equity to enjoin its collection, and if any recognized ground of equitable jurisdiction can be shown the court will entertain the proceeding. In some juris- dictions the inequality in the relative positions of the taxpayer and the collector is deemed in itself ground for equitable inter- ference. In this commonwealth however the remedies at law by petition for abatement and action of contract are considered 43 Barrett v. Cambridge, 10 Allen. 48 (1865); Knowles v. Boston, 129 Mass. 551 (1880); Wheatland v. Boston, 202 Mass. 258 (1909). 44 Thayer Academy v. Braintree, 232 Mass. 402 (1919). 45 Shaw v. Becket, 7 Cush. 442 (1851); Alger v. Easton, 119 Mass. 77 (1875); Hathaway v. Everett, 205 Mass. 246 (1910). 46 Rossire v. Boston, 4 Allen 57 (1862) ; Dunbar v. Boston, 112 Mass. 75 (1873); Alger v. Easton, 119 Mass. 77 (1875); Hathaway v. Everett, 205 Mass. 246 (1910). 47 Shaw v. Becket, 7 Cush. 442 (1851). Collection of Local Taxes 409 G. L. c. 60, § 98] plain and adequate, and it is well settled that a bill in equity will not lie to enjoin the collection of a tax on the ground that it has been illegally assessed, whether brought against the city or town, 48 or the collector. 49 The prompt and unembarrassed collection of taxes is considered of more importance than a possible inconvenience to one or more citizens. The possibility of a multiplicity of suits is no ground for modifying this well established rule. 50 The court will not inquire into the validity of a tax in a proceeding in equity. Even when two towns have assessed the same person for the same property he is left to his remedies at law, and the court will not entertain a bill in equity in the nature of a bill of inter- pleader to determine in which town the tax should properly have been assessed, even with the consent of the towns inter- ested. 51 When however a tax collector in enforcing payment of a tax attempts to go wholly beyond the limits of his jurisdiction and to interfere with the person or property of the person assessed in a manner not warranted by the statutes, if there is no ade- quate remedy at law and grounds for the interposition of equi- table relief appear, it is possible that the court might grant injunctive relief. 52 PETITION FOR WRIT OF MANDAMUS There is little occasion in this commonwealth to employ the writ of mandamus to enforce the performance of duties arising under the laws relating to the assessment and collection of taxes. The writ is issued to compel the performance of an *s Brewer v. Springfield, 97 Mass. 152 (1867); Loud v. Charlestown. 99 Mass. 208 (1868); Whiting v. Boston, 106 Mass. 89 (1870); Hunnewell v. Charlestown, 106 Mass. 350 (1871); Norton v. Boston, 119 Mass. 194 (1875); Clark v. Worcester, 167 Mass. 81 (1896). *o Kelly v. Barton, 174 Mass. 396 (1899); Greenhood v. MacDonald, 183 Mass. 342 (1903); Webber Lumber Co. v. Shaw, 189 Mass. 366 (1905); Warr v. Collector of Taunton, 234 Mass. 279 (1920). so Greenhood v. MacDonald, 183 Mass. 342 (1903). 51 Macy v. Nantucket, 121 Mass. 351 (1876); Welch v. Boston, 208 Mass. 326 (1911). See, however. Hardy v. Yarmouth, 6 Allen 277 (1863), and Forest River Lead Co. v. Salem, 165 Mass. 193 (1896), in which such bills were allowed when no objection was taken. 52 Warr v. Collector of Taunton, 234 Mass. 279 (1920). A bill in equity will not lie against a city or town to recover a sum of money paid as a nec- essary consequence of an illegal tax sale. Clark v. Worcester, 167 Mass. 81 (1896). 410 Taxation in Massachusetts [G. L. c. 60, § 98 act nc4 involving the exercise of discretion, at the instance of a person having no other available remedy. Consequently man- damus is not the proper means to compel either the assessors 53 or the county commissioners to abate a tax, 54 for abatement is a judicial act. A person aggrieved by the decision of the assess- ors has his statutory right of appeal, and if the county com- missioners commit an error of law a person aggrieved may have their proceedings reviewed on writ of certiorari. Mandamus will however lie to compel a board of assessors or county com- missioners to render a decision within a reasonable time upon a petition for abatement which has been heard by them. Man- damus will not lie to compel a collector to receive a tax which the assessors have abated; 55 for if the assessors act within their jurisdiction the collector has no power to disregard their actions. Mandamus will not be issued at the instance of a taxpayer to prevent the illegal expenditure of public money, 50 for the proper remedy is the petition of ten taxpayers provided by statute. In certain parts of the United States, occasions have arisen for the issuance of a writ of mandamus to compel the assessment of a tax. A city or town has sometimes refused to pay its debts and judgment creditors have been unable to satisfy their exe- cutions. The proper officers of the city or town with full power to levy and collect taxes have refused to raise money for the benefit of the creditors of the municipality, and in such cases a writ of mandamus has issued, generally from a federal court, to compel the officers to perform their duty. 57 Even then how- ever if the officer resigns his office before he can be served with the writ and no successor is appointed the effort fails, and the creditors are obliged to resort to a court of equity, which will proceed to collect the tax through its own officials. 58 In this commonwealth an execution against a city or town can be satisfied out of the property of any of the inhabitants, 59 53 Sears v. Assessors of Nahant, 208 Mass. 208 (1911). 54 Gibbs v. Hampden County Commissioners, 19 Pick. 298 (1837) 55 Gordon v. Sanderson, 165 Mass. 375 (1896). se Finlay v. Boston, 196 Mass. 267 (1907). 57 Thompson v. Allen County, 115 U. S. 550 (1885) ; Hubert v. New Orleans, 215 U. S. 170 (1909). ss Welch v. St. Genevieve, 1 Dill. (U. S.) 130 (1871). 59 3 Dane Ab. 158; Hawkes v. Kennebeck, 7 Mass. 461, 463 (1811); Brewer v. New Gloucester, 14 Mass. 216 (1817); Merchants Bank v. Cook, 4 Pick. 405, 414 (1826); Chase v. Merrimack Bank, 19 Pick. 564, 569 (1837); Gaskill v. Dudley, 6 Met. 546 (1843); Hill v. Boston, 122 Mass. 344, 350 (1877). Collection of Local Taxes 411 G.L.c. 60, §98] and there is no occasion for a judgment creditor to seek to compel the assessors to levy a tax to meet his claim. Moreover, there is ample provision for the assessment of local taxes by the county authorities if a town refuses to elect assessors or the assessors elected refuse to assess a tax. When a taxpayer seeks to contest the constitutionality of a method of distributing among the cities and towns of a state the proceeds of a tax collected by the state authorities, or to question whether the distribution is being conducted in accord- ance with the provisions of statute, none of the ordinary meth- ods are available, since in such case the taxpayer is not attempt- ing to have his tax abated, or any part of it returned to him, and in such case it would seem that mandamus is the appro- priate remedy, in order to prevent a failure of justice. Cases have been decided in which such questions were raised by peti- tion for writ of mandamus, but the court has never directly determined whether the procedure was appropriate. 60 Other remedies for excessive or illegal taxes are discussed elsewhere in this work. 81 60 Duffy v. Treasurer & Receiver General, 234 Mass. 42 (1919) ; Dane v. Treasurer & Receiver General, 236 Mass. 280 (1920); Dane v. Treasurer & Receiver General, 237 Mass. 50 (1921); Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921). 01 Ten taxpayers' petition to restrain taxation for an illegal purpose, G. L. c. 40, § 53, supra page 147. Taxpayer's petition to enforce tax limit, G. L. c. 44, § 59. Repayment of illegal corporation or inheritance taxes, G. L. c. 58, § 27, supra page 181. Abatement of excessive taxes and appeals to county commissioners or superior court, G. L. c. 59, § § 59 to 74 inc., supra page 285. Appeal from apportionment of tax on real estate subsequently divided, G. L. c. 59, § 81, supra page 309. Action to recover tax illegal in part, G. L. c. 59. § 82, supra page 311. Action against assessors for illegal assessment, G. L. c. 59, § 87, supra page 313. Action against collector for unlawful arrest, G. L. c. 60, § 29, supra page 338. Action to recover amount paid if tax title is defective, G. L. c. 60, § 46, supra page 360. Writ of entry to recover land illegally held under tax title, G. L. c. 60, § 62, supra page 374. Answer in proceedings to foreclose tax title, G. L. c. 60, § 70, supra page 381. Bill in equity to redeem from tax sale, or to remove cloud from title G. L. c. 60, § 76, supra page 383. Action against collector for unlawful acts, G. L. c. 60, § 95, supra page 396. Abatement of excessive income tax, G. L. c. 62, § § 43 to 48 inc., infra page 494. Abatement of excessive corporation tax, and appeal, G. L. c. 63, § § 51, 71, infra pages 573, 593. Relief from unlawful corporation tax. G. L. c. 63, § § 77, 78, infra page 596. Refunding of loss by stamps on stock transfers erroneously affixed, G. L. c. 64, § 6, infra page 604. Application for appraisal of property for purposes of inheritance tax, G. L. c. 65, § § 25, 26, infra page 649. Petition to probate court to deter- mine amount of inheritance tax, G. L. c. 65, § 30, infra page 654. Petition- for abatement of excessive betterment assessment, G. L. c. 80, § § 5 to 10 inc., infra pages 692 to 697 inc. 412 Taxation in Massachusetts [G. L. c. 60, § 99-105 inc. Penalties Section 99. A collector who neglects or refuses to exhibit ac- counts or to produce receipts, as required under section ninety-four, shall forfeit to the town two and one half per cent of the sums com- mitted to him for collection. * Section 100. Violation by a collector, former collector, or an executor or administrator of a collector or former collector, of any provision of sections nine to twelve, inclusive, shall be punished by a fine of not more than five hundred dollars. Section 101. Violation of section twelve by a person of whom demand is made thereunder shall be punished by a fine of not more than five hundred dollars. Section 102. Violation by a collector of section two or section eight shall be punished by a fine of not less than three hundred dol- lars. Section 103. Whoever refuses or neglects to aid a collector when required under section thirty-three shall forfeit not more than ten dollars. Section 104. Violation by a collector, or by a holder of a tax title, of the last paragraph of section sixty -two, shall be punished by a fine of not more than one hundred dollars. A holder of a tax title who knowingly collects or attempts to collect for the redemption of the land a larger amount than is authorized by law is not only subjected to a penalty by section one hundred and four, but his violation of the law may operate to extend the time allowed for redemption. 1 Forms in Proceedings for Collection of Taxes Section 105. The following forms may be used in proceedings for the collection of taxes under this chapter, and, if substantially followed, they shall be deemed sufficient for the proceedings to which they respectively relate; but other suitable forms may also be used. These forms may also be used, so far as applicable, in the collection of betterments and other assessments of like character. SCHEDULE OF FORMS. No. 1. Foem of Demand under Section 16. B, , 19 . To Herewith find your tax bill due , 19 , amounting to $ Payment -.f the same is hereby demanded. Interest at the rate of per 1 Davidson v. Stafford, 210 Mass. 145 (1911). Collection of Local Taxes 413 G.L.c. 60, §105] cent per annum will be charged from , 19 . You are hereby notified that unless your tax is paid in fourteen days from this date, with legal interest and charges, and twenty-five cents for this demand, the collector will then proceed to collect the same according to law. Collector of Taxes Jor the oj No. 2. Form of Summons under Section 18. B, , 19 . To Your tax for the year 19 , amounting to $ and interest thereon, is now due. You are required to pay the same within ten days from this date with twenty cents for this summons. At the expiration of that time, if the tax is not paid, the collector will proceed to collect the same according to law. Collector oj Taxes jor the oj No. 3. Form of Notice of Sale of Distrained Property under Section 25. collector's sale. Distrained upon a warrant of distress for non-payment of taxes, and will be sold by public auction on , the day of , 19 , at o'clock M v at , unless said taxes, interest and charges shall be paid before the sale, the following described prop- erty, to wit: [Here describe the property.] B, , 19 . Collector oj Taxes jor the oj (Or other authorized officer, as the case may be) No. 4. Form of Notice of Adjournment of Sale under Section 26. [To the original notice of sale, or a copy thereof, add the following, and post at the place of sale:] The collector hereby gives notice that the above sale stands adjourned to , the day of , 19 , at the same hour and place. B, , 19 . Collector oj Taxes jor the oj (Or other authorized officer, as the case may be) No. 5. Form of Certificate required by Section 30 to be given when a Com- mitment is MADE. B, , 19 . I hereby certify that the tax assessed in the of as of the first day of April in the year 19 upon remains unpaid for fourteen days after demand therefor made by me (or the collector of taxes of the town of B) and still remains unpaid; and that for want of goods and chattels whereof to make distress I commit the said person tc jail. I also certify that the amount the said person is to pay for said tax, interest, charges, fees, and traveling expenses as provided by statute, is dollars. Collector oj Taxes jor the of (Or other authorized officer, as the case may be.) 414 Taxation in Massachusetts [G.L. c. 60, §105 No, 6. Form of Collector's Warrant to distrain or commit under Section 34. Commonwealth of Massachusetts. To the Sheriffs of our several Counties, or their Deputies, or to any Constable of or Deputy Collector of Taxes for the of in the County of Greeting : Whereas, a resident of in the County of was duly assessed as of the first day of April in the year nineteen hundred and , by the Assessors of the of , a tax in the sum of dollars; and the same now, after the expiration of four- teen days from the date of a demand made upon him by me in accordance with law for the payment of the same, remains unpaid; Therefore, In the name of the Commonwealth of Massachusetts, you and each of you are required and directed to distrain the goods or chattels of the said person so assessed sufficient to satisfy and pay the amount due for such tax and interest, and all fees and charges of keeping and selling the same, saving and excepting the tools or implements necesssary for the trade or occupation of the said person so assessed; beasts of the plough necessary for the cultivation of his improved land; military arms, uniforms and equipment; utensils for housekeeping neces- sary for upholding life; and bedding and apparel necessary for the said person so assessed and his family. And the goods and chattels so distrained by you, you are required to keep at the cost and charge of the owner for four days at least and within seven days after the seizure to sell the same at public auction, for the payment of the said amount due, having first posted up a notice of the sale in some public place in the city or town where found, forty-eight hours at least before the sale: provided, however, that you may, if you shall see fit, once adjourn said sale for a time not exceeding three days, in which case you shall forthwith post up a notice of such adjournment and of the time and place of sale. And if said distress shall be sold for more than the said amount due you shall return the surplus to the owner of such goods or chattels upon demand, with an account in writing of the sale and charges. And if you cannot find suffi- cient goods and chattels belonging to the person assessed, whereon to make dis- tress, you shall take the body of the said person and him commit to one of the common jails in the county in which you shall arrest him, there to remain until he shall pay said tax, interest, charges, and fees, and for an arrest, one dollar and actual traveling expenses incurred in making such arrest; or until he shall be dis- charged therefrom by due course of law: provided, however, that you may at your discretion, after the service of this Warrant, allow such person to go free for a period not exceeding fourteen days after said service, at which time if said person does not pay his tax with all fees and charges due thereon including one dollar for service of this Warrant and five cents for each mile traveled by you in the performance of this collection you shall then arrest said person on this War- rant and commit him to jail as aforesaid. But if you shall commit such person for the non-payment of a poll tax only he shall not be detained in jail more than seven days.. And in case you shall commit said person so assessed to jail by virtue of this Warrant, you are required to give the keeper of the jail wherein he may be committed an attested copy of this Warrant, with a certificate thereon under your hand, setting forth that for want of goods and chattels of the said person whereof to make distress, you have taken his body and committed him to jail as aforesaid; and also setting forth the amount said person is to pay as his tax, interest, charges, fees and traveling expenses as provided by statute. Hereof fail not, and make return of this Warrant, with your doings thereon, within sixty days from the date hereof. Given under my hand and seal this day of 19 [seal.] Collector of Taxes for the of Collection of Local Taxes 415 G. L. c. 60, § 105] No. 7. Form of Certificate to be endorsed on Copy of Warrant in Case op Commitment. B , , 19 . I hereby certify that, by virtue of the warrant, of which the within is a true copy, for want of goods and chattels whereof to make distress, I have taken the body of the within named and committed him to jail, and that the amount which he is to pay as his tax, interest, charges, fees, and traveling expenses as provided by statute, is dollars. Deputy Collector of Taxes for the oj (Or other authorized officer, as the case may be) No. 8. Form of Demand of Tax on Real Estate under Section 37. C, , 19 . To In compliance with the statute I hereby demand of you payment of dollars, that being the amount of tax assessed for the year 19 on the estate in this [City or Town] [here give a brief statement of the estate] and owned or oc- cupied by you at the date of assessment. You are hereby notified that if said amount, together with the interest, legal costs and charges thereon, is not paid within fourteen days from this date, with twenty-five cents for this demand, the said estate will be sold by public auction, pursuant to law. Collector of Taxes for the of No. 9. Form of Collector's Notice of Sale of Real Estate to be published in a Newspaper under Section 40. B, , 19 . The owners and occupants of the following described parcels of real estate situated in the [City or Town] of , in the County of and Commonwealth of Massachusetts, and the public are hereby notified that the taxes thereon severally assessed for the years hereinafter specified, according to the list committed to me as collector of taxes for said by the assessors of taxes, remain unpaid, and that the smallest undivided part of said land sufficient to satisfy said taxes, with interest and all legal costs and charges, or the whole of said land if no person offers to take an undivided part thereof, will be offered for sale by public auction at the in said on , 19 , at o'clock m., for the payment of said taxes with interest, costs and charges thereon, unless the same shall be previously discharged. [Here state the name of the party taxed, if known; a substantially accurate description of the estate; the year in which the tax is assessed; and the amount of the tax on each parcel of real estate.] Collector of Taxes for the of No. 10. Form of Deed under Sections 43 and 45. Commonwealth of Massachusetts. To all Persons to whom these Presents may come, I, , Collector of Taxes for the of , in the County of and Commonwealth of Massachusetts, Send Greeting: Whereas, the Assessor of Taxes of said of , in the lists of assessments for taxes, which they committed to me to collect for the 416 Taxation in Massachusetts [G. L. c. 60, § 105 year one thousand nine hundred and , duly assessed as owner or occupant of the land in said , which is hereinafter described, the sum of dollars and cents, for State, County and [City or Town] Taxes thereon; and whereas, on the day of , A.D. 19 , I duly demanded of said [if the demand was made on a mortgagee or an attorney of a non-resident owner, here insert the, fact] the payment of said taxes, so as aforesaid assessed on said land, and the same were not paid; and whereas, after the expiration of four- teen days from the time of demanding payment of said taxes as aforesaid, the same still remaining unpaid, I duly advertised that the smallest undivided part of said land sufficient to satisfy said taxes with interest and all legal costs and charges, or the whole of said land if no person offers to take an undivided part thereof, would be sold by public auction for the payment of said taxes with interest, and all legal costs and charges, on the day of , A.D. 19 , at o'clock in the noon, at the in said , by publishing an advertisement thereof, contain- ing also a substantially accurate description, and the names of all owners of said land known to me, and the amount of the taxes so as aforesaid assessed thereon, in the , a newspaper published in , in the County where said land lies, three weeks successively, the last publication whereof was at least one week before the time appointed for the sale, and by posting the said adver- tisement in public and convenient places in said , to wit: the , three weeks before the time appointed for said sale; and whereas, said taxes so as aforesaid assessed on said land were not paid, I proceeded at the time and place appointed as aforesaid for the sale, to offer for sale said land by public auction for the discharge and payment of said taxes thereon with interest, and said legal costs and charges, [if the sale is adjourned add the following :] and no person appeared and bid for an undivided part or for the whole of the land thus offered for sale an amount equal to the said taxes, interest, costs and charges, and I thereupon, at said time and. place appointed for said sale, adjourned said sale until , the day of , A.D. 19 , at o'clock in the noon, at the same place, and then and there made public proclamation of said adjournment; [if there are several adjournments use the following:] and in like manner in all respects and for the same cause, I adjourned said sale [here state the successive dates, hours and places to which the sale was adjourned], and then and there made public proclamation of said adjournments; and at the time and place so fixed and proclaimed for making said sale on each of the several days, I proceeded to offer for sale said land by public auction for the payment of said taxes, interest, costs and charges, and no person appeared at either time so fixed by adjourn- ment for said sale and bid a sum equal to said taxes, interest, costs and charges, until on the day of . , A.D. 19 , the time and place so fixed for said sale by the last of the said adjournments [or, if there was but one adjournment, use such averments as will conform to that fact], I proceeded again to offer for sale by public auction for the payment of said taxes, interest, costs and charges, the smallest undivided part of said land sufficient for the payment of said taxes with interest and legal costs and charges; [// an offer is made for an undivided part use the following : ] and of in the County of and State of offered at said auction to take one undivided part of said land and to pay therefor the amount of said taxes with interest and the legal costs and charges, and that being the smallest undivided part of said land offered to be taken for the payment of said taxes, interest, costs and charges, one undivided part of said land was struck off to said Therefore, know ye, that I, the said , Collector of Taxes as afore- said, by virtue of the power vested in me by law, and in consideration of the said sum of dollars and cents to me paid by said Collection of Local Taxes . 417 G. L. c. 60, § 105] , the receipt whereof I do hereby acknowledge, do hereby give, grant, bargain, sell and convey unto the said one undivided part of the following described land, being the land taxed as aforesaid, to wit: [here describe the land.] [If sale is made of the whole, use the following : ] and no person offering at said auction to take an undivided part of said land, the whole of said land was struck off to of in the County of and State of for the sum of dollars and cents, being the amount of the taxes and necessary intervening charges. Therefore, know ye, that I, the said , Collector of Taxes as afore- said, by virtue of the power vested in me by law, and in consideration of the said sum of dollars and cents to me paid by said , the receipt whereof I do hereby acknowledge, do hereby give, grant, bargain, sell and convey unto the said the following described land, the same being the land taxed as aforesaid, to wit: [here describe the land]. [In each case conclude as follows:] To have and to hold the same, to the said , h heirs and assigns, to and their use and behoof forever; subject to the right of redemption by any person legally entitled to redeem the same and to all easements and restrictions lawfully existing in, upon or over said land or ap- purtenant thereto when so taken. And I, the said Collector, do covenant with the said , h heirs and assigns, that the sale aforesaid has, in all particulars, been conducted ac- cording to law. In witness whereof, I, the said , Collector as aforesaid, have hereunto set my hand and seal, this day of , in the year of our Lord one thousand nine hundred and [seal.] Collector of Taxes for the of Signed, sealed and delivered in the presence of ss. 19 . Then personally appeared the above named , Collector of Taxes for the of, , and acknowledged the foregoing instrument to be his free act and deed. Before me, Justice of the Peace. My commission expires , 19 . No. 11. Form of Deed when the City or Town is the Purchaser under Sections 48 and 50. Commonwealth of Massachusetts. To all Persons to whom these Presents may come, I, . Collector of Taxes for the [City or Town] of , in the County of and Commonwealth of Massachusetts, Send Greeting: Whereas, the Assessors of Taxes of said of , in the lists of assessments for taxes, which they committed to me to collect for the year one thousand nine hundred and , duly assessed as owner or occupant of the land in said , which is hereinafter described, the sum of dollars and cents, for State, County and [City or Town] Taxes thereon ; and whereas, on the day of , A.D. 19 , I duly demanded of said [if the demand was 418 . Taxation in Massachusetts [G. L. c. 60, § 105 made on a mortgagee or an attorney oj a non-resident owner, here insert the fact] the payment of said taxes, so as aforesaid assessed on said land, and the same were not paid; and whereas, after the expiration Of fourteen days from the time of demanding payment of said taxes as aforesaid, the same still remaining unpaid, I duly advertised that the smallest undivided part of said land sufficient to satisfy said taxes with interest and all legal costs and charges, or the whole of said land if no person offers to take an undivided part thereof, would be sold by public auction for the payment of said taxes with interest, and all legal costs and charges, on the day of , a.d. 19 , at o'clock in the noon, at the , in said , by publishing an advertisement thereof, containing also a substantially accurate description, and the names of all owners of said land, and the amount of the taxes so as aforesaid assessed thereon, in the , a newspaper published in , in the County where said land lies, three weeks successively, the last publication whereof was at least one week before the time appointed for the sale, and by posting the said adver- tisement in public and convenient places in said , to wit: the , three weeks before the time appointed for said sale; and whereas, said taxes so as aforesaid assessed on said land were not paid, I proceeded at the time and place appointed as aforesaid for the sale, to sell said land by public auction for the discharge and payment of said taxes thereon with interest, and said legal costs and charges and no person appeared and bid for the estate thus offered for sale an amount equal to the said taxes, interest, costs and charges, and I thereupon, at said time and place appointed for sale, ad- journed said sale until the day of , a.d. 19 , at o'clock in the noon at the same place, and then and there made public proclamation of said adjournment; and in like manner in all respects and for the same cause I adjourned said sale [here state the successive dates, hours and places to which the sale was adjourned], and then and there made public proclamation of said adjournments; and at the time and place so fixed and proclaimed for making said sale on each of said several days, I proceeded to offer for sale said real estate by public auction for the payment of said taxes, interest, costs and charges, and no person appeared at either time so fixed by adjournment for said sale and bid a sum equal to said taxes, interest, costs and charges, and at the time and place so fixed for said sale by the last of the said adjournments, namely, on the day of , a.d. 19 , at o'clock in the noon, I made a public declaration of all the facts hereinbefore recited; and no person then appeared and bid a sum equal to said taxes, interest, costs and charges [if only one adjournment is made, change these averments to conform to the facts] ; and I thereupon then and there immediately gave public notice that I should, and that I then and there did purchase on behalf of -the said of , said real estate for the sum of dollars and cents, being the amount of said taxes, interest, costs and charges; Therefore know ye, that I, the said , Collector of Taxes as afore- said, by virtue of the power vested in me by law, and in consideration of the premises, hereby give, grant, bargain, sell and convey unto the said of , the following described real estate, the same being the land taxed as aforesaid, to wit: [here describe the estate.] To have and to hold the same, to the said [City or Town] of , and its assigns, to its and their use and behoof forever; subject to the right of redemption by any person legally entitled to redeem the same and to all ease- ments and restrictions lawfully existing in, upon or over said land or appurte- nant thereto when so taken. And I, the said Collector, do covenant with the said of , and its assigns, that the sale aforesaid has, in all particulars, been conducted according to law. In witness whereof, I, the said , Collector as aforesaid, have Collection of Local Taxes 419 G. L. c. 60, § 105] hereunto set my hand and seal, this day of , in the year of our Lord one thousand nine hundred and [seal.] Collector of Taxes for the of < Signed, sealed and delivered in presence of ss. 19 . Then personally appeared the above named , Collector of Taxes for the of , and acknowledged the foregoing instrument to be his free act and deed. Before me, Justice of the Peace. My commission expires , 19 No. 12. Form of Deed to City or Town, when the Purchaser fails to pay, etc., under sections 49 and 50. Commonwealth of Massachusetts. To all Persons to whom these Presents may come, I, , Collector of Taxes for the [City or Town] of , in the County of and Commonwealth of Massachusetts, Send Greeting: Whereas, the Assessors of Taxes of said of , in the lists of assessments for taxes, which they committed to me to collect for the year one thousand nine hundred and , duly assessed as owner or occupant of the land in said , which is hereinafter de- scribed, the sum of dollars and cents, for State, County and [City or Town] Taxes thereon; and whereas, on the day of , aj>. 19 , I duly demanded of said [if the demand was made, on mortgagee or an attorney of a no -resident owner, here insert the fact] the payment of said taxes, so as aforesaid assessed on said land, and the same were not paid; and whereas, after the expiration of fourteen days from the time of demanding payment of said taxes as aforesaid, the same still remaining unpaid, I duly advertised that the smallest undivided part of said land sufficient to satisfy said taxes with interest and all legal costs and charges, or the whole of said land if no person offers to take an undivided part thereof, would be sold by public auction for the payment of said taxes with interest, and all legal costs and charges, on the day of , a.D. 19 , at o'clock in the noon, at the , in said , by publishing an advertisement thereof, containing also a substantially accurate description, and the names of all owners of said land known to me, and the amount of the taxes so as aforesaid assessed thereon, in the , a newspaper published in , in the County where said land lies, three weeks successively, the last publication whereof was one week before the time appointed for the sale, and by posting the said advertisement in public and convenient places in said , to wit: the , three weeks before the time appointed for said sale; and whereas, said taxes so as aforesaid assessed on said land were not paid, I proceeded at the time and place appointed as aforesaid for the sale, to sell said land by public auction for the discharge and payment of said taxes thereon with interest, and said legal costs and charges, and, no person offering to take an undivided part of the land for the amount of the taxes and necessary intervening charges, the whole of the said real estate was struck off to of in the County of and State of for the sum of dollars and cents, being the amount of the taxes and necessary intervening charges; and 420 Taxation in Massachusetts [G.L c, 60, §105 whereas, the said failed to pay to me the sum offered by him as aforesaid, and receive his deed of the premises bid off by him, within twenty days after the said sale, and the said sale became null and void, and the said of thereby became the purchaser of the the premises so bid off by the said for the sum of dollars and cents, being the amount of said taxes, interest, costs and charges; Therefore know ye, that I, the said , Collector of Taxes as aforesaid, by virtue of the power vested in me by law, and in consideration of the premises, hereby give, grant, bargain, sell and convey unto the said of , the following described real estate, the same being the land taxed as aforesaid, to wit: [here describe the estate.'] To have and to hold the same, to the said of , and its assigns, to its and their use and behoof forever; subject to the right of re- demption by any person legally entitled to redeem the same, and to all ease- ments and restrictions lawfully existing in, upon or over said land or appurte- nant thereto when so taken. And I, the said Collector, do covenant with the said of and its assigns, that the sale aforesaid has in all particulars been conducted ac- cording to law. In witness whereof, I, the said , Collector as aforesaid, have hereunto set my hand and seal, this day of , in the year of our Lord one thousand nine hundred and [seal.] Collector of Taxes for the of Signed, scaled and delivered in the presence of ss. 19 . Then personally appeared the above named , Collector of Taxes for the of , and acknowledged the foregoing instrument to be his free act and deed. Before me, Justice of the Peace. My commission expires , 19 No. 13. Form of Notice of Intention to take Real Estate under Section 53. collector's notice. The owners and occupants of the following described parcels of real estate situate in the of , in the County of , and Commonwealth of Massachusetts, and all other persons, are hereby noti- fied that the taxes thereon, severally assessed for the year hereinafter specified, according to the list committed to me as Collector of Taxes for the said of , by the Assessors of Taxes of said , remain unpaid, and that said parcels of real estate will be taken for the said of , on the day of A.D. 19 , at o'clock m\, for the payment of said taxes, together with the interest, costs and charges thereon, unless the same shall be previously discharged. [Here state the names of the person assessed, and all owners known' to the collector, a description of the parcel or parcels of lands, the year for which the taxes were assessed, and the sum assessed upon each parcel.] Collector of Taxes for the of No. 14. Form of Taking of Real Estate under Section 54. Whereas, the tax assessed by the assessors of as of the first day of April, in the year 19 , upon as the owner or occupant of the real estate hereinafter described, was duly committed to me as Collector Collection of Local Taxes 421 G. L. c. 60, § 105] of Taxes for said of ; and whereas, the said taxes, amounting to dollars and cents, have not been paid; and whereas, a demand for the payment of said taxes and the interest, costs and charges then due was made by me on the said on the day of , last past, in confonnity to law; and whereas, notice of my intention to take said real estate by virtue of the authority vested in me as Col- lector of Taxes for said has been duly given, as by law required; and whereas, the said taxes, at the date of this instrument, remain unpaid; now, therefore, KNOW ALL MEN BY THESE PRESENTS, that I, as Collector of Taxes as aforesaid, by virtue of the power and authority in me vested as aforesaid, have taken, and by these presents do take, for the said of , subject to redemption according to law, and to all ease- ments and restrictions lawfully existing in, upon or over said land or appurte- nant thereto when so taken, the following described lot or parcel of land, with the buildings thereon, the same being the estate assessed as aforesaid, to wit: [here describe the estate.] The said is the only person known to me as owner of the above described estate. [// the foregoing state- ment is not true, state the names of all owners known to the collector.] In witness whereof, I, the said , as Collector as aforesaid, hereunto set my hand and seal this day of , in the year nineteen hundred and [seal.] Collector oj Taxes for the of No. 15. Form of Affidavit under Section 57 of Collector, Deputy Col- lector or Disinterested Person to be recorded in the Registry of Deeds that Demand has been made. S, , 19 . I [A B, Collector, Deputy Collector or a disinterested person,] hereby certify that on the day of , 19 , I served upon [or witnessed the service upon of] a demand for the pay- ment of a tax of dollars assessed upon him by the assessors of , in 19 , upon the estate in said [here give a substantially accurate description of the estate], with a notice that if said; amount and interest thereon, together with the legal costs and charges, were not paid within fourteen days from the date thereof, the said estate would be sold by public auction, pursuant to law. Commonwealth of Massachusetts. , ss. 19 Then personally appeared the said , and made oath that this statement by him subscribed is true. Before me, Justice of the Peace. My commission expires , 19 No. 16. Form of Affidavit under Section 57, as to Demand, when the Demand is made upon Two or more Persons. S, , 19 . I [A B, Collector, Deputy Collector or a disinterested person,] hereby cer- tify that on or since the day of 19 , I served for witnessed the service] on each of the parties hereafter mentioned, on the date and in the manner specified, as may be seen by reference to their respective names, [of] a demand like the blank hereunto attached, the blanks being first filled wih the date, name, amount of the tax, and location of the real estate. 422 Taxation in Massachusetts [G. L. c. 60, § 105 Names. Amount of Tax. Manner and Date of Service. Commonwealth of Massachusetts. , S3. S, , 19 . Then personally appeared the said , and made oath that the above statement by him subscribed is true. Before me, Justice of the Peace. My commission expires , 19 [Here annex the blank form, No. 8, referred to in the affidavit.] No. 17. Form of Affidavit under Section 57 of Posting and Publishing Advertisement of Sale. S, , 19 • I, A B, of , in the County of , and Commonwealth of Massachusetts [Collector, Deputy Collector or a disinterested person,] hereby certify that three weeks before the time of sale I posted [or witnessed the posting] pursuant to law [of] the printed notice of the Collector of Taxes, a copy whereof is hereto annexed, in a convenient and public place in his precinct, to wit: the , in said [here name the city or town], and that said notice was advertised three weeks successively in the , a newspaper published in [here name the city or town, or if there is no such newspaper, state that fact and add: in said County], the last publication being at least one week before the advertised time of sale, in accordance with law. A B. Commonwealth of Massachusetts. H , ss. S, , 19 . Then personally appeared the above named , and made oath that the foregoing statements by him subscribed are true. Before me, Justice of the Peace. My commission expires , 19 [Here annex" a copy of the advertisement.] No. 18. Form of Affidavit under Section 57 of Demand and Notice to BE ANNEXED TO THE INSTRUMENT OF TAKING. I, C D, of in the County of , and Commonwealth of Massachusetts, on oath depose and say that on the day of , a.d. 19 , I as Collector of Taxes for the of , made a written demand on for the amount of the tax assessed by the assessors of said of , as of the first day of April, a.d. 19 , upon the said , with the interest, costs and charges, then due, on certain real estate situated in said of , by [here state manner in which the demand was made], of which the following is a true copy: "C, , 19 . To , I hereby demand of you the payment of dollars and cents, that being the amount of tax assessed for the Collection of Local Taxes 423 G. L. c. 60, § 105J year 19 by the assessors of , on the real estate [here describe the estate] owned by you. You are hereby notified that if said amount, together with the interest, costs and charges thereon, is not paid within fourteen days from this date, the said real estate will be taken for said taxes for the said [city or town] of . Tax, $ ; interest, costs and charges, C D, Collector of Taxes for the of ." [If notice is published and posted, add:] And I, the said C D, do further depose and say that I posted and published notices, of which the following is a copy [!»ere annex a copy of the notice], as follows: A copy thereof was posted on [here state where posted], and I also published a copy of said notice in the , a newspaper published in said [if there be no such paper published in said town, state the fact and add, "in in said county"], three weeks successively, that the posting of said notices and the first publication thereof were more than fourteen days after making the demand as aforesaid ; and I do further depose and say that, at the date of the instrument of taking, hereto annexed, the amount of taxes due on the estate therein de- scribed, with the interest, costs and charges, amounted to the sum of dollars and cents, and that the parcel or parcels of land were taken for the reason that the taxes remained unpaid at the time of the said taking. Collector of Taxes for the of ss. , 19 . Then personally appeared the above named C D, and made oath that the foregoing affidavit by him subscribed is true. Before me, Justice of the Peace. My commission expires , 19 No. 19. Form of Deed by City or Town when Estate is redeemed under Section 62, to be executed by the Proper Officers of the City or Town. know all men by these presents, That the of , in consideration of , to it paid by of , the receipt whereof is hereby acknowledged, does hereby remise, release, and forever quitclaim unto the said all fe* t right, title and interest which the said of acquired, by or under a deed made to it [or taking made in its behalf] by , the Collector of Taxes for said city [or town] of , dated the day of in the year of our Lord one thousand nine hundred and , and recorded with Deeds, Volume Page in and to the following parcel of real estate in said , viz.: [here describe the real estate.] To have and to hold the above released premises, with all the privileges and appurtenances to the same belonging, to the said , h heirs and assigns, to h and their use and behoof forever. In witness whereof, the said of has caused its corporate seal to be hereunto affixed, and these presents to be signed, acknowl- edged and delivered in its name and behalf by , its , hereto duly authorized, this day of , in the year of our Lord nineteen hundred and City [or Town] of [seal.] Signed and sealed in the presence of By ss. 19 . 424 Taxation in Massachusetts [G. L. c. 60, § 105 Then personally appeared the above named ol for the city [or town] of , and acknowledged the fore- going instrument to be the free act and deed of said city [or town] of Before me, Justice of the Peace. My commission expires , 19 No. 20. Form of Certificate under Section 63. Whereas, I, , Collector of Taxes for the of , County of and Commonwealth of Massachusetts, for the year 19 , did sell and convey certain real estate to by deed dated , 19 , and recorded in the Registry of Deeds, in Book Page , for the non-payment of a tax as- sessed thereon to in the year 19 , which real estate is described as follows, viz: [here describe the real estate.] And Whereas of in the County of and State of was assessed ,19 , as owner or occupant of said property, and he alleges that he is a person having an interest in the property and as such desires to redeem the same from the sale in pursuance of Section 62 of Chapter 60 of the General Laws; And Whereas the said has this day paid to me the following sums to redeem said property from said sale, to wit: Amount for which it was sold, ........$ Interest at 8% from date of sale, ....... Examination of Title, Deed of Release, \ Recording, ) Additional sum as per statute, 1 00 S Therefore, I, the said Collector of Taxes, for the said of hereby certify that I have received from the said the said sum of dollars and cents, ($ ) for the purpose aforesaid. Dated this day of , a.d. 19 Collector of Taxes for the of No. 21. Form of Receipt by Collector to a Mortgagee, under Section 58. S, , 19 . I, , Collector of Taxes for the of , hereby certify that the Assessors of Taxes of said of , in the list of assessments for taxes, which they committed to me to collect for the year one thousand nine hundred and , duly assessed the sum of dollars and cents, as owner or occupant of the real estate situated and described as follows, viz.: [here describe the real estate.] and I further certify that the said negected to pay such tax within the year for which it was assessed, and that who claims to be the holder of a mortgage upon said real estate, has paid to me the sum of dollars and cents, being the amount of said tax, with all interest, costs and charges, the receipt of which I hereby acknowledge. Collector of Taxes for the of ss. , 19 Collection of Local Taxes 425 G. L. c. 60, § 105] Then personally appeared the above named and made oath that the foregoing statement by him subscribed is true. My commission expires . , 19 Before me, Justice of the Peace. No. 22. Forms of Notices when Tax Title is deemed Invalid, under Sec- tions 82 and 84. [from the assessors to the collector.] Office of the Board of Assessors, 19 . To the Collector of Taxes for the of Sir: You are hereby notified that the tax assessed as of the first day of April, 19 , in the name of upon an estate estimated to contain [here in- sert area] land, situated [here insert the name of street or other descriptions, was invalid by reason of error in assessment; and that any deed given by you in consequence of a sale for the non-payment of such tax conveyed no valid title to the purchaser. Board of Assessors of the of , by One of said Assessors. No. 23. To [from the collector to the holder of the title.] B, , 19 You are hereby notified that I have reason to believe that the title conveyed to by , Collector, and recorded with Deeds, Volume , Page , of an estate described, as follows [here describe estate], in the name of , is invalid by reason of an error in the assessment for the year 19 , [or in the proceedings for the sale.] [Here give a brief state- ment of the defect] : and I do hereby, notify and require you, within thirty days from the time when this notice shall be served upon you, to surrender and discharge the deed so given, and to receive from the of the sum due therefor, with interest as provided by law, or to file with the Collector a written statement that you refuse to make such surrender and discharge. Collector of Taxes for the of CHAPTER 61 TAXATION OF FOREST LANDS The taxation of land covered with growing trees has always presented peculiar problems. In the case of a tree suitable for conversion into lumber, it can be sold and utilized but once ; but it may be taxed ten, twenty or fifty times; that is, every year from the time its potential use begins to add value to the land until it is actually cut, or destroyed by fire or storm. Under the constitutional requirement of proportional taxation the assessors were bound to assess standing timber each year to the full amount of the value which its presence added to the land. Many persons felt that such taxation not only was unjust in itself, but that it resulted in the general deforestation of the com- monwealth, with all the incidental evils which such a condition brings about. In 1878 provision was made by statute for an exemption for a ten year period of land of little value upon which trees of certain species had been planted. 1 This statute, with certain amendments, 2 remained on the statute books until 1914. 3 It was probably unconstitutional, as a violation of the requirement of proportionality in taxation, 4 but it contained so many restric- tions and limitations that it was rarely invoked and its consti- tutionality was never passed upon by the court. In 1912 the Forty-first Amendment to the Massachusetts constitution was adopted, providing as follows: "Full power and authority are hereby given and granted to the general court to prescribe for wild or forest lands such methods of taxation as will develop and conserve the forest resources of the commonwealth. ' ' In 1914 the legislature, under the authority of the foregoing amendment, enacted a statute providing an elaborate system •St. 1878, c. 131. ■ St. 1880, c. 109; St. 1908, c. 120. 3 St. 1914, c. 598, §26. 4 Supra, Part I, §53. 426 Taxation of Forest Lands 427 G. L. c. 61] for the taxation of forest lands which it was hoped would bring about the rapid reforestation of land suitable for no other pur- pose and thus enhance the general prosperity of the common- wealth. 5 The statute has however as yet been but little used. It is applicable only to woodland classified as woodlot or plan- tation upon the petition of the owner, and by 1920 not more than twenty lots in the entire state had been so classified. 6 The object of the statute is to bring about the cutting of mature trees but at the same time to encourage the planting of young trees to take their place and the growth of immature trees until they are fit for cutting. This object was sought to be at- tained by imposing upon classified forest land (1) a forest land tax, upon the value of the land exclusive of the trees thereon, to be assessed and collected annually at the local rate in the same manner as local taxes generally; (2) a forest product tax on the value of cut timber, payable when the timber is cut, at a rate specified in the statute and increasing gradually to six per cent after April 1, 1939; (3) a forest commutation tax, equal to the difference between the amount of tax upon the land imme- diately before it was classified and the forest land tax immedi- ately after it was classified, payable annually, and subject to reduction each year upon land with respect to which forest pro- duct tax has been paid in the same proportion as the stumpage value of the trees cut bears to the stumpage value of the trees on the lot at the date of classification. By these provisions the owner is taxed only once for the increment in value of growing trees accruing after the date of classification. It is expected that legislation will be enacted shortly which will carry the same principle into effect without the extremely complicated administrative provisions of the present law. B St. 1914, c. 598, now G. L. c. 61. « See 1920 Pub. Doc. No. 19, Table V. CHAPTER 62 TAXATION OF INCOMES Origin and Purpose of the Income Tax To understand the apparently complicated statutory system which provides for the taxation of incomes, it is necessary to have some knowledge of the causes which led to the enactment of the income tax law and the evils which it was intended to remedy. The real object of the statute was not to produce addi- tional revenue for the public use, but to provide a more satis- factory system for the taxation of intangible personal property than that which had been in use since intangible property had come into existence. The principles which governed the taxation of personal prop- erty from the earliest settlement of the colony were simple: all personal property was taxable at the domicile of the owner, and all personal property taxable within a town was taxed on its capital value at the same rate as real estate. While all the personal property of each individual was tangible and visible and kept in the town in which he dwelt or in one of the neighbor- ing towns, it was an easy matter to assess such property, and on the other hand it was in no danger of being taxed directly or indirectly more than once. The first complications arose when it became customary for persons keeping shops or stores or main- taining factories in one of the larger towns to dwell in a different town, either because the other town was a more attractive place of residence or because the rate of taxation was lower there, but a proper means of dealing with this situation was soon de- vised. 1 When corporations began to be formed in Massachusetts new difficulties arose, but they have been met and overcome, and while the laws for the taxation of Massachusetts corpora- tions and their stockholders may not even yet have been wholly 'The annual tax act of 1742-3 contained a provision for the taxation of stock in trade of merchants, traders and factors in the town where the business was carried on (St. 1742-3, c. 31, §8) and this provision, with some modifica- tions, was continued in force until 1918, when tangible personal property gen- erally was made taxable where situated. 428 Taxation of Incomes 429 G. L. c. 62] perfected, as tax laws they meet the requirements of justice in taxing all the property of corporations once, and only once. 2 It was the taxation of bonds, notes and other evidences of indebtedness and of the stocks of foreign corporations, in which a large proportion of the wealth of Massachusetts is invested, that caused the chief difficulty. In the first place, the holders of much of such property who did business and dwelt in the win- ter months in large cities where the tax rate was high and the assessors alert often had summer residences in small towns in which the tax rate was low, and by a mere assertion of change of their inward intent they became legal residents in the smaller towns and thus, even if they were assessed for all their property, escaped a large proportion of the tax which they would have been bound to pay if they had retained their domicile in the towns with which all their real associations and interests re- mained. This evil was aggravated by the inevitable effect of such asserted changes in domicile in making the tax rate of the towns in which domicile was claimed grow lower and lower as the aggregate of taxable property was thus illegitimately increased, while the tax rate of the cities deserted, for purposes of assessment only, by their wealthiest inhabitants was cor- respondingly increased. Furthermore, when a small town might acquire an increase of its taxable property by the mere assertion of a wealthy summer resident's intent to make it his legal domicile, the temptation to an express or implied understanding that if the taxpayer would make the town his domicile the asses- sors would deal leniently with him was almost irresistible ; and, if there was no such understanding, the assessors of small country towns were seldom men of sufficient business experience to be able to make any estimate of the probable wealth of the new- comer, or lacked the time or means to make an extensive exam- ination of the subject. Even if they had the inclination, the time and the means, there was no method by which they could unearth the holdings of one of their summer residents in the stocks and bonds of the innumerable corporations of other states and other countries. As a consequence of these various influences, men generally recognized as millionaires escaped with a nominal personal property tax, and hardly a fifth of the personal prop- erty in this commonwealth was subjected to taxation ; and much 2 See G. L. c. 63, infra, page 505. 430 Taxation in Massachusetts [G. L. c. 62 of that was assessed in the towns whose tax rates were lowest. On the other hand it was contended, not without justice, by men whose savings were invested in bonds and notes or in the stocks of foreign corporations, that the state had no moral right to tax such property at its full capital value; that a bond is a debt, and, when a sum of money is borrowed, to tax the bor- rower for the money and the lender for the debt is to assume that the aggregate wealth of the world is increased by every loan that is made, which is a palpable absurdity ; and that a share of stock in a corporation is merely a convenient means of repre- senting a fractional interest in the property of the corporation, and as the property of a corporation is taxed as such where it is located and enjoys the protection of the government, to tax the property of the corporation as a whole and the fractional interests of its different owners as well is the most flagrant kind of double taxation. The justice of such contentions was recog- nized by our laws in the case of the stock of domestic corpora- tions and in the case of domestic mortgages and mortgage bonds, but not the slightest mitigation was offered in the case of other classes of bonds or notes or of stock of foreign corporations. Furthermore the tax on such property, being based on the value of the principal and not on the income, might well amount to half the annual return from the property, a burden too severe to be borne, and finally as almost everyone avoided payment of the tax on such property, a man who disclosed his ownership to the assessors had to bear a disproportionate burden of taxation. As a result of these considerations, persons of the most scrupu- lous honesty in regard to private transactions did not hesitate to avoid taxation on this class of personal property in every possible manner, and it was rarely subjected to assessment ex- cept at the very time when the tax bore most heavily; namely when it was exposed to the view of the assessors by the death of the owner and the necessary publicity of the probate court; and then, when as by the establishment of a trust it was likely to be so exposed for more than a year, no time was lost in con- verting it into non-taxable securities. The difficulties attending the taxation of this class of prop- erty first began to be seriously felt in the middle of the last cen- tury, and more and more drastic statutes were enacted to com- pel each taxable inhabitant to disclose his holdings to the Taxation of Incomes 431 G. L. c. 62] assessors but without avail. In more recent years the vigorous and well directed efforts of the tax commissioner and his assist- ants to uncover and expose this class of property and to subject it to taxation did in many instances oblige the holders of the property of deceased persons, some of whom had left estates of great value, to submit for a year or two to the burden which the letter of the law imposed, but, as far as any general improve- ment in the taxation of intangible property was concerned, their efforts did not have the success hoped for, and chiefly resulted in greater and greater concentration of wealth in towns in which the tax rate was low, often by virtue of purely colorable claims of domicile, and finally began to drive capital out of the commonwealth to states where milder systems of taxation pre- vailed. The experience of Massachusetts was the experience of every other state which had attempted to enforce a general uniform property tax so as to include intangible personal property ; and by the beginning of this century it was coming to be generally under- stood that such attempts were futile and defeated their own ends. Many states had adopted systems for the taxation of intangible property by which all such property was taxed at a fixed uniform rate, the rate being much less than the local rate for the taxation of real estate and tangible personal property. Such a system was suggested for Massachusetts in 1908, but was held unconstitu- tional as a violation of the requirement of proportionality in tax- ation. 3 Other states had a registration tax, by which intangible securities were exempted from direct taxation upon payment of a registration fee, but this also was held a violation of the state constitution. 4 It was sought to sustain a tax on the income of intangible property as an excise, but this failed to win the ap- proval of the court; 5 and an attempt to justify on historical grounds a tax on the capital value of intangibles measured by the multiplication of its annual return by an arbitrary figure met with equally ill success. 6 Finally, in 1915, after years of ef- fort, a remedy was made available by the adoption of the Forty- fourth Amendment to the state constitution, authorizing the "Opinion of the Justices, 195 Mass. 607 (1908). * Opinion of the Justices, 220 Mass. 613, 625 (1915) ; Perkins v. Westwood, 226 Mass. 268 (1917). 5 Opinion of the Justices, 220 Mass. 613, 623 (1915). •Opinion of the Justices, 220 Mass. 613, 619 (1915). 432 Taxation in Massachusetts [G. L. c. 62 levy of a tax on incomes, and in the following year the income tax law was enacted; but, in view of the foregoing statement of the struggle which led to its enactment, it will be readily under- stood that it was not, like the federal income tax which was first enacted in 1913, a means for providing additional revenue and aimed primarily at the wealthier classes, but was intended to enable the state to impose a tax on intangible securities which was capable of enforcement with some degree of equality and without driving capital out of the state. So far as it applied to income from property it affected only the classes of intangible property which were previously taxable on their capital value at the local rate, and as to such property it reduced the tax from a variable local rate, which amounted frequently to from 30 to 50 per cent of the income, to a fixed rate of 6 per cent, but provided means for the strict and impartial enforcement of the tax. To other classes of intangible property, whether reached for taxa- tion by a franchise tax, such as stocks in Massachusetts cor- porations or deposits in savings banks, or wholly exempted, such as mortgages and mortgage bonds and state and municipal bonds, the income tax had no application; and similarly with the in- come from real estate and from intangible personal property it had no concern. In the few years that have elapsed since the income tax law was enacted, the conditions which previously prevailed have been largely forgotten, and the income tax is looked upon by many merely as one of the numerous pests with which those who live in the present times are afflicted; but if the taxpayers would but consider the evils which the enactment of the income tax law remedied, the income tax would be held in higher es- teem, and would, it is believed, be better understood. 7 Limitations upon the Taxation of Incomes The Forty-fourth Amendment to the constitution of this ' Those who have forgotten conditions as they existed in Massachusetts prior to the enactment of the income tax act should study the present situation in Maine, New Hampshire and Vermont, and in many of the states of the middle west, in which the constitution requires uniformity in taxation. In most of these states, after various futile attempts to assess intangible property at the same rate as real estate, this class of property is allowed to escape taxation altogether except when in the hands of those who are too honest to conceal it or too un- sophisticated to know how to do so, or when it is exposed to the assessors through its appearance in the probate courts. Taxation of Incomes 433 G. L. c. 62] commonwealth, approved and ratified by the people in Novem- ber, 1915, is phrased in the following language: "Full power and authority are hereby given and granted to the General Court to impose and levy a tax on income in the manner hereinafter provided. Such tax may be at different rates upon in- come derived from different classes of property, but shall be levied at a uniform rate throughout the commonwealth upon incomes de- rived from the same class of property. The general court may tax income not derived from property at a lower rate than income derived from property, and may grant reasonable exemptions and abatements. Any class of property the income from which is taxed under the provisions of this article may be exempted from the im- position and levying of proportional and reasonable assessments, rates and taxes as at present authorized by the constitution. This article shall not be construed to limit the power of the general court to impose and levy reasonable duties and excises." Although the income tax law now in force is limited in its application to certain classes of income only, and the real pur- pose of the Forty-fourth Amendment was to authorize the taxa- tion of the classes of income which are taxed by the present law, the amendment itself is not so limited, but authorizes the taxa- tion of income of every class and description which the legisla- ture may at any time see fit to tax. There are, however, certain limitations upon the taxation of incomes under the amendment. In the first place, there is the limitation imposed by the amendment itself, that the tax shall be levied at a uniform rate throughout the commonwealth upon incomes derived from the same class of property, which pro- hibits a graded income tax such as is imposed by the federal law, and also prohibits income taxes in force in certain cities and towns only, or imposed at different rates in different cities and towns. Then again, the adoption of the amendment did not in any way affect the limitations of the federal constitution, or give the state any greater powers with respect to income taxes than it already had with respect to property taxes ; and the state cannot tax the income of federal office holders, 1 or interest on United States 1 Biscoe v. Tax Commissioner, 236 Mass. 201 (1920) and see also supra, Part I, §28. 3 434 Taxation in Massachusetts [G. L. c. 62 bonds, 2 or discriminate in its income taxes against non-residents or against interstate commerce, 4 or impose income taxes in such an arbitrary and unreasonable manner as to deprive persons of their property without due process of law. 5 Clearly the legislature cannot tax that as income which is not income. The requirement of proportionality in taxation has not been repealed except so far as to allow the taxation of income, and a direct tax which is not proportional to the tax on property generally cannot be sustained as an income tax unless it is in truth a tax on income. But the word "income" in the Forty- fourth Amendment was employed to express a comprehensive idea, and must be interpreted as including any item which by any reasonable understanding can fairly be regarded as income. In- come may be derived from capital invested or in use, from labor, from the exercise of skill, ingenuity or sound judgment, or from a combination of any or all of these factors. It includes gain, profit or revenue of every description. 6 The distinction drawn between capital and income for the purposes of administering trust estates is not necessarily to be followed in determining what is income for purposes of taxation. "Income," like most other words, has different meanings de- pendent upon the connection in which it is used and the result intended to be accomplished. 7 But the construction put upon the Sixteenth Amendment to the federal constitution by Congress and the federal taxing authorities prior to the adoption of the Forty-fourth Amendment in this commonwealth is important as bearing upon what was understood by the word "income" in the latter amendment, for the federal income tax law of 1913 may be presumed to have been more or less familiar to the members of the general court and to the people during the discussion 2 8upra, Part I, §27. 3 Travis v. Yale & Towne Mfg. Co., 252 U. S. 60 (1920) and see also supra, Part I, §17. 4 Supra, Part I, §§ 20-25 inc. A state may, however, tax income derived from interstate commerce at the same rate as other income. United States Glue Co. v. Oak Creek, 247 U. S. 321 (1918) ; Shaffer v. Carter, 252 U. S. 37, 57 (1920) ; Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920) ; H. P. Hood & Sons v. Commonwealth, 235 Mass. 572 (1920). b Bupra, Part I, §32. Income received from property which was not within the jurisdiction of the commonwealth when it produced the income cannot be taxed. Hart v. Tax Commissioner, Mass. (1921). 8 Tax Commissioner v. Putnam, 227 Mass. 522 (1917). 7 Tax Commissioner v. Putnam, 227 Mass. 522, 533 (1917). Taxation of Incomes 435 G. L. c. 62] accompanying the adoption of the Forty-fourth Amendment. 8 So also decisions of the supreme court of the United States with respect to the power granted Congress by the Sixteenth Amend- ment, though rendered after the adoption of the Forty-fourth Amendment in this commonwealth, are important, though not controlling, for they involve the meaning put upon the same word under much the same circumstances by that learned trib- unal. 9 The very purpose of the Forty-fourth Amendment was to authorize the taxation of certain classes of property upon an income basis while other property was taxed at its capital value, and to dispense with the requirement of proportionality between taxes levied on income and those levied on capital value. Nevertheless, the requirement of proportionality is not re- pealed, and taxes on income cannot be used either openly or covertly as a means of bringing about disproportionate taxation. It is not to be supposed that the requirement that all property shall share in the burdens of government could be evaded by taxing the income of certain arbitrarily se- lected classes of property at such a rate that all the public rev- enues were thereby raised, and other property thus wholly ex- empted from its share of the public burden. 10 But in general, the rate at which income taxes shall be levied, and the relation which they shall bear to taxes on property at its capital value lies wholly in the discretion of the legislature. 11 The Forty-fourth Amendment provides that income not de- rived from property may be taxed at a lower rate than income derived from property; and it was generally supposed that a distinction was intended to be drawn between income derived from the personal efforts of a taxpayer and that arising from his ownership of property. Nevertheless it has been held that, as the right to labor is property, income received as 8 Tax Commissioner v. Putnam, 227 Mass. 522, 528 (1917). • Under the federal income tax amendment it has been held that a stock dividend cannot be taxed as income, Eisner v. Macomber, 232 U. S. 189 (1920) ; that the gain derived from the sale of capital assets may be taxed as income, Merchants' Loan & Trust Co. v. Smietanka, 255 U. S. 509 (1921) ; but that if the taxpayer sells property at less than he paid for it, but for more than it was worth when the income tax amendment went into effect, he cannot be taxed on the transaction as one producing income, Goodrich v. Edwards, 255 U. S. 527 (1921). "Duffy v. Treasurer & Receiver General, 234 Mass. 42, 52 (1919). "Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921). 436 Taxation in Massachusetts [G. L. c. 62 compensation for personal services is income from property, and may be taxed at a higher rate than income arising from the owner- ship of property. 12 Interesting questions may arise when it is sought to tax in- come in a manner not permitted by the Forty-fourth Amend- ment but which would have been constitutional in the absence of such amendment. Thus it is generally considered that a tax on the income of a business is an excise, and not a property tax, and consequently not subject to the requirement of proportionality, so that a tax on the income derived from business imposed at a uniform rate throughout the commonwealth could have been constitutionally levied prior to the adoption of the Forty-fourth Amendment, provided the business was not one of those which can be exercised by anyone as of common right, without gov- ernmental regulation. It has been held that an excise on the enjoyment of a corporate franchise may be constitutionally measured by income although imposed in such a way as not to comply with the Forty-fourth Amendment, 13 and it is probable that it would be held that that amendment was not intended to limit any existing power of taxation. Taxation of Income from Certain Intangibles Section 1. income of the classes described in subsections (a), (&), (c) and (e) received by any inhabitant of the commonwealth during the preceding calendar year, shall be taxed at the rate of six per cent per annum. The income taxed under this section (with the exception of dividends received from unincorporated associations) is exclu- sively income from the forms of intangible property which -were previously taxable at their capital value at the local rate; and income from real estate or from securities of the classes known as "non-taxables" is not taxed or in any way affected by the statute. "Inhabitant" means legal resident, in the same sense in which the word has always been used in the statutes relating to taxa- tion. 1 It does not in this statute apply to corporations, domestic 12 Rayner v. Commissioner of Taxation, Mass. (1921). 13 Eaton, Crane & Pike Co. v. Commonwealth, 237 Mass. 523 (1921). ^eehan v. Tax Commissioner, 237 Mass. 169 (1921). As to the principles of law determining legal residence, see supra, page 221. Taxation op Incomes 437 G.L.c. 62, §1, (a)] or foreign, except when holding property in trust for an individual inhabitant of the commonwealth. The section now under con- sideration is also qualified by section twenty-five by which it is provided that returns are required only of those who are inhabi- tants of this commonwealth at some time between January 1 and June 30 of the year in which the tax is assessed, and inferen- tially that no other person is obliged to pay the tax. Conse- quently one who was an inhabitant of this commonwealth and re- ceived income in part of a year, but changed his domicile to another state before the end of the year, is not subject to the tax in the following year with respect to such income, and con- versely under the provisions of the statute one who became an inhabitant after January 1, and before June 30 in any year, is subject to the tax, although it relates to income received while the person assessed was not an inhabitant of this commonwealth. The latter provision was however held to be beyond the constitu- tional powers of the legislature. 2 Women, whether married or single, who are inhabitants of this commonwealth, having income of their own of the taxable classes, are taxable under this law; and the same is true of minors. The domicile of a married woman, or of a minor, is of course ordinarily that of the husband or father. A person acting in a fiduciary capacity for the benefit of an inhabitant of this commonwealth or for an unborn or unascertained person is bound to file a return and is taxable, even if he is not an inhabitant of this commonwealth, if he derived his appointment from a Massa- chusetts court. Income is received within the meaning of the statute not only when it is paid in cash or by check, or by goods or services, but also when it is credited by a bank or a broker or agent, or upon a running account. If, however, income is not paid in cash or the equivalent of cash, the taxpayer is taxable only upon the fair cash value of what he received, whether it be foreign money or the note of a person whose ability to pay is open to question, or property of any other class. Interest from Bonds, Notes and Other Debts (a) Interest from bonds, notes, money at interest and all debts due the person to be taxed, except from : 2 Hart v. Tax Commissioner, Mass. (1921). 438 Taxation in Massachusetts [G. L. c. 62, § 1, (a) First, Deposits in any savings bank chartered by the common- wealth or in the Massachusetts Hospital Life Insurance Company, or such of the deposits in the savings department of any trust company so chartered as do not exceed in amount the limits imposed upon deposits in savings banks by section thirty-one of chapter one hundred and sixty-eight, and deposits in any bank situated in the state of New Hampshire, so long as the provisions of chapter one hundred and eighty-nine of the Public Acts of nineteen hundred and seventeen of that state remain in force, and deposits in any bank in any other state which exempts from taxation to its inhabitants similar deposits, and interest and dividends thereon, owned by such inhabitants in banks in this commonwealth. Second, Bonds, notes and certificates of indebtedness of the United States and such bonds, notes and certificates of indebtedness of the commonwealth and of political subdivisions thereof as are exempted from taxation by clause twenty-fifth of section five of chapter fifty- nine. Third, Loans secured exclusively by mortgage of real estate, tax- able as real estate, situated in the commonwealth, to an amount not exceeding the assessed value of the mortgaged real estate less the amount of all prior mortgages. Fourth, Loans made in the course of business by persons loaning money as a business upon the pawn or pledge of tangible personal property. This subsection takes the place of the tax on capital value upon "money at interest and other debts due" and "public stocks and securities . . . bonds of railroads and street railways" which was in force for so many years. 1 When the taxable interest of one person is not in excess of five dollars (as is not unusual in the case of a depositor in a bank whose daily balance is small) and his income from all sources is not over two thousand dollars, the income tax division does not insist upon the filing of a re- turn or the payment of a tax. Interest is taxable under this section, and not under section five as business income, although the business of the taxpayer is to loan money at interest, the only exception being in the case of a pawnbroker. In the case of an open account between two persons upon which there have been debits and credits of interest, 1 G. L. c. 59, §4, cl. 2, supra, page 191. Taxation of Incomes 439 G.L. c. 62, §1, (a)] the net credit should be returned for taxation, if the account has remained open during the whole of the period over which the computation of net interest is made. Interest is deemed to be received when credited ; discount on a note is of course taxable as interest, and the same is true of accrued interest included in the price received from the sale of a bond. Deposits in Banks Under the original statute, deposits in savings banks chartered by this commonwealth and in the savings departments of trust companies so chartered, within the limits imposed upon savings banks, were exempted, because such deposits are reached for taxation by a tax on the franchise of the banks and had long been exempt from the direct property tax. 2 Subsequently the exemption was extended to deposits in savings banks in such other states as grant a like exemption to deposits in Massachu- setts savings banks owned by their own inhabitants. 3 It has been ruled that in the case of a deposit in the savings department of a trust company which exceeds in amount the limits imposed upon deposits in savings banks, the depositor is taxable upon the entire interest and not merely upon so much as is derived from the portion of the deposit in excess of the savings bank limit. The soundness of this ruling has been questioned but it has not been contested in the courts and it seems clearly sound if this statute and the statute providing for the taxation of the savings departments of trust companies are to be considered complementary. 4 Interest on deposits in the Postal Savings Banks is exempt because a state is not allowed to tax such income. Interest on money on deposit in the savings departments of national banks, is, however, taxable. Income received from shares in Massachu- setts cooperative banks is not taxable, either before or after the maturity of the shares. 5 Interest received from deposits in any banks, except savings banks and savings departments of trust companies, is of course subject to taxation. 2 G. L. c. 63, §15, infra, page 518; G. L. c. 59, §5, cl. 28, supra, page 214. 8 St. 1918, c. 7; St. 1918, c. 120. The states whose savings banks are included in the exemption are (besides New Hampshire) Maine, Vermont, Connecticut and New York. 4 G. L. c. 63, §11, infra, page 515. 6 The exemption also extends to co-operative banks chartered in Maine, Ver- mont, New Hampshire, Connecticut and New York. 440 Taxation in Massachusetts [G. L. c. 62, § 1, (a) United States, State and Municipal Bonds The exemption of interest received on United States bonds is based upon the lack of power of a state to tax the instrumental- ities of the federal government 6 and is not confined to the narrow limits set forth in the statute. It includes certificates of in- debtedness and all other forms of obligations of the United States, and extends to the obligations of all bodies politic and corporate established by Congress which Congress has expressly declared should be exempt from taxation, such as the bonds of territories and insular possessions and of municipal corporations located therein, and bonds of such corporations as the Federal Land Banks and the War Finance Corporation and federal farm loan bonds. The state and municipal securities which are exempt from taxation under the terms of the statute are bonds and notes issued by this commonwealth since January 1, 1906 and bonds and notes of cities, towns and districts within the commonwealth issued since May 1, 1908, stating on their face that they are tax- exempt. The bonds and notes of other states, or of cities and towns in other states, are taxable even if they bear on their face the statement that they are tax-exempt. Interest on Mortgages The exemption of interest received on loans secured by mort- gage of real estate is a continuation of the practice which pre- vailed under the earlier statutes, originating in 1881, which was designed for the purpose of avoiding the double taxation of the same property which would result if mortgaged real estate were taxed at its full value, and the mortgage thereon were also taxed. 7 The exemption is therefore strictly limited to mortgages of tax- able real estate; and interest on a mortgage upon a church or other exempt property is taxable. If the amount of the mort- gage is greater than the assessed value of the land, the interest on the excess is taxable. Although the same element of double taxation may be pres- ent, the exemption does not extend to mortgages oi tangible "Supra, Part I, §27. 7 G. L. c. 59, §12, supra, page 230. y Taxation of Incomes 441 G.L.c. 62, §1, (a), (b)] personal property situated within the commonwealth, or of prop- erty, real or personal, situated outside the commonwealth. There is no provision for apportionment in case the mortgage includes real estate within the commonwealth and other property as well, and in such case the entire interest is taxable. 8 There is no requirement that the obligation secured by a mortgage be held by one individual, and the interest on an entire issue of bonds secured by a mortgage, or on a set of "parti-mortgage receipts" is exempt whenever a note held by one individual secured by a like mortgage would be exempt. 9 It is not always easy for a private investor to determine what bonds are tax-exempt, and the income tax division has prepared a list of mortgage bonds which it has investigated, with a statement of those which it considers taxable and those which it considers tax-exempt. Pawnbrokers Under the original income tax act, it was held that interest received by a pawnbroker in the course of his business was tax- able at six per cent as "money at interest" rather than at one and one-half per cent as income from business. 10 It was how- ever almost immediately provided by the legislature that inter- est received by persons loaning money as a business upon the pawn or pledge of tangible personal property should be taxed upon such interest as income from a business and not as money at interest. 11 Dividends on Stock in Foreign Corporations (h) Dividends, other than stock dividends paid in new stock of the company issuing the same, on shares in all corporations and joint stock companies organized under the laws of any state or nation other than this commonwealth, except banks the shares of which are sub- ject to taxation under section one of chapter sixty-three and except such foreign corporations as are subject to a tax upon their franchises payable to the commonwealth under section fifty-eight of chapter sixty-three. 8 See Brooks v. West Springfield, 193 Mass. 190 (1906); Sweetser v. Man- ning, 200 Mass. 378 (1909). 'See Knight v. Boston, 159 Mass. 551 (1893). "Goldman v. Tax Commissioner, 230 Mass. 554 (1918). 11 St. 1918, c. 150. 442 Taxation in Massachusetts [G. L. c. 62, § 1, (6) This provision of the income tax law was intended to be com- plementary to the statute under which corporations were taxed, and to reach stock held by residents of Massachusetts in all cor- porations except those which were themselves taxed on their shares or franchises by the corporation tax act then in force. Under the present system of taxing corporations, foreign corpor- ations doing business in this commonwealth are taxed on their franchises, and their stock is taxable with respect to its income when in the hands of residents of Massachusetts, although an allowance is made to prevent double taxation, so that the statutes are still in a sense complementary. 1 Dividends on shares in all corporations and joint stock companies organized under the laws of any state or nation other than Massachusetts and received by a resident of this commonwealth are taxable under this pro- vision of the income tax act, except dividends on shares in na- tional banks and on certain public service companies which pay a franchise tax to the state. 2 So-called dividends upon insurance policies are however not taxable, as they are merely the return of over-payments of premiums. 3 It is not necessary that a dividend, to be taxable, be paid in cash. Dividends paid in property, in scrip, in Liberty Bonds or in stock of other corporations are taxable at the fair market value of the property when received. 4 The taxability of dividends paid in the stock of the corporation which issued them raised one of the most notable controversies in the history of the law of taxation. Stock dividends were held to be taxable as income under the Massachusetts income tax act; 5 but under the federal income tax acts it was not only held that a stock dividend was 1 G. L. c. 63, §43, infra, page 567. 2 There are at present only three such companies, namely, the American Tel. & Tel. Co. ; the New England Tel. & Tel. Co., and the Western Union Tel. Co. 3 See Orleans Board of Assessors v. New York Life Insurance Co., 216 U. S. 517 (1910). 4 When a sum of money is paid by a corporation in settlement of a claim for accrued dividends, the sum so paid is taxable as a dividend. Wilder v. Tax Com- missioner, 234 Mass. 470 (1919). 6 Tax Commissioner v. Putnam, 227 Mass. 552 (1917). In that case it was held that the stock dividend was taxable although declared out of earnings that had been invested in permanent additions to the plant of the corporation prior to the adoption of the Forty-fourth Amendment. In Tilton v. Tax Commissioner, Mass. (1921), it was held that a stock dividend was income whether derived from an increase in the market value of capital assets or from accumulated profits. Taxation op Incomes 443 G.L.c.62,§l, (o)] not taxable under the general provisions of law, 6 but that a stock dividend could not constitutionally be taxed by Congress, because it was not income. 7 While this decision did not affect the inter- pretation of the constitution and laws of Massachusetts, a statute was shortly afterward enacted in Massachusetts exempting stock dividends from taxation. 8 Difficult questions frequently arise in the case of small cor- porations when all or a greater part of the stock is held by two or three men who are also the officers of the corporation and have active control of its business. Apart from the tax laws it is nobody's affair but their own how the profits are divided, and whether in the form of salaries or dividends. If however the division is in proportion to the holdings of stock rather than to the services performed, and the amount received is greatly in excess of reasonable compensation for services, the money distributed will be taxed as a dividend, even if it is treated as a salary by the corporation. 9 The taxability of a dividend depends upon the state of things existing at the time that it is received by the stockholder, either by being paid to him or to his order in cash or credited to him on the books of his banker or broker. It is immaterial when the dividend was earned. A stockholder has no individual interest in the profits of a corporation until a dividend is declared, and he can be taxed on a dividend as income at the time he received it, although it was earned by the corporation at a time when the state had no power to levy an income tax. 10 Unincorporated Associations (c) Dividends, other than stock dividends paid in new stock of the partnership, association or trust issuing the same, on shares in partnerships, associations or trusts, the beneficial interest in which is represented by transferable shares, except dividends on shares of the following : First, Partnerships, associations or trusts, which file with the com- missioner the agreement hereinafter provided for, and the property "Towne v. Eisner, 245 U. S. 418 (1918). 'Macomber v. Eisner, 252 U. S. 189 (1920). 8 St. 1920, c. 352. • See United States v. Philadelphia Knitting Mills Co., C. C. A., Third Circuit, March, 1921. 10 Tax Commissioner v. Putnam, 227 Mass. 522 (1917). 444 Taxation in Massachusetts [G. L. c. 62, § 1, (c) (d) (e) of which consists exclusively of one or more of the following specified kinds of property, to wit : real estate wherever situated and supplies therefor and receipts therefrom ; stocks of corporations tax- able under section fifty-eight of chapter sixty-three, bonds, notes, loans secured by mortgage of real estate, and certificates of indebted- ness, the income of which is exempt from taxation under this section ; property the income of which, if any, would be taxable under this section if owned by an inhabitant of the commonwealth ; shares in partnerships, associations or trusts, dividends on which are exempt from taxation under this section. Second, Partnerships, associations or trusts, the beneficial interest in which is represented by transferable shares, which file such agree- ment and furnish satisfactory proof to the commissioner that two thirds, at least, of their taxable property is taxed within the common- wealth and that the remainder, if taxable, is taxed where situated. (d) Partnerships, associations or trusts, the dividends on shares of which are exempt from taxation under this section, shall pay to the commissioner annually a tax of six per cent of the income derived from their property, so far as such income would be taxable under this section if received by an inhabitant of the commonwealth. (e) Dividends on shares of any partnership, association or trust, of the classes designated in paragraphs first and second of subsection (c), shall be subject to taxation under this section unless the trustees or managers thereof file with the commissioner, in such form as he determines, its agreement to pay to the commonwealth annually the tax imposed by subsection (d) and any tax imposed by section five. In case of any breach of the terms of any such agreement, the same may be enforced by information in equity brought by the attorney general at the relation of the commissioner in the supreme judicial court for Suffolk county. This remedy shall be in addition to all other means of collection provided by this chapter, and to the pen- alties hereinafter imposed. Prior to the enactment of this statute, the excess, if any, of the total value of the shares in an unincorporated association over the value of the property of the association escaped all tax- ation. 1 This portion of the income tax act constitutes an at- tempt to reach such property, but without inflicting double tax- ation. Under its provisions "real estate trusts" are not taxed l Hoadley v. Essex County Commissioners, 105 Mass. 519 (1870). Taxation op Incomes 445 G.L.c.62, §1, (e)] on their income at all, and "holding companies" are not taxed unless the securities which they hold are taxable under this act, in which case the income from the securities is taxed to the "company" and the dividends are not taxed to the shareholder. An unincorporated association doing a manufacturing or mer- cantile business (or any other business which it is capable of doing) principally within this commonwealth (as evidenced by the location of two thirds of its taxable property) is taxable upon its business income like any other partnership at one and a half per cent, 2 and an association doing business principally without the commonwealth is not taxed on its business income but the shareholders are taxed on their dividends at the six per cent rate just as if it were a foreign corporation. It is of great importance to the shareholders in one of these associations which is entitled to pay the tax itself and receive all the exemptions and deductions of an individual citizen that it file the agreement provided for in subsection (e) ; otherwise its entire income from all sources derived is taxable at six per cent in the hands of those of its shareholders who are inhabitants of this commonwealth, so far as the same is distributed. The agreement, to be effective with respect to the dividends paid in any year, must be filed not later than the first day of February in the following year. An association which has filed the agreement in accordance with law is taxable only when an individual would be taxable under like circumstances. It is not taxable for the rent of real estate, or for royalties from a mine, or for the profit upon an isolated sale of real estate or other tangible capital asset, or for interest and dividends which would not be taxable if received by an individual inhabitant of the commonwealth. It is taxable, like an individual, at one and one half per cent upon the net profits of a business carried on by it, at three per cent upon the excess of the gains over the losses from the sale of intangible property, and at six per cent upon such interest and dividends as would be taxable if received by an individual inhabitant. It may claim a single exemption of $2000 from its business income. It can claim no deduction on account of the individual share- holders, and must pay its tax in full without regard to the proportion of shareholders who are not inhabitants of this 2 Under G. L. c. 62, §5 (d) infra, page 457. 446 Taxation in Massachusetts [G. L. c. 62, § 1, (e) (f) (g) commonwealth. It may claim a deduction from business income on account of salaries paid to officers and employees, even though such officers and employees are also shareholders. An association is entitled to file the agreement as an owner of real estate even although the real estate which it controls is not owned by it in fee, provided its interest in such real estate is as high as a lease for years. An association which has filed the agreement must make a return each year, even if it has received no income. An associ- ation which has not filed the agreement need make no return of income, but it must file a return in the same manner as an individual or a corporation, giving the names of employees, stock- holders and bondholders, who are inhabitants of this common- wealth, to whom it has made payments during the year, in accord- ance with the provisions of section thirty-three. Securities Held in Pledge or on Margin (/) For the purposes of this chapter any securities of the classes designated in this section, held in pledge, or on margin or otherwise, by an agent or broker as security for a debt of his principal, whether standing in the name of the principal or any other person, shall be deemed the property of the principal, and the income arising there- from shall be included in the total income of the principal under this section. Under earlier decisions it had been held that stocks held by a broker in pledge or on margin were taxable to the broker. 1 These decisions were contrary to the weight of authority in other states and were extremely unsatisfactory to the brokers, and the effect of the decisions was modified by the income tax act for the purposes of that tax. Distribution of Capital (g) No distribution of capital, whether in liquidation or other- wise, shall be taxable as income under this section; but accumulated profits shall not be regarded as capital under this provision. Difficulties sometimes arise in determining how far a dividend constitute^ a distribution of capital; and the director of the 'Chase v. Boston, 180 Mass. 458 (1902). Taxation op Incomes 447 G.L.c.62,§2, (a) (&)] income tax division requires that dividends claimed to be a dis- tribution of capital be set forth in the return so that the facts in relation thereto may be verified by the commissioner. Divi- dends in reduction of capital and dividends in liquidation of a corporation the capital of which has been impaired are clearly not taxable; but dividends of a corporation even in liquidation are taxable (provided ordinary dividends of such corporation are taxable) so far as they represent a division of assets in excess of the capital and paid-in surplus. As a distribution of accumulated earnings they are taxable even if the earnings were accumulated before the income tax law went into effect and were invested in the acquisition of permanent capital assets. 1 Interest Deduction Section 2. (As amended by St. 1921, Chapter 265.) From the income taxable under the preceding section, the taxpayer may, under the conditions prescribed in this section and section seven, receive a deduction on account of interest paid by him during the year on debts of the following classes : (a) Debts, except those secured by mortgage or pledge of real estate or tangible personal property, owed by persons engaged in the business of buying, selling, or otherwise dealing in intangible personal property, provided that such business, if it includes other classes of dealings, does not include buying, selling, improving or otherwise dealing in or with real estate or buying, selling, manufacturing or otherwise dealing in or with tangible personal property other than gold' bullion. (&) Debts owed by other persons, except debts secured by such mortgage or pledge and debts on account of which the taxpayer is entitled to claim a deduction under sections five and six. Said deduction shall be allowed, in respect of interest on any debt belonging to class (&) above enumerated arising from loans or open accounts directly or indirectly secured by intangible personal prop- erty, only to an amount not exceeding eighty per cent of the income returned by the taxpayer for taxation under section one on account a Tax Commissioner v. Putnam, 227 Mass. 522 (1917). See also Moore v. Tax Commissioner, 237 Mass. 574 (1921) holding that, upon the liquidation of a corporation, accumulated profits used as capital but not capitalized by the issu- ance of a stock dividend or absorption in permanent works are taxable as income - when distributed to the shareholders. 448 Taxation in Massachusetts [G. L. c. 62, §§ 2, 3, 4 of intangible personal property which secured such loans or open accounts. Persons described in paragraph (a) of this section may, if the deductions allowed by subsections (a)', (&), (c), (d), (e) and (/) of section six exceed the total income taxable under subsections (&) and (c) of section five, deduct from their taxable interest and dividends, after deducting the aforesaid interest deduction, an amount of such excess which bears the same proportion to the total excess as their income taxable under section one bears to their total net income as determined under section three. Section 3. The deduction to be allowed under the preceding section shall be determined in the following manner : A taxpayer claiming the benefit thereof shall file with the com- missioner or the income tax assessor of his district a return, in such form as the commissioner prescribes, of his entire income from all sources, together with such other information as said commissioner deems necessary for the determination of the amount of this deduc- tion. The commissioner may, in lieu of such return, accept a sworn duplicate of the annual return of income made under the federal in- come tax law. He may also, in any case where he deems it necessary, require the taxpayer to file such a sworn duplicate. From said return and information the commissioner or the income tax assessor shall determine the amount of interest paid during the year by the taxpayer on debts of class (a) or (&) enumerated in the preceding section, for which deduction is authorized by said section, which interest, for the purposes of this section, shall be called the net interest. He shall also determine the total net income of the tax- payer, exclusive of income taxable under section five, as such total net income would be if no deduction were made for interest paid during the year. The taxpayer may deduct from his income taxable under section one an amount of interest paid by him during the year which shall bear the same proportion to the net interest paid as his income taxable under section one bears to his total net income as above de- termined. Section 4. A partnership, association or trust, the beneficial in- terest in which is represented by transferable shares, paying to the commonwealth a tax upon income subject to taxation under section one, as provided in subsection (d) thereof, may receive the deduction authorized by section two on the same terms as an individual inhabi- tant. Taxation of Incomes 449 G. L. c. 62, § 4] The foregoing sections have seemed to many to be unneces- sarily complicated and confusing, and require some knowledge of the object sought to be attained to be readily understood. The Massachusetts income tax, like the federal income tax, is intended to be a tax upon net income rather than upon gross receipts; but since the Massachusetts income tax is, unlike the federal income tax, a tax upon certain specified classes of income only and not upon the entire income of the taxpayer, the tax- payer is obviously not entitled to a deduction except on account of expenses incurred in connection with the classes of income which are taxed. Income from taxable intangible property is generally wholly or almost wholly net. The expenses of caring for the property and collecting the income, such as the rent of a safe deposit vault or even the employment of a confidential clerk or secretary, are not sufficiently large in proportion to the income to be worthy of a special provision for deduction except in the case of trust property, in which case expenses of administration properly chargeable to income are allowed to be deducted. Federal taxes are not deducted because the right of the state to tax its own citizens is primary. The only deduction to which an owner of intangible property is fairly entitled is interest paid by him on a loan secured by property the income of which is taxable under the act. In the original draft of the income tax act it was provided that there should be a deduction for interest so paid and that the owner of taxable intangibles pledged as security for a loan should be taxable only on the net income therefrom, but it was deemed to be impossible to apply such a rule in many instances, and to meet the common case of loans secured by a shifting mass of collateral, partly taxable and partly non-taxable, where it would be impossible to determine what proportion of the interest was attributable to the portion of the loan secured by taxable securities, the rather complicated provisions of this section were adopted. They are intended to provide a rule-of- thumb for bringing about the desired result as nearly as possible. The taxpayer (other than one whose sole business is in dealing in securities) is allowed to deduct from his income from taxable intangibles that portion of the interest paid by him during the year which shall bear the same proportion to all the interest paid by him other than on loans secured by mortgage or pledge 450 Taxation in Massachusetts [G. L. c. 62, §§ 4,5, (a) of real estate or tangible personal property or on loans incurred by him in connection with his business, that his income from taxable intangibles bears to his total income other than from his business, employment or profession, from annuities, from fiduciaries and from buying and selling securities; provided, however, that such deduction cannot exceed eighty per cent of the total income from taxable intangibles. Fortunately for the taxpayer he does not have to make this computation himself, and it is made by the commissioner on the basis of the figures included in the return of such taxpayers as claim this deduction. A person claiming the deduction is nec- essarily obliged to include in his return his income from all sources, taxable and non-taxable, in the latter class falling income from non-taxable intangibles, from real estate, from savings banks and all other sources. In determining the gain from the sale of property for the purposes of the interest deduction the same rule is applied as when the determination is for the pur- pose of levying a tax; namely the price at the sale is compared with the purchase price unless the property was bought prior to January 1, 1916, in which case the value at that date is the test. The cost of any subsequent additions or betterments which may properly be capitalized, and any excess of expenses over receipts, may be added. In determining the total income of the taxpayer, losses from the sale of real estate may be deducted from income from other sources. Annuities Section 5. Income of the following classes received by any in- habitant of the commonwealth during the preceding calendar year shall be taxed as follows : (a) Income from an annuity shall be taxed at the rate of one and one half per cent per annum. The income of property held in trust shall not be exempted from taxation under section one nor shall pay- ments to beneficiaries be taxed under this section, because of the fact that the whole or any part of the payments to the beneficiaries is in the form of an annuity. An annuity taxable under this act is a definite sum of money payable annually, or in fractions or parts of a year, to an inhabi- tant of this commonwealth, during the life of one or more Taxation of Incomes 451 G. L. c. 62, § 5, (a) (&)] persons, which he has a right to receive without regard to the actual income derived from any particular source by the person or corporation bound to pay it. Income from an annuity is taxed at a lower rate than income from intangible property partly because the capitalized value of an annuity is less than the value of property producing an equivalent annual income and partly because the income from an annuity had been taxed for over eighty years at the local rate, 1 which in the years before the enactment of the income tax act averaged about 1.8 per cent, and it was not the purpose of this statute to increase the burden of taxation upon any class of property. An annual payment does not cease to be an annuity because its amount was determined at an interest rate and not by the use of a mortality table, or because it is stipulated that even if the annuitant dies the payments will continue until their total reaches a certain sum. Pensions which the pensioner is legally and irrevocably entitled to receive are taxable as annuities unless specially exempted by law. Pensions granted by the United States are not taxable by the state. The proceeds of an insurance policy payable to a designated beneficiary in fixed annual amounts during his life are taxable as an annuity. 2 The right to receive alimony is not taxable as an annuity. The payment of a fixed sum annually out of the income of any particular property by an executor, adminis- trator or trustee is not taxable as an annuity; but a charge or condition attached to a gift or devise and providing for the an- nual payment by the donee or devisee of a fixed sum to a third person does create a taxable annuity. Income from Professions, Employments, Trade or Business (6) The excess over two thousand dollars of the income, as de- fined in section six, derived from professions, employments, trade or business shall be taxed at the rate of one and one half per cent per annum. In determining such income the rental value of living 1 The provision in regard to the taxation of income from an annuity was in- troduced for the first time in the Revised Statutes of 1836, although it is not referred to in the Commissioners' Notes. 2 An insurance company may he taxed on account of annuity contracts while the annuitant is at the same time subjected to an income tax on the annuity. Mutual Benefit Life Insurance Co. v. Commonwealth, 227 Mass. 63 (1917). 152 Taxation in Massachusetts [G. L. c. 62, § 5, (b) quarters furnished any individual as part of his compensation shall be included. The wages and salaries of employees and officers of the United States government shall not be taxed. Retirement allowances, however described, from the commonwealth or any county, city, town or district thereof, or from any person, if not exempt by law, and interest received in the course of business by persons loaning money as a business upon the pawn or pledge of tangible personal property, shall be taxed under this subsection. As early as 1646, special provision was made in the Massa- chusetts Bay Colony for the taxation of all such persons as by the advantage of their arts and trades were better able to help bear the public charges than common laborers and workmen. Such persons were to be rated for their returns and gains, in the same proportion as other men for the produce of their es- tates. All of the tax laws in the colonial and provincial periods continued this tax, which was generally described as a tax on in- comes by any trade or faculty. This tax was kept in force after the Revolution, and income from a profession, trade or employ- ment was taxed in each town at the same rate as real estate and personal property. 1 In 1849 income of this class not exceed- ing six hundred dollars was exempted, and in 1873 this exemp- tion was extended to two thousand dollars as a concession to the merchants and tradesmen of Boston and other commercial centres, who had made great efforts to have the tax repealed. The tax was very unequally enforced ; as there were no com- pulsory returns, in some towns it was ignored altogether; in others "personal estate and income" furnished a convenient catch-all to use in order to reach for taxation persons who were apparently in comfortable circumstances but about whose re- sources little was known. In a few cities a genuine effort was made to enforce the tax. Although the real purpose of the income tax act of 1916 was to provide a more equitable and practicable method of taxing intangible personal property than was furnished by the direct property tax, it was thought best, in order to provide against any possible loss of revenue by the reduction in the rate of the tax on intangibles, and to make the operation of the tax laws 1 Wilcox v. Middlesex County Commissioners, 103 Mass. 544 (1870). Whether this tax was an excise or a property tax was never decided. See Opinion of the Justices, 220 Mass. 613, 625 (1915). Taxation of Incomes 453 G.L.c. 62, §5, (ft)] more equitable, to convert the time honored municipal tax on the income from trades, professions and employments into a state tax at a uniform rate, and to provide for compulsory re- turns. Although the average rate throughout the state was ap- proximately 1.8 per cent, the rate fixed for the tax under the new statute was but 1.5 per cent, and the exemption of two thousand dollars was retained, and additional allowances were granted for dependents. The scope of the section is broad, and it includes almost every form of income derived from the personal efforts of the taxpayer. It is of course not necessary that the income be in money, and compensation for services in property or in the right to occupy a dwelling is taxable at its money value. Even the value of so much of the products of a farm as the farmer de- votes to the use of himself and his family is taxable. Commis- sions and directors' fees are taxable. A bonus paid to an em- ployee is taxable to him if it is additional compensation for his services and is considered a business expense by the employer. An employment would probably include almost any per- sonal service performed for another, for which the taxpayer was compensated, even if his employment was temporary, casual or irregular or consisted of but a single specified piece of work. A business is not so easy to delimit. One who sold his dwelling house, or his yacht, or his automobile, at a profit would not be taxable on such profit as income from business. Business im- ports a customary and habitual occupation, yet a person who has made but a single transaction in a year may under some cir- cumstances be held to be in business and his profit therefrom may be taxable. If a person has several different employments or occupations during a year, he is taxable on the total income from all. Rents payable solely as the compensation for the use of real estate are clearly not taxable to the owner of the real estate as business income, even if he has no other occupation than col- lecting the rents and caring for the property which produces the rent. If however he heats and lights the rented property, fur- nishes elevator service and employs janitors and scrub-women upon the premises it might be contended that he was in business and that his income from the property was a business income. In such case however it would seem that in any event the excess 454 Taxation in Massachusetts [G. L. c. 62, § 5, (6) of the actual income of the property over what the fair rental value thereof would be without such service would be all that could fairly be attributable to the business, the rest being rent of real estate and not taxable income. Even if under such con- ditions the whole income was held taxable, the tax would not reach a very large proportion of the owner's income from the property, since the deduction of five per cent of the value of the property employed in the business under section 6, subsec- tion (g) would be very substantial. A trustee or other fiduciary who carries on business as such is entitled to claim the exemption of two thousand dollars or more (depending on the number of dependents of the beneficiary) for each beneficiary entitled to share in the income, provided that the beneficiary did not receive business income from other sources which consumed his exemption. The trustee cannot how- ever claim on account of any beneficiary an exemption greater than that beneficiary's share of the income, nor can he claim any exemption on account of any non-resident beneficiary, since the share of the income payable to such beneficiary is not taxable under the act. The salary of an officer or employee of the United States is beyond the power of the state to tax; 2 but in the original income tax act it was provided that if an officer or employee of the United States was in receipt of business income from other sources, so much of such other income should be taxed as, when added to the federal salary, exceeded two thousand dollars. This method of indirectly reaching* the federal salary having been held improper, 3 the statute was changed accordingly. A person receiving business income through a contract with the United States, and who is not an officer or employee of the federal gov- ernment, is however taxable thereon. The tax on business income takes no account of the place where the business is carried on, and liability to taxation depends wholly upon the domicile of the taxpayer. A resident of this commonwealth is taxable for the income from a profession, em- ployment, trade or business carried on entirely in another state or country; and conversely, although it would clearly lie within 2 Supra, Part I, §28. "Biscoe v. Tax Commissioner, 236 Mass. 201 (1920). Taxation of Incomes 455 G.L.c.62,§5, (6) (c)] its power, this commonwealth has not attempted to tax the business income of non-residents earned within its limits. Gains from Sales of Intangibles (c) (As amended by St. 1921, chapter 376.) The excess of the gains over the losses received by the taxpayer from purchases or sales of intangible personal property, whether or not said taxpayer is engaged in the business of dealing in such property, shall be taxed at the rate of three per cent per annum. Any trustee or other fidu- ciary may charge any taxes paid under this paragraph against princi- pal in any accounting which he makes as such trustee. This paragraph imposes a tax on a source of income which was not taxed under the law as it previously existed and is thus not in harmony with the general purpose of the income tax act, which was to reduce and equalize the burden of taxation rather than to lay taxes on subjects which had previously not been taxed. It was not contained in the original draft of the bill, but was introduced later, in order to reach the large fortunes which were being made in stock speculation during the war. The con- stitutionality of the tax imposed by this paragraph was assailed on the ground that a gain made in the sale of stocks by a person not engaged in the business of buying and selling securities was an increase in capital, and not income, and could not be taxed as income; but the court held that the word "income" in the Forty-fourth Amendment is susceptible of a meaning sufficiently broad to include gain from even a single isolated sale of intangible property; and that the statute was not objectionable as levying a tax at a different rate from the same class of property, as income from dividends or interest and income from the sale of the prop- erty from which such dividends or interest might arise do not properly belong to the same class. 1 Under this paragraph it has been ruled in accordance with the provisions of section seven that when property sold during any year was owned by the seller on January 1, 1916, his profit or loss is to be determined by comparing the selling price with the market value of the security on January 1, 1916. The com-' missioner has prepared pamphlets showing the value on January 1, 1916, of the securities commonly bought and sold. These 'Tax Commissioner v. Putnam, 227 Mass. 522 (1917). 156 Taxation in Massachusetts [G. L. c. 62, § 5, (c) values are of course not binding on the taxpayer but are gen- erally accepted in the absence of evidence showing them to be wrong. 2 In case the property sold was purchased after January 1, 1916, the actual price paid, plus the broker's commission paid for the purchase, is taken as the cost, and in every case the actual price received, less the broker's commission paid for the sale and the stamp tax, is taken as the selling price. If the security be- comes worthless, and so unsalable at any price, it may be cred- ited as a total loss. It has been held that the price received from the sale of "rights" — the transferable privilege given to stockholders in a corporation about to issue new stock to subscribe to such stock at a specified price — is taxable under this section even if the stock itself decreased in value at the time of the new issue. 3 A liquor license and a seat on the stock exchange are also considered to be "intangible property," profit on the sale of which is taxable under this subsection. The "purchases or sales" of intangible personal property re- ferred to in this paragraph are not necessarily purchases or sales for money, but include exchanges of securities or the disposition of securities for anything of value. Many taxpayers have won- dered how there can be any gain or profit on a fair and equal exchange. The comparison is however made between the value of the security owned by each taxpayer on January 1, 1916 (or the price which he paid when he bought it, if his purchase was subsequent to that date) and the value on the date of the ex- change of the property for which he exchanged it. If both securities have appreciated in value, both parties to the exchange make a profit and are taxable thereon. To ascertain the amount of the profit, the commissioner must determine the value of the property exchanged on the date of the exchange. 4 2 Thus in Osgood v. Tax Commissioner, 235 Mass. 88 (1920), the commis- sioner's determination of value was shown to be erroneous, and an abatement granted. Doubtless if the transaction was in fact a loss, it would not be taxed as a profit merely because the security sold for a higher figure than its value on Jan. 1, 1916. See Goodrich v. Edwards, 255 U. S. 527 (1921). 3 Tax Commissioner v. Putnam, 227 Mass. 522 (1917). 4 Thus if A bought 10 shares of the X Co. in 1914 for $80 a share, and the shares were worth $90 a share on Jan. 1, 1916, and B bought 10 shares of the Y Co. in July, 1916, for $90 a share and they made an equal exchange in July, 1919, and at that time the stock in each company was worth $120 a share, each would have made a taxable gain of $30 a share, or $300 and would be taxable thereon at 3%, or for $9. Taxation of Incomes 457 G. L. c. 62, § 5, (c) (d)] Even when the exchange is a step in the course of the reor- ganization of one or more corporations it is taxable, although the taxpayer does no more than to exchange shares of an old corporation for shares of a new corporation which has taken over the property of the old, whether the new corporation is a consoli- dation of several old ones, 5 or is formed to take over the business of but one existing corporation and carries on the identical bus- iness without any outward appearance of change. 6 When an executor, administrator or other fiduciary distrib- utes securities to a legatee in payment of a legacy of a specific sum it has been ruled that such distribution is to be taken as a sale of the securities for the amount of the legacy and the profit or loss is to be figured accordingly. The payment of a bond when due is not a sale, and the difference between the amount so paid and the price paid for the bond is not a gain or loss within the meaning of this section. If intangible property is sold which was received as a gift or legacy, or as compensation for services or as a dividend, the actual value when received is taken as the cost price except in case of a stock dividend of stock of the corporation issuing the dividend in which, under the present ruling, the entire amount of the price received is considered as gain, and in case of a spe- cific legacy, when the value is taken as of the death of the testa- tor. If intangible property is sold by a fiduciary or assignee or similar functionary, the cost to the person whose estate he repre- sents is taken as the cost, or if the property was bought prior to January 1, 1916, the value on that date. Income of Unincorporated Associations Taxable under Section Five (d) Income of the classes enumerated in subsections (a), (b) and (c) received by any partnership, association or trust, the beneficial 6 Stone v. Tax Commissioner, 235 Mass. 93 (1920). "Osgood v. Tax Commissioner, 235 Mass. 88 (1920). In this case a corpor- ation having both common and preferred stock had a large surplus and a new corporation with a larger capitalization was organized with no preferred stock, and the stockholders of the old company were given an opportunity to exchange their old stock, both common and preferred, for a larger amount of the common stock of the new company. This transaction was held taxable. The justice of taxing a profit of this character, which may never be realized, has been much questioned, and in the Federal Revenue Act of 1921 it is expressly provided that such transactions shall not be taxed. 458 Taxation in Massachusetts [G. L. c. 62, § 5, (d) (e) interests in which are represented by transferable shares, shall be taxed under this section, unless the dividends on the transferable shares issued by such partnership, association or trust are taxable under section one. When the dividends paid by unincorporated associations are taxable to the holders of shares in the association, and when the associations are themselves taxable on their income and the shareholders are exempt is determined by the provisions of para- graphs (c), (d) and (e) of section one. Income from Intangibles Not Taxable under Section Five (e) Interest and dividends taxable under section one shall not be taxed under this section. This provision was intended to make it clear that income from securities held by a person in connection with his business should not be taxed as business income ; if taxable the income is taxed at the six per cent rate ; if non-taxable the income is not taxed at all. In other words this paragraph is a direct implication that the commissioner can analyze the income derived from professions, employments, tr*ade or business and tax at six per cent so much of it as is income taxable under section one and the balance, so far as it is not from sources specifically exempt, at one and one-half per cent. 1 Determination of Business Income Section 6. Income taxable under subsection (&) of section five shall be the gross income from the profession, employment, trade or business, in the year for which the income is computed, not including income exempt from taxation under this chapter or taxable hereunder otherwise than under said subsection (&), but including gains from the sale of capital assets, other than intangible personal property, employed therein ; less the following deductions : The gross income from a profession is the total of the gross receipts. The gross income of an employment is the salary, wages, or commissions received during the year, including any bonus or extra compensation to which the employee is legally Goldman v. Tax Commissioner, 230 Mass. 554 (1918). Taxation op Incomes 459 G.L.c. 62, §6, (a)] entitled but not including such an element if it is a gift. Fees received by directors of corporations are taxable as income. Or- dinarily the gross income of an employment is also the net in- come except for the taxes paid thereon. The gross income of a trade or business, unless the person taxed customarily estimates his income upon a more accurate basis in accordance with sec- tion seven, is the excess of the total amount of money actually received during the year from the sale of goods over the total amount paid during the year, in the case of a mercantile business for the purchase of stock in trade, and, in the case of a manu- facturing business, for the purchase of raw material. From the gross income thus ascertained the taxpayer is entitled to make the deductions set out in the following subsections. Deductions — Business Expenses (a) Expenses paid withm the year in the profession, employment, trade or business, including the cost of ordinary repairs but not in- cluding personal or family expenses; provided, that premiums paid for use and occupancy insurance, or rent insurance, shall not be de- ducted as part of such expenses. This of course includes such items as rent of the taxpayer's office or place of business, heating and lighting the same, and wages, fees, salaries and commissions paid by him to employees or others for services in connection with his business. Bonuses, extra commissions or gifts to employees cannot be considered unless the employee was legally entitled thereto by the terms of his contract. The proprietor of the business is not entitled to deduct the amount of his drawing account or compensation for his time and labor, and the same is true of a partnership. The salaries, so-called, or drawing account, of the partners are really a divi- sion of income, which is taxable to the partnership and not to the partners. Ordinary repairs of property used in the business constitute a deductible expense; but permanent additions to equipment, plant or other capital assets, and amounts expended for per- manent improvements and betterments, or for extraordinary repairs which appreciably prolong the life of the property, 460 Taxation in Massachusetts [G. L. c. 62, § 6, (a) (b) constitute a capital investment, and cannot be charged as a deduction against income. Deductions Continued — Depreciation, Obsolescence and Depletion (b) A reasonable allowance for depreciation and obsolescence of property within such year, and for depletion within the year of wast- ing assets owned by the person taxed and used in the profession, em- ployment, trade or business; provided, that with the approval of the commissioner a taxpayer may, in lieu of the aforesaid allowance for depreciation and obsolescence, be allowed to deduct actual expenses of replacement of capital and extraordinary repairs, and with such ap- proval may in any year defer such deductions in whole or in part to one or more subsequent years. The taxpayer cannot of course charge off both an allowance for depreciation and obsolescence and the actual cost of making good such depreciation and obsolescence, but is, with the per- mission of the commissioner, allowed to choose which method of crediting himself with this loss he shall adopt. The concluding clause of this paragraph makes provision for cases in which such radical repairs or replacement are made that the cost exceeds the net income of the year. As the taxpayer cannot set off the net loss on his operations of that year against profits of the ensu- ing year he is allowed to spread his deductions over the following year or years so that he may get full credit for them. A deduction for depreciation and obsolescence is allowed only upon capital assets used in. the business; the depreciation of stock in trade or goods purchased for manufacture or sale will be shown in the inventory if one is taken or reflected in the decreased receipts when the goods are sold. No deduction is allowed for depreciation of the good will of the business. When no other more accurate measure is available, the usual method of determining the annual allowance for depreciation or depletion is to divide the cost of the property when new by the number of years of its anticipated life and to deduct each year the amount thus determined. Thus in the case of pat- ents, which expire at the end of seventeen years, one seven- teenth of the cost of securing or purchasing the patent may be claimed as the annual allowance for depletion. Taxation op Incomes 461 G. L.c. 62, §6, (c)] Deductions Continued — Taxes Paid (c) All taxes paid within the year to the United States or any- other nation, or to any state, county, city, town or district, in respect of the profession, employment, trade or business, or the property held or used in connection therewith, but not including assessments for betterments. It will be noted that the federal income tax (or a portion thereof) is deductible from the tax on business income, but not from the tax on the income of intangibles. Taxpayers should bear in mind that inasmuch as the tax imposed by the portion of the statute now under consideration is a tax on income of a limited kind only, the deduction allowed is with respect to the tax on that same kind of income only or on property held or used in connection therewith, and in this respect differs from the federal income tax, which is a general income tax and from which taxes generally can be deducted. Accordingly, only that portion of the income tax, state or federal, which was assessed in the preceding year with respect to business income can be deducted from the business income of that year. The income tax paid to the state on business income in the preceding year can be readily ascertained; the federal income tax paid on this class of income during the preceding year is more difficult of computation, but it may be ascertained by the following formula, reference being made to the figures shown in the federal income tax return of the taxpayer for the pre- ceding year. a — net income from salaries, wages, business or profession. b = taxable income from all sources, except dividends and liberty bonds, excluding from consideration "minus items" and deduc- tions, c = total normal tax paid, d = taxable income from all sources, excluding from consideration " minus items " and deduc- tions, e = total surtax paid. The amount deductible for the purposes of the state income tax is a a — X c + — Xe b d Deductions Continued — Interest on Business Debts (d) Interest paid within the year on indebtedness of the person taxed incurred in connection with his profession, employment, trade 462 Taxation in Massachusetts [G. L. c. 62, § 6, (d) (e) (f) or business ; but no interest allowed as a deduction under section two shall also be allowed under this section. This deduction is strictly limited to interest paid on indebted- ness incurred in connection with the business, and whether an indebtedness is incurred in connection with the business is a question of fact in each instance, depending on the use to which the funds are put. Unlike the federal income tax, the taxpayer cannot deduct interest on money borrowed for living expenses, or on a mortgage upon his home, unless the money so obtained was used in his business. Deductions Continued — Losses and Destruction of Capital Assets (e) Losses from the sale within the year of capital assets other than intangible personal property, and losses of capital assets other than stock in trade sustained within the year by fire, theft or other casualty, or amounts paid within the year on account of claims in law or equity incurred in connection with the profession, employ- ment, trade or business, when such losses or amounts paid are not compensated for by insurance or otherwise. The reason that losses connected with stock in trade are not allowed as a deduction is that they are covered by the allow- ance for the cost of goods when purchased. In determining the loss from the sale of capital assets under this paragraph, the value on January 1, 1916, of such property as was owned on that date and the actual cost of property acquired since that date is taken as the basis for comparison, subject to correction by adding all amounts expended upon the property and capital- ized and deducting all amounts written off or allowed for de- preciation. Deductions Continued — Losses from Bad Debts (/) The amount of any debts receivable arising from the conduct of the profession, employment, trade or business subsequent to Decem- ber thirty-first, nineteen hundred and fifteen, determined by the person taxed to be worthless and actually charged off during the year; but no debts receivable shall be so charged off and deducted, unless they have previously been included as income in a return made under this chapter or corresponding provisions of earlier laws. Only such bad debts can be deducted from the income of a Taxation of Incomes 463 G.L.c.62,§6, (/) (g)} profession, employment, trade or business as arose in connection with such profession, employment, trade or business, and then only if they have previously been included as income in a re- turn by a taxpayer. If the taxpayer returns his income on a cash basis, he can claim no deduction for bad debts, because he never includes in his return a charge made by him against a cus- tomer until it is paid. If a charge proves uncollectible, and it is based on merchandise sold, the taxpayer is entitled to a de- duction for the cost of the goods, not as a bad debt but in deter- mining the gross income of the business. He is not entitled to deduct the expected profit from the sale, or the charges made by him for personal services which he finds himself unable to col- lect, from the income which he has collected. If however he makes his return upon an accrual or inventory basis and includes a sale on credit or other charge as income and subsequently finds himself unable to make collection thereon, he can deduct the amount of the debt as a loss upon the next return filed after the debt is charged off. The allowance for bad debts may there- fore more properly be designated a correction than a deduction. In the original income tax act the provision that no debts should be charged off unless they had previously been included in a return was limited to debts receivable as income, and it was considered that debts receivable as principal might be charged off and deducted without having been so included, because being receivable as principal they would not have been properly returnable as income under the act. In the consolidation of the General Laws the words "as income" were omitted as meaning- less and confusing, 1 and as the law now stands the taxpayer has no right to a deduction for an impairment of capital arising from a debt receivable as principal (such as a loan of capital assets) proving uncollectible, although he is allowed a deduction for the impairment of his capital by a loss in the sale of capital assets, or a loss by fire, theft or other casualty, under the preced- ing paragraph. Deductions Continued — Income Attributable to Capital Invested in the Business (gr) An amount equal to five per cent of the assessed value, less the amount of all mortgages thereon, of the stock in trade and other 'St. 1918, c. 257, §63; and see Preliminary Report of Commissioners, page 127. 464 Taxation in Massachusetts [G. L. c. 62, § 6, (g) (h) tangible property, real and personal, owned by the person taxed and used or employed in the profession, employment, trade or business within or without the commonwealth, on the day as of which such property is assessed in the year for which the income is computed. In case any such stock in trade or other tangible property located without the commonwealth is taxed in respect of its income, and not in respect of its capital value, by the taxing district where located in such year, the commissioner may determine its value in any other manner, and may allow a deduction of an amount equal to five per cent of the value so determined. This deduction originated in the practice of the Boston as- sessors under the earlier statute taxing business incomes, and was based upon the provision in the statute that incomes derived from property subject to taxation should not be taxed. The practice was continued with express statutory sanction under the present income tax act. The object of the deduction is to avoid double taxation and to confine the tax upon business income to a tax on the income from the personal efforts of the person taxed and not to tax the income from his capital, which is rep- resented by property already taxed. It is a fair assumption that five per cent constitutes the return from the capital employed in the business and represented by the stock-in-trade and other tangible property used therein, and that the taxpayer might have received a return of five per cent without any personal efforts on his part by investing his money in securities issued by others; and that the excess over five per cent is the return from his personal efforts, and from his good fortune, skill and judgment. Deductions Continued — Allowances for Wife, Children or Dependent Parents (h) The sum of five hundred dollars for a husband or wife with whom the taxpayer lives, and the sum of two hundred and fifty dollars for each child under the age of eighteen, or parent entirely dependent on the taxpayer for support. The aforesaid deduction shall not be allowed to both husband and wife, but may be allowed to either as they shall mutually agree, or shall be prorated between them in pro- portion to the net income of each in excess of two thousand dollars. Taxation of Incomes 465 G.L.c.62,§6, (fc),§7] In no case shall the total deduction on account of husband and wife, and children and parents, exceed one thousand dollars. This provision adopts the exemption of two thousand dol- lars found in the previous law but establishes an additional exemption with a maximum of one thousand dollars on account of persons dependent upon the taxpayer for support. It should be remembered that this exemption applies only to the income from professions, employment, trade or business and has nothing to do with the tax on other forms of income. Unlike the federal law this statute does not provide for a combined return of hus- band and wife, but, in the very unusual case of a husband and wife living together and each having a separate business income of over two thousand dollars, the additional exemption must be apportioned. It is to be noted that a husband cannot claim a deduction on account of his wife even if he supports her unless he is actually living with her; and that an actual living apart takes away the right to the deduction although there has been no judicial separa- tion. Under the rulings of the commissioner, to claim the deduc- tion the husband and wife must have been living together for at least six months of the taxable year, except in cases where the separation has been caused by the insanity or illness of either, or by the husband's or wife's temporary absence on business or on account of health or similar reason. If the wife dies during the taxable year the husband is still entitled to the deduction, if he has lived with her for six months of the year before her death. On the other hand the status of children for the purposes of this deduction is determined by the conditions existing on January first of the year in which the return is filed. Accrual Basis for Determining Income Authorized Section 7. Persons who customarily estimate their income and expenditure on a basis other than their actual cash receipts and dis- bursements may, with the approval of the commissioner, compute upon a similar basis their income taxable under this chapter. Persons who customarily estimate their income and expenditure on the basis of an established fiscal year instead of the calendar year, may, with the approval of the commissioner and subject to such rules and 466 Taxation in Massachusetts [G. L. c. 62, § 7 regulations as he may establish, return their income taxable under this chapter on the basis of such fiscal year. In determining gains or losses realized from sale of capital assets, the basis of determination, in case of property owned on January first, nineteen hundred and sixteen, shall be the value on that date, and in case of property acquired thereafter, the value on the date when it is acquired. This section applies both to income from intangible personal property and to business income. In the former case the tax- payer may figure his income on the basis of dividends and inter- est actually received during the year, or he may figure it on an accrual basis. In respect to business income he may figure it on the basis of actual cash receipts and disbursements, or upon an annual inventory and profit and loss basis. Even when a taxpayer does not customarily estimate his in- come on an accrual basis, if he buys a bond or a share of stock for a fixed price plus accrued interest or accrued dividend, in returning for the purposes of the income tax the interest or dividend subsequently received he may deduct the amount so paid for accrued interest or accrued dividend. Such amount should be returned as income by the seller, if an inhabitant of this commonwealth. In making inventory, all raw materials, stock in process of manufacture and finished product, owned by the taxpayer, whether or not in his possession, should be included. Inven- tories should be valued at cost, or at cost or market whichever is lower, and the method selected should be applied to each item in the inventory, and adhered to in subsequent years, unless per- mission for a change is secured from the commissioner. Although it is optional with a taxpayer to return his income on an accrual basis, the commissioner disapproves of a return on a cash basis by a taxpayer who keeps his books on an accrual basis. The date fixed by the statute as the basis for determining property values for the purpose of ascertaining gains or losses in case of subsequent sale is the date when income became tax- able, although the income tax act was enacted a few months later and the constitutional amendment which authorized the taxation of incomes was adopted in the previous November. The original statute required all returns to be made on the basis Taxation op Incomes 467 G. L. c. 62, §§ 7, 8] of the calendar year, but was amended in 1917 so as to allow a taxpayer with the consent of tne commissioner to return his income upon the basis of his own fiscal year. Exemptions Section 8. The following income shall be exempt from the taxes imposed by this chapter : (a) Three hundred dollars in all of income taxable under section one and under subsection (a) of section five, received by a person whose total income from all sources does not exceed six hundred dol- lars during the year; but said exemption shall not be given to any married person if the joint income of both husband and wife from all sources exceeds twelve hundred dollars. (6) Income received by corporations, except as provided in sec- tion fourteen. (c) Income received from land classified under chapter sixty-one. (d) Such part of the income received by trustees or other fidu- ciaries as is payable to or accumulated for persons not inhabitants of the commonwealth. (e) Income of intangible personal property exempt from taxation by section five of chapter fifty-nine, except under clauses seventeenth, eighteenth, twenty-second, twenty-third, twenty -seventh, twenty-ninth and thirty-third of said section. (/) Income from an annuity or pension paid by a town in this commonwealth on account of service in a police or fire department. (g) Income from an annuity, pension or endowment exempted by section thirty-seven or forty-one of chapter thirty-two, and all sums exempted by either of said sections by virtue of their being de- ducted from wages as contributions to an annuity, pension or endow- ment fund. Under the original income tax act the exemptions were not specifically enumerated, but it was provided 1 that the act should not be construed to impose a tax upon any corporation or per- son in respect to income derived from property exempted from taxation by provisions of law existing prior to the passage of the act. As this provision led to a construction of the act by the court which was contrary to the intention of its framers 2 it was *St 1916, c. 269, §11. ■ See Maguire v. Tax Commissioner, 230 Mass. 503 (1918). 468 Taxation in Massachusetts [G. L. c. 62, §§ 8, 9 thought best to include all the exemptions in one section. It is however to be noted that the exemption from the tax on business income is not included in this section, but is found in the last paragraph of section six. The provision in paragraph (a) was adopted after much dis- cussion, but its object has not always been understood. A "flat" exemption from the six per cent tax was not provided because, the tax not being a general income tax, a taxpayer might have a very large income from non-taxable sources, and but a small income subject to this tax, and no reason of public policy requires such a person to be exempted. In the case of a person having no other income, such considerations would not apply, but there had previously been no exemption whatever from the tax on the capital value of taxable securities and it was not thought wise to provide one except in the case of persons whose total income was so small that it might well be thought that they were unable to contribute to the public charges. It is felt by some that the exemption is too small and it may work hardship in such cases as that of a widow with young children and no income other than seven or eight hundred dollars from taxable intangibles; but an "unearned income" is not looked on with as much favor by the majority of the people as an "earned income" ; the own- ership of stocks and bonds is usually confined to the wealthier classes, and an exemption which may apply to a person who owns intangibles having a capital value of ten or twelve thou- sand dollars when the exemption in favor of a widow or orphan owning real estate is of only one thousand dollars of capital value 3 would not seem unduly small. Estates of Deceased Persons Section 9. The estates of deceased persons who last dwelt in the commonwealth shall be subject to the taxes imposed by this chapter upon all income received by such persons during their lifetime, if assessed within the time limited by section thirty-seven, except income taxable under subsection (&) of section five. The income received by the estates of such deceased persons shall be subject to all the taxes imposed by this chapter to the extent that the persons to whom such income is payable, or for whose benefit it is accumulated, are 3 G. L. c. 59, §5, cl. 17, supra, page 209. Taxation of Incomes 469 G. L. c. 62, § 9] inhabitants of the commonwealth. All taxes under this section shall be assessed to the executor or administrator, and before the appoint- ment of an executor or administrator said taxes shall be assessed in general terms to the estate of the deceased, and the executor or ad- ministrator subsequently appointed shall be liable for the tax so as- sessed as though it were assessed to him. No person shall be taxed under this chapter for income received from any executor or admin- istrator which income has itself been taxed under this section. If any income, other than income received by him or income of his decedent with respect to which he is required by this chapter to make a return, is taxable under this chapter to an executor or administrator or to the estate of his decedent, he shall not be obliged to pay a tax under this chapter thereon unless it is assessed within one year after his giving bond ; provided, that he has given due notice of his appointment and has filed his inventory within nine months thereafter. If the inven- tory shall not have been filed within said nine months, the executor or administrator shall be obliged to' pay any taxes that may be as- sessed under this chapter within three months after the filing of the inventory. With respect to income received from the first day of Janu- ary to the time of his death by a person who died within the taxable year, there has been some confusion in the administra- tion of the law. The original income tax act provided that "the income received by persons since deceased shall be taxed to their estates" and the commissioner, in accordance with what is believed to have been the intent of the legislature, construed the act as requiring that all taxable income received by a de- ceased person between the first day of January and the date of his death should be taxable to his estate. It is to be noted that this construction was contrary to the general theory of the law, which is that the tax is a tax of the year in which the return is filed, measured by the ability of the taxpayer to pay as evi- denced by his income in the preceding year ; x and the court held that the words "since deceased" in the statute meant since Jan- uary first, 1917, 1917 being the first year that returns were re- quired, and that in any event income of a person who died in 1916 could not be taxed. 2 This decision was construed as denying 1 See G. L. c. 62, §25, infra, page 483. * Faulkner v. Tax Commissioner, 229 Mass. 120 (1918). 470 Taxation in Massachusetts [G. L. c. 62, §§ 9, 10 the validity of any tax on the income of a deceased person received prior to his death; but in 1919 the statute was amended so as to authorize the taxation of all income received by a de- ceased person prior to his death taxable under this chapter, ex- cept business income. 3 With respect to income received by an executor or admin- istrator accruing in the interval between the death of the de- cedent and the distribution of his estate, the executor or admin- istrator is taxable except with respect to so much of such income as is payable to or is accumulated for the benefit of persons who are not residents of this commonwealth, or, in the case of income from intangibles, for persons who would not be taxable if they received the income directly by reason of the smallness of its amount and the smallness of their income from all sources. An executor or administrator is accordingly obliged to include in his return of income a statement of the respective domiciles of the beneficiaries and of their proportionate shares in the income; and beneficiaries' claims of exemption based upon the smallness of their income may be included in such return. 4 Estates Held in Trust Section 10. The income received by estates held in trust by trus- tees, any one of whom is an inhabitant of the commonwealth or has derived his appointment from a court of the commonwealth, shall be subject to the taxes assessed by this chapter to the extent that the persons to whom the income from the trust is payable, or for whose benefit it is accumulated, are inhabitants of the commonwealth. In- come accumulated in trust for the benefit of unborn or unascertained persons or persons with contingent interests shall be taxed as if ac- cumulated for the benefit of inhabitants of the commonwealth. In the computation of the tax, the trustees, in addition to the deduction on account of interest paid, allowed under section two, shall be en- titled to the following deductions from income taxable under section one, and under paragraphs (a) and (c) of section five, before the taxable income of the beneficiaries shall finally be determined: (a) Such proportion of the following items as the amounts of in- come taxable under section one and subsections (a) and (c) of sec- tion five together bear to the total income received by the trustee "St. 1919, c. 136, §1. 4 G. L. c. 62, §12, infra, page 474. Taxation of Incomes 471 G. L. c. 62, § 10] from all sources, exclusive of income taxable under subsection (&) of section five, to wit : ( 1 ) all taxes paid within the year to the United States or any other nation or to any state, county, city, town or dis- trict, except taxes assessed on real estate or tangible personal prop- erty, inheritance or other taxes assessed upon the transfer of estates of deceased persons, Massachusetts income taxes and assessments for betterments; (2) amounts paid within the year for rental of safe deposit boxes; and (3) amounts paid within the year for premiums on surety bonds of the trustee. (b) All amounts paid on account of fees or compensation for services of the trustee, to an amount not exceeding five per cent of the gross income taxable under section one, and subsections (a) and (c) of section five. (c) All taxes paid within the year to the commonwealth and as- sessed under this chapter on income taxable under section one and subsections (a) and (c) of section five, on account of beneficiaries who still remain inhabitants of the commonwealth. (d) The trustees may also deduct from the income taxable under section one a proper amount for the amortization, according to any approved method, of premiums paid upon bonds owned by the estate the income of which is taxable under said section one. In the enactment of the income tax the legislature deter- mined to commit this commonwealth to the enlightened prin- ciple that a state should not use its constitutional powers to their utmost limit by taxing trust property to the trustee if he is a resident, regardless of the domicile of the beneficiary, and to the beneficiary if he is a resident and the trustee a non-resident, 1 but should confine itself to a single and consistent rule for the taxation of trust property. Accordingly it was determined that the taxability of trust property should depend wholly upon the domicile of the beneficiary, although for purposes of convenience the tax was assessed upon the trustee if he was within the juris- diction of the commonwealth. 2 In this respect a change was 1 As to the constitutionality of the double taxation of trust property see supra, Part I, §33. * The trustee is the logical person to make the return and pay the tax upon trust property, as he has the information and the funds available. The reason that the beneficiary includes trust property in his return and pays the tax there- on under the federal income tax law is that the tax is graded in proportion to the income of the taxpayer from all sources, and the trustee, having in most cases no knowledge of his beneficiary's other income, would not know how much to pay. 472 Taxation in Massachusetts [G. L. c. 62, § 10 made from the law as it previously existed, as under the former provisions a resident trustee was taxed without regard to the domicile of the beneficiary, and a resident beneficiary of a non- resident trustee was also taxed, unless the trust property was legally taxed to a trustee under a testamentary trust in another state. 3 Under the present law, it is necessary for the trustee to set forth in his return the domicile of each beneficiary and the pro- portionate part of the income payable to each. The domicile of each beneficiary is determined as of January first of the year in which the return is filed, unless a non-resident beneficiary be- comes a resident before June thirtieth in such year, in which case the commissioner has ruled that a tax is due on the income payable to such beneficiary ; and if he makes such change of domi- cile after the trustee has filed his return, the trustee is required to file a supplementary return setting forth the facts. Apart from the exemption based upon the domicile of the beneficiaries and the deductions set forth in the foregoing sec- tion of the statute, the trustee is taxable upon all money or other property received by him which would be taxable as in- come to a person who received it in his own right, without re- gard to the fact that the money received is not distributed but is allowed to accumulate, or that for the purpose of the trust it is deemed principal and not income. The breadth of the con- struction given to the world "income" in the Forty-fourth Amendment is illustrated by the numerous classes of receipts which are considered capital and not income as between life tenant and remainderman, but are considered income for pur- poses of taxation. 4 The fact that money is received by a trustee rather than by an individual investor, and must be treated by him as capital, does not affect the right of the commonwealth to tax it as income. Trusts for charitable purposes are subject to the tax, unless the beneficiary comes within ,one of the classes specifically 3 St. 1909, c. 490, Part I, §23, cl. 5; and see Hunt v. Perry, 165 Mass. 287 (1896). 4 Thus profits and gains arising from the increase in value of investments and realized by sale, money derived from the sale of "rights," and stock dividends, are considered capital as between life tenant and remainderman but are income for purposes of taxation. Tax Commissioner v. Putnam, 227 Mass. 522 (1917). The rule as to stock dividends was subsequently changed by statute. See G. L. c. 62, §1 (b), supra, page 441. Taxation of Incomes 473 G. L. c. 62, §§ 10, 11] exempted from taxation by existing law/' or unless the benefi- ciaries of the charity are not inhabitants of the commonwealth. If some are residents and others non-residents the tax must be apportioned accordingly. The object of the provision in regard to deductions is to per- mit the trustee to claim as a deduction the same proportion of the expenses of the trust which are chargeable to income under the established probate practice that the taxable income bears to the whole income of the trust, so far as the same is derived from invested capital and not from a business carried on by the trustee. • Income from Non-Resident Trustees Section 11. If an inhabitant of the commonwealth receives in- come from one or more trustees, none of whom is an inhabitant of the commonwealth or has derived his appointment- from a court of the commonwealth, such income shall be subject to the taxes imposed by this chapter, according to the nature of the income received by the trustees. The foregoing section carries out the principle explained under the preceding section, by which the taxability of trust property is made to depend upon the domicile of the beneficiary. It has been held that although the legal title to trust property is in the trustee, and the situs of intangible property is ordinarily at the domicile of the owner, the beneficiary has an interest in intangible property held in trust which may be taxed at his domicile. 1 The beneficiary does not necessarily have any means of knowing the character of the trust property or whether it is taxable, but the commissioner, doubtless believing that the beneficiary can find out if he really wants to, has ruled that if a resident beneficiary cannot secure from a non-resident trustee information as to the nature of the income received, so that it may be properly segregated for taxation, the whole shall be treated as derived from taxable interest and dividends, and taxed at the six per cent rate. In the original income tax act, it was intended that all taxable income received by a resident beneficiary from a •See Watson v. Boston, 209 Mass. 18 (1911). l Maguire v. Tax Commissioner, 230 Mass. 503 (1918), affirmed, Maguire v. Trefry, 253 U. S. 12 (1920). 474 Taxation in Massachusetts [G. L. c. 62, §§ 11,12 non-resident trustee should be taxed; but as elsewhere in the statute it was provided that income derived from property exempt from taxation under existing law should not be taxed, and the existing law exempted property held by a non-resident trustee for a resident beneficiary under a testamentary trust if legally taxed in another state, it was held that such exemption applied under the income tax act. 2 The statute was later amended to carry into effect the original intent of the legislature. 3 Claim of Exemption for Beneficiary Section 12. A trustee may, at the request of any beneficiary, claim the benefit of the exemption provided by subsection (a) of section eight for each person to whom the income from the trust is payable, or for whose benefit it is accumulated, and an inhabitant of this commonwealth receiving income from one or more trustees, none of whom is an inhabitant of this commonwealth or has derived his appointment from a court of this commonwealth, may also claim the benefit of such exemption ; provided, that the commissioner is satisfied by an affidavit from the beneficiary claiming exemption, or for whose benefit the same is claimed, or otherwise, that such beneficiary is not allowed in all trusts or estates under which he may be a beneficiary, and on account of all income on which he is liable to taxation under this chapter, more than the total amount of exemption to which he is entitled under said subsection (a). Since the exemption depends upon the total income of the beneficiary, or on his total business income, which the fiduciary would have no means of knowing, although the fiduciary is to pay the tax, he cannot well claim the exemption until he is as- sured that the beneficiary had no other income which would deprive him of his exemption. . A beneficiary who has no taxable income except from a fiduciary who is taxable under this act is not taxable himself, although if such income exceeds two thousand dollars he must file a return under the provisions of section twenty-two. The return, however, need not set out the income thus re- ceived. 'Maguire v. Tax Commissioner, 230 Mass. 503 (1918). "St. 1918, c. 207. Taxation of Incomes 475 G. L. c. 62, §§ 13, 14] Applications of Foregoing Provisions to Other Fiduciaries Section 13. Sections ten to twelve, inclusive, shall, so far as apt, apply to executors, administrators, guardians, conservators, trustees in bankruptcy, receivers and assignees for the benefit of creditors, to the income received by them and to their beneficiaries; except that clauses (a), (&), (c) and (d) of. section ten authorizing certain deduc- tions, shall apply only to trustees and guardians. The provisions as to the taxation of trust property are by this section extended to fiduciaries other than trustees and it has been ruled by the commissioner that the section applies to re- ceivers of absentees and to natural guardians of minors. Guar- dians and conservators and receivers of absentees may claim on behalf of the beneficiary any exemption to which he is entitled. A public administrator of the estate of a deceased person leav- ing no known heirs need make no return of income; and the trustee, assignee or receiver of a corporation or of a trust with transferable shares which has not filed the agreement to pay taxes, is not subject to the income tax; but the receiver of a foreign corporation who has been appointed by a court of this commonwealth to hold a fund for the benefit of Massachusetts creditors is subject to the income tax. Receivers and trustees in bankruptcy of individual debtors are taxable on income to the extent that such income has accrued for the benefit of Massa- chusetts creditors, the creditors being deemed the beneficiaries of the trust. Corporations Acting as Trustees Section 14. Corporations acting as trustee or in any other fidu- ciary capacity shall, 'with respect to the income received by them in that capacity, be subject to this chapter in the same manner and under the same conditions as individual inhabitants of the common- wealth acting in similar capacities, except that no such corporation shall be taxed on account of any property the income of which would be taxable under section one if received by an individual inhabitant, or an account of the income derived from such property, if such prop- erty is held by such corporation as mortgagee or pledgee to secure the payment of bonds, notes or other evidences of indebtedness the inter- est on which is taxable under section one to such individual 476 Taxation in Massachusetts [G. L. c. 62, §§ 14, 17 inhabitants of the commonwealth as receive it, or the principal of which is exempt from taxation under laws other than this chapter. Section 15. Every corporation liable to taxation under the pre- ceding section shall make the returns, and be subject to the penalties, prescribed by this chapter. This is the only provision for the taxation of corporations in the chapter and of course this provision does not affect prop- erty in which a corporation has a beneficial interest, but merely puts trust companies and other corporations acting in a fiduciary capacity upon the same basis as individual trustees with respect to the taxation of trust property. Under the original income tax act this section applied only to corporations authorized by law to act as trustee, but in the consolidation of the General Laws it was amended to include all corporations acting as trustee, so that a corporation acting as trustee without authority would not on that account escape taxation. 1 Settlement of Taxes on Fiduciaries Section 16. For the purpose of facilitating the settlement and distribution of estates held by trustees and the other fiduciaries named in section thirteen, the commissioner, with the approval of the attorney general, may on behalf of the commonwealth agree on the amount of taxes at any time due or to become due from such estates under this chapter, and payment in accordance with such agreement shall be full satisfaction of the taxes to which the agreement relates. Partnerships Section 17. Partnerships having a usual place of business in the commonwealth, any member of which is an inhabitant thereof, shall be subject to the taxes imposed by this chapter. If any of the mem- bers of the partnership are not inhabitants of the commonwealth, only so much of the income thereof as is proportionate to the aggregate interest of the partners who are inhabitants of the commonwealth in the profits of the partnership shall be taxed. The tax shall be as- sessed on such a partnership by the name under which it does busi- ness, and the partners shall not be taxed with respect to the income derived by them from such a partnership. •St. 1918, c. 257, §67. Taxation of Incomes 477 G.L.c.62, §17] This provision differs from the federal income tax law in that when a partnership has a place of business in this common- wealth and so can be subjected to its laws, the partnership is treated as an entity and taxed on its income and the partners do not pay a tax on their income from the partnership. The taxability of the income of a partnership does not, however, depend upon the location of its place or places of business but upon the domicile of the partners, and a partnership composed of non-residents may have its place of business in this common- wealth without paying any tax here except upon its tangible property, just as an individual non-resident may. A partnership is subject to the different taxes imposed under this chapter in the same manner as an individual, and if it receives income from taxable intangibles or makes gains from the sale of intangible property, it is taxable on such income at six per cent or three per cent respectively. If the partnership is dissolved during the year, the partners must include all partner- ship income received up to the time of dissolution, separating the income from taxable intangibles from gain from the sale of intangibles and from business income. Loans by a partner to a partnership are recognized as valid ; the interest thereon may be deducted as a partnership expense and is taxable to the partner receiving it in the same manner as other interest; whereas so-called "partner's capital," contributed under an arrangement by which each partner is to receive inter- est on the capital invested by him in the business before any profits are divided, is not considered a loan, and the payment of interest thereon is treated as a distribution of profits. Clubs, associations, labor unions and similar bodies and fra- ternal, benevolent or charitable organizations which are not in- corporated and which are not exempted from taxation by any provision of law, are treated as partnerships by the income tax division and taxed as such on what income they may have from taxable securities or otherwise, with a proportionate deduction on account of members who are not residents of Massachusetts. While this ruling may not be technically correct it is not likely to be questioned because of the inconvenience which would re- sult if it were overthrown, and each member taxed individually for his proportion of the income of the association. A partnership having a usual place of business in this 478 Taxation in Massachusetts [G. L. c. 62, §§ 17, 18 commonwealth at any time between January 1 and June 30 in any year, if its total income from all sources in the preceding year was in excess of two thousand dollars, or if it received any income in that year from taxable intangibles or profit for the year in buying and selling intangible property, is bound to file a return. Establishment of Partners' Exemptions Section 18. A partnership, in computing its taxable income, may deduct at the request of any partner the whole or any part of the amount of the exemptions to which such partner may be entitled under sections five and eight and of the deduction for family to which he may be entitled under clause (h) of section six; provided the com- missioner is satisfied by an affidavit from the partner for whose benefit any such exemption or deduction is claimed, or otherwise, that such partner is not allowed, in all partnerships in which he may be a partner and on account of all income on which he is liable to taxation under this chapter, more than the total amount of such exemptions and deductions to which he is entitled. Each amount so deducted shall be set forth in the return of the partnership, and the partner requesting the same shall be allowed no further exemption or deduc- tion on account thereof. The commissioner, in his discretion, may excuse a partnership which has a place of business in the common- wealth from filing a return under this chapter, if its principal place of business is not within the commonwealth, and in such case may require the partners- who are inhabitants of the commonwealth to include in their individual returns their shares of the partnership in- come, and may assess to each partner individually a tax on his share. No partnership can claim on account of any partner a greater exemption than such partner's share of the income. Thus, if the total net business income of a partnership composed of three unmarried men without dependent parents and without other income was $5000, if each partner had an equal share in the business the whole income of the partnership would be exempt; but if one had a three-fifths interest and the others a one-fifth interest apiece, the partnership would be taxable on $1000. A partner having a business income apart from the partner- ship may apportion his exemption between his private income and the income of the partnership, as he deems advisable. Taxation of Incomes 479 G.L.c. 62, §§19-21] Resident Members of Partnerships Having No Place of Business in Massachusetts Section 19. An inhabitant of the commonwealth who is a mem- ber of a partnership having no usual place of business in the com- monwealth, who receives income from such partnership derived from such a source that it would be taxable if received directly by such partner, shall as to such income be subject to the taxes imposed by this chapter. Under this statute a resident of this commonwealth who is a member of a partnership which has no usual place of business in this commonwealth is obliged to include the income which he receives from the partnership in his individual return, sepa- rating the income from taxable intangibles from gains from the sale of intangibles and from business income but not being obliged to give the details as to business income which a partner- ship itself is obliged to return. In some cases the commissioner allows a partnership having a usual but not its principal place of business in this commonwealth to file no return, on condition that the resident members of the partnership include such income in their individual returns. Procedural Provisions Applicable to Partnerships Section 20. The provisions of this chapter in respect to the filing of returns, and the assessment, abatement and collection of taxes, and to notices concerning the same, shall apply to partnerships subject to taxation under this chapter. Partnerships with Transferable Shares Section 21. Sections seventeen to twenty, inclusive, shall not apply to partnerships, associations or trusts, the beneficial interest in which is represented by transferable shares, and nothing in said sections shall affect other provisions of this chapter so far as the same relate to such partnerships, associations or trusts, the beneficial inter- est in which is represented by transferable shares. The distinction is carefully drawn throughout the chapter between ordinary partnerships on the one hand, which involve 480 Taxation in Massachusetts [G. L. c. 62, §q 21, 22 personal relations between the partners, so that one partner can- not transfer his interest in the partnership to a stranger to the agreement without the consent of his associates, and unincor- porated associations, the shares in which are transferable in the same manner as stock in corporations, but which are technically partnerships when the control of the affairs of the association is in the hands of the shareholders rather than of the trustee who holds the legal title to the property of the association. The taxation of such partnerships is governed by section one, paragraph (c), (d) and (e) of this chapter. The mere fact that shares in an unincorporated association are subject to a restriction requiring the approval of the associa- tion, or of a third party, before they can be transferred, or re- quiring that they be first offered for sale to the association, does not necessarily establish the fact that the shares are not trans- ferable, within the meaning of the statute. Returns of Income Section 22. Every individual inhabitant of the commonwealth, including every partnership, association or trust, whose annual in- come from all sources exceeds two thousand dollars shall annually make a return of his entire income, except income derived (a) from real estate, (&) from dividends exempt from taxation under section one, (c) from interest upon bonds or other obligations of the United States, (d) from interest upon such bonds, notes and certificates of indebtedness of the commonwealth and political subdivisions thereof as are exempt from taxation under clause twenty -fifth of section five of chapter fifty-nine, (e) from loans secured exclusively by mortgage of real estate, taxable as real estate, situated in the commonwealth, to an amount not exceeding the assessed value of the mortgaged real estate less the amount of all prior mortgages, and (/) from wages or salaries received from the United States. Every other individual inhabitant, including every partnership, association or trust, who receives income taxable under section one or subsection (a) or (c) of section five shall make an annual return of such taxable income. This section not only requires a return from every person actually taxable under any of the provisions of the chapter and from every person who would be taxable but for the fact that his total income is under six hundred dollars, but also requires Taxation of Incomes 481 G. L. c. 62, § 22] a return from every person whose total income is over two thousand dollars even if none of such income is taxable, al- though no one (except for the purpose of certain exemptions and deductions) is required to disclose the amount of his income not taxed by this act. The object is a practical one; namely to com- pel every person whose standard of living indicates an income of two thousand dollars or more to put himself on record under oath as not having taxable income if he has none, rather than to leave to the public authorities the burden of guessing whether a man in obviously comfortable circumstances who failed to file a return had in fact no taxable income or was evading taxes which he should properly pay. The sources of income which need not be returned are enumerated in the statute rather than those which must be, and consist of those which are clearly not taxable; the object being to prevent the taxpayer from always giving himself the benefit of any doubt and omitting from his return all income the taxability of which might be questionable. By inadvertence interest upon savings deposits was omitted from the list of income which need not be returned, but the commis- sioner, by virtue of the latitude given him in preparing returns, has not required a statement of such income. Income received by beneficiaries from fiduciaries who are bound to make a return under this act, and income received by a partner from a partnership of which he is a member, are not mentioned in the list of classes of income upon which a return need not be made. In practice, however, the commissioner does not require a return of such income, although he requires the taxpayer to state whether he has received any such income and if he answers in the affirmative to designate the fiduciary or part- nership from which the income was received, so that the commis- sioner can ascertain whether such fiduciary or partnership has filed a return. The statute contemplates the signing of a return by the tax- payer himself and not by an agent or attorney. Provision is made in section twenty-nine for an extension of the time for filing a return in case of sickness, absence or other disability. In extreme cases, however, in which it will be obviously impossible for the taxpayer to personally sign a return within a long and indefinite period, the commissioner will accept a return signed by an agent or attorney. 482 Taxation in Massachusetts [G. L. c. 62, §§ 22-24 One does not concede that he is taxable by filing a return. In a doubtful case a return should be filed ; otherwise the penal- ties provided by law would be incurred if the final decision of the contested question should be adverse. The person filing the return should, however, set out in his return his contention, and the grounds upon which it is based, whether he denies his liabil- ity to the tax on the ground that he is not an inhabitant or on the ground that his income does not come within the provisions of the law. Fiduciaries' Returns Section 23. Every executor, administrator, trustee, guardian, conservator, trustee in bankruptcy, assignee for the benefit of credi- tors and receiver, other than a receiver of a domestic corporation, and every other person receiving income taxable under this chapter, shall make an annual return of his taxable income as provided in this chapter. In the case of a resident of Massachusetts who died during a taxable year after having received taxable income, his executor or administrator must file a return of all income which would have been taxable to the decedent if he had lived (except income from professions, employments, trade or business received by the decedent during the taxable year prior to his death) to which he is required to make oath that it is true and complete to the best of his knowledge and belief. This return must be filed be- fore the first day of March in the following year, unless the ex- ecutor or administrator was not appointed until after the first day of February in such year, in which case it must be filed within sixty days after his appointment. This return is. in ad- dition to and distinct from the return which the executor or administrator is required to file with respect to taxable income received after his appointment. No return is required of an assignee, trustee in bankruptcy or receiver of a corporation, except in the case of a receiver of a foreign corporation holding a fund for the benefit of Massachu- setts creditors, since such fiduciaries are not subject to the tax. Further Provisions Respecting Returns Section 24. Returns under the two preceding sections shall be on oath, and shall be filed with the income tax assessor for the district Taxation of Incomes 483 G. L. c. 62, §§ 24, 25] where the taxpayer resides or has his principal place of business or, at the option of the taxpayer, with the commissioner, shall be made in such form as the commissioner prescribes, and shall contain such further information as he deems pertinent. The return shall be made on or before March first in each year, and, except as provided in sections seven and twenty-five, shall relate to the income received during the year ending on December thirty-first preceding. Time as of Which Liability to Tax is Fixed Section 25. Every individual who is an inhabitant of the com- monwealth at any time between January first and June thirtieth, both inclusive, in any year, and every executor, administrator, trustee or other fiduciary in office between said days in any year, who is such inhabitant, or who derived his appointment from a court of this com- monwealth, and the estate of every deceased inhabitant of the com- monwealth, shall be subject to the taxes imposed by this chapter. Every such individual or fiduciary shall file a return under section 'twenty-two or twenty-three if he has in the preceding year received income taxable under this chapter, and an executor or administrator shall file a return under section twenty-three if his decedent in the preceding year received any such income not returned by the de- cedent. If a person has become an inhabitant of the commonwealth or has been appointed an executor or administrator after February first in any year, the return shall be due and shall be filed within ninety days after he becomes such inhabitant or receives such ap- pointment. Under the earlier statutes liability to taxation in any city or town was determined by the domicile of the taxpayer on April first in each year, and in order to establish domicile in towns in which the tax rate was low migrations often occurred just prior to April first. The present law however bases liability to taxation upon domicile in this commonwealth at any time within the first six months of the year and thus discourages temporary absences as a means of evading the tax. It is to be noted that under the statute liability to taxation is not based upon the receipt of taxable income by a person while resident in Massachusetts; but the tax is a tax upon individual inhabitants for the year in which the return is filed, measured by ability to pay as evidenced by income from sources not 484 Taxation in Massachusetts [G.L.c. 62, §§25-27 otherwise taxed in the preceding calendar year. Since income of the current year cannot be determined until the year has expired, the tax cannot be levied, like a property tax, with reference to the state of things existing on the day as of which the tax is as- sessed, and, from the necessity of the case, the income of the previous year is taken as the measure of the tax ; but the theory that the income is the measure and not the subject of the tax is consistently followed except in the provision, established by an amendment after the enactment of the original act, that the income (other than business income) of an inhabitant who died during a taxable year shall be taxed to his executor in the fol- lowing year. Thus one who becomes a resident after the first day of January is taxable for income received while he was a resident of another state; and, conversely, this commonwealth makes no attempt to tax a person who receives income while living in this commonwealth but who removes therefrom prior to the first day of January in the following year, or to tax a non-resident who derives income from a business carried on in this commonwealth year after year. The supreme judicial court of the commonwealth however held that the theory upon which the statute was based was un- sound; that the tax is. a property tax and cannot be levied with respect to property which is not within the jurisdiction of the commonwealth, and that consequently a person who changes his domicile to Massachusetts cannot be taxed upon income received by him before the change of domicile was made and while he was a resident of another state. 1 Notices and Returns Section 26. The commissioner shall prepare blanks for the re- turns required by sections twenty-two and twenty-three and shall cause them to be distributed throughout the commonwealth; but no person shall be excused from making the return by failure of the commissioner to send or give one of the blanks to him. Section 27. The commissioner shall annually give seasonable notice of the requirements of sections twenty-two to twenty -five, in- clusive, by posting or in any other suitable manner, not later than January fifteenth, in every town in the commonwealth. 1 Hart v. Tax Commissioner, Mass. (1921). Taxation of Incomes 485 G. L. c. 62, § 28] Omitted and Supplementary Returns Section 28. If the commissioner shall, from information derived from the return or otherwise, be of opinion that any person whose income is taxable under this chapter may have failed to file a return, or to include in a return filed, either intentionally or through error, . all the sources of his taxable income, he may require from such person a return or a supplementary return on oath, in such form in each individual instance as the commissioner prescribes, of all the sources from which the taxpayer received any income, whether or not taxable under this chapter in the year for which the return was made. If from a supplementary return or otherwise the commissioner finds that any sources of taxable income have been omitted from the original return, he may require the amount of income from each source of taxable income so omitted to be disclosed to him on oath of the person liable for the tax, and added to the original return. Such supple- mentary return and the correction of the original return shall not relieve the person making the same from any of the penalties to which he may be liable under any provision of this chapter. The commis- sioner may proceed under any provision of sections thirty and thirty- five to thirty-seven, inclusive, whether or not he requires a return or a supplementary return under this section. The purpose of this section is two-fold. In the first place it gives the commissioner an opportunity to demand of a person who has wrongfully failed to file a return that he comply with the law ; and if such person, after receiving the notice, persists in his refusal to file the return, he subjects himself to the serious penalties imposed by section fifty-six. In the second place, even if a perspn has filed a return, if the commissioner is of opinion that he has failed to include in such return all the sources of his taxable income, the commissioner may require him to file a supplementary return showing all the sources of his income; and if such supplementary return dis- closes sources of taxable income not included in the return, the commissioner may then require such person to disclose on oath the amount of such income. The authority granted by this section cannot however be used by the commissioner as a means of auditing or verifying a return filed in accordance with law. The taxpayer may be required to 486 Taxation in Massachusetts ' [G. L. c. 62, §§ 28-30 disclose the sources of his income; he may probably be compelled to name the corporations whose stock and bonds he owns and to designate those which he has returned as taxable, and to state in general terms the other sources of his income, such as rents of real estate, mortgage interest, interest on savings deposits and the like; but the commissioner has no power under this section to require a person who has filed a return to state the amount of his income from each source, or the number of shares of stock or other securities which he holds, unless his supplementary re- turn disclosed taxable income which he did not include in his original return. The power to verify returns is granted solely by the provisions of section thirty, and can be exercised only under the limitations contained in that section. Extension of Time for Filing Returns Section 29. In case of sickness, absence or other disability, the commissioner may allow further time for filing any return required by this chapter. Verification of Returns Section 30. In order to verify any return made pursuant to this chapter the commissioner may, within two years after September first of the year in which such return was due, if he has reason to believe the return to be fraudulent or incorrect, direct by special au- thorization a deputy or other agent to verify the return ; and for the purpose of such verification the books and papers of the person shall be open to the examining officer, or shall be produced for the purpose upon a summons, which the commissioner, or the examining officer, may issue. The person making the return may be examined by such officer on oath. When the income tax law was enacted, the people of Massa- chusetts were not accustomed to inquisitorial investigations of their private affairs; compulsory returns of taxable property were unknown, and the drastic and sometimes arbitrary exer- cise of governmental power which the war with Germany brought about with respect to the enforcement of both the federal income tax law and other statutes rjad not then begun. The idea even of a compulsory return was repugnant to many, and after careful Taxation op Incomes • 487 G. L. c. 62, § 30] consideration by the legislature it was deemed inadvisable to give the commissioner general power to audit or verify returns which had been filed in apparent compliance with law, and it was thought best to trust that the honesty of taxpayers, the fairness of the law, and the severe penalty imposed in case of a fraudulent return would render any general evasion of the law unlikely. It is only in special cases, when the commissioner has evidence in his possession which gives him reasonable ground to believe that a return is fraudulent or incorrect, that a verification of a return by examination of the taxpayer under oath and production of his books and papers is authorized. No deputy or other agent of the commissioner may lawfully verify a return without a spe- cial authorization from the commissioner. If the taxpayer re- fuses to submit to examination, the examining officer may issue a summons, and if the taxpayer disregards the summons, the examining officer may apply to the court for a summons from the court, 1 and if the taxpayer then refuses to comply with the summons, a capias may issue and he will be dealt with accord- ing to law. The court however will not issue a summons unless the commissioner produces evidence that he has reason to believe the return to be fraudulent or incorrect. A person who has filed a return can therefore not be required to submit to the verification of his return by a deputy or other agent of the commissioner unless the agent exhibits to him a special authorization from the commissioner, stating that the commissioner has reason to believe the return in question to be fraudulent or incorrect and directing the agent to verify the return ; and even then, if the taxpayer doubts whether the com- missioner had good reason to believe his return to be fraudulent or incorrect, he may refuse to allow his return to be verified and contest the right of the commissioner to require verification when the commissioner applies to the court for a summons. While a taxpayer who has filed an honest return is naturally reluctant to give the impression that he has something to con- ceal by refusing to disclose the details in regard to his income to an agent of the commissioner, taxpayers should bear in mind that information disclosed to the taxing officials otherwise than in compliance with the requirements of law is not protected by *G. L. c. 233, §10. 488 . Taxation in Massachusetts [G.L.c. 62, §§30-32 law from being made public or from being otherwise used to their private disadvantage. Mandamus to Compel Filing of Return Section 31. If any person fails to file, on or before May first of any year, a return required by this chapter, any justice of the supreme judicial or the superior court, on petition of the commis- sioner or the income tax assessor for the district where such person is required to file the return, or of any ten taxable inhabitants of the commonwealth, shall issue a writ of mandamus requiring such person to file the return. The order of notice on the petition shall be return- able not later than ten days after the filing thereof. The petition shall be heard and determined on the return day or on such day thereafter as the court shall fix, having regard to the speediest possible determination of the cause consistent with the rights of the parties. The judgment shall include costs in favor of the prevailing party. All writs and processes may be issued from the clerk's office in any county, and, except as aforesaid, shall be returnable as the court orders. The real purpose of this provision was to enable the neighbors of a person of means who, through the connivance of the taxing officials, was evading taxation, to compel him to file a return. It was doubtless based on the fear that some of the experiences under the tax laws then in force would be repeated, but no occa- sion has arisen or is likely to arise for the invocation of the statute for the purpose for which it was intended. It has how- ever proved useful as a speedy means for determining the tax- ability of certain classes of income concerning which a real doubt exists. 1 Privacy of Returns Section 32. Returns shall be open to the inspection of the com- missioner, and his deputies, assistants and clerks when acting under his authority, and the income tax assessors, and their deputies, as- sistants and clerks when acting under their authority. The books, accounts and other records in the hands of the commissioner, except returns, shall be open to the inspection of the state auditor, and his 1 See Tax Commissioner v. Putnam, 227 Mass. 522 (1917). Taxation of Incomes 489 G. L. c. 62, §§ 32, 33] deputies, assistants and clerks when acting under his authority for the purpose of auditing the accounts of the commissioner. Said returns shall be preserved for two years, and thereafter until the commis- sioner orders them destroyed. The commissioner shall, on request of any inhabitant of the commonwealth, state whether or not any desig- nated person has filed an income tax return for the current or any prior year. The penalty for disclosure of returns except in accordance with this section is found in section fifty-eight of this chapter. This statute leaves it to be decided when the question arises, whether an income tax return can be used against the person making it in judicial proceedings in which his income is material, as for the determination of alimony, or in respect to damages for breach of promise of marriage, or in proceedings to enforce pay- ment of a judgment for necessaries and the like. Information at the Source Section 33. Every employer, being an inhabitant of the com- monwealth or having a place of business therein, shall file annually with the commissioner a return in such form as he shall from time to time prescribe, giving the names and addresses of all regular em- ployees residing in the commonwealth to whom said employer has paid wages, salary or other compensation in excess of the sum of eighteen hundred dollars during the preceding calendar year. In any individual case, upon request of the commissioner, the exact wages, salary or other compensation shall be stated. Every corporation and every partnership, association or trust the beneficial interest in which is represented by transferable shares, doing business in the commonwealth, unless the dividends paid on its shares are exempt from taxation under section one, shall annually file with the commissioner in such form as he shall from time to time prescribe, a complete list of the names and addresses of its share- holders, as of record on December thirty-first of the preceding year, or on any other date satisfactory to the commissioner, or, in its dis- cretion, of such shareholders as are residents of the commonwealth, together with the number and class of shares held by each share- holder and the rate of dividends paid on each class of stock for such preceding year. 490 Taxation in Massachusetts [G. L. c. 62, §§ 33, 34 Every corporation, partnership, association or trust doing busi- ness in the commonwealth shall report annually to the commissioner, in such form as he shall from time to time prescribe, the names and addresses of all residents of the commonwealth to whom it has paid interest during the preceding calendar year on its bonds, notes or other evidences of indebtedness, and to whom it has paid any annui- ties, except, however, interest coupons payable to bearer, and income exempt from taxation under this chapter. In any individual case, any such corporation, partnership, association or trust shall, upon request of the commissioner, state the respective amounts of interest and annuities so paid by it to any person during any calendar year. The returns, lists and reports required by this section shall be made on or before March first in each year ; but the commissioner may authorize them to be made at any other date and in connection with any other reports or returns that said individuals, partnerships, asso- ciations, trusts and corporations may be required to file with him. Section 34. The treasurer of every city, town and county, and the state auditor, shall, annually not later than April tenth, in the form prescribed by the commissioner, furnish to him names and ad- dresses of all employees of said cities, towns, counties and of the commonwealth, respectively, receiving during the preceding calendar year as salary, wages, or otherwise, amounts exceeding eighteen hun- dred dollars in each case, together with the amount received by each. Section thirty-three, it will be noticed, throws an obligation upon corporations and non-residents, who are not obliged to file any return of their own income. The fixing of the minimum salary to be returned at eighteen hundred dollars was due to the assumption that persons having such salary might well have other income of two hundred dollars and so be bound to file a return. The term "regular employees" includes all persons who have customarily been employed in any capacity during the year when occasion for such employment arises, as distinguished from per- sons employed for a particular piece of work. Compensation other than in money must be included, but no bonuses or extra commissions to which the employee was not legally entitled. It has been ruled that "employees" includes officers of a corpora- tion, but the soundness of this ruling is perhaps open to question. "Doing business" in this section is used in its ordinary sense. Taxation of Incomes 491 G. L. c. 62, §§ 34-36] A corporation which merely maintains a transfer agent in this commonwealth is not obliged to file a list of its shareholders. "Bonds, notes or other evidences of indebtedness" means evi- dences of indebtedness which are in the form of securities and does not include accounts payable or deposits in a bank or trust company. Assessment of Persons Who Have Filed Returns Section. 35. The commissioner shall determine from the returns required by this chapter, or in any other manner, the income of every person taxable thereunder, and shall assess thereon the tax hereby provided; but he shall not determine the income of a person who has filed a return in accordance with sections twenty-two to twenty-five, inclusive, within the time prescribed by law, to be in excess of that disclosed by such return, without notifying such person and giving him an opportunity to explain the apparent incorrectness of his return. This provision marks a departure from the law in regard to the taxation of personal property in that the commissioner is not bound to "receive as true" a return duly filed. He is bound to give the taxpayer an opportunity for explanation if he rejects the figures in his return, but he is not obliged to accept the ex- planation and may assess the tax upon extrinsic evidence. The taxpayer however, if he is overassessed, having filed a return, is in position to contest the assessment and to secure an abate- ment by appropriate proceedings. Assessment of Persons Who Have Not Filed Returns Section 36. If any person who has failed to file a return, or has filed an incorrect or insufficient return, and has been notified by the commissioner of his delinquency, refuses or neglects within twenty days after such notice to file a proper return, or if any person files a fraudulent return, the commissioner shall determine the income of such person, taxable under this chapter, according to his best infor- mation and belief, and assess the same at not more than double the amount so determined. A person who is lawfully assessed under the provisions of this section cannot in any event be granted an abatement by the 192 Taxation in Massachusetts , [G. L. c. 62, §§ 36, 37 commissioner below double the amount for which he was prop- erly taxable, 1 and if the commissioner rightly or wrongly refuses to give him even this measure of relief, however arbitrary or ex- cessive the tax may have been, the taxpayer can have no redress from the superior court, unless it appears that he had good cause for his delay in filing his return. 2 In this respect the statute was modelled upon the law in regard to the taxation of personal property. 3 Omitted Assessments Section 37. If the commissioner finds from the verification of a return, or otherwise, that the income of any person subject to taxa- tion under this chapter or any portion thereof, has not been assessed, he may, at any time within two years after September first of the year in which such assessment should have been made, assess the same, first giving notice to the person so to be assessed of his inten- tion, and such person shall thereupon have an opportunity within ten days after such notification to confer with the commissioner in person or by counsel or other representative as to the proposed assess- ment. After the expiration of ten days from such notification the commissioner shall assess the income of such person subject to taxa- tion, or any portion thereof, which he believes has not theretofore been assessed, and he shall thereupon give notice under section thirty- nine to the person so assessed, and the tax shall be payable fourteen days after the date of such notice. The provisions of this chapter in respect to the abatement and collection of taxes shall apply to a tax so assessed. Whenever, in the course of a verification of the returns of a taxpayer under section thirty, the commissioner finds that an overpayment of the total amount of taxes due from such taxpayer has been made on any year's return subject to verification, the amount of such overpayment shall be deducted from the amount of any addi- tional tax found to be due on any other year 's returns so verified, and only the net amount thus determined to be due shall be assessed addi- tionally. This section is in its original form, except that the last sen- tence, authorizing deduction for overpayments, was added in 1920. It is to be noted that an overpayment discovered after 1 G. L. c. 62, §44, infra, page 495. 2 See G. L. c. 62, §47, infra, page 498. 3 G. L. c. 59, §64, supra, page 293. Taxation of Incomes 493 G. L. c. 62, §§ 37-39] the time for filing petitions for abatement has expired and not due to an error of the income tax officials, cannot be used as a credit, except against an underpayment on some other item by the same taxpayer. Rules and Regulations of the Commissioner Section 38. The commissioner may from time to time make such rules and regulations, not contrary to this chapter, as he deems neces- sary to carry out its provisions. Under authority of this section the commissioner has prepared a set of rules and regulations, known as Bulletin No. 5, contain- ing not only instructions in regard to the preparation and filing of returns and other forms, but also interpretations of the various sections of the income tax law and rulings of law in regard to various situations which have arisen or seem likely to arise. While all of the rules and regulations are carefully thought out and are of great service in preparing returns, taxpayers should appreciate the difference between the regulations which relate to procedure and which unless inconsistent with the statute have the force of law and would be recognized as binding by the courts, and those which relate to the construction of the law and which are binding only upon the officers of the income tax division, and which, while they indicate to the taxpayer the position that will be taken by the commissioner, are not even considered by the court if the question to which they relate is submitted for judicial determination. Collection of Income Taxes Section 39. The commissioner, annually on or before September first, shall give written notice to every person taxable under this chapter of the amount of the tax payable by him, and of the date on which the tax is due and payable, which shall be October first. The notice shall be mailed, postage prepaid, addressed to the person as- sessed at his place of residence or business, or at the address given in his return, or otherwise delivered at such place of residence or busi- ness or at such address. All taxes assessed hereunder may be paid at the office of the commissioner in Boston or at the office of the income tax assessor for the district where the taxpayer resides or has his principal place of business, at the option of the taxpayer, and the 494 Taxation in Massachusetts [G. L. c. 62, §§ 39-43 notice shall state the places at which the tax may be paid. Failure to receive such notice shall not affect the validity of the tax. Section 40. All taxes received by the income tax assessors shall be accounted for and turned over to the commissioner as often as once in each week. Section 41. If a tax assessed under this chapter is not paid within fifteen days from the date when due, interest at the rate of six per cent per annum from the due date shall be added to and become part of the tax. The commissioner, and the income tax assessors in their respective districts, shall have for the collection of taxes assessed under this chapter all the remedies provided by chapter sixty for the collection of taxes on personal estate by collectors of taxes of towns, and shall be allowed charges and fees as therein provided. Any action of contract brought to recover any such tax shall be brought in the name of the commonwealth. Section 42. If any income taxable under this chapter, received by executors, administrators, trustees, or other fiduciaries, is duly assessed to them thereunder and they neglect to pay the same, any such fiduciary shall be personally liable therefor to the commissioner in contract, and may be allowed in his account for the amount paid by him. The "notice" referred to in section thirty-nine is of course what is ordinarily known as a tax bill. It should be remembered that liability to the tax does not depend upon the receipt of the bill, and that a person who has received taxable income and has been assessed thereon is liable to interest and other penalties whether he has received a bill or not. If he has received no bill it is incumbent upon him to make inquiries as to the amount of his tax. The means of enforcing payment provided in section forty- one by reference to chapter sixty include first a summons, upon which a fee of twenty cents is payable, and then an action at law against the person assessed, the seizure of his personal prop- erty by distress, or the arrest of his person, at the option of the assessor, Abatement by the Commissioner Section 43. Any person aggrieved by the assessment of a tax under this chapter may apply to the commissioner for an abatement Taxation of Incomes 495 G. L. c. 62, §§ 43, 44] thereof at any time within six months after the date of the notice of the assessment, or, if he dies during said six months his executor or administrator may apply for such abatement within one month after his appointment ; and if, after a hearing, the commissioner finds that the tax is excessive in amount or that the person assessed is not sub- ject thereto, he shall abate it in whole or in part accordingly. If the tax has been paid, the state treasurer shall repay to the person as- sessed the amount of such abatement, with interest thereon at the rate of six per cent per annum from the time when it was paid. The commissioner shall notify the petitioner by registered letter of his decision upon the petition. Section 44. No tax assessed on any person liable to taxation under this chapter shall be abated in any event unless the person assessed shall have filed, at or before the time of bringing his petition for abatement, a return as required by sections twenty-two to twenty- five, inclusive; and if he failed without good cause to file his return within the time prescribed by law, or filed a fraudulent return, or, having filed an incorrect or insufficient return, has failed, after notice, to file a proper return, the commissioner shall not abate the tax below double the amount for which the person assessed was properly taxable under this chapter. The first step in contesting a tax assessed upon income in every case, whether the taxpayer denies the validity of the entire tax or contends that the tax is excessive in amount, is an appli- cation to the commissioner for the abatement of the tax. This procedure may be followed, whether the tax has been paid or not; and may be availed of although the tax has been paid without protest. Applications must be prepared upon a form prescribed by the commissioner and must be filed within six months of the date of the tax bill. 1 If mailed, the postmark de- termines whether the filing is seasonable. If an informal appli- cation is seasonably filed, it will be considered if an application in proper form is sent promptly after notification by the com- missioner that the first application was not in proper form, al- though the formal application is filed after the expiration of the statutory period. Applications for abatement based upon an error by the income tax division will be received at any time, if filed promptly after the discovery of the error by the taxpayer. 1 In the original statute the period was three months, but by St. 1920, c. 385, §4, it was extended to six months. 496 Taxation in Massachusetts [G. L. c. 62, §§ 44, 45 In case the application for abatement is based upon the three hundred dollar exemption granted by section eight, para- graph (a), or upon the accidental inclusion in the return of non-taxable income, the commissioner requires a statement in de- tail of the entire income of the taxpayer from all sources to ac- company the application. An individual taxpayer, or a partner or beneficiary, is deemed to have waived any exemptions or de- ductions to which he is entitled and which have not been claimed on the return, unless an application for abatement is filed within the six months' period. An application for abatement will be determined upon the statements in the application and such supplementary state- ments and affidavits as the taxpayer may file therewith, unless the taxpayer requests a formal hearing. If a hearing is asked for, notice of the time and place of the hearing will be given the taxpayer, and he may be represented by counsel if he so de- sires. If no postponement is asked for and granted, and the tax- payer does not appear either personally or by counsel at the time set for the hearing, the hearing will be declared closed. The provision in section forty-four in regard to the filing of a return as a prerequisite to an application for abatement is similar to the law in regard to the abatement of taxes upon per- sonal property. 2 The income tax act however makes it clear that the return must be filed not later than the time when the peti- tion is brought, whereas under the law in regard to personal property a list might be filed at any time before the hearing. The penalty in case a return was without reasonable excuse not filed seasonably is increased from fifty per cent as it existed in the law relating to personal property to one hundred per cent; but the provision in regard to the penalty is still a limitation and not a direction, and if the commissioner, after he has assessed a tax more than twice too large, refuses to make any abatement whatever, the taxpayer has no remedy except the statutory ap- peal. Appeal to the Board of Appeal Section 45. Any person aggrieved by the refusal of the com- missioner to abate, in whole or in part, under section forty-three, a 2 See G. L. c. 59, §61, supra, page 287. Taxation of Incomes 497 G. L. c. 62, §§ 45, 46] tax assessed under this chapter, may appeal therefrom, within thirty days after receiving notice of the decision of the commissioner, by filing a complaint with the clerk of the board of appeal from decisions of the commissioner. If, on hearing, said board finds that the person making the appeal was entitled to an abatement under section forty- three from the tax assessed on him, it shall make such abatement as it sees fit. The decision of the board of appeal shall be final and con- clusive, and shall be communicated in writing to the petitioner and the commissioner within five days thereafter. Section 46. If the tax abated has been paid, the state treasurer shall repay to the petitioner the amount of the abatement and in- terest at the rate of six per cent per annum from the time of pay- ment, upon presentation to him by the petitioner of the notice of the decision of the board. The remedy by appeal to the board of appeal, which is the tribunal established by section twenty-one of chapter six of the General Laws 1 primarily to pass upon appeals in questions of valuation arising under the corporation tax law, was granted by the legislature in supposed analogy to the now obsolescent remedy of appeal to the county commissioners in the case of the local property tax. The paragraph is not very well phrased, but it apparently gives the board of appeal a wide discretion in abating taxes and in its original form permitted the board to remit the penalty of doubling the tax in case a taxpayer has failed without good cause to file a return within the prescribed time. In the consolidation of the General Laws the phraseology of this section was somewhat changed without any amendment by the legislature, so that whether intentionally or otherwise the powers of the board of appeal have been considerably cut down. The provision that the decision of the board of appeal shall be final and conclusive is to be construed as applicable only to decisions of questions of fact, and not as depriving the taxpayer of his right to have questions of law finally determined by the supreme judicial court. 2 The proper procedure in case the ap- pellant desires to raise questions of law is to submit to the board requests for rulings of law in accordance with his contentions, 1 Supra, page 139. * See Commissioner of Public Works v. Justice of Dorchester District, 228 Mass. 12 (1917). 498 Taxation in Massachusetts [G. L. c. 62, §§ 46, 47 and if the decision of the board is adverse, to file in the supreme judicial court a petition for writ of certiorari, asking that the board be required to certify their proceedings, and their action upon the requests for rulings. The provisions of section forty-six are not accepted literally by the state treasurer, and in practice payment is not made upon presentation to him of the notice of the decision of the board of appeal, but in due season a check for the amount abated is mailed to the taxpayer. * Appeal to the Superior Court Section 47. (As amended by St. 1921, chapter 113, section 1.) Any person agrieved by the refusal of the commissioner to abate in whole or in part under section forty-three a tax assessed under this chapter, and who has paid his tax, may, instead of pursuing the remedy provided in section forty-five, appeal from such refusal by filing a complaint against the commissioner in the superior court for the county where such person resides or has his principal place of business, or, if such person claims a domicile without the common- wealth, by filing a complaint against the commissioner in the superior court for any county, within thirty days after the notice by the com- missioner of his decision in accordance with section forty-three. An order of notice shall be issued by said court and served on the com- missioner within such time as the court directs, and subsequent pro- ceedings shall be conducted in accordance with sections sixty-five to sixty-eight, inclusive, of chapter fifty-nine. If an abatement is granted, the amount thereof shall be repaid to the complainant by the state treasurer, with interest at the rate of six per cent per annum from the time when the tax was paid, and costs. This provision was designed to conform to the existing practice in the case of appeals from the refusal of assessors of a city or town to abate a tax upon real or personal property. 1 In the original statute it was expressly provided that "if the com- plainant was subject to taxation under this act and did not file his return within the time prescribed by law, he shall not be entitled to have any part of his tax abated by the court, unless the court finds that he had good cause for his delay, or the tax 1 G. L. c. 59, §64, supra, page 293. Taxation of Incomes 499 G. L. c. 62, §§ 47, 48] commissioner had previously so found." 2 In this respect, as in others, it was intended to follow the rule in the case of the prop- erty tax, and to include as one of the penalties for failure to file a return within the prescribed time an absolute denial of the right of appeal to the superior court, no matter how excessive the tax may have been, or how unwarranted the refusal of the commis- sioner to abate it. 3 For some unexplained reason the words above quoted were omitted by the commissioners who prepared the General Laws, and whether the somewhat drastic rule which they established is still in force may be open to some doubt. Statutory Remedies Exclusive Section 48. (As amended by St. 1921, chapter 113, section 2.) The remedies provided by sections forty-three to forty-seven, in- clusive, shall be exclusive, whether or not the tax is wholly illegal. But the word "exclusive" in this section shall not be construed to deprive any person of a right of action at law in any federal court. The object of this provision is to exclude the possibility of a common law action of contract in the case of a tax wholly illegal, and to make all controversies, whether as to validity or amount, determinable in the statutory proceedings for abatement only, and thus to avoid the difficult and technical questions which had arisen in connection with local property taxes with respect to the propriety of the statutory or the common law proceedings. 1 The last sentence of the foregoing section was added in 1921 and merely states the law as it previously existed, as a state statute cannot deprive any person of his remedies in the federal courts. A citizen of another state or nation upon whom an income tax is assessed by this commonwealth upon the ground that he is an inhabitant thereof may, if the amount involved exceeds three thousand dollars, contest his liability to the tax in the United States district court either by means of a bill in equity seeking to enjoin the commissioner from proceeding to collect the tax, 2 or by paying the tax under protest and bring- ing an action at common law for money had and received against 2 St. 1916, c. 269, §20. 3 Sears v. Nahant, 205 Mass. 558 (1910). 1 See G. L. c. 60, §98, supra, page 400. 2 Dunn v. Trefry, 260 Fed. Rep. 147 (1919), and see also Agassiz v. Trefry, 266 Fed. Rep. 8 (1920) affirming 260 Fed. Rep. 226 (1919). 500 Taxation in Massachusetts [G. L. c. 62, §§ 48-51 the state treasurer who was in office when the tax was collected. 5 If the liability of any person to the tax is questioned by him on the ground that his rights under the federal constitution are vio- lated, he may seek redress in the United States courts, without regard to his citizenship or the amount involved. Loss of Exemption of Principal by Failure to Return Income Section 49. All property owned by a resident of the common- wealth on April first in any year, which during the preceding cal- endar year had produced for such owner any income taxable under this chapter, shall, despite anything in this chapter, be subject to taxation to such owner in accordance with chapters fifty-nine and sixty, if such owner does not make to the commissioner a full return of his taxable income from such property on or before September first of the year in which a return of income is required by sections twenty-two to twenty-five, inclusive, and provided the tax so assessed is greater than the amount of the tax properly payable under sections one and thirty-five to thirty-seven, inclusive. Section 50. Property taxable in any year under the preceding section shall be assessed in that year between September second and December tenth, both inclusive. The amount of taxes assessed by the local assessors upon such property in such town in any year, less the amount assessed and collected by the commissioner as here- inafter provided, shall be entered on the tax list of the collector of such town, and he shall collect and pay over the same to the town. Section 51. Any taxpayer aggrieved by the assessment of a tax under section forty-nine may appeal to the commissioner within thirty days after the receipt of the tax bill therefor, or other actual notice of the assessment. In ease of an adverse determination by the com- missioner, the taxpayer may appeal to the board of appeal as pro- vided in section forty-five, or to the superior court as provided in section forty-seven ; and if the taxpayer shall prove that the income of the property was duly returned or that it was not taxable or that there was reasonable excuse for not making the return, the tax shall be abated, and, if it has previously been paid, the amount abated shall be repaid by the town to the taxpayer, with interest from the time of such payment. 8 International Paper Co. v. Burr ill, 260 Fed. Rep. 664 (1919). Taxation of Incomes 501 G. L. c. 62, §§ 52-54 inc.] Section 52. At any time prior to the collection by the town of the tax provided for by section forty-nine the commissioner may assess and collect the tax provided for by this chapter on the in- come of the property, subject to the limitation of time provided by section thirty-seven. Upon the collection of the tax, the commissioner shall at once notify the tax collector of the town where the taxpayer resides, and the tax collected by the commissioner shall be deducted from the tax assessed in that town ; and if the tax assessed therein has been collected, the amount so deducted shall be repaid by the town to the taxpayer. If a tax collected by a town under section forty -nine is afterward abated, the amount of the abatement, together with the amount of any interest paid by the taxpayer on that amount, shall be paid by the town to the taxpayer. Section 53. Upon discovery of property the income of which for the preceding calendar year, taxable under this chapter, has not been returned on or before September first of the year in which the return is required, the commissioner shall forthwith notify the assessors of the town where the property is taxable, unless there is within his knowl- edge a reasonable excuse for the failure of the taxpayer to file the return. Upon making any assessment under section forty-nine, the assessors shall forthwith notify the commissioner. The object of these sections is to provide, as an additional penalty for failure to file a return, that the owner of securities yielding taxable income shall not have the benefit of the exemp- tion of such securities from taxation at the local rate on their capital value. He is not, however, subjected to a tax on both principal and income, but merely on the income and on the excess of the tax on principal over that on income. Effect of Unconstitutionality of Part of the Chapter Section 54. If any part, subdivision or section of this chapter shall be declared unconstitutional, the validity of its remaining pro- visions shall not be affected thereby. The object of the foregoing provision was to avoid all controversies over the question whether all of the provisions of the income tax act were intended to be so interwoven that the unconstitutionality of one provision therein would result in the upsetting of the entire act. 502 Taxation in Massachusetts [G. L. c. 62, §§ 55-59 Penalties Section 55. If any person required to file a return under this chapter fails to file the return within the time prescribed therein, the sum of five dollars for every day during which such person is in default shall be added to, and become part of the tax, as an additional tax; but the commissioner may, in his discretion, abate any such additional tax in whole or in part. Section 56. Whoever files a fraudulent return, and whoever, having failed to file a return or having filed an incorrect or insuf- ficient return without reasonable excuse fails to file a return within twenty days after receiving notice from the commissioner of his delinquency, shall be punished by a fine of not less than one hundred nor more than ten thousand dollars, or by imprisonment for not more than one year, or both, and shall forfeit his right to hold public office anywhere within the commonwealth for such period, not exceeding five years, as the court determines. Any person filing a fraudulent return of interest deduction under section three, or giving fraudulent information under said section or section four to the commissioner or an income tax assessor relative to any deduction given by section two, shall be punished as provided in this section. Section 57. Any individual, partnership, association, trust or corporation failing without reasonable excuse to file a return, list or report, or otherwise give information, as required by section thirty- three, shall be punished by a fine of not less than twenty -five nor more than five hundred dollars. Section 58. The disclosure by the commisioner, or by the state auditor, or by any deputy, assistant, clerk or assessor, or other employee of the commonwealth, or of any city or town therein, to any person but the taxpayer or his agent, of any information what- ever contained in or set forth by any return filed under this chapter, other than the name and address of the person filing it, except in proceedings to collect the tax or by proper judicial order, or for the purpose of criminal prosecution under this chapter, shall be punish- able by a fine of not more than one thousand dollars, or by imprison- ment for not more than six months, or both, and by disqualification from holding office for such period, not exceeding three years, as the court determines. Section 59. Section thirty-one and the penalties provided by sections fifty -five and fifty-six shall apply to individuals and corpora- Taxation of Incomes 503 G. L. c. 62, §§ 59, 60] tions acting in any fiduciary capacity. In the case of a corporation, the penalty may be imposed on the corporation, on the officers whose duty it was to make the return, or on both. Section 60. In the case of a partnership one or more members of which are inhabitants of the commonwealth and which has a usual place of business in the commonwealth, the penalties imposed by this chapter may be inflicted upon any member of the partnership who is an inhabitant of the commonwealth and who has any active part in the management of the affairs of the partnership, and if there is no such member, upon the persons in charge of its affairs in this common- wealth. In the case of a partnership, association or trust, the bene- ficial interests in which are represented by transferable shares, the penalties imposed by this chapter for failure to file a return may be inflicted upon the trustees, managers or officers whose duty it was to make the return. The foregoing provision when originally enacted in 1916 was the first instance of any statute imposing a penalty (other than the risk of being doomed) upon failure by an individual taxpayer to file a tax return. The harsh operation of the per- sonal property tax when literally enforced rendered the imposi- tion of a penalty for failure to bring in a list out of the question ; but it was one of the essential elements of the income tax law that returns should be compulsory, and that a reasonable tax could thus be enforced with equality. The penalties imposed by the foregoing sections are not the only ones established under the chapter and others are to be found in other sections. The means for enforcing the filing of returns under the income tax law may be summarized as follows : (1) Failure to file a return on or before the first day of March may be punished (a) by a penalty of five dollars a day (section 55), (b) by liability to "dooming" by the commissioner (section 36) with no right to an abate- ment by the commissioner below double the proper tax (section 44) and no remedy whatever in the superior court (section 47) unless there was good cause for the delay. (2) Failure to file a return on or before the first day of May 504 Taxation in Massachusetts [G. L. c. 62, § 60 may be redressed by a petition for mandamus to com- pel the filing of the return (section 31). (3) Failure to file a return before the first day of September deprives the delinquent of the exemption from the tax on capital value, and the securities from which the in- come was received remain taxable in the city or town in which the owner lives at their capital value at the local rate (section 49). (4) Failure to file a return after special notice from the commissioner, or the filing of a fraudulent return, may be punished (a) by a fine of not less than one hundred nor more than ten thousand dollars, or by imprisonment for not more than one year, or by both, and by forfeiture of the right to hold public office for not more than five years (section 56), (b) by liability to "dooming" at double the estimated tax (section 34) with no right to an abate- ment by the commissioner below double the proper tax (section 44) and no remedy whatever in the superior court if the commissioner refuses to make any abatement (section 47.) Although the statute requires a return in every case in which an inhabitant of the commonwealth has received taxable interest and dividends, where the amount received is trifling, as when a person maintains a small bank balance in a trust company or national bank and occasionally is credited with a dollar or less in interest, the expense of collection would be greater than the amount received, and no penalty is imposed by the commissioner for failure to file a return of taxable interest of less than five dol- lars in the case of an individual whose total income from all sources is less than two thousand dollars, and whose gross income from business is less than two thousand dollars; and no penalty is imposed upon a bank or other party for failure to file an infor- mation return with respect to a payment of interest during the year of less than five dollars. CHAPTER 63 TAXATION OF CORPORATIONS It has been an almost universal practice throughout the United States to tax corporations by methods different from those applied to individual citizens. In corporations there are five elements of taxable value, each of which may be made a subject of taxation, namely (1) franchise, (2) capital, (3) prop- erty, (4) income, (5) shares of stock in the hands of the indivi- dual stockholders. While some of these elements represent the same basic values, they are so far distinct that they may be sep- arately taxed without violating the constitutional rights of the corporation or its stockholders. As a rule, however, the states have not subjected corporations, and especially domestic cor- porations, to double taxation, but their efforts have been directed toward reaching for purposes of taxation the sum by which the value of the aggregate capital stock of a corporation exceeds the value of such of its real and personal property as may be made subject to local taxation. Where such an excess exists it rep- resents the estimate of the trained judgment of the market of the value of the earning capacity of the corporation — a capitali- zation of its anticipated income. While such an element of value is never taxed in the case of an individual or an ordinary part- nership, it is readily reached by the taxation of the shares in the hands of the individual share holders; and when that ob- vious and simple method of taxing corporations is discarded because of the difficulty in assessing shares in the hands of non- residents which represent property within the state, the reach- ing of this corporate excess by a tax on the franchise or the cap- ital of the corporation itself follows as a logical and natural step. TAXATION OF BANK SHARES Rate and Place of Taxation Section 1. All shares of stock in banks, whether of issue or not, existing by authority of the United States or of any law of the com- 505 506 Taxation in Massachusetts [G.L. c. 63, §1 monwealth not contained in chapters one hundred and sixty-seven to one hundred and seventy-four, inclusive, and located in the com- monwealth, shall be assessed to the owner thereof in the town where such bank is located, and not elsewhere, in the assessment of state, county, city and town taxes, whether such owner is a resident of said town or not. They shall be assessed at their fair cash value on April first, after deducting therefrom the proportionate part of the value of the real estate belonging to the bank, at the same rate as other moneyed capital in the hands of citizens is by law assessed. The persons appearing from the books of the banks to be owners of shares at the close of the business day last preceding April first shall be deemed to be the owners thereof. Prior to the civil war, when national banks were unknown, all incorporated banks doing business within this commonwealth were subject to an annual tax of one-half of one per cent of their capital stock, payable to the commonwealth, 1 and in addition thereto were subject to local taxation on account of their real estate. 2 The shareholders were also taxed the full value of their shares in the towns where they respectively dwelt, without any deduction on account of the real estate of the bank, as the statute authorizing such deduction applied only to manufac- turing corporations. 3 The bank was not taxed for its personal property, for the same reasons that other corporations were not. 4 The tax on the capital stock was sustained as an excise, 5 and the property taxes, while resulting in double taxation, did not violate any constitutional right. During the civil war national banks were established by act of Congress, and the state banks were driven out of existence by oppressive taxation. 6 The national banks are instrumentalities created by the United States government for the performance of its constitutional functions, and it is not within the power of the states to impose taxes upon them except so far as the imposition of taxes upon them is permitted by the laws under which they are created, and with such limitations and qualifi- *8t 1812, c. 32; St. 1828, c. 96, §21; R. S. c. 9, §1, G. S. c. 57, §88. 'Tremont Bank v. Boston, 1 Cush. 142 (1848). "Tremont Bank v. Boston, 1 Cush. 142 (1848). *Waltham Bank v. Waltham, 10 Met. 334 (1845) ; Tremont Bank v. Boston, 1 Cush. 142 (1848). "Portland Bank v. Apthorp, 12 Mass. 252 (1815). •Veazie Bank v. Fenno, 8 Wall. 533 (1869). Taxation of Corporations 507 G. L. c. 63, § 1] cations as those laws prescribe. 7 One of the early acts of Con- gress relating to national banks provided that nothing therein should prevent the inclusion of the shares in such banks in the valuation of the property of the owner in the assessment of taxes imposed under state authority at the place where such bank was located and not elsewhere, but not at a greater rate than was assessed upon other moneyed capital in the hands of individual citizens of such state. 8 There is no doubt that this act of Congress was intended to comprehensively control the subject with which it dealt and thus to furnish the exclusive rule governing the state taxation of these federal agencies. 9 Soon after the establishment of the national banks, provision was made by the legislature of this commonwealth for the taxa- tion of shares in national banks in the cities and towns where the owners of the shares respectively dwelt. 10 It was held by the supreme judicial court of the commonwealth that "place" in the act of Congress meant "state" so that the Massachusetts statute was in conformance with the act of Congress. 11 The supreme court of the United States held that at any rate a per- son who resided in the same city as that in which the bank was located could not complain of the statute. 12 Shortly afterward Congress passed an amendatory act providing that "place" in the original statute should be construed to mean "state" but that shares in national banks owned by non-residents of the state should be taxed in the city or town where the bank was located and not elsewhere; 13 and later in the same year provision was made in this commonwealth for the taxation of shares of non- residents of the commonwealth in the city or town in which the bank was located, while residents remained taxable in the towns where they respectively dwelt. 14 Under this and similar statutes it was held that bank shares held by residents of the commonwealth were to be taxed in the same manner as other 7 Van Allen v. The Assessors, 3 Wall. 573 (1869) ; Austin v. Aldermen of Boston, 7 Wall, 694 (1868) ; Lionburger v. Rouse, 9 Wall. 468 (1869) ; Owensboro National Bank v. Owensboro, 173 U. S. 664 (1899) ; Rich v. Packard National Bank, 138 Mass. 527 (1885). 8 U. S. St. 1864, c. 106, §41; Rev. St. of U. S. §5219. •Bank of California v. Richardson, 248 U. S. 476 (1919). 10 St. 1865, c. 242. "Austin v. Aldermen of Boston, 14 Allen 359 (1867). "Austin v. The Aldermen, 7 Wall. 694 (1868). 18 U. S. St. 1868, c. 7 (Feb. 10, 1868). "St. 1868, c. 349 (June 11, 1868). 508 Taxation in Massachusetts [G. L. c. 63, § l personal property and subject to the same exceptions and quali- fications upon the general rule that personal property is to be taxed in the city or town in which its owner resides. 15 The present method of taxing bank shares was adopted in 1873 and since that time there has been little change in the statutes re- lating to the subject. 16 The portion of the national banking act which has caused the greatest uncertainty is the provision limiting the taxation of bank shares to the rate assessed upon other moneyed capital in the hands of individual citizens. It has been provided since 1868 that assessors of cities and towns in which a national bank is located shall in ascertaining the tax-rate for each year omit from the valuation the value of all shares in such banks held by non-residents of the city or town; 17 and it has been held upon great deliberation that such a provision does not conflict with the requirements of the act of Congress. 18 It is further held that the requirement that the rate shall not exceed that on other moneyed capital in the state does not mean that the tax rate of the town having the lowest rate of all towns in the common- wealth must not be exceeded, but that in each town its own rate is the limit. 19 The real difficulty however has been with respect to the meaning of "moneyed capital." It is now well settled that it is limited in its meaning to capital engaged in earning money by dealing in money 20 and that it does not mean capital in the form of money invested by individuals in other forms of business or in the stock of corporations generally. It has no application to the stock of insurance companies 21 or of public service com- panies or of manufacturing or business corporations. 22 So far as the stock of corporations is concerned, it merely requires that "Murray v. Berkshire Life Insurance Co., 104 Mass. 586 (1870) ; Goldsbury v. Warwick, 112 Mass. 384 (1873) ; Revere v. Boston, 123 Mass. 375 (1877). 16 The present method of taxing bank shares was first adopted by St. 1871, c. 390. This statute was repealed by St. 1872, c. 321, and return made to the old method, but by St. 1873, c. 315, the present method was permanently resorted to. 17 G. L. c. 59, §22, supra, page 252. 18 Providence Institution for Savings v. Boston, 101 Mass. 575 (1869). 18 Providence Institution for Savings v. Boston, 101 Mass. 575 (1869). 20 Wellington First National Bank v. Chapman, 173 U. S. 205 (1899). 2l People v. The Commissioners, 4 Wall. 244 (1866); Aberdeen Bank v. Chehalis County, 166 U. S. 440 (1897). "Mercantile National Bank v. New York, 121 U. S. 138 (1887) ; Talbott v. Silver Bow County, 139 U. S. 438 (1891). Taxation of Corporations 509 G. L. c. 63, § l] the stock of national banks shall not be taxed at a higher rate than the stock of other corporations engaged in the business of banking. 23 Even with respect to corporations engaged in the bus- iness of banking, a discrimination is lawful if made in favor of banks of a class whch do not compete with national banks, such as savings banks, 24 or trust companies which confine themselves to their original function of administering trusts. 25 It has how- ever been recently held, contrary to the previous general under- standing of the law, that the restriction in the statute includes something besides shares in banking corporations and other corporations that enter into direct competition with the national banks; and that it includes the investment by individuals in money at interest and other evidences of indebtedness such as normally enter into the business of banking. 26 The law does not require that the taxation of shares of na- tional banks and of corporations doing a banking business and chartered by the states be identical, provided the tax on the shares in the state banks is equally severe; 27 but any real dis- crimination against the national banks is illegal, whether it con- sists of a statute allowing deductions to stockholders in state banks which are not allowed in the case of national banks 28 or a systematic and intentional undervaluation of stock in state banks while stock in national banks is assessed at its full value. 29 23 National Bank of Redemption v. Boston, 125 U. S. 60 (1888) ; Palmer v. McMahon, 133 U. S. 660 (1890); National Bank of Commerce v. Seattle, 166 U. S. 463 (1897). "Mercantile National Bank v. New York, 121 U. S. 138 (1887) ; Davenport National Bank v. Davenport, 123 U. S. 83 (1887) ; National Bank of Redemption v. Boston, 125 U. S. 60 (1888). 25 Mercantile National Bank v. New York, 121 U. S. 138 (1887) ; Jenkins v. Neff, 186 U. S. 230 (1902). 26 Merchants National Bank v. Richmond, U.S. (1921). The effect of this decision would not be to hold the Massachusetts statute for taxing national bank stock unconstitutional, for the statute follows the wording of the act of Congress ; but it might limit the tax to the rate collected on money at interest in the hands of individuals, namely 6% of the income. G. L. c. 62, §1 (a), supra, page 437. "Mercantile National Bank v. New York, 121 U. S. 138 (1887) ; San Fran- cisco National Bank v. Dodge, 197 U. S. 70 (1905) ; Covington v. Covington First National Bank, 198 U. S. 100 (1905) ; A. J. Tower Co. v. Commonwealth, 223 Mass. 371 (1916). 28 New York v. Weaver, 100 U. S. 539 (1879) ; Evansville Bank v. Britton, 105 U. S. 322 (1881); Whitbeck v. Mercantile National Bank, 127 U. S. 193 (1888); Palmer v. McMahon, 133 U. S. 660 (1890); San Francisco National Bank v. Dodge, 197 U. S. 70 (1905). 29 Pelton v. Commercial National Bank, 101 U. S. 143 (1879) ; Whitbeck v. Mercantile National Bank, 127 U. S. 193 (1888); Albuouerque First National Bank v. Albuquerque, 208 U. S. 548 (1908). 510 Taxation in Massachusetts [G. L. c. 63, § l It is well settled that shares in a national bank located in another state owned by a resident of this commonwealth cannot be taxed by the city or town in which the owner resides. 30 Shares in a national bank located in this commonwealth are taxable only for state, county, city or town purposes and are not subject to taxation for the benefit of incorporated subordinate districts in which the owners of the shares reside whether the district is in the same town in which the bank is located 31 or in a different one. 32 The aggregate capital stock of a national bank cannot be taxed to the bank; the shares can be assessed only as the prop- erty of the individual stockholders. 33 In assessing the shares it is not necessary to deduct the proportionate part of the value of the shares which represents property of the bank which the state could not tax directly, such as United States bonds. 34 When a national bank holds stock in a state bank, the national bank cannot be taxed by the state as a stockholder of the state bank; but the stock of the state bank may be considered as an asset of the national bank in valuing the shares of the national bank for the purpose of taxing the stockholders. When however one national bank holds stock in another national bank, the former bank may be taxed as a stockholder of the latter ; but the state cannot at the same time include such stock ownership as an asset of the former bank in valuing its shares for taxation to its stockholders, since in such case the same property would be taxed twice. 35 The "fair cash value" of the shares is the market value, and not the value to be deduced by a comparison of the assets and liabilities. If there is evidence of the market price, evidence of the value so deduced is not controlling 30 or even important. 37 It is to be noted that under the Massachusetts statute the real es- tate of a national bank is subject to local taxation, and the value of the real estate is deducted from the value of the shares in 30 Flint v. Aldermen of Boston, 99 Mass. 141 (1868). 81 Rich v. Packard National Bank, 138 Mass. 527 (1885). "Little v. Little, 131 Mass. 367 (1881). 83 Owensboro National Bank v. Owensboro, 173 U. S. 664 (1899). "Van Allen v. Assessors, 3 Wall. 573 (1865) ; People v. The Commissioners, 4 Wall. 244 (1866) ; Evansville National Bank v. Britton, 105 U. S. 322 (1881) ; Palmer v. McMahon, 133 U. S. 660 (1890). 35 Bank of California v. Richardson, 248 U. S. 476 (1919). 36 National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891). "National Bank of Commerce v. New Bedford, 175 Mass. 257 (1900). Taxation of Corporations 511 G. L. c. 63, §§ 1, 2, 3] taxing the shares. The valuation of bank shares is made by the local assessors and the remedy by appeal to the county commissioners or to the superior court is the same as in the case of ordinary local taxation. 38 The bank and not the shareholders is the proper party to file the list, to petition for abatement and to take an appeal; 39 but the list need not be a list of its property as required in ordinary local taxation as a prerequisite to an abatement; a list of its shares is all that is required. 40 The right of the states to tax the real estate of national banks is expressly established by the federal statutes, and there would seem to be no valid constitutional objection to the taxa- tion of the shares at their full value and taxation of the real estate as well. 41 The states however have no power to tax the personal property of a bank, tangible or intangible, even if the bank is in the hands of a receiver and its shares are of no value, 42 or to tax its franchise, or the aggregate value of its shares in excess of its tangible assets. 43 A state may tax deposits in na- tional banks as the property of the individual depositors, pro- vided the tax is not levied in such a way as to discriminate against deposits in national banks as compared with other like property. 44 Collection of Tax Section 2. Every such bank shall pay the tax so assessed to the collector or other person authorized to receive it at the time when other taxes in the town become due. If not so paid, said tax, with interest thereon at the rate of twelve per cent per annum from the day when due, may be recovered from said bank in contract by the collector of such town. Section 3. The shares of such banks shall be subject to the tax paid thereon by the corporation or by its officers, and the corporation and its officers shall have a lien on all shares in such bank and on all 38 National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891). "National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891) ; Adams v. New Bedford, 155 Mass. 317 (1891). 40 National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891). "Commercial National Bank v. Chambers, 182 U. S. 556 (1901). See, how- ever, Albuquerque First National Bank v. Albuquerque, 208 U. S. 548 (1908). 42 Rosenblatt v. Johnston, 104 U. S. 462 ( 1881 ) . 43 Louisville Third National Bank v. Stone, 174 U. S. 432 (1899) ; Owensboro National Bank v. Owensboro, 173 U. S. 664 (1899). "Clement National Bank v. Vermont, 231 U. S. 120 (1913). 512 Taxation in Massachusetts [G. L. c. 63, §§3, 4 rights and property of the shareholders in the corporate property for the payment of said taxes. The statutes in effect require the tax to be collected through the bank, by the town where the bank is located and at the rate prevailing in that town, but the proceeds are distributed as if the shares were taxable in the cities or towns where the owners of the shares dwell, in the same manner as other intangible per- sonal property was taxable before the enactment of the income tax act. Although the bank is required to pay the tax, it makes that payment not in its own right, but as agent of the share- holders. The tax is not upon the bank but upon the shareholders. 1 There can be no doubt that a state may require a national bank to pay the tax assessed upon its shareholders, if the bank may reimburse itself by collecting the proportionate amount of the tax from each shareholder. 2 Such a method of collecting taxes on shares in corporations was in common use when the national banking act was first enacted, and it is not to be sup- posed that Congress intended to prohibit the states from using this well recognized method of collection. 3 Distribution of the Tax Section 4. The cashier of every such bank shall make and de- liver to the assessors of the town where it is located, on or before April tenth in each year, a statement on' oath showing the name of each shareholder, with his residence and the number of shares belonging to him at the close of the business day last preceding April first, as the same then appeared on the books of said bank. If the cashier fails to make such statement, said assessors shall forthwith obtain a list of the names and residences of shareholders and of the number of shares belonging to each. They shall, forthwith, upon obtaining such state- ment or list, transmit a copy thereof to the commissioner ; and shall, immediately upon the determination of the tax rate in such town for the year, give to the commissioner written notice thereof, and ■A. J. Tower Co. v. Commonwealth, 223 Mass. 371 (1916). 2 Louisville First National Bank v. Kentucky, 9 Wall. 353 (1869) ; Lionberger v. Rouse, 9 Wall. 468 (1869) ; Waite v. Dowley, 94 U. S. 527 (1876) ; Aberdeen First National Bank v. Chehalis County, 166 U. S. 440 (1897); Covington v. Covington First National Bank, 198 U. S. 100 (1905) ; Citizens National Bank v. Kentucky, 217 U. S. 443 (1910). •Louisville First National Bank v. Kentucky, 9 Wall. 353 (1869). Taxation of Corporations 513 G. L. c. 63, §§ 4-7] also of the amount assessed by them upon the shares of each bank located therein. Section 5. Said commissioner shall thereupon determine the amount of the tax assessed upon shares in each of said banks which would not be liable to taxation in said town according to chapter fifty-nine ; and such amount shall be a charge against said town. He shall, in like manner, determine the amount of tax so assessed upon shares which would be so liable to taxation in each town other than that where the bank is located ; and such amount shall be a credit to such town. He shall forthwith give written notice by mail or at their office to the assessors of each town thereby affected of the aggregate amount so charged against and credited to it; and they may within ten days after notice of such determination appeal therefrom to the board of appeal from decisions of the commissioner. Section 6. At the expiration of ten days after said notice or upon being informed of the decision of the board of appeal, the com- missioner shall certify to the state treasurer the aggregate amount of charges against, and credits to, each town, as so determined ; and the treasurer shall thereupon withhold out of any sums payable by the commonwealth to any town against which a charge is certified, the amount of such charge, and shall allow or pay over to each town to which a credit is certified the amount of such credit. Section 7. In such adjustment of charges and credits, one per cent upon the amount assessed and collected by each town shall be allowed to it for the expense of assessment and collection. No town shall in any year be allowed credits or payments under this chapter until the assessors have complied with its requirements and with section twenty-two of chapter fifty-nine, relative to the taxation of bank shares. No bank, the shares in which are liable to taxation under section one, shall be liable thereto under section fifty-eight, nor shall the shareholders be liable to taxation for their shares therein for any purpose, except under this chapter. The object of the foregoing statutes is to ensure the appli- cation of the principle that intangible property is taxable at the domicile of the owner, which was firmly imbedded in the law when this method of taxing bank shares was established, and while the shares are taxed in the place where the bank is situ- ated, in literal compliance with the requirements of Congress, the towns of the domicile of the shareholders receive the benefit 514 Taxation in Massachusetts [G. L. c. 63, §§ 8, 9 inc. of the tax. It is a peculiar circumstance that bank shares' are now the only remaining class of intangible personal property to which the principle of mobilia sequuntur personam still ap- plies. The list of shareholders required by section four is the only list which the bank is obliged to file as a prerequisite to an ap- plication for abatement of tjie tax on its shares. 1 The pro- vision at the end of section seven exempting the bank and the shareholders from other taxation cannot be construed to require the deduction of the value of shares in national banks owned by a domestic business corporation from the aggregate value of its capital stock in determining the tax on its corporate fran- chise. 2 Establishment of Exemptions Section 8. The amount paid into the treasury annually, under this chapter, on account of shares in banks, which on April first are the absolute property of any savings bank liable to taxation under section eleven, shall be deducted from the taxes of such savings bank at the next payment by it to the commonwealth after the col- lection of the taxes on such bank shares. The commissioner may re- quire a statement of all shares so owned by any savings bank, in a form aproved by him, signed and sworn to by the treasurer or like financial officer thereof. From such statement and other evidence, and subject to appeal by such corporation under section seventy-one, he shall determine the amounts to be deducted, and certify the same to the state treasurer upon the final determination thereof; but the amount so to be deducted from the tax payable by any savings bank shall not exceed, in any year, the amount of the tax assessed on account of that portion of its deposits invested in shares in such banks. Section 9. The commissioner shall annually, as soon as may be after the first Monday in November, certify to the state treasurer the amounts assessed and collected for the year in respect of shares in such banks owned absolutely by any society or institution of the classes specified in clauses third and fourth of section five of chapter fifty- nine, and the treasurer shall thereupon pay over such amounts to such society or institution owning such shares. 'National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891). 2 A. J. Tower Co. v. Commonwealth, ,223 Mass. 371 (1916). Taxation of Corporations 515 G. L. c. 63, §§10, llinc] Section 10. The assessors of a town, upon request of any person resident therein who is the owner of any shares in such banks which, under clauses seventeenth and eighteenth of section five of chapter fifty-nine would be entitled to exemption from taxation, shall give to him a certificate stating such fact; and the town treasurer, upon request therefor, and the deposit with him of such certificate, shall pay to such owner the amount so collected in respect of such shares, immediately upon the allowance made to such town under this chapter. The object of the foregoing statutes is to provide the ma- chinery by which certain classes of individuals and corporations, which are exempt from direct taxation on other property, may establish their exemption with respect to shares in national banks. All shares in national banks, by whomsoever owned, are taxed in the first instance; but the tax is refunded to the indi- viduals and corporations described in the foregoing sections. SAVINGS BANKS, SAVINGS DEPARTMENTS OF TRUST COMPANIES AND CO-OPERATIVE BANKS Excise on Savings Banks and Savings Departments Section 11. Every savings bank and every trust company hav- ing a savings department, as defined respectively in chapters one hundred and sixty-eight and one hundred and seventy-two, shall pay to the state treasurer, on acount of its depositors, an annual tax of one half of one per cent, which shall be levied on the amount of the deposits in a savings bank, and on the amount of such of the deposits in the savings department of a trust company as do not exceed in amount the limits imposed upon deposits in savings banks by section thirty-one of chapter one hundred and sixty-eight, to be assessed and paid as follows: one-fourth of one per cent shall be assessed by the commissioner upon the average amount of such deposits for the six months preceding May first, and paid on or before May twenty- fifth ; and a like percentage shall be assessed upon the average amount of such deposits for the six months preceding November first, and paid on or before November twenty-fifth. Prior to 1862 there were no special provisions of law relat- ing to the taxation of savings banks, and savings banks, like 516 Taxation in Massachusetts [G. L. c. 63, § 12 other corporations, were taxed for their real estate in the town where it was situated but were not taxed for their personal prop- erty; and the depositors were taxed for the amounts of their deposits as "money at interest" in the towns where they re- spectively dwelt. 1 In 1862 a statute was enacted, imposing an annual tax upon savings banks to be paid to the common- wealth based upon the amount of the deposits, and exempting the deposits from other taxation. The validity of this statute was contested in the courts and it was held that it could not be sustained as a property tax; but as an excise on the franchise of the bank it was valid, and the amount of the deposits was held to be a proper measure of the value of the franchise. 2 The "deposits" upon which the tax is based include only the amounts deposited in the bank and dividends thereon payable to depositors and do not include the guarantee fund and undivided profits ; in other words the tax is based upon the amount credited to depositors and not upon the market value of the assets of the bank. 3 Exemption of Portions of Deposits Section 12. So much of said deposits shall be exempt from taxa- tion under the preceding section as is invested in any of the following : (a) Seal estate used for banking purposes. (&) Loans secured by mortgage of real estate taxable in this commonwealth. (c) Real estate the title of which has been acquired by fore- closure or purchase under clause twelfth of section fifty-four of chap- ter one hundred and sixty-eight, for five years after the title thereof is vested in the corporation. (d) Bonds or certificates of indebtedness of the United States. (e) Bonds or certificates of indebtedness of the commonwealth issued after January first, nineteen hundred and six. (/) Bonds, notes and certificates of indebtedness of any county, fire district, water district, light district, improvement district, city or town in the commonwealth, issued on or after May first, nineteen hundred and eight, stating on their face that they are exempt from taxation in Massachusetts. 1 Worcester County Institution for Savings v. Worcester, 10 Cush. 128 (1852). 2 Commonwealth v. The People's Five Cents Savings Bank, 5 Allen 428 ( 1862) . •Suffolk Savings Bank, Petitioner, 151 Mass. 103 (1890). Taxation of Corporations 517 G. L. c. 63, §§ 12, 13] (g) Shares of stock of trust companies organized under the laws of the commonwealth. After the enactment of the excise tax on savings banks the personal property of such banks continued to be exempt from direct taxation, 1 but the real estate of such banks has remained taxable in the town in which it is situated. So far as the consti- tutional rights of the bank are concerned, as the tax is an excise and not a property tax, the state is not bound to grant a deduc- tion based on the investment of the deposits in property which is itself taxed or in property which the state has no power to tax, such as United States bonds; 2 but the state has consistently attempted to deal fairly with institutions for savings and has allowed the deductions set forth in section twelve, with a view to avoiding what in effect amounts to double taxation or to the taxation of securities which would be exempt in the hands of in- dividual investors. So far as these deductions relate to property which is taxed in some other way, since they do not constitute the grant of an exemption, but an attempt to avoid double tax- ation, they are liberally construed; 3 and when a savings bank erects a building of more than one story in height, and occupies only the first floor for banking purposes, and rents the remain- ing portion of the building to various tenants, if it appears that the area of the building is not unnecessarily great, and that the business of the bank cannot be conveniently conducted on dif- ferent floors, the deduction for the purposes of the excise tax should be based on the value of the entire building. 4 In the case of the savings department of a trust company, the deductions are to be computed pro rata between the amount of deposits subject to the excise tax and the amount of those which, because they exceed the limitations upon deposits in savings banks, are not subject to the excise tax. 5 Returns of Amount of Deposits Section 13. Every savings bank and every trust company hav- ing a savings department shall semi-annually, on or before May tenth 1 G. L. c. 59, §5, cl. 16, supra, page 208. Commonwealth v. Provident Institution for Savings, 12 Allen 312 (1866) ; Provident Institution v. Massachusetts, 6 Wall. 611 (1867). •Suffolk Savings Bank, Petitioner, 149 Mass. 1 (1889). 'Suffolk Savings Bank, Petitioner, 149 Mass. 1 (1889). •Old Colony Trust Co. v. Commonwealth, 220 Mass. 409 (1915). 518 Taxation in Massachusetts [G. L. c. 63, §§ 13-15 and November tenth, make a return to the commissioner, signed and sworn to by its president and treasurer, of the amount of its deposits if a savings bank, and if a trust company of the amount of deposits in its savings department, on the first day of each of said months, and of the average amount of such deposits for the six months pre- ceding each of said last mentioned days. A corporation neglecting to make such return shall forfeit fifty dollars for each day during which such neglect continues. If it wilfully makes a false statement in such return it shall be punished by a fine of not less than five hundred nor more than five thousand dollars. There is nothing in this section of the statutes which re- quires the commissioner to accept as true a return filed in accord- ance with its provisions, or which precludes him from ascer- taining the truth through some other source of information. 1 Tax Exempt Investments in Savings Department Not Basis of Deduction from Other Taxes Section 14. No investment of deposits in the savings department of any trust company exempt in any year from the tax imposed by section eleven shall be in the same year a basis for any deduction allowed in computing any other tax which trust companies are re- quired by law to pay. Exemption of Deposits from Other Taxes Section 15. All deposits taxed under section eleven shall be otherwise exempt from taxation in any year in which said tax is paid. One of the essential objects of the original act imposing an excise on savings banks was to provide that the deposits should not be subject to local taxation as money at interest in the hands of the depositors. The deposits in savings banks incorporated in this commonwealth have continued to be exempt from any taxation other than the tax on the franchise of the bank by which they are indirectly reached; 1 and the dividends on such deposits are not subject to the state income tax. 2 In 1909 provision was made for the taxation of the savings departments of trust com- 'Old Colony Trust Co. v. Commonwealth, 220 Mass. 409, 413 (1915). 1 Deposits are not subject to local taxation, G. L. c. 59, §5, el. 28, supra, page 214. 2 G. L. c. 62, §1, subsection (a) clause first, supra, page 439. Taxation of Corporations 519 G. L. c. 63, §§ 15, 16] panies in the same manner as savings banks; 3 but as there is no such limitation upon the amount which may be deposited by any one individual in the savings department of a trust company as is applicable to savings banks, this enactment gave the trust companies an advantage over the savings banks; and in 1911 it was provided that the franchise tax and the corresponding exemption from direct taxation should thereafter apply only to such of the deposits in savings departments as did not exceed the limit placed by law upon the deposits in savings banks.* It is to be noted that the distinction was made between deposits which exceeded and those which did not exceed the statutory limit upon savings bank deposits; and that the whole of a de- posit which exceeded the statutory limit was made locally tax- able and not merely that part of it which exceeded such limit. This distinction has been retained in the income tax law ; and the whole of the interest on a deposit in a savings department which exceeds the statutory limit is subject to the income tax, 5 and the whole of such deposit is exempt from the excise tax on the trust company in the savings department of which it is deposited. 6 Effect of Incapacity to Do Business Section 16. Whenever a bank, as defined in section one of chapter one hundred and sixty-seven, is restrained from doing busi- ness by an injunction issued by any court, or is in the hands of the commissioner of banks under said chapter, the tax payable by the bank under section eleven, as computed on May first or November first next ensuing, after the bank is incapacitated from doing busi- ness as aforesaid, shall be reduced by the same proportion which the number of business days during the six months next preceding the said May first or November first on which the bank was thus in- capacitated bears to the total number of business days in the said six months; and thereafter the bank shall be relieved from paying taxes under said section so long as it continues to be incapacitated from so doing business. • St. 1909, c. 342. 'St. 1911, c. 337. 8 Supra, page 439. •See Old Colony Trust Co. v. Commonwealth, 220 Mass. 409 (1915) ; J. S. Lang Engineering Co. v. Commonwealth, 231 Mass. 367 (1918). A pass-book in the savings department of a trust company is a "security" within the meaning of the statutes imposing a tax on the franchises of corporations. J. S. Lang Engineering Co. v. Commonwealth, 231 Mass. 367 (1918). 520 Taxation in Massachusetts [G. L. c. 63, §§ 16-18 Before the enactment of any statute specifically covering the subject, it was held that, inasmuch as the tax on savings banks was an excise on the privilege of doing business, when a savings bank had been perpetually enjoined from doing business, 1 or when the bank commissioner had taken and retained possession of its property and business, 2 it was not liable to the tax, but when the bank was still in the exercise of its corporate powers, although they had been somewhat curtailed by the courts on account of its weak financial position, it was still subject to the excise tax. 3 The effect of the foregoing statute is, in the class of cases in which the bank would not have been taxable at all under the law as it previously stood, to make the bank liable to a portion of the tax proportionate to the number of days in which it had been doing business in the taxable period. Massachusetts Hospital Life Insurance Co. Section 17. The Massachusetts Hospital Life Insurance Com- pany shall semi-anually, on or before May tenth and November tenth, make a return, signed and sworn to by a majority of its board of direc- tors, of the full amount of all money and property, in detail, in its possession or charge as deposits, trust funds or for purposes of investment, and shall pay upon all the same, except upon deposits invested in loans secured by mortgages of real estate taxable in this commonwealth and in bonds or certificates of indebtednes of the United States, a tax at the rate imposed upon savings banks on account of deposits. If said corporation neglects to make such return, it shall forfeit fifty dollars for each day such neglect continues; and if it wilfully makes a false statement in any such return, it shall be punished by a fine of not less than five hundred nor more than five thousand dollars. Savings Bank Insurance Section 18. Savings and insurance banks doing business under chapter one hundred and seventy-eight shall, in respect to all funds held by the insurance department as a part of its insurance reserve or surplus, and the General Insurance Guaranty Fund created by said Commonwealth v. Lancaster Savings Bank, 123 Mass. 493 (1878). "Greenfield Savings Bank v. Commonwealth, 211 Mass. 207 (1912). -Commonwealth v. Barnstable Savings Bank, 126 Mass. 526 (1879). Taxation op Corporations 521 G. L. c. 63, §§ 18-20] chapter shall in respect to all funds held by it, pay to the common- wealth the same taxes, at the same rate, to the same extent, and in the same manner as taxes under section eleven are payable on deposits held by the savings department. Savings and insurance banks shall not be taxable on funfls held as part of the expense guaranty fund, or of the insurance guaranty fund, nor shall such banks or the Gen- eral Insurance Guaranty Fund be liable to the commonwealth for any taxes or fees provided to be assessed upon life insurance com- panies, or for any taxes or fees except as above provided. All in- surance policies and annuity contracts issued by such banks shall otherwise be exempt from taxation. Co-operative Banks Section 19. The capital stock, corporate franchises and personal property, but not the real estate, of co-operative banks shall be ex- empt from taxation. This exemption is doubtless granted to avoid double taxation, as the capital of co-operative banks is almost entirely invested in mortgages of real estate. The exemption of co-operative banks is also found in chapter fifty-nine. 1 INSURANCE COMPANIES Life Insurance Companies Section 20. Every life insurance company, as defined by section one hundred and eighteen of chapter one hundred and seventy-five, authorized to transact business in the commonwealth shall annually pay an excise of one-quarter of one per cent upon the net value of all policies in force on December thirty-first of the year preceding that in which the tax is payable, issued or assumed by such company on the lives of residents of this commonwealth as determined by the com- missioner from the return required under this section and such other evidence as he may obtain. All contingencies of any other character insured against by such company under authority of clause sixth of section forty-seven of chapter one hundred and seventy-five or any other provision of law, contracts for which are required to be in separate and distinct policies, shall be taxable under sections twenty- two and twenty-three of this chapter. Every such company shall annually, on or before May first, make a return to the commissioner, 1 G. L. c. 59, §5, cl. 16, 30, supra, pages 208, 214. 522 Taxation in Massachusetts [G. L. c. 63, § 20 on oath of its president or secretary and its actuary, giving in such detail as the commissioner shall require the total number of policies in force on December thirty-first preceding on the lives of residents of this commonwealth, the aggregate net value thereof and the aggregate amount insured. Whenever the commissioner deems it for the best interest of the commonwealth he may require in addition to the above information the following details relating to each policy of ordinary business in force on December thirty-first preceding on the life of a resident of Massachusetts : the number, date and class, the age of the assured, the amount insured and the net value. In respect to ordinary business the aggregate net value so reported shall be the combined aggregate of the mean reserve computed for each policy, or each group of policies requiring a separate computation to determine their net value, on the basis of valuation used or approved by the com- missioner of insurance under section nine of chapter one hundred and seventy-five. In respect to industrial business the aggregate net value so reported may be estimated upon the basis of such general averages or otherwise as shall be authorized by the commissioner with the approval of the commissioner of insurance. A life insurance company within the meaning of the fore- going statute is a company engaged in the business of issuing any form of policy conditioned upon the continuance or cessa- tion of human life, 1 and the business of life insurance thus in- cludes the writing of term insurance, endowment insurance and annuity contracts, as well as ordinary policies of life insurance, properly so-called. 2 In case a life insurance company issues in- surance against accident, liability or sickness, it is taxable with respect to such policies under sections twenty-two and twenty- three; but an insurance company is allowed to include in a life insurance policy a provision that premiums shall be waived in case of total disability and that a greater amount shall be paid if the insured meets death by accident than if he dies a natural death, 3 and such policies are taxable under this section without apportionment. 4 ^ee G. L. c. 175, §118. 1 Mutual Benefit Life Insurance Co. v. Commonwealth, 227 Mass. 63 ( 1917 ) - It was also held in the same case that there was nothing unconstitutional in taxing the company on annuity contracts, although the annuitant was also taxed on the annual payments as income. *G. L. c. 175, §24. * See Metropolitan Life Insurance Company v. Insurance Commissioner, 208 Taxation of Corporations 523 G.L. c. 63, §§20, 21] By the General Statutes, life insurance companies ' were obliged to pay to the commonwealth "one cent on every thousand dollars insured by them on lives." In 1880 a tax of one-half of one per cent upon the aggregate net value of policies in force held by residents of the commonwealth was imposed, and in 1881 this tax was reduced to one-quarter of one per cent and there it has remained. The statute imposing this tax has been held to be constitutional as an excise upon the privilege of holding and managing the property of others, and it was further held that the method adopted to ascertain the value of this privilege was not unreasonable. 5 In 1915 the statute was recast so as to au- thorize the commissioner to require the return of additional de- tails 6 and it was again amended in 1919 to make it clear that acci- dent, liability and health insurance, issued under policies distinct from those on life, were not taxable under this section. 7 Retaliatory Tax on Foreign Life Insurance Companies Section 21. Every foreign life insurance company shall annually pay with respect to business taxable under the preceding section, in addition to the excise hereby imposed, a sum equal to the excess over such excise of the amount of tax which would be imposed in the same year by the laws of the state or country under which such company is organized, upon a life insurance company incorporated in this commonwealth, or upon its agents, if doing business to the same extent in such state or country. The first provision on this subject was made in 1856, the stat- ute then enacted requiring "the same taxes, fines, penalties, deposits and obligations" on companies incorporated in another state and doing business in Massachusetts as were imposed on Massachusetts companies doing business in such other state. In 1873 provision was made for the taxation of every foreign life insurance company on premiums charged or received on con- tracts made in this commonwealth during the year at the highest rate imposed by the state of incorporation of such company Mass. 386 (1911) ; Metropolitan Life Insurance Company v. Insurance Commis- sioner, 220 Mass. 52 (1914). 5 Connecticut Mutual Life Insurance Co. v. Commonwealth, 133 Mass. 161 (1882). •St. 1915, c. 217. T St. 1919, c. 349, §7. 524 Taxation in Massachusetts [G. L. c. 63, §§ 21-23 upon companies chartered by this commonwealth. This statute was in force before the excise on net values now imposed by sec- tion twenty was enacted, and it was not intended that a foreign company should pay both taxes, and the tax on premium re- ceipts was in no case assessed unless it exceeded the tax on net values. 1 The object of the statute was to make the rate of taxa- tion thereunder no more burdensome upon foreign companies doing business here than the like rate upon Massachusetts com- panies doing business in the foreign state. 2 In 1919 the statute was enacted in its present form, making it clear that the tax was not additional to the tax on net values except so far as it exceeded such tax, and also extending its provisions so as to apply to all taxes assessed on Massachusetts life insurance com- panies by other states, whether based on premium receipts or otherwise. Insurance Companies Doing Business Other Than Life Insurance Section 22. Every domestic insurance company as defined in section one of chapter one hundred and seventy-five, except life insur- ance companies with respect to business taxable under section twenty, shall annually pay an excise of one per cent upon the gross premiums for all policies written or renewed, all additional premiums charged, end all assessments made by such company on policy holders during the preceding calendar year ; but such premiums for policies written or renewed for insurance of property or interests in other states or countries where a tax is actually paid by such company, or its agents, shall not be so taxed. Section 23. Every foreign insurance company as defined in sec- tion one of chapter one hundred and seventy-five, except life insurance companies with respect to business taxable under sections twenty and twenty-one, shall annually pay an excise upon the gross premiums for all policies written or renewed, all additional premiums charged, and all assessments made during the preceding calendar year for insurance of property or interests in this commonwealth, or which are subjects of insurance by contracts issued through companies or agents therein, at the rate of two per cent but not less in amount than 1 Metropolitan Life Insurance Co. v. Commonwealth, 198 Mass. 466 (1908). * Metropolitan Life Insurance Co. v. Commonwealth, 198 Mass. 466 (1908). Taxation of Corporations 525 G. L. c. 63, § 23] would be imposed by the laws of the state or country under which such company is organized upon a like insurance company incor- porated in this commonwealth, or upon its agents, if doing business to the same extent in such state or country. In case any company discontinues business in this commonwealth and reinsures the whole or part of its risks without making payment of this excise, the com- pany accepting such reinsurance shall pay the same, and if several companies shall make such reinsurance, the tax shall be apportioned among such companies in proportion to the original premiums on the business in this commonwealth so reinsured by each company. These statutes are applicable to all corporations, associations, partnerships or individuals engaged as principals in the business of making contracts of insurance, other than life insurance. 1 A contract of insurance is an agreement by which one party for a consideration promises to pay money or its equivalent, or to do an act valuable to the insured, upon the destruction, loss or injury of something in which the other party has an interest.* It has been held that the excise provided for by this statute may be constitutionally imposed upon any association given by legislative sanction the privilege of acting independently of the rules that govern a simple partnership, 3 and as no foreign com- pany or association is allowed to carry on an insurance business in this commonwealth unless it is fully and legally organized under the laws of its own state or country, 4 the constitutionality of the statute with respect to all associations to which it is applicable appears to be unquestionable. These statutes are applicable to mutual as well as to stock companies. Before the enactment of any statutes specifically requiring the taxation of insurance companies or other corpora- tions it was held that a mutual fire insurance company was not taxable for personal property held by it for the purposes of its incorporation and invested in its corporate name. 5 An insurance company might have offices in many cities and was not a resident of any of them. It was said however that the insured stood in the same position as stockholders and they should be taxed for their respective interests. After the imposition of the corporate *G. L. c. 175, §i. ' 'G. L. c. 175, §2. •Oliver v. Liverpool, etc., Insurance Co., 100 Mass. 531 (1868). *G. L. c. 175, §151. "Worcester Mutual Fire Insurance Co. v. Worcester, 7 Cush. 600 (1851). 526 Taxation in Massachusetts [G. L. c. 63, §§ 23, 24 franchise tax in 1864 it was held that a mutual life insurance company was not taxable thereunder upon its unredeemed guar- antee stock. Subsequently it was provided that mutual fire and marine insurance companies should under certain circumstances be taxable for the corporate franchise tax, and companies so taxed were exempted from the special provisions relating to fire and marine insurance companies; but there was no special pro- vision for the taxation of mutual life insurance companies and they were not excepted from the effect of the statutes relating to the taxation of life insurance companies. In 1918 the special provisions for the taxation of mutual fire and marine insurance companies were repealed/ and all mutual companies are now taxable in the same manner as stock companies. Determination of Amount of Premiums Tax Section 24. In determining the amount of the tax payable under sections twenty-one, twenty-two and twenty-three, there shall be de- ducted all premiums on policies written but not taken, or cancelled through default of payment, and all premiums returned or credited to policy holders during the year for which the tax is determined, provided that all such premiums have been included as premium receipts in a return made under the following section and a tax assessed thereon, and all premiums paid to authorized companies for reinsurance, provided that it is shown to the satisfaction of the com- missioner that the tax on such premiums has been or will be paid in full by such reinsuring company. Under the original statute imposing a tax on the premium re- ceipts of insurance companies, no deduction whatever was al- lowed from the full amount of all gross premiums received. 1 When subsequently provision was made for certain deductions — such as sums paid for return premiums on cancelled policies and sums actually paid to other companies for reinsurance — it was expressly provided that dividends should not be considered re- turn premiums. Under these circumstances it was held that the tax was on gross premiums, subject to the statutory deduc- tions, and not upon the net premiums after deducting dividends * Commonwealth v. Berkshire Life Insurance Co., .98 Mass. 25 (1867). 7 St. 1918, c. 184, §8. »St. 1862, c. 224, §§1, 6, 9. Taxation op Corporations 527 G. L. c. 63, §§ 24-27 inc.] paid to policy holders. 2 Subsequent legislation however author- ized the deduction of premiums returned or credited to policy- holders. 3 Returns and Inspection of Books Section 25. Every insurance company liable to taxation under section twenty-one, twenty-two or twenty-three shall annually in January make a return to the commissioner in such form as he shall prescribe, on oath of its secretary or other officer having knowledge of the facts, setting forth: if a domestic company, the total amount of gross premiums for all policies written or renewed, of all additional premiums charged and of all assessments made, during the preceding calendar year, and the amount of each class of deductions claimed under any provision of this chapter ; if a foreign company, the total amount of gross premiums for all policies written or renewed, of all additional premiums charged and of all assessments made, during the preceding calendar year for insurance of property or interests in this commonwealth, or which are subjects of insurance by contracts issued through companies or agents therein, and the amount of each class of deductions claimed under any provision of this chapter, and in addition to the above any information which the commissioner may require in assessing an excise under any provision of law. For cause, the commissioner may extend the time within which any such statement may be filed, but not to a date later than March first. Section 26. The books, papers and accounts of every insurance company and of its agents shall be open at all times to inspection and examination by the commissioner and the commissioner of insurance, or their duly authorized representatives, for the purpose of verifying the accuracy of the returns made under sections twenty and twenty- five. Section 27. Every insurance company neglecting to make the re- turn required by section twenty or twenty-five shall forfeit twenty- five dollars for every day during which such neglect continues. If any company neglects to make such return for ten days after notice thereof addressed to it has been deposited in the post office, postage prepaid, it shall further forfeit five hundred dollars, and upon an in- 1 American Mutual Liability Insurance Co. v. Commonwealth, 224 Mass. 299 (1916). »St. 1916, c. 227; St. 1917, c. 97; St. 1918, c. 184, §1; St. 1919, c. 349, §12. 528 Taxation in Massachusetts [G. L. c. 63, §§ 27-29 formation by the attorney general at the relation of the commissioner it may be restrained from the further transaction of its business in this commonwealth until it has made such return ; but such penalties shall not be incurred if it is proved that the return was duly made and deposited in the post office, postage prepaid, properly directed to the commissioner, and that there was no neglect. If any return required by said section twenty or twenty-five contains a false state- ment which is known, or by the exercise of reasonable care might have been known, to the officers making it, to be false, such company shall be liable for the amount of tax thereby lost to the commonwealth, and each offending officer shall forfeit not less than five hundred nor more than five thousand dollars. Assessment and Collection of Tax Section 28. The commissioner, from such returns, and from such other evidence as he may obtain, shall assess upon all insurance com- panies subject to this chapter the taxes imposed by sections twenty to twenty-three, inclusive, and shall forthwith upon making such assessment give to every such company notice of the amount thereof. Such taxes shall become due and payable to the state treasurer thirty days after the date of such notice but not later than July first. All such taxes, whether assessed before or after July first, shall bear interest at the rate of twelve per cent per annum from that date until they are paid. Within ten days after the date of such notice the com- pany may apply to the commissioner for a correction of said excise, and in default of settlement may be heard thereon by the board of appeal. The commissioner shall annually, on or before July first, deliver to the state treasurer a certificate stating the name of every such company upon which such excise has been assessed and the amount assessed upon each, and a like certificate of such further assessments as may be made after that date. Section 29. Every domestic or foreign insurance company shall be liable for the full amount of all taxes assessed under this chapter upon it or its agents, which, with interest at the rate of twelve per cent per annum, may be recovered in contract by the state treasurer in the name of the commonwealth. It shall further be liable, upon an information, to an injunction restraining it and its agents from the further prosecution of its business until all taxes due with costs and interest are fully paid. Taxation of Corporations 529 G. L. o. 63, § 30] DOMESTIC BUSINESS CORPORATIONS . Early Methods of Taxing Corporations It was not until the latter part of the eighteenth century that the taxation of private corporations became a subject of any importance in Massachusetts. There were no private business corporations in the colony or the province until near the time of the revolution and perhaps only one private corporation of any kind in Massachusetts before the year 1772, namely, that of Harvard College. 1 Soon after the revolution however the cor- porate form of organization came into frequent use by the pro- prietors of banks, turnpikes and bridges, and to some extent of mills and factories, and before the nineteenth century was far advanced incorporated mills and banks and manufacturing and railroad corporations became the owners of large amounts of property. In 1793 for the first time special mention was made in the statutes of the taxation of corporate stock or property, when it was provided that bank shares should be assessed at their just value to the individual shareholders in the places where they respectively resided. 2 In 1801 the provision was extended to shares in turnpike and bridge corporations 3 and in 1805 to "any other incorporated company possessing taxable property." 4 In 1812 banking corporations were subjected to an excise of one per cent per annum on their capital stock. 5 There were no spe- cial provisions relating to the taxation of corporations themselves (other than the tax on the franchise of banking corporations) but corporations were commonly assessed under the general pro- visions of the statutes as the "owners" of both real and personal property where it was situated, the only corporations owning per- sonal property being usually definitely established in a single town, so that frequent controversies as to the place of taxation were not likely to arise. Objection to this method of taxation being taken in 1813 for the first time, it was pointed out by the court that, inasmuch as the stockholders were assessed for their shares in the towns 1 Attorney-General v. Sullivan, 163 Mass. 446 (1895). 2 St. 1793, c. 9, A. •St. 1800, c. 77, §2. «St. 1804, c. 144, §2. •St. 1812, c. 32; Portland Bank v. Apthorp, 12 Mass. 252 (1815). 530 Taxation in Massachusetts [G. L.c. 63, §30 in which they dwelt, to subject the property of the corporation to taxation in the town in which it was situated would result in double taxation, a thing to be avoided unless clearly required by the statute. As to personal property there was no such re- quirement; in fact, strictly speaking, there was no authority to assess it at all. The corporation was not a resident of the town in which its principal place of business was situated ; the lo- cation of personal property in a town gave the town no right un- der the statutes to tax it except in certain carefully designated in- stances, and moreover, if the personal property of a corporation might be taxed in one town, it might be taxed in every town in which the corporation did business. As to real estate however the statutes provided that it should be taxed in the town in which it lay, and as all real estate whether owned by corporations or individuals was included in the valuation of a town upon the basis of which the state tax was apportioned, it would be unjust to exempt any of it from contributing to the payment of such taxes. Accordingly it was held that a corporation was liable to be taxed upon its real estate but not upon its personal property. 8 No material change in the statutes relating to the taxation of corporations was made until 1832 when it was provided that all machinery employed in any branch of manufacture and be- longing to any corporation or person should be assessed where situated and that in assessing the shares of a manufacturing cor- poration there should be deducted the value of the machinery and real estate of the corporation specifically taxed. 7 These provisions were re-enacted in the Revised Statutes 8 and in the General Statutes 9 and continued to be the law until 1864. It is to be noted that during that period the personal property of cor- porations remained exempt from taxation by judicial construc- tion of statutes general in terms, and that this exemption was not so much based upon any supposed difficulty in fixing the domicile of a corporation as upon the injustice of taxing the 8 Salem Iron Factory v. Danvers, 10 Mass. 514 (1813). See also to same effect Boston & Sandwich Glass Co. v. Boston, 4 Met. 181 (1842) ; Dunnell Manu- facturing Co. v. Pawtucket 7 Gray 277 (1856). In Tremont Bank v. Boston, 1 Cush. 142 (1848), it was held that a banking corporation was taxable for its real estate in the town where the land lay, although the shareholders were taxed on their shares without deduction for real_ estate and the bank paid a tax to the commonwealth on its capital stock. 7 St. 1832, c. 158. 8 R. S., c. 7, §10, cl. 2. »G. S. c. 11, §12, cl. 2. Taxation of Corporations 531 G. L. c. 63, § 30] same property twice — once to the shareholders and once to the corporation. 10 Accordingly it was held that all the special pro- visions of statute for the taxation of personal property other- wise than at the domicile of its owner which were in force prior to 1918, 11 though general in terms, had no application to the property of domestic corporations. 12 The Development of the Franchise Tax While the method of taxation of corporate shares and prop- erty in force prior to the civil war may have been a satisfactory one in the more or less primitive conditions which existed when it was established and when the shareholders in Massachusetts corporations were almost exclusively inhabitants of the common- wealth, as soon as shares in such corporations began to be held by non-residents, the personal property and franchises of the cor- porations to the extent that the shares were held outside the state escaped all taxation in Massachusetts, and probably, as a practical matter, were rarely reached by the assessors in the states where the holders resided. This condition was obviously undesirable, and tended to encourage the real or colorable trans- fer of shares in domestic corporations to non-residents. In 1863 a statute was enacted requiring domestic corporations to pay into the treasury of the commonwealth one-fifteenth of all dividends declared by them on the shares of non-resident "Thus in Trustees of the Greene Foundation v. Boston, 12 Cush. 54 (1853), it was held that a corporation which had no capital stock was taxable for its personal property generally in the town with which it was most closely identified and in Collector of Boston v. Mount Auburn Cemetery, 217 Mass. 286 (1914), it was held that a cemetery corporation had its domicile for the purposes of taxation in the town in which the cemetery was located. 11 G. L. c. 59, §18, supra, page 237. 12 Thus under what are now the provisions of G. L. c. 59, domestic corpor- ations were not taxable for bank stock which they owned, Worcester County Institution for Savings v. Worcester, 10 Cush. 128 (1852); Murray v. Berk- shire Life Insurance Co., 104 Mass. 586 (1870); or for their income, Boston Water Power Co. v. Boston, 9 Met. 199 (1845) ; or for the polls of minors in their employ, Boston & Sandwich Glass Co. v. Boston, 4 Met. 181 (1842) ; or for stock-in-trade, Amesbury Woolen & Cotton Manufacturing Co. v. Amesbury, 17 Mass. 461 (1821) ; Boston & Sandwich Glass Co. v. Boston, 4 Met. 181 (1842) ; or for horses, Middlesex Railroad Co. v. Charlestown, 8 Allen 330 (1864) ; or for property held by another in trust, Worcester v. Board of Appeal, 184 Mass. 460 (1904); or for property pledged, Waltham Bank v. Waltham, 10 Met. 334 (1845). A corporation is taxable for property held by it in trust for another because such property adds no value to its shares and is consequently not reached by the franchise tax. Ricker v. American Loan & Trust Co., 140 Mass. 346 (1885). 532 Taxation in Massachusetts [G.L.c. 63, §30 owners. 1 This statute was held unconstitutional. 2 If the charge was a tax, it was not proportional; if an excise it was unequal, and cast greater burdens upon citizens of other states than of Massachusetts in violation of the federal constitution. In 1864, before the statute of the previous year had been passed upon by the supreme court of the state, a new and valid method of reaching indirectly the interests of non-resident share- holders was adopted by the legislature in the form of an excise upon the franchise of domestic corporations based upon the ex- cess of the market value of all the capital stock of a corporation over the value of the real estate and machinery belonging to it situated in Massachusetts and locally taxed. 3 The shares owned by residents of the commonwealth were no longer to be taxed locally, and the personal property of the corporation other than machinery continued to be exempt. 4 This statute was sustained by the supreme courts of Massa- chusetts 5 and of the United States 6 as a valid excise on the fran- chise of the corporation and not as 1 a property tax, and with many elaborations and improvements which time and experience have shown to be just and advisable it stands today as the basis of the tax on domestic corporations now in force in Massachusetts. Under the original statute, as amended in the following year, it was held that as the tax was not a property tax its validity did not depend on the nature of the property held by the corpora- tion taxed and on which the market value of its shares depended and that the corporation was not entitled to deductions which were not granted specifically by the statute. Consequently taxes were sustained which gave the corporation no credit for real estate outside the commonwealth, 7 for shares of another corporation on which it paid taxes in Massachusetts, 8 or even for bonds of the United States. 9 1 St. 1863, c. 236. 8 Oliver v. Washington Mills, 11 Allen 268 (1865). • St. 1864, c. 208. ♦Fall River v. Bristol County Commissioners, 125 Mass. 567 (1878). 6 Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866) ; Commonwealth v. Hamilton Manufacturing Co., 12 Allen 298 (1866). 8 Hamilton Company v. Massachusetts, 6 Wall. 632 (1867). 7 Commonwealth v. New England Slate & Tile Co., 13 Allen 391 (1866). 8 Commonwealth v. New England Slate & Tile Co., 13 Allen 391 (1866). •Commonwealth v. Hamilton Manufacturing Co., 12 Allen 298 (1866); Manufacturers' Insurance Co. v. Loud, 99 Mass. 146 (1868) ; Hamilton Co. v. Massachusetts, 6 Wall. 632 (1867). Taxation of Corporations 533 G. L. c. 63, § 30] The tax was based wholly upon the market value of the shares and not upon the value of the property owned by the cor- poration, and was not unreasonable and invalid if it was founded upon a price that was merely speculative and greatly in excess of the value of the tangible property of the corporation; 10 for the franchise of even a land company may have great value. The value of the tangible property of the corporation was mate- rial only when the market value of the shares could not be other- wise ascertained. The Establishment of the Present System In 1902, complaint having arisen that the ordinary busi- ness corporation was overtaxed, a commission was appointed to investigate the subject, and recommended that in valu- ing the franchise of the corporation for taxation there should be deducted, in addition to real estate and machinery, the value of securities which if owned by an individual would not be tax- able and the value of property other than real estate and ma- chinery situated in another state or country and there taxed. The legislature of 1903 not only adopted these recommendations, but provided that the tax should in no event, after making the statu- tory deductions, exceed a tax levied at the statutory rate upon a valuation twenty per cent in excess of the value of the tangible property and taxable securities of the corporation. 1 The first and most obvious effect of the maximum limitation was to reduce the tax on the more prosperous corporations whose demonstrated earning capacity had increased the market value of their aggregate capital stock far above the book value of their assets; but a secondary effect, the recognition of which was not long delayed, was to bring about a marked inequality in the taxes levied on corporations of similar size and financial strength, and eventually to present opportunities for evasion which were so commonly availed of as to deprive the state of a large portion of the revenue which it should properly have received. 2 In 1917 10 Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866); Common- wealth v. Cary Improvement Co., 98 Mass. 19 (1867). . "St. 1903, c. 437, §74. This statute also established as a minimum limita- tion the rule that the local taxes and the corporate franchise tax of any cor- poration should not together be less than one-tenth of one per cent of the aggre- gate market value of its capital stock. 2 See Reports of Tax Commissioner for 1905, 1911 and 1916; Report of Special Commission on Taxation appointed under Chapter 134 of the Resolves 534 Taxation in Massachusetts [G. L. c. 63, § 30, cl. 1, 2 a joint special committee was appointed to consider the revision of the whole system of taxing corporations. This committee reported in favor of discarding the tax on franchise value alto- gether and substituting a tax on income. 3 The recommendation of the committee was not acceptable to the legislature of the following year; but finally, in 1919, the present statute was adopted, retaining the tax on the "corporate excess," as the aggre- gate value of the capital stock in excess of the statutory deduc- tions had come -to be known, but at a much reduced rate, and with the maximum limitation discarded and the more obvious inequalities of the earlier law evened out; and at the same time a tax on income at a moderate rate was added to meet the loss of revenue arising from the reduction of the rate of the tax on the corporate excess. To the complications incidental to this system of taxation, even when applied to a corporation doing business wholly in Massachusetts, were added elaborate provisions for allocating to Massachusetts an equitable portion of the tax in the case of a corporation doing business in Massachusetts and in other states as well, so that to one unfamiliar with the growth and development of the statute, and the objects sought to be attained, the statute is extremely difficult of comprehension. This lack of simplicity is of course a serious fault ; but it must be remem- bered that the complexities of the statute have gradually grown up as a means of preventing particular inequalities which have been foreseen or have actually occurred, and that the statute, whatever its faults may be, represents the result of years of study of many trained minds engaged in a sincere effort to bring about an equitable system of taxing corporations in this com- monwealth. To What Corporations Applicable Section 30. When used in this section and sections thirty-one to fifty-two, inclusive, the following terms shall have the following meanings : 1. "Domestic business corporation," every corporation organ- ized under or subject to chapter one hundred and fifty-six. of 1915, pp. 24-31; Report of Joint Special Committee on Corporation Tax, 1918, Senate Document No. 28. 8 1918, Senate Document No. 28. Taxation of Corporations 535 G. L. c. 63, § 30, cl. 1, 2] 2. "Foreign corporation," every corporation, association or or- ganization established, organized or chartered under laws other than those of the commonwealth, for purposes for which domestic corpora- tions may be organized under chapter one hundred and fifty-six, which has a usual place of business in this commonwealth, or is en- gaged here, permanently or temporarily, in the construction, erection, alteration or repair of a building, bridge, railroad, railway or struc- ture of any kind. In accordance with the foregoing statute domestic business corporations consist of all corporations having a capital stock and established for the purpose of carrying on business for profit and organized under the general laws of the commonwealth, other than corporations of the classes enumerated in the follow- ing paragraph, and all such corporations created by special law except such as were organized before March 11, 1831, and whose charters, containing provisions inconsistent with these statutes, are not subject to amendment, alteration or repeal and also excepting such as were organized after June 17, 1903 and the charters of which contain provisions inconsistent with these statutes. 1 The term does not include corporations organized under gen- eral or special laws of this commonwealth for the purpose of carrying on the business of a bank, savings bank, co-operative bank, trust company, credit union, surety or indemnity company, or safe deposit company, or for the purpose of carrying on within the commonwealth 2 the business of an insurance company, rail- road, electric railroad, trolley motor or street railway company, telegraph or telephone company, gas or electric light, heat or power company, canal, aqueduct or water company, cemetery or crematory company or any other corporations which now have or may hereafter have the right to take land within the common- 1 March 11, 1831 is the date of the going into effect of the statute (St. 1830, C 81 ) enacted to counteract the effect of the decision of the Dartmouth College case by providing that all charters thereafter granted should be subject to amend- ment, alteration or repeal. June 17, 1903, is the date of the enactment of the Business Corporation Law (St. 1903, c. 437). 2 There were formerly special provisions regarding the taxation of corpora- tions organized under the laws of this commonwealth for the purpose of build- ing railroads in foreign countries. See Pratt v. Street Commissioners of Boston, 139 Mass. 555 (1885) . Since 1903 such corporations have been subject only to the domestic franchise tax. Mexican Central By. Co. v. Commonwealth, 192 Mass. 129 (1906). 536 Taxation in Massachusetts [G. L. c. 63, § 30, cl. 3 wealth or to exercise franchises in public ways granted by the commonwealth or by any county, city or town. Corporate Excess — Valuation and Deductions 3. "Corporate excess," in the case of a domestic business cor- poration, the fair cash value of all the shares constituting the capital stock of a corporation on the first day of April when the return called for by section thirty-five is due, less the value of the following : (a) The works, structures, real estate, machinery, poles, under- ground conduits, wires and pipes owned by it within the common- wealth subject to local taxation, except such part of said real estate as represents the interest of a mortgagee. (&) Securities, the income of which, if any, if received by a natural person resident in this commonwealth, would not be liable to taxation, except shares in national banks and voluntary associations, trusts and partnerships. (c) Its real estate, machinery, merchandise and other tangible property situated in another state or country, except such part there- of as represents the interest of a mortgagee. (d) If any portion of its cash and accounts and bills receivable, excluding notes, is attributable to an office outside the commonwealth, the same proportion of its cash and accounts and bills receivable, excluding notes, which its real estate, machinery and merchandise situated in another state or country bear to its total real estate, machinery and merchandise, to the extent that such proportion fairly represents, in the judgment of the commissioner, the amount which is properly allocable to such other state or country. Valuation of Shares The first step in determining the "corporate excess" of any corporation is for the commissioner to ascertain the fair cash value of all the shares constituting the capital stock of the cor- poration on the first day of April of the year for which the tax is assessed. Before shares can be considered as constituting part of the capital stock of a corporation they must have been issued ; it is not sufficient that they have been subscribed for. 1 More- over they must have been issued by authority of law ; and when a statute requires the approval of a commission before a cor- 1 Boston & Albany R. R. Co. v. Commonwealth, 157 Mass. 69 (1892). Taxation of Corporations 537 G. L. c. 63, § 30, cl. 3] poration of a certain class can issue its shares, a corporation of that class which has issued its shares without obtaining such ap- proval is not liable to the franchise tax, for the shares so issued were void. 2 Mere failure on the part of the corporation to comply with some directory provision of statute in regard to the issu- ance of shares would not however exempt the corporation from taxation on such shares. 3 The valuation is based upon the fair market value of the shares, and not upon the value of the property of the corpora- tion which is represented by such shares. 4 If the shares are com- monly bought and sold, and have a readily ascertainable mar- ket value, such value is for all practical purposes conclusive, and it is idle to even consider the "book value" of the shares, or to attempt to value them merely as fractional interests in the net assets of the corporation. 5 If however the shares are not commonly bought and sold, their fair market value must be ascertained by whatever other methods are available, and any evidence which throws light upon value may be considered. 6 Prior to the enactment of the present law in 1919, when there were no sales to guide the commissioner' he commonly relied upon the net book value of the assets of a corporation as shown by its return as a test of the value of its aggregate capital stock. The present statute, which necessarily resulted in furnishing the commissioner with a statement of the income of each corporation while at the same time it repealed the statute which limited the valuation of the aggregate capital stock of a corporation to a sum not more than twenty per cent in excess of the value of the tangible property and taxable secur- ities owned by it, has given the commissioner the opportunity of using the net income of a prosperous corporation not only as itself the basis of a tax but as indicating a value in the stock in excess of the amount reflected by the value of the assets, and as thus furnishing a justification for an increase in the valu- ation of the franchise over the amount fixed under the statute 'Attorney-General v. Massachusetts Pipe Line Gas Co., 179 Mass. 15 (1901). •Attorney-General v. Massachusetts Pipe Line Gas Co., 179 Mass. 15 (1901). * Commonwealth v. Lowell Gas Light Co., 12 Allen 75 (1866); Common- wealth v. Cary Improvement Co., 98 Mass. 19 (1867). "National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891); Na- tional Bank of Commerce v. New Bedford, 175 Mass. 257 (1900). 6 Thus the effect of a dividend earned and declared but not yet paid should be considered, Boston & Lowell R. R. Co. v. Commonwealth, 100 Mass 399 (1868). 538 Taxation in Massachusetts [G. L. c. 63, § 30, cl. 3 previously in force. 7 While there is no doubt that the annual net income is a material factor in determining the value of stock in a corporation, the business conditions which affect the value of stock in different corporations are so diverse that a capitalization of net income by a formula which does not take into consideration these different conditions is an uncertain guide; and yet it is clearly impossible for the commissioner or his assistants to make an individual study of the peculiar facts applicable to each of the many thousand corporations chartered in this commonwealth. Under these circumstances, if the officers of a corporation feel that the commissioner has overvalued its shares, they should not hesitate to bring the matter to his at- tention. Deductions — in General The deductions to which a domestic business corporation was entitled under the original corporate franchise tax consisted only of real estate and machinery situated within the common- wealth and locally taxed, and it was held that corporations were not entitled to deductions not specifically mentioned in the stat- ute. A corporation was given no credit for real estate situated outside the commonwealth, 8 for shares of another corporation on which it paid taxes in this commonwealth, 9 or even for bonds of the United States which were not taxable at all. 10 Inasmuch as the tax is an excise and not a property tax, corporations have no constitutional right to any deductions whatever, but the 7 At the present time the method used by the commissioner to determine the value of the aggregate shares of a business corporation, domestic or foreign, is to capitalize the average net income for the preceding five years at 12%% and to give the figure thus obtained one-half the weight given to the net value of the assets of the corporation. Reduced to a formula the method is as follows: a = net value of the assets (excess of assets over liabilities). b = average net income of the corporation for five preceding years. c = value of aggregate shares. 2a + 8b c = 3 In 1920 it was attempted to give a decreasing weight to the income of the preceding years proportioned to their distance from the time of assessment, but this method proved unsatisfactory and was abandoned. 8 Commonwealth v. New England Slate & Tile Co., 13 Aller 391 (1866). •Commonwealth v. New England Slate & Tile Co., 13 Allen 391 (1866). 10 Commonwealth v. Hamilton Manufacturing Co., 12 Allen 298 (1866) ; s. c. sub nom Hamilton Co. v. Massachusetts, 6 Wall. 632 (1867); Manufacturers' Insurance Co. v. Loud, 99 Mass. 146 (1868). Taxation of Corporations 539 G. L. c. 63, § 30, cl. 3] legislature has consistently endeavored to deal fairly with them and to avoid everything that might indirectly result in double taxation. In 1865 it was provided that the value of their real estate and machinery subject to local taxation "wherever sit- uated" should be deducted. 11 In 1902 underground conduits, wires and pipes were made locally taxable and their value was deducted from the corporate franchise tax. 12 In the Business Corporation Law of 1903 the subject was gone into comprehen- sively and the value of securities which if owned by a natural person resident within this commonwealth would not be liable to taxation and the value of property other than real estate and machinery situated in another state or country and subject to taxation therein were added to the items to be deducted. 13 In 1909 poles were included in the deductible items 14 and in 1917 it was provided that cash on hand or in bank and ac- counts receivable should be regarded as property situated in another state or country if the corporation had a usual place of business in such other state or country and such property was taxable therein. 15 In 1919, by a statute going into effect before the new corporation tax law, which was enacted in the same year, it was provided that so much of the real estate of a cor- poration as was represented by a mortgage debt should not be deducted. 16 Thus the statutes in regard to deductions in force when the 1919 law was enacted were very much the same as the provisions contained in that act. Deductions — (a) Real Estate, Machinery and Structures The deduction of real estate and machinery within the com- monwealth from the tax on stock of domestic corporations was established in 1832 and was continued in force when the cor- porate franchise law was established. The only changes in this portion of the statute have been the addition of conduits, wires and pipes in 1902, and poles in 1909, and the provision enacted in 1919 that the part of the real estate representing the interest of a mortgagee should not be considered. This last provision was enacted to prevent the amount of a mortgage from being "St. 1865, c. 283, §5. w St. 1902, c. 342. lS St. 1903, c. 437, §72. l4 St. 1909, c. 439, §2. 18 St. 1917, c. 208. »St. 1919, c. 332. 540 ' Taxation in Massachusetts [G. L. c. 63, § 30, cl. 3 deducted twice; once as a debt decreasing the net value of the aggregate stock of the company and again as part of the value of the real estate included in the statutory deduction. When the mortgage covers both real estate in Massachusetts and other property the interest of the mortgagee in the real estate in Mas- sachusetts is determined by apportionment in accordance with the respective values of the real estate in Massachusetts and the other property; but the interest of the mortgagee in real es- tate in Massachusetts is never to be deemed to be in excess of the fair cash value of such real estate. The use of the words "real estate" in that part of the statute which establishes an exception from the deduction of "such part of said real estate as represents the interest of a mortgagee" has caused some confusion. It is probable that the words "real estate" were used by inadvertence and "said property" was what was meant; but taking the statute as it stands its appli- cation is open to some question, for it is not clear in what sense the words "real estate", are used. It will be remembered that buildings are taxable as real estate, regardless of any arrange- ment between the owner of the land and the owner of the build- ing, 17 but that machinery, poles, conduits, wires and pipes are taxable as personal property, though affixed to the land. 18 It is not clear whether the exception from the deduction is applicable only to property taxable as real estate or includes all property that is real estate within the meaning of the law generally. It is to be noted that the deduction is limited to property owned by the corporation and subject to local taxation; it doe3 not extend to property occupied by the corporation on lease or otherwise on which it pays the taxes, nor on the other hand is the deduction lost with respect to property owned by the cor- poration merely because the tax is paid by another. Mortgages of real estate subject to local taxation which are held by a corporation have always been considered real estate within the meaning of the statute and the value of such mortgages is in- cluded in the deduction. 19 The provisions with respect to the valuation of real estate for the purpose of deduction found in the last paragraph of sec- 17 See G. L. c. 59, §11, supra, page 226. 18 See G. L. c. 59, §§11, 18, cl. 5, supra, pages 226, 246,. "Firemen's Insurance Co. v. Commonwealth, 137 Mass. 80 (1884). Taxation of Corporations 541 G. L. c. 63, § 30, cl. 3] tion fifty-five and in sections fifty-seven and fifty-nine, aimed at making the excise tax and the local tax on real estate comple- mentary, although in terms applicable only to the tax on the cor- porate franchise of public service corporations and trust com- panies, are undoubtedly made applicable to the tax on the cor- porate excess of business corporations by the second sentence of section forty-four. Deductions — (b) Non-Taxable Securities The deduction of non-taxable securities from the aggregate value of the capital stock of corporations originated with the Business Corporation Law of 1903 and has continued without change except so far as necessary to adapt the statute to the Income Tax Act. 20 The word "securities" includes bonds, stock certificates, promissory notes, bills of exchange and other like evidences of indebtedness or of property; 21 but it does not in- clude mere choses in action or accounts receivable not evidenced by written instruments which are more than mere statements of account but in a sense are recognized as representing the obli- gation itself. 22 As applied to deposits in banks, it does not in- clude money on deposit in a national bank or trust company un- less evidenced by a negotiable certificate of deposit, 23 but it does include deposits in savings banks or in the savings depart- ments of trust companies, since the bank books of such .institu- 20 Under the original statute the deduction was granted with respect to securities which if owned by a natural person resident in the commonwealth would not be liable to taxation. Under this statute it was held that shares in national banks were not deductible, although such shares, unlike shares in other corporations which were, taxed when owned by individuals, were taxed when owned by domestic corporations, and were included in the taxable franchise value of domestic corporations as well. A. J. Tower Co. v. Commonwealth, 223 Mass. 371 (1916). When the income tax law was enacted, all securities previously tax- able (except national bank stocks) were exempted from taxation on their cap- ital value when in the hands of individuals; but it was expressly provided that they should still be considered as taxable for the purpose of deductions under the corporate franchise tax. St. 1916, c. 269, §11. Under the corporation tax law of 1919 this circuitous method of dealing with the subject was rendered unneces- sary; but as exemption from taxation on income was made the basis of deduc- tion, it was necessary to specifically except shares in national banks from the deduction, and also shares in voluntary associations, partnerships and trusts, since such organizations are in some instances themselves taxed under the in- come tax law and the shares are consequently not taxed on income. 21 Boston Railroad Holding Co. v. Commonwealth, 215 Mass. 493- (1913); Bellows Falls Power Co. v. Commonwealth, 221 Mass 51 (1915) ; J. S. Lang Engineering Co. v. Commonwealth, 231 Mass. 367 (1918). "Boston Railroad Holding Co. v. Commonwealth, 215 Mass. 493 (1913). "Boston Railroad Holding Co. v. Commonwealth, 215 Mass. 493 (1913). 542 Taxation in Massachusetts [G. L. c. 63, § 30, cl. 3 tions are not mere statements of account but partake of the nature of money securities. 24 The only real difficulty in determining what securities are non-taxable is in the case of notes or bonds secured by mortgage of real estate. Such securities are subject to the income tax when owned by individual residents of the state unless they are secured solely by mortgage of real estate, situated in Massachu- setts and taxable as real estate, and are then exempt only to an amount not in excess of the assessed value of the real estate after deducting all prior mortgages, 25 and, before allowing a de- duction on account of mortgage bonds and notes, the commis- sioner requires the corporation to satisfy him that the mort- gage covers nothing but real estate, and to furnish a statement showing the location of the real estate, the amount of mortgage outstanding on April first, the amount of any prior liens, and the assessed value of the real estate. It is to be noted that mort- gages of real estate situated in Massachusetts and locally taxed were treated as deductible under the preceding paragraph of this section before non-taxable securities were added to the items of deduction, but there appears to be no difference in the nature and extent of the deduction, under whatever paragraph allowed. Deductions — (c) Tangible Property Situated in Another State or Country In the corporate franchise act of 1865 it was provided that the real estate and machinery of domestic corporations "wher- ever situated" should be an item of deduction, if subject to local taxation. In 1903 the deduction was extended to all "property situated in another state or country and subject to taxation therein." Under this statute it was held that the deduction ap- plied only to tangible property and did not extend to stock in a foreign corporation, 26 or to bank deposits in another state and accounts receivable arising out of business carried on in another state, 27 or to the franchise to carry on business as a corporation in another state. 28 24 J. S. Lang Engineering Co. v. Commonwealth, 231 Mass. 367 (1918). "See G. L. c. 62, §1, (a) cl. third, supra, page 440. 26 Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915). 27 Simplex Electric Heating Co. v. Commonwealth, 227 Mass. 225 (1917). 28 American Glue Co. v. Commonwealth, 195 Mass. 529 (1907). See also Farr Alpaca Co. v. Commonwealth, 212 Mass. 156 (1912) holding that wool in a bonded warehouse within the commonwealth was not deductible. Taxation of Corporations 543 G. L. c. 63, § 30, cl. 3] As other states began to adopt the practice of taxing foreign corporations by other methods than a direct tax on the property of such corporations, difficult questions began to arise with re- spect to the deduction of property in another state which was not subject to a direct property tax but which was nevertheless reached for purposes of taxation in some other way; but in the corporation tax act of 1919 these difficulties were done away with by no longer basing the deduction of property located in another state upon the legislative desire to avoid double taxation, but upon the injustice of reaching by means of an excise real estate and tangible personal property located in another state and which the state could not constitutionally subject to a direct tax; and the deduction with respect to property in another state was granted without regard to the question whether such prop- erty was locally taxed. The same limitation in respect to mortgages was imposed upon the deduction of the value of property located in another state as was imposed in the case of the deduction of the value of real estate situated in Massachusetts, and the same method of apportioning the deduction is applied when the mortgage covers property located in another state and other property as well. The 1919 statute also specifically limited the deduction under this paragraph to tangible property, but made special provision in the following paragraph for a limited deduction on account of intangible property in another state. Deductions — (d) Cash and Bills Receivable Attributable to an Office Outside the Commonwealth In 1917 it was held that the deduction with respect to prop- erty situated in another state did not apply to bank deposits in another state or to accounts receivable in another state; 29 but in the same year a statute was enacted providing that cash on hand or in bank or accounts receivable owned by a domestic business corporation should be regarded as property situated in another state or country if the corporation had a usual place of business in such other state or country and such property was taxable therein. 30 In 1919 the deduction with respect to such property was placed in its present form. "•Simplex Electric Heating Co. v. Commonwealth, 227 Mass. 225 (1917). 80 St. 1917, c. 268. 544 Taxation in Massachusetts [G. L. c. 63, § 30, cl. 4 It is to be noted that the deduction does not extend to secur- ities in any form, even to promissory notes, although it would doubtless include checks and other like instruments calling for immediate payment. Accounts and bills receivable are not considered to be attributable to an office outside the state unless they resulted from sales made by agents chiefly situated at, con- nected with or sent out from such office, or from rents or royal- ties from property situated in another state or country or from the use of patents outside the commonwealth, and in any event were payable at such office. If there are accounts or cash at- tributable to another state or country the allocation is made in accordance with the rule laid down in the statute, unless on account of peculiar conditions such method appears to be unjust. After the foregoing deductions have been made, there re- main only (1) the merchandise and other tangible personal property of a corporation situated in Massachusetts (except buildings, machinery, conduits, wires, pipes and poles so far as these may constitute personal property) ; (2) securities wher- ever kept and wherever the property which they represent is located which would be subject to the income tax if owned by an individual resident, and also national bank stock and shares in voluntary associations, trusts and partnerships; (3) such proportion of the cash, and accounts and bills receivable as is allocated to Massachusetts. This represents the corporate excess unless the price actually paid for stock or the record of earnings indicate that the aggregate capital stock after the statutory de- ductions has a higher value, in which case there is added by the commissioner what in effect amounts to an item for "good-will." Definitions Continued — Corporate Excess Employed within the Commonwealth 4. "Corporate excess employed within the commonwealth" by a foreign corporation, such proportion of the fair cash value of all the shares constituting the capital stock on the first day of April when the return called for by section thirty-five is due as the value of the assets, both real and personal, employed in any business within the commonwealth on that date, bears to the value of the total assets of the corporation on said date, less the value of the following : (a) Works, structures, real estate, machinery, poles, underground conduits, wires and pipes owned by it within the commonwealth sub- Taxation of Corporations 545 G. L. c. 63, § 30, cl. 4, 5] ject to local taxation, except such part of said real estate as represents the interest of a mortgagee; (&) Securities held in the commonwealth, the income of which, if any, if received by a natural person resident therein, would not be liable to taxation, except shares in national banks, voluntary associa- tions, trusts and partnerships. In determining the proportion of assets employed within the commonwealth, the commissioner may in- clude such bank deposits in other states as are employed principally in the conduct of the business in the commonwealth. The subject matter of the foregoing section will be discussed more at length in connection with the statutes specifically re- lating to the taxation of foreign corporations. 1 Definitions Continued — Net Income 5. ' ' Net income, ' ' except as otherwise provided in sections thirty- four and thirty-nine, the net income for the taxable year as required to be returned by the corporation to the federal government under the federal revenue act of nineteen hundred and eighteen, and, in the case of a domestic business corporation, such interest and dividends, not so required to be returned as net income, as would be* taxable if received by an inhabitant of this commonwealth ; less, both in the case of a domestic business corporation and of a foreign corporation, in- terest, so required to be returned, which is received upon bonds, notes and certificates of indebtedness of the United States. Many taxpayers have complained of the differences between the state and federal income tax returns, and no doubt it would make matters much easier for the taxpayers if the returns were identical in form ; but in the case of the tax upon individuals the fundamental difference in purpose and character between the federal and the state income tax laws creates so many distinc- tions in substance that identity in form is impracticable. 1 In the case of the state tax on corporations it was however possible to use substantially the same measure of income as was employed in the federal income tax upon corporations; and for the con- venience of the corporations taxed it was provided that the re- turns of income in the case of the state tax should be identical 1 G. L. c. 63, §40, infra, page 565. 1 Supra, G. L. c. 62. 546 Taxation in Massachusetts [G. L. c. 63, § 30, cl. 5 with the return already filed for the federal tax. There are how- ever certain additions and deductions which must be made, in order to adapt the law to the different constitutional limitations applicable to the state and federal governments. Accordingly a domestic corporation is obliged to include in its taxable net income, in addition to the income included in its federal return, interest and dividends which would be taxable by the state if re- ceived by an individual inhabitant but which are not subject to the federal income tax when received by a corporation, such as interest on bonds of another state or of municipal corporations therein, or of the commonwealth or of municipal corporations therein if issued before such bonds became exempt from taxation, all of which the United States has no power to tax, and dividends of corporations which themselves have paid a tax to the United States, and which are not subject to taxation a second time when received by another corporation but which have no such claim of exemption from the state. On the other hand interest on United States bonds is taxable by the United States but is not taxable by a state, 2 and such interest is deducted from the federal return before it becomes the final measure of income for the purposes of the state. As the statute specifically authorizes such deduction, the question whether it is constitutionally necessary, in view of the fact that the tax is an excise on the franchise of the corporation and the income is the measure and not the subject of the tax, is purely academic; 3 but a similar question might arise in the case of interest on bonds of territorial governments and of other in- strumentalities of the United States which are exempt from state but not from federal taxation and which are not permitted by the statute to be deducted from the net income of the corpora- tion for purposes of state taxation. 4 In order to prevent the confusion that would otherwise arise, in determining net income as defined in the federal act, federal regulations and decisions interpretative of the law are followed by the state authorities where applicable; but the commissioner will not necessarily follow the decision of the federal authorities on questions of fact. Supra, Part I, §27. Supra, Part I, §8. 4 Supra, Part I, §27. ■i Taxation of Corporations 547 G. L. c. 63, § 30, cl. 6; §31] Definitions Continued — Taxable Year 6. ' ' Taxable year, ' ' the fiscal or calendar year for which the cor- poration was required to make its last return to the federal govern- ment due prior to April first of the year in which the tax is to be assessed, or, if such return was for a fractional period, a full year, including and ending with such fractional period. Deductions Not Allowed Section 31. In determining the corporate excess of a domestic busines corporation, or the corporate excess employed within the com- monwealth by a foreign corporation, there shall not be deducted the value of shares in national banks and in voluntary associations, trusts and partnerships, nor of other securities the income of which, if owned by a natural person resident in this commonwealth, would be liable to taxation, nor shall there be deducted the value of any shares of stock of the corporation itself owned directly or indirectly by it or for its benefit ; and the commissioner, in determining for the purposes of taxation the value of the corporate excess of, or corporate excess em- ployed within the commonwealth by, any such corporation, shall not take into consideration any debts of the corporation unless he is satis- fied that no part of such debts was incurred for the purpose of re- ducing the amount of taxes to be paid by it, and, in the case of a domestic business corporation which is a subsidiary of a foreign cor- poration or closely affiliated therewith by stock ownership, that such debts represent only the fair value of the property given therefor. The first part of this section appears to have been enacted ex majore cautela to make it clear that securities which would be taxable either directly or indirectly, on principal or income, to an individual resident are not deducted in determining the corporate excess. Shares in national banks are included in the corporate excess, although they are also subject to the national bank tax. 1 Shares in voluntary associations, trusts and partner- ships are included in the corporate excess whether they would be taxable in the hands of an individual resident or reached by a tax on the association itself; other securities are not included in the excess unless they would be taxable in the hands of an in- dividual resident. 1 A. J. Tower Co. v. Commonwealth, 223 Mass. 371 (1916). 548 Taxation in Massachusetts [G. L. c. 63, §§31,32 The other provisions of this section were adopted to meet methods of evasion which had become common. Rate of Tax Upon Domestic Corporations Section 32. Except as otherwise provided in sections thirty- three and thirty-four, every domestic business corporation shall pay annually, with respect to the carrying on or doing of business by it, an excise equal to the sum of the following, provided that every such corporation shall pay annually a total excise not less in amount than one twentieth of one per cent of the fair cash value of all the shares constituting its capital stock on the first day of April when the return called for by section thirty -five is due : (1) An amount equal to five dollars per thousand upon the value of its corporate excess. (2) An amount equal to two and one half per cent of that part of its net income, as defined in this chapter, which is derived from business carried on within the commonwealth. The rate of the corporate franchise tax as originally enacted was one and one-sixth per cent of the valuation of all the shares of each corporation after the authorized deductions had been made, and there was no maximum or minimum limitation. In 1865 it was enacted that the rate was to be fixed by an appor- tionment of the whole amount of money to be raised by taxation upon property in the commonwealth during the same current year upon the aggregate valuation of all the cities and towns in the commonwealth for the preceding year. No substantial change was made until the enactment of the Business Corpora- tion Law in 1903, when the maximum and minimum limitations were first inserted. The tax on any corporation was not to ex- ceed by more than twenty per cent a tax on the tangible prop- erty and taxable 1 securities of the corporation at the same rate, thus limiting the possibility of a heavy tax based upon the high speculative value of the stock, and the tax was not to fall below one-tenth of one per cent of the market value of the entire capital stock even if the deductions authorized by the statute equaled the valuation of all the shares. 1 In the original statute, apparently by error, it was provided that the maximum tax should be based on securities which if owned by a natural person resident within the commonwealth would not be liable to taxation, but by St. 1904, c. 261, §1, the word "not" was stricken out. Taxation op Corporations 549 G. L. c. 63, § 32] In 1906 the method of fixing the rate upon domestic business corporations was altered so that it was based upon the average annual rate of the three preceding years, the annual rate for this purpose being ascertained as before; 2 and in 1909 this method of fixing the rate was extended to all corporations sub- ject to the corporate franchise tax. 3 When the present law was adopted in 1919 the maximum limitation was wholly done away with; the minimum limitation was reduced to one twentieth of one per cent of the fair cash value of the aggregate capital stock; 4 the rate of taxation upon the corporate excess which was approaching and would doubtless have soon passed twenty dollars per thousand was reduced to a fixed rate of five dollars per thousand, and, to counterbalance this decrease, a tax of two and one-half per cent of the net in- come derived from business carried on in this commonwealth was added. A distinction is to be noted between the phraseology of the foregoing section and that of the corresponding provision of the earlier law. In the earlier law it was provided that every cor- poration subject to the act should pay a tax upon its corporate franchise at the specified rate; 5 and under this provision it was held that a corporation could not relieve itself from liability to taxation by neglecting to do business, or ceasing to do business, and that nothing short of the loss of its franchise could exoner- ate it from the tax. 6 In the present law it is provided that every domestic business corporation shall pay the specified excise "with respect to the carrying on or doing of business by it" and the question at once arises whether a corporation which does not carry on or do busi- ness within the taxable year is liable to the tax. With the large class of corporations which fail to conduct a profitable business and are abandoned by their stockholders and exist only in name until finally dissolved by act of legislature, the question is purely 2 St. 1906, c. 271, §§9, 12. •St. 1909, c. 513. * It was provided by St. 1921, c. 361 that the tax assessed under G. L. c. 63, §32, in the year 1921, should not be less than one-twentieth of one per cent of the corporation's gross receipts from business assignable to this commonwealth under G. L. c. 63, §38, cl. 6. This statute was applicable to the year 1921 only and was enacted to protect the state from loss of revenue due to the business conditions prevailing in 1920. "St. 1909, c. 490, III, §43. •Attorney-General v. Massachusetts Pipe Line Gas Co., 179 Mass. 15 (1901). 550 Taxation in Massachusetts [G. L. c. 63, §§ 32-34 academic, because such corporations are without income and their shares have no value; but there are many corporations which have ceased to do any active business but which receive a substantial income from their property and the shares of which are of great value. Under statutes of similar wording it has been held that such corporations are not taxable; 7 but it is not be- lieved that it was the intention of the legislature to exempt such corporations from taxation under section thirty-two. The phraseology of the statute has however left the matter open to controversy; but in any event it would seem that if a domestic business corporation was not taxable under section thirty-two on the ground that it was not engaged in business it would be sub- ject to the tax on its corporate franchise under the provisions of sections fifty-three and fifty-eight. Affiliated and Subsidiary Corporations Section 33. If a domestic business corporation which is a sub- sidiary of a foreign corporation or closely affiliated therewith by stock ownership, is so managed that its books of account do not show its true earnings, it shall pay as a minimum tax under this chapter an amount equal to twenty dollars per thousand on its corporate excess, unless it shall file within the first ten days of April a statement, as of April first, of its net income showing to the satisfaction of the commissioner its true earnings for its last prior fiscal year, eliminating therefrom all payments to such other corporation or its officers in excess of the fair value of the property or services given therefor. Section 34. If two or more domestic business corporations participated in the filing of a consolidated return of income to the federal government, the tax under paragraph (2) of section thirty- two may, at their option, be assessed upon their combined net income, which tax shall be assessed to all said corporations and collected 7 Thus in Attorney-General v. Boston & Albany R. R. Co., 233 Mass. 460 (1919) it was held that a railroad company which had leased its entire prop- erty to another company, under statutory authority, was not "doing business for profit" within the meaning of a statute imposing a tax. On similar facts it was held that a railroad corporation was not "engaged in business" within the mean- ing of the federal corporation tax act of 1909, McCoach v. Minehill & Schuylkill Haven R. R. Co., 228 U. S. 295 (1913) ; and the latter statute was also held in- applicable to a corporation whose only property was a parcel of real estate leased to a single lessee for a long term and whose only activity was to receive and dis- tribute the rent therefrom. Zonne v. Minneapolis Syndicate, 220 U. S. 187 (1911) ; United States v. Emery, Bird, Thayer Realty Co., 237 U. S. 28 (1915). See also Von Baumbach v. Sargent Land Co., 242 U. S. 503 (1917). Taxation of Corporations 551 G. L. c. 63, §§ 34, 35] from any one or more of them. In the case of domestic business cor- porations thus affiliated and not electing, under the foregoing pro- vision, to be assessed upon their combined net income, and in the fur- ther case of one or more domestic business corporations filing with one or more foreign corporations a consolidated return of net income to the federal government, each such domestic business corporation shall file with the commissioner, as a part of its return required by this chapter, a statement of net income in such form as he may prescribe, showing its gross income and deductions in accordance with the law and regulations governing the usual federal returns of corporations not thus affiliated, and the net income thus shown, after making deductions therefrom and additions thereto as provided in paragraph five of section thirty, shall be the "net income" under this chapter. The provisions of section thirty-three were adopted for the purpose of preventing the evasion of corporation taxes by a method which had become common under the earlier law; the provisions of section thirty-four were adopted for the purpose of permitting corporations, whenever practicable, to use the same material in preparing their returns for the state that was used in their federal returns. A consolidated return cannot how- ever be filed except in the case of two domestic corporations, or of two foreign corporations doing business in this common- wealth and subject to the provisions of this chapter. Even if two corporations elect to file a consolidated return of income, they must each file a separate statement of corporate excess. Corporations which are classed as "personal service corporations" under the federal law and so are not taxable on their income may however use a copy of their statement of income on their federal information returns as a statement of their income on their state returns, either by amending the form provided in the state return or substituting a copy of the corresponding schedule in the federal return. Returns Section 35. Every domestic business corporation shall, within the first ten days of April, make a return as of April first, sworn to by its treasurer or assistant treasurer, or in their absence or in- capacity by any other principal officer, in such form as the commis- 552 Taxation in Massachusetts [G. L. c. 63, § 35 sioner prescribes, giving (a) a copy of such parts as he may designate of the federal return or returns for the year on the income of which the tax is to be assessed, which it has made singly or with one or more other corporations, (&) such other data as he requires to de- termine the proportion of net income derived from business carried on within the commonwealth, (c) such information as he requires for the determination of the corporate excess. Whenever the time for filing its federal return has been extended, the commissioner may extend the time for filing such return. The return of a domestic corporation is in effect divided into three parts. It contains (1) a statement of net income taken from the federal return filed by the corporation, with the correc- tions required to make the return conform to the state statute. 1 (2) A statement similar to that required in returns under the earlier law, in 'order that the commissioner may determine the corporate excess. (3) In the case of corporations doing business in whole or in part in other states or countries, the information required to enable the commissioner to allocate to Massachusetts only that part of the tax to which that commonwealth is en- titled under the law. In preparing the table of assets and liabilities there is no requirement that the two columns balance: that is, if the net assets exceed the par value of the capital stock outstanding the difference need not be entered as surplus, and if the net assets are less than the par value of the capital stock the difference need not be entered as "good will." If good will is entered in excess of its actual value, the only result will be that the cor- poration will pay more taxes than the law requires. A corporation is not exonerated from filing a return by reason of the fact that it has received no income during the taxable year. There is ordinarily no difficulty in filing a return of in- come within the specified time, since the year to which it relates ended three months previously, and a return of income has al- ready been filed with the federal authorities. The statute how- ever in respect to the information required for determining the corporate excess demands what is often impossible, by requiring the filing of a balance sheet as of the first day of April within the first ten days of that month. In cases where an extensive 1 G. L. c. 63, §30, cl. 5, supra, page 545. Taxation of Corporations 553 G. L. c. 63, §§ 35, 36] inventory must be taken, the time is often too short. While the commissioner appears to have no power to extend the time for filing a return, unless an extension has been granted for filing the federal return, he may exercise the discretion granted him by section forty-nine of abating the penalty for a late re- turn, and this discretion is usually exercised whenever there are reasonable grounds for the delay. Returns are required to be accompanied by such memoranda, supporting schedules, and other statements as are called for by the forms or by the instruction sheets which are distributed with them. Prior to 1913 there was no provision in the law that the tax returns of a corporation should not be open to public inspection, and such returns were frequently offered in evidence as an admis- sion by the corporation of the values stated therein, and were held to be competent for that purpose, 2 although a statement of the value of the capital stock was not competent evidence of the value of the property of the corporation, because the value of the stock is dependent upon other elements. 3 In 1903 it was provided by statute that returns should be open only to the inspection of the commissioner and such other officers of the commonwealth as should have occasion to inspect them for the purpose of assessing or collecting taxes, 4 and it was held that re- turns filed while that statute was in force could not be introduced in court in any case other than a criminal proceeding directly in- volving the integrity of the return. 5 In the business corpora- tion tax act of 1919 no provision was included with respect to the privacy of returns, and it would seem that the return of a business corporation filed since 1919 can be used in evidence against the corporation filing it in any case in which it is ma- terial. Effect of Correction of Federal Return Section 36. If the assessment made by the federal government is based upon a net income greater or less than the net income returned 2 Brackett v. Commonwealth, 223 Mass. 119, 126 (1916). s Union Glass Co. v. Somerville, 228 Mass. 202 ( 1917) . 4 St. 1903, c. 437, §48. This provision was continued in St. 1909, c. 490, III, §40 and St. 1914, c. 198, §6. °Brackett v. Commonwealth, 223 Mass. 119, 126 (1916) ; Union Glass Co. v. Somerville, 228 Mass. 202 (1917). 554 Taxation in Massachusetts [G. L. c. 63, §§ 36, 37 by said corporation, or if an additional assessment is at any time made on the ground that the net income was incorrectly returned in the first instance, or if, after the tax as assessed is paid to the federal government, any part of such tax is refunded, the corporation, within ten days after the receipt of such notice of said fact, shall make return on oath to the commissioner of the amount by which the net income originally returned differs from the net income on which the tax was computed by the federal government upon the latest determination by it of the proper tax, and of the facts giving rise to the difference. If upon such facts an additional tax is due the commonwealth, the com- missioner shall assess the additional tax, and the corporation shall, within thirty days after receipt of notice from the commissioner of the amount thereof, pay such additional tax. If upon said facts a less tax is due the commonwealth than that paid by the corporation, the state treasurer shall, upon certification of the commissioner, repay within thirty days such difference without any further statutory appropriation therefor. Income Allocable in Entirety Section 37. The commissioner shall determine, in the manner provided in this and the following section, the part of the net income of a domestic corporation derived from business carried on within the commonwealth. The following classes of income shall be allocated as follows: (a) Interest and dividends which would be taxable under section one of chapter sixty-two, if received by an inhabitant of the com- monwealth, shall be allocated to this commonwealth. (6) Gains realized from the sale of capital assets, if such assets consist of intangible property or if they consist of real estate or tangible personal property situated in the commonwealth, shall be allocated to this commonwealth. (c) Gains received from the sale of capital assets, if such assets consist of real estate or tangible personal property situated outside the commonwealth, shall not be allocated in any part to this com- monwealth. This and the following section set forth the manner in which the legislature has dealt with the difficult problem of allocating to Massachusetts only that part of the income of a domestic cor- poration to which this commonwealth is fairly entitled. Prob- Taxation op Corporations 555 G. L. c. 63, §§ 37, 38] ably a state could levy a franchise tax upon domestic corpora- tions graded in accordance with income from whatever source derived, but the legislature has not sought to stretch its con- stitutional powers in such a way as to impose a more onerous tax upon domestic corporations than it may constitutionally impose upon foreign corporations doing business within the com- monwealth. The situs of intangible personal property being ordinarily at the domicile of the owner, and the domicile of a domestic corporation being the state in which it was incorporated, all income derived from interest and dividends which would be taxable under chapter sixty-two if received by an individual in- habitant of the commonwealth is allocable to Massachusetts. It is to be noted that all other interest and dividends, which are taxable to a corporation although not to an individual, are not allocable in their entirety under this section. In determin- ing what interest and dividends would be taxable to an indi- vidual, department rulings issued with respect to the income tax are followed. The same principle applied to gains from the sale of capital assets consisting of intangible personal property results in the allocation of the entire income so derived to this commonwealth ; and similarly no question can be raised with respect to the pro- priety of the rule by which the allocation of the gain derived from the sale of capital assets consisting of real estate and tangi- ble personal property is made to depend upon the location of such property. It is to be noted that allocation under this sec- tion is made, even if the corporation is not carrying on business outside Massachusetts; or in other words, under no circum- stances does the commonwealth attempt to tax the gain derived by a domestic corporation from selling capital assets consisting of real estate and tangible personal property situated outside the commonwealth. Allocation of Remainder of Net Income Section 38. Income of the classes described in the preceding section having been allocated, the remainder of the net income as defined in section thirty shall be allocated as follows: 1. If the corporation carries on no business outside the common- 556 Taxation in Massachusetts [G. L. c. 63, § 38 wealth, the whole of said remainder shall be allocated to this com- monwealth. 2. If the corporation carries on any business outside the com- monwealth, the said remainder shall be divided into three equal parts : (a) Of one third, such portion shall be attributed to business carried on within the commonwealth as shall be found by multiply- ing said third by a fraction whose numerator is the value of the cor- poration's tangible property situated within the commonwealth and whose denominator is the value of all the corporation 's tangible prop- erty wherever situated. ( b ) Of another third, such portion shall be attributed to business carried on within the commonwealth as shall be found by multiplying said third by a fraction whose numerator is the expenditure of the cor- poration for wages, salaries, commissions or other compensation to its employees, and assignable to this commonwealth as hereinafter provided, and whose denominator is the total expenditure of the cor- poration for wages, salaries, commissions or other compensation to all its employees. (c) Of the remaining third, such portion shall be attributed to business carried on within the commonwealth as shall be found by multiplying said third by a fraction whose numerator is the amount of the corporation 's gross receipts from business assignable to this com- monwealth as hereinafter provided, and whose denominator is the amount of the corporation's gross receipts from all its business. 3. In a case where only two of the foregoing three rules are applicable, the said remainder of net income of the corporation shall be divided into two equal parts only, each of which shall be ap- portioned in accordance with one of the remaining two rules. If only one of the three rules is applicable, the part of the net income received from business carried on within the commonwealth shall be deter- mined solely by that rule. 4. The value of the corporation's tangible property for the pur- poses of this section shall be the average value of such property during the taxable year. 5. The amount assignable to this commonwealth of expenditure of the corporation for wages, salaries, commissions or other com- pensation to its employees shall be such expenditure for the taxable year as represents the compensation of employees not chiefly situated at, connected with or sent out from premises for the transaction of Taxation op Corporations 557 G. L. c. 63, § 38] business owned or rented by the corporation outside the common- wealth. 6. The amount of the corporation's gross receipts from business assignable to this commonwealth shall be the amount of its gross receipts for the taxable year from (a) sales, except those negotiated or effected in behalf of the corporation by agents or agencies chiefly situated at, connected with or sent out from premises for the transac- tion of business owned or rented by the corporation outside the com- monwealth and sales otherwise determined by the commissioner to be attributable to the business conducted on such premises, (&) rentals or royalties from property situated, or from the use of patents, within the commonwealth ; provided, that upon application by a corporation which owns or controls substantially all the capital stock of another corporation, or by the corporation so owned or controlled, the com- missioner may impose the tax provided for by this chapter upon the income of the two corporations jointly in the same manner as though they were a single corporation, or may, in such other manner as he shall determine, equitably adjust the tax of the applying corporation. 7. If a corporation maintains an office, warehouse or other place of business in a state other than this commonwealth for the purpose of reducing its tax under this chapter, the commissioner shall, in deter- mining the amount of its gross receipts from business assignable to this commonwealth, include therein the gross receipts from sales attributed by the corporation to the business conducted at such place of business in another state. 8. In the case of consolidated returns of net income, the com- missioner shall allocate such income, so far as practicable, in accord- ance with the above rules. 9. A rule shall not be deemed to be inapplicable merely because all the tangible property or the expenditure of a corporation for wages, salaries, commissions or other compensation, or the gross receipts of the corporation, are found to be situated, incurred, or received without the commonwealth. 10. From the net income allocated to this commonwealth there shall be deducted the same proportion thereof which the fair cash value of machinery owned by the corporation and used in manufac- turing in the commonwealth bears to its total assets employed therein, and the amount remaining shall be its net income subject to tax under this chapter. 558 Taxation in Massachusetts [G. L. c. 63, § 38 In the foregoing section is undertaken the difficult task of allocating the remainder of the net income of domestic corpora- tions; that is all of the net income as defined in the fifth clause of section thirty except interest and dividends which would be taxable if received by an individual inhabitant of the common- wealth and gains from the sale of capital assets, all of which are allocable in their entirety under the preceding section. The allocation provided by section thirty-eight is not made in any event except in the case of a corporation carrying on busi- ness outside Massachusetts. Corporations which do not carry on business outside the commonwealth are taxable on their en- tire net income, except gains from the sale of capital assets con- sisting of real estate and tangible personal property situated outside the commonwealth. A corporation which has its factories or stores in Massachu- setts is not deemed to be doing business outside the state merely because it owns tangible property situated outside the state, or because it ships goods to purchasers outside the state, or even because it sends commercial travellers or other agents to solicit business outside the state. It is only when it maintains a factory, store or office or other regular or established place of business in active operation outside the state that it will be deemed to be doing business outside of Massachusetts and so entitled to an allocation of its income under section thirty- eight. If it is determined that a corporation is doing business out- side of Massachusetts, three factors are given equal weight in allocating the income; (1) the value of tangible property belonging to the corporation situated within and without the commonwealth; (2) the wages and other compensation paid to persons employed within and without the commonwealth; (3) the gross receipts from business done within and without the commonwealth. The value of tangible property is deemed to be its average value, as ascertained by weekly or monthly inventories, if avail- able. If such inventories are not available, inventories as of the beginning and end of the taxable year may be used, provided the relative value of the tangible property within and without the commonwealth has remained substantially constant through- out the year. Taxation of Corporations 559 G. L. c. 63, § 38] The wages paid to persons employed within the common- wealth are deemed to be the wages paid to all employees not chiefly situated at, connected with or sent out from places of business owned or rented by the corporation outside the com- monwealth. An employee is one who works for and under the control of the corporation, and it does not include an independ- ent contractor, or another corporation. The mode of payment is not conclusive ; a travelling salesman paid on a commission basis is an employee within the meaning of the statute if under the control of the corporation. The allocation of gross receipts to Massachusetts is clearly defined in the sixth clause of the foregoing section. Compen- sation for services performed by the corporation should be in- cluded in the gross receipts, and is allocable to Massachusetts unless performed by agents or employees chiefly situated at, connected with or sent out from premises for the transaction of business which are owned or rented by the corporation out- side of Massachusetts. The deduction in the tenth clause is based primarily upon the fact that machinery employed in manufacture is locally taxed and in this respect differs from other tangible personal property of corporations, and since other tangible personal prop- erty of corporations is reached only by the tax on corporate excess at the rate of five dollars a thousand and machinery is taxed at the local rate which averages approximately twenty-five dollars a thousand, corporations engaged in manufacture and owning expensive machinery would be discriminated against unless a deduction was made in their behalf in the portion of the tax based on income. Machinery may not be made the basis of a deduction unless it is both owned by the corporation and used in manufacturing in Massachusetts. Machinery held upon lease and owned by another is excluded, even though the taxes on such machinery are assessed to and paid by the lessee. The relative value of the machinery and other assets employed in Massachusetts may be determined by taking the sum of the value at the beginning and at the end of the year and dividing by two. 560 Taxation in Massachusetts [G. L. c. 63, § 39 FOREIGN CORPORATIONS Excise on Foreign Corporations Section 39. Every foreign corporation shall pay annually, with respect to the carrying on or doing of business by it within the com- monwealth, an excise equal to the sum of the following, provided that every such corporation shall pay annually a total excise not less in amount than one twentieth of one per cent of such proportion of the fair cash value of all the shares, constituting its capital stock as the assets, both real and personal, employed in any business within the commonwealth on April first following the close of the taxable year, bear to the total assets of the corporation employed in business on said date : ( 1 ) An amount equal to five dollars per thousand upon the value of the corporate excess employed by it within the commonwealth. (2) An amount equal to two and one half per cent of that part of its net income, as defined in section thirty and in this section, which is derived from business carried on within the commonwealth. If two or more foreign corporations doing business in this com- monwealth participated in the filing of a consolidated return of in- come to the federal government, the tax under paragraph (2) above may, at their option, be assessed upon their combined net income, in which case the tax shall be assessed to all said corporations and collected from any one or more of them. Foreign corporations thus affiliated and doing business in this commonwealth, which do not elect, under the foregoing provision, to be assessed upon their combined net income, and all other foreign corporations doing business in this com- monwealth, which have filed with one or more corporations not sub- ject to this section a consolidated return of net income to the federal government, shall each file with the commissioner, as a part of the return required by this chapter, a statement of net income in such form as he may prescribe, showing the gross income and deductions in accordance with the law and regulations governing the usual federal returns of corporations not thus affiliated; and the net income thus shown, after making deductions therefrom and additions thereto as provided in paragraph five of section thirty, shall be the "net income" under this chapter. Until 1919 the taxation of foreign corporations proceeded along entirely different lines from the taxation of domestic cor- Taxation of Corporations 561 G. L. c. 63, § 39] porations. 1 Real estate of a foreign corporation was always without controversy assessed in the city or town in which it lay, 2 and a foreign corporation was not treated as an inhabitant of the city or town in which it had its principal place of business in this commonwealth. 3 In these respects there was no difference in the taxation of foreign and of domestic corporations. It was held however that foreign corporations, unlike domestic cor- porations, were taxable for personal property which fell within any of the classes of property taxable where situated regardless of the owner's domicile, 4 such as merchandise and stock-in-trade used in business or manufacture, machinery employed in manu- factures, personal property leased for profit, horses and cattle, and conduits, wires, pipes and poles. 5 In the Business Corpora- tion Law of 1903 it was provided in terms that foreign corpora- tions should be assessed for their real estate, machinery and mer- chandise in the city or town in which it was situated, 6 and it was held that this provision was in addition to existing liabilities of foreign corporations under the previous statutes and was not subject to the conditions and qualifications contained in such statutes, so that machinery and merchandise of a foreign cor- poration was taxable where situated regardless of its manner of use. 7 The only effect of the statute of 1909 providing for the taxation of merchandise, machinery and animals of non-residents and foreign corporations upon the taxation of foreign corpora- tions was to add animals other than those enumerated in the existing statutes to the personal property upon which such cor- porations were taxable. ^ee Blackstone Mfg. Co. v. Blackstone, 13 Gray 488 (1859). 2 Hough v. North Adams, 196 Mass. 290 (1907). 'Boston Investment Co. v. Boston, 158 Mass. 461 (1893) ; Coffin v. Artesian Water Co, 193 Mass. 274 (1906). 4 These exceptions were contained in St. 1909, c. 490, I, § 23, and were ap- parently not intended to declare what property should be taxed and what ex- empted, but to decide in what city or town property made taxable by other statutes should be assessed; nevertheless as to foreign corporations and non- residents of the commonwealth they had the effect of imposing a tax upon prop- erty which would otherwise wholly have escaped taxation in this commonwealth. "Blackstone Manufacturing Co. v. Blackstone, 13 Gray 488 (J.859) ; Boston Loan Co. v. Boston, 137 Mass. 322 (1884) ; Singer Manufacturing Co. v. Essex County Commissioners, 139 Mass. 266 (1885); Lamson Consolidated Store Service Co. v. Boston, 170 Mass. 355 (1898). "St. 1903, c. 437, §71. It was held that the corporation can be constitu- tionally assessed as owner instead of the goods themselves in Scollard v. Amer- ican Felt Co., 194 Mass. 127 (1907). 7 Hilliard v. Fells Ice Co., 200 Mass. 331 (1909). 562 Taxation in Massachusetts [G. L. c. 63, § 39 The taxation of tangible property imposed in 1903 as well as the excise on foreign corporations provided by another sec- tion of the same statute, referred to later, tended to check the practice of securing incorporation from other states for the pur- pose of doing business in Massachusetts; but intangible prop- erty, such as stocks, bonds and notes, and money and accounts receivable, was not subject to local taxation when owned by for- eign corporations, and a foreign corporation the property of which was largely of this character was not taxed as heavily as a domestic corporation owning similar property. If however the shares of such a corporation were owned by residents of this state and did not escape the view of the local assessors, the for- eign corporation directly and indirectly was more severely taxed than the domestic corporation. Shares in foreign corporations owned by residents of this state were taxed to the Owner in the city or town in which he dwelt 8 without any deduction for tangible property of the corporation subject to taxation in this commonwealth or elsewhere. 9 No general excise on foreign corporations was provided by law until 1903, but in that year a tax was imposed of one one-hun- dredth of one per cent of the par value of the capital stock, de- ducting local taxes, the amount of the excise not to exceed two thousand dollars. In 1907 this tax was increased to one-fiftieth of one per cent and the deduction omitted, the limit of two thousand dollars however remaining unchanged. These statutes were held inapplicable to a foreign corporation having its place of business in this state only for use in interstate commerce, 10 or to a foreign corporation for the taxation of which there was no special provision in our statutes, if it should be engaged in the work of conducting some kind of interstate commerce for hire as its principal function and at the same time should be engaged in intrastate business so closely connected with the in- terstate commerce that it could not be given up without serious detriment to the interstate commerce. 11 They were however held applicable to corporations engaged in ordinary mercantile business which was partly interstate and partly local, when "Great Barrington v. Berkshire County Commissioners, 16 Pick. 572 (1835) ; Dwiglit v. Springfield Centre Fire District, 11 Met. 374 (1846). "Dwight v. Mayor & Aldermen of Boston, 12 Allen 316 (1866). 10 Attorney-General v. Electric Storage Battery Co., 188 Mass. 239 (1905). "Baltic Mining Co. V. Commonwealth, 207 Mass. 381 (1911). Taxation of Corporations 563 G. L. c. 63, § 39] there was no insuperable difficulty in separating the two divi- sions of the business. 12 So construed they were sustained by the supreme court of the United States; 13 but in 1914 a statute was enacted imposing an additional tax of one one-hundredth of one per cent upon the capital stock of a foreign corporation in excess of ten million dollars, 14 and it was held that this enactment indicated an at- tempt to tax the entire capital stock of the corporation, and thus to reach property outside of Massachusetts, and conse- quently rendered the entire system of excises unconstitutional. 15 The repeal of the 1914 act revived the constitutionality of the earlier statute, 10 but left the system of taxing foreign corpora- tions in an unsatisfactory condition. The enactment of the income tax law in 1916 17 removed the shares of foreign corporations from the sphere of local taxation, and subjected the dividends of such corporations to a moderate tax which in many cases left foreign corporations in a more favorable position than domestic. In 1915 a statute was enacted requiring foreign corporations to file with the commissioner a list of their property subject to local taxation. 18 This was deemed a great hardship, as domestic corporations were not tax- able their personal property at all and individuals were not re- quired to file a list of such property, and the time for the statute to go into effect was extended from year to year so that it never actually went into effect; 19 but its enactment tended to induce foreign corporations to withdraw their opposition to a reason- able system of excise taxes. By 1919 it was realized that the place of incorporation was often a mere legal fiction, and that common sense required the taxation of corporations doing business in this commonwealth upon substantially the same principles, regardless of the state 12 S. S. White Dental Manufacturing Co. v. Commonwealth, 212 Mass. 35 (1912); Keystone Watch Case Co. v. Commonwealth, 212 Mass. 50 (1912); Marconi Wireless Tel. Co. v. Commonwealth, 218 Mass. 558 (1914). 13 Baltic Mining Co. v. Massachusetts, 231 U. S. 68 (1913) ; Cheney Bros. v. Massachusetts, 246 U. S. 146 (1918). 14 St. 1914, c. 724. 15 International Paper Co. v. Massachusetts, 246 U>. S. 135 (1918) ; Locomo- bile Co. v. Massachusetts, 246 U. S. 146 (1918). ia St. 1918, c. 76, see supra, Part I, §23. 17 See G. L. c. 62, §1, supra, page 428. 18 St. 1915, c. 167. "See St. 1917, c. 89; St. 1918, c. 133. 564 Taxation in Massachusetts [G. L. c. 63, § 39 by which the charter was issued. Accordingly foreign corpora- tions were included in the corporation tax act of 1919 and were made taxable in the same manner as domestic corporations, ex- cept that a foreign corporation was taxed on only so much of its corporate excess as was employed in business in this common- wealth, and the allocation of income from interest and dividends and from the gain from the sale of capital assets was somewhat different. But in other respects the taxation of domestic and of foreign corporations was made identical. It is believed that the method of taxing foreign corporations established by section thirty -nine not only meets the objections which proved fatal in the case of the excise on foreign corpora- tions imposed by the legislature in 19 14, 20 since the statute has been drawn with great care so as to exclude the possibility of taxing directly or indirectly property of such corporations situ- ated outside the commonwealth, but that it may also be consti- tutionally applied to foreign business corporations having a place of business in this state solely for the purpose of engaging in interstate commerce, since payment of the tax is not a condition precedent to the doing of business in this commonwealth, and the tax, though in form an excise, is in effect a tax upon income earned and property located within the commonwealth at no greater rate than other income and other property are taxed. 21 Accordingly the narrow distinctions between interstate and intra- state commerce which were drawn under the earlier acts are of no significance under the present law. The tax however is by its terms an excise imposed with respect to the carrying on or doing of business within the com- monwealth, and it would seem that a corporation which does no business within the commonwealth is not subject to the tax. Undoubtedly, if a corporation does business anywhere, and has its financial office in this commonwealth, it is subject to the tax; 22 but if it has definitely and permanently ceased to do business in the state of its origin, or elsewhere, it would seem that it is not taxable in this commonwealth under the terms of the statute merely because it maintains an office here. '"See supra, Part I, §23, note 8. 21 See Supra, Part I, §§20-25 inc. "Old Dominion Co. v. Commonwealth, 237 Mass. 269 (1921). Taxation of Corporations 565 G.^.c. 63, §§40, 41] Returns — Corporate Excess Employed Within the Commonwealth Section 40. Every foreign corporation shall make returns as provided in sections thirty-five and thirty-six; and all provisions of said sections shall apply to such corporations, except that the term "corporate excess" in said section thirty-five shall, in the case of a foreign corporation, mean the corporate excess employed by it within the commonwealth. With respect to a foreign corporation, a state has no power to tax the entire capital, even with deductions for taxable prop- erty actually located elsewhere, but only so much of the capital as is employed within the state imposing the tax. The present method of taxing foreign corporations was designed to comply with this constitutional limitation. The definition of "corpor- ate excess employed within the commonwealth" is found in the fourth clause of section thirty. Permanent investments are not deemed to be assets employed in business unless the corporation which owns them is incor- porated for the express purpose of making investments or unless such investments are employed in the ordinary course of bus- iness. Tangible property employed in business is deemed to be employed at the place where it is physically present and in use or kept. Merchandise in transit will be deemed to be employed at the factory or storehouse from which it was shipped. In the case of intangible property employed in the business, the same proportion of the property will be deemed to be employed in Massachusetts as the proportion of the remainder of the income allocated to Massachusetts under section forty-one; although if this method of apportionment does not fairly reflect the true proportion, another method will be employed by the commis- sioner, either at his own motion or upon the request of the cor- poration. In determining the non-taxable securities "held in the com- monwealth" which are subjects of deduction, only those cus- tomarily and usually kept in Massachusetts will be considered. Allocation of Income Section 41. The commissioner shall determine in the manner provided in this section the part of the net income of a foreign cor- 566 Taxation in Massachusetts [G.L.c. 63, §§41, 42 poration derived from business carried on within the common- wealth. The following classes of income shall be allocated as follows : (a) Gains realized from the sale of capital assets, if such assets consist of real estate or tangible personal property situated in the commonwealth, shall be allocated to this commonwealth. (b) Interest received from any corporation organized under the laws of the commonwealth Or from any association, partnership or trust having transferable shares and having its principal place of business in the commonwealth, or from any inhabitant of the com- monwealth, except interest received on deposits in trust companies or in national banks doing business in the commonwealth, shall be allo- cated to this commonwealth. (c) Gains realized from the sale of capital assets other than those named in paragraph (a) above shall not be allocated in any part to this commonwealth. Income of the foregoing classes having thus been allocated, the remainder of the net income as defined in section thirty shall be allo- cated as follows: If a foreign business corporation carries on no business outside this commonwealth, the whole of said remainder shall be allocated to this commonwealth. If a foreign business corporation carries on any business outside this commonwealth, the net income taxable under this chapter shall be determined as provided in section thirty-eight. Section 42. A foreign corporation carrying on part of its busi- ness outside the commonwealth may, in lieu of the allocating method required by the preceding section for determining the amount of business assignable to this commonwealth, refuse to accept such de- termination by notification thereof to the commissioner on or before the time when its income tax return under this chapter is due to be filed. Such a foreign corporation shall, within thirty days thereafter, file with the commissioner, under oath of its treasurer, a statement in such detail as the commissioner shall require, showing the amount of its annual net income derived from business carried on within the com- monwealth. The commissioner may require such further information with reference thereto as he may deem necessary for the assessment of the tax, and shall determine the proportion of the net income re- ceived from business carried on within the commonwealth. Taxation op Corporations 567 G. L. c. 63, §§ 42, 43] The net income upon which a foreign corporation is taxable is the income upon which it is taxable under the federal law, deducting interest received from bonds, notes and certificates of indebtedness of the United States which are taxed by the United States but which the state has no power to tax. In this respect there is no difference between a domestic and a foreign corporation. But a domestic corporation, being in effect an inhabitant of the commonwealth, is also taxable on interest and dividends which would be taxable if received by an indi- vidual resident of the commonwealth but which are not taxable by the United States. A foreign corporation, on the other hand, not being an inhabitant of the commonwealth, is not taxable on this class of income. In the allocation of income, with respect to gains from sales of capital assets, as the foreign corporation is not an inhabitant of the commonwealth, it is not taxable on gains from the sale of intangible assets; the taxability of gains from the sale of tangible assets depends upon the location of the assets. With respect to income consisting of interest received by a foreign corporation, the whole of such interest received from inhabitants of the commonwealth or from Massachusetts corporations and unincorporated associations (except interest from deposits in national banks and trust companies) is allocated to Massachu- setts. The remainder of the taxable net income is allocated in precisely the same manner as in the case of domestic corpora- tions, except that in section forty-two provision is made for allo- cation by some other method at the request of the corporation, based on income actually received from business carried on in this commonwealth. Credit for Dividends Taxed to the Stockholders Section 43. After determining the amount of tax due from any foreign corporation under paragraph (2) of section thirty -nine, the commissioner shall then credit the corporation with a sum equal to five per cent of the dividends paid by it, during the previous calendar year, to inhabitants of this commonwealth, and the amount then re- maining due shall be the amount of tax to be levied upon the cor- poration under said paragraph ; provided, that if more than one half of the capital stock of any such corporation is owned by another 568 Taxation in Massachusetts [G. L. c. 63, § 43 foreign corporation not subject to taxation under sections thirty to fifty-one, inclusive, but has stockholders who are inhabitants of this commonwealth and are subject to taxation upon their income under section one of chapter sixty-two, such corporation, upon filing with the commissioner such information as he shall deem necessary for the purpose, shall be credited with a sum equal to five per cent of such a proportion of its total dividends as will prevent double taxation of the income of the corporation and of the dividends of such other for- eign corporation actually taxed to inhabitants of this commonwealth. Dividends from stock in domestic corporations are not taxed in this commonwealth; whereas dividends from stock in foreign corporations are subject to the income tax when received by in- habitants of this commonwealth. If a foreign corporation is taxed on its income and the same income is taxed in the hands of the individual stockholders the same income would be taxed twice ; and while double taxation of this character is not uncon- stitutional, it is not considered equitable, and the legislature has attempted to avoid it by allowing a deduction from the tax on foreign corporations on account of dividends paid by them to residents of this commonwealth. This deduction however does not fully cover the tax paid by such residents, since it amounts to but five per cent of such dividends, and as the rate of the income tax on dividends of foreign corporations is six per cent, one per cent of the amount of such dividends is taxed twice. The deduction extends to dividends paid to a foreign busi- ness corporation not subject to taxation under this chapter but which owns more than one half of the stock of a foreign business corporation which is taxable. A corporation is entitled to a credit for the stockholders of the corporation so holding its stock who are residents of this commonwealth, provided it files with the commissioner a statement of the number of its shares owned by such other corporation, the names and addresses of the inhabitants of Massachusetts to whom such other corpora- tion has paid dividends, the amounts so paid and actually taxed, the respective earnings of both corporations and such other in- formation as may be required to determine the amount of the credit. Taxation of Corporations 569 G. L. c. 63, § 44] ASSESSMENT AND COLLECTION OF EXCISE ON BUSINESS CORPORATIONS Assessment of Excise Tax Section 44. The commissioner shall determine, from the returns required by this chapter and from any other available information, the net income derived from business carried on within the common- wealth and the corporate excess of every domestic business corpora- tion, and the net income derived from business carried on within the commonwealth of, and the corporate excess employed within the commonwealth by, every foreign corporation, and shall assess thereon the tax provided for in this chapter. Except as otherwise provided in this chapter, the part of said tax which is based upon the value of the corporate excess, or corporate excess employed within the com- monwealth, shall be assessed and collected in the same manner and with the same powers as provided in this chapter for the taxation of cor- porate franchises, and shall be subject to the other administrative provisions thereof. He shall not determine the income of any such corporation, which has filed a return within the time prescribed by law, to be in excess of the income shown by such return, without notifying the corporation and giving it an opportunity to explain the apparent incorrectness of the return. For the purpose of verifying any such return, the commissioner may, within two years after Sep- tember first of the year in which such return was due, examine personally or by deputy or agent the books and papers of the corpora- tion, which shall be open to such officer for verification. This section, at least so far as it relates to the taxation of the corporate excess of business corporations, follows in general the provisions of the earlier law. It is to be noted that the com- missioner, with respect to the tax on the corporate excess of a corporation which has filed a return, is not bound by the return as the assessors of a city or town are bound in the case of the local property tax, 1 but may determine the value of the corporate excess from the return or from any other information available, and may disregard the return without notifying the corporation of his intent so to act. He may exercise this power without examining the returns personally, and may make his determina- tion of value through his deputies and assistants. 2 With respect ^Id Colony Trust Co. v. Commonwealth, 220 Mass. 409 (1915). 2 Commonwealth v. New England Slate & Tile Co., 13 Allen 391 (1866). 570 Taxation in Massachusetts [G. L. c. 63, § 44 to the tax on corporate income, if a corporation has filed a re- turn of its income the commissioner is not permitted to disregard the return unless he notifies the corporation and gives it an opportunity to explain the apparent incorrectness of the return. This provision is borrowed from the statute imposing the tax on personal incomes. 3 With regard to the verification of returns, the law does not respect the privacy of corporations as it does that of individual taxpayers, and the commissioner may either personally or by agent examine the books of a corporation which has filed a re- turn, although he has no evidence in his possession which jusi- fies him in believing the return to be fraudulent or incorrect.* The right of the commissioner to inspect the books of a corpora- tion liable to taxation was established under the original cor- porate franchise act 5 and has continued in force continuously since that time. The visitorial powers of the state over corpora- tions can be invoked to justify an examination of the books and papers of a corporation which in the case of an individual taxpayer would constitute a violation of his constitutional rights. 6 The provision of section forty-four incorporating by refer- ence in the case of the part of the tax based on corporate excess the methods of assessment and collection and the administra- tive provisions applicable to the tax on corporate franchises of public service corporations and trust companies is of limited importance since the act of 1919 has become a part of the chap- ter on the taxation of corporations. The administrative provi- sions contained in sections sixty-eight to eighty inclusive are in terms applicable to all corporations taxed under the chapter, except when the contrary expressly appears, so that as to those sections this provision is not necessary. It would seem that the provisions contained in the last paragraph of section fifty-five, and in sections fifty-seven and fifty-nine, aimed at making the excise tax and the local tax on real estate complementary, are the only portions of the chapter which are incorporated into the business corporation tax by this provision. 3 G. L. c. 62, §35, supra, page 491. * Compare G. L. c. 62, §30, supra, page 486., •St. 1864, c. 208, §16. 1 See G. L. c. 63, §69, infra, page 591 for a discussion of the limits upon the right to inspect the books of a corporation. Taxation of Corporations 571 G. L. c. 63, §§ 45, 46] Assessment of Additional Tax Section 45. If the commissioner discovers from the verification of a return, or otherwise, that the full amount of any tax due under sections thirty to fifty-one, inclusive, has not been assessed, he may, at any time within two years after September first of the year in which such assessment should have been made, assess the same, first giving notice to the corporation to be assessed of his intention ; and a representative of the corporation shall thereupon have an opportunity, within ten days after such notification, to confer with the commis- sioner as to the proposed assessment. After the expiration of ten days from the notification the commissioner shall assess the amount of the tax remaining due to the commonwealth, and shall give notice to the corporation so assessed. Any tax so assessed shall be payable to the state treasurer fourteen days after the date of the notice, and sections fifty-one and fifty-two shall apply to a tax so assessed. The earlier statutes gave, in terms at least, no power to the commissioner to assess an additional tax upon a corporation which had filed a return and been assessed thereon, even if it ap- peared from subsequent investigation that the tax was insuffi- cient, except in case the valuation of the local assessors of the real estate and machinery of a corporation was reduced upon its application for abatement and the deduction which the cor- poration had previously received in determining its corporate excess was thus rendered too large. 1 Double Assessment on Refusal to File Proper Return Section 46. If no return, or an incorrect or insufficient return, has been filed, and the corporation so in default refuses or neglects after notice to file a proper return, or if a fraudulent return has been filed, the commissioner shall determine the income of the corpora- tion according to his best information and belief, and shall assess the same at double the amount so determined, which additional tax shall be in addition to the other penalties provided for by this chapter. This provision was not found in the earlier statutes for the taxation of corporations, but was copied from the similar pro- 1 St. 1904, c. 442, §2, now G. L. c. 63, §59, infra, page 583. 572 Taxation in Massachusetts [G. L. c. 63, §§ 46-48 vision in the law for the taxation of personal income, 1 which was in turn a development of the "fifty per cent penalty" so long in force in connection with the local property tax. 2 Rules and Regulations Section 47. The commissioner shall make from time to time such reasonable rules and regulations, consistent with sections thirty to fifty-one, inclusive, as he may deem necessary for carrying out their provisions. In accordance with the provisions of this section the com- missioner has issued a set of rules and regulations, known as Bulletin No. 355, and a supplement thereto containing a re- vision of the original rules. These bulletins contain not only administrative regulations but also the department's construc- tion of certain sections of the statute, and are extremely use- ful; but taxpayers should remember that while the administra- tive regulations, when reasonable and not inconsistent with the statute, have the force of law, the rulings of the department with respect to the construction of the statute merely indicate the attitude the department has taken and are in no sense con- trolling if the matter is brought before the court. ' Collection Section 48. Except as provided by section forty-five, the com- missioner shall annually, as soon as may be after the first Monday of August, give notice to the treasurer of each corporation of the amount of any tax levied upon it under sections thirty to fifty-one, inclusive, of the date upon which such amount is payable and of the time within which the corporation may apply for a correction of the tax ; but failure to receive said notice shall not affect the validity of the tax. Such taxes shall be payable to the state treasurer within thirty days after the date of said notice, but not before October twentieth. In the collection of all taxes under said sections thirty to fifty-one, inclusive, the state treasurer shall have all the remedies provided by this chapter for the collection of other taxes upon cor- porations. The notice of the tax referred to in the foregoing section is 1 G. L. c. 62, §36, supra, page 491. 2 G. L. c. 59, §61, supra, page 287. Taxation of Corporations 573 G. L. c. 63, §§ 48-52 inc.] what is ordinarily known as the tax bill. The means of collec- tion are discussed in connection with sections seventy-two to seventy-six, inclusive. Penalties Section 49. If a corporation fails to file the returns required by sections thirty-five, thirty-six and forty when they are due, there shall be added to and become a part of the tax, as an additional tax, the sum of five dollars for every day during which the corporation is in default; but the commissioner may abate any such additional tax in whole or in part. Section 50. If any return required by section thirty-five, thirty- six or forty contains a false statement which is known or, by the exercise of reasonable care might have been known to the officer mak- ing it to be false, such officer and the corporation shall be liable for the amount of tax thereby lost to the commonwealth, and in addition to a penalty of not less than five hundred nor more than five thousand dollars. Application for Abatement Section 51. Application for the abatement or correction of any tax assessed under sections thirty to fifty, inclusive, may be made within thirty days after the date upon which the notice of assessment is sent, and from the decision of the commissioner thereon any cor- poration may appeal in the manner provided by section seventy-one. The remedies of a corporation for excessive or illegal taxes are discussed in connection with sections seventy-seven and seventy-eight. Effect of Unconstitutionality Section 52. If the excise imposed by section thirty-two on domestic business corporations, or that imposed by section thirty- nine on foreign corporations, is declared unconstitutional by a final judgment, order or decree of the United States supreme court or the supreme judicial court of the commonwealth, sections thirty to fifty- one, inclusive, shall be null and void, and all laws repealed or made inoperative by chapter three hundred and fifty-five of the General Acts of nineteen hundred and nineteen shall thereupon be revived and continue in full force and effect as if the said chapter had not been en- 574 Taxation in Massachusetts [G. L. c. 63, §§ 52, 53 acted. In such case the commissioner and local assessors shall forth- with assess all taxes that have become due under such prior laws, and the time for making any assessment or performing any other duty imposed or privilege granted by such laws shall be extended for a period of six months after the date when they are thus determined to be in force, and the time within which corporations may apply by petition to the supreme judicial court under section seventy-seven for the abatement of the excise imposed by section thirty-two, or of that imposed by section thirty-nine, shall be extended for the same period. If any part, section or subdivision of said sections thirty to fifty-one, inclusive, other than the provisions in sections thirty-two and thirty-nine imposing an excise, shall be declared unconstitutional, the validity of the remaining parts of said sections thirty to fifty-one, inclusive, shall not be affected thereby. When the business corporation tax law of 1919 was enacted, although great care was used not to exceed the constitutional lim- itations upon legislative power, it was feared that the tax im- posed by the act might on some ground be held unconstitu- tional either by the state or the federal courts, and to avoid the loss of revenue which might result it was expressly provided that in such event the earlier provisions of law for the taxation of domestic and foreign business corporations, both by the state and by the local assessors, which had been repealed by the new law, should at once revive. It does not however now seem prob- able that it will be necessary to invoke this provision of the law. TAXATION OF PUBLIC SERVICE CORPORATIONS AND TRUST COMPANIES Returns Section 53. Every corporation organized under general or special laws of the commonwealth for purposes of business or profit, having a capital stock divided into shares, except banks whose shares are otherwise taxable under this chapter, except insurance com- panies with capital stock and mutual insurance companies with a guaranty capital or permanent fund whose premiums are otherwise taxable under this chapter, and except corporations taxable under sections thirty to fifty-one, inclusive, in addition to all returns re- quired by its charter, and in addition to all returns otherwise required Taxation of Corporations 575 G. L. c. 63, §§ 53, 54] under this chapter, shall annually, between April first and tenth, make a return to the commissioner, on oath of its treasurer, stating the name and place of business of the corporation, and setting forth as of April first of the year in which the return is made : First. The total authorized amount of its capital stock; the amount issued and outstanding and the amount then paid thereon; the classes, if any, into which it is divided ; the par value and number of its shares ; the market value of the shares of each class of its stock outstanding. Second. A statement in such detail as the commissioner may re- quire of the assets, both within and without the commonwealth, be- longing to the corporation, with the value thereof, and of the liabili- ties of the corporation. Third. A statement, in a form prescribed by the commissioner, of the profit or loss resulting from the business of the corporation for the twelve months ending with December thirty-first preceding the year in which the return is made. Fourth. A complete list of the shareholders of the corporation, their residences, the amount and class of stock, if more than one, be- longing to each. If stock is held as collateral security, the list shall state the name and residence of the pledgor and of the pledgee. In lieu of such list a railroad, street railway, electric railroad, gas, electric, water, telephone or telegraph corporation may file a statement of the number of its shares held by non-residents. So much of said return as relates to the profit or loss which has resulted from the business of the corporation shall be open only to the inspection of the commissioner, his deputies, clerks and assistants, and such other officers of the commonwealth as may have occasion to inspect it for the purpose of assessing or collecting taxes. Section 54. In addition to the facts required by the preceding section, the following classes of corporations shall give in their returns the following information : Railroad, telegraph, street railway and electric railroad corpora- tions shall state the whole length of their lines and the length of their lines without the commonwealth. Electric railroad corporations shall also state the length of their lines constructed on private land. Street railway and electric railroad corporations shall also state the length of track operated by them in each town on March thirty- first preceding the return, to be determined by measuring as single 576 Taxation in Massachusetts [G. L. c. 63, § 54 track the total length of all tracks operated by them, including sidings and turnouts, and including tracks owned by them, those which they lease and those over which they have trackage rights only, and the amount of dividends paid on their capital stock during the year end- ing on September thirtieth preceding the return, and during each year from the organization of the company. Telephone companies incorporated under the general or special laws of the commonwealth, and manufacturing, owning, using, selling or licensing others to use telephones or other apparatus or appliances pertaining thereto wholly or partly within the commonwealth, and all such companies organized without the commonwealth for the pur- pose of establishing, owning or licensing others to use such telephones, apparatus or appliances, but having in use within it any of their lines or telephones, shall state, in such form as the commissioner may re- quire, the facts necessary to ascertain the deductions authorized by the following section. If the return of a domestic telephone company sets forth the amount and market value of any stocks in other cor- porations held by the company making the return upon which a tax has been assessed and actually paid either in this or in any other state for the year preceding the date of said return, the commissioner shall examine the books, accounts and papers of such other corpora- tions so far as may be necessary for the verification of said return. Railroad, street railway and electric railroad corporations or com- panies organized elsewhere than in the commonwealth, but having lines therein, shall likewise make the returns required by this section. Every corporation or association chartered or organized without the commonwealth which owns, controls or uses a line of telegraph within the commonwealth, shall make the returns required in this and the preceding section to be made by telegraph companies within the commonwealth, except the list of shareholders, or statement in lieu thereof required by the preceding section ; and all telegraph lines within the commonwealth controlled and used by such cor- poration or association, shall, for the purposes of this chapter, be deemed to be a part of its own lines. Sections fifty-three to sixty inclusive contain the provisions now in force which impose a tax on corporate franchises based wholly upon the aggregate value of the capital stock less such deductions as are authorized by law, and, in general, continue Taxation of Corporations 577 G. L. c. 63, § 54] in force the provisions for the taxation of corporations which were in effect prior to the enactment of the law for the taxation of business corporations in 1919. As national banks, savings banks (including the savings departments of trust companies), co-operative banks and insurance companies were already taxa- ble under other provisions of law, and the 1919 act withdrew from the scope of the old corporate franchise tax domestic business corporations, although sections fifty-three to sixty inclusive in terms impose a tax upon all domestic corporations organized for profit having a capital stock divided into shares (as dis- tinguished from municipal corporations and educational or char- itable institutions and fraternal or social organizations) subject to certain specified exceptions, the corporations which come within the exceptions are more numerous than those which do not, and the only corporations which remain subject to the old form of corporate franchise tax are public service corporations, trust companies and possibly a few corporations organized by special law before March 11, 1831. 1 It is to be noted that the statute applies to foreign railroad, street railway, electric railroad, telegraph and telephone com- panies which operate lines within this commonwealth, and it was as a result of the payment of the franchise tax by this class of corporations that the shares of the corporations were exempt from taxation in the hands of the stockholders before the enact- ment of the income tax law, and that dividends paid by such cor- porations are not subject to the income tax under the present law. 2 Returns filed under this section are, unlike the returns filed by business corporations, privileged against public disclosure of the amount of profit and loss. 3 1 The corporations actually taxed under the provisions of sections fifty-three to sixty, inc., appear to consist of trust companies, safe deposit companies, gas and electric light companies, street railway companies, railroad companies, tele- phone and telegraph companies, power companies, crematory companies, water companies, aqueduct companies, bridge companies and canal companies. Electric railroad and trolley motor companies and any other corporations having the right to take land within the commonwealth by eminent domain or to exercise franchises in public ways granted by the commonwealth or by any county, city or town are also subject to taxation under these sections. • 2 G. L. c. 62, §1 (b). The only foreign corporations subject to the tax at the present time are the American Tel. & Tel. Co., the New England Tel. & Tel. Co. and the Western Union Tel. Co. 3 See G. L. c. 63, §35, supra, page 551. 578 Taxation in Massachusetts [G. L. c. 63, § 55 Valuation and Deductions Section 55. The commissioner shall ascertain from the returns or otherwise the true market value of the shares of each corporation required to make a return under section fifty-three or fifty-four, and shall estimate therefrom the fair cash value of all the shares con- struing its capital stock on April first preceding, which, unless by the charter of a corporation a different method of ascertaining such value is provided, shall, for the purposes of this chapter, be taken as the true value of its corporate franchise. From such value there shall be made the following deductions : First. In case of a railroad, telegraph, street railway or electric railroad corporation or company, whether chartered or organized in this commonwealth or elsewhere, so much of the value of its capital stock as is proportional to the length of that part of its line, if any, lying without the commonwealth ; and also the value of its works, structures, real estate, machinery, poles, underground conduits, wires and pipes, subject to local taxation within the commonwealth. Second. In case of a domestic telephone company, the amount and market value of all stock in other corporations held by it upon which a tax has been paid in this or other states for the twelve months last preceding the date of the return. Third. In case of a domestic or foreign telephone company, so much of the value of its capital stock as is proportional to the number of telephones used or controlled by it, or under any letters patent owned or controlled by it, without the commonwealth. , Fourth. In case of a domestic or foreign telephone company, the value of its works, structures, real estate, machinery, poles, under- ground conduits, wires and. pipes, subject to local taxation within the commonwealth. Fifth. In case of corporations subject to section fifty-three or fifty-four, other than railroad, telegraph, telephone, street railway and electric railroad corporations or companies, the value as found by the commissioner of their works, structures, real estate, machinery, poles, underground conduits, wires and pipes, subject to local taxation wherever situated. For the purposes of this section the commissioner may take the value at which any works, structures, real estate, machinery, poles, underground conduits, wires and pipes are assessed at the place where Taxation op Corporations 579 G. L. c. 63, §§ 55, 56] they are located as the true value, but such local assessment shall not be conclusive of the true value thereof. The principles applicable to the valuation of the shares of a corporation are discussed at length in connection with statutes providing for the valuation of the shares of domestic business corporations. 1 The decisions interpreting the statutory provi- sions as to deductions are also discussed in the same connection. 2 It is to be noted that public service companies whose lines extend into other states are taxed on the "unit system," 3 the share of Massachusetts being apportioned according to mileage within and without the commonwealth in the case of railroad, telegraph, street railway or electric railroad companies, and ac- cording to the number of telephones within and without the commonwealth in the case of telephone companies. It has been held by the supreme court of the United States that the method of taxation prescribed by this section when applied to a corpora- tion engaged in interstate commerce is not open to constitu- tional objections either as an interference with interstate com- merce or as an attempt to tax property outside the common- wealth. 4 The commissioner may adopt the valuation of the local assessors of the real estate and other structures locally taxed in determining the value of such property for purposes of deduc- tion, but is not bound to do so. The procedure in case of con- flicting valuations is discussed elsewhere. 5 Deduction of Mortgages Held by Trust Companies Section 56. In determining under the preceding section the value of the corporate franchise of a trust company, that part of its real estate represented by its interest as mortgagee in taxable real estate within the commonwealth shall, for purposes of deduction under clause fifth of said section, be regarded as the average amount of value of such part of its real estate for the year for which the tax on the corporate franchise is levied, such average amount of value to be 1 G. L. c. 63, §30, cl. 3, Valuation of Shares, supra, page 536. 2 G. L. c. 63, §30, cl. 3, Deductions, supra, page 538. 3 Supra, Part I, §42. 'Western Union Tel. Co. v. Massachusetts, 125 U. S. 530 (1887); Massa- chusetts v. Western Union Tel. Co., 141 U. S. 40 (1890). 5 See G. L. c. 63, §§57, 59, infra, pages 580, 583. 580 Taxation in Massachusetts [G. L. c. 63, §§ 56, 57 determined monthly in such manner as the commissioner shall deem just. This statute was enacted in 1918, to take effect after the conclusion of the war. The only provisions now in force specifi- cally applicable to trust companies in the chapter relating to the taxation of corporations besides the one now under discus- sion are the statutes relating to the taxation of their savings de- partments and the minimum tax established by section fifty- eight. It was provided in the Public Statutes that domestic trust companies and similar institutions should be subject to the provisions of the chapter relating to the taxation of corpora- tions so far as the same were applicable thereto; and that they should be taxed upon property held in trust by them or deposited with them according to the terms of their respective charters. In 1888 provision was made for the incorporation of trust com- panies by general law. Companies so incorporated were to be subject to the general corporate franchise tax on their capital stock. Deposits which might be withdrawn on demand or on ten days' notice were to be taxed to the depositors. Other de- posits were to be taxed to the company at three-fourths the rate of the franchise lax, and property held in trust which would be taxable if held by an individual trustee resident within the commonwealth was to be taxed at the full rate of the corporate franchise tax. The provision as to the taxation of demand de- posits was retained until the enactment of the income tax act in 1916; that as to the taxation of other deposits was dropped in 1908. The tax on property held in trust was reduced in 1909 to the rate upon which savings banks are taxed, but restored to the rate of the corporate franchise tax in the following year. Upon the enactment of the income tax act, property held in trust by corporations was made taxable on its income in the same manner as property held by individual trustees. Conflict between Valuations of Commissioner and Assessors Section 57. If the value of the works, structures, real estate, machinery, poles, underground conduits, wires and pipes of a cor- poration subject to local taxation within the commonwealth, as de- termined by the commissioner, is less than the value thereof as de- Taxation of Corporations 581 G. L. c. 63, § 57] termined by the assessors of the town where it is situated, he shall give notice of his determination to such corporation ; and, unless within one month after the date of such notice it applies to said assessors for an abatement, and, upon their refusal to grant an abatement, prosecutes an appeal under section sixty-four of chapter fifty-nine, giving notice thereof to the commissioner, the valuation of the commissioner shall be conclusive upon said corporation. Entirely apart from the foregoing provision, a corporation, in contesting municipal taxation, has all the remedies of a natural person. It may apply for abatement if the tax is ex- cessive 1 or sue at common law to recover it back if it is wholly void. 2 The foregoing section, taken in connection with section fifty-nine, is required to complete the symmetry of the system of taxing corporations. The object of the legislature in requiring deductions from the aggregate value of the shares in ascertaining the amount of the excise tax was to prevent double taxation in fact if not in form and to insure that property of a corporation which under the laws was subject to local taxation should not be included in the valuation upon which the excise on the fran- chise is based. 3 Although the commissioner in making his deductions may accept the valuation of the local assessors upon the property of a corporation locally taxable he is not bound to do so. If he makes a lower valuation than the assessors he is required to notify the corporation, and unless it applies for an abatement it will be subject to double taxation. In such a case, when the application for abatement is heard, the corporation may have but little interest in the outcome, for whatever abatement of the property tax it may secure is added to the excise tax and if it secures no abatement of the property tax the excise tax will be proportionally smaller. The commonwealth and the city or town in which the property is situated are the real parties in interest and the main object of the hearing is to determine what valuation shall be binding upon each of them, thus affecting •See for example Tremont & Suffolk Mills v. Lowell, 178 Mass. 469 (1901) ; Milford Water Co. v. Hopkinton, 192 Mass. 491 (1906). 2 See for example Boston Manufacturing Co. v. Newton, 22 Pick. 22 (1839) ; Boston & Sandwich Glass Co. v. Boston, 4 Met. 181 (1842) ; Boston Water Power Co. v. Boston, 9 Met. 199 (1845) ; Masonic Educational, etc., Trust v. Boston, 201 Mass. 320 (1909). 8 Firemen's Fire Insurance Co. v. Commonwealth, 137 Mass. 80 (1884). 582 Taxation in Massachusetts [G. L. c. 63, §§ 57, 58 the amount of the excise or tax which each is respectively en- titled to assess or collect. 4 It has accordingly been held that the right of a corporation under such circumstances to abate- ment on appeal is not lost by its own previous failure to file a sworn list of its estate. 5 Although the statute refers to the section applicable to ap- peals to the county commissioners only, a corporation notified under this section which has filed no list may employ the concur- rent remedy of an appeal to the superior court. 6 It is to be noted that these provisions are not applicable to the valuation of the machinery and other structures of tele-, phone and telegraph companies, as such structures are valued by the commissioner himself and certified by him to the asses- sors. 7 Rate of Taxation Section 58. Every corporation subject to section fifty-three or fifty-four shall annually pay a tax upon its corporate franchise, after making the deductions provided for in section fifty-five, at a rate equal to the average of the annual rates for three years preceding that in which such assessment is laid, the annual rate to be determined by an apportionment of the whole amount of money to be raised by taxa- tion upon property in the commonwealth during the same year, as returned by the assessors of the several towns under section forty- seven of chapter fifty -nine, upon the aggregate valuation of all towns for the preceding year, as returned under sections forty-seven and forty-nine of chapter fifty-nine ; but the total amount of the tax to be paid by a trust company in any year upon the value of its corporate franchise shall amount to not less than two-fifths of one per cent of the total amount of its capital stock, surplus and undivided profits at the time of said assessment, as found by the commissioner. The development of the statutes by which the rate of taxa- tion upon corporate franchises was established is discussed in 4 Lowell v. Middlesex County Commissioners, 146 Mass. 403, 409 (1888). Although it is nowhere expressly provided in the statutes that if a corporation prosecutes its appeal unsuccessfully the result is conclusive against the commis- sioner and he must grant an abatement, the plain implication of the statute justifies the assumption that this is the law. 6 Lowell v. Middlesex County Commissioners, 146 Mass. 403, 409 (1888); Essex Co. v. Lawrence, 214 Mass. 79, 87 (1913). 6 Essex Co. v. Lawrence, 214 Mass. 79, 87 (1913). » See G. L. c. 59, §§39, 40, 41, 42 and 73, Supra, pages 240, 303. Taxation of Corporations 583 G. L. c. 63, §§ 58-60] connection with section thirty-two. It is to be noted that the maximum and minimum limitation established in 1903 was ap- plicable only to business corporations and so was never in force in respect to the corporations now subject to the tax imposed by this section. Additional Excise upon Abatement of Local Tax Section 59. When the commissioner has received notice of an abatement of the taxes of any corporation under section seventy-four of chapter fifty-nine, he shall assess upon such corporation an ad- ditional tax upon its corporate franchise value, in such amount as shall make the total franchise tax equal that which would have been assessed had the valuation as established by said abatement been adopted by the commissioner when making his original assessment upon the corporate franchise value of such corporation, which addi- tional tax shall be paid and collected as an addition to the franchise tax next to be assessed upon said corporation after such abatement; but such additional tax, when collected, shall be distributed as if it were part of the original tax. It was originally held that the property tax and the excise were not necessarily complementary and that a corporation was not deprived of its right to an abatement of its property tax by the fact that the commissioner had accepted the assessors' valu- ation of the property in fixing the amount of the excise and that the excise had been paid; 1 subsequently however the statute recited above was enacted, giving the commissioner the right to assess an additional excise equal to the amount of such abate- ment. Whenever any abatement of the local property tax is finally made to any corporation taxable under chapter sixty-three, the assessors, county commissioners or court, as the case may be, which makes the abatement is required by law to forthwith no- tify the commissioner of corporations and taxation, so that he may be in position to assess the additional excise accordingly. 2 Notice of Tax and Application for Correction Section 60. The commissioner shall annually, as soon as may be after the first Monday of August, give notice to the treasurer of every Fremont & Suffolk Mills v. Lowell, 178 Mass. 469 (1901). 2 G. L. c. 59, §74, supra, page 303. 584 Taxation in Massachusetts [G. L. c. 63, §§ 60, 61 corporation, company or association liable to any tax under section fifty-eight, of the amount thereof, the time when due, the right to apply for correction, and the right of appeal, all as herein provided. Said tax shall be due and payable to the state treasurer within thirty days after the date of such notice, but not before October twentieth. The taxpayer may apply to the commissioner, within thirty days after the date of the notice, for correction of the tax, and if he so applies, may, in default of settlement, be heard on such application by the board of appeal. The notice referred to in this section is of course what is ordinarily known as the tax bill. Prior to 1919 there was no provision of statute for the correction of the tax by the commis- sioner himself, and the only remedy of a taxpayer aggrieved by the valuation was to apply to the board of appeal, although, in practice, an informal application to the commsisioner often resulted in the correction of a tax. 1 In 1919 provision was made for application to the commissioner as a step preliminary to the filing of an application with the board of appeal. The procedure in case of appeal to the board of appeal is regulated by section seventy-one. Commutation Tax on Street Railways Section 61. A street railway or electric railroad company, in- cluding a company whose lines are located partly within and partly without the commonwealth, whether chartered or organized under the laws of the commonwealth or elsewhere, shall annually, on or before October fifteenth, make and file in the office of the assessors of every town where any part of the railway or railroad operated by it is situated a return signed and sworn to by its president and treasurer, stating, as of September thirtieth preceding the return, if a street railway company, the length of track operated by it in public ways and places in such town, and also the total length of track operated by it in public ways and places, and if an electric railroad company stating the length of track operated by it longitudinally upon public ways and places in such town, and also the total length of track 1 It has been held that if after a corporation has been duly notified of the tax assessed upon it the tax is reduced and no further notice given to the cor- poration the tax is not invalidated, for the reduction may be presumed to have been made with the assent of the corporation. Commonwealth v. New England Slate & Tile Co., 13 Allen 391 (1866). Taxation of Corporations 585 G. L. c. 63, §§ 61-63] operated by it, such total length of track in the case of each kind of company being determined as provided in section fifty-four. Such return shall also state the amount of the gross receipts of the company during the year ending on September thirtieth preceding, including therein all amounts received by it from the operation of its railway or railroad, but excluding income derived from the sale of power, rental of tracks or other sources. Section 62. Annually on or before November first, the assessors of every town where a street railway or an electric railroad is opera- ted, including a company whose lines are located partly within and partly without the commonwealth, whether chartered or organized under the laws of the commonwealth or elsewhere, shall assess on each company described in the preceding section operating a railway or railroad therein an excise of an amount equal to such proportion of the following percentages of the gross receipts of such company as, in the case of a street railway company, the length of tracks operated by it in public ways and places of such town bears to the total length of tracks operated by it in public ways and places, and in the case of an electric railroad company as the length of tracks operated by it longitudinally in public ways and places of such town bears to the total length of tracks operated by it. The percentages shall be based upon the annual gross receipts for each mile of track as follows, and computed upon the aggregate of said annual gross receipts: four thousand dollars or less, one per cent; more than four thousand dollars and less than seven thousand, two per cent ; more than seven thousand dollars and less than fourteen thousand, two and one quarter per cent ; more than fourteen thousand dollars and less than twenty-one thousand, two and one half per cent ; more than twenty-one thousand dollars and less than twenty- eight thousand, two and three-quarters per cent; twenty-eight thou- sand dollars or more, three per cent. The excise provided by this section shall be in addition to all other taxes. Section 63. Aldermen, selectmen, or a street railway or an elec- tric railroad company operating in their town, may petition the department of public utilities for a revision of the amount of the excise to be paid by a company under the preceding section. Said department shall, upon such petition, after public notice and a hear- ing at which said aldermen or selectmen and said company may sub- mit evidence, determine the average annual cost to said town of the 586 Taxation in Massachusetts [G. L. c. 63, §§ 63-66 inc. work described in section sixty-six done by it during the preceding three years which it was not by law required to do prior to October first, eighteen hundred and ninety-eight, and also the average annual payment made by said company to said town under and pursuant to the preceding section during said three years; and having de- termined said average annual cost and average annual payments, said department shall fix the proportion of a percentage of the gross re- ceipts which shall be paid as an excise under said section by the company to said town annually thereafter, said percentage to be fixed at such a rate as will be necessary to yield to said town annually thereafter an amount equal to the average annual cost to said town determined as aforesaid ; and the percentage so fixed shall not again be changed for the period of three years, and then only in the man- ner herein provided. Section 64. The department of public utilities may at any time, upon petition therefor by a town entitled to a part of the excise paid by a street railway or an electric railroad company, after such notice as the department may order to all other towns entitled to share in the excise paid by said company, and after a hearing, determine as to the distribution thereof among the several towns where such com- pany operates any part of its railway or railroad, and fix the pro- portions thereof to which they shall respectively be entitled, which shall thereafter be the proportions of said excise to be assessed upon said company, instead of the proportion based upon length of tracks as provided in section sixty-two. Section 65. Prior to November fifteenth in each year the asses- sors of every town shall notify the collector of taxes thereof of the amount of excise assessed therein under section sixty-two, and the collector shall forthwith notify the treasurer of each street railway and electric railroad company of the amount of excise so assessed upon it, which shall become due and payable within thirty days after receipt of such notice. The provisions of chapter sixty, so far as appropriate, shall apply to the collection of such excise. Section 66. All taxes collected from a street railway or an elec- tric railroad company and paid to a town under the preceding sec- tion, section twenty-five of chapter fifty-eight or section twenty-eight of chapter five hundred and seventy-eight of the acts of eighteen hun- dred and ninety-eight, shall be applied in the case of street railway companies toward the repair and maintenance of the public ways and the removal of snow therefrom within such town, and in the case of Taxation of Corporations 587 G. L. c. 63, § 66] electric railroad companies shall be applied toward the construction, repair and maintenance of the public ways and places where the tracks of such company are located, and to the removal of snow from such public ways and places within such towns. Prior to 1898 there was no special provision for the taxation of street railway companies, and, when incorporated in this com- monwealth, they were taxed just as other domestic corporations, paying the local tax on their real estate and the excise on their capital stock. They were bound to keep in repair that portion of the street which lay within their tracks, 1 and in many in- stances were subject to various other burdens imposed as con- ditions of the grant of their locations. Some of these conditions were of doubtful validity, and in the rapid extension of street railway construction which took place in the final decade of the last century the whole subject of the relations between street railway companies and the municipalities in which their tracks lay became unsatisfactory and confused. The question whether street railways should make a direct payment for their use of the streets to the municipalities in which their tracks were located was brought to the attention of the legislature by Gov- ernor Wolcott in 1897. The result was the appointment of a commission to investigate the subject of the relationship of municipalities and street railway companies 2 and in the follow- ing year a complete revision was made of the system of taxing such companies and obtaining compensation for their use and disturbance of the streets. 3 In the first place, the regular corporate franchise tax upon the capital stock of such street railways as maintained lines both within and without the commonwealth was proportioned to the percentage of miles of line within the commonwealth to the entire mileage of the company and imposed regardless of the place of incorporation, 4 and instead of being distributed in accordance with the residence of the stockholders, it was dis- tributed in proportion to the mileage of track in the different cities and towns in which the railway was located. 5 »P. S. c. 113, §32. - St. 1897, c. 509. 8 St. 1898, c. 578. *St. 1898, c. 417, now G. L. c. 63, §55, supra, page 575. St. 1898, c. 578, §4, now G. L. c. 58, §22, supra, page 177. 588 Taxation in Massachusetts [G. L. c. 63, § 66 In the second place, an additional corporate franchise tax was imposed upon street railway companies the locations of which proved to be especially profitable. 6 This tax was based upon the amount of the annual dividends, was assessed by the commonwealth and distributed among the various towns in pro- portion to the mileage therein of the railway assessed. In the third place, the obligation to repair portions of the highway, whether imposed by statute or franchise, was com- muted to an annual money payment based upon the gross re- ceipts per mile of track, 7 assessed and collected by the cities and towns in which the tracks lay. 8 This change in the terms of a franchise could be effected, it was held, against the wishes of the municipalities concerned, without violating that clause of the constitution which prohibits the impairment of the obliga- tion of contracts. 9 These various taxes were cumulative. The money derived from the additional franchise and commutation taxes is required to be expended upon the maintenance of the streets in which the tracks are situated. 10 The commutation tax is not an excise upon the franchise of the street railway company as a corpora- tion, or upon its right to exist and do business, but is exacted for the privilege of operating the street railway upon public ways. The tax is payable as long as the railway is operated, even if the company is in the hands of a receiver. 11 In 1906 elaborate provisions were made for the regulation of electric railroads operating principally upon private rights of way. 12 They were made subject to the additional corporate franchise tax, and, so far as they maintained tracks in the public ways, to the commutation tax as well. It has been held that a •St. 1898, c. 578, §3, repealed by St. 1919, c. 349, §18. 7 In Greenfield & Turner's Falls Street Railway Co. v. Greenfield, 187 Mass. 352 (1905), it was held that in computing the annual gross receipts for each mile of track, the total gross receipts should be divided by the number of miles of all tracks operated by the company, whether on public highways or private land. In Natick & Cochituate Street Railway Co. v. Wellesley, 207 Mass. 514 (1911), it was held that the gross receipts of the year should be divided by the number of miles of track on the thirtieth day of September, regardless of any changes of mileage that have taken place during the year. e G. L. c. 63, §62. •Springfield v. Springfield St. Ry Co., 182 Mass. 41 (1902); Worcester v. Worcester St. Ry Co., 182 Mass. 49 (1902), affirmed, 196 U S. 539 (1905). 10 St. 1906, c. 463, Part III, §137, now G. L. c. 63, §66. "Collector of Lakeville v. Bay State St. Ry Co., 234 Mass. 336 (1920). 12 St. 1906, c. 516, now G. L. c. 162. Taxation op Corporations 589 G.L. c. 63, §§66, 67] corporation operating freight cars in the public streets by steam the charter of which imposed upon it all the duties provided by- general law for street railway companies is subject to the commu- tation tax. 13 In recent years the operation of street railways has tended to become unprofitable, and the assessment of these cumulative taxes contributed toward the abandonment of the weaker lines and the charging of increasing fares upon those which remained. In 1919 the dividend tax was repealed; 14 and the assessment of the commutation tax was suspended for the two following years. 15 In 1921 the suspension was extended for two years more; 16 and there is some question whether the tax will ever again be enforced. 17 MISCELLANEOUS PROVISIONS APPLICABLE TO ALL CORPORATIONS Excise on Corporations Interested in Ships and Vessels Section 67. The commissioner shall assess annually as of April first an excise tax upon the interest of every corporation organized under the laws of this commonwealth and having a place of business therein, in any ship or vessel which has, during the period of its busi- ness in the year preceding said April first, been engaged in interstate "MacDonald v. Union Freight R. R. Co., 190 Mass. 123 (1906). "St. 1919, c. 349, §18. "St. 1919, c. 370. " St. 1921, c. 406. 17 Special provision for the taxation of the Boston Elevated Railway Com- pany was made in 1897 (St. 1897 c. 500, §10) and the company was exempted from the operation of the general legislation of the following year. St. 1918, c 578, §28. The tax was hased on gross earnings, and the gross earnings, it was held, included only those accruing from all lines of railway operated by it as a common carrier, and did not include income derived from other corporate prop- erty. Boston Elevated Ry. Co. v. Commonwealth, 199 Mass. 96* (1908). The sec- tion of the statute excepting the Boston Elevated Railway Company from the general street railway law taken literally appeared to include all railways on streets upon which the Boston Elevated Railway Company had locations, but it was held not to include any railway companies other than the one named. Boston v. Union Freight Railroad Co., 181 Mass. 205 (1902). In 1917 the special tax upon the Boston Elevated Railway Company was abolished, and it was pro- vided that the company should be taxed as if it were a street railway company, and should in addition pay each year a sum equal to the excess of any dividends over six per cent paid by it during the year, Sp. Acts 1917, c. 373, IV. In 1918, when the company became subject to public operation, all of the special provisions in regard to the taxation of the company were repealed, but it was also provided that nothing in the fact of public operation should affect the liability of the company and its stockholders to taxation. Sp. Acts 1918, c. 159, §§2, 17. 590 Taxation in Massachusetts [G. L. c. 63, § 67 or foreign carrying trade, which tax shall be one-third of one per cent upon the value of such interest as determined by him. Such tax shall become due and shall be collected at the same time and in the same manner as other taxes assessed to such corporations. The presi- dent and treasurer of every such corporation owning an interest in any such ship or vessel shall annually, within thirty days after April first, make a return to the commissioner, on oath, setting forth in detail the name of the ship or vessel, the interest of the corporation therein, and the value of such interest. If the commissioner is satis- fied of the truth of the return he shall deduct said value from the fair cash value of the shares of the corporation as estimated by him for the purpose of determining the true value of its corporate excess, if it is taxable under sections thirty to thirty-eight, inclusive, or of its corporate franchise, if it is taxable under section fifty-eight. Ships and vessels have always been the subject of taxation in this commonwealth as personal property. 1 The fact that they are engaged in foreign or interstate commerce does not exempt them from taxation as property under state authority at the domicile of the owner or in any place where they may fairly be said to have a situs, 2 provided they are taxed at no greater rate than other property, and a tax based on value and not on carrying capacity is not a violation of the prohibition against tonnage duties contained in the United States constitution. 3 In 1881 however a statute was enacted for the purpose of encourag- ing foreign commerce exempting ships and vessels engaged in the foreign carrying trade from taxation and providing that the income derived from such vessels should be taxed instead of the vessels themselves. 4 This statute had no application to cor- porations, which of course had not been directly taxed for per- sonal property, and such vessels, when owned by corporations, continued to be indirectly taxed so far as they enhanced the value of the capital stock of the corporations which owned them. In 1902 the method of taxing vessels engaged in the foreign 'St. 1780, c. 43; St. 1811, c. 78; R. S. c. 7, §4; G. S., c. 11, §4; P. S., c. 11, §4; R. L., c. 12, §4; G. L., c. 59, §4, supra, page 191. 2 Old Dominion Steamship Co. v. Virginia, 198 U. S. 299 (1905). The situa of a vessel is the domicile of its owner unless it is permanently located and kept in a different place. Southern Pacific Co. v. Kentucky, 222 U. S. 63 (1911). 3 State Tonnage Tax Cases, 12 Wall. 204 (1870), and see also supra, Part I, §14. *St. 1881, c. 284. Taxation of Corporations 591 G. L. c. 63, §§ 67-69] carrying trade was changed to its present form and an excise tax of one-third of one per cent was imposed, in lieu of all other taxes upon the interest of every owner of such a vessel, whether a person, a partnership or a corporation. 5 In 1913 this statute was extended to include ships engaged in the interstate carry- ing trade. 6 Persons and partnerships since the enactment of this statute pay this tax to the towns in which they are taxable for personal property and are exempted from any other tax upon their interests in such vessels, 7 and corporations pay this tax to the commonwealth and are entitled to a deduction in their franchise tax on account of the value of their interests in such vessels. 8 Excises on Special Privileges Not Affected by this Chapter Section 68. The taxes imposed by this chapter upon any corpora- tion shall not affect or prevent the imposition and collection of any other tax now authorized, or that may hereafter be authorized, upon any especial privilege, franchise or business enjoyed or exercised by such corporation. Inspection of Books and Papers Section 69. Every corporation taxable under this chapter, ex- cept a foreign corporation taxable under section twenty-one, twenty- three or fifty-eight, shall, when required for the purposes of any tax except that imposed on its income by section thirty-two or thirty -nine, submit its books to the inspection of the commissioner, and its treasurer and directors to examination on oath relative to all matters affecting the determinations to be made by said commissioner. A corresponding provision is found in section forty-four authorizing the examination of the books of a corporation for the purpose of verifying its return of income, but in that sec- tion the right of examination is limited to two years after the filing of the return, and there is no provision for the examina- 8 St. 1902, c. 374, 375. • St. 1913, c. 473. 7 G. L. c. 59, §8, supra, page 220. 8 In the consolidation of the General Laws this statute was modified to make it clear that it applied to domestic business corporations taxable under the 1919 statute. 592 Taxation in Massachusetts [G. L. c. 63, § 69 tion on oath of the treasurer and directors of the company. It is to be noted that the penalty imposed by section seventy-nine for refusal to submit the books for examination is limited to the public service corporations and trust companies taxable under section fifty-eight, and does not apply to business corporations. If such corporations refuse to submit their books for examination, the only means available to the commissioner for compelling them to comply with his demand is a petition for writ of man- damus. This limitation upon the right of inspection is in accord with sound principles. The Massachusetts constitution provides that no person shall be compelled to furnish evidence against himself 1 and protects every person from unreasonable searches and seizures of his papers. 2 The prohibition against unreason- able searches includes any unreasonable compulsory disclosure of private papers. 3 A requirement that a person submit all his books and papers for examination without a specific limitation to those required for the particular exigency is unreasonable; 4 and in any event no person should be compelled to disclose his private affairs until he has been required to do so after a hear- ing before a cempetent judicial tribunal. 5 The statute does not authorize an examination of the books of a corporation unless it is necessary in order to properly ascertain its liability to taxa- tion under this chapter. 6 Under its visitorial powers over cor- porations, a state may compel a corporation to submit its books and papers to examination, even though the disclosure thus made will lead to a criminal prosecution, 7 but it is in accord with sound principles and possibly essential to the constitutionality of the act, in the case of purely private business corporations, that the examination be required only after a judicial hearing, in which the commissioner is bound to show that the examination is reas- onably necessary in order to enforce the provisions of the cor- poration tax law. declaration of Rights, Art. XII. 2 Declaration of Rights, Art. XIV. *Boyd v. United States, 116 U. S. 616 (1886). 4 Hale v. Henkel, 201 U. S. 43 (1906). 'Robinson v. Richardson, 13 Gray 454, 458 (1859). See also Consolidated Rendering Co. v. Vermont, 207 U. S. 541 (1908). 6 Commonwealth v. Cary Improvement Co., 98 Mass. 19, 22 (1867). T Hale v. Henkel, 201 U. S. 43 (1906) ; Wilson v. United States, 221 U. S. 361 (1911). Taxation of Corporations 593 G. L. c. 63, §§ 70, 71] Interest on Overdue Taxes Section 70. Corporations which neglect to pay taxes assessed and certified to the state treasurer by the commissioner shall .pay interest at the rate of six per cent per annum from the time when such taxes were payable until paid, if such payment is made before the commencement of proceedings for the recovery thereof, and twelve per cent if made after the commencement thereof. Application to the Board of Appeal Section 71. (As amended by St. 1921, chapter 123.) Except as otherwise provided, any party aggrieved by any decision of the com- missioner upon any matter arising under this chapter from which an appeal is given, may apply to the board of appeal from decisions of the commissioner within ten days after notice of his decision. Said board shall hear and decide the subject matter of such appeal, and give notice of its decision to the commissioner and the appellant ; and its decision shall be final and conclusive as to questions of fact, al- though payments have been made as required by the decision appealed from. Any overpayment of tax determined by decision of said board of appeal shall be reimbursed by the commonwealth. Taxes, excises, costs or expenses of any kind assessed upon any corporation, com- pany or association, except a municipal corporation, which are un- paid and are uncollectible, may be abated by the board of appeal on the recommendation of the attorney general and commissioner at any time after the expiration of five years from the date when the same became payable. The provision for application to the board of appeal 1 cor- responds in a measure to the statutory proceedings for the abate- ment of local property taxes by appeal to the county commis- sioners, and is the exclusive remedy in case of the overvaluation of the franchise, the corporate excess or the income of a cor- poration. 2 While the findings of the board of appeal are final on ques- tions of fact, its decisions on questions of law may be reviewed on petition for writ of certiorari. If the applicant desires to 1 See as to the Board of Appeal G. L. c. 6, §21, supra, page 139. 2 Boston Manufacturing Co. v. Commonwealth, 144 Mass. 598 (1887); At- torney-General v. East Boston Co., 222 Mass. 450 (1916). 594 Taxation in Massachusetts [G. L. c. 63, §§ 71-75 inc. have the record in proper form for raising the desired questions of law in certiorari proceedings, he should file carefully prepared requests for rulings of law, and the board may be compelled to certify how it disposed of such requests. Collection of Corporation Taxes Section 72. When a tax or excise of any kind remains due to or is claimed by the commonwealth from a corporation, company or association, whether existing by authority of the commonwealth or otherwise, except a municipal corporation, for ten days after notice given through the mail by the state treasurer to its treasurer or other financial agent that such tax or excise is due and unpaid, the state treasurer may, in addition to other modes of relief, issue his war- rant, directed to the sheriff or his deputies of the county where such corporation, company or association has its place of business, com- manding the collection of such tax or excise. Such warrant may be substantially in the form of and served in the same manner as those issued by the assessors of towns. Such warrant shall not run against the body of any person, nor shall any property of such delinquent corporation, company or association be exempt from seizure and sale thereon. The officer having such warrant shall collect such tax or excise, and interest upon the same at the rate of twelve per cent per annum from the time when such tax or excise became due, and may collect and receive for his fees the sum which an officer would be entitled by law to receive upon an execution for a like amount. He shall also collect one dollar for the warrant, which he shall pay to the state treasurer. Section 73. If a corporation, company or association fails to pay a tax levied under this chapter, except the excise imposed by section sixty-two, the treasurer may recover the same in contract in the name of the commonwealth. Section 74. The lessee of the works, structures, real estate or machinery of any corporation, company or association taxed under this chapter shall also be liable for the payment of the tax, and upon such payment may, in the absence of an agreement to the contrary, retain it out of the rent of the property, or recover it in an action against the lessor. Section 75. In addition to the methods provided by sections seventy-two and seventy-three, taxes under this chapter, except sec- Taxation of Corporations 595 G. L. c. 63, §§ 75, 76] tion sixty-two, may be collected by an information brought in the supreme judicial court by the attorney general at the relation of the state treasurer. The court may issue an injunction upon such in- formation, restraining the further prosecution of the business of the company, association or corporation until such taxes, with interest and costs thereon, have been paid ; but no telegraph company accept- ing the provisions of section fifty-two hundred and sixty-three of the Revised Statutes of the United States shall be enjoined from con- structing, maintaining or operating a telegraph line over and along any of the military or post roads of the United States within this commonwealth. Section 76. The sale or transfer, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the cor- poration's business, of any part or the whole of the assets of a domestic business corporation shall be fraudulent and void as against the commonwealth, unless such corporation shall, at least five days before the sale or transfer, notify the commissioner of the proposed sale or transfer and of the price, terms and conditions thereof, and of the character and location of said assets. Whenever such a cor- poration shall make such a sale or transfer, the tax imposed by this chapter shall become due and payable at the time when the commis- sioner is so notified, or, if he is not so notified, at the time when he should have been notified. This section shall not apply to sales by receivers, assignees under a voluntary assignment for the benefit of creditors, trustees in bank- ruptcy, or public officers acting under judicial process. It will be observed that the statutes provide three methods for enforcing payment of taxes assessed upon corporations and payable to the commonwealth. (1) A warrant authorizing the seizure and sale of the property of the delinquent corpora- tion, provided by section seventy-two and constituting in effect a warrant of distress. (2) An action of contract by the com- monwealth against the delinquent corporations, provided by section seventy-three. (3) An information by the attorney general at the relation of the state treasurer to restrain the cor- poration from carrying on business until the tax is paid, author- ized by section seventy-five. The third is the method now commonly employed. The action of contract must be brought in the name of the 596 Taxation in Massachusetts [G. L. c. 63, §§ 76, 77 commonwealth. The court has no jurisdiction to entertain an action brought in the name of the state treasurer. 1 The infor- mation against a corporation, on the other hand, should be brought in the name of the attorney-general. In an information under the statute, and doubtless also in an action of contract by the commonwealth to recover the amount of a tax, it is not open to the defendant to show that the tax is excessive in amount by reason of overvaluation, or that it is il- legal in part. The only recourse of the corporation in such cases is to pursue the remedies provided by sections seventy-one and seventy-seven respectively, and it cannot collaterally attack the validity of an assessment which is in part at least lawfully assessed, in an action brought to collect it. 2 But if the assess- ment is wholly void, the corporation may set up its invalidity in an action brought to enforce payment. 3 An information cannot be maintained to restrain a corpora- tion engaged solely in interstate commerce from carrying on bus- iness within the commonwealth until an excise tax lawfully imposed upon it is paid. 4 An information may however be main- tained under this section against a foreign corporation engaged in interstate commerce having a usual place of business in this commonwealth, provided that it has a place of business used for other purposes, but the injunction issued will restrain it only from doing business other than interstate commerce until the tax is paid. 5 Remedy of Corporation in Case of Taxes Illegally Assessed Section 77. Any corporation, company or association aggrieved by the exaction of any tax or excise or of any part thereof may, within six months after the payment of the same, whether such pay- ment be after or before the issue of the warrant mentioned in section seventy-two, apply by petition to the supreme judicial court, setting forth the amount of the tax or excise and costs thereon so paid, the general legal grounds and the specific grounds in fact, if any, upon which it is claimed such tax or excise should not have been exacted. Said petition shall be the exclusive remedy and shall be entered and 'Oliver v. Colonial Gold Co., 11 Allen 283 (1865). * Attorney-General v. East Boston Co., 222 Mass. 450 (1916). 3 Compare G. L. c. 60, §35, svpra, page 342. * Western Union Tel. Co. v. Massachusetts, 125 U. S. 530 (1887). •Attorney-General v. Electric Storage Battery Co., 188 Mass. 239 (1905). Taxation op Corporations 597 G. L. c. 63, §§ 77, 78] heard in Suffolk county. A copy of the same shall be served upon the state treasurer and upon the attorney general. The proceedings upon such petition shall conform, as nearly as may be, to proceedings in equity, and an abatement shall be made of only such portion of the tax or excise as was assessed without authority of law. Section 78. If the court, upon a hearing or trial, adjudges that said tax or excise, and the costs thereon, have been illegally exacted, a copy of the judgment or decree shall be transmitted by the clerk of the court to the state auditor, who shall thereupon audit and cer- tify the amount adjudged to have been illegally exacted, with interest, and costs to be taxed by the clerk of the court in the same manner as other claims against the commonwealth, and the state treasurer shall pay the same, without any further act or resolve making appropria- tion therefor. So much thereof as has been paid by the common- wealth to any town may be deducted from and set off against any sum afterwards payable to such town. The distinction between the remedy provided by section sev- enty-seven and the remedy by application to the board of ap- peal under section seventy-one is important. The application to the board of appeal is the exclusive remedy for overvaluation. The remedy by petition to the supreme judicial court was not intended to enable a corporation to bring before the court the in- quiry whether there had been an overvaluation of that which was taxable, but whether there had been a wrongful assessment of a tax or excise upon that which was not the proper subject of taxation. 1 While the distinction between a tax illegal in part and a tax excessive because of an erroneous construction of the law by the commissioner may be obvious in principle, in practice cases frequently arise in which it is difficult for the corporation to de- termine the proper remedy. In such cases the safest course is to institute proceedings under both sections, and then if the remedy first brought to trial is held to be the improper one, the corporation may fall back upon the other. If the petition is not filed within six months after the payment of the tax, the court has no jurisdiction to entertain the proceed- ing. 2 Not only must the petitioner file his petition within the 1 Boston Mfg. Co. v. Commonwealth, 144 Mass. 598 (1887). * Lever Bros. Co. v. Commonwealth, 232 Mass. 22 (1919). 598 Taxation in Massachusetts [G. L. c. 63, § 78 statutory period, but he must take out a subpoena within a reasonable time thereafter and make a reasonable effort to serve it. 3 A general appearance on behalf of the commonwealth will not give the court jurisdiction if these requirements are not complied with. 4 It is to be noted that the remedy by petition may be invoked whether the collection of the tax is enforced by warrant or it is paid without the issuance of process. It may be employed when the tax is only partially invalid. The remedy by petition can be invoked only in the case of a tax ; a filing fee wrongfully collected cannot be recovered back in a proceeding under section seventy-seven. 5 Either party may appeal from an adverse de- cision of a single justice to the full court; if the decision is in favor of the petitioner the appeal should be in the name of the commonwealth and not of the attorney general. 6 The remedy by petition is the exclusive remedy, at least so far as the state courts are concerned, 7 and prior to 1919 there was no provision authorizing the repayment of an admittedly illegal tax unless proceedings had been brought under the statute within the specified period. If the validity of the tax upon a numerous class of corporations was dependent upon the deter- mination of a doubtful question of law, the corporations affected, even with the consent of the state authorities, could not pay their respective taxes under protest and await the result of a test case, but to protect their rights were required to go to the expense of instituting a separate proceeding in court in the case of each corporation. By legislation enacted in 1919 it was pro- vided that the state should have authority to repay a tax il- legally exacted to corporations which filed an application with the commissioner before the time for instituting proceedings in court expired, and under this statute corporations may protect their rights by filing an application and awaiting the determina- tion of the question involved in proceedings brought by other parties. 8 3 International Paper Co. v. Commonwealth, 232 Mass. 7 (1919) ; Locomobile Co. v. Commonwealth, 232 Mass. 16 (1919). 4 Locomobile Co. v. Commonwealth, 232 Mass. 16 (1919). 5 Lever Bros. Co. v. Commonwealth, 232 Mass, 22 (1919). •Boston & Albany R. R. Co. v. Commonwealth, 157 Mass. 69 (1892). 7 Attorney-General v. East Boston Co., 222- Mass. 450 (1916). 8 G. L. c. 58, §27, supra, page 181. Taxation of Corporations 599 G. L. c. 63, §§ 78-80] A domestic corporation which has paid an illegal tax and al- lowed the time for instituting proceedings under section seventy- seven to elapse without action on its part has lost its right to re- cover back the tax in any form of action ; a common law action will not lie against the state treasurer, because the statute ex- pressly provides that the remedy provided by section seventy- seven is exclusive. A foreign corporation however may, it has been held, maintain an action at common law in the district court of the United States against the state treasurer who was in office when the tax was collected to recover back the amount of an illegal tax, the jurisdiction of the federal court being grounded on diversity of citizenship. 9 Penalties and Their Enforcement Section 79. Any corporation, company or association, liable to taxation under section fifty-eight, neglecting to make the returns re- quired by this chapter, or refusing or neglecting, when required, to submit to the examinations provided for therein, shall forfeit such sum not greater than two per cent upon the par value of its capital stock as the court may deem just and equitable. Section 80. Penalties and forfeitures imposed by this chapter may be collected by an action of contract under section seventy-three or by an information under section seventy-five. An injunction issued upon such an information may contain a provision continuing it in force until the returns and certificates required by this chapter have been filed. •International Paper Co. v. Burrill, 260 Fed. Rep. 664 (1919) CHAPTER 64 TAXATION OF STOCK TRANSFERS Before the enactment of the statute imposing a tax on the transfer of stock, the constitutionality of such a tax was submitted to the supreme judicial court. All of the justices agreed that a tax on the transfer of stock of corporations was a valid excise ; but with respect to taxing the transfer of shares in voluntary- associations there was considerable difference of opinion. Three of the justices were of opinion that an excise could not be im- posed on the exercise of a natural right and that the transfer of shares in voluntary associations was a natural right. Three of the justices were of opinion that the exercise of a natural right could be taxed; and the seventh was of opinion that a natural right could not be taxed, but that the transfer of shares in a voluntary association was not a natural right. The majority thus held that a tax on the transfer of shares in voluntary asso- ciations could be taxed; 1 and in 1914 the stock transfer act was enacted, and with some minor amendments it has remained in force since that time. By the statute a tax is levied upon all sales and agreements to sell, and upon all deliveries or transfers of shares or certificates of stock of all corporations, whether domestic or foreign, and of all voluntary associations existing under a written instrument or declaration of trust where the beneficial interests are divided into transferable certificates or shares, at the rate of two cents on each $100 of the face value or fraction thereof. When the certifi- cate has no face or par value, the tax is levied at the rate of two cents for each share. When the certificate has a face value of a certain amount, and also bears a statement that a lesser amount has been paid in, the tax is based on the face value, not on the amount paid in. The law applies to the stock of foreign and of domestic cor- porations, and of voluntary associations, and to residents and Opinion of the Justices, 196 Mass. 603 (1908). 600 Taxation op Stock Transfers 601 G. L. c. 64] non-residents, liability to taxation being grounded on the fact that the sale, or some essential step therein, has taken place within this state. While the law has no extraterritorial opera- tion, nevertheless, where it appears that the transfer of the stock on the corporate books within this state is essential to render the sale effectual, the transaction is subject to a tax, al- though in all other respects made without the state. 2 This statute does not apply to the original issue of stock; but all sales or transfers made subsequent thereto are tax- able. It is not necessary to render it taxable that the transaction involves a sale. By the statute a tax is imposed upon all trans- fers of shares or certificates of stock, whether or not the transac- tion entitles the holder in any manner to the benefit of such stock, or whether the transfer is made to secure the future payment of money, or future transfer of stock, or possession is given for any other purpose, except those purposes expressly provided for in the statute. The mere surrender of a certificate of stock for reissue in smaller denominations is not taxable ; but if the stock is reissued in part to a third party the transaction is taxable to the extent of the transfer to the third party. The surrender of the certificates of stock of a deceased per- son for issuance in the name of his executor or administrator is not taxable; but all transfers made by the latter to trustees, legatees, distributees and others are taxable. A transfer made by an executor to an administrator with the will annexed of the same estate, or by a trustee to a succeeding trustee under the same trust is not taxable ; but a transfer to and from voting trustees is taxable, as is also the transfer of voting trust certifi- cates. An agreement evidencing the deposit of stock certificates as collateral security for money loaned thereon, which stock cer- tificates are not actually sold, is not taxable, nor is the deposit of the securities taxable. A transfer from a customer to a broker, or from a broker to a customer, when made solely for the purpose of making a pur- 2 For the constitutional questions arising out of the levy of a stamp tax under such circumstances see Hatch v. Reardon, 204 U. S. 152 (1907). 602 Taxation in Massachusetts [G. L. c. 64 chase or sale, is not taxable, provided the broker files with the transfer agent a certificate setting forth the facts. The statute applies to shares in co-operative banks when such shares are actually sold. It does not apply when such shares are cancelled or withdrawn, nor to the original issue of such shares. It is the duty of the seller or transferor to pay the required tax by procuring, affixing and cancelling stamps indicating the amount of the tax. When the evidence of transfer is shown only by the books of the company, the stamps should be placed upon such books; where the change of ownership is by transfer of a certificate the stamp should be placed upon the certificate; in case of an agreement to sell, or where the sale is effected by the delivery of the certificate assigned in blank, there should be made and delivered by the seller to the buyer a bill or memor- andum of such sale, to which the stamps should be affixed. This bill or memorandum should be 'affixed to the certificate when presented for transfer. Every such bill or memorandum of sale, or agreement to sell or sales ticket must show: — (a) The date of the transaction. (b) The name of the seller. (c) The stock to which it relates, the number of 'shares and the amount of the sale; and all such bills of sale or memoranda should be preserved for at least two years from their respective dates. In every case where a stamp is used to denote the payment of the tax, the person using or affixing the stamp must cancel it by writing or stamping thereon the initials of his name, and the date upon which the stamp is attached. He should also cut or perforate the stamp in a substantial manner, so that it cannot be used again. Every corporation or association, the transfer of whose shares is subject to the tax, is required to keep or cause to be kept at some accessible place within the commonwealth a stock certifi- cate book or transfer ledger or register, in which should be re- corded, in separate columns, the date of making every transfer of stock, the name of the stock and the number of shares thereof, the name of the party surrendering the certificates, the name of the party to whom certificates are issued in exchange therefor, Taxation of Stock Transfers 603 G. L. c. 64] and evidence of the payment of the tax, which evidence may be furnished either: (a) By attaching to the stock certificate surrendered for transfer the stamps required for such transfer, or (b) If the stamps are not attached to the certificate, but are attached to the bill or memorandum of sale effecting or evidenc- ing the transfer of such certificate, by attaching to the certificate the said bill or memorandum of sale with stamps attached. The corporation or association is required to retain and keep all surrendered or cancelled shares or certificates of stock and all bills or memoranda relating to the sale or transfer of stock for at least two years after the date of the delivery thereof, and to keep for at least two years after the date of the last entry thereon, its stock certificate book or transfer ledger. Every broker is required to keep a true book of account, in which there should be recorded: (a) The date of making every sale, agreement to sell, de- livery or transfer of shares or certificates of stock. (b) The name of the stock and the number of the shares. (c) The face value thereof. (d) The name of the seller and the name of the buyer. (e) The face value of the stamps affixed to the bill or mem- orandum or certificate. These books should be preserved for at least two years, and are subject to examination by the commissioner or his repre- sentatives at any time between 10 o'clock in the forenoon and 3 o'clock in the afternoon, except on Saturdays, Sundays and legal holidays. Collection of the tax may be enforced by an action brought in the name of the commonwealth, or by an information in equity by the attorney general. It is also provided that no transfer of stock made after the statute went into effect on which a tax should have been but was not paid shall be made the basis of any legal proceeding in any court in the commonwealth. Severe penalties are also provided for the consummation of a sale or transfer without payment of the tax, for the transfer of stock by a transfer agent if the tax has not been paid, for the illegal re-use of stamps, for failing to keep the books required by the statute, or for refusing to allow the commissioner to examine the books. 604 Taxation in Massachusetts [G. L. c. 64 In case stamps have been erroneously affixed, a claim may be made with the commissioner for the refund of the amount of the tax so paid, within ninety days after the erroneous affixing, and if he rejects the claim, appeal may be made to the board of appeal. CHAPTER 65 TAXATION OF LEGACIES AND SUCCESSIONS History of the Inheritance Tax The inheritance or succession tax, though first introduced into Massachusetts legislation in comparatively recent times, is by no means a modern discovery as a device for raising revenue for public use. An inheritance tax in much its present form was an established feature of the Roman system of taxation and exists to-day in almost all the countries whose jurisprudence is based on the Roman law. Many incidents of the feudal system furnished in substance the equivalent of a succession tax. In England the probate duty was introduced in 1694 and the tax on legacies in 1780. The system has been steadily developed since that time, and the "death duties" as they are called furnish a substantial portion of the revenues of the British government. Inheritance taxes were imposed by the United States during the period between 1797 1 and 1802 and again during and after the civil war 2 and the wars with Spain and with Germany.* The first state to adopt the inheritance tax was Pennsylvania in 1826. The expansion of this system of taxation was slow until 1885 when it was established in New York and since that time it has rapidly extended to almost every state in the Union. The inheritance tax first appeared in Massachusetts in 1891, * but it was then confined to inheritance by will or intestate 'U. S. St. July 6, 1797, c. 11. J U. S. St. July 1, 1862, c. 119, §§ 111, 112. This act was amended two years later, and repealed in 1870. The revenue act of 1894 contained a provision for the taxation of inheritances, but the entire act was held unconstitutional on account of its income tax provisions. Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429 (1895) ; 158 U. S. 601 (1895). * The Spanish War inheritance tax was imposed by U. S. St. June 13, 1898, c. 448, §§29, 30. An inheritance tax was included in the Revenue Act of 1909 as it passed the House of Representatives ; but a tax on the income of corpor- ations was substituted in the Senate. Flint v. Stone Tracy Co., 220 U. S. 107 ( 1911 ) . An inheritance tax was imposed in 1916, before the United States entered the World War, U. S. St. 1916, c. 463, §261, as amended by U. S. St. 1917, c. 63, §900; c. 159, §300. See also War Revenue Act of 1918, c. 400. ♦ St. 1891, c. 425. 605 606 Taxation in Massachusetts [G. L. c. 65 succession to strangers or collateral relatives. In 1907 the direct inheritance law was enacted 5 imposing a tax on all inheritances above a certain value, which value is larger in the case of direct inheritance ; but a bequest or inheritance of sufficient size even to the testator's own children is reached by the tax. In 1916 the rate of taxation was modified, and, in general, increased. The inheritance tax is favored both by economists and by those charged with the duty of raising revenue for the public needs. It is considered the least burdensome of all taxes, and, until the enactment of the income tax act in 1916 6 , furnished the only practicable means of reaching the great mass of personal property consisting of stocks, bonds, notes and other easily con- cealed objects which readily escaped the annual assessment but which when the owner died passed through the probate court and were then exposed to official examination. While the amount raised by the inheritance tax varies from year to year, according to the number of wealthy residents who have died during the year, in a state of substantial size a considerable revenue can be counted on every year, and taken as a whole, the tax has given general satisfaction when it has been imposed with fairness. Constitutionality of Inheritance Taxes Inheritance taxes are of two classes, namely, estate taxes and legacy or succession taxes. 1 An estate tax is imposed upon the net estate of the decedent passing at his death, and does not concern itself with the legacies or distributive shares into which the estate is divided or the relationship to the decedent of those who receive the property. It is a tax on the trans- mission and not on the receipt of property. The present federal tax is an estate tax. 2 A legacy or succession tax is a tax upon the privilege of tak- ing property by will or by inheritance or by succession in any other form upon the death of the owner, and is imposed upon each legacy or distributive share of the estate as it is received. It is a tax on the receipt and not on the transmission of property. The present Massachusetts tax is a legacy and succession tax. 8 St. 1907, c. 563. •St. 1916, c. 268. 'Knowlton v. Moore, 178 U. S. 41, 49 (1900) ; Minot v. Winthrop, 162 Mass. 113, 124 (1894). 'Plunkett v. Old Colony Trust Co., 233 Mass. 471 (1919). Taxation op Legacies and Successions 607 G. L. c. 65] The inheritance tax was not established in Massachusetts or elsewhere in the United States without a contest over its constitutionality. It has been sustained here and elsewhere, not as a direct tax but as an excise on the privilege of taking or transmitting property by will or inheritance or by succession in any other form upon the death of the owner — a privilege which if not wholly dependent for its existence upon the will of the legislature is at least so far subject to regulation as to be unquestionably a proper subject of excise. 3 The power of the state is not limited to the taxation of the privilege of receiving or transmitting property by will or by the laws regulating intestate succession but extends to all forms of conveyances made gratuitously and intended to take effect in possession or enjoyment after the death of the grantor or donor. 4 The passing into possession and enjoyment of property may be made subject to taxation, even though the instrument under which the property passes was executed and effective before the statute imposing the excise was enacted. 5 A suc- cession tax may even be constitutionally made applicable to the personal estate of a person who has died before it was enacted, although the right to receive the distributive shares has already vested, provided the estate has not passed out of the control of the probate court into the hands of the distributees. 6 As an inheritance tax is an excise it follows as a necessary consequence that in determining the value of the privilege taxed and consequently the amount of the excise it is proper to take 3 Knowlton v. Moore, 178 U. S. 41 (1900); Minot v. Winthrop, 1G2 Mass. 113 (1894). * The state may tax the succession of a husband or wife to community prop- erty. Moffit v. Kelly, 218 U. S. 400 ( 1910) . The state may tax the transfer of property by deed intended to take effect in possession or enjoyment after the death of the grantor. Keeney v. New York, 222 U. S. 525 (1912). The United States may levy a tax on the succession of property within the several states. Knowlton v. Moore, 178 U. S. 41 (1900). 5 The state may tax the execution of a power though the power was created prior to the enactment of the tax. Crocker v. Shaw, 174 Mass. 266 (1899) ; Attorney General v. Stone, 209 Mass. 186 (1911) ; Burnham v. Treasurer & Re- ceiver General, 212 Mass. 165 (1912) ; Chanler v. Kelsey, 205 U. S. 466 (1907). The state may tax the vesting in possession of trust property by failure to exer- cise a power of appointment created prior to the establishment of the tax, Minot v. Treasurer & Receiver General, 207 Mass. 588 (1911) ; and a legacy in com- pliance with a contract may be taxed, although the contract was made before the enactment of the tax. Clarke v. Treasurer & Receiver General, 226 Mass. 301 (1917). •Cahen v. Brewster, 203 U. S. 543 (1906). 608 Taxation in Massachusetts [G. L. c. 65, § 1 into consideration property which could not be constitutionally subjected to direct taxation; 7 and that the tax need not be pro- portional but may be graduated in any manner which the court cannot clearly see to be arbitrary and unreasonable. 8 Subjects and Rates of Taxation Section 1. All property within the jurisdiction of the common- wealth, corporeal or incorporeal, and any interest therein, whether belonging to inhabitants of the commonwealth or not, which shall pass by will, or by laws regulating intestate succession, or by deed, grant or gift, except in cases of a bona fide purchase for full consider- ation in money or money's worth, made in contemplation of the death of the grantor or donor or made or intended to take effect in posses- sion or enjoyment after his death, and any beneficial interest therein which shall arise or accrue by survivorship in any form of joint own- ership in which the decedent joint owner contributed during his life any part of the property held in such joint ownership or of the pur- chase price thereof, to any person, absolutely or in trust, except to or for the use of charitable, educational or religious societies or institu- tions, the property of which is by the laws of the commonwealth ex- empt from taxation, or for or upon trust for any charitable pur- poses to be carried out within the commonwealth, or to or for the use of the commonwealth or any town therein for public purposes, shall be subject to a tax at the percentage rates fixed by the following table : Provided, however, that no property or interest therein, which shall pass or accrue to or for the use of a person in Class A, except a grandchild of the deceased, unless its value exceeds ten thousand dol- lars, and no other property or interest therein, unless its value ex- ceeds one thousand dollars, shall be subject to the tax imposed by this chapter, and no tax shall be exacted upon any property or interest T Thus a state may tax a bequest to the United States. United States v. Perkins, 163 U. S. 625 (1896). A state may tax a bequest of United States bonds. Plummer v. Coler, 178 U. S. 115 (1900) ; Callahan v. Woodbridge, 171 Mass. 595 (1898). A state may tax a bequest of property which it has agreed should be exempt from taxation without thereby impairing the obligation of contracts. Orr v. Gilman, 183 U. S. 278 (1901). The United States may tax a bequest to a city incorporated by a state. Snyder v. Bettman, 190 U. S. 249 (1903). "Minot v. Winthrop, 162 Mass. 113 (1894) ; Magoun v. Illinois Trust & Sav- ings Bank, 170 U. S. 283 (1898); Billings v. Illinois, 188 U. S. 97 (1903); Campbell v. California, 200 U. S. 87 (1906) ; Keeney v. New York, 222 U. S. 525 (1912) ; Watson v. New York, 254 U. S. 122 (1920). Taxation of Legacies and Successions 609 G.L. c. 65, §1] so passing or accruing which shall reduce the value of such property or interest below said amounts. Rate Per Centum op Tax on Value of Property or Interest Relationship op Beneficiary to Deceased Class A. Husband, wife, father, mother, child, adopt- ed child, adoptive parent, grandchild. . . Class B. Lineal ancestor, except father or mother; lineal descendant, except child or grand- child; lineal descendant of adopted child; lineal ancestor of adoptive parent; wife or widow of a eon ; husband of a daughter , . . Class C. Brother, sister, half brother, half sister, nephew, niece, step-child or step-parent, All others, Class D. On Value not exceeding $10,000. 1% 3% 5% On Excess above $10,000, not exceeding $25,000. 2% 5% 6% On Excess above $25,000, not exceeding $50,000. 2% 4% 7%' On Excess above $50,000, not exceeding $250,000. 4% 5% 8% 8% On Excess above $250,000, not exceeding $1,000,000. 5% «% 9% 9% On Excess above $1,000,000. 8% 7% 10% 10% The original inheritance tax statute of 1891 imposed a tax of five per cent for the use of the commonwealth upon all prop- erty passing by will or descent or conveyance taking effect after the death of the grantor "except to or for the use of the father, mother, husband, wife, lineal descendant, brother, sister, adopted child, the lineal descendant of any adopted child, the wife or widow of a son or the husband of a daughter of a decedent" and except certain charitable bequests to be considered later. It was further provided that no estate should be liable to this tax unless it exceeded ten thousand dollars in value. In 1895 it was provided that no bequest should be subject to the tax unless it exceeded five hundred dollars ; but it was held that this exemption did not apply to the estates of persons dying before its enactment. 1 In 1896 the same exemption was extended to l Howe v. Howe, 179 Mass. 546 (1901). This provision with others was re- enacted by St. 1906, c. 436, §1, and section 2 of the latter statute provided that section 1 should apply to all cases in which the tax remained unpaid at its passage. In 1909 and 1910 the commonwealth collected a number of inheritance taxes which had fallen due during the early years of the law and had been then overlooked. It would seem that so far as these legacies were less than $500 they 610 Taxation in Massachusetts [G. L. c. 65, § 1 distributive shares of the estates of persons dying intestate. In 1901 the exemption of estates not exceeding ten thousand dollars was stricken out; but it was provided that the statute containing this provision should not apply to the estates of per- sons dying before its enactment. 2 In 1907 the statute was enacted in much its present form as regards to degrees of re- lationship taxed, except that in 1909 the adoptive parent or his lineal ancestor was put in the same class as the adopted child and his descendant. The statute of 1907 made a radical change so that the tax no longer applied to collateral inheritances only but included all, direct as well as collateral. The statute contained a general revision and re-enactment of all the provisions relating to the inheritance tax, and two years later with such further amend- ments as had intervened was re-enacted again as Part IV of the general codification of the statutes relating to taxation. The statute of 1907 was not retroactive and applied only to the es- tates of persons who died after September 1, 1907. The estates of persons who died between July 10, 1891, and September 1, 1907, were left subject to taxation in accordance with the pro- visions of the earlier statutes. 3 Under the 1907 statute the succession of property in the manner provided is taxable in. every case except (1) the suc- cession by the husband, wife, father, mother or child of decedent of $10,000 or less; (2) the succession by anyone else of $1,000 or less; (3) bequests of any size for certain charitable purposes discussed elsewhere. 4 In 1912 a general increase in the rates of taxation upon the larger legacies or shares was established, but the successions or shares which were left untaxed were not modified. The were exempt under the provisions of St. 1906, c. 436, but the office of the at- torney general ruled otherwise and not enough was involved to justify litigation by the individuals taxed. 2 It was held in Callahan v. Woodbridge, 171 Mass. 595 (1898), that in de- ciding whether an estate was exempt on account of its size, debts were to be de- ducted but not expenses of administration ; but in determining the amount of the tax, only the amount which actually passes to the successor is considered. This decision is now of importance only in relation to the estates of persons who died between July 10, 1891, when the original inheritance tax was first put in force, and April 16, 1901, when the limitation of $10,000 was repealed. s Hill v. Treasurer & Receiver General, 227 Mass. 331 (1917). * Infra, page 619. Taxation op Legacies and Successions 611 G.L.c. 65, §1] statute was not retroactive, and applied to the .estates of per- sons dying after May 29, 1912. 5 In 1916 a statute was enacted making important changes in the inheritance tax act. Under this statute the rate of taxation was modified and, in general, increased, although the successions which were left untaxed under the 1907 statute were not affected ; RATES PRIOR TO MAY 29, 1912 Rate of Succession Tax under Acts of 1907, Chapter 563, as codified and amended by acts of 1909, chapter 490, part iv, and acts of 1909, Chapters 268 and 527. In Effect upon the Estates of Per- sons DYING ON OR AFTER SEPT. 1, 1907, AND PRIOR TO MAY 29, 1912. VALUE OF SHARE. Over Over Over Over BENEFICIARY. $1,000 $10,000 $25,000 $50,000 I1.0G9 but not but not but not but not Over or Under. over over over over $100,000. $10,000. $25,000. $50,000. $100,000. 1. Charitable, educational or re- ligious societies or institutions exempt from local taxation; trusts for charitable purposes to be carried out within Massachu- setts; city or town in Massachu- setts for public purposes . . No tax No tax No tax No tax No tax No tax 2. Class A HuBband, wife, fa- * ther, mother, child, adopted child, adoptive parent . No tax No tax 1 per cent 1 per cent 1$ per cent 2 per cent 3. Class A. Lineal ancestor, ex- cept father or mother; lineal descendant, except child; lineal descendant of adopted child, lineal ancestor _ of adoptive parent: wife or widow of a son; husband of a daughter No tax 1 per cent 1 per cent 1 per cent 1J per cent 2 per cent 4 Class B. Brother, sister, half brother, half sister, nephew. niece No tax 3 per cent 3 per cent 4 per cent 4 per cent 5 per cent 5 All others (including step No tax 5 per cent 5 per cent 5 per cent 5 per cent 5 per cent No tax is payable on account of the interest of any beneficiary who does not take in excess of $1,000. No tax is payable on account of property passing to the husband, wife, father, mother, child or adopted child of deceased unless his or her total beneficial interest exceeds $10,000. If the value of all property passing to any one of such beneficiaries exceeds $10,000, the tax attaches to the whole amount. In no event is the tax to reduce the share below the excepted amount. but instead of leaving the rate of taxation to which each entire legacy was subject dependent upon the amount of the legacy as under the earlier statutes, it was provided by the 1916 statute that so much of each legacy or share as fell below one of the designated limits was to be taxed at the rate imposed upon lega- cies and shares below such limit and only the excess was to be taxed at the higher rate. 6 "St. 1912, c. 678, §§1, 2. •St. 1916, c. 268, §1. 612 Taxation in Massachusetts [G. L. c. 65, § l The 1916 statute was not retroactive, and applied to persons dying after May 25, 1916. The earlier statutes remained in force with respect to persons dying before that date. There has been no change in the rate of taxation since 1916, except in temporary acts intended to raise funds for particular emergencies. 7 The RATES SINCE MAY 29, 1912, AND PRIOR TO MAY 26, 1916. Rate of Succession Tax under Acts of 1912, Chapter 678. In Effect upon the Estates of Persons dying on or after May 29, 1912, and prior to May 26, 1916. VALUE OF SHARE. Over Over Over Over Over beneficiary. $1,000 81,000 $10,000 $25,000 $50,000 $250,000 or but not but not but not but not but not Over Under. over over over over over $1,000,000. $10,000. $25,000. $50,000. $250,000. $1,000,000. 1. Charitable, educational or religious societies or institu- tions exempt from local tax- ation; trusts for charitable purposes to be carried out within Massachusetts; city or town in Massachusetts for public purposes . . . No tax No tax No tax No tax No tax No tax No tax 2. Class A. Husband, wife, fa- ther, mother, child, adopted child, adoptive parent No tax No tax 1 per cent 1 per cent 2 percent 3 per cent 4 per cent 3. Class A. Lineal ancestor, ex- cept father or mother; lineal descendant, except child; lin- eal descendant of adopted child; lineal ancestor of adoptive parent; wife or widow of a son; husband of a daughter No tax 1 per cent 1 per cent 1 per cent 2 per cent 3 per cent 4 per cent 4. Class B. Brother, sister, half brother, half sister, nephew, niece No tax 2 per cent 3 per cent 5 per cent 6 per cent 7 per cent 8 per cent 5. All others (including step- children) No tax 5 per cent 5 per cent 5 per cent 6 per cent 7 per cent 8 per cent No tax is payable on account of the interest of any beneficiary who does not take in excess of $1,000. No tax is payable on account of property passing to the husband, wife, father, mother, child or adopted child of deceased unless his or her total beneficial interest exceeds $10,000. If the value of all property passing to any one of such beneficiaries exceeds $10,000, the tax attaches to the whole amount. In no event is the tax to reduce the share below the excepted amount tables accompanying the text will show the rates of taxation applicable to the estates of persons dying within the periods designated therein. 7 By St. 1918, c. 191, it was provided that all property of persons dying be- tween May 3, 1918 and May 3, 1919 should be subject to an additional tax of 25% of the tax imposed by the existing law. By St. 1919, c. 342, §4 (the War Bonus Tax act) the additional tax was extended to the estates of persons dying between May 3, 1919 and July 22, 1920. By St. 1920, c. 441, the additional tax was extended to the estates of persons dying between July 22 and December 1, 1920, being imposed for the general purposes of the commonwealth. G. L. c. 65, §1] Taxation of Legacies and Successions RATES SINCE MAT 26, 1916 613 Rate of Succession Tax under Acts of 1916, Chapter 268. In Effect upon the Estates of Persons dying on or after May 26, 1916. VALUE OF SHARE. Over Over Over Over Over $1,000 $1,000 $10,000 $25,000 $50,000 $250,000 BENEFICIARY. or but not but not but not but not but not Over Under. over over over over over $1,000,000. $10,000. $25,000. $50,000. $250,000. $1,000,000. 1. Charitable, educational or reli- gious societies or institu- tions exempt from local tax- ation; trusts for charitable purposes to be carried out within Massachusetts; city or town in Massachusetts for public purposes .... No tax No tax No tax No tax No tax No tax No tax 2. Class A. — Husband, wife, fa- ther, mother, child, adopted child, adoptive parent No tax No tax 1% 2% 4% 5% 6% on excess on excess on excess on excess 3. Grandchild No tax 1% 1% 2% 4% 5% 6% on excess on excess on excess on excess 4. Class B. — Lineal ancestor, ex- cept father or mother; lineal descendant except child or grandchild; lineal descend- ant of adopted child; lineal ancestor of adoptive parent; wife or widow of a son; hus- band of a daughter No tax 1% 2% 4% 5% 6% 7% on excess on excess on excess on excess on excess 5. Class C. — Brother, sister, half- brother, half-sister, nephew, niece, step-child or step-par- ent . . . • . No tax 3% 5% 7% 8% 9% 10% on excess on excess on excess on excess on excess 6. Class D— All others . . . No tax 5% 6% 7% 8% 9% 10% on excess on excess on excess on excess on excess No tax is payable on account of the interest of any beneficiary who does not take in excess of $1,000. No tax is payable on account of property passing to the husband, wife, father, mother, child or adopted child of deceased unless his or her total beneficial interest exceeds $10,000. If the value of all property passing to any one of such beneficiaries exceeds $10,000, the tax attaches to the whole amount. In no event is the tax to reduce the share below the excepted amount. An additional tax of 25% of the amount indicated in the preceding table is assessed on the estates of persons dying be- tween May 3, 1918 and December 2, 1920. Transactions Which Are Subject to the Tax The original statute was. made applicable to property "which shall pass by will, or by the laws of the commonwealth regu- lating intestate succession or by deed, grant, sale or gift, made or intended to take effect in possession or enjoyment after the death of the grantor." The changes which have been made in this phraseology consist of striking out the words "of the com- 614 Taxation in Massachusetts [G. L. c. 65, § l monwealth" in the Revised Laws, and the striking out of the word "sale" in the direct inheritance tax law of 1907 and the insertion at the same time of the exception of "cases of a bona fide purchase for full consideration in money or money's worth," and the inclusion in 1920 of grants or gifts made in contempla- tion of the death of the grantor or donor among the transac- tions subject to the tax. 1 With respect to property passing by will, the liability to tax- ation is based upon the transmission of the property at the time of the death of the testator, even if he creates a series of future interests which do not take effect in possession or enjoy- ment until long afterward; 2 but when a will creates a vested interest in the principal of a trust fund and the person entitled to such interest dies, the passing of the fund to his heirs and next of kin is subject to an additional tax. 3 The collection of a debt against the estate of a deceased per- son through the ordinary channels is of course not subject to the inheritance tax; 4 but the exception in the statute in favor of transactions for full consideration does not apply to wills, and a legacy given in pursuance of a contract and for full considera- tion is taxable. 5 When the provisions of a will are the subject of controversy and a compromise is effected with the approval of the probate court which results in the distribution of the estate in a man- ner different from that prescribed by the will, the tax never- theless should be assessed on the property as disposed of by the will and legacies are taxable for the full amount even although they are reduced by the compromise below the established limit of taxability. 6 It is generally considered that dower, being a common law right continued and preserved by the statutes, is not subject iSt. 1920, c. 548. As to the construction of this phrase, see G. L. c. 65, §3, infra, page 623. 2 As to the taxation of future interests, see G. L. c. 65, §14, infra, page 640. •Hall v. Beebe, 223 Mass. 306 (1916). 4 Hill v. Treasurer & Receiver General, 227 Mass. 331 (1917). r- Clarke v. Treasurer & Receiver General, 226 Mass. 301 (1917). See also Hill v. Treasurer & Receiver General, 227 Mass. 331 (1917) in which it was held that although money paid by virtue of an ante-nuptial agreement as a debt against the husband's estate is not taxable, if the husband provides in his will that the wife may take the specified sum in securities instead of in cash and she avails herself of this right, this is a legacy in payment of a debt and is taxable. "Baxter v. Treasurer & Receiver General, 209 Mass. 459 (1911). Taxation of Legacies and Successions 615 G.L. c. 65, §1] to the tax, for the reason that the change of the right of dower upon the death of the husband from an inchoate to a consum- mated right is not a passing of the property "by the laws regu- lating intestate succession." The right of curtesy on the other hand, being in its present form wholly a creature of statute, may with more propriety be held to be subject to the tax. 7 With respect to grants or gifts, it has been held that a deed of settlement, revocable or irrevocable, whether made before or after the enactment of the statute, under which the principal is not to vest in ownership or possession until the grantor's death and which does not so vest until the statute is in force is subject to the tax. 8 As far as the exception of a bona fide purchase for full consideration is concerned, the consideration must actually equal in value the property transferred, and it is not enough that it is substantial or that the parties consider it sufficient. 9 The taking out of an insurance policy payable to a designated beneficiary and the payment of the premiums by the insured is not a gift intended to take effect in possession or enjoyment after the death of the donor, and the amount paid to the beneficiary on the death of the insured is not subject to the tax. 10 In the original statute there was no provision for the taxa- tion of the acquisition of a complete interest in property by right of survivorship. In 1915 however it was held that the acquisition of a complete title in real estate by the surviving tenant by the entirety was not subject to the succession tax, because it was not acquired by intestate succession but by reason of the nature of the estate. 11 The same decision was reached in the case of the exercise of the right of survivorship in real and personal property held in joint tenancy. 12 In the follow- T Even, however, assuming that curtesy is not subject to the tax, if a sur- viving husband does not file his election to take curtesy and accepts the more favorable provisions of his wife's will, all the property which comes to him from his wife's estate is subject to the tax, and not merely the excess over what he was entitled to by virtue of his marital rights. Dana v. Dana, 226 Mass. 297 (1917). "Crocker v. Shaw, 174 Mass. 266 (1899) ; New England Trust Co. v. Abbott, 205 Mass. 279 (1910) ; State St. Trust Co. v. Treasurer & Receiver General, 209 Mass. 373 (1911). As to gifts in contemplation of death, see G. L. c. 65, §3, infra, page 623. •State St. Trust Co. v. Treasurer & Receiver General, 209 Mass. 373 (1911). 10 Tyler v. Treasurer & Receiver General, 226 Mass. 306 (1917). "Palmer v. Treasurer & Receiver General, 222 Mass. 263 (1915). 12 Attorney-General v. Clark, 222 Mass. 291 (1915). 616 Taxation in Massachusetts [G. L. c. 65, § 1 ing year however the tax was specifically extended to cover the passing of any beneficial interest in property by survivorship in any form of joint ownership in which the decedent joint owner contributed during his life any part of the property held in such joint ownership or the purchase price thereof. 13 It is however open to some doubt whether the statute is broad enough even now to cover the case of tenancy by the entirety. What Property is Subject to the Tax Under the original statute of 1891, which provided merely that all property within the jurisdiction of the commonwealth passing in the specified manner should be subject to the tax, it was held that the legislature had undertaken to. impose a tax limited only by its constitutional powers, 1 and consequently that all personal property of decedents who were residents of this commonwealth of whatever nature and wherever kept was subject to the tax, because the succession of personal property takes place primarily by virtue of the laws of the owner's domi- cile. 2 On the other hand, the personal property of a non-resi- dent decedent kept within this commonwealth was held to be taxable here, because such property is within the state and subject to its jurisdiction. 3 The property it was said has the protection of our laws and our laws are invoked for its adminis- tration. 4 It was also held that shares of Massachusetts corpora- tions and of national banks situated within this commonwealth owned by non-resident decedents and kept outside the state 13 St. 1916, c. 268, §1. 1 Kinney v. Treasurer & Receiver General, 207 Mass. 368 (1911). For the limits of legislative power in such cases, see supra, Part I, §47. 2 Real estate of a resident decedent located in another state is not subject to the tax; and this principle would exonerate from the tax a beneficial interest in land located in another state belonging to a resident decedent, although the interest was assignable without deed, when the holders of the beneficial interests were not associated together in any way; but shares in an unincorporated asso- ciation owning real estate in other states and belonging to a resident decedent are taxable. Dana v. Treasurer & Receiver General, 227 Mass. 562 (1917). Per- sonal property of a resident decedent, of whatever character, is taxable. Thus bonds of foreign corporations, though kept in another state and secured by mortgage of real estate in another state, stocks of foreign corporations and cash on deposit in another state are all taxable. Frothingham v. Shaw, 175 Mass. 59 (1899). Such a tax cannot be evaded by organizing a foreign corporation to hold the assets of a resident decedent. Gardiner v. Treasurer & Receiver General, 225 Mass. 355 (1916). •Callahan v. Woodbridge, 171 Mass. 595 (1898). •Callahan v. Woodbridge, 171 Mass. 595 (1898). Taxation of Legacies and Successions 617 G.L. c. 65, §1] were subject to the tax because such corporations having an abiding place here akin to the domicile of a natural person are subject to the jurisdiction of the commonwealth and the stock- holders are the proprietors of the corporation. 5 Although the situs of a debt is the domicile of the creditor and not that of the debtor and accordingly the debts and obligations of residents and of Massachusetts corporations owed to non-resident dece- dents were not subject to the general property tax, when the debt or obligation was evidenced by a tangible piece of paper as in the case of a bond, the state in which the paper was kept had jurisdiction thereof, and bonds either of Massachusetts or of foreign corporations owned by a non-resident decedent but kept within this commonwealth were held to be subject to the tax; 8 and when the debt or obligation could not be transferred to the person who succeeded thereto upon the death of the decedent, or enforced by him, without resorting to the jurisdiction of this commonwealth it was held subject to the tax without regard to the place where the paper which evidenced the debt was kept. 7 The assessment of the tax in such a broad and sweeping man- ner produced considerable revenue for the treasury of the com- monwealth, but before many years had elapsed almost every state in the union had enacted an inheritance tax law and pro- ceeded to enforce it in the same drastic manner. As a result 6 Greves v. Shaw, 173 Mass. 205 (1899) ; Gardiner v. Treasurer & Receiver General, 225 Mass. 355 (1916). It was held in the former case that the fact that the executor was able to get the shares transferred to the legatees before proving the will here did not exempt him from paying the tax. Shares in real estate trusts when the trustees lived and managed the property in this state and the property is situated here are taxable, although the decedent was a non-resident and the shares were kept outside the state. Peabody v. Treasurer & Receiver General, 215 Mass. 129 (1913). See also Priestley v. Treasurer & Receiver Gen- eral, 230 Mass. 452 (1918). •Callahan v. Woodbridge, 171 Mass. 595 (1898). This principle does not extend so far as to justify the taxation of stock in a foreign corporation belong- ing to a non-resident decedent merely because the stock certificates were kept in. this commonwealth. Clark v. Treasurer & Receiver General, 218 Mass. 292 ( 1914) . T Thus in Kinney v. Treasurer & Receiver General, 207 Mass. 368 (1911) it was held that notes belonging to a non-resident decedent and kept outside the state but secured by mortgage upon real estate within the state were subject to the tax. In Bliss v. Bliss, 221 Mass. 201 (1915) it was held that registered bonds of this commonwealth belonging to a non-resident decedent and kept out- side the state were taxable, because they could not be transferred without re- sorting to the jurisdiction of this commonwealth; but that notes of a partner- ship belonging to a non-resident and kept outside the state were not taxable, although the principal place of business and the domicile of one of the partners was in this commonwealth, if another of the partners lived elsewhere, as the notes could be enforced without resorting to the courts of this commonwealth. 618 Taxation in Massachusetts [G. L. c. 65, § 1 the estates of decedents whose funds were invested in several different states were often made subject to two, three or even more inheritance taxes with respect to the same property. For reasons stated elsewhere such a result violated no constitutional rights, 8 but it began to be felt that it was unjust as well as un- wise, and concerted efforts were made throughout the country to mitigate the burden of duplicate inheritance taxation. In 1907 a step was made in this direction in Massachusetts which involved the exemption of property of a non-resident de- cedent where a like exemption was made by the laws of his domicile in favor of citizens of this commonwealth; 9 and in 1912 the state renounced all inheritance taxes upon the estates of non-resident decedents except upon their interests in real estate within this commonwealth. 10 In 1907 also the commonwealth renounced the taxation of the property of resident decedents not situated within the commonwealth, if legally subject to a like tax elsewhere. 11 Although a number of other states adopted a similar policy, it was not universally accepted, and the states which adhered to the principle of subjecting to the inheritance tax everything which lay within their constitutional power to reach profited at the expense of the states which had adopted a more equitable policy. Massachusetts finally gave up the attempt to bring about by its example the levying of inheritance taxes along lines of interstate comity, and in 1916 repealed the statute exempting property of resident decedents elsewhere taxed, 12 and in 1920 8 Supra, Part I, §33. 9 St. 1907, c. 563, §3. See G. L. c. 65, §5, infra, page 626. 10 St. 1912, c. 678. Under this statute it was held that the real estate of a non-resident decedent which was taxable included a mortgage of real estate with- in the commonwealth, Hawkridge v. Treasurer & Receiver General, 223 Mass. 134 (1916), and shares in a partnership association owning real estate in this com- monwealth ; but not shares in an association constituting a trust as distinguished from a partnership. Priestley v. Treasurer & Receiver General, 230 Mass. 452 (1918). Even under the former statute it was held that when real estate of a non-resident decedent situated in Massachusetts was subject to a mortgage the tax should be merely on the equity of redemption although the decedent left suf- ficient personal property in his own state to pay off the mortgage. McCurdy v. McCurdy, 197 Mass. 248 (1908). 11 St. 1907, c. 563, §3. Under this statute it was held that it was open to the courts of this state to determine for themselves whether property of a resi- dent decedent was "legally subject" to a tax in another state, even if the tax had been sustained by the highest court of sucli state. Welch v. Treasurer & Receiver General, 227 Mass. 87 (1916). "St. 1916, c. 268, §3. The 1907 statute remains in force with respect to persons dying between September 1, 1907 and May 26, 1916. Taxation of Legacies and Successions 619 G.L. c. 65, § 1] resumed the taxation of personal property of non-resident dece- dents within its jurisdiction, except in the case of residents of states which exempted the property of citizens of this common- wealth under like circumstances. 13 Exemptions It is to be remembered that there are no exemptions based on the character of the property of which a legacy or distribu- tive share is composed. The so-called "tax exempt" securities are not exempt from the operation of the inheritance tax. Stocks of Massachusetts corporations and even United States bonds are included in determining the amount of the inheritance tax. 1 The tax is not on the property but upon its transmission, and the property is the measure and not the subject of the tax. The only exemptions are based upon the character of the party re- ceiving the legacy. The original statute provided that property passing "to or for (the use of) charitable, educational or religious societies or institutions, the property of which is exempt by law from taxa- tion" should not be subject to the inheritance tax. Under this statute it was held that as there was no law exempting all the property of charitable, educational or religious societies or in- stitutions from general taxation, but only their property when used in a certain way, it was not entirely clear what was meant, but the more reasonable interpretation was that bequests to institutions whose property is generally exempt should be exempt from this tax, regardless whether the particular piece of property bequeathed would itself be exempt. 2 A bequest to a town to establish a public institution of one of the designated classes came within the literal wording of the statute and was conse- quently exempt. 3 The exemption did not however embrace all charitable gifts but only those in which a charitable institution incorporated or unincorporated was trustee or cestui que trust. 4 13 St. 1920, c. 396, §1. The 1912 statute remains in force with respect to persons dying between May 29, 1912 and May 4, 1920. 'Plummer v. Coler, 178 U. S. 115 (1900); Orr v. Gilman, 183 U. S. 278 (1901) ; Callahan v. Woodbridge, 171 Mass. 595 (1898). "Thus it was held in First Universalist Society v. Bradford, 185 Mass. 310 (1904) that the bequest of a parsonage to a religious society was exempt from the tax, although the parsonage itself was taxable. "Essex v. Brooks, 164 Mass. 79 (1895). 4 Hooper v. Shaw, 176 Mass. 190 (1900). 620 Taxation in Massachusetts [G. L. c. 65, § 1 The exemption applies only to charitable institutions ex- empted from taxation by the laws of this state, 5 although there is no requirement that a charitable institution incorporated in this state limit its field of usefulness to this state under penalty of taxation. 6 When a testator leaves property to trustees for a charitable purpose to be carried out outside the commonwealth so that the bequest is taxable, the trustees cannot escape the tax by forming a Massachusetts corporation and turning over the property to it; 7 but when the property is directly devised to such charitable purposes as the trustees may designate, and the trustees cause a corporation to be formed and the property turned over to it, the bequest is exempt, because the passage from the testator's estate to the corporation is direct. 8 With respect to a bequest to an existing corporation, the exemption depends upon the purposes and work of the corporation at the time of the testator's death. 9 In 1895 it was provided that bequests to towns for any public purpose should not be subject to the tax, 10 and there is no doubt that the legislature intended to confine this exemption to towns within this commonwealth. 11 In 1905 this exemption was ex- tended to bequests to or for the use of a city or town for public purposes 12 and in 1906 bequests to a trustee or trustees for pub- lic charitable purposes within the commonwealth were made exempt. 13 In the statute of 1907 which originated the direct inheritance tax and codified and re-enacted the existing statutes 5 A bequest to a municipal or charitable or educational corporation located outside the state is taxable. Minot v. Winthrop, 162 Mass. 113 (1894) ; Rice v. Bradford, 180 Mass. 545 (1902); Pierce v. Stevens, 205 Mass. 219 (1910); Davia v. Treasurer & Receiver General, 208 Mass. 343 (1911) ; Batt v. Treasurer & Receiver General 209 Mass. 319 (1911). It was held in Board of Education v. Illinois, 203 U. S. 553 (1906), that there was nothing in violation of the con- stitution of the United States in a state statute limiting the exemption from the legacy tax to charitable institutions incorporated within the state. A bequest to the World Peace Foundation, a corporation organized to promote peace among nations, is for charitable rather than for political purposes, and is exempt. Park- hurst v. Treasurer & Receiver General, 228 Mass. 196 (1917). As to what consti- tute charitable, educational and religious societies within the meaning of the tax laws see G. L. c. 59, §5, el. 3, 11, supra, pages 197, 205. •Balch v. Shaw, 174 Mass. 144 (1899). 7 Pierce v. Stevens, 205 Mass. 219 (1910). 8 Balch v. Shaw, 174 Mass. 144 (1899). •Parkhurst v. Treasurer & Receiver General, 228 Mass. 196 (1917). 10 St. 1895, c. 307. "Davis v. Treasurer & Receiver General, 209 Mass. 319 (1911). 12 St. 1905, c. 470. ■ St. 1906, c. 436. Taxation of Legacies and Successions 621 G. L. c. 65, §§ 1, 2] relating to the subject of inheritance taxes, the last exemption was put very briefly as "for or upon trust for any charitable purposes," 14 and the same phraseology was employed in the codification of 1909. 15 In the same year however the whole sub- ject of the geographical limitation of exemptions from the inher- itance tax was given explicit attention by the legislature and the exemption of charitable institutions in terms confined to such institutions "the property of which is by the laws of this com- monwealth exempt from taxation," the exemption of cities and towns confined to cities and towns "within this commonwealth" and the exemption of charitable trusts confined to "charities to be carried out within this commonwealth." 16 The statute how- ever which contained these provisions was held to be merely de- claratory of the existing law and a bequest taking effect outside the state made by a person who died in 1908 was held to be sub- ject to the tax. 17 The provision as to exemption has remained unchanged since 1909, except that in 1916 legacies to the commonwealth itself were added to the tax exempt class. 18 Powers of Appointment Section 2. Whenever any person shall exercise a power of ap- pointment, derived from any disposition of property made prior to September first, nineteen hundred and seven, such appointment when made shall be deemed a disposition of property by the person exercis- ing such power, taxable under section one, in the same manner as though the property to which such appointment relates belonged abso- lutely to the donee of such power, and had been bequeathed or devised by the donee by will; and whenever any person possessing such a power of appointment so derived shall omit or fail to exercise the same within the time provided therefor, in whole or in part, a disposi- tion of property taxable under section one shall be deemed to take place to the extent of such omission or failure in the same manner as though the persons thereby becoming entitled to the possession or. enjoyment of the property to which such power related had succeeded "St. 1907, c. §1. 15 St. 1909, c. 490, Part IV, §1. "St. 1909, c. 527, §1. 1T Davis v. Treasurer & Receiver General, 208 Mass. 343 (1911). "St. 1916, c. 268, §1. 622 Taxation in Massachusetts [G. L. c. 65, § 2 thereto by a will of the donee of the power failing to exercise such power, taking effect at the time of such omission or failure. Under the original statute it was held that the donor of a power of appointment and not the donee was the decedent whose estate was liable to taxation, and consequently that the exercise after the enactment of the inheritance tax statute of a power of appointment created prior to its enactment was not subject to the tax. 1 Thus remained the law until 1909 when a statute which is in substance the provision quoted above was enacted, in effect subjecting to the provisions of the direct inheritance law of 1907 the subsequent exercise of all testamentary powers of appointment created prior to the taking effect of that law, and also the subsequent passing of property by the failure to exercise such powers, and exonerating from the provisions of the collateral inheritance law of 1891 the subsequent exercise of powers created after its enactment and prior to the taking effect of the direct inheritance law of 1907, upon which the taxes had not already been settled. The constitutionality of the statute of 1909 was assailed in a case in which a tax was imposed upon the passing of property by failure to exercise a power created by deed long before the enactment of any inheri- tance tax law in the commonwealth ; but it was held that as the succession in possession and enjoyment was not determined until the donee of the power acted or refused or omitted to act, it was not vested in anybody, and that when it vested in possession through a disposition dependent upon the will and conduct of the donee of the power a succession tax might be constitutionally imposed, 2 and the same result was reached in the case of a suc- cession tax upon the equal distribution of property among the children of the beneficiary for life by reason of the failure of the beneficiary to exercise a special power of appointment to fix the proportions in which the property should be distributed among his children and grandchildren. 3 The test to be applied to determine whether property pass- 1 Emmons v. Shaw, 171 Mass. 410 (1898). J Minot v. Treasurer & Receiver General, 207 Mass. 588 (1911). See also Moffitt v. Kelly, 218 U. S. 400 (1910). 'Burnham v. Treasurer & Receiver General, 212 Mass. 165 (1912). When, however, upon the failure of a donee of a power to exercise it, another person is given the power, no tax is due upon the failure of the first donee to exercise the power, because no one thereby became entitled to the possession or enjoyment of the property. Attorney-General v. Thorp, 230 Mass. 25 (1918). Taxation of Legacies and Successions 623 G. L. c. 65, §§ 2, 3] ing by the exercise of a power of appointment under the present statute is this: Would the property in question have been sub- ject to an inheritance tax if it had been the property of the donee of the power and had passed by way of devise or legacy under his will? 4 When the donee of the power dies domiciled in another state, so much of the property is subject to the inheritance tax as is within the jurisdiction of the commonwealth and would have been taxable if the donee of the power had owned it outright. 5 This principle cannot however be extended to justify the taxa- tion of the transfer of property by the exercise of a power of appointment by a resident decedent, when the power was cre- ated by the will of a non-resident and the property is not physi- cally within the jurisdiction of the commonwealth, because in such case the succession can be determined and enforced without resorting to our courts, and does not depend upon any privilege conferred by our laws. 6 When a decedent having a general power of appointment dies insolvent, having exercised the power, and a portion of the sum appointed is applied by order of the court to the payment of his debts, only the remainder is subject to the inheritance tax. 7 When a testator directs that all his legacies be paid in full, and that taxes be charged to the residue of his estate, such a direction does not apply to the exercise by him of a special power of ap- pointment, and the inheritance tax must be paid out of the sum appointed rather than out of the residue of the estate. 8 Gifts in Contemplation of Death Section 3. Any deed, grant or gift completed inter vivos, except in cases of bona fide purchase for full consideration in money or money's worth, made not more than six months prior to the death of the grantor or donor, shall, prima facie, be deemed to have been made in contemplation of the death of the grantor or donor. Notwith- standing any provision of section one, no tax shall be payable there- *Minot v. Treasurer & Receiver General, 207 Mass. 588, 590 (1911) ; Clark v. Treasurer & Receiver General, 218 Mass. 292 (1914) ; Gardiner v. Treasurer & Receiver General, 225 Mass. 355, 362 (1916). 6 Clark v. Treasurer & Receiver General, 218 Mass. 292 (1914) ; Gardiner v. Treasurer & Receiver General, 225 Mass. 355 (1916). •Walker v. Treasurer & Receiver General, 221 Mass. 600 (1915). T Hill v. Treasurer & Receiver General, 229 Mass. 474 (1918). e Loring v. Gardner, 221 Mass. 571 (1915). 624 Taxation in Massachusetts [G. L. c. 65, § 3 under on account of any deed, grant or gift in contemplation of death made more than two years prior to the death of the grantor or donor, unless made or intended to take effect in possession or enjoyment after such death. In 1920 provision was made for the first time for subjecting to the inheritance tax completed gifts of a decedent, which took effect at once in possession and enjoyment, provided they were made by him in contemplation of death. 1 The ultimate test of liability to taxation in such cases is whether the gift was made in contemplation of death, although the statute set forth above regulates the determination of the question by providing that a completed gift made within six months of the death of the donor shall be deemed prima facie to have been made in con- templation of death, and that in no event shall a tax be payable on such a gift if made more than two years prior to the death of the donor. The statute applies only to gifts made on or after May 27, 1920 ; 2 and the tax is payable at the expiration of one year after the death of the donor. 3 The statute taxing gifts in contemplation of death has not yet been brought before the supreme judicial court of Massa- chusetts; but similar statutes, some of them more drastic, have been in force in other states for several years, and have been held constitutional when their validity has been assailed. The con- stitutionality of the Massachusetts act has however been ques- tioned as creating an arbitrary discrimination between different classes of completed gifts, and as attempting to levy an excise upon the exercise of a natural right, which is not a "commodity" within the meaning of the constitution of Massachusetts. 4 A gift is made in contemplation of death when there is an apprehension of death soon to occur, arising from some existing bodily condition, as when the donor is suffering from a disease which he knows to be fatal, or from some impending peril, and the statute does not apply to the general expectation of eventual decease commonly entertained by all persons, even if the donor is advanced in years. Ante-nuptial settlements, or advance- ments made to the children of a decedent, are not made in con- templation of death merely because they take the place of a 1 St. 1920, c. 548. See G. L. c. 65, §1, supra, page 608. 1 G. L. c. 65, §36, infra, page 660. 3 G. L. c. 65, §7, infra, page 627. 4 See Part I, §55. Taxation of Legacies and Successions 625 G. L. c. 65, §§ 3, 4] testamentary disposition. Even if a gift was made within six months of the death of the donor, the presumption that it was made in contemplation of death may be rebutted by competent evidence. Shares in Multi-State Corporations Section 4. When the personal estate passing under section one from any person not an inhabitant of the commonwealth consists in whole or in part of shares in any railroad or street railway company or telegraph or telephone company incorporated under the laws of this commonwealth and also of some other state or country, so much only of each share as is proportional to the part of such company's line lying within this commonwealth shall be considered as property of such person within the jurisdiction of the commonwealth for the purposes of this chapter. Certain important public service corporations having lines in more than one state are incorporated under the laws of every state in which their lines are located although they have but a single issue of capital stock. The subjection of shares in such corporations to the inheritance tax has received attention from both the legislature and the courts. Under the general pro- visions of the original statute it was held that shares in a rail- road corporation having a charter both from Massachusetts and from another state and having track in both states, owned by a non-resident decedent and kept outside this commonwealth at the time of his death, were subject to the tax. So long as the railroad holds a Massachusetts charter, it was said, Massachu- setts can prescribe the payment of a tax as a condition of the right to succeed to stock issued under that charter. 1 It was later held that the value for the purpose of taxation should under such circumstances be limited to the value of the property of the corporation within the commonwealth. A different rule, it was said, might be constitutional but it would be unfair and the legislature cannot be assumed to have intended it. 2 Just prior to this decision but after the case arose a statute was enacted .providing for an apportionment by mileage in case of shares in a multi-state corporation held by a non-resident de- 1 Moody v. Shaw, 173 Mass. 375 (1899). 2 Kingsbury v.' Chapin, 196 Mass. 533 (1907). 626 Taxation in Massachusetts [G. L. c. 65, §§ 4, 5 cedent, which was repealed so far as it applied to the estates of persons dying after May 29, 1912, 3 when the state abandoned the policy of taxing the personal property of non-resident de- cedents. When the taxation of the property of non-resident decedents was resumed, the statute providing for the appor- tionment of the tax on stock in multi-state corporations was re-enacted. 4 In 1911 provision was made for the exemption of a part of the value of stock in a multi-state corporation owned by a resi- dent decedent, apportioned according to mileage; 5 but when the state resumed the policy of taxing all the personal property of resident decedents, wherever located, this provision was re- pealed. 8 Reciprocal Exemption of Non-Resident Decedents Section 5. Property of a non-resident decedent which is within the jurisdiction of the commonwealth at the time of his death, if sub- ject to a tax of like character with that imposed by this chapter by the law of the state or country of his residence, shall be subject only to such part of the tax hereby imposed as may be in excess of the tax imposed by the laws of such other state or country, provided that a like exemption is made by the laws of such other state or country in favor of estates of residents of this commonwealth ; but no such ex- emption shall be allowed until the tax provided for by the law of such other state or country shall be actually paid, guaranteed, or secured in accordance with law. In 1907 a statute in substance the same as the foregoing was enacted, 1 and this statute remained in force until 1912 when the state renounced all taxation of the estates of non-resident de- cedents. 2 In 1920 the state resumed the taxation of the prop- erty of non-resident decedents, and the statute establishing reciprocal exemptions was revived. 3 3 St. 1907, c. 563, §2, codified as St. 1909, c. 490, IV, §2 and repealed by St. 1912, c. 678, §2. * St. 1920, c. 396, § 2, applicable to persons dying after May 4, 1920. 8 St. 1911, c. 502, §1. °St. 1916, c. 268, §3, applicable to persons dying after May 26, 1916. x St. 1907, c. 563, §3 (last sentence). 2 St. 1912, c. 678, §2 (with respect to the estates of persons dying after May 29, 1912). 3 St. 1920, c. 397, §3 (with respect to the estate of persons dying after May 4, 1920). Taxation of Legacies and Successions 627 G. L. c. 65, §§ 5-7] While the 1907 statute was in force it was held that a "like exemption" was made by the laws of another state with respect to the taxation of intangible personal property within the mean- ing of the statute, when the laws of such state exempted from the inheritance tax all intangible personal property of non- residents, independently of. any correlative concession by other states; and the property of a resident of another state is not subject to taxation here, if similar property of a decedent resi- dent of this state, within the jurisdiction of such other state, would not be taxed by such other state. 4 Persons Liable for the Tax Section 6. Administrators, executors and trustees, grantees or donees under conveyances or gifts made during the life of the grantor or donor, and persons to whom beneficial interests shall accrue by survivorship, shall be liable for the taxes imposed by this chapter, with interest, until the same have been paid. Taxes imposed upon the passing of property by will or by the laws regulating intestate succession, though imposed on the particular legacies or distributive shares, are payable by the exe- cutor, administrator or trustee, and not by the legatee or dis- tributee, except in the case of the tax on a future interest com- ing into possession when there is no executor, administrator or trustee, in which case the tax is payable by the person receiving the interest. On the other hand, taxes imposed upon the pass- ing of property by gift, whether intended to take effect in pos- session or enjoyment after the death of the donor, or made in contemplation of death, and by survivorship, are payable by the donee or the survivor, since such property would not consti- tute assets of the estate of the decedent or come into the pos- session of his executor or administrator. Time of Payment Section 7. Taxes imposed by this chapter upon property or in- terests therein, passing by will or by laws regulating intestate suc- cession, shall be payable to the state treasurer by the executors, ad- ministrators or trustees at the expiration of one year from the date of 4 Bliss v. Bliss, 221 Mass. 201, 209 (1915) ; Borden v. Treasurer & Receiver General, 221 Mass. 212 (1915). 628 Taxation in Massachusetts [G. L. c. 65, §§ 7, 8 the giving of bond by the executors, administrators or trustees first appointed; except that in all cases where there shall be a devise, descent or bequest to take effect in possession or come into actual enjoyment after the expiration of one or more life estates or of a term of years, the taxes thereon shall be payable by the executors, adminis- trators or trustees in office when such right of possession accrues, or, if there is no such executor, administrator or trustee, by the persons so entitled thereto, at the expiration of one year from the date when the right of possession accrues to the persons so entitled. If the probate court, acting under section thirteen of chapter one hundred and ninety-seven, has ordered the executor or administrator to retain funds to satisfy a claim of a creditor, the payment of the tax may be suspended by the court to await the disposition of such claim. Taxes imposed by this chapter upon property or interests therein, passing by deed, grant or gift to take effect in possession or enjoy- ment after the death of the grantor or donor, or upon beneficial inter- ests arising or accruing by survivorship in any form of joint owner- ship, shall be payable by the grantee, donee or survivor at the expira- tion of one year from the date when his right of possession or enjoy- ment accrues. Taxes imposed by this chapter upon property or inter- ests therein passing by deed, grant or gift made in contemplation of death shall be payable by the grantee or donee at the expiration of one year after the death of the grantor or donor. In case of any deed, grant or gift of a life interest or term of years, the donee for life or years shall pay a tax only on the value of his interest, and the donee of the future interest shall pay his tax when his right of possession or enjoyment accrues. Section 8. If a foreign executor, administrator or trustee as- signs or transfers any stock in any national bank situated in this com- monwealth, or in any corporation organized under the laws of this commonwealth, owned by a deceased non-resident at the date of his death and liable to a tax under this chapter, the tax shall be paid to the state treasurer at the time of such assignment or transfer, and if it is not paid when due, such executor, administrator or trustee shall be personally liable therefor until it is paid. A bank situated in this commonwealth or a corporation organized under the laws of this commonwealth which shall record a transfer of any share of its stock made by a foreign executor, administrator or trustee, or issue a new certificate for a share of its stock at the instance of a foreign executor, Taxation op Legacies and Successions 629 G. L. c. 65, § 8] administrator or trustee, before all taxes imposed thereon by this chapter have been paid, shall be liable for such tax in an action of contract brought by the state treasurer. Under the original statute of 1891 it was provided that when there was a devise for life or years that was not taxable by reason of the relationship of the devisee to the testator, and a remainder to a collateral heir or a stranger that was taxable, the value of the life estate should be appraised and deducted from the total value, and the remainder should be taxed in the established manner; 1 and it was further provided that all taxes imposed by the act should be paid by the executors, adminis- trators or trustees at the expiration of two years from the date of their giving bond 2 except when the probate court had ordered the executor or administrator to retain funds to satisfy the claim of a creditor whose right of action had not accrued, or when the probate court ordered the time of payment extended. 3 These statutes remained unchanged until 1902, except for the striking out in 1895 of a clause permitting payment to be made to the county treasurer instead of to the treasurer of the common- wealth. 4 Under these statutes it was held that when property was left in trust to pay the income to a person so related to the testator that the bequest was not taxable and on his death to pay the principal to one not exempt, the tax on the remainder must be paid out of the principal although the result was to diminish the income of the exempt beneficiary; and that in the absence of specific authority in the will this loss would not be made good to him out of the estate. 5 It was further held that when an annuity was devised to collateral kindred, the whole tax thereon should be paid out of the annuity as soon as it be- came payable, even although the entire first payment of the annuity was thereby exhausted. 6 When a life estate of the exempt class was terminated before the payment of the tax so that its real value could be actually determined, nevertheless • St. 1891, c. 425, §2. 'St. 1891, c. 425, §4. • St. 1891, c. 425, §18. 4 St. 1895, c. 430, §1. B Minot v. Winthrop, 162 Mass. 113 (1894). •Minot v. Winthrop, 162 Mass. 113 (1894). Since 1912, the statutes have specifically provided that the tax should be paid out of capital and not income. St. 1912, c. 678, §1, now G. L. c. 65, §12, infra, page 635. 630 Taxation in Massachusetts [G. L. c. 65, § 8 for the purpose of fixing the tax on the remainder, the life estate was required to be valued on the basis of its probable duration at the death of the testator. 7 When the remainder consisted of future and contingent interests, and it could not be determined until long after the testator's death whether they would fall to direct or to collateral heirs, a case arose for the probate court to defer payment of the tax, and the liability of the remainder to the tax depended upon the outcome of the contingency. 8 There was nothing in the statute which limited the time within which suit might be brought to recover the tax. 9 In 1902 a radical change was made and a statute enacted in that year 10 provided that when there was a devise, descent or bequest to strangers or collaterals to take effect in possession or enjoyment after a life estate or term for years (1) the tax thereon should not be payable until the persons entitled came into possession of the property; (2) the tax should be based on the actual value of the property when the right of possession accrued; (3) the liability for payment should rest upon the beneficiary instead of upon the executor or administrator. It was held that the statute was retrospective and applied to all estates upon which the tax had not been paid, 11 and was con- stitutional as so construed, although it might increase the amount of the tax on the remainderman, by reason of the appreciation in value of the property during the preceding term for life or years, as it was aimed to do more exact justice to both the commonwealth and to the taxable beneficiaries by substituting a real for an estimated valuation which might be incorrect by reason of the variation between the actual and the estimated duration of the preceding life estate or by reason of the appre- ciation or depreciation of the property between the death of the testator and the acquisition of possession by the remainder- man. 12 There was nothing in the statute which limited its application to remainders after such previous estates as were not subject to the tax. 13 The statute permitted the payment 7 Howe v. Howe, 179 Mass. 546 ( 1901 ) . 8 Howe v. Howe, 179 Mass. 546 (1901). •Howe v. Howe, 179 Mass. 546 (1901). " St. 1902, c. 473. "Stevens v. Bradford, 185 Mass. 439 (1904). 12 Attorney General v. Stone, 209 Mass. 186 (1911), 18 1 Opinions of Attorney General, 76. Taxation of Legacies and Successions 631 G. L. c. 65, § 8] of the tax at any period previous to the acquisition of posses- sion, the value being fixed as of the time of payment after de- ducting the value of the preceding term. In 1903, it apparently being felt that the interests of the commonwealth were not sufficiently protected, it was provided that a tax on the remainder or reversion in personal property of the estates of persons dying thereafter should be assessed and collected under the provisions of the original statutes unless the persons beneficially interested gave bond within one year from the death of the decedent for the payment of the tax when they should enter into possession. 14 For the tax on remainders and reversions in real estate the commonwealth was sufficiently pro- tected by its lien. The provisions of the last mentioned statutes relating to the deferment of the payment of taxes upon estates in remainder or reversion received considerable modification when the direct inheritance tax of 1907 was enacted. Such taxes were made pay- able by the executor, administrator or trustee in office when the right of possession accrued and if there was no executor, ad- ministrator or trustee, by the person entitled to the property; and a sum of money might be deposited instead of a bond. The date of payment was however definitely fixed as the date when right of possession accrued if there was an executor, adminis- trator or trustee in office; otherwise one year later, so that the filing of the bond was no longer a condition precedent to the deferment of the tax. The only advantages in filing the bond or making the deposit are that it extinguishes- the lien upon the real estate and makes possible the allowance of the final probate accounts of the executor, administrator or trustee. In 1909 a change was made by striking out a provision that the tax should be payable before the expiration of two years if the legacies were paid earlier. 15 The statute which made this last amendment and re-enacted the remainder of the section was given general application to taxes which remained unpaid, and accordingly it has been held that although the statute of 1907 was in terms wholly prospective in operation, the re-enactment of the section now under consideration in 1909 made it applicable to taxes 11 St. 1903, c. 276. See the following case decided under that statute. Dow v. Abbott, 197 Mass. 283 (1908). 15 St. 1909, c. 527, §2. 632 Taxation in Massachusetts [G. L. c. 65, § 8 assessed under the statutes in force prior to 1907 as well as to those under the act of that year. 16 In 1915 the time of payment was reduced to one year from the date of giving bond by the executors, administrators or trus- tees first appointed, 17 and in the following year the tax was made payable in the case of the passing of property by gift or survivorship within one year after the right of possession accrued. 18 The provisions of section eight were first enacted in 1900, 19 but were repealed in 1912 with respect to the estates of persons dying thereafter, 20 as they ceased to be applicable after the state renounced the taxation of the estates of deceased non-residents. In 1920, when the state resumed the taxation of the estates of deceased non-residents within its jurisdiction, the statute was re- enacted. 21 Summary The tax is payable and interest begins to run one year from the date of giving bond by the executor or administrator except (1) When the probate court has ordered the retention of funds to satisfy a claim of a creditor it may order payment of the tax suspended. 22 (2) When there is an estate to take effect in possession after a term for life or years, the tax is not payable until the right to possession accrues, if there is an executor, administrator or trustee in office; and if there is no such person in office at that time the tax is not payable until a year later; 23 but the tax "St. 1909, c. 527, §10; Attorney General v. Stone, 209 Mass. 186, 192 (1911). "St. 1915, c. 162. 18 St. 1916, c. 268, §2. 19 St. 1900, c. 371, §1. This statute first appeared in 1900 as a means of more readily enforcing payment of the inheritance tax on stock in national banks situated in this commonwealth and in Massachusetts corporations, which it had been held in the previous year were subject to the tax, although the foreign executor had succeeded in getting them transferred without taking out ancillary administration here. Greves v. Shaw, 173 Mass. 205 (1899). The statute in its original form and in the Revised Laws applied to the obligations of such cor- porations as well as to their stock, but as enacted in the statute of 1907 and in its present form the provision as to obligations ia omitted. 30 St. 1912, c. 678, §2. 21 St. 1920, c. 396, §4. 33 G. L. c. 65, §7, par. 2. 23 G. L. c. 65, §7, par. 1. Taxation op Legacies and Successions 633 G. L. c. 65, §§ 8, 9] may at the option of the persons entitled to a future interest be paid earlier. 24 (3) When a foreign executor, administrator or trustee of a non-resident decedent causes stock in a Massachusetts corpora- tion or in a national bank situated in this commonwealth to be transferred, the tax becomes payable forthwith. 25 (4) The probate court may extend the time of payment of the tax whenever the circumstances of the case require such extension. 26 (5) In the case of a gift taking effect in possession or en- joyment after the death of. the donor, or upon the accrual of an interest in joint property by survivorship, the tax becomes payable at the expiration of one year from the date when the right of possession or enjoyment accrues. 27 (6) In the case of a gift made in contemplation of death, the tax becomes payable at the expiration of one year from the death of the donor. 28 (7) In case of any gift of a future interest, the tax on the future interest becomes payable when the right of possession or enjoyment thereof accrues. 29 Lien for Tax Section 9. Property of which a decedent dies seized or possessed, subject to taxes as aforesaid, in whatever form of investment it may happen to be, and all property acquired in substitution therefor, shall be charged with a lien for all taxes and interest thereon which are or may become due on such property; but said lien shall not attach to any personal property after the same has been sold or disposed of for value by the executors, administrators or trustees, or to real estate after it has been conveyed by the executors, administrators or trus- tees under license or decree of the probate court, or to real estate which, during the life of the grantor, is conveyed by recorded or registered deed and transferred in possession and enjoyment by him to the grantee, in contemplation of death. The lien charged by this chapter upon any real estate or separate parcel thereof may be dis- 24 G. L. c. 65, §14, infra, page 640. 25 G. L. c. 65, §8. 20 G. L. c. 65, §32, infra, page. 27 G. L. c. 65, §7, par. 3. 28 G. L. c. 65, §7, par. 3. 29 G. L. c. 65, §7, par. 4. 634 Taxation in Massachusetts [G. L. c. 65, §§ 9, 10 charged by the payment of all taxes due and to become due upon said real estate or separate parcel, or by an order or decree of the probate court discharging said lien and securing the payment to the common- wealth of the tax due or to become due by bond or deposit as herein- after provided, or by transferring such lien to other real estate owned by the owner or owners of said real estate or separate parcel thereof. The provisions for the enforcement of the lien on real estate are found in section thirty-one. Delivery of Assets to Foreign Executor Section 10. Securities or assets belonging to the estate of a de- ceased non-resident shall not be delivered or transferred to a foreign executor, administrator or legal representative of such decedent, un- less such executor, administrator or legal representative has been licensed to receive said securities or assets under section three of chapter two hundred and four. License to receive, sell, transfer or convey securities or assets under said section shall not be granted unless it appears to the judge of the probate court that all taxes im- posed by this chapter have been paid or secured according to law. Any person or corporation that delivers or transfers any securities or assets belonging to the estate of a non-resident decedent before all taxes imposed thereon by this chapter have been so paid or secured shall be liable for such tax in an action of contract brought by the state treasurer. This section was first enacted in 1900 1 and was re-enacted in the Revised Laws, but it received considerable modification in the statute of 1907, 2 the express prohibition of the granting of the license and the liability for delivering assets before all taxes have been paid having been added at that time. The statute was repealed as inapplicable in 19 12, 3 so far as it related to the estates of persons dying thereafter, when the state ceased to tax the estates of deceased non-residents; but when the tax- ation of such estates was resumed in 1920, the statute was re- enacted. 4 The section of the General Laws referred to in the 'St. 1900, c. 371, §2. 2 St. 1907, c. 563, §16. See also St. 1909, c. 527, §7. 8 St. 1912, c. 678, §2. * St. 1920, c. 396, §5. Taxation op Legacies and Successions 635 G.L. c. 65, §§ 10,11,12] statute allows an executor, administrator, guardian or trustee duly appointed in another state or country to file a petition in the probate court for license to receive personal property situ- ated in this commonwealth to which he is entitled. The section now under consideration relates only to the col- lection of the inheritance tax, and cannot be invoked in aid of the claim of a private party. 5 Interest and Discount Section 11. If taxes imposed by this chapter are not paid when due, interest shall be charged and collected from the time the same became payable. If a tax imposed by this chapter is paid prior to the date upon which it is. due, it shall be discounted at the rate of four per cent a year. When interest begins to run in any case depends upon when the tax is due, as established by other provisions of the law. 1 Ordinarily interest begins to run one year from the date of the executor's or administrator's bond; 2 but when there is a deferment of the tax on a "future estate, and there is an exe- cutor, administrator or trustee in office when the right of pos- session to such estate accrues, the tax is payable and interest begins to run when the right of possession accrues; but if there is no such officer in existence when the right of possession ac- crues the tax is not payable and interest does not begin to run until one year thereafter. 3 Tax Chargeable to Capital Section 12. All taxes under this chapter shall be paid out of and chargeable to capital and not income, unless otherwise provided in a will or codicil, or deed or other instrument creating the grant or gift; but this provision shall not affect any right of the common- wealth to collect such tax, or any lien therefor. The enactment of the foregoing provision in 1912 modified the existing rule, and. established the principle that all inheri- 5 Morrison v. Hass, 229 Mass. 514 (1918); Morrison v. Berkshire Loan & Trust Co., 229 Mass. 519 (1918). 1 G. L. c. 65, §7, supra, page 627. 2 Bradford v. Storey, 189 Mass. 104 (1905). "Attorney General v. Stone, 209 Mass. 186, 192 (1911). 636 Taxation in Massachusetts [G.L. c. 65, §§12, 13 tance taxes should be paid out of capital and not income. 1 When in a will which establishes a number of trusts there is no sequestration of any part of the general trust fund, but it is held as a unit, the inheritance taxes must be paid out of this fund as the capital of the estate. 2 The state inheritance tax, unlike the federal estate tax, is normally assessed upon and payable out of each legacy and dis- tributive share, and is not paid out of the residue of the estate unless the testator expressly so directs. Even when a devise of real estate was made in accordance with a contract between the testator and the devisee, the inheritance tax must be paid out of the devise; 3 and a direction by a testator to pay taxes on lega- cies out of the residue of his estate will not include appointments made by him in his will under a power established by the will of a prior decedent. 4 Value for Purposes of the Inheritance Tax Section 13. Except as otherwise provided in this and the fol- lowing section, the tax imposed by this chapter shall be assessed upon the actual value of the property at the time of the death of the decedent. In case of a devise, descent, bequest or grant to take effect in possession or enjoyment after the expiration of one or more life estates or of a term of years, the tax shall be assessed on the actual value of the property or interest therein coming to the beneficiary at the time when he becomes entitled to the same in possession or enjoy- ment. The value of an annuity or a life interest in any such property, or any interest therein less than an absolute interest, shall be de- termined by the "American Experience Tables" at four per cent compound interest; but when an annuity or a life interest is termi- nated by the death of the annuitant or life tenant, and the tax upon such interest is not due and has not been paid in advance, the value of said interest for the purposes of taxation under this chapter shall be the amount of the annuity or income actually paid or payable to the annuitant or life tenant during the period for which he was en- titled to the annuity or was in possession of the life estate. 1 St. 1912, c. 678, §1. As to the earlier law, see Sohier v. Eldredge, 103 Mass. 345 (1869). 2 Parkhurst v. Ginn, 228 Mass. 159 (1917). s Lane v. Richardson, 234 Mass. 403 (1920). 'Loring v. Gardner, 221 Mass. 571 (1915). Taxation of Legacies and Successions 637 G.L.C. 65, §13] The original statute provided merely that the value for the purpose of taxation should be the "actual value" without fixing a date as of when the valuation should be made ; but it was held by the court in a case in which the property had greatly appre- ciated in value between the death of the testator and the dis- tribution of the legacies that it could be gathered from other portions of the act that it was the intention of the legislature that the valuation should be made as of the date of the death of the decedent. 1 Income accruing between the death of the de- cedent and the distribution of the property is not taxed, 2 but income which has accrued before the death of the decedent is included in his estate subject to taxation although not collected until after his death, the income in such cases being apportioned as of the date of his death. This principle does not however jus- tify the taxation of income, though paid at fixed intervals, which is not apportionable, such as rent or dividends on stock of corporations. Although the valuation, except in certain prescribed in- stances, is made as of the date of the death of the decedent, and the rights of all parties vest at the death, in determining the amount upon which the tax is computed all payments made by the executor or administrator to relieve the estate from a general charge upon it, to discharge the debts or other obligations of decedent or to defray the legal expenses of administration are deducted, and the tax is only upon the balance passing to the legatee or distributee. 3 Applying this principle, inheritance taxes paid to the United States, 4 and inheritance taxes which the executor or administrator was obliged to pay to other states in order to reduce the property of the decedent to possession, and property taxes assessed before but payable after the death of decedent are deductible. 5 When the decedent was a non-resident part of whose prop- erty was within the jurisdiction of Massachusetts, it was the i Hooper v. Bradford, 178 Mass. 95 (1901). 2 Hooper v. Bradford, 178 Mass. 95 (1901). 3 Old Colony Trust Co. v. Treasurer & Receiver General, Mass. (.1921). Debts and expenses of administration may be deducted, Callahan v. Woodbridge, 171 Mass. 595 (1898); but only such payments are deductible as have been allowed by the probate court. See G. L. c. 65, §27, injra, page 651. 4 Hooper v. Shaw, 176 Mass. 190 (1900); Old Colony Trust Co. v. Treasurer & Receiver General, Mass. (1921). 5 Old Colony Trust Co. v. Treasurer & Receiver General, Mass. (1921). 638 Taxation in Massachusetts [G. L. c. 65, § 13 practice to tax a legacy or share including such property if the entire legacy or share was of sufficient value to fall within the statutory provisions, but to determine the amount of the tax by considering only the portion of the legacy or share that was within the jurisdiction of Massachusetts; but it was held that the statutes did not warrant the taxation of such a legacy or share unless the portion within the jurisdiction of Massachu- setts exceeded the statutory minimum. 6 If a sufficient portion of the estate of a non-resident is within the jurisdiction of Mas- sachusetts to bring a proportionate part of any legacy or share above the statutory minimum, such legacy or share will be taxed upon the proportion that the part of the estate taxable in Mas- sachusetts bears to the entire estate, and the executor or admin- istrator will not be allowed to diminish the amount of the tax by devoting the property subject to the jurisdiction of this state to the payment of debts, exempt legacies and legacies to the direct heirs; 7 but it would seem that a non-resident testator by specifically devising such of his property as is subject to the jurisdiction of Massachusetts to his direct heirs or to Massachu- setts charities and the remainder of his estate to friends or col- lateral kindred could lawfully effect a reduction of the tax on his estate. In the case of a present interest determinable upon death, such as a life estate 8 or an annuity, the present value of the in- terest is determined according to the expectancy of life of the person upon whose death the determination of the interest de- pends, as shown by the experience tables. 9 Formerly it was held that the expectancy as of the death of the testator was to govern, even if the death of the life tenant or annuitant had oc- curred before the tax was assessed; 10 but since 1913 it has been provided that in such case the amount of the tax should be de- e Attorney General v. Barney, 211 Mass. 134 (1912). 'Kingsbury v. Chapin, 196 Mass. 533 (1907). 8 As to what constitutes a life estate, it was held in Dow v. Abbott, 197 Mass. 283 (1908), that when a piece of real estate was devised to a devisee "to use for the term of five years or longer" the devise should be taxed as a life estate. In Kemp v. Kemp, 223 Mass. 32 (1916), it was held that when a testator devised the income of all of his estate to his wife for life, with power if the income was insufficient to sell any of the property and spend the proceeds, her estate should be taxed as a life estate. B In 1909 the "American Experience Tables" were substituted for the "Ac- tuaries Combined Experience Tables" which had been in use since 1891. "Howe v. Howe, 179 Mass. 546 (1901). Taxation of Legacies and Successions 639 G. L. c. 65, § 13] American Experience Tables. — Discounted at 4 Per Cent Compound Interest. Explanation: To find the present worth of the life estate of a person, multiply the principal of the fund by the figure in column 1 opposite the age of the person at the nearest birthday. Example: A, who is 26 years, 4 months old at the death of B, is given by B's will a4ife estate in property valued at $20,000. Solution: Opposite age 26 in column 1 is .7143; multiply .7143 X $20,000 = $14,286. To find the present worth of an annuity of a given amount for life, multiply the annuity by the figure in column 2 opposite the age at the nearest birthday of the person receiving the annuity. Example: A, who is 25 years, 7 months old at death of B, is given by B's will an annuity of $800 for life. Solution: Opposite age 26 in column 2 is 17.857; multiply 17.857 X $800 - $14,285.60. AGE Column 1 Life Estates. Column 2 An- nuities. AGE. Column 1 Life Estates. Column 2 An- nuities. AGE. Column 1 Life Estates. Column 2 An- nuities. 10 .7766 19.414 40 .6177 15.443 70 .2523 6.307 11 .7737 19.343 41 .6088 15.220 71 .2397 5.993 12 .7708 19.269 42 .5995 14.988 72 .2274 5.685 13 .7677 19.192 43 .5900 14.749 73 .2153 5.383 14 .7645 19.112 44 .5801 14.502 74 .2034 5.086 15 .7611 19.028 45 .5699 14.248 75 .1918 4.794 16 .7577 18.942 46 .5594 13.985 76 .1802 4.505 17 .7540 18.851 47 .5486 13.714 77 .1688 4.219 18 .7503 18.757 48 .5374 13.436 78 .1574 3.936 19 .7464 18.660 49 .5260 13.151 79 .1462 3.656 20 .7423 18.558 50 .5143 12.858 80 .1352 3.380 21 .7388 18.452 51 .5002 12.559 81 .1243 3.108 22 .7337 18.342 52 .4902 12.255 82 .1137 2.842 23 .7291 18.228 53 .4776 11.944 83 .1032 2.580 24 .7244 18.109 54 .4651 11.628 84 .0927 2.318 25 .7194 17.985 55 .4523 11.307 85 .0823 2.057 26 .7143 17.857 56 .4393 10.982 86 .0720 1.799 27 .7089 17.723 57 .4261 10.653 87 .0619 1.548 28 .7034 17.585 58 .4128 10.321 88 .0524 1.310 29 .6976 17.440 59 .3994 9.985 89 .0434 1.085 30 .6916 17.291 60 .3859 9.648 90 .0347 0.867 31 .6854 17.135 61 .3724 9.309 91 .0262 0.654 32 .6789 16.973 62 .3588 8.969 92 .0181 0.454 33 .6722 16.806 63 .3452 8.630 93 .0116 0.291 34 .6653 16.632 64 .3316 8.290 94 .0055 0.137 35 .6580 16.451 65 .3181 7.952 95 36 .6505 16.263 66 .3046 7.616 37 .6428 16.069 67 .2913 7.282 38 .6347 15.868 68 .2781 6.952 39 .6264 15.659 69 .2651 6.627 If an annuity is payable semiannually, add .250 to the annuity value in Column 2. If an annuity is payable quarterly, add .375 to the annuity value in Column 2. If an annuity is payable monthly, add .458 to the annuity value in Column 2. 640 Taxation in Massachusetts [G.L. c. 65, §§ 13, 14 pendent upon the amount of income or annuity actually paid. 11 In the case of a prese*it interest determinable upon a con- tingency other than death, as in the case of a will providing for the payment of income to the testator's widow until her death or remarriage, or in the case of termination upon any other condition which cannot be valuecl by the experience tables, it appears to be the practice to tax the interest as a life interest and to require payment of the tax without deferment. 12 Payment of Taxes on Future Interests Section 14. Any person entitled to a future interest in any property may pay the tax on account of the same at any time before such tax would be due under this chapter, and in such cases the tax shall be assessed upon the actual value of the interest at the time of payment, and such value shall be determined by the commissioner as provided in this chapter. Whenever it is impossible to compute the present value of any interest, the commissioner may, with the approval of the attorney general, effect such settlement of the tax as he shall deem to be for the best interests of the commonwealth, and payment of the sum so agreed upon shall be a full satisfaction of such tax. Under the original inheritance tax act of 1891, it was pro- vided that all taxes imposed by the act should be paid within two years of the date of the bond of the executor or adminis- trator unless the probate court specially ordered the date of pay- ment extended, and the value of a future interest was determined by deducting from the value of the property the value of the preceding estate, as determined by the experience tables if it depended upon the duration of human life. If a future interest was contingent, and it was uncertain when it would vest and what would be the relationship to the testator of the person who eventually would receive it, the probate court was necessarily bound to defer payment of the tax until the uncertainty upon which the amount, and under the law which taxed only col- lateral inheritances, liability to the tax depended. 1 In 1902, it was provided that the tax upon a future interest 11 St. 1913, c. 689, §1. 12 Howe v. Howe, 179 Mass. 546 (1901); Moors v. Treasurer & Receiver General, 237 Mass. 254 ( 1921 ) . 1 Howe v. Howe, 179 Mass. 546 ( 1901 ) . Taxation of Legacies and Successions 641 G. L. c. 65, § 14] should not be payable until the person entitled came into pos- session, and should be based upon the actual value of the prop- erty at the time when the right of possession accrued. 2 The statute however permitted the payment of the tax at any time previous to the acquisition of possession, and this provision of statute is still in force. 3 It may be of great advantage to pay a tax on a future inter- est immediately upon the death of the testator, for the tax is based upon the value of the interest at the time of payment, and if the property is likely to appreciate in value it is wise to pay the tax at once. So also, if a tax is based on the present value of a future interest, the value of the present interest must be deducted from the value of the property itself to determine the value of the future interest, whereas, if the tax is paid when the holder of the future interest comes into possession and enjoy- ment, the tax is based upon the entire value of the property. If the rate is the same in either case, although the tax will be larger if the payment is deferred, this disadvantage will be counterbalanced by the advantage to the taxpayer in having the use and interest of the money applicable to the tax in the interval. If however the additional value to the future estate which comes to it with the expiration of the preceding estate subjects it to a tax at a higher rate, there may be a substantial advantage in paying the tax in advance, even if the property itself is not likely to appreciate in value. 4 Nevertheless, there is no right to the payment of a tax on a future interest unless the value of such interest can be def- initely determined by the experience tables or otherwise. If there is a contingency which creates an uncertainty, there is no enforceable right to the payment of the tax, even if the person presumptively entitled to the future interest offers to pay a tax based upon the assumption that the uncertainty will be deter- mined in such a way as to operate against him and the amount of which will thus be at least equal to and may be more than the amount which would be due if the value of his interest could be accurately determined. 5 2 St. 1902, c. 473. See G. L. c. 65, §7, supra, page 627. 5 Dow v. Abbott, 197 Mass. 283 (1908). The provision is at present con- tained in the first sentence of section 14. 4 Moors v. Treasurer & Receiver General, 237 Mass. 254 (1921). "Mitton v. Treasurer & Receiver General, 229 Mass. 140 (1918). 642 Taxation in Massachusetts [G.L. c. 65, §§ 14,15 The provision authorizing a settlement when it was impos- sible to compute the value of an interest first appeared in the statutes in 1903, but was then limited to the case of a taxable devise dependent upon a contingency or the exercise of a dis- cretion. In 1904 settlement was authorized in the case of a devise of an estate for life or years to a person of the untaxable class with power of appointment over the remainder. In 1907 the provision for settlement was extended to all future interests and in 1909 to all interests, future or otherwise, and the statute as finally amended and re-enacted was made applicable to all cases in which the tax remained unpaid at the date of its pas- sage. 6 The settlement of a tax under this provision lies wholly in the discretion of the taxing officials and will not be enforced by mandamus, no matter how reasonable an offer a taxpayer may have made and how unreasonable the position of the commis- sioner in refusing to accept it. 7 If the person entitled to a present interest in the income of property pays a tax on such interest and afterward receives a share of the principal by reason of being alive when the time for distribution arrives, the value of his interest in the income and of his share of the principal when distributed should be added together to determine the rate at which they should be taxed, and if they are taxable at a higher rate than that at which the interest of the legatee in the income which was payable at the death of the testator was assessed, the legatee must pay an additional tax upon his interest in the income. 8 Deposit or Bond for Payment of Tax on Future Interests Section 15. In case of a bequest or grant of personal estate made or intended to take effect in possession or enjoyment after the death of the grantor, to take effect in possession or come into actual enjoy- ment after the expiration of one or more life estates or a term of years, whether conditioned upon the happening of a contingency, dependent upon the exercise of a discretion, subject to a power of appointment, or otherwise, the executor, administrator or grantee may deposit with the state treasurer a sum of money sufficient in the opinion of the commissioner to pay all taxes which may become due upon such • St. 1909, c. 527, §10, enacted June 19, 1909. T Mitton v. Treasurer & Receiver General, 229 Mass. 140 (1918). 8 Moors v. Treasurer & Receiver General, 237 Mass. 254 (1921). Taxation of Legacies and Successions 643 G.L.c. 65, §§15, 16] bequest or grant, and the persons having the right to the use or income of such personal estate shall be entitled to receive from the commonwealth interest at the rate of two and one half per cent per annum upon such deposit, and when said tax shall become due the treasurer shall repay to the persons entitled thereto the difference be- tween the tax certified and the amount deposited; or any executor, administrator, trustee or grantee, or any person interested in such bequest or grant may give bond to a judge of the probate court having jurisdiction of the estate of the decedent, in such amount and with such sureties as said court may approve, conditioned that the obligor shall notify the commissioner when said tax becomes due and shall then pay the same to the commonwealth. In 1902 authority for deferring payment of the tax on a fu- ture interest was for the first time given by the legislature, 1 but in the following year it was provided that the tax on any future interest in personal property should be payable without defer- ment unless the person beneficially entitled to the interest gave bond for the payment of the tax within one year of the death of the testator. 2 While this statute was in force, unless the legatee gave the bond within the specified period, the executor or administrator was bound to pay the tax. 3 In 1907 the deposit of money was made permissible, as well as a bond, but the deposit or bond ceased to be a condition pre- cedent to the deferment of the tax; 4 but the statutes authoriz- ing the deposit or bond are still in force, and the making of the deposit or the giving of a bond is still of advantage in mak- ing the allowance of the final accounts of the executor or ad- ministrator possible. 5 Excessive Compensation of Executor Taxable Section 16. If a testator gives, bequeaths or devises to his executors or trustees any property otherwise liable to the tax im- posed by this chapter in lieu of their compensation, the value thereof in excess of reasonable compensation, as determined by the probate court upon the application of any interested party or of the com- missioner, shall be subject to this chapter. 1 See G. L. c. 65, §§7, 14, supra, pages 627, 640. 3 St. 1903, c. 276. 3 Dow v. Abbott, 197 Mass. 283 ( 1908) . 4 St. 1907, c. 563, §5. 5 See G. L. c. 65, §23, infra, page 648. 644 Taxation in Massachusetts [G. L. c. 65, §§ 16,17 This statute has received no modification since it was first enacted in 1891 other than reduction to its present concise phrase- ology in the Revised Laws and the substitution in 1907 of the tax commissioner for the treasurer and receiver general as the party to make application to the probate court. The ordinary compensation of an executor, administrator or trustee is not subject to the inheritance tax, being deducted as one of the expenses of administration, and it is only a bequest in excess of reasonable compensation that is taxable, and then only as to the amount of the excess. Executor Liable for Tax Section 17. An executor, administor or trustee holding property subject to the tax imposed by this chapter shall deduct the tax there- from or collect it from the legatee or person entitled to said property ; and he shall not deliver property or a specific legacy subject to said tax until he has collected the tax thereon. An executor or adminis- trator shall collect taxes due upon land passing by inheritance or will which is subject to said tax from the heirs or devisees entitled thereto, and he may be authorized to sell said land, in the manner prescribed by section twenty-one, if they refuse or neglect to pay said tax. The first part of this section appeared in the original act of 1891 and the last part first appeared in 1901. The two statutes were consolidated in the Revised Laws and appeared in the direct inheritance law of 1907, in the codification of 1909 and in the General Laws in the same phraseology as in the Revised Laws. It is plain that under this statute it is the duty of the executor, administrator or trustee in the case of articles of personal property specifically devised to collect the tax before delivering the article to the legatee, and that in the case of a specific legacy in common to two or more persons the tax is to be collected from each in proportion to his interest. 1 It is to be noted that in collecting the inheritance tax the commonwealth deals directly with the executor or adminis- trator, 2 and has no direct relations with the persons who even- tually receive the property of a decedent except in the case of a 1 Ops. Attorney General, 30. "Dow v. Abbott, 197 Mass. 283 (1908). Taxation op Legacies and Successions 645 G.L.c. 65, §§17, 18] gift made in the life of the decedent, 3 or when payment of the tax is deferred until after the execirtor or administrator has gone out of office, 4 or when the tax is collected by enforcing the statu- tory lien upon the property of the decedent. 5 It is the executor or administrator who must pay the tax and the statutes furnish him ample means of raising money from the estate in whatever form it may be to satisfy the tax. 6 If he is in doubt about the liability of the estate to taxation he may apply to the probate court for instructions; 7 but if he turns over the property of the estate to the persons entitled without paying a tax which was then due he is personally liable for the tax. 8 On the other hand the persons beneficially interested in the estate have no opportunity to contest with the commonwealth the liability of the estate to taxation; 9 and if an executor or administrator pays a tax claimed by the commonwealth without an adjudica- tion of court, he is personally liable to the heir or legatee if it is subsequently held that the tax was not legally due. 10 Legacy Charged on Real Estate Section 18. If a legacy subject to said tax is charged upon or payable out of real estate, the heir or devisee, before paying said legacy, shall deduct said tax therefrom and pay it to the executor, ad- ministrator or trustee, and the tax shall remain a lien upon said real estate until it is paid. Payment thereof may be enforced by the executor, administrator or trustee in the same manner as the payment of the legacy itself could be enforced. This section has received no alteration since it was first enacted except a slight modification of phraseology without change of meaning. Payment of a legacy charged upon or pay- able out of real estate may be enforced by action at law or bill in equity and the same remedies are open to the executor to enforce payment of the tax. 3 G. L. c. 65, §7, supra, page 627. 4 G. L. c. 65, §7, supra, page 627; §14, supra, page 640. 5 G. L. c. 65, §5, supra, page 626, and §31, infra, page 656. a G. L. c. 65, §§18, 21, infra, pages 645, 646. 7 G. L. c. 65, §30, infra, page 654. 8 G. L. c. 65, §30, infra, page 654. 9 G. L. c. 65, §27, infra, page 651. "Essex v. Brooks, 164 Mass. 79 (1895). 646 Taxation in Massachusetts [G. L. c. 65, §§ 19, 20 Provision for Payment of Tax Not Taxable Section 19. When provision is made by any will or other in- strument for payment of the legacy or succession tax upon any gift thereby made out of any property other than that so given, no tax shall be chargeable upon the sum to be applied in payment of such tax. Prior to 1907 it was contended by the treasury department that a direction in a will to pay the tax on a legacy out of the estate amounted to an increase of the legacy by the amount of the tax, and it was the practice to assess a tax on a sum which after the tax was deducted would leave the amount of the legacy. This practice was overturned by the statute quoted above. Repayment of Tax on Property Returned Section 20. If a person who has paid to the estate of a deceased person, or to the commonwealth, any tax or part of a tax imposed on such estate by this chapter, afterward refunds to the estate any of the property upon which such tax was paid, or, in the case of a tax or part of a tax paid to the estate of the deceased, or paid to the commonwealth on account of such estate, if it is judicially deter- mined that the whole or any part of such tax ought not to have been paid, such tax, or the due proportion thereof, shall be repaid to him by the executor, administrator or trustee. This statute has not been materially modified since the year after its original enactment, when an error in wording which appeared in the statute in its original form was corrected. The statute contemplates the payment of a tax by the devisee, legatee or heir to the executor or administrator and applies to all taxes under the statute and not merely to those referred to in the three preceding sections. A person receiving property under the will or by intestate succession may be obliged to repay or re- turn it to meet the demands of creditors of the estate, or of children of the testator unintentionally omitted in the case of a will, or for similar reasons, and if under such circumstances he has previously paid the tax he is of course entitled to have it returned to him. Taxation of Legacies and Successions 647 G.L. c. 65, §§21, 22] Sale of Real Estate for Payment of Tax Section 21. The probate court may authorize executors, ad- ministrators and trustees to sell the real estate of a decedent for the payment of said tax in the same manner as it may authorize them to sell real estate for the payment of debts. This essential provision for the enforcement of the inheri- tance tax law has remained in the statutes since the original enactment of the inheritance tax law in 1891 without modifica- tion, except a slight alteration in verbiage when the Revised Laws were enacted. Under this section payment of the tax by the executor is not a condition precedent to the maintenance of the petition. 1 Such a petition need not contain all the allegations required in the case of a petition to sell real estate for payment of debts. 2 It is sufficient if it alleges the death of the decedent and the de- vise or descent of his real estate, contains a description of the real estate and further states that an inheritance tax is due thereon and that the respondent has taken possession of the real estate and refuses to pay the tax. 3 Inventory and Appraisal Section 22. A full and complete inventory and appraisal on oath of every estate shall be filed in the probate court or with the com- missioner by the executor, administrator or trustee within three months after his appointment, and such inventory shall contain a com- plete list of all assets within the knowledge of said executor, adminis- trator or trustee. If he neglects or refuses to file such an inventory and appraisal he shall be liable to a penalty of not more than one thousand dollars. The original statute required the filing of inventories of only such estates as were in whole or in part subject to the tax; but it was the opinion of the attorney-general that if any part of the estate was subject to the tax the executor or administrator was bound to file an inventory of the whole, 1 and that the treas- x Lane v. Richardson, 234 Mass. 403 (1920). 3 Under G. L. c. 202, §1. 8 Lane v. Richardson, 234 Mass. 403 (1920). 1 1 Opinions of Attorney General, 40. 648 Taxation in Massachusetts [G. L. c. 65, §§ 22, 23, 24 urer had no power to dispense with this requirement. 2 The obligation of the register of probate to notify the tax commis- sioner was added in 1895, and in the direct inheritance tax act of 1907 the obligation of filing an inventory was imposed in the case of every estate. In 1909 further provision was made that the inventory should be "full and complete" and "contain a complete list of all assets within the knowledge of the said executor, administrator or trustee." The obligation to file an inventory exists in every case, whether there is any liability to taxation or not. The inventory affords the commissioner the opportunity to determine whether the estate is liable to the tax. Non-Payment of Tax as Affecting Allowance of Probate Accounts Section 23. Except as provided in the following section, no final account of an executor, administrator or trustee shall be allowed by the probate court unless such account shows, and the judge of said court finds, that all taxes imposed by this chapter upon any property or interest therein belonging to the estate to be settled by said account and already payable have been paid, and that all taxes which may be- come due on said estate have been paid or settled as hereinbefore provided, or that the payment thereof to the commonwealth is secured by bond or deposit or by lien on real estate. The certificate of the commissioner and the receipt of the state treasurer for the amount of the tax therein certified shall be conclusive as to the payment of the tax, to the extent of said certification. Section 24. The fact that an estate may later become subject to a tax imposed by this chapter, or that a tax hereby imposed is due and the amount thereof cannot be ascertained, shall not prevent the allowance of the final account of the executor, administrator or trustee thereof, if it appears that all taxes imposed by this chapter for which such estate is liable, which are already payable and the amount of which can be ascertained, have been paid, and that such property or interest therein has been transferred to a trustee appointed by a pro- bate court of the commonwealth who has given bond, with sufficient sureties, in such a sum as to insure the payment of all taxes which are or may become due on said estate, unless such trustee is exempted from giving sureties by the probate court appointing him; and such 2 1 Opinions of Attorney General, 52. Taxation op Legacies and Successions 649 G. L. c. 65, §§ 24, 25] trustee shall be liable for such taxes and the interest thereon in the same manner and to the same amount as if he had been the executor, administrator or trustee originally liable therefor, and the property received by him shall be subject to a lien for said taxes and interest until the same are paid. Section twenty-three has remained in substantially the same form since its original enactment, except for the changes in phraseology necessary to conform to the other changes in the inheritance tax laws. Section twenty-four was first enacted in 1910. The allowance of a final account by the probate court and the issuance of a decree for distribution when the common- wealth is not a party is not a bar to the subsequent collection of a tax which is due by operation of the statutes; the allow- ance of an account under such circumstances is unauthorized by statute and if not absolutely void is at least not binding on the commonwealth. 1 Conversely, the failure of an executor or administrator to file an account and have it allowed does not do away with the requirement resting on the commissioner to notify the executor or administrator of the amount of the tax, or estop the executor or administrator from contending that the tax is invalid. 2 Determination of Value Section 25. The value of the property upon which the tax is computed shall be determined by the commissioner and notified by him to the persons by whom the tax is payable, and such determina- tion shall be final unless the value so determined shall be reduced by proceedings as herein provided. At any time within three months after such determination the probate court shall, on application of any party interested in the succession, or of the executor, administrator or trustee, appoint one or three disinterested appraisers, who, first being sworn, shall appraise such property at its actual market value as of the day of the death of the decedent, and shall make return thereof to said court. Such return, when accepted by said court, shall be final, except that any party aggrieved by such appraisal shall have an appeal upon matters of law. One half of the fees of said appraisers, as determined by the judge of said court, shall be paid by the com- monwealth, and one half by the other parties to the proceeding. 1 Attorney General v. Stone, 209 Mass. 186 (1911) j Attorney General v. Raf- ferty, 209 Mass. 321 (1911). 2 Attorney General v. Roche, 219 Mass. 601 (1914). 650 Taxation in Massachusetts [G. L. c. 65, § 26 Section 26. At any time within three months after the date of the determination of value of any estate made by the commissioner under the preceding section, the commissioner may, at the request or with the consent of the persons by whom the tax is payable, alter such determination of value. If any such alteration is made, the commissioner shall notify the persons by whom the tax is payable of the alteration, and the period within which application may be made for the appointment of an appraiser or appraisers as provided by said section shall be three months from the date of said alteration of value by the commissioner. In all proceedings in the probate court under this or the preceding section, or by an appraiser or appraisers appointed by the court under either section, the commisioner shall receive notice thereof and may be heard. The date as of when valuation is made has already been dis- cussed. 1 The original statute provided that the valuation should be made by the probate court; but the treasurer or any person interested in the estate might apply for the appointment of ap- praisers whose return when accepted by the court should be final. The appraisers' fees were to be paid by the treasurer. In 1905 the statute was amended by a provision that half of the ap- praisers' fees should be paid by the treasurer and half by the other party to the preceeding ; and that the court might appoint a single appraiser. In 1907 the power of originally determining the value was given to the tax commissioner, and the executor, administrator or trustee, as well as the parties interested in the succession, were given authority to apply for an appraisal. The provisions for an alteration of the determination of value, now found in section twenty-six, were first enacted in 1912. The provisions of section twenty-five furnish the exclusive remedy for a person aggrieved by an excessive valuation placed by the commissioner upon the property with respect to the pass- ing of which the tax is assessed. The remedy of petition for abatement under section twenty-seven is available only when the tax is in whole or in part illegally assessed, and has no applica^ tion to an excessive valuation of property the passing of which is subject to the tax. 2 If no appeal is taken, the valuation of the commissioner is final. 3 1 G. L. c. 65, §13, supra, page 636. 2 Attorney General v. Skehill, 217 Mass. 364 (1914). 8 Attorney General v. Roche, 219 Mass. 601 (1914). The administrator may, Taxation op Legacies and Successions 651 G. L. c. 65, §§ 26, 27] An executor or administrator cannot apply under section twenty-five for a re-appraisal of only part of the property of the decedent. He cannot accept the valuation of the commis- sioner with respect to items of property which the commissioner has appraised at too low a value and invoke the remedy pro- vided by the statute with respect to items which the commis- sioner has over-valued. If the tax is just, considering the prop- erty of the decedent in its entirety, the executor or administrator cannot complain if one or more items were overvalued. 4 Assessment, Certification and Abatement Section 27. The commissioner shall determine the amount of tax due and payable upon any estate or part thereof, and shall certify the amount so due and payable to the state treasurer and to the persons by whom the tax is payable ; but in the determination of the amount of any tax under this chapter the commissioner shall not be required to consider any payments on account of debts or expenses of administration which have not been allowed by the probate court having jurisdiction of said estate. Payment of the amount so certified shall be a discharge of the tax. An executor, administrator, trustee, grantee, donee or survivor aggrieved by any determination of the com- missioner may, within one year after the payment of any such tax, apply by a petition in equity to the probate court having jurisdiction of the estate of the decedent for the abatement of the tax or any part thereof, and if the court adjudges that the tax or any part thereof was wrongly exacted it shall order an abatement of such part thereof as was assessed without authority of law. Upon a final decision order- ing an abatement of any part of such a tax, the treasurer shall pay the amount adjudged to have been illegally exacted, with interest, without any further act or resolve making appropriation therefor. This statute originated in 1907, and prior to its enactment there was no provision for an authoritative statement by a rep- resentative of the commonwealth of the amount of tax claimed to however, show in abatement proceedings that the value of the estate was re- duced by the payment of debts. Attorney General v. Laycock, 221 Mass. 146 (1915). * Whitney v. Tax Commissioner, 234 Mass. 188 (1919). In this case the court expressly left open the question of the necessary scope of an application for reappraisal by a devisee or legatee who is interested only in some particular property less than the entire estate. 652 Taxation in Massachusetts [G. L. c. 65, § 27 be due equivalent in any way to the assessment of a local tax by the assessors. The statute automatically assessed the tax, and an executor or administrator who was in doubt as to the liability of a portion of the estate to the tax, but was willing with the assent of the legatees to pay all that the common- wealth claimed, had no means of securing a binding statement from the commonwealth without applying for instructions from the probate court. The statute quoted above remedies this situation to a certain extent; but nevertheless an estate that is liable to the tax may be made to pay it at any time that the commissioner certifies the tax is due and no such means of es- cape by lapse of time is afforded as is the case in the assess- ment of local taxes, which cannot be imposed after a certain day in the year for which they are assessed. The second portion of the section also tends to bring the inheritance tax more in harmony with the general tax system of the commonwealth by giving the representative of the estate of a deceased person or the grantee of property under a gift inter vivos subject to the tax or a joint owner who takes by survivor- ship, who is aggrieved by a determination of the commissioner in regard to the amount of the tax, an opportunity to apply for abatement. As the law stands now a person who is aggrieved by the valuation for the purpose of the tax of property which is to pass to him may apply for a re-valuation by appraisers, with appeal on matters of law ; and if he is aggrieved in any other way as by the subjection of property to the tax which he claims is exempt, the representative of the estate may apply for an abatement to the probate court. A distinction is thus to be noted between section twenty-five and section twenty-seven. A legatee or devisee or a distributee in case of an intestate estate may apply for a reappraisal under section twenty-five as a "party interested in the succession." This right is essential to a reasonable protection of the rights of such parties because the determination of the commissioner is final upon valuation unless application for re-appraisal is made, and if such parties had no right to be heard upon the re- appraisal they would be deprived of their property without a hearing. Upon abatement for any cause other than over- valuation there is no provision for a petition by the persons who are to receive the estate of the decedent and who thus ultimately Taxation of Legacies and Successions 653 G. L. c. 65, §§ 27, 28] pay the tax, but the certification of the commissioner is not con- clusive, so, if the question is not judicially determined by pro- ceedings in the probate court, the legatees and distributees retain their common law right of suing the executor or administrator for their legacies or distributive shares without deduction, thus raising the question of the legality of the tax. The right to apply for a re-appraisal under section twenty- five must also be carefully distinguished from the right to ap- ply for an abatement under section twenty-seven. Re-appraisal is the only remedy for over- valuation of the property the passing of which is subject to the tax, and a petition for abatement will not lie merely to correct an error in valuation. 1 Petition for abatement is the remedy in case of an assessment illegal in whole or in part. 2 Failure on the part of the commissioner to allow a proper deduction for debts of the estate is an illegality which may be made the ground of a petition for abatement. 3 If no appeal is taken from the valuation of the commissioner, he determines or computes the amount of the tax and certifies the tax to the treasurer and receiver general for collection. But he must also notify the person by whom the tax is to be paid, and the tax is not payable until such notice is given. As the legislature has not prescribed the kind of notice, it may be per- sonal or by mail. If the taxpayer lives in a city, the notice should if possible be directed to the street and number of his residence. A notice to his attorney is not sufficient. 4 Examination on Oath of Persons Having Information Section 28. For the purpose of assessing taxes imposed by this chapter, the commissioner may summon and examine on oath any person supposed to know or have means of knowing any material fact touching the subject of such assessment. The said examination may be reduced to writing, and false swearing therein shall be deemed perjury and be punishable as such. A justice of the superior court, upon application of the commissioner, may compel the attendance of 'Attorney-General v. Skehill, 217 Mass. 364 (1914). 2 Attorney-General v. Roche, 219 Mass. 601 (1914); Attorney-General v. Laycock, 221 Mass. 146 (1915) ; Whitney v. Tax Commissioner, 234 Mass. 188, 191 (1919). See also G. L. c. 58, §27, supra, page 181, as to petitioning the commissioner for abatement. s Attorney General v. Laycock, 221 Mass. 146 (1915). * Attorney General v. Roche, 219 Mass. 601 (1914/. 654 Taxation in Massachusetts [G. L. c. 65, §§ 28-30 such witnesses and the giving of such testimony before the commis- sioner in the same manner and to the same extent as before said court. The foregoing section was first enacted in 1914. It is essen- tial to an enforcement of the tax upon gifts inter vivos intended to take effect in possession or enjoyment after the death of the donor, or made in contemplation of death, and upon the ac- quisition of property by survivorship, since the executor or administrator in his official capacity would have no knowledge of such transactions and might well have no actual knowledge of them. Although the commissioner is authorized to summon wit- nesses, no penalty is imposed for disregard of the summons, and the commissioner can enforce attendance only by proceeding through the court. Dooming on Refusal of Information Section 29. Whenever an executor, administrator, trustee, or any person liable to taxation under this chapter, refuses or neglects to furnish to the commissioner any information which in the opinion of the commissioner is necessary to the proper computation of taxes payable by such executor, administrator, trustee or person, after having been requested so to do, the commissioner shall certify such taxes at the. highest rate at which they could in any event be computed. Jurisdiction of the Probate Court Section 30. The probate court having jurisdiction of the settle- ment of the estate of the decedent shall, subject to appeal as in other cases, hear and determine all questions relative to the tax imposed by this chapter, or by the corresponding provisions of earlier laws, and the state treasurer shall represent the commonwealth in any such pro- ceedings. If the court finds that any tax remains due, it shall order the executor, administrator or trustee to pay the same, with interest and costs, and execution shall be awarded against the goods and estate of the deceased h\ the hands of the executor, administrator or trustee, or, if it appears that there are no such goods or estate in his hands, against the goods and estate of the executor, administrator or trustee, as if for his own debt ; but the administrators, executors, trustees and Taxation of Legacies and Successions 655 G. L. c. 65, § 30] grantees mentioned in this chapter shall be personally liable only for such taxes as shall be payable while they continue in the said offices or have title as such grantees respectively. The first sentence of this section is substantially the statute as it appeared in 1891 and in the Revised Laws. An amend- ment in 1903 related to the discharge of the lien and to secur- ing the payment of a tax due on account of the passing of real estate, and its provisions have been superseded. The sec- ond sentence originated in 1907 and provides a more definite method for carrying out the orders of the court. It has been held that the probate court has jurisdiction of a petition brought by an executor of a foreign will proved in this commonwealth for instructions upon the question whether he is liable to pay a tax upon the property, real and personal, of the testator found in this commonwealth, 1 and of a petition filed by the treasurer to determine whether a tax is payable and the amount thereof. 2 It was held in 1895 that the jurisdiction of the probate court is not exclusive, and that a legatee may sue the executor for his legacy at common law and thus raise the question whether any tax should be deducted. 3 As there is no method provided for a legatee or distributee to contest the tax (except for excessive valuation) in any other way than by an action against the exe- cutor or administrator, if the executor or administrator pays the tax without asking the probate court for instructions or apply- ing for an abatement, and there is no requirement that the cer- tification of the commissioner be final and conclusive if it is not questioned in the manner provided by statute, it would seem that the decision referred to is still good law, although an executor or administrator would doubtless not often put himself in a po- sition which would subject him to liability in such an action. Although the statute provides that the state treasurer shall represent the commonwealth in proceedings under this section, it is not essential to the jurisdicion of the court that he be made a party, and the failure to make him a party when he has not asked to be admitted as such is not ground for reversing a judgment rendered under this section. 4 1 Callahan v. Woodbridge, 171 Mass. 595 (1898). 2 Bradford v. Storey, 189 Mass. 104 (1905). "Essex v. Brooks, 164 Mass. 79 (1895). 4 Lane v. Richardson, 234 Mass. 403 (1920). 656 Taxation in Massachusetts [G.L. c. 65, §§31, 32 Enforcement of Lien on Real Estate Section 31. Upon petition of the state treasurer the probate court shall, after such notice to the owners of any real estate or separate parcel thereof as said court shall order, determine the amount of taxes imposed by this chapter and by corresponding provisions of earlier laws which have become payable, and of interest on said taxes, for which such real estate or separate parcel thereof is charged with a lien. After such determination said treasurer may collect said taxes and interest by sale in the manner provided by chapter sixty for the collection of taxes by sale by a collector of taxes, so far as applicable. From the first enactment of the inheritance tax law in 1891 it was open to the state treasurer to petition the probate court to determine whether a tax was payable, and, if payable, what the amount should be ; but there was no provision authorizing the probate court to enforce payment of the amount determined to be due. 1 There was also provision that the taxes should consti- tute a lien until paid, 2 but no specific authority for enforcing the lien by foreclosure or sale. In 1910 however proceedings for enforcing the lien upon real estate in the same manner as liens for local taxes are enforced were authorized. Proceedings for the Recovery of Unpaid Taxes Section 32. The treasurer shall commence proceedings for the recovery of any of the taxes imposed by this chapter or by corre- sponding provisions of earlier laws within six months after the same become payable; and also whenever the judge of a probate court certifies to him that the final account of an executor, administrator or trustee has been filed in such court, and that the settlement of the estate is delayed because of the non-payment of said tax. The pro- bate court shall so certify upon the application of any heir, legatee or other person interested therein. Whenever the circumstances of a case require, the probate court may extend the time for payment of said tax, with or without interest. Odinarily the collection of inheritance taxes takes care of itself. If the validity or amount of the tax is not in dispute, the executor or administrator sets aside funds sufficient to pay the Bradford v. Storey, 189 Mass. 104 (1905). 2 See G. L. c. 65, §9, supra, page 633. Taxation of Legacies and Successions 657 G. L. c. 65, §§ 32, 33] tax before he distributes the estate; and, if any question about the tax has arisen, he applies to the. probate court for instruc- tions and acts in accordance with the decision of the court. If the payment of the tax is postponed under the statute, the com- monwealth is protected by deposit or bond. 1 The statute quoted above is in substance that originally enacted in 1891, except that it was then provided that the treasurer should "bring suit" and the wording appeared in the Revised Laws "commence an action." Just what form of "suit," "action" or "proceedings" was contemplated has never been determined by the supreme court, but the wording of the earlier statutes at least would seem to imply an action of contract in the superior court. The follow- ing section, however, first enacted in 1909, makes clear the forms of action to be employed, although such remedies are not neces- sarily exclusive. 2 It has been held that the provision as to time is only directory, and that the treasurer is not limited to a period within six months after the tax has become payable, 3 and further that the obligation to pay the tax can be terminated only by payment and that neither the general statute of limita- tions nor the special statute applicable to actions against execu- tors and administrators can be invoked as a bar to a proceeding to recover an inheritance tax. 4 The concluding clause of the section quoted above authorizes the deferment of the payment of the tax when it cannot be as- certained who the ultimate beneficiaries will be and what rela- tionship they will bear to the decedent, 5 and no settlement has been made with the commissioner. 6 Remedies for Collection of Taxes Section 33. Taxes imposed by this chapter and by corresponding provisions of earlier laws may be recovered by the state treasurer in an action of contract brought in the name of the commonwealth, or by an information in equity brought in the supreme judicial court by the attorney general at the relation of the treasurer. In a proceeding under this section for the collection of taxes imposed by this chapter, 1 G. L. c. 65, §15, supra, page 642. 3 See decisions under G. L. c. 60, §35, supra, page 342. * Howe v. Howe, 179 Mass. 546 ( 1901 ) . ♦Bradford v. Storey, 189 Mass. 104 (1905). •Howe v. Howe, 179 Mass. 546 (1901). •Under G. L. c. 65, §14, supra, page 640. 658 Taxation in Massachusetts [G. L. c. 65, § 33 the determination by the commissioner under section twenty -seven of the amount of the tax shall be final as to such amount ; but an executor, administrator, trustee, grantee, donee or survivor may show, in any proceeding brought against him under this section, any facts which would entitle him to an abatement under section twenty-seven, and a judgment or decree shall be entered for the amount of the tax so determined less the amount proved to have been assessed without authority of law, together with interest and costs. If upon an in- formation brought hereunder the court shall find that any tax remains due, it shall order the executor, administrator, trustee, grantee, donee or survivor to pay the same, with interest and costs, and may award execution therefor in the manner and form provided in section thirty. The foregoing section was first enacted in 1909; whether it was enacted for the purpose of defining the proceedings which the treasurer was authorized by the preceding section to insti- tute, or for providing additional remedies, is not entirely clear. In proceedings brought under this section it is not open to the defendant to contest the valuation by the commissioner of the property the passing of which is subject to the tax; the only remedy of a person aggrieved by an overvaluation is to apply for a re-appraisal under section twenty-five. 1 The defendant may however set up as a defense that the tax was in whole or in part illegally assessed. 2 SUMMARY There are now four distinct methods provided for collecting inheritance taxes, namely: (1) Petition to the probate court by the commissioner to determine whether a tax is due and the amount thereof. 3 (2) Action of contract in the name of the commonwealth. 4 (3) Information in equity brought in the supreme judicial court by the attorney general. 5 1 Thus in such proceedings it is not even open to the defendant to show that the true value of the property was so small that no inheritance tax whatever was due. Attorney-General v. Skehill, 217 Mass. 364 (1914). 2 Thus it is competent for the defendant to show that by the payment of debts the assets of the estate were reduced to such a point that no tax was pay- able. Attorney General v. Laycock, 221 Mass. 146 (1915). 3 G. L. c. 65, §30, supra, page 654. 4 G. L. c. 65, §33, supra, page 657. 5 G. L. c. 65, §33, supra, page 657. Taxation op Legacies and Successions 659 G. L. c. 65, § 33] In all of the above execution issues against the goods of the decedent in the hands of the executor, administrator or trustee; but if there are no such goods the executor, administrator or trustee is personally responsible for taxes payable while he was in office. (4) Sale of real estate for non-payment of taxes assessed on account of the same. 6 In addition to these direct methods, pressure may be indi- rectly applied in the following manner : (5) Enforcement of lien on personal property until it is sold or disposed of for value. 7 (6) Prohibition of allowance of final account unless tax on future estate is secured by deposit or bond. 8 (7) Prohibition of delivery of property by executor or ad- ministrator to legatee or heir until he has collected the tax thereon. 9 (8) Sale of land by executor or administrator if heirs or devisees refuse or neglect to pay the tax, or the personal property is insufficient. 10 (9) Enforcement of tax on legacy charged upon real estate in the same manner as payment of the legacy could be enforced/ 1 (10) Liability of domestic corporation for the tax in ac- tion of contract if it transfers shares of non-resident decedent before the tax is paid. 12 (11) Withholding of license to receive assets of non-resident decedent until tax has been paid. 13 (12) Liability of person for tax in action of contract if he delivers assets of non-resident decedent before tax has been paid. 14 (13) Application by commissioner for appointment of ad- ministrator if no will is offered for probate or application for administration made within four months. 15 e G. L. c. 65, §31, supra, page 656. 'G. L. c. 65, §9, supra, page 633. 8 G. L. c. 65, §23, supra, page 648. 8 G. L. c. 65, §17, supra, page 644. 10 G. L. c. 65, §21, supra, page 647. 11 G. L. c. 65, §18, supra, page 645. ' 12 G. L. c. 65, §10, supra, page 634. 13 G. L. c. §10, supra, page 634. 18 G. L. c. 65, §10, supra, page 634. 15 G. L. c. 193, §3, infra, page 747, 660 Taxation in Massachusetts [G. L. c. 65, §§ 33-36 inc. (14) Withholding allowance of final probate account until the tax is paid. 16 Recovery of Penalties and Forfeitures Section 34. Penalties and forfeitures incurred under this chapter may be recovered by the state treasurer in an action of contract brought in the name of the commonwealth, or by an information in equity brought in the supreme judicial court by the attorney general at the relation of the state treasurer. Papers Not Open to Public Inspection Section 35. Papers, copies of papers, affidavits, statements, letters and other information and evidence filed with the commis- sioner in connection with the assessment of taxes upon legacies and successions, except inventories filed with him under section twenty- two, shall be open only to the inspection of persons charged or likely to become charged with the payment of taxes in the case in which such paper, copy, affidavit, statement, letter or other information or evidence is filed, or their representatives, and to the commissioner, his deputies, assistants and clerks and such other officers of the com- monwealth and other persons as may, in the performance of their duties, have occasion to inspect the same for the purpose of assessing or collecting taxes. Nothing in this section shall be construed as limiting the duties imposed upon the commissioner by section three of chapter fifty-eight or as prohibiting the use of such papers, copies, affidavits, statements, letters and other information and evidence in legal proceedings involving the assessment, collection or abatement of taxes. The Tax Not Retrospective Section 36. This chapter shall apply only to property or interests therein passing or accruing upon the death of persons dying on or after May fourth, nineteen hundred and twenty, and as to all prop- erty and interests therein passing or accruing upon the death of persons who have died prior to said date the laws theretofore applicable shall remain in force ; but so much of this chapter as relates to property or interests therein passing by deed, grant or gift com- pleted inter vivos in contemplation of death shall apply only to such 18 G. L. c. 65, §23, supra, page 648. Taxation of Legacies and Successions 661 G. L. c. 65, § 36] deeds, grants or gifts made on or after May twenty-seventh, nineteen hundred and twenty. The original collateral inheritance tax was not enforced against the estates of persons dying before its enactment, and the early modifications of the exemptions based upon the size of the estate or of individual bequests were not retrospective. 1 The radical change made in 1902 which postponed the valuation of future estates and the payment of the tax thereon applied however to all cases in which the tax had not been paid. 2 The direct inheritance tax statute of 1907 applied only to the es- tates of persons dying on or after the date it went into effect, namely, September 1, 1907, and while it repealed all previous statutes relating to the inheritance tax it left them in force so far as they applied to the estates of persons dying before the designated date. 3 In 1909 a statute was enacted providing for the application of the direct inheritance tax to the passing of property by the exercise or non-exercise of powers of appointment created prior to September 1, 1907, and this statute in terms repealed so much of the statute of 1907 that provided that that act should not have a retroactive effect as was inconsistent therewith. 4 The additional methods for collecting inheritance taxes pro- vided by statute in 1909 and 1910 were in terms made applicable to all unpaid taxes, whether imposed under the provisions of the statute of 1907 or of earlier laws. 5 The general increase in rates imposed in 1912 was not re- troactive, and applied only to the estates of persons dying after May 29, 1912, and the increase and change in the method of taxation adopted in 1916 applied only to the estates of persons *St. 1895, c. 307; Howe v. Howe, 119 Mass. 546 (1901) ; St. 1901, c. 297. 2 St. 1902, c. 473; Stevens v. Bradford, 185 Mass. 439 (1904); Attorney- General v. Stone, 209 Mass. 186 (1911). 3 St. 1907, c. 563, §26. The main purpose of this section was to establish a definite line between the cases that should be governed by the new act, and those which would remain subject to the laws previously in force. When an in- dividual prior to 1907 in good faith conveyed property to trustees to pay the income to himself for life and on his death to pay the income to his children and died after 1907 the interest of the children was held not to be subject to the tax. Welch v. Treasurer & Receiver General, 217 Mass. 348 (1914). The statute (St. 1909, c. 268) which placed an adoptive parent upon an equality with a natural parent did not otherwise change the law by making the 1907 statute retroactive. New England Trust Co. v. White, 224 Mass. 332 (1916). 1 St. 1909, c. 527, §8. 8 G. L. c. 65, §33, supra, page 657. 662 Taxation in Massachusetts [G. L. c. 65, § 36 dying after May 25, 1916. 6 The rates of taxation have not been modified since then, except in the case of the temporary addi- tional taxes, 7 and the new provisions which went into effect on May 4, 1920 were those under which the commonwealth re- sumed the taxation of the orooerty of non-residents. 8 6 See G. L. c. 65, §1, supra, page 608. 7 Infra, page 759. 8 See G. L. c. 65, §1, What Property is Subject to the Tax, supra, page 616. CHAPTER 66 PUBLIC RECORDS Chapter sixty-six contains the requirements as to the paper and ink to be used on public records and the custody of such records. The valuation and assessment lists of assessors are public records, and such provisions apply to them.' 1 Commonwealth v. Segee, 218 Mass. 501 (1914), 663 CHAPTER 70 SCHOOL FUNDS AND OTHER STATE AID FOR PUBLIC SCHOOLS State Aid from the Income Tax Section 1. The state treasurer shall annually, on or before November fifteenth, pay to the several towns from the proceeds of the tax on incomes, which shall be available therefor without appropria- tion, the sums required for the purposes of Part I of this chapter, as part reimbursement for salaries paid to teachers, supervisors, prin- cipals, assistant superintendents and superintendents for services in the public day schools rendered during the year ending the preceding June thirtieth. Section 2. For each such person employed for full time service for the entire school year, such reimbursement shall be as follows : (1) Two hundred dollars for every person so employed who re- ceived as salary not less than eight hundred and fifty dollars and who is a graduate of an approved normal school or college and had taught on full time at least two years previous to said year or whose prepara- tion and teaching experience are accepted as equivalent. (2) One hundred and fifty dollars for every person so employed not included in paragraph (1) who received as salary not less than seven hundred and fifty dollars- and (a) has satisfactorily completed one year of professional training in an approved normal school or teachers' training school, and had taught on full time at least three years previous to said year; or (&) is a graduate of an approved nor- mal school or college, and had taught on full time for at least one year previous to said year; or (c) whose preparation and teaching experi- ence are accepted as equivalent. (3) One hundred dollars for every person so employed and not included in paragraphs (1) or (2) who received as salary not less than six hundred and fifty dollars. Section 3. For every such person employed for less than full time service for the school year, but otherwise described in the preceding section and receiving a proportionate salary, said reim- 664 State Aid for Public Schools 665 G. L. c. 70, §§ 3-6 inc.] bursement shall in each case be in such proportion to the reimburse- ment provided for in said section as his service bears to full time service. No town in a superintendency union shall receive under this chapter reimbursement for the part time employment of a super- intendent if entitled to reimbursement therefor under section sixty- five of chapter seventy-one. Section 4. Every town whose valuation, including omitted assess- ments, for the year next preceding the date of payment, when divided by the net average membership of its public day schools as defined in section five for the year ending on the next preceding June thirtieth, yields a quotient less than forty-five hundred dollars shall, for each person for whom it received reimbursement under section two, re- ceive supplementary reimbursement as follows : (1) Three hundred dollars if said quotient is less than two thousand. (2) Two hundred and fifty dollars if said quotient is less than twenty-five hundred but not less than two thousand. (3) Two hundred dollars if said quotient is less than three thou- sand but not less than thirty -five hundred. (4) One hundred and fifty dollars if said quotient is less than thirty-five hundred but not less than three thousand. (5) One hundred dollars if said quotient is less than four thou- sand but not less than thirty-five hundred. (6) Fifty dollars if said quotient is less than forty-five hundred but not less than four thousand. For each person for whom any such town received proportionate reimbursement under section three it shall in each case receive as supplementary reimbursement the same proportion of the sums named herein for full time service. Section 5. For the purposes of section four the net average mem- bership of the public day schools of a town for any school year shall be the average membership for such year as shown by the school registers, increased by the number of pupils resident therein whose tuition in the public schools of another town, for not less than half such year, the town has paid, decreased by the number of non-resident pupils attending its schools for not less than half such year. Section 6. No town shall be entitled to reimbursement under Part I of this chapter on account of salaries paid to teachers whose employment in state-aided vocational schools or departments, con- 666 Taxation in Massachusetts [G.L.c.70,§§6,7 tinuation schools or Americanization classes entitle the town to state reimbursement. For every teacher in a practice school connected with a state normal school, part or all of whose salary is paid or reim- bursed by the commonwealth, the town's reimbursement under this chapter shall be proportionate to the part thereof paid by it. Section 7. Every superintendent of schools shall file with the commissioner of education, not later than August first in each year, a sworn statement, upon blanks prepared by the commissioner, con- taining the data necessary to determine the amounts payable under Part I of this chapter. Before filing such statement, the superin- tendent shall submit it to the chairman of the school committee, who shall countersign it on oath, if, after examination, he finds it correct. The commissioner shall cause such statements to be examined, and shall transmit them to the state treasurer, with a tabulation showing the amount due each town. These sections were enacted in 1919, the same year when the permanent provision for the income tax was adopted. 1 There is distributed in accordance with the provisions of these sections about four million dollars annually, and this sum is taken from the income tax each year before the distribution provided in chapter fifty-eight is put into effect. The effect of this statute is not to increase the aggregate amount of income tax distributed to the cities and towns each year, but to modify the method of distribution, so that some towns receive more and others less than they would receive if the entire tax were dis- tributed in accordance with the method established by chapter fifty-eight; in general, small towns in remote sections of the state, in which there is a relatively small amount of taxable property benefit at the expense of the manufacturing cities. There is no obligation that the money received under these sections be applied to educational purposes; it is paid into the treasury of the town and may be appropriated for any munici- pal purpose. The constitutionality of these sections has been assailed, on the ground that they authorize the levy of a tax upon a particu- lar class of property for a particular public use from which the property taxed derives no special and peculiar benefit; but this objection was not sustained. 2 'G. L. c. 58, §18. 2 Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921). CHAPTER 79 EMINENT DOMAIN General Provisions as to Betterments It is provided in section one that an order for the taking of land by eminent domain shall, in case the improvement for which the taking is made is one for which betterments may be assessed, state whether betterments are to be assessed therefor. It is pro- vided in section nine that when injury is caused to real estate in pursuance of a formal vote or order of a board of public officers although there is no taking, and the owner of the real estate is under the law entitled to damages, if the order estab- lishes a public improvement for which betterments may be as- sessed, it shall state whether betterments are to be assessed therefor. In section twelve it is provided that, in assessing damages, benefits shall be set off unless it was stated in the order of taking, or in the order establishing the improvement, that betterments were to be assessed. Settlement and Assumption of Betterments Section 39. Whenever damages may be recovered under this chapter, the body politic or corporate liable for such damages may after the right to such damages has become vested effect such settle- ment of the damages with the person entitled thereto as it may deem to be for its best interests, and it may as one of the terms of the settlement of a claim for damages growing out of the proceedings in respect of which betterments have been or are to be assessed agree in writing with the owner of the land assessed to assume such better- ments. Such body politic or corporate may after the right to such damages has become vested offer in writing to pay to the person en- titled to receive the same the amount which it is willing to pay in settlement thereof, with interest thereon, together with taxable costs if a petition for the assessment of such damages is pending. If an award of damages has previously been made, the offer shall not J)e 667 668 Taxation in Massachusetts [G. L. c. 79, § 39 of a less amount than such award. Acceptance thereof may be either in full satisfaction of all damages so sustained, or as a payment pro tanto without prejudice to any right to have the remainder thereof assessed by the appropriate tribunal. After notice of such offer, made as aforesaid, or payment of the amount thereof, no interest shall be recovered, except upon such amount of damages as shall, upon final adjudication, be in excess of the amount of said offer ; provided, that all taxable costs accruing subsequently to said offer shall be recover- able by the petitioner in all cases, except as provided in section thirty- eight. Members of a board which is authorized to levy a better- ment assessment are not agents of the city or town but public officers, and they cannot lawfully delegate their duty to make the assessment or submit the amount of the assessment to ar- bitration, or give up by contract any valuable rights of the city or town with respect to the levy of betterments except in the manner provided by statute. 1 They may however consider an offer of favorable terms as to land damages in laying out a street, and although they cannot bind the city or town by an agreement not to assess betterments or to assume the better- ments except in accordance with the statute, their acts taken in connection with acts of the other municipal authorities may constitute the acceptance of an offer which obligates the city or town to assume the betterments. 2 The statute uses very broad language regarding the terms upon which damages may be released, and is held to authorize any reasonable arrangement in regard to the construction of the way and the effect of its construction, direct and incidental, upon the abutting property, not fraudulent or corrupt or re- sulting in an unfair and unjust distribution of the cost of the improvement. 3 1 Boylston Market Association v. Boston, 113 Mass. 528 (1873) ; Somerville V. Dickerman, 127 Mass. 272 (1879) ; Aspinwall v. Boston, 191 Mass. 441 (1906) ; Whitcomb v. Boston, 192 Mass. 211 (1906). 2 Bartlett v. Boston, 182 Mass. 460 (1903) ; Aspinwall v. Boston, 191 Mass. 441 (1906), and see also Averill v. Boston, 193 Masa. 488 (1907) ; Boston Water Power Co. v. Boston, 194 Mass. 571 (1907) ; Burrage v. Boston, 198 Mass. 580 (1908). 3 Atkinson v. Newton, 169 Mass. 240 (1897) ; Bell v. Newton, 183 Mass. 481 (1903). CHAPTER 80 BETTERMENTS Assessment of Betterments Section 1. Whenever a limited and determinable area receives benefit or advantage, other than the general advantage to the com- munity, from a public improvement made by or in accordance with the formal vote or order of a board of officers of the commonwealth or of a county, city, town or district, and such order states that better- ments are to be assessed for the improvement, such board shall within six months after the completion of the improvement determine the value of such benefit or advantage to the land within such area and assess upon each parcel thereof a proportionate share of the cost of such improvement, and shall include in such cost all damages awarded therefor under chapter seventy-nine; but no such assessment shall exceed the amount of such adjudged benefit or advantage. Although the assessment of betterments for the laying out of public ways and for some other classes of public improvements has been employed as a means of raising the necessary funds to construct such improvements in sporadic instances in Massa- chusetts since very early times, 1 it is only within the last eighty years that special assessments in their modern form, imposed by administrative officers upon the land specially benefited by a public improvement and paid directly to the public authorities, have become part of the settled policy of the commonwealth. Sewers were not public property until 1841, and assessments pay- able to the city or town were not authorized by statute until that year. The first general statute authorizing sidewalk assessments was enacted in 1858. In January, 1866, the supreme judicial court upheld the constitutionality of an act passed in the preceding year authorizing the assessment of betterments for the widening and laying out of cer- tain specified streets in Boston, 2 and in the same year a better- 1 Supra, Part I, §64, and see as to the constitutional limitations upon the levying of betterment assessments, Part I, §§65 to 72 inc. 'Dorgan v. Boston, 12 Allen 223 (1866). 669 670 Taxation in Massachusetts [G. L. c. 80, § 1 ment act applicable to all streets in Boston was enacted. In 1867 the statute was extended to include Charlestown and in 1868 to any city whose city council should accept it, and in 1871 it was put in force in all cities, and in all towns which should vote to accept it. Park betterments were first authorized by general laws in 1882, street watering assessments in 1890, and assessments for the destruction of insect pests in 1905. 3 When the revision and consolidation of the general laws was undertaken in 1916, the commissioners found the laws re- lating to betterments and special assessments in much confu- sion. From time to time, as the need had arisen, laws had been passed authorizing the imposition of assessments for different kinds of improvements, and many special betterment laws had also been enacted applicable to particular cities and towns or to districts affected by particular improvements. The result was that while the same general principles of law had been estab- lished in all cases, the details of administration were different in different cities and towns and in different classes of improve- ments. As a consequence there was much uncertainty and con- fusion as to the law applicable in any particular case, and fur- thermore, on account of the piecemeal manner in which the law had been built up there were certain classes of public improve- ments which conferred a direct benefit upon adjoining land, but with respect to which no provision for the assessment of the benefit existed. 4 The commissioners thereupon caused to be prepared a draft of a statute establishing a uniform system for the assessment of betterments, and this statute was enacted in 19 18 5 and went into effect in 1921 as chapter eighty of the General Laws. The effect of this statute was two-fold. In the first place it estab- lished a uniform precedure for the levying of betterment assess- ments, and superseded the existing procedure in each case whether established by general or by special laws. In this re- spect it was merely a change in procedure. In the second place it extended the right to levy betterment assessments to every 3 The history and development of the provisions of statute authorizing betterment assessments for particular classes of improvements may be found in the first edition of this work, which was published while these statutes were still in force. * See Preliminary Report of Commissioners to Consolidate and Arrange the General Laws, p. 228. 6 St. 1918, c. 257, §219. Betterments 671 G.L. c. 80, §1] public improvement laid out by a public governmental body whenever a limited and determinable area received a special benefit from the improvement. In this respect it made an important change in the substantive law, extending the power of levying betterments to all cases in which betterments might be constitutionally levied and dispensing with the necessity of special statutory authority to justify an assessment on any particular class of improvement. It thus not only included other improvements than those already enumerated in the stat- utes authorizing betterment assessments, but also extended the power of levying betterments which had previously been com- monly limited to cities and to such towns as had accepted par- ticular betterment acts, to all towns and counties in every case which might arise. It is to be noted however that the statute is limited in its application to improvements laid out or established by a for- mal vote or order and that it does not include construction or other work performed on land already owned or controlled by the public authorities, or work which requires no formal order to establish it. Accordingly, assessments for the establishment of sewers and sidewalks in existing public ways, or for sprinkling streets or for exterminating insect pests are not within the scope of the statute, and the statute does not ex proprio vigore extend to such assessments even with respect to its administrative pro- visions. It will be found however that most of the statutes which authorize assessments of such a character specifically adopt by reference the administrative provisions contained in the chapter on betterments. 6 The statutes authorizing the levy of betterments were not in- tended to provide an exclusive method by which the cost of lay- ing out and constructing public improvements should be met. 7 The method which had, except in a few instances, been always employed of paying the entire cost by general taxation except so far as the damages were reduced by set-off of special benefits or the expenses met by voluntary private contribution was left in full force and intended to be the ordinary mode of proceeding. 6 See G. L. c. 83, §28, infra, page 726 (sewers and sidewalks) ; G. L. c. 85, §6, infra, page 727 (removal of snow) ; G. L. c. Ill, §§136, 138, infra, page 729 (drainage of wet lands); G. L. c. 252, §13, infra, page 751 (improvement of low lands) ; G. L. c. 252, §19, infra, page 753 (roads to swamps and quarries). 7 Sexton v. North Bridgewater, 116 Mass. 200 (1874). 672 Taxation in Massachusetts [G. L. c. 80, § l As however owners of considerable tracts of land often find it for their pecuniary advantage to lay out and construct streets wholly at their own cost, being more than made good by the increased value of their remaining lands, and as the set-off of special benefits from damages may result in an unequal and disproportionate distribution of the burden of paying for the benefit, since one who is damaged but little if any may be very greatly benefited and yet contribute neither money nor land to the improvement, while another who receives no greater benefit but whose land of value equal to or greater than the amount of the benefit happens to be taken thereby pays in full for the benefit his remaining land receives, in some instances it is more just to the public and to the individual owners that the public should be reimbursed in whole or in part for the expense of a public improvement by the owners of land which it peculiarly benefits, in proportion to and not exceeding the benefit which each receives. It would not however be wise and just to lay out all public improvements under the betterment system, 8 and for this reason it is expressly provided that betterments shall not be assessed for a public improvement unless the order establishing the improvement expressly provides that better- ments are to be assessed therefor. 9 What Benefits Can Be Assessed. There may be three classes of benefits arising from a public improvement. (1) General benefits or those arising from causes which affect the entire community and perhaps raise the value of land in an entire city or town. (2) Local benefits, or those accruing to an entire neighborhood by reason of its proximity to the improvement. (3) Special benefits, or those relating to a particular estate by reason of its direct relation to the improve- ment. To illustrate by a concrete case, suppose a new highway is constructed from the center of one municipality to a neighbor- • Atkinson v. Newton, 169 Mass. 240, 245 (1897). * See also G. L. c. 79, §1. It was at first held to be a question of fact whether a highway was laid out under the betterment act, Allen v. Charlestewn, 109 Mass. 243 (1872); Godbold v. Chelsea, 111 Mass. 294 (1873); Sexton v. North Bridgewater, 116 Mass. 200 (1874) ; Ryan v. Boston, 118 Mass. 248 (1875), but in 1874 provision was made that every public way should be deemed to be laid out under the highway act unless the order laying it out expressly declared the proceedings to be under the betterment act. St. 1874, c. 275, §2; Masonic Building Association v. Brownell, 164 Mass. 306 (1895). Betterments 673 G.L. c. 80, §1] ing city with which good road connection had previously been lacking. The benefit to the whole municipality by increased facility of communication with the neighboring city is the gen- eral benefit. The benefit to the section through which the new highway passes in increasing values for business use on account of the traffic upon the new highway is the local benefit. The benefit to a particular parcel by reason of its being left in a desirable size or shape or in fronting upon a desirable street is the special benefit. 1 Long before the assessment of betterments for public im- provements such as streets or sewers had become the general practice, it was customary, when land had been taken for a public improvement and the owner was seeking compensation, to re- quire the benefit to his remaining land to be set off from the damages 2 and this is still done when betterments are not as- sessed. 3 Under the highway act and some other similar stat- utes only special benefits were allowed to be set off, 4 but this rule was merely a matter of construction; there is no constitu- tional requirement that local benefits cannot be set off, and, under statutes which are worded so as to authorize it, both local and special benefits are the subject of set-off. 5 Of course the same benefits cannot be both the subject of set-off and of an assessment of betterments, 6 and under the early betterment acts, inasmuch as the special benefits were still set off from the damages, the betterment was confined to the local benefits. 7 The statutes which permitted the set-off of special benefits when 'Upham v. Worcester, 113 Mass. 97 (1873) ; Bancroft v. Boston, 115 Mass. 377 (1874) ; Baker v. Boston Elevated Ry. Co., 183 Mass. 178, 182 (1903). 2 Commonwealth v. Coombs, 2 Mass. 489 (1807) ; Commonwealth v. Sessions of Norfolk, 5 Mass. 435 (1809) ; Palmer Co. v. Ferrill, 17 Pick. 58 (1835). •Baker v. Boston Elevated Railway Co., 183 Mass. 178 (1903) ; Peabody v. Boston Elevated Railway Co., 191 Mass. 513 (1906) ; Fifty Associates v. Boston, 201 Mass. 585 (1909). 4 Meacham v. Fitchburg R. R. Co., 4 Cush. 291 (1849) ; Dickinson v. Fitch- burg, 13 Gray 546 (1859); Whitman v. Boston & Maine R. R., 7 Allen 313 (1863) ; Paine v. Woods, 108 Mass. 160 (1871) ; Hilbourne v. Suffolk, 120 Mass. 393 (1876) ; Parks v. Hampden, 120 Mass. 395 (1876) ; Childs v. New Haven & Northampton Co., 133 Mass. 253 (1882). 5 Baker v. Boston Elevated Ry. Co., 183 Mass. 178 (1903) ; Peabody v. Boston Elevated Ry. Co., 191 Mass. 513 (1906). •Benton v. Brookline, 151 Mass. 256 (1890) ; Garvey v. Revere, 187 Mass. 545 (1905). When a betterment assessment might have been but has not been laid, benefits which would have been included in the assessment cannot be set off in a petition for damages. Atkins v. Boston, 188 Mass. 77 (1905). T Green v. Fall River, 113 Mass. 262 (1873); French v. Lowell, 117 Mass. 363 (1875). 674 Taxation in Massachusetts [G. L. c. 80, § l betterments were to be assessed were changed by later enact- ments, so that now it is the general rule that an assessment of betterments includes both local and special benefits. 8 General benefits cannot of course be the subject either of set-off or of assessment for betterments. 9 It follows from what has already been said that in distin- guishing between general benefits and local benefits for purposes of taxation, distinctions which have been drawn by the courts between the different classes of benefits for the purpose of fix- ing damages under the power of eminent domain are of no importance as precedents, 10 unless the statute under which the damages were awarded provided for the set-off of all benefits not general. 11 Any actual advantageous effect upon a well defined and limited part of a city or town can be recognized as a benefit when it comes to the imposition of a special assess- ment under the power of taxation. 12 In other words every kind of benefit and advantage which enters into the value of the land beyond the advantage received generally by all land in the city or town may be considered, 13 and it is not even necessary that the local benefit differ from the general benefit in kind if there is an appreciable difference in degree. 14 The rules by which the amount of benefit conferred upon land by a public improvement is to be ascertained are the same as those by which land values are to be determined in any other connection. The inquiry is how much has the particular public improvement added to the fair market value of the property, as between a willing seller and a willing buyer, with reference to all the uses to which it is reasonably adapted and for which it is plainly available, prospective as well as present, by strangers as well as by the owner, considering chances and probabilities of future use only if sufficiently near in time and definite in kind to be of practical importance and to enter into present market value. 15 8 Benton v. Brookline, 151 Mass. 250 (1890). "Upham v. Worcester, 113 Mass. 97 (1873) ; Baker v. Boston Elevated Rail- way Co., 183 Mass. 178, 182 (1903). 10 Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902). 11 As in Peabody v. Boston Elevated Ry. Co., 191 Mass. 513 (1906). 12 Sears v. Street Commissioners of Boston, 180 Mass. 274 (1902). "Peabody v. Boston Elevated Ry. Co., 191 Mass. 513 (1906). "Peabody v. Boston Elevated Ry. Co., 191 Mass. 513 (1906). "Driscoll v. Northbridge, 210 Mass. 151 (1911). Betterments 675 G.L.c.80,§l] Exemptions from Special Assessments It is well settled that the exemption from taxation granted by general laws 1 to certain property of charitable and other corporations of similar character does not per se include an exemption from special assessments. Charitable institutions are exempted from taxation because they usually relieve the community of a burden which it would itself be obliged to bear. A special assessment frequently takes the place of a set-off of benefits from the damages caused by the construction of a public work, and if land was taken from a charitable corpora- tion and it was not assessed for betterments it would receive a greater amount in damages than the amount of injury in- curred, and this excess might have to be met by the other abut- ters. There is no reason that the abutters should bear this addi- tional expense merely because the whole community is relieved of a burden by the charitable acts of the corporation. While this situation would not arise in every case and is less likely since assessments have been limited to actual benefit, it formed a strong reason for the establishment of the rule, and the rule as a rule is still in force. 2 When however the property sought to be assessed is devoted by statute to a perpetual use which can derive no enjoyment of the improvement for which the assessment is levied, it cannot be subjected to such assessment, not so much on account of an exemption from taxation, whether derived from general laws, the charter of the corporation or from implication of law, but because an assessment cannot constitu- tionally be levied on property for the cost of an improvement which cannot by any possibility benefit it for either use or sale. 3 In some cases it will be plain as a matter of law that a par- ticular public improvement will be of no benefit to a neighbor- ing charitable or educational institution. In other cases how- *G. L. c. 59, §5, supra, page 193. 2 Boston Seamen's Friend Society v. Boston, 116 Mass. 181 (1874), a case of a betterment for widening a street, assessed upon a charitable corporation. The principle was applied, in Worcester Agricultural Society v. Worcester, 116 Mass. 189 (1874), to a sewer assessment upon an agricultural society, in Phillips Academy v. Andover, 175 Mass. 118 (1900), to a street watering assess- ment upon an educational corporation and in Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914) to a street watering assessment upon a cemetery corporation. See also to same effect Illinois Central R. R. Co. v. Decatur, 147 U. S. 190 (1893). s Mount Auburn Cemetery v. Cambridge, 150 Mass. 12 (1889); Boston v. Boston & Albany R. R. Co., 170 Mass. 95 (1898). 676 Taxation in Massachusetts [G. L. c. 80, § 1 ever whether the improvement might confer a benefit upon the institution is a question of fact, and must be determined in the same manner as any other question of fact, and a finding made thereon by the trial court ; and if the institution would re- ceive a benefit it is liable to assessment. 4 The exemption from general taxation which, it has been held, extends by implication to all property devoted to the public use 15 includes special assessments as well, for the principles of propriety, justice and expediency upon which the exemption rests are applicable alike to every kind of taxation. 6 Moreover, as such assessments are usually enforceable only by a sale of the land assessed, it can hardly have been the intention of the legislature to impose them upon land which is one of the instru- mentalities by which public duties are performed. 7 When the exemption is contained in the charter of the cor- poration, whether it includes special assessments depends upon the wording of the charter. An exemption from all taxes does not in itself include special assessments, 8 but freedom from "all civil impositions, taxes and rates" is, it has been held, sufficiently broad to include special assessments. 9 Time of Levy Until 1869 there was no requirement in the case of better- ment assessments for highway purposes that the assessment should not be made until the work was completed or that it should be made within any specified limit of time, but in that year by separate enactments such requirements were imposed, two years from the order being the limit in the latter case. 1 ♦Garden Cemetery Corporation v. Baker, 218 Mass. 339 (1914). 5 Supra, page 217. 6 Worcester County v. Worcester, 116 Mass. 193 (1874); Boston v. Boston & Albany R. R. Co., 170 Mass. 95 (1898). 7 Worcester County v. Worcester, 116 Mass. 193 (1874). And see also Mount Auburn Cemetery v. Cambridge, 150 Mass. 12 (1889). This is not the only ground for the rule, however, for the same decision was made in the case of an assessment enforceable by action at law. Boston v. Boston & Albany R. R. Co., 170 Mass. 95 (1898). 8 Boston Asylum and Farm School for Indigent Boys v. Street Commissioners of Boston, 180 Mass. 485 (1902). •Harvard College v. Aldermen of Boston, 104 Mass. 470 (1870). 1 For a history of this legislation see Foster v. Park Commissioners, 133 Mass. 321 (1882). As to the levy of assessments before the completion of the improvement see Jones v. Metropolitan Park. Commissioners, 181 Mass. 494 (1902). Betterments 677 G.L.c. 80, §1] Under the earlier statutes it was held that an abutter could not complain if he was assessed before the street was fully com- pleted, because his assessment was thereby less than it would otherwise have been and the city was still bound to complete the street. 2 Under the statutes in their later form it was held that an assessment would not be defeated by a failure to complete the way in trivial and unimportant particulars, 3 but that an assessment must be considered as a claim by the public authori- ties that the way was completed and the benefit fixed by the condition of the way as it then stood. 4 As far as the other re- quirement, that the betterments be assessed within two years of the order of laying out is concerned, it was held that there must be an order upon which to base the assessment even before the statute was so clear in requiring it, 5 and it was held that the two years' period did not begin to run until the order received the adoption or approval legally necessary to put it in force. 6 While these statutes were in force, if the construction of a public highway was not completed for any reason until after two years from the order establishing it, no betterments could be assessed. As the statutes provided no means of giving notice to the public of the anticipated amount of the assessment or of the area to be assessed, such a limitation was of importance; in the case of sewers, to which it did not apply, assessments levied many years after the order of construction were held valid. 7 When the general betterment act was enacted in 1918, 2 Whiting v. Mayor & Aldermen of Boston, 106 Mass. 89 (1870). 3 In Chase v. Aldermen of Springfield, 119 Mass. 556 (1876), it was held that the mere fact that railings and barriers had not been erected did not make the work incomplete so that betterments could not be assessed. In Lincoln v. Wor- cester, 122 Mass. 119 (1877), it was held that the fact that the sidewalk op- posite petitioner's land at the point where it was crossed by his driveway was not brought to grade did not defeat the assessment. 4 In Chase v. Aldermen of Springfield, 119 Mass. 556 (1876), it was held that a betterment was not invalid "because no grade line has been established." The rights and liabilities of abutters depend on the grade actually constructed. In Lincoln v. Worcester, 122 Mass. 119 (1877), it was said by the court that the act of making the assessment is a claim on the part of the respondent that it has done the widening and grading which it intended to do; and, in considering the reasonableness and justice of the assessment the jury are to consider what has actually been done rather than what on paper was directed to be done. 6 Hitchcock v. Aldermen of Springfield, 121 Mass. 382 (1876). "Quinn v. Cambridge, 187 Mass. 507 (1905) ; Jewett v. Mayor of Medford, 233 Mass. 65 (1919). 7 See for example Hester v. Collector of Brockton, 217 Mass. 422 (1914), in which an assessment levied seventeen years after the order for construction was sustained. 678 Taxation in Massachusetts [G. L. c. 80, § l inasmuch as provision was made for recording notice of the an- ticipated amount of assessment and of the area to be assessed, 8 no reason remained for strictly limiting the time of the assess- ment or denying the right to levy an assessment in cases of im- provements which could not be completed within two years; and the only limitation of time imposed under the present law is that the assessment must be levied within six months after the completion of the improvement. Assessment Limited to the Actual Cost and to the Actual Benefit The amount of the betterment assessment levied for a par- ticular public improvement is strictly limited to the cost of improvement. The fact that a special benefit is derived from the improvement furnishes a justification for the imposition of a betterment assessment, but such benefit would not of itself warrant the exaction of money by way of compensation there- for. The estates are assessed not for the benefit conferred but for the cost of the improvement, and the benefit is merely a means of apportioning the cost. 1 The statute provides that the assessable cost shall include all damages awarded under chapter seventy-nine; and the cost clearly includes only such damages as may be recovered in legal proceedings, and if a city or town pays a sum as damages which it is under no legal obligation to pay the amount so paid cannot be included in the assessable cost. 2 It does not of course follow that a person assessed can contest the amount of awards and adjustments of damages made in good faith, or even object to a compromise when the legal liability of the city or town was really a disputed question. The rule of damages is precisely the same whether the order of taking states that betterments are to be assessed or not, ex- cept that if betterments are not to be assessed the special ben- efit to the land from the improvement is set off from the dam- 8 G. L. c. 80, §2, infra, page 681. 1 Chase v. Aldermen of Springfield, 119 Mass. 556 (1876), and see also Supra, Part I, §68. 2 Fuller v. Somerville, 136 Mass. 556 (1884). Betterments 679 G.L.c. 80, §1] ages, 3 but if betterments are to be assessed such benefit is not set off but the benefits are separately assessed. 4 The assessment upon each estate is strictly limited to the actual benefit (in excess of the general advantage to the com- munity) to such estate. This limitation is imposed by the constitution itself. 5 The street betterment act limited the as- sessment to one-half the benefit, and this same limitation was contained in the general betterment act as first enacted; but in the following year the limitation to one-half the benefit was struck out. 6 While in the case of a public improvement abut- ting upon lots of similar depth and similar character it may be a reasonable method for the board which levies the assessment to apportion the burden among the different lots in proportion to frontage upon the improvement or according to some other arbitrary measure, it must be remembered that the law con- templates a determination of the actual benefit to each lot, and that if the estates assessed are of different characteristics and are affected by the improvement in different ways, an assessment by linear foot of frontage or by any other arbitrary measure is improper. While it is not proper to join together the cost of two sep- arate and independent public improvements and to assess the cost in proportion to the benefits derived from both improve- ments, 7 there is no objection to an assessment based upon the 3 Benton v. Brookline, 151 Mass. 250, 261 (1890). 4 In the early betterment acts of the present series, inasmuch as they ap- plied only to cities, and the same board of officers that laid out the streets and awarded the damages assessed the betterments, it was held that no benefits could be set oft' against the damages. Godbold v. Chelsea, 111 Mass. 294 (1873). And see also Prince v. Boston, 111 Mass. 226 (1872) ; Bancroft v. Boston, 115 Mass. 377 (1874); Boston Seamen's Friend Society v. Boston, 116 Mass. 181 (1874). When a few years later the betterment acts were extended to towns and author- ized city or town officials to assess betterments for ways laid out by county com: missioners, inasmuch as when the damages were awarded it could not be known whether betterments would be assessed, special benefits were allowed to be set off' from the damages and the betterments excluded special benefits and included only local benefits. Upham v. Worcester, 113 Mass. 97 (1873); Green v. Fall River, 113 Mass. 262 (1873) ; Wood v. Hudson, 114 Mass. 513 (1874). When in 1874 it was provided that every way should be deemed laid out under the high- way act unless the order laying it out expressly declared it to be under the betterment act, there was no further occasion to exclude special benefits from the betterments or allow them to be set off from the damages. Benton v. Brookline, 151 Mass. 250, 264 (1890). 5 Part I, §69. 6 St. 1919, c. 333, §4. 7 Arnold v. Cambridge, 106 Mass. 352 (1871). 680 Taxation in Massachusetts [G. L. c. 80, § 1 cost and benefit of an improvement taken as a whole, even if it includes distinct and separate elements, if it is, in fact, but a single improvement. 8 Street Betterments in the City of Boston As already stated, the modern development of street better- ment assessments in this commonwealth originated with a spe- cial statute applicable to certain streets in Boston, and soon afterwards a statute applicable to Boston generally was enacted which was gradually extended throughout the commonwealth and constitutes in large measure the basis of the present gen- eral betterment act. Originally the assessments were made in Boston by the board of aldermen, but the board of street com- missioners was established in 1870 and the power to assess betterments was transferred to this board in the following year. 1 In 1891 an elaborate statute regarding highways in the city of Boston, generally called the board of survey act, was enacted 2 which made especial provision for betterment assessments, and many extensive improvements were projected and undertaken; but in 1901 the portion of the statute relating to betterments was held to be unconstitutional in that it authorized the assess- ment of the whole cost of laying out and constructing a highway to be assessed in proportion to benefits without regard to the possibility that the actual benefit in each case might be exceeded. 3 About this time assessments for betterments under other statutes had been held invalid by the court, some on account of the un- constitutionality of the statute, and others on account of irregu- lar or illegal action of the public authorities in proceedings on which the assessments were founded. It was supposed that there were other invalid assessments and other completed improve- ments for which assessments of betterments had been contem- plated, which in view of these decisions could not then be legally made. Under these circumstances in 1902 a statute was enacted amending the board of survey act and providing for assessments 8 Lincoln v. Street Commissioners, 176 Mass. 210 (1900); Sears v. Street Commissioners, 180 Mass. 274 (1902) ; American Unitarian Association v. Com- monwealth, 193 Mass. 470 ( 1907 ) ; Quinn v. Mayor and Aldermen of Springfield, 233 Mass. 595 (1919). 1 See Bigelow v. Boston, 123 Mass. 50 (1877). a St. 1891, c. 323. 3 Lordon v. Coffey, 178 Mass. 489 (1901) ; Harwood v. Street Commissioners of Boston, 183 Mass. 348 (1903). Betterments 681 G. L. c. 80, §§ l, 2] for public ways subsequently laid out in accordance with con- stitutional principles; 4 and about the same time another stat- ute was enacted authorizing the re-assessment in a constitu- tional manner of assessments for public ways completed within six years before the passage of the act. 5 This last statute was held to be constitutional, 6 to apply to assessments invalid for irregularity as well as to those laid out under an unconstitutional statute 7 and to apply to ways laid out more than six years before its passage if completed within six years of its passage. 8 There were further amendments to the amended board of survey act and in 1906 a new statute was passed covering the whole subject. 9 This statute operated in a satisfactory manner, and when the general betterment act was enacted in 1918, and superseded all special acts then in force with relation to the levying of assessments, many of the advantageous features of the city of Boston statute were incorporated into the general betterment act, and thus extended throughout the common- wealth. Plan and Estimate Section 2. An order under section one which states that better- ments are to be assessed for the improvement shall contain a descrip- tion sufficiently accurate for identification of the area which it is ex- pected will receive benefit or advantage, other than the general ad- vantage to the community, from such improvement, and shall refer to a plan of such area, and shall contain an estimate of the betterments that will be assessed upon each parcel of land within such area ; and such order, plan and estimate shall be recorded, within thirty days from the adoption of the order, in the registry of deeds of every county or district in which the benefited area is situated. No better- ments shall be assessed for such improvement unless the order, plan and estimate are recorded as herein provided, nor upon any parcel of land not within such area, nor for a greater amount than such estimate. 4 St. 1902, c. 521. 6 St. 1902, c. 527. 8 Warren v. Street Commissioners of Boston, 187 Mass. 290 (1905). 7 Warren v. Street Commissioners of Boston, 187 Mass. 290 (1905). 8 New England Hospital v. Street Commissioners of Boston, 188 Mass. 88 (1905). • St. 1906, c. 393. 682 Taxation in Massachusetts [G. L. c. 80, §§ 2, 3 This section was intended to remedy an evil which had long existed in the betterment laws. The lien for a special assess- ment arose, under the law as it previously existed, when the order for the laying out of the improvement upon which it was based was adopted; 1 but although such lien constituted an encumbrance, it was not of record in the registry of deeds, and the extent of the area to be assessed and the probable amount of the assessment could not be determined even by an examina- tion of the records of the board which laid out the improvement. Thus an inchoate betterment assessment remained a hidden menace in the conveyance of real estate. Since 1880, statutes had been enacted, providing for the recording of notice of intent to levy a betterment assessment and the service of personal notice upon the owners of land liable to assessment, 2 but these statutes were in force only in such cities as accepted them through the action of the city council; and as they were intended for the benefit of the citizens rather than of the city, and their provisions were found impracticable, they were rarely used. In the special act relating to the city of Boston, provision was made for an estimate of the better- ments when a street was laid out, and the amount of the esti- mate was not allowed to be exceeded. 3 The present statute was enacted as a part of the general betterment act of 1918, and carries to its logical conclusion the principle of giving record notice of a betterment assessment so far as can be done before the work is constructed and the cost determined. While it imposes additional trouble and ex- pense upon the officers of a city or town, it is believed that the convenience to property owners and others dealing with real estate far exceeds the inconvenience to those who duty it is to carry out the law. Surrender of Estate Assessed Section 3. An owner of land abutting on a public improvement and liable to assessment therefor under this chapter may give notice in writing to the board, within three months after the award of damages is made, that he elects to surrender his land; and if said 'Blackie v. Hudson, 117 Mass. 181 (1875) ; Carr v. Dooley, 119 Mass. 294 (1876) ; Maloy v. Holl, 190 Mass. 277 (1906). 2 St. 1880, c. 187, §§1-3, inc.; St. 1907, c. 344, §§ 24-26, inc. 3 St. 1906, c. 393/ §§2, 5. Betterments 683 G. L. c. 80, § 3] board adjudge that the public convenience and necessity require the taking of such abutting estate for the improvement named, they may take the whole thereof, and shall thereupon estimate its value, exclud- ing the benefit or advantage accruing from such improvement; and such owner shall convey the estate to the body politic or corporate on behalf of which the assessment was made and may recover therefrom in contract the value so estimated. The commonwealth, county, city, town or district may sell any portion of said land which is not needed for such improvement. This section was adopted almost verbatim from the street betterment act, but was modified so as to cover all public im- provements, and the right to offer to surrender was extended so that it might be exercised any time within three months after the award of damages. The principle of the statute was em- bodied in various special acts; but in some of these the right to surrender was absolute. 1 A person holding any estate or interest in land is an "owner of land" within the meaning of this statute and entitled to sur- render his estate or interest. 2 This or a similar statute has been held to apply to a tenant in common, 3 to a mortgagee 4 and to the holder of an equity of redemption. 5 The requirement that the land abut upon the way is construed strictly and land sepa- rated from it by another way cannot be surrendered. 6 The right to surrender is not a personal right in the owner, but the assess- ment being a lien and surrender being a means of paying the assessment, the right to surrender runs with the land. 7 When an assessment has been levied, the authority of the board which levied it is exhausted, and it cannot by vacating the assessment deprive the landowner of his right to surrender. 8 1 Under the earlier law an offer to surrender had to be made before the estimate of damages, and could not be made after the laying out of a public way even if there was no adjudication as to damages, for a failure to award damages is equivalent to an award of no damages. Taintor v. Mayor and Aldermen of Cam- bridge, 197 Mass. 412 (1908). 2 Leavitt v. Cambridge, 120 Mass. 157 (1876); Farnsworth v. Boston, 121 Mass. 173 (1876) ; Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879). "Leavitt v. Cambridge, 120 Mass. 157 (1876). 'Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879). •Farnsworth v. Boston, 121 Mass. 173 (1876). •Holt v. Somerville, 127 Mass. 408 (1876). 1 Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879). 8 Farnsworth v. Boston, 121 Mass. 173 (1876) ; Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879). 684 Taxation in Massachusetts [G. L. c. 80, §§ 3, 4 Under statutes which gave the owner an absolute right to sur- render, it has been held that mandamus is the proper remedy to enforce the right to surrender; 9 and the smallness of an as- sessment does not destroy the owner's right. 10 If part of an estate has been taken for the way and the owner has made a settlement with the public authorities and given a warranty deed he cannot surrender the residue. 11 Collection Section 4. Within a reasonable time after making the assess- ment the board shall commit the list of assessments upon land in each town with their warrant to the collector of taxes thereof, and he shall forthwith send notice in accordance with section three of chapter sixty, to the person to whom each parcel was assessed at the last pre- ceding annual assessment of taxes. Except as otherwise herein pro- vided, the collector shall have the same powers and be subject to the same duties with respect to such assessments as in the case of the annual taxes upon real estate, and the law in regard to the collection of the annual taxes, to the sale of land for the non-payment thereof and to redemption therefrom shall apply to assessments made under this chapter, so far as the same are applicable ; but the owner of land assessed shall not be personally liable for the assessment thereon. Every collector of taxes receiving a list and warrant from the board shall collect the assessment therein set forth, and at such times as the board shall direct shall pay over to the treasurer of the body politic on behalf of which the assessment was made the amounts collected by him. All assessments apportioned under section thirteen, and all other assessments on real estate constituting a lien thereon and remaining unpaid on April first in any year, shall be placed on the annual tax bill for such real estate. Under the earlier statutes there wao no express provision for the commission of betterment assessments to the collector with a warrant, signed by the board which levied the assessment, directing him to collect the assessment, and the practice in the different cities and towns was not uniform. In general, in cases where the assessment took the form of a general charge •Leavitt v. Cambridge, 120 Mass. 157 (1876); Farnsworth v. Boston, 121 Mass. 173 (1876) ; Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879). 10 Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879). "Holt v. Somerville, 127 Mass. 408 (1879). Betterments 685 G. L. c. 80, § 4] running over a series of years, as in the case of an apportioned betterment assessment or an assessment for an annually re- curring expense, the assessment was certified to the assessors and committed by them to the collector with their warrant, at the same time as the annual tax levy. When a single assess- ment was made for a permanent improvement, the assessment was committed by the board which levied it to the collector directly, and although there was no express authority for a warrant, a warrant was usually issued, and the courts on sev- eral occasions assumed that a warrant in such cases was prop- erly issued. 1 The general betterment act of 1918 removed all doubt by expressly requiring a warrant. The customary method of collecting a special assessment is to enforce the lien upon the land assessed, although in this commonwealth it has been not unusual to enforce payment of a special assessment by action at law against the owner of the land assessed when such method of collection was authorized by statute, 2 and some narrow distinctions were drawn between statutes which impliedly authorized an action and those which did not. 3 As the method of collecting special assessments by actions at law had fallen into disuse, and there was grave doubt as to its constitutionality, 4 the present statute was so drawn as to exclude the personal liability of the landowner. In any Leominster v. Conant, 139 Mass. 384, 388 (1885) ; Murphy v. Clinton, 182 Mass. 198, 200 (1902). 2 In the following cases actions by cities and towns to recover special assess- ments have been before the courts without any intimation that any constitutional difficulty was involved in the proceeding. Boston v. Shaw, 1 Met. 130 (1840) ; Lowell v. Hadley, 8 Met. 180 (1844) ; Lowell v. Wentworth, 6 Cush. 221 (1850) ; Lowell v. French, 6 Cush. 223 (1850) ; Lowell v. Wheelock, 11 Cush. 391 (1853) ; Lowell v. Wyman, 12 Cush. 273 (1853); Charlestown v. Stone, 15 Gray 40 (1860) ; Roxbury v. Nickerson, 114 Mass. 544 (1874) ; West Roxbury v. Minot, 114 Mass. 546 (1874) ; Boston v. Boston & Albany R. R. Co., 170 Mass. 95 (1898). See also Torrey v. Wallis, 3 Cush. 442 (1849) ; Twycross v. Fitchburg R. R. Co., 10 Gray 293 (1858). 3 When a statute authorizes the levying of an assessment but provides no means for its collection, the city or town is entitled to bring an action at common law, and if subsequently it is given a lien on the land assessed the latter remedy will be taken to be cumulative, Lowell v. Wyman, 12 Cush. 273 (1853) ; but if the statute which first authorizes the assessment provides for a lien and is silent as to other remedies the lien will be taken to be exclusive. Roxbury v. Nickerson, 114 Mass. 544 (1874) ; West Roxbury v. Minot, 114 Mass. 546 (1874). In Bum- stead v. Cook, 169 Mass. 410, it was held that under the provisions of a statute applicable only to the city of Northampton, the fee for entrance to a sewer did not constitute a lien on the land. *See Dewey v. Des Moines, 173 U. S. 202 (1899). 686 Taxation in Massachusetts [G. L. c. 80, §§ 5-10 inc. event, when an assessment is invalid and cannot be collected by any legal process, the city or town cannot recover the amount of the benefit conferred in a common law action in the nature of indebitatus assumpsit. 5 In collecting an assessment by enforcement of the lien the collector acts in precisely the same manner as in collecting a general tax on real estate, and the statutes and decisions upon the sale of land, redemption and the like are equally applicable. 6 If the assessment exceeds a statutory limit, it is void only to the extent of the illegal excess and the tax sale is not invalid. 7 Remedies for Excessive or Illegal Assessments There are three methods which under proper conditions can be used by the owner of land subjected to a special assess- ment to contest the assessment ; petition for abatement, petition for writ of certiorari and action of contract to recover back the assessment after paying it under protest. These remedies are not cumulative; each has its proper sphere, and though they overlap to a certain extent great care must be taken in each case to select the proper form of action. Petition for abatement is the proceeding to be adopted when it is sought to contest the amount of the assessment. It is not a proper means for contesting the validity of the assessment. 1 Petition for certiorari is a proper proceeding to be adopted when it is sought to contest the constitutionality of the statute under which the assessment is levied or the validity of the as- sessment itself 2 and is the only means of contesting an assess- ment on account of some irregularity in the procedure of the appropriate public officials in laying out or constructing the improvement for which the assessment was levied or in levying the assessment. It is not a proper means for contesting the 'Boston v. Shaw, 1 Met. 130 (1840). 8 See for example Kelso v. Boston, 120 Mass. 297 (1876); Leominster v. Conant, 139 Mass. 384 (1885) ; Murphy v. Clinton, 182 Mass. 198 (1902). 7 Lynde v. Maiden, 166 Mass. 244 (1896). 'Crandell v. Taunton, 110 Mass. 421 (1872) ; Snow v. Fitchburg, 136 Mass. 179 (1883) ; Hall v. Staples, 166 Mass. 399, 402 (1896) ; Bowditch v. Boston, 168 Mass. 239 (1897). 2 Bowditch v. Boston, 168 Mass. 239 (1897) ; Weed v. Boston, 172 Mass. 28 (1898). Betterments 687 G. L. c. 80, §§ 5-10 inc.] amount of the assessment, even if its excessiveness was due to errors of law. 3 Action of contract is a proper means of contesting a void assessment. 4 It is not a proper means of contesting the amount of an assessment or defeating the assessment on account of irregularities in procedure. 5 It is well settled that a bill in equity will not lie to restrain a city or town or its collector of taxes from collecting an illegal or invalid special assessment. 6 Petition for Certiorari The function of a writ of certiorari is to correct errors of law in the actions of a board or officer acting judicially, but not according to the course of the common law, and from the orders of which or whom no appeal lies. A board or officer levying or apportioning special assessments is acting judicially and certi- orari will lie to it or him. 1 Certiorari will lie only to correct er- rors apparent on the record, and if a petitioner wishes to bring up a question of law not apparent on the record as it stands he must ask that the record be extended to include the ruling com- plained of. 2 The practice is to hear the merits of the case on the petition for the writ; 3 and the respondents should not file an answer signed by counsel but a return signed by them in person setting forth their record. 4 This return should be signed by the mem- 3 Jones v. Aldermen of Boston, 104 Mass. 461, 469 (1870) ; Whiting v. Mayor and Aldermen of Boston, 106 Mass. 89 (1870) ; Prince v. Boston, 111 Mass. 226 232 (1872) ; Grace v. Newton Board of Health, 135 Mass. 490 (1883) ; Beals v. James, 173 Mass. 591, 600 (1899); Lincoln v. Street Commissioners, 176 Mass. 210 (1900). *Sheehan v. Fitchburg, 131 Mass. 523 (1881) ; Dexter v. Boston, 176 Mass. 247 (1900) ; Smith v. Boston, 194 Mass. 31 (1907). 6 Wright v. Boston, 9 Cush. 223 (1852) ; Butler v. Worcester, 112 Mass. 541 (1873) ; Kelso v. Boston, 120 Mass. 297 (1876) ; Chapin v. Worcester, 124 Mass. 468 (1878) ; Taber v. New Bedford, 135 Mass. 162 (1883) ; Foley v. Haverhill, 144 Mass. 352 (1887). •Brewer v. Springfield, 97 Mass. 152 (1867) ; Whiting v. Boston, 106 Mass. 89 (1870); Norton v. Boston, 119 Mass. 194 (1875); Clark v. Worcester, 167 Mass. 81 (1896) ; Greenhood v. MacDonald, 183 Mass. 342 (1903). ^owditch v. Superintendent of Streets of Boston, 168 Mass. 239 (1897); Weed v. Mayor and Aldermen of Boston, 172 Mass. 28 (1898). 2 Tileston v. Street Commissioners of Boston, 182 Mass. 325 (1902). 3 Warren v. Street Commissioners of Boston, 183 Mass. 119 (1903). 4 Chase v. Aldermen of Springfield, 119 Mass. 556 (1876) ; Warren v. Street Commissioners of Boston, 183 Mass. 119 (1903). 688 Taxation in Massachusetts [G. L. c. 80, §§ 5-10 inc. bers of the board in office at the time it is filed even if they were not in office when the proceedings complained of took place, as the members have official knowledge of the proceedings of the board. 5 The return is conclusive of the facts in the record alleged therein. 6 The issuance of the writ in the first place rests in the discre- tion of the court and the respondents may allege facts outside the record showing that though the record is defective justice does not require the issuance of the writ. The petitioners may not offer evidence to disprove the record, but they may dispute the extrinsic facts alleged. 7 If the record is defective the re- spondents may amend it even after the petition has been heard. 8 Certiorari is a discretionary writ, and will not be issued for technical and unimportant defects in the proceedings; 9 and it will not be issued for the gravest irregularities if the petitioner has been guilty of laches in allowing the public money to be expended without objection for an improvement which he ex- pects to enjoy. 10 If after a hearing a writ of certiorari is ordered to issue there is nothing to be done but to quash or modify the proceedings according as the record is wholly or partially bad. It is then too late to amend the record or to raise questions of discretion. ii 5 Collins v. Mayor and Aldermen of Holyoke, 146 Mass. 298 (1888). 6 Fairbanks v. Mayor and Aldermen of Fitchburg, 132 Mass. 42 (1882) ; Ward v. Aldermen of Newton, 181 Mass. 432 (1902). A statement in a return that petitioner was duly served with notice of the proceedings upon which the assess- ment was based may be contradicted by parol evidence, however, just as the record of a domestic judgment can be directly impeached for want of service. Hall v. Staples, 166 Mass. 399 (1896). 7 Fairbanks v. Mayor and Aldermen of Fitchburg, 132 Mass. 42 (1882) ; Ward v. Aldermen of Newton, 181 Mass. 432 (1902) ; Janvrin v. Poole, 181 Mass. 463 (1902). By agreeing on facts inconsistent with their return, the respondents waive the objection that on a petition for certiorari the facts found by them cannot be controverted. Jones v. Metropolitan Park Commissioners, 181 Mass. 494 (1902). 8 Chase v. Aldermen of Springfield, 119 Mass. 556 (1876); Foster v. Park Commissioners, 131 Mass. 225 (1881); Warren v. Street Commissioners, 183 Mass. 119 (1903). •Jones v. Aldermen of Boston, 104 Mass. 461 (1870); Workman v. Wor- cester, 118 Mass. 168 (1875) ; Atkinson v. Newton, 169 Mass. 240 (1897) ; Sears v. Mayor and Aldermen of Worcester, 180 Mass. 288 (1902). 10 Whiting v. Mayor and Aldermen of Boston, 106 Mass. 89 (1870) ; Taber v. New Bedford, 135 Mass. 162 (1883) ; Grace v. Newton Board of Health, 135 Mass. 490 (1883) ; Atkinson v. Newton, 169 Mass. 240 (1897) ; Harwood v. Donovan, 188 Mass. 487 (1905). "Warren v. Street Commissioners, 183 Mass. 119 (1903). Betterments 689 G. L. c. 80, §§ 5-10 inc.] A person who seeks to have an assessment quashed on peti- tion for certiorari is not estopped from maintaining the petition by having applied for an abatement of the assessment or for damages from the improvement for which the assessment was levied. 12 Under the law as it formerly stood, if he should be obliged to wait until the petition for certiorari was decided and it was decided against him it might be too late to file the other petitions. It is not believed that the provisions which allow a petition for abatement, 13 or for damages, 14 to be filed within six months after the determination of a suit brought to attack the validity of the proceedings require the deferment of such petitions until the suit is disposed of. Action of Contract Against the City or Town Upon well settled principles, when an invalid betterment as- sessment has been collected by a city or town, the person who paid it may recover it back in an action of contract against the city or town in the nature of an action for money had and received. 1 The action will not lie merely because the assessment is ex- cessive; 2 the proper remedy in such case is an application for abatement. The action will not lie for mere irregularities in the procedure; the remedy in such case is petition for certiorari.* When however the assessment is wholly void, the action of con- tract is in some respects the most advantageous remedy, for the owner, if he is within his legal rights, cannot be denied recovery on account of laches or as an exercise of discretion as he may be in a petition for certiorari. 4 He is not estopped from recov- ering back an assessment by reason of the fact that he has 12 Hitchcock v. Aldermen of Springfield, 121 Mass. 382 (1876). 13 G. L. c. 80, §8, infra, page 695. ,4 G. L. c. 79, §18. l Sheehan v. Fitchburg, 131 Mass. 523 (1881) ; Dexter v. Boston, 176 Mass. 247 (1900) ; Smith v. Boston, 194 Mass. 31 (1907), and see also supra, page 400. 2 Wright v. Boston, 9 Cush. 223 (1852) ; Butler v. Worcester, 112 Mass. 541 (1873) ; Chapin v. Worcester, 124 Mass. 468 (1878). This principle does not pre- vent the recovery back of an unconstitutional sewer assessment, although it was collected by adding part of the assessment to the general tax bill under author- ity of statute. Dexter v. Boston, 176 Mass. 247 (1900). 'Kelso v. Boston, 120 Mass. 297 (1876) ; Taber v. New Bedford, 135 Mass. 162 (1883) ; Foley v. Haverhill, 144 Mass. 352 (1887). * Smith v. Boston, 194 Mass. 31 (1907). 690 Taxation in Massachusetts [G-. L. c. 80, §§ 5-10 inc. made use of the improvement for which the assessment was levied. 5 It has been held that the statutory provisions restricting the action of contract to recover back a tax 6 apply to special assessments as well as to general taxation, and accordingly to justify such an action payment must be under duress or pro- test and suit must be begun within three months of the date of payment. 7 What Irregularity Invalidates an Assessment To justify a special assessment there must be a public im- provement laid out and constructed by authority of law. It does not follow however that an owner of land assessed for the benefit arising from a new public work can defeat the assess- ment by finding a flaw in the proceedings by which it was laid out or a failure to comply in all respects with the requirements of the statutes relating to the construction of such works. It is of course clear that such total disregard of the statutes providing for the laying out of public works as would invalidate the lay- ing out itself, so that attempted construction thereunder would constitute a trespass and the proceedings themselves could be collaterally impeached whenever their validity came before a court, would render any special assessment attempted to be levied for works so laid out wholly invalid. 1 Mere violation of less essential requirements not relating to the assessment itself does not necessarily invalidate the assessment 2 unless the stat- utory requirements violated were made for the protection of 'Sheehan v. Fitchburg, 131 Mass. 523 (1881); Smith v. Boston, 194 Mass. 31 (1907). 6 G. L. c. 60, §98, supra, page 400. 7 Wheatland v. Boston, 202 Mass. 258 (1909). 1 Sheehan v. Fitchburg, 131 Mass. 523 (1881) (layout so vague that it was not clear what land was taken ) . 2 Kelso v. Boston, 120 Mass. 297 (1876 (failure to keep on file plan of all sewers in city) ; Fairbanks v. Mayer and Aldermen of Fitchburg, 132 Mass. 42 (1882) (cost of sewer not stated but ascertainable by computation) ; Leominster v. Conant, 139 Mass. 384 (1885) (sewer constructed before laying out, and slight variation in size of pipe); Collins v. Holyoke, 146 Mass. 298 (1888) (failure of superintendent of sewers to report cost to mayor) ; Masonic Building Association v. Brownell, 164 Mass. 306 (1895) (requisite allegations in two separate orders); Beals v. James, 173 Mass. 591 (1899) (construction of tem- porary catch-basins) ; Corcoran v. Aldermen of Cambridge, 199 Mass. 5 (1908) (failure of superintendent of streets to certify data to assessors when they had the facts before them) . Betterments 691 G.L. c. 80, §§5-10 inc.] the taxpayer. If he can show that such requirements were materially violated he may have the assessment set aside without proof that he has actually suffered damage. 3 He cannot how- ever defeat the assessment by evidence of negligence and delay in the construction of the work if no statute was violated. 4 When the statute under which a public work is constructed authorizes the assessment of a proportional share of the entire cost and part of the cost is incurred unlawfully but no more is actually assessed than was lawfully expended, the assessment is invalid; 5 but when the statute authorizes the fixing of a certain part of the cost as the assessable cost and the sum fixed is less than the amount lawfully expended it is immaterial whether the rest of the expenditures were incurred lawfully or not. 6 The board which is authorized by statute to make an assess- ment cannot delegate the power to some other official; 7 but an assessment is not invalid merely because the proper board em- ployed assistance in making it if the assessment itself is finally determined by the board. 8 An error or irregularity in the assess- ment proceedings themselves which does no harm to the persons assessed and does not involve the violation of a statute enacted for their protection does not invalidate the assessment. 9 The record of the proceedings is not defective merely because it fails to exclude the possibility of error; there must be error apparent on its face. 10 If the person assessed is in doubt as to the validity of the assessment on account of the ambiguity or insufficiency of the record he must ask to have the record extended; he can- not assume that it is invalid and demand that it be quashed. 11 3 Bowditch v. Superintendent of Streets, 168 Mass. 239 (1897); Warren v. Street Commissioners, 181 Mass. 6 (1902). In both of these cases statutory re- quirements as to making contracts for construction were not followed. 'Whiting v. Mayer and Aldermen of Boston, 106 Mass. 89 (1870). . B Warren v. Street Commissioners, 181 Mass. 6 (1902). 6 Gardiner v. Street Commissioners, 188 Mass. 223 (1905) ; Morse v. Street Commissioners, 197 Mass. 292 (1908). 7 Boylston Market Association v. Boston, 113 Mass. 528 (1873). 8 Collins v. Mayor and Aldermen of Holyoke, 146 Mass. 298 (1888) ; Sears v. Aldermen of Boston, 173 Mass. 71 (1899). "Whiting v. Mayor and Aldermen of Boston, 106 Mass. 89 (1870) ; Keith v. Boston, 120 Mass. 108 (1876). 10 Jones v. Aldermen of Boston, 104 Mass. 461 (1870) ; Foley v. Haverhill, 144 Mass. 352 (1887). "Ward v. Aldermen of Newton, 181 Mass. 432 (1902); Tileston v. Street Commissioners of Boston, 182 Mass. 325 (1902). 692 Taxation in Massachusetts [G. L. c. 80, § 5 Inasmuch as a special assessment is generally levied upon the land and not upon the owner, if the land is properly described, failure to name the owner correctly does not invalidate the as- sessment. 12 A description of the land sufficient to operate as a good conveyance is sufficient to base a betterment assessment upon. 13 If the name of the owner is used as a means of describ- ing the estate an error therein does not invalidate the assess- ment if no one was misled or prejudiced thereby. 14 Petition for Abatement Section 5. The owner of any real estate upon which betterments have been assessed may, within six months after notice of such assess- ment has been sent out by the collector, file with the board a petition for an abatement thereof, and the board within sixty days after such filing shall grant such abatement as may be necessary to make such assessment conform to section one. Such petition may be filed with the clerk or secretary of the board, or delivered by mail or other- wise at their office. The board shall within ten days after their decision upon the petition give written notice thereof to the petitioner. If an assessment is abated by the board the assessment so determined shall stand as the assessment upon the land, and if it has not been paid shall be collected in the same manner as the original assessment. If the assessment has been paid, the person by whom it was paid shall be reimbursed by the body politic on behalf of which it was assessed to the amount of the abatement allowed, with interest at the rate of four per cent per annum from the time of payment. The street betterment act contained no provision authoriz- ing an application for abatement to be made directly to the board which levied the assessment, and the only remedy of a person aggrieved by the amount of the assessment was to file a petition in court asking for a revision of the assessment. The statutes relating to sewer assessments and various special acts contained provisions for application for abatement to the board which levied the assessment. Even when a board levies a bet- terment assessment after due consideration of the facts in re- lation to each estate, it may wish to modify its conclusion after "Smith v. Carney, 127 Mass. 179 (1879) ; Masonic Building Association v. Brownell, 164 Mass. 306 (1895). "Masonic Building Association v. Brownell, 164 Mass. 306 (1895). "Masonic Building Association v. Brownell, 164 Mass. 306 (1895). Betterments 693 G. L. c. 80, §§ 5, 6, 7] hearing such evidence as an owner may bring before it, and when an assessment is made by some arbitrary measure, as in the case of sewer and sidewalk assessments, the board should cer- tainly have power to correct any injustice it may have done. The general betterment act of 1918 therefore contained a pro- vision requiring in all cases, as the first step in proceeding for a reduction of a betterment assessment, an application for abate- ment to the board which levied it, with a right of appeal to the court in case the decision of the board was unfavorable. Extension of Time for Filing Petition Section 6. If a suit in which the validity of an assessment is drawn in question is brought within the time for filing a petition to the board for the abatement thereof or within six months after the determination of an earlier suit involving the same question, brought within the time for filing such petition, which failed for want of juris- diction, defect of form or other like cause not decisive of the merits of the controversy, the petition may be filed within six months after the final determination of such suit. The foregoing section was first introduced in the general betterment act of 1918, in order that the procedure in better- ment proceedings might correspond as far as practicable with those in eminent domain cases. The object of the statute is to authorize the deferment of petitions for abatement in cases in which the validity of the assessment is drawn in question. Appeal to the Superior Court Section 7. A person who is aggrieved by the refusal of the board to abate an assessment in whole or in part may within thirty days after notice of their decision appeal therefrom by filing a petition for the abatement of such assessment in the superior court for the county in which the land assessed is situated. If a single parcel of land so assessed lies in more than one county the petition may be filed in the superior court for either such county, and the court in which such petition is first filed shall have exclusive juris- diction thereof. This section in substance continues the remedy which had been in force for many years in the case of a person aggrieved 694 Taxation in Massachusetts . [G. L. c. 80, § 7 by the amount of his assessment, except that the petition to the superior court is now in every case an appeal from the action of the board which levied the assessment upon a petition for abatement filed directly to such board. The time for filing the petition in court is therefore based upon the date of the notice of the decision of such board, and, as in the case of ap- peals from boards of assessors from their refusal to abate general taxes, is limited to thirty days from the date of such notice. After the expiration of the statutory period the court has no jurisdiction of the subject-matter of a petition, and the want of jurisdiction may be taken advantage of at any time before judgment. 1 A person assessed is not estopped from applying for an abatement by asking that the assessment be apportioned, 2 or by petitioning for a writ of certiorari to quash the assessment on the ground of invalidity. He cannot however base an application for abatement on the invalidity of the assessment. 3 If after the petition for abatement is entered and before it is heard the assessment is quashed in certiorari proceedings, it is proper to dismiss the petition for abatement without costs to either party. 4 At the hearing on petition for abatement the burden of proof is on the petitioner to show that the assessment is excessive and should not stand. 5 In ascertaining the true amount of benefit, the course of trial and the character of the evidence is very similar to that at a trial for damages to land by the laying out of a public improvement, and the rules of evidence are much the same. 6 The benefit is to be estimated as of the date ^usty v. Lowell, 117 Mass. 78 (1875). 2 Gardner v. Boston, 106 Mass. 549 (1871). 3 Crandell v. Taunton, 110 Mass. 421 (1872) ; Bigelow v. Boston, 120 Mass. 326 (1876) ; Breed v. Lynn, 126 Mass. 290 (1879) ; Snow v. Fitchburg, 136 Mass. 179 (1883). * Breed v. Lynn, 126 Mass. 290 (1879). 5 Bigelow v. Boston, 120 Mass. 326 (1876) ; Beals v. Brookline, 174 Mass. 1 (1899) ; Driscoll v. Northbridge, 210 Mass. 151 (1911). 6 For the rules of evidence in eminent domain proceedings see Nichols, Eminent Domain, 2d ed. Chapter XXV. See also the following decisions on evidence in betterment proceedings. In Alden v. Springfield, 121 Mass. 27 (1876), it was held that while petitioner may introduce evidence tending to show that the assessment upon his land was too great, he is not entitled to inquire as to the proportion of the benefit to the lands of himself and the other abutters on the way, as compared with the benefit to real estate generally in the city. Such an inquiry might properly be excluded as tending to confuse the jury; and that Betterments 695 G. L. c. 80, §§ 7, 8] of the original order; 7 when the assessment cannot be levied until the work is completed the jury is to consider what the improvement actually consists of and not what was planned in the laying out. 8 The petitioner is not limited to showing that the assess- ment exceeded the actual benefit; but he may show that he has suffered by being obliged to pay a disproportionate amount of the cost even if the special benefit was not exceeded. 9 Death of Person Entitled to Petition Section 8. If a person who is entitled to petition for an abate- ment under this chapter dies within the time limited for such petition without having filed the same, his executor, administrator, heir or petitioner cannot introduce evidence that a culvert which occasioned part of the expense in the widening of the street was of no benefit to him. The question is as to the benefit of the whole construction of the street, and petitioner had no right to introduce evidence as to the benefit resulting from any particular piece of work done in the course of such construction. In Treadwell v. Boston, 123 Mass. 23 (1877), it was held that, the question being the permanent advantage, if any, the temporary inconvenience caused by the construction was so insignificant and remote that it might properly be ex- cluded as an element. Evidence that the most beneficial use of a lot assessed would be to erect buildings fronting on a street not the one widened is, however, admissible; it tends to reduce the benefit likely to accrue from the widening of a street that would be only a side street so far as the lot in question was con- cerned. In Beals v. Brookline, 174 Mass. 1 (1899), it was held that evidence of the cost of a covered channel by a different plan of location is inadmissible, as open- ing up collateral questions. In the absence of anything to the contrary it is to be assumed that the plan adopted by the selectmen was proper and reasonable. Evidence that on account of the taking petititioner was not able to cut his land up into lots of the most desirable shape was inadmissible as too remote. In Driscoll v. Northbridge, 210 Mass. 151 (1911), it was said by the court that the inquiry is how much has the particular public improvement added to the fair market value of the property, as between a willing seller and a willing buyer, with reference to all the uses to which it is reasonably adapted and for which it is plainly available, prospective as well as present, by strangers as well as by the owner. Chances and probabilities of future use, if sufficiently near in time and definite in kind to be of practical importance, enter into present mar- ket value and so far as they enhance or diminish it are given full weight. But where they are so remote to rest chiefly in the imagination, and do not in fact influence the price which customers would be willing to pay in a present sale, they cannot be the basis of a determination of benefit or value. 'Jones v. Aldermen of Boston, 104 Mass. 461 (1870); Boston Seamen's Friend Society v. Boston, 116 Mass. 181 (1874) ; Treadwell v. Boston, 123 Mass. 23 (1877). 8 Lincoln v. Worcester, 122 Mass. 119 (1877). •Whiting v. Boston, 106 Mass. 89, 97 (1870) ; Prince v. Boston, 111 Mass. 226, 232 (1872) ; Keith v. Boston, 120 Mass. 108 (1876) ; Lincoln v. Street Com- missioners, 176 Mass. 210 (1900). 696 Taxation in Massachusetts [G. L. c. 80, §§ 8, 9 devisee, if interested, may, within one year after his interest vests, file such petition in the same manner and with the same effect as if filed by the deceased in his lifetime. This section was taken from a provision which had been in force since 1859, but had previously been contained in the chap- ter on survival of actions. If the assessment has been paid, the right to an abatement and partial refund is a chose in ac- tion which passes to the executor or administrator and not to the heir or devisee, or to any grantee of the land; 1 but if the assessment has not been paid, as it was not a personal liability of the decedent but a charge on the land, it would seem that the right to petition would lie in the heir or devisee, 2 unless it was necessary for the administrator to sell the land in order to pay debts or legacies or otherwise to comply with the terms of the will. 3 Procedure on Petition to Superior Court Section 9. Upon the filing of a petition under section seven, process shall issue and service be made as in suits in equity upon the body politic on behalf of which the assessment was made. Any de- fence to the petition not relating to the amount of the assessment must be pleaded within thirty days of the return day of the subpoena ; but no answer relating solely to the amount of the assessment shall be filed, and there shall be no default for failure to enter an appearance. The trial shall be by the court unless one of the parties within the time prescribed in actions at law files a notice that he desires a trial by jury; and the court may appoint an auditor. Interrogatories may be filed with the same effect as in actions at law. The court, at the request of any party, shall advance the petition so that it may be heard and determined with as little delay as posible. In case peti- tions have been filed for the assessment of damages and for the abatement of betterments with respect to the same parcel of land and the same public improvement, the petitions shall be tried together. In ease of trial by jury, if either party requests it the jury shall view the premises. If the assessment is not reduced the respondent shall recover costs and an execution shall issue therefor as in actions J See Webster v. Lowell, 139 Mass. 172 (1885). 2 See Crandell v. Taunton, 110 Mass. 421 (1872) ; Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879). 8 See Old Colony Trust Co. v. Treasurer & Receiver General, Mass. (1921). Betterments 697 G. L. c.-80, §§9-ll] at law; but if the assessment is reduced the petitioner shall recover judgment for costs, and the assessment so determined shall stand as the assessment upon the land, and if it has not been paid shall be collected in the manner provided for an original assessment. If the assessment has been paid judgment shall be entered for the peti- tioner for the amount of the reduction, with interest at the rate of four per cent per annum from the time of payment. This section was designed in part to provide express rules in regard to procedure, which had been given very little atten- tion in the earlier statutes and in part to bring the procedure in betterment petitions as far as possible in harmony with that provided in eminent domain cases, and thus to introduce sub- stantive changes which it was believed would prove advanta- geous. It is to be noted that the trial may be without jury; and the case may be tried with a petition for damages to the same land arising from the same public improvement. Appeal to the County Commissioners Section 10. A person who is aggrieved by the refusal of a board of officers of a city, town or district to abate an assessment may, in- stead of pursuing the remedy provided by section seven, appeal within the time limited therein to the county commissioners of the county in which the land assessed is situated, and the county commissioners shall hear the parties, and shall have the same powers and duties with respect to the abatement of such assessment as the board by which it was assessed, and may make an order as to costs. The decision of the county commissioners shall be final. The right of appeal to county commissioners, which had pre- viously existed in the case of sewer assessments, was included in the general betterment act of 1918, for the reason that in some sections of the state it is a more convenient remedy than an appeal to the court. Contribution by Lessee Section 11. If an assessment is made upon land the whole or part of which is leased, the owner shall pay the assessment, and may collect of the lessee an additional rent for the portion so leased equal to ten per cent per annum on that proportion of the amount paid 698 Taxation in Massachusetts [G.L.c.-80,§11 which the value of the leased portion bears to that of the whole estate, after deducting from the whole amount any money received for damages to such land in excess of what he has necessarily expended thereon by reason of such damages. A lessee aggrieved by the im- position of this burden may, within six months from the time demand is made upon him for such additional rent, file a petition in the superior court for the county in which the land is situated, to de- termine the proportion of the assessment which he ought to bear, and the proportion determined upon the petition shall be substituted for the proportion provided by this section. If such proportion is reduced the lessee shall recover costs from the owner; otherwise the owner shall recover costs from the lessee. In the absence of special provision by statute or contract it is the duty of the lessor to pay a betterment assessment upon leased land, 1 and if it is understood between the parties to a lease that such burdens are to fall upon the lessee it is well to have this point made clear by appropriate phraseology. When betterment assessments first became common frequent contro- versies arose between landlords and tenants whether a covenant by the latter to pay taxes and duties or other more or less synony- mous expressions included betterment assessments. When the assessment was upon the owner and not upon the land the courts were not inclined to permit him to throw the burden upon the tenant if the language of the covenant left the matter open to doubt; 2 but the courts have been very liberal in construing agreements by the lessee to pay taxes and similar impositions upon the demised premises so as to include betterment assess- ments levied on the land itself, even when the lease was made before there was any general statute in force authorizing the levying of such assessments. 3 When a lessee has covenanted to pay assessments levied dur- ing the term of the lease, he is bound to pay such an assess- ment originally assessed during the term although it is revised 'Twycross v. Fitchburg R. R. Co., 10 Gray 293 (1858) ; Snow v. Rice, 207 Mass. 331 (1911). 2 Torrey v. Wallis, 3 Cush. 442 (1849); Twycross v. Fitchburg R. R. Co., 10 Gray 293 (1858). 3 In the following cases a covenant by the lessee to pay all taxes and assess- ments, or all taxes and duties, was held to include betterment assessments. Codman v. Johnson, 104 Mass. 491 (1870); Walker v. Whittemore, 112 Mass. 187 (1873) ; Curtis v. Pierce, 115 Mass. 186 (1874) ; Blake v. Baker, 115 Mass. 1888 (1874) ; Simonds v. Turner, 120 Mass. 328 (1876). Betterments 699 G.L.c.80,§§11, 12] and reduced after the expiration of the lease. 4 A covenant by the lessee to pay assessments runs with the land and may be enforced against an assignee of the lease who is in possession when an assessment is levied. 5 In 1871 a statute which is in substance section eleven as appearing above was enacted. This statute did not, it was held, affect existing covenants, 6 nor does it, it is .to be supposed, prevent the making of special agreements between lessor and lessee to apportion betterments in a different manner. The statute, it will be noted, gives the lessor no right to add to the lessee's rent until he has paid the assessment, and if he delays payment by contesting the amount of the assessment until after the lease expires, he has no right to charge the lessee with any portion of what he has finally paid. 7 The statute as originally enacted applied only to better- ments for highways, but in the general betterment act of 1918 it was extended to all betterment assessments. Under the original act the addition to the rent was imposed arbitrarily, without regard to the actual benefit to the tenant, and the statute was thus of doubtful constitutionality. This objection was removed by adding a provision authorizing the tenant to have the addition to his rent modified by the court to conform to the actual benefit to the tenant. Although this remedy will probably rarely be invoked, its existence will prevent injustice in some cases and removes all doubt as to the constitutionality of the statute. Duration of Lien Section 12. Assessments made under this chapter shall constitute a lien upon the land assessed. The lien shall take effect upon the recording of the order stating that betterments are to be assessed for the improvement, and shall continue for two years after the assess- ment is made, or, if an assessment has been apportioned, for two years after the last portion is payable, unless sooner paid. If the validity of an assessment made under this chapter is called in question in any legal proceeding to which the board which made the assessment 4 Blake v. Baker, 115 Mass. 188 (1874). 'Torrey v. Wallis, 3 Cush. 442 (1849). 'Walker v. Whittemore, 112 Mass. 187 (1873) ; Curtis v. Pierce, 115 Mass. 186 (1874). 7 Snow v. Rice, 207 Mass. 331 (1911). 700 Taxation in Massachusetts [G. L. c. 80, §§ 12, 13 or the body politic for the benefit of which it was made is a party, instituted prior to the expiration of the lien therefor, the lien shall continue until one year after the validity of the assessment is finally determined. This section was enacted in the general betterment law of 1918 in substantial accordance with the provisions previously in force in respect to highway betterments and sewer assess- ments, with this important difference, that under the present law the lien does not take effect until the order stating that better- ments are to be assessed for the improvement is recorded in the registry of deeds, whereas under the earlier statutes the lien went into effect as soon as the order was adopted, 1 without ref- erence to the recording of the order, which in most instances was not required at all. In collecting an assessment by enforcement of the lien the collector acts in the same manner as in collecting the general tax on real estate, and the statutes and decisions relative to the sale of land for non-payment of taxes, redemption, foreclosure and the like are applicable to special assessments. 2 Interest and Apportionment Section 13. Assessments made under this chapter shall bear interest at the rate of four per cent per annum from the thirtieth day after the assessment list has been committed to the collector. If at any time before demand for payment by the collector the owner of land assessed gives notice to the board to apportion such assessment such board shall, and in any other case may, apportion the same into such number of equal portions, not exceeding ten, as the owner shall in his notice request ; but no one of said portions shall be less than five dollars. The board shall certify such apportionment to the collector, and he shall add to each annual tax bill upon the land so assessed one of such portions until the whole assessment has been paid. He shall also add to the first such bill interest on such assessment to the last day of October of such year, and in the bill for each year thereafter one year's interest on the amount of the assessment remaining un- paid, or, if the parcel and the assessment thereon have been divided as hereinafter provided, he shall include the proportionate part of such apportionment in the annual tax bills upon the parcels into which 1 See G. L. c. 80, §2, supra, page 681. * See G. L. c. 60, §§37-86, inc., supra, pages 346 to 392, inc. Betterments 701 G. L. c. 80, §§ 13, 14] the land has been divided. Any portion of an assessment remaining unpaid may be paid at any one time, notwithstanding a prior appor- tionment. The rate of interest upon unpaid special assessments, whether apportioned or not, was reduced in 1918 from six to four per cent to conform to the corresponding provision in the eminent domain act, the higher rate having frequently operated to induce land owners to delay as long as possible the final de- termination of proceedings for the determination of damages by the taking of their land by eminent domain in order to have the benefit of what was then considered a high rate of interest. Almost immediately interest rates rose as a result of war con- ditions, so that at present cities and towns which issue bonds to meet the cost of a public improvement paid for by betterment assessments are .often obliged to pay a higher rate of interest on the bonds than they receive upon the deferred installments of the apportioned betterment assessments. The provisions of section thirteen in regard to apportion- ment follow in general the previous statutes, but were intended to provide a simple and uniform system in place of the con- fusing and inconsistent provisions previously in force. An owner of land assessed who asks for an apportionment does not thereby forfeit his right to apply for an abatement of the assessment. 1 ' The request for apportionment must be made in a much more limited time than the petition for abate- ment and it is not to be supposed that the legislature intended to shorten the time for bringing a petition by one who availed himself of the privilege of asking for an apportionment. An owner of land subjected to an invalid assessment which has been apportioned does not forfeit his right to recover back the later installments by having paid the first without protest; 2 and he may recover such an installment back in an action of contract notwithstanding its having been added to his general tax bill. 3 Apportionment by Assessors Section 14. The aldermen of any city may direct that the appor- tionment of betterments under the preceding section be made by the Gardner v. Boston, 106 Mass. 549 (1871). 2 Smith v. Boston, 194 Mass. 31 (1907). 3 Dexter v. Boston, 176 Mass. 247 (1900). 702 Taxation in Massachusetts [G. L. c. 80, §§ 14, 15 assessors thereof, and thereupon all powers and duties with respect to the apportionment of betterments assessed in behalf of such city shall be transferred from the board by whom the assessment was made to the assessors. The foregoing section was introduced into the general bet- terment act of 1918 in order to permit the purely ministerial duty of apportioning betterment assessments to be transferred to the board of assessors. Subsequent Division of Land Assessed Section 15. If land which is subject to a lien for an assessment made under this chapter is subsequently divided by sale, mortgage, partition or otherwise and such division has been duly recorded in the registry of deeds, the board, before the land has been advertised for sale for non-payment of the assessment, may, or upon the written re- quest of the owner or mortgagee of a portion thereof, accompanied by a plan sufficient for the identification of the division o*f the whole estate, with the names of the different owners thereof, shall, divide said assessment or the amount thereof remaining unpaid, and the costs and interest accrued thereon, among the several parcels into which said land has been divided, assessing upon each parcel the part of the original assessment remaining unpaid proportionate to the special benefit received by such parcel from the improvement. After such assessment has been so divided, only the part of the assessment, in- terest and costs assessed upon each parcel shall constitute a lien upon such parcel. At least seven days prior to making such division the board shall send by registered mail to all owners of any interest in the land assessed, whose addresses are known to them, a notice of their intention to make such division and of the time appointed there- for, unless such notice has been waived. A person aggrieved by any action of the board under this section shall have the same remedy as a person aggrieved by the refusal of the board to abate an assess- ment. The provision for the division of an unpaid betterment assessment when the land upon which it was assessed was divided was taken from previous statutes relating to sewer assess- ments, and to public improvements in the city of Boston. Apart from a division in accordance with the procedure laid down by statute, an assessment is properly made in one entire sum on the Betterments 703 G.L.c 80, §§15, 16] land as it existed when the lien went into effect and is to be enforced as one lien on the entire parcel, regardless of any di- vision of the parcel by sale or otherwise before or after the assessment. 1 Re-Assessment Section 16. If an assessment is invalid and has not been paid in full or has been paid under such circumstances that it can be recovered back, it may be re-assessed by the board in the amount for which the original assessment ought to have been made, at any time before the expiration of two years from the date of the assessment, if the land has in the meantime been alienated ; otherwise at any time before the alienation thereof. Such assessment shall be a lien upon any sum paid on account of the original assessment, and to the extent that it is not thereby satisfied shall be a lien upon the land. It shall be collected in the same manner as an original assessment, and shall in all other respects be subject to this chapter. A re-assessment is a new assessment of a betterment which has been held or found to be invalid ; an order of the board which levied an assessment reducing it in amount is not a re-assess- ment, 1 The provisions in the general betterment act of 1918 in regard to re-assessment were taken in substance from the high- way betterment act but were somewhat amplified and certain de- fects in the law were remedied. In general the provisions in re- gard to the re-assessment of general taxes are incorporated into this section. 2 The lien for a re-assessment under the foregoing section at- taches when the original order is recorded and is not lost by reason of the invalidity of an assessment thereunder, so that it remains an incumbrance on the land, 3 unless the invalidity of the assessment was due to such illegality in the establish- ment or construction of the public improvement for which the assessment was levied that no valid assessment could have been made. In such case, if by subsequent curative act an assess- 1 Hester v. Collector of Brockton, 217 Mass. 422 (1914). See as to provi- sions for division of lien for general taxes G. L. c. 59, §§79-81, inc., supra, page 309. i Blake v. Baker, 115 Mass. 188 (1874). 2 See G. L. c. 59, §§77, 78, supra, page 306. s Colburn v. Litchfield, 132 Mass. 449 (1882); Smith v. Abington Saving8 Bank, 171 Mass. 178 (1898); Maloy v. Holl, 190 Mass. 277 (1906). 704 Taxation in Massachusetts [G. L. c. 80, §§ 16, 17 ment is authorized and is levied, there is no encumbrance on the land until the curative act is enacted. 4 Provisions of Chapter Eighty Exclusive Section 17. Whenever a formal vote or order for the laying out or construction of a public improvement, or for the taking of land therefor, states that betterments are to be assessed, no betterments shall be assessed except under this chapter, and all proceedings relat- ing to such betterments shall be as herein provided, notwithstanding any special act hitherto enacted. This section was intended to make it clear that the provisions of the general betterment act of 1918 now incorporated in chap- ter eighty of the General Laws supersede all other general and special acts and provisions in city charters, upon the same sub- ject. It is to be noted however that the provisions of chapter eighty do not apply except in the case of a formal vote or order for the laying out or construction of a public improvement stating that betterments are to be assessed, and with respect to betterments or special assessments imposed in any other way, the provisions of chapter eighty are not applicable unless specifically incorporated by reference. *Maloy v. Holl, 190 Mass. 277 (1906) ; Campbell v. Haven, 211 Mass. 121 (1912) ; Sullivan v. Mandell, 212 Mass. 174 (1912). CHAPTER 82 THE LAYING OUT AND RELOCATION OF PUBLIC WAYS Assessment of Cost of Relocation Section 11. If application is made to the commissioners by a town, or by five inhabitants thereof, to relocate or order specific re- pairs on a way within such town, whether it was laid out by authority of the town or otherwise, they may, either for the purpose of estab- lishing the boundary lines of such way or of making alterations in the course or width thereof, or of making specific repairs thereon, relocate it in the manner prescribed for laying out highways in sections two to nine, inclusive. The expense shall be assessed upon the petitioners or upon the county or town, or upon the land benefited by the im- provement under chapter eighty, as the commissioners may order. The commissioners may, without petition, after giving notice as pro- vided in section three, relocate any public way for the purpose of establishing its boundaries, or of making specific repairs thereon, in which case no part of the expense shall be assessed upon the town. In spite of rather broad language in the statute giving power to county commissioners to act under the highway betterment act, it was intimated by the court that county commissioners could not relocate a highway under the betterment act, at least in towns which had not accepted the act; 1 but under the pres- ent statute, which was modified to conform to the general bet- terment act of 1918, it is clear that county commissioners may assess betterments for the relocation of a highway in any part of the state. The county commissioners have long had the power to as- sess all or part of the expense of a relocation upon the persons who petitioned for the relocation, 2 and while such an assess- ' Watertown v. Middlesex County Commissioners, 176 Mass. 22, 28, 32 (1900) ; Bennett v. Wellesley, 189 Mass. 308, 317 (dissenting opinion of Knowl- ton, C. J.) (1905). "By St. 1835, c. 152, §8, the county commissioners could locate anew a road only upon the application of the town, and the town was required to pay 705 706 Taxation in Massachusetts [G.L. c.82,§§11, 12 ment would not in most instances be levied in accordance with the limitations imposed by the constitution in respect to betterment assessments, the persons who petitioned for a re- location while such a statute was in force would not be in a posi- tion to contend that a burden thus voluntarily incurred by them was not constitutional. As an alternative, the county commissioners may determine that the county shall pay the expense of a relocation, or they may impose it upon the cities or towns, or assess it directly upon the land benefited, in accordance with the provisions of the chapter on betterments. If the cost is imposed upon a city or town, the city or town cannot assess the sum it is thus obliged to pay upon the land benefited, but must raise it out of the general tax levy, as it was evidently the intention of the legis- lature that the order of the county commissioners should con- stitute a final determination of the whole subject of the payment of the expenses. 3 Assessment of Cost of Laying Out, Alteration, Repair or Discontinuance Section 12. When a highway has been finally laid out, altered, relocated or discontinued, or when specific repairs are ordered on an existing highway by the county commissioners,* the county shall be primarily liable for all damages thereby caused, or for all amounts awarded or assessed as indemnity. The commissioners shall deter- mine what proportion if any of the expenses of the proceedings, cost of construction, damages and indemnity shall be assessed upon the land benefited under chapter eighty and whether the remainder, if any, shall be borne by the county, or by the towns in which the parts of the highway are respectively located. The commissioners shall notify each such town of any balance due from such town to the county under this section and may enforce payment as provided in section fifteen. all the expenses. So in R. S., c. 24, §9. By St. 1851, c. 214, the commissioners were authorized to locate anew a road within any town upon the application of any five inhabitants of the town, in which case the persons making the applica- tion were required to pay all the expenses. By G. L. c. 43, §12, it was pro- vided that the expense should be assessed upon the petitioners for the relocation or upon the town or county as the commissioners might order, and by St. 1873, c. 165, the further amendment was made by which the commissioners might assess the expenses in whole or in part upon the abutters. 3 Tufts v. Mayor and Aldermen of Somerville, 122 Mass. 273 (1877). The Laying Out and Relocation op Public Wats 707 G. L. c. 82, §§ 12, 24, 26] It was held in 1871 that under the provisions of statute as they then existed county commissioners had no authority to institute proceedings under the betterment acts in any city to be conducted under those acts either by themselves or by the city council or other board of a city in compliance with their order; 1 but in 1887 they were given such power over highways within a city, or within a town which had accepted the better- ment act. The statute seemed to contemplate that the actual assessment of the betterments would be made by the local authorities. The general betterment act of 1918 however gave the county commissioners power to assess betterments them- selves directly, and in any part of the state. 2 The repairs for which betterments may be levied are "spe- cific repairs" such as changing the grade, or resurfacing, and there is no authority for levying betterments for "ordinary repairs," made by the administrative officers in charge of the repair of highways without a formal vote or order of a board of officers of a county, city or town. 3 Assessment of the Cost of Private Ways Section 24. ... If a private way is laid out, relocated, altered or discontinued by a town, or if a town makes specific repairs thereon, or if a town way is discontinued, the persons upon whose application such way is laid out, relocated, altered or discontinued or upon whose application specific repairs are made thereon shall, before such way is entered upon for the purposes of construction, or is closed up, give such town security satisfactory to the selectmen that they will in- demnify such town for all damages and charges which it is obliged to pay by reason thereof, and all such damages and charges shall be repaid to the town by the persons making such application ; provided, however, that in case of the discontinuance of a town way the select- men may order a part of the damages to be paid by the town. . . . Section 26. . . . If it is a private way, the damages and costs, or such part thereof as the county commissioners consider reasonable, shall be repaid to the town by the persons for whose use it was laid out, relocated or altered, and security for such payment, satisfactory to the county commissioners, shall be given to the town by such 'Chase v- Worcester, 108 Mass. 60 (187i). 2 G. L. c. 80, §1, supra, page 669. 3 Hitchcock v. Aldermen of Springfield, 121 Mass. 382 (1876). 708 Taxation in Massachusetts [G. L. c. 82, § 26 persons before the way is entered upon for the purpose of construct- ing or altering the same. The private ways referred to in these statutes are really pub- lic ways laid out and constructed by public authority and which the public may lawfully use to the same extent as public high- ways and are private only in that the land damages are paid by the persons benefited by the laying out. 1 An assessment could not constitutionally be levied for the construction of a purely private way. 2 It is to be noted that the land damages are to be paid by the persons for whose use or benefit the way is laid out and without limitation to actual benefit. These statutes have stood in much the present form since long before the con- stitution was adopted and would probably not now be held unconstitutional. The statutes may well be construed as author- izing the assessment only upon those who petition for the way and thus waive any right to object to the constitutionality of the statutes. 1 Denham v. Bristol County Commissioners, 108 Mass. 202 (1871] 2 Morse v. Stocker, 1 Allen 150 (1861). CHAPTER 83 SEWERS, DRAINS AND SIDEWALKS Sewer Assessments . Section 14. A person who enters his particular drain into a main drain or common sewer, or who by more remote means receives benefit thereby for draining his land or buildings, shall pay to the town a proportional part of the charge of making and repairing the same, and of the charge, not already assessed, of making and repair- ing other main drains and common sewers through which the same discharges, which shall be ascertained, assessed and certified by the aldermen, sewer commissioners, selectmen or road commissioners. This section has stood since its original enactment in 1841 without material change except for the insertion in 1878 of the clause including the cost of other sewers through which the sewer for which the assessment is levied discharges. The constitutional principles already set forth 1 apply to assessments under this statute and an assessment in excess of the actual benefit cannot be sustained; but in the absence of evidence that actual injustice is done there is no objection to apportioning the assessment according to some more or less arbitrary rule. 2 The assessment, if made in proportion to value, should be made according to the value of the land exclusive of buildings, 3 and should not depend upon the immediate neces- sities for drainage but according to the opportunity for drainage when the owner may require it. 4 If a sewer built to drain a certain district carries off the drainage of districts situated above, it would be reasonable that 1 Supra, Part I, §§65-70, inc. 2 Weed v. Boston, 172 Mass. 28 (1898); Dexter v. Boston, 176 Mass. 247 (1900) ; Hall v. Street Commissioners of Boston, 177 Mass. 434 (1901) ; Smith v. Mayor and Aldermen of Worcester, 182 Mass. 232 (1902) ; Cheney v. Beverly, 188 Mass. 81 (1905) ; O'Connell v. First Parish in Maiden, 204 Mass. 118 (1910). 3 Boston v. Shaw, 1 Met. 130 (1840) ; Wright v. Boston, 9 Cush. 223 (1852) ; Springfield v. Gay, 12 Allen 612 (1866); Brewer v. Springfield, 97 Mass. 152 (1867). * Downer v. Boston, 7 Cush. 277 (1851) ; Springfield v. Gay, 12 Allen 612 (1866) ; Snow v. Fitchburg, 136 Mass. 183 (1883). 709 710 Taxation in Massachusetts [G. L. c. 83, § 14 some portion of the cost of the sewer should be apportioned to the upper drains which depend upon it for discharge, 5 al- though such apportionment is not essential to the validity of the assessment, but part of the cost of an existing sewer can- not be arbitrarily included in the assessment for the construc- tion of a new sewer tributary to it. 7 The board laying the as- sessment may lawfully divide the assessment into three classes designated as direct benefit, remote benefit, and more remote benefit, respectively. 8 In fixing the assessable cost, all revenue derived from the sewer should be deducted. 9 It is the duty of the proper officials to levy the assessment within a reasonable time after the completion of the sewer, 10 but there is no requirement in the statute that the assessment be made within a certain time limit and the court will impose none. 11 The provision in the general laws that sewer assessments in cities shall be laid by the board of aldermen supersedes incon- sistent provisions in the several city charters previously granted. 12 When the same structure is used for a sewer and also for another purpose an assessment of the cost of what it would have cost if built solely as a sewer is proper. 13 It is not necessary to give the owners of estates to be assessed notice of intention to levy a sewer assessment, 14 but notice must be given after the assessment is levied. A notice in writing of "Pattern v. Springfield, 99 Mass. 627 (1868). 6 Fairbanks v. Mayor and Aldermen of Fitchburg, 132 Mass. 42 (1882) ; Ayer v. Mayor and Aldermen of Somerville, 143 Mass. 585 (1887). 7 Brown v. Mayor and Aldermen of Fitchburg, 128 Mass. 282 ( 1880) . The cost of the use of an excavator belonging to another city department, and a propor- tionate part of the overhead expenses of the sewer department may be included in the assessable cost of a sewer. Parsons v. Worcester, 234 Mass. 108 (1919). 8 Collins v. Mayor and Aldermen of Holyoke, 146 Mass. 298 ( 1888) . "Patton v. Springfield, 99 Mass. 627 (1868). 10 Dunn v. Mayor of Taunton, 200 Mass. 252 (1908). "Fairbanks v. Mayor and Aldermen of Fitchburg, 132 Mass. 42 (1882); Hester v. Collector of Brockton, 217 Mass. 422 (1914). In the former case an assessment levied six, and in the latter case seventeen, years after the completion of the sewer was sustained. 12 Woodbridge v. Mayor and Aldermen of Cambridge, 114 Mass. 483 (1874). 13 Gray v. Aldermen of Boston, 139 Mass. 328 (1885). If separate sewers are laid for sewage and surface water respectively, and the surface water sewer is of no benefit to a particular parcel of land, an assessment based on the cost of both is valid, if it does not exceed the benefit to the land from the construc- tion of the other sewer. Parsons v. Worcester, 234 Mass. 108 (1919). "Allen v. Charlestown, 111 Mass. 123 (1872) ; Collins v. Mayor and Alder- men of Holyoke, 146 Mass, 298 (1888) ; Smith v. Abington Savings Bank, 171 Mass. 178 (1898). Sewers, Drains and Sidewalks 711 G. L. c. 83, § 14] the amount of the assessment and a statement of what it is for, with a demand for payment, is sufficient. 15 After a lawful order of assessment has been passed, a warrant for its execution com- mitted to the collector and notices given to the owners of the estates assessed, it is not within the power of the board levying the assessment at a subsequent meeting to reconsider or rescind the order laying the assessment. 1 16 Sewer Assessments in the City of Boston As already stated, sewer assessments were first established in the city of Boston by a city ordinance and without special au- thority of statute, and although the method adopted by the ordinance was held unreasonable and the ordinance consequently invalid it was not intimated that it was beyond the power of the city to build sewers and levy assessments therefor. 1 In 1841 however general provision was made by statute for public sewers and sewer assessments 2 and there was no special legisla- tion regarding sewer assessments in the city of Boston until 1892. It was provided in a statute enacted in that year that the whole cost of every sewer thereafter constructed in the city whether in a street or in a strip of private land should be assessed upon the abutting land in proportion to frontage upon the sewer, to an amount not exceeding four dollars for each lineal foot of sewer. 3 This statute was held unconstitutional in 1898 in that it applied to all parts of the city whether cut up into house lots or not and to sewers in strips of private land taken for the purpose as well as in highways, so that it might be expected to work gross injustice in many cases, and that it excluded all inquiry as to actual benefits either in the original assessment or upon appeal. 4 In 1897 provision was made for assessing the cost of main- tenance of sewers upon real estate in the city, 5 and this statute "Collins v. Mayor and Aldermen of Holyoke, 146 Mass. 298 (1888) j Law- rence v. Webster, 167 Mass. 513 (1897). 18 Woodbridge v. Mayor and Aldermen of Cambridge, 114 Mass. 483 (1874). And see also Farnsworth v. Boston, 121 Mass. 173 (1876) ; Barnstable Savings Bank v. Boston, 127 Mass. 254 (1879). 1 Boston v. Shaw, 1 Met. 130 (1840). 2 Supra, page 709. 8 St. 1892, c. 402. *Weed v. Boston, 172 Mass. 28 (1898). And see also Dexter v. Boston, 176 Mass. 247 (1900) ; White v. Gove, 183 Mass. 333 (1903). 8 St. 1897, c. 426, §7. 712 Taxation in Massachusetts [G. L. c. 83, § 14 also was held unconstitutional in May, 1899, because it author- ized an assessment for a purpose improper for special assess- ments and because it made no provision for a hearing. 6 Shortly afterward the provision for sewer assessments was enacted in its present form and this statute has been sustained as constitu- tional. It provides that the assessments shall be proportional, and this is construed as meaning proportional to benefits, and, it is to be assumed, not in excess of benefits actually received. 7 The statute further provides that the assessment must be levied within two years after the completion of the work; that it shall not exceed four dollars per linear foot ; and that it shall constitute a lien for two years after the assessment. Provision is also made for the revision and correction of an assessment by the board which levied it, and for appeal to the superior court in the manner provided for appeals from the board of assessors in the case of the general property tax. 8 By other statutes still in force provision is made for the abatement and suspension of assessments when the board deems it just and proper, 9 for the suspension of assessments upon exempt lands as long as they remain exempt, 10 for the relieving of portion of a parcel of land from an assessment when part of the assessment is paid 11 and for the recording of notice by the superintendent of streets before he starts the construction of a sewer. 12 Special assessments are not permitted in the case of sewers designed for the disposal of surface drainage solely. 13 In the absence of a general legislative revision and consolida- tion of the innumerable special acts governing the construction of public ways and sewers in the city of Boston, and relating to the authority of the officers charged with the supervision of the various municipal departments, there are seemingly incon- sistent or contradictory provisions which make it very difficult to construe them so as to formulate a clear and comprehensive system of municipal administration. The original board of survey act of 1891 provided for the inclusion of the cost of 8 Sears v. Street Commissioners of Boston, 173 Mass. 350 (1899). 7 Hall v. Street Commissioners of Boston, 177 Mass. 434, 440 (1901). 8 St. 1899, c. 450, §3, as amended by St. 1912, c. 371. 9 St. 1896, c 359. 10 St. 1892, c. 402, §4. 11 St. 1895, c. 297. "St. 1903, c. 268, §1. 13 St. 1902, c. 526. See, however, as to brook courses, Sp. Acts 1915, c 108. Sewers, Drains and Sidewalks 713 G L. c. 83, § 14] building a sewer in the assessable cost of the street, and there is nothing inconsistent with these provisions in the general bet- terment law. A similar provision in a statute applicable to a particular improvement in the city of Boston was held con- stitutional and the joining of these two items is thus in itself unobjectionable. 14 In some instances when for some reason it was not desired to assess betterments for the laying out and con- struction of the street, assessments for the cost of the sewer alone were laid under the board of survey act and acts in amend- ment thereof, 15 and while the act was unconstitutional and the assessments void because they were not limited to the actual benefit 16 there seemed to be no objection to an assessment under this statute merely because it was for the sewer only. In the sewer maintenance assessment act of 1897 there was a provision that no sewer should thereafter be constructed except under authority of that act; 17 but the assessment feature of that act, which was held unconstitutional 18 was so inseparable from the rest of the statute that the whole statute was invalid; 19 and a sewer might be constructed as part of a street under the street betterment act while the sewer act remained unrepealed. 20 The provision that no sewer should be constructed except under the provisions of the sewer assessment act however was re-enacted in the unobjectionable sewer assessment act of 1899 and is still in force, 21 although a later street betterment act, which was superseded by the general betterment law of 1918, provided for assessments for the cost of laying out or constructing a highway "with or without a sewer." 22 Under the original statute of 1841 and all other statutes re- lating to the laying out of sewers down to 1897, including the unconstitutional statute of 1892, the order of laying out and "Lincoln v. Street Commissioners of Boston, 176 Mass. 210 (1900). "Parke v. Boston, 175 Mass. 4G4 (1900) ; Harwood v. Donovan, 188 Mass. 487 (1905) ; Tappan v. Street Commissioners of Boston, 193 Mass. 498 (1907). 18 Smith v. Boston, 194 Mass. 31 ( 1907) . 17 St. 1897, c. 426, §1. 18 Sears v. Street Commissioners of Boston, 173 Mass. 350 (1899). "Tappan v. Street Commissioners of Boston, 193 Mass. 498 (1907). 20 Tappan v. Street Commissioners of Boston, 193 Mass. 498 (1907). The distinction is of practical importance; if an assessment tor a sewer is under the betterment act it cannot be levied until the street is completed. 21 St. 1899, c. 450, §1 ; St. 1903, c. 268, §1. "St. 1906, c. 393, §2; St. 1913, c. 536. See Sullivan v. Mandell, 212 Mass. 174, 177 (1912). 714 Taxation in Massachusetts [G. L. c. 83, §§ 14, 15 the assessment were made by the mayor and aldermen, or, after 1882, by the board of aldermen alone. In 1897 these pow- ers were given to the street commissioners, and since that date no sewer can be laid out even in an existing street except by order of the board of street commissioners with the approval of the mayor; and an assessment by the street commissioners for the cost of a sewer constructed on the order of the mayor alone is not valid. 23 Assessment for Sewerage System at Uniform Rate Section 15. The city council of a city or a town may adopt a system of sewerage for a part or the whole of its territory, and may provide that assessments under section fourteen shall be made upon owners of land within such territory by a fixed uniform rate, based upon the estimated average cost of all the sewers therein, according to the frontage of such land on any way in which a sewer is con- structed, or according to the area of such land within a fixed depth from such way, or according to both such frontage and area; but no assessment in respect to any such land, which by reason of its grade or level or any other cause cannot be drained into such sewer, shall be made until such incapacity is removed. If the assessment is accord- ing to the area within such fixed depth, the lien therefor shall attach to the parcel assessed. A special statute similar to the above was held unquestion- ably constitutional before the general provision was enacted 1 and the latter was enforced for several years without any ques- tion of its constitutionality, but" the later decisions threw grave doubt upon its validity. 2 It was held however that the statute "Sullivan v. Mandell, 212 Mass. 174 (1912). 'Butler v. Worcester, 112 Mass. 541 (1873). The general statute was first enacted in 1878. 8 See the following extract from the report of the commissioners who pre- pared the Revised Laws in reference to this section. "This section has been retained notwithstanding the decisions in Weed v. Boston, 172 Mass 28, and Dexter v. Boston, 176 Mass. 247. In the first of these cases, the section was referred to with the implication that on account of its limitations it may not be unconstitutional, and in the second no reference is made to it. The principles laid down in the opinion in Sears v. Boston, 173 Mass. 75, would clearly sustain it as applied to a certain class of cases in which the result of the method prescribed coincides with the result of an assessment 'according to the benefits received.' See also Carson v. Brockton, 175 Mass. 242, and Hall v. Boston, January 4, 1901 [177 Mass. 434]. It would be possible so to redraft the section as to bring it clearly within the rule enunciated in these cases; but as Sewers, Drains and Sidewalks 715 G. L. c. 83, § 15] should be construed as authorizing only assessments proportional to and not in excess of the actual benefit and that thus construed it was constitutional. 3 If, in any particular instance, the assess- ment is greater than the increase in the fair market value of the land resulting from the establishment of the sewer, the owner of the land will be entitled to an abatement. 4 The assessments under this statute are not limited to per- sons who enter their drains into the sewer or who by more remote means receive benefit thereby, but are made upon owners of estates within the sewerage territory according to fixed uni- form rates; 5 excepting such lands as will never use the sewer, either from natural causes or by reason of their perpetual de- votion by authority of statute to a use for which drainage is unnecessary. 6 An assessment may be levied under this statute upon lands abutting upon a street in which a sewer has been constructed after the statute was enacted but before the town in which the sewer lies has accepted the statute, for the liability to an as- sessment is an encumbrance upon the abutting estates when the sewer is laid out, although its amount cannot then be ascertained. It is a liability to an assessment in any manner which may be lawfully adopted. 7 An assessment under an ordinance providing that assessments shall be by uniform rates based on the cost of all sewers according to frontage on any street in which there is a public sewer and to area within a fixed depth from such street and fixing such rates is levied under this section and leaves no question as to the amount of land covered by the assessment. 8 An assessment can be levied under this section for a sewer constructed by private parties in a private way and acquired by the town when the way was laid out as a public way, for the such redraft might involve questions of expediency as well as of constitutional limitation, it is not considered to be within the province of the commission." 3 Cheney v. Beverly, 188 Mass. 81 (1905) ; Hester v. Collector of Brockton, 217 Mass. 422 (1914). And see also O'Connell v. First Parish in Maiden, 204 Mass. 118 (1910). The provision for application for abatement now contained in section 5 of chapter 80 applies to an assessment under section 16. Taylor v. Mayor and Aldermen of Haverhill, 192 Mass. 287 (1906) ; Driscoll v. Northbridge, 210 Mass. 151 (1911). 4 Driscoll v. Northbridge, 210 Mass. 151 (1911). 6 Leominster v. Conant, 139 Mass. 384 (1885). 6 Mount Auburn Cemetery v. Cambridge, 150 Mass. 12 (1889). 7 Leominster v. Conant, 139 Mass. 384 (1885). 8 Taylor v. Mayor and Aldermen of Haverhill, 192 Mass. 287 (1906). 716 Taxation in Massachusetts [G. L.c. 83, §§15, 16 assessment is not affected in any way by the cost of the sewer in the street upon which the land abuts. 9 It is not necessary that notice of a sewer assessment under this section be given before it was levied, if notice was given after it was levied. 10 The imposition of sewer assessments at a fixed uniform rate under the foregoing section proved satisfactory until by reason of the increase in cost of labor and materials during the war with Germany the previously established rates failed to produce the proportion of the cost of sewers which it was desired to assess upon the abutting property and the additional burden was thrown upon the general taxpayers. As the statute contains no provision for the modification of the rate after it has once been established, in some instances it became necessary for cities and towns to secure special authority from the legislature for the modification of their rates. Annual Charges for the Use of Sewers Section 16. The aldermen of any city except Boston or the sewer commissioners, selectmen or road commissioners of a town, may from time to time establish just and equitable annual charges for the use of common sewers, which shall be paid by every person who enters his particular sewer therein. The money so received may be applied to the payment of the cost of maintenance and repairs of such sewers or of any debt contracted for sewer purposes. The statute authorizing the establishment of annual charges for the use of sewers when first enacted in 1892 provided that the charges should be established by the city council of a city or by a town, but when the Revised Laws were prepared in 1902 the statute was changed with respect to the officers who might establish the charges so as to be more in harmony with the other provisions of law relative to the control of sewers. It was held that an assessment under this statute based principally upon the water used upon the estate could be con- stitutionally levied even upon an estate which had been assessed for the construction of the sewer. An assessment for the con- struction of the sewer does not forever bind the city to main- •Slocum v. Brookline, 163 Mass. 23 (1895). 10 Smith v. Abington Savings Bank, 171 Mass. 178 (1898). Sewers, Drains and Sidewalks 717 G. L. c. 83, §§ 16-18] tain the sewer free of charge, and the maintenance of the sewer is a special benefit. The assessment is limited to those who actually use the sewer and to be "equitable" within the meaning of the statute must be proportional to the benefit and not in excess of it. The owner assessed has no right to a jury trial and when a uniform and self-adjusting rate is adopted under which no question as to proportion can arise or any other ques- tion except the general one whether the rate is high, the local authorities may be authorized to determine that question. 1 Payment for Permanent Privilege of Using Sewers Section 17. The aldermen of any city except Boston or a town in which main drains or common sewers are laid may determine that a person who uses such main drains or common sewers in any manner, instead of paying an assessment under section fourteen, shall pay for the permanent privilege of his estate such reasonable amount as the aldermen or the sewer commissioners, selectmen or road commissioners shall determine. When an ordinance provides that sewer assessments shall be by fixed uniform rates based upon the cost of all sewers therein according to frontage and area within a fixed depth, it sufficiently appears that the ordinance is enacted under sec- tion fifteen and not under section seventeen. 1 A person aggrieved by the determination of the amount to be paid under this section is entitled to apply for an abatement. The statute formerly expressly so provided, and the provision was omitted merely because the general provisions of section twenty-eight established the remedy for abatement in the case of all forms of sewer assessments. 2 Determination of Method of Assessment Section 18. The city council of a city or a town which itself is, or the officers of which are, entitled, under sections fourteen to seven- teen, inclusive, or under any special act, to assess upon land the whole 'Carson v. Sewerage Commissioners of Brockton, 175 Mass. 242 (1900), af- firmed, 182 U. S. 398 (1901). In this case the ordinance charged for unmetered water service eight dollars and for metered water service thirty cents per thou- sand gallons of sewage with a minimum charge of eight dollars. 1 Taylor v. Mayor and Aldermen of Haverhill, 192 Mass. 287 (1906). *St. 1918, c. 257, §212, and see Preliminary Report of Commissioners to Consolidate the General Laws, p. 217. 718 Taxation in Massachusetts [G. L. c. 83, §§ 18-21 or a part of the 'cost of laying, making, maintaining or repairing main drains or common sewers, may determine that such assessments shall be made by two or more of the methods provided in said sections or special acts, and may determine what part of the expense or esti- mated average cost shall be paid under each method. In addition to the methods of levying sewer assessments provided by chapter eighty-three, if a city or town lays a sewer through private land, it may take the necessary easement un- der the general provisions of chapter seventy-nine, and levy betterment assessments under chapter eighty. Extension of Time for Payment Section 19. The aldermen of a city or the sewer commissioners, selectmen or road commissioners of a town may extend the time for the payment of such assessments upon land which is not built upon until it is built upon or for a fixed time; but interest at a rate not less than the town pays upon any loan for sewer purposes shall be paid annually upon the assessment from the time it was made, and the assessment shall be paid within three months after such land is built upon or at the expiration of such fixed time. The provisions of this section do not authorize a sewer assessment in excess of the present enhancement of the market value of the land assessed resulting from the construction of the sewer, but recognize that the potentiality of sewerage may increase the market value even of vacant land, although it may be a hardship to the owner to pay the assessment before the land is capable of returning an income. 1 Fee for the Use of Sewers Section 20. The owners of land or parts thereof not liable to as- sessment, or not in fact assessed, may use the common sewers for the disposal of their sewage from such land only on payment of such reasonable amount as the aldermen or the sewer commissioners, select- men or road commissioners shall determine. Land Abutting Upon More Than One Way Section 21. If land abuts upon more than one way, assessments for sewers based wholly or in part upon frontage shall be assessed 'Driscoll v. Northbridge, 210 Mass. 151 (1911). Sewers, Drains and Sidewalks 719 G. L. c. 83, §§ 21-24] upon the frontage upon one such way and upon so much of the front- age upon such other way as is not exempted by the board whdse duty it is to make the assessment ; and such board may exempt from assess- ment so much of the frontage upon such other way as they consider just and equitable. When a sewer runs on two sides of a parcel of land of mod- erate size, if the assessment is by frontage, such a parcel ia doubly assessed, and a statute which made no allowance for such a situation would be unconstitutional. 1 Sewers Built by Land Owners Section 22. If an ordinance or by-law provides that any drain or sewer laid in any land or way, public or private, which is opened or proposed to be opened for public travel and accommodation shall be a main drain or common sewer, and such drain or sewer is laid in a private way or land at the expense of the owner thereof, his land shall not be assessed for such drain or sewer, except for the cost of connecting it with common drains or sewers already established. Payment of Part of Cost by the City or Town Section 23. This chapter shall not prevent a town from provid- ing, by ordinance or otherwise, that a part of the expense of laying out, constructing, maintaining and repairing main drains or common sewers shall be paid by such town ; and any city except Boston and any town adopting a system of sewerage which had not, prior to May sixth, eighteen hundred and ninety-two, actually levied assess- ments for the cost of such system shall pay such portion, not less than one quarter nor more than two thirds, of the cost of laying out, con- structing, maintaining and repairing the common sewers as the city council or the sewer commissioners, selectmen or road commissioners may determine. Assessment for Particular Sewers Section 24. The owner of any land benefited by the laying out of a particular sewer from the common sewer to the boundary of the way shall pay to the town for the permanent privilege of using the same such reasonable amount as the aldermen or the sewer commissioners, dexter v. Boston, 176 Mass. 247, 252 (1900). 720 Taxation in Massachusetts [G. L. c. 83, §§ 24, 26 selectmen or road commissioners determine, which may be fixed at the estimate'd average cost of all such particular sewers within the terri- tory for which a system of sewers has been built or adopted. The board or officers authorized to lay out sewers shall assess the cost of connecting private land with a common sewer under section three upon the land so connected, and may require that an applicant for a connection of his land with a sewer shall pay in advance an amount equal to the estimated assessment therefor, which shall be applied to the payment of the assessment, and the remainder, if any, shall be repaid to the applicant. Sidewalk Assessments Section 26. In the order for the construction of a new sidewalk or the reconstruction of a sidewalk with material of more permanent character than that with which it was originally constructed, the board making the order may provide for the assessment of a reason- able amount, not exceeding one half the cost, upon the abutting estates. If an ordinance or by-law so provides, the total assessed upon any individual estate shall not exceed one per cent of the value thereof as fixed by the last preceding annual assessment for taxes. The first legislation in this commonwealth in which sidewalk assessments were authorized consisted of special statutes grant- ing power to levy such assessments to particular towns and cities. A number of such acts had been passed before the date of the earliest general law concerning sidewalks, and many such statutes have been enacted since that time, some of which are still in force. The earliest general law was enacted in 1855 and having been continued in force since then without material change constituted the first of the three alternative systems which were in force prior to the enactment of the General Laws. Under this system one-half the expense was assessed upon abut- ting lands with no provision that the walk should be afterward maintained at public expense or that previous assessments should be deducted ; and this system to be in force required acceptance by the city or town. The second system, which also required acceptance, provided for an assessment of one-half the expense not exceeding one per cent of the value of an estate, and if the walk was constructed of permanent materials any sum previously paid was to be deducted from the assessment and the walk Sewers, Drains and Sidewalks 721 G. L. c. 83, § 26] thereafter maintained at the public expense. This system originated in 1872 with an amendment in 1874. The third system is the same as the second except that the limit of one per cent of the value of the estate is lacking and there is no requirement that the statute be accepted; and it is applicable only to cities. This system was established in 1895; and it was held that it did not supersede special provisions contained in the various city charters or the alternative systems of the ex- isting general laws, although it came in force as an optional method in cities which had no special provisions whether they had accepted the other systems or not. When the preparation of the General Laws was in process, the commissioners deemed the existing provisions as to side- walk assessments unsatisfactory because there was no provision for revocation of acceptance, and if a city or town accepted a later act and it proved unsatisfactory it had no power to go back to an earlier, and because it was often a difficult matter for a person whose land was assessed to determine under which system the assessment had been made. 1 Accordingly a single uniform system was substituted for the conflicting and con- fusing provisions which had previously been in force. Charter provisions and special acts relative to sidewalk assessments are not superseded by the provisions of the General Laws; the sec- tion of the chapter on betterments which provides that better- ments shall be, assessed only under that chapter has no applica- tion to sidewalk assessments. 2 In addition to the power to establish sidewalks by authority of the statute now under consideration, a city or town may lay sidewalks under its general power to make specific repairs on public ways, and the order of the aldermen (or selectmen or road commissioners) establishing a sidewalk must contain a statement that in their judgment the public convenience re- quires its establishment 3 to justify an assessment under section twenty-six. 4 Ordinarily the laying of curbing is included in and is part of the construction of a sidewalk; but if in any in- 1 See Preliminary Report of Commissioners, p. 220. 2 For the method of levying sidewalk assessments in force in Boston see infra, page 722 ; for the special provisions as to other cities see Copeland v. Springfield, 166 Mass. 498 (1896). 3 As provided in G. L. c. 83, §25. * Borden v. Brockton, 208 Mass. 348 (1911). 722 Taxation in Massachusetts [G. L. c. 83, § 26 stance curbing is necessary in order that the street may be safe and convenient, and the aldermen omit or neglect to order the curbing to be laid, the mayor may direct the superintendent of streets to lay it, as "ordinary repairs" necessary to make the way reasonably safe and convenient. 5 It has been held that if an assessment is too large in exceed- ing one per cent of the assessed value the assessment is void only to the extent of the illegal excess and a sale for non-payment of such an assessment is not void. 6 In passing upon assessments under special charter provi- sions the courts have been inclined to treat the performance of requirements made for the protection of the persons assessed as a condition precedent to the validity of the assessment, 7 but to treat other requirements as merely directory. 8 Sidewalk Assessments in the City of Boston The first statute authorizing sidewalk assessments in Boston was enacted in 1799 and provided that when the cartway in any public street was paved, the owner of each abutting lot should at his own expense cause the footway in front of his estate to be paved with bricks or flat stones and kept in repair, and if he failed in this duty the surveyors of highways might perform it and recover of the owner the expense. In 1831 this provision was extended to macademized ways and in 1833 provision was made for the acceptance of sidewalks by the city after they had been put in repair by the abutters and relinquished to the city; after such relinquishment and acceptance they were to be main- tained at the expense of the city. In 1872 a general statute applicable to all cities which should accept the same was enacted and was accepted by the city of Boston on May 21, 1872. This is the second system of side- walk assessments as it stood before the enactment of the General Laws without the limitation of one per cent of the valuation, 6 Draper v. Mayor of Fall River, 185 Mass. 142 (1904). 8 Lynde v. Maiden, 166 Mass. 244 (1896). « Lowell v. Wentworth, 6 Cush. 221 (1850) ; Lowell v. French, 6 Cush, 223 (1850); Lowell v. Wheelock, 11 Cush. 391 (1853); Charlestown v. Stone, 15 Gray 40 (1860) ; Tufts v. Charlestown, 98 Mass. 583 (1868) ; Arnold v. Cam- bridge, 106 Mass. 352 (1871). s Lowell v. Hadley, 8 Met. 180 (1844) ; Dickinson v. Worcester, 138 Mass. 555 (1885) ; Browne v. Boston, 166 Mass. 229 (1896). Sewers, Drains and Sidewalks 723 G. L. c. 83, § 26] which was added in 1874 and never accepted by the city of Bos- ton. In 1892 a special statute relating only to Boston was en- acted providing for the assessment of the whole cost of making sidewalks upon the abutters in proportion to frontage without reference to actual benefit and without right of appeal. This statute, in view of later decisions, was probably unconstitutional. Up to 1893 there had been no general repeal of inconsistent pro- visions or reference to anything but sidewalks thereafter built, so that with regard to existing sidewalks the duty to maintain depended upon the time when they were constructed and the section of the city in which they were situated, for there had been special enactments in regard to sidewalks in some of the cities and towns subsequently annexed to Boston which so far as the duty to maintain was concerned were apparently still in force. In 1893 another special statute was enacted, which re- pealed in terms all acts inconsistent therewith and provided for the assessment of not more than one-half the cost of construc- tion in just proportions and the maintenance of the sidewalks at the expense of the city. This statute was substantially the same as that in force between 1872 and 1892 and was the equiva- lent of the third system as it stood before the enactment of the General Laws, or the second as it was prior to the amend- ment of 1874. x The board of aldermen was abolished and its powers transferred to the city council in 1909 so that sidewalk assessments in Boston are now laid by this body. 2 In 1916 another special statute was enacted which was super- seded in the following year by the statute now in force. 3 The present statute provides in substance that the city council, with the approval of the mayor, may grade, construct or complete sidewalks with or without edgestones and cover them with suitable material, and, if entry for the purpose of construction is made within two years of the order, may assess upon each abutter a just proportion, not exceeding one-half, of the expense of the sidewalk. Every assessment is a lien from the date of entry; is payable within thirty days and if not paid is appor- tioned into not less than five instalments, one of which is added 1 See generally on the history of legislation concerning sidewalks in Boston, Attorney General v. Boston, 142 Mass. 200 (1886) ; Gopeland v. Springfield, 166 Mass. 498 (1896). 2 St. 1909, c. 486, §1. 8 Sp. Acts 1917, c. 196. 724 Taxation in Massachusetts [G. L. c. 83, §§ 26, 27 to each annual tax bill upon the estate until the whole is paid. When sidewalks are constructed with edgestone and covered with brick, stone, concrete or artificial stone, they are afterward maintained by the city, and the amount of any assessment previously paid for construction with less durable material is deducted from the assessment levied for the permanent sidewalk. A sidewalk assessment, like any other special assessment, can- not lawfully exceed the increase in market value on each estate assessed due to the improvement; and an assessment cannot be levied upon property devoted to a public use which can derive no benefit from the sidewalk. 4 When a sidewalk is constructed as part of a new street, the cost of the sidewalk is included in the cost of the street and assessed under the street betterment laws, and it is only when a sidewalk is newly built in an existing street that the sidewalk assessment laws come into play. There is an old statute which is generally considered to be in force respecting the construction of sidewalks in streets which have not been laid out as public ways but which have been opened or dedicated to public use by the owners, or permitted by the owners to be used by the public. This statute is of very doubtful constitutionality as it appears to authorize taxa- tion for a use not public. 5 It cannot be sustained as an ex- ercise of the police power because it is not limited in its appli- cation to ways that are unsafe. There is moreover some doubt whether it has not been repealed. Lien for Sewer and Sidewalk Assessments Section 27, (as amended by St. 1921, chapter 486, section 20.) Whenever the aldermen of a city or the sewer commissioners, select- men or road commissioners of a town lay out or determine to con- struct a sewer or drain in a public way, or in a way opened or dedi- cated to the public use which has not become a public way, or adopt an order for the establishment or reconstruction of a sidewalk for such a way, and assessments may be made or charges imposed under this chapter for the construction of such improvement or the use thereof, they shall forthwith cause to be recorded in the registry * Boston v. Boston & Albany R. R. Co., 170 Mass, 95 (1898). "Morse v. Stocker, 1 Allen 150 (1861). •Nute v. Boston Co-operative Building Co., 149 Mass. 465 (1889). Sewers, Drains and Sidewalks 725 G. L. c. 83, § 27] of deeds of the county or district in which such city or town is situ- ated a statement of their action, which shall specify the ways in which such sewer, drain or sidewalk is located. All assessments made or charges imposed under this chapter upon any land which abuts upon any such way in which such sewer, drain or sidewalk is located shall constitute a lien upon such land from the time such statement is re- corded. The purpose of the foregoing section, which was enacted at the time of the consolidation of the General Laws, was to make the incidence of the lien for sewer and sidewalk assessments a matter of record in the registry of deeds, as is provided in the case of betterment assessments. 1 Under the laws as they pre- viously stood, the lien for a sewer assessment arose when the order for construction of the sewer was adopted, and there was no provision for recording such an order in the registry of deeds. The assessment might be made during an indefinite period after the construction of the sewer and the lien continued in force until two years after the assessment was made. 2 The special act relating to the city of Boston required the recording of a statement in the registry of deeds of intent to construct a sewer in any specified street, before any lien could attach, 3 and a similar provision was incorporated in the General Laws, in order to make certain the existence of the lien and to fix the time of its incidence. 4 As the statute originally stood, it applied only to sewers and sidewalks in public ways. If a sewer was to be built in a way dedicated to public use which had not become a public way, in order to establish a lien for the assessment it was necessary to proceed under the chapter on betterments, which might lawfully be done in such a case, for the establishment of a sewer in a private way necessarily involved the taking of land by eminent domain. When sewer assessments in a city were assessed at a fixed uniform rate it was not desirable to make an exception in 1 G. L. c. 80, §2. 2 Thus in Hester v. Collector of Brockton, 217 Mass. 422 (1914) an assess- ment for the construction of a sewer was sustained which was made seventeen years after the order for construction, and long after the land assessed had been divided and sold to different parties. 3 St. 1903, c. 268, §1. 4 See Preliminary Report of Commissioners to Consolidate and Arrange the General Laws, p. 218. 726 Taxation in Massachusetts [G. L. c. 83, §§ 27, 28 the case of sewers in private streets and accordingly the statute was amended in 1921 so as to extend to ways opened or dedicated to the public use which had not become public ways. Adoption of Administrative Provisions of Betterment Law Section 28. The provisions of chapter eighty relative to the ap- portionment, division, re-assessment, abatement and collection of as- sessments, and to interest, shall apply to assessments made under this chapter. This section originated at the time of the enactment of the General Laws, and was intended to make the administrative features of sewer and sidewalk assessments uniform with the pro- cedure provided in the chapter on betterments, and it super- seded twelve sections of the earlier statutes which provided for the administration of the different forms of sewer assessments. It is to be remembered however that it applies only to assess- ments levied under chapter eighty-three of the General Laws, and that it has no application to sewer and sidewalk assessments levied under special acts. CHAPTER 85 REGULATIONS RELATIVE TO WAYS AND BRIDGES Assessments for the Cost of Removing Snow from Sidewalks Section 6. Any town which accepts this section or has accepted corresponding provisions of earlier laws, may cause the snow and ice to be removed from its permanent sidewalks constructed of brick, stone, cement, concrete or asphalt, and may provide that the asses- sors may assess upon the estates abutting on said sidewalks, from which snow or ice has thus been removed, the whole or any part of the cost of such removal ; and the provisions of chapter eighty rela- tive to the abatement and collection of betterments shall apply to such assessments. Section 7. Any person, or the agent of any person, owning an estate abutting on any sidewalk as aforesaid, may, on or before No- vember first in any year, procure the exemption of such estate from the assessment aforesaid for the following year by a stipulation in writing with the selectmen that he will remove snow and ice from the sidewalk on which the estate abuts, at such time and in such manner as the selectmen or road commissioners shall direct ; and if he fails to fulfil his stipulation the assessment above provided for shall be made and collected as if no such stipulation had been made. As early as 1835 it was" held that a by-law of the city of Boston which required the owners or occupants of houses border- ing on streets to clear the snow from the sidewalks adjoining their lands was valid, not as imposing a tax, but as a reasonable police regulation. 1 Since 1857 the statutes have specifically authorized cities and towns to require the removal of snow from their side- walks by the owners of abutting land. 2 Since 1902 the statutes have also provided for the assess- ment of the cost of removing snow as a special assessment under the power of taxation. 1 Goddard, Petitioner, 16 Pick. P04 (1835). 2 See G. L. c. 85, §5. 727 CHAPTER 111 PUBLIC HEALTH Assessment for Drainage of Wet Lands Section 132. Land which is wet, rotten or spongy, or covered with stagnant water, so as to be offensive to residents in its vicinity or injurious to health, shall be deemed a nuisance, which the board of health of the town where it lies, upon petition and hearing, may abate in the manner provided in the seven following sections; but if the expense of abatement will exceed two thousand dollars, such abatement shall not be made without a previous appropriation there- for. Section 133. Whoever is injured by such nuisance may, by peti- tion describing the premises upon which it is alleged to exist and stating the nature of the nuisance complained of, apply to the board for its abatement ; whereupon such board shall view the premises and examine into the nature and cause of such nuisance. Section 134. Upon such examination, if the board is of opinion that the petition should be granted, it shall appoint a time and place for a hearing, first giving reasonable notice thereof to the petitioners, to the persons whose lands it may be necessary to enter upon to abate the nuisance, and to any other persons who may be damaged or benefited by the proceedings, and to the mayor or the chairman of the selectmen, unless the selectmen constitute the board of health, that they may be heard upon the necessity and mode of abating such nuisance, the question of damages, and of the assessment and appor- tionment of the expenses of the abatement. Section 135. Such notice shall be in writing, and may be served, by any person authorized to serve civil process, by personal service upon the mayor or chairman of the selectmen, the petitioners, the owner or occupant of any land upon which it may be necessary to enter or which may be benefited by the abatement, or the authorized agent of such owner or occupant, or by leaving an attested copy of such notice at the last and usual place of abode of such persons ; but if the land is unoccupied and the owner or agent is unknown or out 728 Public Health 729 G. L. c. Ill, §§ 135-138] of the commonwealth, the notice to such owner may be served by posting an attested copy thereof upon the premises, or by advertis- ing in one or more newspapers in such manner and for such length of time as the board may order. Section 136. At the time and place appointed therefor, the board shall hear the parties, and thereafter may cause such nuisance to be abated by entering upon any land and by making such excava- tions, embankments and drains therein and under and across any ways as may be necessary; and shall also determine in what manner and at whose expense the improvements shall be kept in repair, shall estimate and award the damage sustained by and the benefit accru- ing to any person by reason of such improvements, and what propor- tion of the expense of making and keeping the same in repair shall be borne by the town and by the persons benefited thereby. The board shall forthwith give notice of its decision, in the manner required in the preceding section, to the parties to whom notice is required to be given by section one hundred and thirty-four and to the assessors of said town. The expense of making and keeping such improvements in repair shall be assessed by the assessors upon the persons benefited thereby, as ascertained by said decision, shall be included in their taxes, shall be a lien upon the land benefited thereby, and shall be collected in the same manner as other taxes upon land. Apportion- ment of assessments under this section may be made and the parts thereof be collected as provided in chapter eighty. Section 137. A person entitled to notice under section one hun- dred and thirty-four, who is aggrieved by the decision of said board or of the commissioners appointed under section one hundred and forty that the land described in the petition is a nuisance, may ap- peal therefrom to the superior court, if, within twenty-four hours after notice of such decision, he gives written notice to said board of his intention so to do, and within seven days thereafter files a peti- tion in the superior court stating his grievance and the action of said board thereon, and enters into such recognizance as said court shall order. Said court may hear and determine such appeal, pending which all proceedings by the board of health relative to such nuisance shall be stayed. Section 138. Whoever is aggrieved by such decision in the award of damages or in the determination of benefits accrued or in the ap- portionment of the expense may, within three months after notice thereof, petition* the superior court under chapter seventy-nine or 730 Taxation in Massachusetts [G. L. c. Ill, §§ 138-140 chapter eighty, first giving one month 's notice in writing to the mayor and aldermen or selectmen of his intention so to do, and particularly specifying therein his objections to said decision. Such petition shall otherwise be made in like manner and the proceedings thereon shall be the same as in case of land taken or betterments assessed under said chapters, respectively. Section 139. The board shall, within thirty days after the abate- ment of such nuisance, make return of its doings to the town clerk, who shall record them in the town records. Section 140. If the board unreasonably refuses or neglects to proceed in the matter of said petition, the petitioner may apply to the superior court, which, upon a hearing and for good cause shown, may appoint three commissioners, who shall proceed in the manner pro- vided in sections one hundred and thirty-three to one hundred and thirty-nine, inclusive. The foregoing statutes were first enacted in 1868 and are intended to deal with a different condition than a nuisance upon the land of a single individual which he can be compelled under the police power to abate at his own expense on the one hand, 1 or to the compulsory joint drainage of swamps and meadows in which several persons have a common interest effected under the police power for their common benefit on the other. 2 These statutes provide, in a sense, for a public improvement and au- thorize the taking of land by eminent domain and the assessment of betterments under the power of taxation, with all the con- stitutional safeguards to which each of these powers is respec- tively subject. 3 In this respect these statutes resemble many special acts which had previously been passed and had been held constitutional 4 and are themselves not open to constitu- te supra, Part I, §71; and Goddard, Petitioner, 16 Pick, 503 (1835); Salem v. Eastern R. R. Co., 98 Mass. 431 (1868) ; Cambridge v. Munroe, 126 Mass. 496, 502 (1879); Nickerson v. Boston, 131 Mass. 306 (1881); G. L. c. Ill, §§123, 124, 125. 2 See supra, Part I, §66, and Coomes v. Burt, 22 Pick. 422 (1839) ; Lowell v. Boston, 111 Mass. 454, 469 (1873) ; G. L. c. 252, §§1-14, inc. 3 Grace v. Newton Board of Health, 135 Mass. 490 (1883). Under this statute a nuisance consisting of large quantities of stagnant water standing in an open drain may be dealt with, Grace v. Newton Board of Health, 135 Mass. 490 (1883), but not the open end of a house sewer built in a private way and emptying upon private land, Huse v. Amesbury Board of Health, 163 Mass. 240 (1895). 4 Dingley v. Boston, 100 Mass. 544 (1868) ; Bancroft v. Cambridge, 126 Mass. 438 (1879). Public Health 731 [G. L. c. Ill, § 140 tional objection if construed as they may well be as not author- izing an assessment in excess of actual benefit. 5 To sustain an assessment under these statutes it is an abso- lute prerequisite that the owner of lands assessed be given the notice required by the statutes in the manner therein prescribed, and actual knowledge is not sufficient. 6 Moreover the notice is the basis of the assessment and if an improvement is eventu- ally made more extensive than described in the notice an assess- ment cannot be levied for the excess. 7 The requirement that an abatement shall not be made with- out a previous appropriation if the cost exceeds two thousand dollars cannot be evaded by dividing up the abatement of a single nuisance; but it does not prohibit the abatement of several separate nuisances at the same time without an appro- priation although the aggregate cost exceeds two thousand dollars. 8 Special statutes authorizing the filling of certain low lands or the straightening and improving of watercourses have fre- quently provided for assessing betterments for the benefits de- rived therefrom and some of the decisions under such statutes are set forth in the notes. 9 "Grace v. Newton Board of Health, 135 Mass. 490 (1883). •Watuppa Reservoir Co. v. Mackenzie, 132 Mass. 71 (1882); Grace v. Newton Board of Health, 135 Mass. 490 (1883) ; Hall v. Staples, 166 Mass. 399 (1896). In the last named case it was held that a person assessed could on peti- tion for writ of certiorari contradict the record of the board by parol evidence that notice was not in fact served upon him; and that he was not barred by laches in having stood by without objection until the work was completed. 'Grace v. Newton Board of Health, 135 Mass. 490 (1883). In this case it was also held that ( 1 ) the board of health may act by committee in abating the nuisance, (2) a new notice of its intention to make the assessment need not be given after the hearing, (3) if any assessments were not sufficiently specific by reason of the want of description of the real estate benefited, it was competent for the board of health to extend or amend its record. 8 United States Drainage, etc., Co. v. Medford, 225 Mass. 467 (1917). In the same case it was held that a contract for the drainage of wet lands executed by the board of health of a city was void if it did not have the written approval of the mayor, as required by the city charter. • In Lawrence v. Webster, 167 Mass. 513 (1897), it was held that an ordinary bill sent to an owner by mail was sufficient compliance with a statutory require- ment that notice of the assessment should be served forthwith. In Beals v. James, 173 Mass. 591 (1899), it was held that if an owner received actual notice, he could not complain that it was improperly served. In Quinn v. James, 174 Mass. 23 (1899), it was held that notice to the owners that the selectmen intended to assess a portion of the expense upon the estates benefited, according to law, is a sufficient notice that they intended to act under the law authorizing the assess- ment of betterments ; also that land may be assessed for the benefit from the re- moval of a stagnant pool even if it does not abut on the pool. CHAPTER 132 FORESTRY Assessment for the Extermination of Insect Pests Section 18. The mayor of every city and the selectmen of every town shall, on or before November first in each year, and at such other times as he or they shall see fit or as the forester may order, cause a notice to be sent to the owner, so far as can be ascertained, of every parcel of land therein which is infested with said moths ; or, if such notification appears to be impracticable, by posting such notice on said parcels of land, requiring that the eggs, caterpillars, pupae and nests of said moths shall be destroyed within a time specified therein. The publication of the notice in newspapers published or circulated in the city or town at least three times during the month of October shall be deemed a compliance with the law, if in the opinion of the mayor or selectmen such publication will be a sufficient notice. When, in the opinion of the mayor or selectmen, the cost of de- stroying such eggs, caterpillars, pupae or nests on land contiguous and held under one ownership in a city or town shall exceed one half of one per cent of the assessed value thereof, a part of said premises on which said eggs, caterpillars, pupae or nests shall be destroyed may be designated in such notice, and such requirement shall not apply to the remainder of said premises. The mayor or selectmen may designate the manner in which such work shall be done, but all work done under this section shall be subject to the approval of the forester. If the owner shall fail to destroy such eggs, caterpillars, pupae or nests as required by said notice, the city or town, acting by the local superintendent appointed under section thirteen, shall, subject to the approval of the said forester, destroy the same, and the amount actually expended thereon, not exceeding one half of one per cent of the assessed valuation of said lands, as heretofore specified in this section, shall be assessed upon the said lands ; and such an amount in 732 Forestry 733 G. L. c. 132, §§ 18-20] addition as shall be required shall be apportioned between the city or town and the commonwealth in accordance with section fourteen. The amounts to be assessed upon private estates as herein provided shall be assessed and collected, and shall be a lien on said estates, in the same manner and with the same effect as in the case of assess- ments for street watering. Section 19. If, in the opinion of the assessors of a city or town,' any land therein has received, by reason of the abatement of said nuisances thereon by said forester or by said city or town, a special benefit beyond the general advantage to all land in the city or town, then the said assessors shall determine the value of such special benefit and shall assess the amount thereof upon said land ; provided, that no such assessment on lands contiguous and held under one ownership shall exceed one half of one per cent of the assessed valuation of said lands; and provided, that the owner or owners shall have deducted from such assessment the amount paid and expended by them during the twelve months last preceding the date of such assessment toward abating the said nuisances on said lands, if, in the opinion of the assessors, such amount has been expended in good faith. Such as- sessment shall be a lien upon the land for three years from the first day of January next after the assessment has been made, and shall be collected under a warrant of the assessors to the collector of taxes of such city or town, in the manner and upon the terms and conditions and in the exercise of the powers and duties, so far as they may be applicable, prescribed by chapter sixty, and real estate sold under such warrant shall be subject to the provisions of said chapter relative to land sold for taxes. Section 20. A person aggrieved by such assessment may appeal to the superior court for the county where the land lies, by entering a complaint in said court within thirty days after he has had actual notice of the assessment, which complaint shall be determined as other causes by the court without a jury. The complaint shall be heard at the first sitting of said court for trials without a jury after its entry ; but the court may allow further time, or may advance the case for speedy trial, or may appoint an auditor as in other cases. The court may revise the assessment, may allow the recovery of an amount wrongfully assessed which has been paid, may set aside, in a suit begun within three years from the date thereof, a collector's sale made under an erroneous assessment, may award costs to either party, and may render such judgment as justice and equity require. 734 Taxation in Massachusetts [G. L. c. 132, §§ 21-26 inc. Section 21. If, in the opinion of the assessors, the owner of an estate upon which an assessment has been made is, by reason of age, infirmity or poverty, unable to pay the assessment, they may upon application abate the same. Section 22. A person aggrieved by the taxes assessed upon him for the suppression of gypsy and brown tail moths, pursuant to sec- tion eighteen or nineteen, may, within six months after the date of the first tax bill issued on account of the taxes complained of, apply to the assessors for the abatement thereof, who may make such abate- ment as they deem reasonable. Section 23. The assessors shall not abate a tax under the pre- ceding section except upon the written recommendation of the local superintendent who certified the assessment in question to the assessors or provided them with the information as to the work performed, upon which such tax was assessed, unless the error or excess com- plained of originated in the work of the assessors who laid the tax. Section 24. The assessors shall keep a record of all such taxes abated and shall preserve for three years all written recommenda- tions received under the preceding section. They shall furnish the collector of taxes with a certificate of each abatement, which shall relieve him from the collection of the sum abated. Section 25. The city forester, superintendent or other person having charge of the suppression of gypsy and brown tail moths in each city and town in the commonwealth, or, where there is no such person, the tree warden may destroy within the limits of his city or town the tent caterpillar, leopard moth and elm beetle or any other tree or shrub destroying pest, if authorized so to do by the mayor and city council or by the selectmen in towns. Section 26. The city forester or other officer designated in the preceding section may enter upon private land, and the owners of private land may be taxed for work done under said section as pro- vided by sections eighteen and nineteen; provided, however, that nothing contained in this section shall require the commonwealth to pay any part of any such expense other than for the suppression of the gypsy and brown tail moths, that no land shall be assessed here- under which has been assessed the maximum amount provided by said sections eighteen and nineteen for the suppression of the gypsy and brown tail moths, and that the aggregate assessment on any parcel of private land for the suppression of the tent caterpillar, Forestry 735 G. L. c 132, §§ 26-29 inc.] leopard moth, elm beetle and gypsy and brown tail moths shall not exceed the maximum provided by said sections. Section 27. To assist in exterminating gypsy and brown tail moths, the local moth superintendent in any city or town may furnish, at cost, to any owner of real estate situated within such city or town arsenate of lead. It shall be used only for the suppression of gypsy and brown tail moths and only upon land of the purchaser. Section 28. The amounts due for material furnished under the preceding section shall be charged by the local moth superintendent to the owners of private estates, and shall be collected in the same way as amounts assessed for private work, and shall be a lien on said estates in the same manner as said assessments. The amount thus charged shall be deducted from the total amount expended in each city or town in the suppression of the gypsy and brown tail moths as provided in section fifteen. Section 29. To assist in exterminating insect pests the city for- ester, local moth superintendent or tree warden in any city or town may obtain from the forester, at cost, arsenate of lead. It shall be used only for the suppression of gypsy and brown tail moths, the tent caterpillar, leopard moth and elm beetle, and only upon lands owned or controlled by the city or town. The cost of said material shall be certified by the forester to the state treasurer, and shall be collected by him as an additional state tax upon the city or town making such purchase. It was provided in 1902 that a city or town should be liable for damage to land caused by entry of its employees engaged in destroying the specified insect pests, but that the benefit to the land from the destruction of the pests might be set off from the damage. In 1905 provision for assessment was made and the statute then enacted is with certain amendments still in force. The provisions in regard to abatement by local assessors were added in 1911. CHAPTER 143 INSPECTION, REGULATION AND LICENSES FOR BUILDINGS Notice to Assessors of Building Permits Section 61. The inspector of buildings in every city and town having such an officer shall give written notice to the assessors thereof of the granting by him of permits for the construction of any build- ing therein or for any substantial alteration therein or addition thereto. ' Such notice shall be given within seven days after the grant- ing of each permit, and shall state the name of the person to whom the permit was granted and the location of the building to be con- structed or altered or to which an addition is to be made. 736 CHAPTER 147 STATE AND OTHER POLICE Tax on Gross Receipts of Boxing Matches Section 40. Every licensee holding or conducting any such box- ing or sparring match or exhibition shall, within seventy-two hours after its conclusion, pay to the state treasurer a sum equal to five per cent of the total gross receipts from the sale of tickets or from admis- sion fees; provided, that if such match or exhibition is conducted as an incidental feature in an event or entertainment of a different character, such portion of the total receipts shall be paid to the com- monwealth as the commission may determine or as may be fixed by rule adopted under section forty-six. Within said time the licensee shall furnish to the commission a report, duly verified by the treas- urer and secretary, showing the exact number of tickets sold and admission fees collected for the contest, and the gross receipts thereof, and such other data as the commission may require. Section 47. The remainder of the sums received under section forty, after paying the expense to the commonwealth of administering sections thirty-two to forty-seven, inclusive, shall, annually on or before November first, be distributed by the state treasurer to the several towns in proportion to the amounts collected from licensees acting therein under said sections. 737 CHAPTER 156 BUSINESS CORPORATIONS Organization and Filing Fees Section 53. The fee for filing and recording the articles of or- ganization required by section ten, including the issuing by the state secretary of the certificate of incorporation, shall be one twentieth of one per cent of the total amount of the authorized capital stock with par value, and five cents a share for all authorized shares without par value, as fixed by the articles of organization, but not in any case less than fifty dollars. Section 54. The fee for filing and recording the certificate re- quired by section forty-three providing for an increase of capital stock shall be one twentieth of one per cent of the amount of stock with par value and five cents a share for all shares without par value, by which the capital is increased, but not in any case less than twenty dollars. Section 55. The fees for filing all other certificates, statements or reports required by law of corporations shall be ten dollars for each certificate, statement or report, but no fee shall be paid for filing the certificate of change of officers or of annual meeting required by section twenty-four or twenty-nine or the annual tax return required by sections thirty-five and forty of chapter sixty-three. It is not entirely clear whether the charges imposed by the foregoing sections constitute excises levied under the power of taxation or fees no larger in amount than may be regarded as necessary to bear the expenses of maintaining and caring for the record. As originally imposed they were doubtless in- tended merely as fees, but they have been increased in amount in recent years so as to yield a substantial revenue. 1 If merely fees there is no provision of law which authorizes a proceeding 1 In Lever Bros. Co. v. Commonwealth, 232 Mass. 22 (1919), it was held that a fee of five dollars for filing a certificate of condition was not a tax but a filing fee; but in Hood Rubber Co. v. Commonwealth, 238 Mass. 369 (1921), the fee for an increase in capital stock was, by agreement of the parties, treated as an excise. 738 Business Corporations 739 G. L. c. 156, §§ 53-55] against the commonwealth to recover back such a charge if wrongfully exacted. 2 When a corporation, at a single meeting and as part of one transaction, reduces the value of its outstanding capital stock and authorizes the issue of new stock but not in excess of the amount by which the existing stock was reduced, it is not obliged to pay a fee on the new issue of stock, since there is no increase in capital. 3 In 1920, provision was made for imposing a fee on the issue of stock without par value. 4 Such a law is not uncon- stitutional in imposing a charge on stock without par value equal to that on stock having a par value of one hundred dollars for each share, although the actual value of stock without par value may be less; 5 but the tax is imposed only when the capital is increased and the substitution of shares without par value for those with par value is not taxable even if the number of shares is increased, provided the surplus of tjie corporation is not cap- italized. 6 2 Lever Bros. Co. v. Commonwealth, 232 Mass. 22 (1919). "Commonwealth v. United States Worsted Co., 220 Mass. 183 (1915). 4 St. 1920, c. 349, §§8, 9. 5 See American Uniform Co. v. Commonwealth, 237 Mass. 42 ( 1921 ) . 6 Hood Rubber Co. v. Commonwealth, 238 Mass. 369 (1921). As to filing fees for other classes of corporations, see G. L. c. 158, §43; c. 164, §33; c. 181, §23. If there is an increase in capital the filing fee is payable. Olympia Theatres, Inc. v. Commonwealth, 238 Mass. 374 (1921). [G.L.c. 160, c. 161 CHAPTER 160 RAILROADS Taxation of Railroad Property Section 87. Land, outside the location of the railroad five rods in width, taken or purchased for railroad, depot or station purposes shall not be exempt from taxation. Before any statute specifically regulated the taxation of railroad property, it was held that the location of a railroad, five rods in width, which it was authorized to acquire by eminent domain, was exempt from taxation, 1 as property devoted to the public use; 2 but that property outside its location which a railroad company had lawfully acquired for car-houses and other buildings to be used exclusively for the purposes of the railroad was taxable. 3 The statute recited above, first enacted in 1853, appears to be merely declaratory of the law as it previously existed, and although it does not specifically provide that the location of a railroad five rods in width shall be exempt from taxation, the inference is so plain that it has never been ques- tioned. 4 Although only an easement is taken for railroad pur- poses, the fee in a railroad location is not taxable to the owner. 6 1 Worcester v. Western Railroad Corporation, 4 Met. 564 (1842). 3 See supra, page 217. •Boston & Maine Railroad v. Cambridge, 8 Cush. 237 (1851). * In Charlestown v. Middlesex County Commissioners, 1 Allen 199 (1861), it was held that when a railroad was authorized by statute to file a new loca- tion", the new location was exempt. In Norwich & Worcester R. R Co. v. Worces- ter County Commissioners, 151 Mass. 69 (1890), it was held that when a rail- road company had purchased a single parcel "for station purposes, and for tracks and yard room, to be used in connection therewith," the whole was taxable. B Lancy v. Boston, 186 Mass. 128 (1904). CHAPTER 161 STREET RAILWAYS Assessments on Street Railway Companies for Widening or Altering Public Ways Section 78. If application is made for a location in a public way where no street railway tracks are located, and such way is 740 Street Railways 741 G. L. c. 164] widened under chapter eighty or eighty-two by an order declaring the widening to be necessary for public convenience for the purpose of granting such location of street railway tracks therein, a propor- tionate share of the expense of such widening may be assessed upon a company accepting a location in the way so widened ; but the amount of such assessment, in addition to the amounts assessed on real estate, shall not exceed one half of the total cost of such widening. Section 79. If a public way where the tracks of a company have been located for a period of five years is altered, or if the grade thereof is changed under chapter eighty or eighty-two, the company shall pay such proportionate share of the expense thereof, including therein the necessary cost of changing its railway to conform to such alteration or change of grade, as may be assessed upon it, provided that, if betterments are assessed, no such assessment on the company shall exceed the aggregate amount of all the betterments assessed upon real estate, and that in no case shall such assessment exceed one quarter of the total cost of such alteration or change of grade. Section 80. The provisions of chapter eighty relative to the as- sessment of betterments on real estate, so far as applicable, shall apply to assessments made under the two preceding sections. CHAPTER 164 MANUFACTURE AND SALE OF GAS AND ELECTRICITY Assessment of Cost of Laying Pipes and Wires Section 61. A town acquiring a plant may provide by ordinance or by-law for the equitable assessment upon the owner or occupant of any premises of the cost, or any part thereof, of laying and main- taining pipes, conduits, conductors or other appliances thereon. Pay- ment of such assessments shall not be compulsory, but it shall be a condition precedent to the supplying of gas or electricity to the occupants of such premises, and may be required before providing »rr>} ijineos therefor. 742 Taxation in Massachusetts [G. L. c. 175, c. 184 CHAPTER 175 INSURANCE Liability of Insurance Companies to Taxation Section 19. Every company shall be liable to taxation by any general law taxing insurance companies, and it shall by its proper officers make to the commissioner of corporations and taxation the returns and statements of its business and affairs required by law for the assessment of such taxes, and thereupon its officers and agents may be examined on oath by the officer to whom such returns are to be made. CHAPTER 184 GENERAL PROVISIONS RELATIVE TO REAL PROPERTY Covenants against Encumbrances Section 22. Whoever conveys real property by a deed or mort- gage which contains a covenant that it is free from all encumbrances shall, if it appears by a public record that an actual or apparent en- cumbrance, known or unknown to him, exists thereon, be liable in an action of contract to the grantee, his heirs, executors, administrators, successors or assigns, for all damages sustained in removing the same. The foregoing statute was first enacted in 1855. Its effect was two-fold. (1) It created the right to sue for removing an encumbrance which appeared of record to be valid although for some reason not apparent on the record it was invalid. (2) It made the right to sue for removing an encumbrance appearing of record a right that ran with the land. Recovery could not be had under the statute however, even for nominal damages, unless money had been actually paid to remove the encumbrance, and it did not apply to encumbrances which were neither real nor apparent, so that a purchaser could not recover the expense incurred for obtaining releases from the holder of a tax title to General Provisions Relative to Real Property 743 G. L. c. 184, § 22] the property which was void on its face. 1 It was held in 1885 that the statute had no application to encumbrances appearing of record in any other place than the registry of deeds and consequently did not include tax liens unless they had been en- forced by sale. In the Revised Laws the wording was changed from "appears of record" to " appears by a public record" upon the recommendation of the commissioners who prepared the revision, for the express purpose of including tax liens, and there can be no doubt that the statute now applies to liens for unpaid taxes. 3 The lien for a tax goes into effect and becomes an encum- brance upon the first moment of April first in each year, although it is not actually assessed until later, and if a deed containing a covenant against encumbrances is given on or after April first and contains no exception in favor of taxes of the current year, the vendor is liable on the covenant, although the tax had not been actually assessed at the time of conveyance; 4 but the purchaser can recover only nominal damages if his possession has not been disturbed and he has not paid the tax at the time of the trial. 5 If he has paid the tax he is entitled to recover the full amount of it, without apportionment and with such other necessary expenses as he has been put to in removing the en- cumbrance. 6 If the vendee has given a note secured by mortgage of the property sold as part payment he may recoup what he paid to relieve the land from the encumbrance in an action by the vendor on the note, 7 or the amount so paid by him should be deducted by the court in determining how much is due on the mortgage in a writ of entry to foreclose. 8 Of course if the taxes of the previous years have not been paid, even if not assessed to the vendor, and the lien has not Gibbets v. Leeson, 148 Mass. 102 (1888). 2 Carter v. Peak, 138 Mass. 439 (1885). 8 The valuation and assessment lists of the assessors are public records. Commonwealth v. Segee, 218 Mass. 501 (1914). 4 Cochran v. Guild, 106 Mass. 29 (1870); Hill v. Bacon, 110 Mass. 387 (1872) ; Davis v. Bean, 114 Mass. 358 (1874. In Hill v. Bacon, supra, the con- veyance was made on the day the lien went into effect. 5 Bradshaw v. Crosby, 151 Mass. 237 (1890). See also Tibbets v. Leeson, 148 Mass. 102 (1888). "Coburn v. Litchfield, 132 Mass. 449 (1882) ; Bradshaw v. Crosby, 151 Mass. 237 (1890) ; Richmond v. Ames, 164 Mass. 467, 475 (1895) ; Smith v. Abington Savings Bank, 171 Mass. 178 (1898). 7 Davis v. Bean, 114 Mass. 358 (1874). "Davis v Bean, 114 Mass. 360 (1874). 744 Taxation in Massachusetts [G L c 184, § 22 expired by the lapse of two years from the first day of October in the year for which they are assessed ; and a fortiori if the land has been sold for non-payment of such taxes, the covenant against encumbrances is broken. 9 It is incumbent upon the pur- chaser in an action for breach of the covenant to show that there was a real encumbrance, and if it appears that a tax had been improperly assessed upon the property, or that the lien had been lost by invalid proceedings for its enforcement there is no encumbrance and consequently no liability. 10 A mere error in the assessment which though it invalidates the tax may be corrected by re-assessment is a defense to an action on a coven- ant against encumbrances, for there is no lien on the land if there is an alienation before re-assessment. 11 When, notwithstanding a covenant against encumbrances, there is an oral agreement that the purchaser pay the tax for the current year, such an agreement is binding and may be enforced against the purchaser; 12 but an agreement to pay taxes applies only to taxes legally assessed. 13 The collector, if he sees fit, may maintain an action at law against the person assessed to recover a tax on real estate, al- though the person assessed has disposed of the property, 14 but if under such circumstances the purchaser has agreed to pay the tax, the vendor by equitable proceedings may be subrogated to the rights of the collector against the land and may thus reim- burse himself for the money he has wrongfully been compelled to pay. 45 One who has sold land without covenant against en- cumbrances is not bound to reimburse the purchaser for any part of the taxes which the latter is obliged to pay to save the land from sale. 16 When there is no covenant against encum- brances in a conveyance of land and no agreement or understand- ing between the parties in regard to the payment of the cur- rent tax, the collector may thus impose the ultimate liability to the tax upon either of the parties that he may for any reason °Charland v. Home for Aged Women, 204 Mass. 563 (1910). 10 Tibbets v. Leeson, 148 Mass. 102 (1888). 11 G. L. c. 59, §77, supra, page 306. "Preble v. Baldwin, 6 Cush. 549 (1850). 13 Massachusetts General Hospital v. Boston, 212 Mass. 20 (1912). "Richardson v. Boston, 148 Mass. 508 (1889); Webber Lumber Co. v. Shaw, 189 Mass. 366 (1905). "Webber Lumber Co. v. Shaw, 189 Mass. 366 (1905). "Swan v. Emerson, 129 Mass. 289 (1880). General Provisions Relative to Real Property 745 G. L. c. 184, § 22] select, by exercising his choice of suing for the tax or selling the land, and the party who is obliged to pay the tax can make no claim on the other for reimbursement or contribution. The most common provision for the payment of current taxes in an agreement for the sale of real estate is an agreement that the tax shall be apportioned, that is, the vendor pays the same proportion of the tax as the number of days from the first of April to the date of the conveyance bears to the total num- ber of days in the year, and the purchaser pays the balance. If the tax has not been paid at the time of conveyance, the ven- dor's share is deducted from the purchase price, but if the vendor has already paid the tax the purchaser's share is added to the purchase price. When it is provided in an agrement for the sale of real estate that taxes for the current year shall be "appor- tioned" or "adjusted," such an arrangement is ordinarily what is meant. 17 This right of apportionment, however, rests entirely on the express agreement of the parties; the collector of taxes is under no obligation to recognize it and it has never been held by the courts that in the absence of an express agreement, the taxes, as between vendor and vendee, should be apportioned either on account of the general custom or the obvious fairness of such an arrangement. special assessments When real estate is conveyed with a covenant against encum- brances, the existence of a lien on the property for a special assessment or betterment is of course a breach of the covenant, and the right of the purchaser or his assigns to sue for the breach is the same as when the encumbrance consists of a lien for the general tax. W T hen the covenant is not against encumbrances generally, but refers in terms to "taxes" as a subject of exclusion or inclusion, "taxes" will or will not be held to signify special assessments according as the intent of the parties is indicated by the context. 18 It was formerly the law that the lien went into effect and the encumbrance began upon the date of the order for the lay- 1? Sleeper v. Nicholson, 201 Mass. 110 (1909) ; J. L. Hammett Co. v. Alfred Peats Co., 217 Mass. 520 (1914). "Smith v. Abington Savings Bank, 165 Mass. 285 (1896); Williams v. Monk, 179 Mass. 22 (1901). 746 Taxation in Massachusetts [G. L. c. 184, § 22 ing out of the public improvement upon which the assessment was based, even if the assessment was not made until later, and consequently a vendor was liable upon his covenant if there had been such an order prior to his conveyance even if he knew nothing about it, no land of his was taken and no assessment was in existence at the time of the conveyance. 19 It was the liability to an assessment that constituted the encumbrance; and the liability was an encumbrance upon the land when it accrued even though its amount might not be known and the present right of enforcement might not come into existence until the assessment was afterward made. 20 Under the redrafting of the betterment laws which occurred at the time of the consoli- dation of the General Laws, the further establishment of these unrecorded liens was guarded against, and since January first, 1921 no lien can arise without the filing of an order in the registry of deeds, either in the case of a betterment assessment 21 or an assessment for the construction of sewers. 22 When a special assessment is invalid for technical error, if the proper officers could correct the error by proceedings in due form, and re-assess the same amount upon the land and sell the land if the re-assessment was not paid, such error in an assess- ment is no defense in an action on a covenant against encum- brances. 23 If, however, the only statute under which an assess- ment could have been made at the time of the conveyance was unconstitutional, 24 or the improvement was constructed in such a manner that under the existing statutes no valid assessment could have been levied, a valid assessment authorized by a stat- ute enacted after the conveyance is not a breach of the coven- ant, because when the deed was given there was no liability to assessment and consequently no encumbrance. 25 When the parties knew of the improvement at the time of "Blackie v. Hudson, 117 Mass. 181 (1875) ; Carr v. Dooley, 119 Mass. 294 (1876) ; O'Connell v. First Parish in Maiden, 204 Mass. 118 (1910) ; Cotting v. Commonwealth, 205 Mass. 523 (1910). 20 Maloy v. Holl, 190 Mass. 277 (1906). 21 G. L. c. 80, § 12, supra, page 699. 22 G. L. c. 83, § 27, supra, page 724. 23 Colburn v. Litchfield, 132 Mass. 449 (1882); Smith v. Abington Savings Bank, 171 Mass. 178, 186 (1898) ; Maloy v. Holl, 190 Mass. 277, 279 (1906). "Lorden v. Coffey, 178 Mass. 489 (1901). 25 Maloy v. Holl, 190 Mass. 277 (1906); Morse v. Street Commissioners of Boston, 197 Mass. 292 (1907) ; Campbell v. Haven, 211 Mass. 121 (1912) ; Sul- livan v. Mandell, 212 Mass. 174 (1912). General Provisions Relative to Real Property 747 G. L. c. 184, §22] the conveyance and the vendor specifically agreed to pay for it, he cannot require the purchaser to contest the validity or even the constitutionality of the assessment. 26 If the assessment is not a lien, but only a condition precedent to making use of the improvement it is not an encumbrance. 27 The purchaser may re- cover on the covenant if the lien can be enforced against him even if it could not have been enforced against the vendor; 28 but if the covenant related to only a portion of the property assessed the vendor is liable for a proportionate part of the assessment only. 29 The duration of the lien depends upon the provisions of the statutes under which the assessment was made, and unless it has expired in accordance with such provisions, the vendor is liable upon his covenant. 30 M McCormick v. Cheevers, 124 Mass. 262 (1878). "Such as an entrance fee for the use of a sewer, Bumstead v. Cook, 169 Mass. 410 (1897). 28 As where the vendor was the commonwealth, Cotting v. Commonwealth, 205 Mass. 523 (1910). 29 Smith v. Carney, 127 Mass. 179 (1879). ^O'Connell v. First Parish in Maiden, 204 Mass. 118 (1910). CHAPTER 185 THE LAND COURT Jurisdiction over Foreclosure of Tax Titles Section 1. The land court shall be a court of record. It shall have exclusive original jurisdiction of the following matters : (b) Proceedings to foreclose tax titles, under chapter sixty. CHAPTER 193 APPOINTMENT OF ADMINISTRATORS Application by Commissioner of Corporations and Taxation Section 3. If a person dies leaving an estate which may be liable to an income tax under chapter sixty-two or a legacy or succession 748 Taxation in Massachusetts [G.L.c. 198, § 1 tax under chapter sixty-five, and a will disposing of such estate is not offered for probate, or an application for administration made, within four months after his decease, the probate court, upon application by the commissioner of corporations and taxation, may appoint an administrator. This section appeared in much its present form in the orig- inal inheritance tax act of 189 1. 1 The object of the statute is of course to prevent the evasion of the tax by the division of the estate of a deceased person by agreement of all concerned with- out the intervention of the probate court, a practice which was not at all uncommon before the enactment of the statute, es- pecially in the rural districts. In 1907 the words "if it then appears that there is no will in existence" were added in the appropriate section of the direct inheritance tax act of that year, but these words were struck out in 1911, so that an ad- ministrator is appointed on application of the commissioner if the executor named in the will does not offer it for probate. 2 In 1915 the statute was amended so as to operate when in the opinion of the commissioner a tax was due, 3 and in 1919 it was extended so as to include the income tax as well as the inheri- tance tax. 4 1 St. 1891, c. 425, §13. 2 St. 1911, c. 551. 3 St. 1915, c. 64. *St. 1919, c. 349, §6. CHAPTER 198 INSOLVENT ESTATES OF DECEASED PERSONS Taxes a Preferred Claim Section 1. If the estate of a person deceased is insufficient to pay all his debts, it shall, after discharging the necessary expenses of his funeral and last sickness and the charges of administration, be applied to the payment of his debts, which shall include equitable liabilities, in the following order: First, Debts entitled to a preference under the laws of the United States. Second, Public rates, taxes and excise duties. Accounts and Settlements op Receivers 749 G.L.c. 206, c. 216] CHAPTER 206 ACCOUNTS AND SETTLEMENTS OF RECEIVERS Taxes a Preferred Claim Section 31. The following claims shall, in the settlement of estates by receivers, be entitled to priority in the order named : First, Debts due the United States or debts due, or taxes assessed by, the commonwealth or a county, city or town therein. The state insolvency laws are suspended while the national bankruptcy act is in force. The state statutes as to the settle- ment of estates by receivers are however still in force and under these statutes taxes constitute a preferred claim. 1 It has been held that, even in the absence of statute, when an estate is in the hands of a receiver appointed by a court of equity, taxes should receive priority. 2 1 Waite v. Worcester Brewing Co., 176 Mass. 283 (1900); Equitable Trust Co. v. Kelsey, 209 Mass. 416 (1911). 2 Jones v. Arena Publishing Co., 171 Mass. 22 (1898). CHAPTER 216 COURTS OF INSOLVENCY Preferred Claims Section 118. In the order for a dividend under the preceding section, the following claims shall be first paid in full in the follow- ing order : First, The twenty-five dollars or expense of publication as pro- vided in section one hundred and seventy paid by a creditor and the legal fees, paid by him, of an officer for the service of the order of notice to the debtor upon the original petition and for the service of a writ of injunction issued to restrain the transfer or disposition of any part of the debtor's property, not exempt from attachment, and from any interference therewith. Second, The legal fees of the messenger. 750 Taxation in Massachusetts [G.L.c. 217, § 16 Third, Debts due to the United States, and debts due to and taxes assessed by the commonwealth, or a county, city or town therein. Under all systems of government, taxes have constituted a preferred claim. 1 Although the insolvency laws are suspended while the national bankruptcy act remains in force, under that enactment also taxes due a state or a county, city or town therein constitute a preferred claim. 2 1 Murray v. Hoboken Land, etc. Co., 18 How. 272 (1855). 2 G. L. c. 60, § 36, supra, page 344. See also as to insolvent estates of deceased persons, G. L. c. 198, § 1, supra, page 748 and as to settlements of estates by receivers, G. L. c. 206, § 31, supra, page 749. CHAPTER 217 JUDGES AND REGISTERS OF PROBATE AND INSOLVENCY Register to Send Copies of Inventories to Commissoner Section 16. The register shall, except as herein provided, send by mail to the commissioner of corporations and taxation a copy of every inventory and appraisal filed in his court by an executor, administrator or trustee, within thirty days after the filing of the same. The register shall also, within the same period, send by mail to said commissioner a copy of the will of the decedent, if such has been allowed by the probate court. The register shall also furnish such copies of papers in his office as the commissioner shall require, and shall furnish information as to the records and files in his office in such form as the commissioner may require. A refusal or neglect by the register so to send a copy of such inventory and appraisal or to furnish such copies or information shall be a breach of his official bond; but the commissioner may excuse him from sending copies of inventories and of wills of estates no part of which, in his judgment, appears to be subject to a tax under chapter sixty-five. If an execu- tor, administrator or trustee fails to file said inventory and appraisal within three months from the date of his appointment, the register shall within thirty days after the expiration thereof notify the com- missioner of such failure. Improvement op Low Land and Swampg 751 G. L. c. 252, § 13] This statute, which was originally enacted as section ten of the inheritance tax act of 1891, at first merely required the reg- ister of probate to send to the state treasurer a copy of the in- ventory of any estate, part of which was subject to the tax. In 1907 the obligation was made much broader, and since that date the only changes have been the addition of the final clause in 1908, authorizing the tax commissioner to excuse the register in certain cases, and an amendment in 1909 providing that a copy should be sent in every case instead of the original or a copy, as formerly. CHAPTER 252 IMPROVEMENT OF LOW LAND AND SWAMPS Assessment of Cost of Draining Low Land Section 13. The commissioners shall, after due notice and a hearing, determine what proportion of the total expense of the im- provement, of the cost of maintenance of drains and ditches and of the payment for works or structures taken or otherwise acquired in connection therewith, except such as is to be paid by the common- wealth, shall be paid by each town where any of the land improved lies, and shall return their award to the board, which shall, upon acceptance thereof, send a copy thereof to each such town. Any such town aggrieved by such award may, by petition joining all the other such towns as party respondents, appeal to the superior court for the county where the greater part of the land improved lies; provided, that such petition is entered not later than the next return day after the expiration of thirty days from its receipt of said copy. Questions of fact shall, upon motion of either party, be tried by jury in such manner as the court orders. The court may affirm, reverse or alter the award, and the decision of the court shall take effect as an original award. The board shall forthwith send to the county commissioners of the county where the greater part of the land lies a copy of the award as finally determined. The sum so ascertained to be due from any such town shall be paid by the treasurer thereof to said county 752 Taxation in Massachusetts [G. L. c. 252, § 14 in not exceeding twenty equal annual instalments to be collected in the same manner as taxes. Section 14. The assessors of each such town shall divide the sum ascertained to be due from their town under the preceding section, among the various parcels of land therein which are within the drain- age district and are benefited by the improvement in proportion to the special benefit received by each such parcel therefrom and shall assess the same in the same manner as betterments are assessed under chapter eighty. The provisions of said chapter relative to the appor- tionment, division, reassessment, abatement and collection of assess- ments for betterments, and to interest, shall apply to assessments made under this section, except that such assessments shall be apportioned in twenty equal annual instalments or in such lesser number as the assessors may determine. The statutes making provision for the improvement of low land are of ancient origin, but have received considerable modi- fication in recent years. They apply in cases when it is neces- sary or useful to drain or flow a tract of low land held by several proprietors, and they provide for the establishment of a dis- trict to be drained and the appointment of district drainage commissioners by the state drainage board with authority to carry out a scheme of drainage, primarily at the expense of the county, although the cost is ultimately to be assessed upon the owners of land within the district. The assessment of the cost is not however an exercise of the power of taxation, but a proceeding of a semi-judicial nature authorized as an exercise of the police power, for the adjust- ment of the individual rights of owners in respect to a piece of property in which all have a common interest, 1 and conse- quently the assessment can be constitutionally levied although the money is not expended for the public use. 2 Under the statutes formerly in force, the collection of the amount assessed upon land within the district was carried out by an officer appointed expressly for the purpose. It was held that such collector, if he received a warrant from the commis- 1 Lowell v. Boston, 111 Mass. 454, 468 (1873); Turner v. Nye, 154 Mass. 579, 583 (1891) ; Head v. Amoskeag Mfg. Co., 113 U. S. 9, 22 (1885) . When the drainage affects a sufficiently large area, it is for the public use, and the powers of eminent domain and taxation may be employed in its behalf. Talbot v. Hudson, 16 Gray 417 (1860). 2 Supra, Part I, §71. Improvement op Low Land and Swamps 753 G. L. c. 252, §§ 14, 19] sioners that was valid on its face, was protected from any action against him for enforcing payment of the tax even if there were irregularities in the proceedings of the commissioners; 3 but that unless the collector was lawfully appointed, his proceedings were void. 4 Roads to Swamps and Quarries Section 19. The commissioners shall assess the amount awarded as damages upon the persons for whose use the improvements are to be made, in proportion to the benefit to be received by each; but no person shall be assessed an amount greater than the benefit to be re- ceived by him. The provisions of chapter eighty relative to the abatement and collection of betterments shall apply to assessments made under this section. Sections fifteen to twenty-three, inclusive, of chapter two hundred fifty-two provide for the construction of roads or drains to low lands, ponds, swamps, quarries, mines or mineral deposits which cannot be approached or used to advantage without cross- ing the lands of other owners. The statutes on which they were based were in force for many years, 1 but they were of doubt- ful constitutionality, because they authorized an exercise of eminent domain for a use not public. The commissioners who prepared the General Laws recommended their repeal, on the ground that they were obsolete as well as unconstitutional; 2 the legislature however continued them in force, but limited their application to cases in which the improvement was required by public convenience and necessity so that the constitutional difficulty was removed. * Upton v. Holdcn, 5 Met. 360 (1842). 4 Wright v. Leonard, 4 Gray 150 (1855), 1 These statutes were before the court in Sherman v. Tobey, 3 Allen 7 (1871), and Eldridge v. Norfolk County Commissioners, 185 Mass. 186 (1904), without any question as to their constitutionality being raised. 2 See Preliminary Report of Commissioners, p. 55. APPENDIX Additional Statutes Affecting Taxation In addition to the statutes relating to taxation set forth in the preceding pages, the following statutes bear indirectly upon the general subject of taxation or upon the application of the tax laws: G. L. c. 40, sees. 5-13 inc. — Purposes for which towns may appro- priate money, sec. 14 — Land not to be purchased for municipal purpose for more than 25% in excess of its assessed valuation. C. 43, sec. 30 — Same, under optional city charters. sees. 60-61 — Appointment and removal of assessors under Plan B. sec. 67 — Commissioner of finance under Plan C. c. 44, sees. 2-13 inc. — Regulation of municipal indebtedness. sees. 32-34 inc. — Budget in cities. c. 45, sec. 6 — Park betterments to be applied to pay- ment of park loans. c. 67, sees. 18, 30, 35 — Assessments for religious purposes. c. 79, sec. 35 — Assessed value admissible in eminent domain proceedings. c. 84, sees. 12, 13, 14 — Assessments for repair of private ways and bridges. c. 90, sec. 33 — Fees for motor vehicle licenses. sec. 42 — Fees for aircraft licenses. c. 91, sec. 21 — Compensation for tide water displaced. c. 92, sees. 5-7 inc. — Apportionment on towns of expenses of metropolitan sewers, sec. 26 — Apportionment on towns of expenses of metropolitan water supply. c. 92, sees. 54-59 inc. — Apportionment on towns of metro- politan parks, sec. 97 — Apportionments to remain in force. 755 756 Taxation in Massachusetts c. 103, sees. 4, 5 ('. Ill, sec. 83 c. 128, sec. 24 c. 140, sees, . 137-150 inc. c. 148, sec. 29 c. 161, sec. 150 e. 185, sec. 109 — Pilotage fees. — Apportionment on towns of cost of county tuberculosis hospitals. -Recovery of cost of treating plants in- fected with disease. -Dog licenses. -Apportionment on towns of expenses of metropolitan fire prevention district. —Apportionment on towns of expenses of transportation area. —Assessors' valuation admissible in ac- tion to recover damages by registra- tion of land, c. 188, sec. 1 — Homestead not exempt from sale for taxes. c. 207, sec. 3 — License to foreign executor to receive and dispose of personal property c. 231, sec. 145 — Enumeration of sections of chapter on pleading and practice which apply to petitions for abatement of better- ment assessments. c. 237, sec. 3 — Taxes paid by occupant deductible from rents and profits when ousted by writ of entry. Additional Taxes Imposed for Temporary Purposes In addition to the taxes imposed under the provisions of the General Laws, there have been in recent years special additional taxes imposed by statutes of a temporary character and which are not included in the General Laws, enacted to meet the con- ditions which arose as a result of the World War. The state, as well as private citizens, was faced with an increased cost of supplies and materials and in addition was obliged to engage in new activities as a result of war conditions, and although the state tax was increased from eight million dol- lars in 1916 to eleven million dollars in 1917 and to fourteen million dollars in 1920, this increase proved inadequate to meet Appendix 757 the necessities of the state and additional temporary excise taxes were imposed to make up the deficiency. In 1918 a statute was enacted imposing an additional tax, for one year only, of one per cent of the net income of every domestic corporation doing business for profit, upon which in- come such corporation was required to pay a tax to the United States, the income to be determined by the filing by each cor- poration of a copy of its last preceding tax return to the United States collector of internal revenue. 1 Provision was made for ap- portioning the income in the case of corporations doing business outside the state. A similar tax was imposed on foreign cor- porations doing business within the commonwealth. 2 Under these statutes it was held that, inasmuch as a corporation in computing its net income for the federal tax might deduct the sum paid by it as excess profits tax, it was entitled to a like deduction in computing its income for the tax imposed by the state; 3 that a railroad corporation which with legislative sanc- tion had leased its entire property to another company was not "doing business for profit" within the meaning of the statute and so was not subject to the tax. 4 and that a corporation which collected milk in other states, brought it to this state, pasteur- ized it and placed it in other receptacles and distributed it to customers within the state was taxable upon the income thus derived. 5 The provisions of the foregoing acts were revived and re- enacted in 1919 for another year, so far as they applied to domes- tic and foreign business corporations, trust companies, public service companies and insurance companies. 6 In 1919 however the tax was levied solely for the purpose of raising funds to pay the so-called "war bonus" to men from Massachusetts who served in the World War. It was held that although an income tax on individuals was a property tax, and must be either pro- portional, or comply with the limitations of the Forty-fourth Amendment, an income tax on corporations might well be an 1 St. 1918, c. 255. 2 St. 1918, c. 253. 3 American Printing Co. v. Commonwealth, 231 Mass. 237 (1918). * Attorney General v. Boston & Albany R. R. Co., 233 Mass. 460 (1919); Attorney General v. Ware River R. R. Co., 233 Mass. 466 (1919). 5 H. P. Hood & Sons v. Commonwealth, 235 Mass. 572 (1920). •St. 1919, c. 342, §§1, 2,3. 758 Taxation in Massachusetts excise graded in accordance with income, and need not comply with the Forty-fourth Amendment, and on this ground the statute imposing the tax was sustained. 7 In 1920 an additional income tax was again imposed upon corporations, but in 1920, as in 1918, the tax was levied to raise funds for the general purposes of the commonwealth. 8 The 1918 statutes were revived, except that the tax was imposed upon the same classes of corporations as were taxed in 1919, and it was expressly provided that there should be no credit for excess profits or other federal taxes. The rate of taxation was origin- ally fixed at one half of one per cent, but before the law went into effect it was increased to three quarters of one per cent. 9 In 1921 again a similar tax was levied for the general purposes of the commonwealth, at the rate of three quarters of one per cent. 10 Temporary additional taxes have also been levied upon the income of individuals. In 1918 an additional tax of ten per cent of the amount of all taxes imposed by the income tax act of 1916 was imposed for one year, the proceeds to be retained for the general purposes of the commonwealth. 11 In 1919 pro- vision was made 12 for the levy of an additional tax of one per cent on the incomes of professions, employments, trade or busi- ness taxable under the income tax act. 13 The entire proceeds of this tax were to be distributed to the cities and towns of the state in proportion to their respective shares in the burden of the state tax. This tax was to be assessed for the years 1919 and 1920 with respect to the income of 1918 and 1919. Although the amount expected to be raised by this act was approximately equivalent to the proportion of the income tax diverted for educational purposes under the so-called school fund act, it was held that the two acts taken together did not constitute the levy of a tax on a particular subject for a particular purpose and were not objectionable as imposing a special assessment without regard to benefit. 14 It was also held that the tax thus 7 Eaton, Crane & Pike Co. v. Commonwealth, 237 Mass. 523 ( 1921 ) . 8 St. 1920, c. 550. "St. 1921, c. 600. " St. 1921, c. 493. " St. 1918, c. 252. > : St. 1919, c 324. 14 G. L. c. 62, §5 (b). 14 Knights v. Treasurer & Receiver General, 237 Mass. 493 (1921). Appendix 759 imposed on the income from a profession was not in violation of the Forty-fourth Amendment as taxing income not derived from property at a higher rate than income derived from prop- erty, although the entire tax on income from a profession was higher than that imposed upon income from an annuity. 15 This tax was not revived in 1921. Income from the classes of intangible property subject to taxation under the income tax act were also subjected to a temporary additional tax in 1919. 1G This tax was at the rate of one half of one per cent, was to be imposed in the years 1919, 1920, 1921 and 1922 with respect to the income in the preceding years, and the entire proceeds were to be used in meeting the payments for the "war bonus." In 1918 an additional inheritance tax amounting to 25% of the tax imposed by existing laws was levied with respect to the estates of persons dying between May 3, 1918 and May 3, 1919. 17 The proceeds of this tax were retained for the general purposes of the commonwealth. This statute was revived in the following year and made applicable to the estates of per- sons dying between May 3, 1919 and July 22, 1920, the pro- ceeds to be used in meeting the payments for the "war bonus." 18 The statute was again re-enacted and revived in 1920 and made applicable to the estates of persons dying between July 22, 1920 and December 1, 1920, the proceeds to be retained for the general purposes of the commonwealth. 19 This additional inheritance tax has not since been revived. The "war bonus act" was enacted in 1919, and provided for the payment of one hundred dollars to every resident of Massa- chusetts who served in the army or navy of the United States in the World War. 20 The constitutionality of a statute levying taxes for such a purpose had been sustained in connection with the payment of gratuities to veterans of the Civil War; 21 and every effort was made to distribute the burden proportionately upon all subjects of taxation. In addition to the special taxes on the incomes of corporations and of individuals, and on inheri- 15 Rayner v. Tax Commissioner, . . . Mass. . . . ( 1921 ) . » St. 1919, c. 342, §3. 17 St. 1918, c. 191. "St. 1919, c. 342, §4. 19 St. 1920, c. 441. 29 St. 1919, c. 283. "Opinion of the Justices, 211 Mass. 608 (1912). 760 Taxation in Massachusetts tances, already referred to, an additional poll tax of three dol- lars was levied for the years 1920, 1921, 1922 and 1923, 22 and it was further provided that an additional state tax should be levied in the years 1919, 1920, 1921 and 1922 of six hundred and sixty thousand dollars in each year. 23 It was expressly pro- vided in the war bonus act that in consideration of the relative amounts assessed upon corporations and property by the act, no additional taxes for the purposes of the act would be assessed in subsequent years without placing an equivalent burden upon incomes generally and other property. 2 24 FORMS LIST OF FORMS Form No. 1 — Petition to Restrain Unlawful Exercise of Corporate Power. (G. L. c. 40. Sec. 53.) Form No. 2 — Application for Repayment of Illegal Corporation or Inheritance Tax. (G. L. c. 58, Sec. 27.) Form No 3— Collector's Warrant. (G. L. c. 59, Sec. 53.) Form No. 4 — Collector's Warrant. (Form now in use in the City of Boston.) (G. L. c. 59, Sec. 53.) Form No. 5 — Petition for Abatement of Tax. (G. L. c. 59, Sec. 59.) Form No. 6 — Complaint for Refusal to Abate Tax. (G. L. c. 59, Sees. 64 or 65.) Form No. 7 — Certificate of Abatement. (G. L. c. 59, Sec. 70.) Form No. 8— Collector's Bond. (G. L. c. 60, Sec. 13.) Form No. 9 — Declaration in Action by Collector to Recover Tax. (G. L. c. 60, Sec. 35.) Form No. 10 — Offer to Surrender upon Illegal Sale. (G. L. c. 60, Sec. 45.) Form No. 11 — Certificate of Redemption by Payment to Collector. (G. L. c. 60, Sees. 62, 63.) Form No. 12 — Bill in Equity to Redeem from Tax Sale. (G. L. c. 60, Sec. 76.) 22 St. 1919, c. 283, §§10-15, inc. Those who served in the war were ex- empt from this tax; and the same privilege was extended to veterans of the Spanish War and the Phillipine Insurrection by St. 1920, c. 608. 23 St. 1919, c. 342, §5; and see St. 1919, c. 346; St. 1920, c. 557; St. 1921, c. 399. 24 St. 1919, c. 342, §8. Appendix 761 Form No. 13 — Bill in Equity to Remove Cloud on Title Consisting of Invalid Tax Deed. (Sec. G. L. c. 60, Sec. 76.) Form No. 14 — Petition for Injunction against Foreign Corporation. (G. L. c. 60, Sec. 91.) Form No. 15 — Declaration in Action to Recover Back Illegal Tax. (See G. L. c. 60, Sec. 98.) Form No. 16 — Complaint against Commissioner of Corporations and Taxation for Refusal to Abate Income Tax. (G. L. c. 62, Sec. 47.) Form No. 17 — Petition for Abatement of Illegal Excise on Corpora- tion. (G. L. c. 63, Sec. 77.) Form No. 18 — Petition to Probate Court to Determine Liability to Inheritance Tax. (G. L. c. 65, Sec. 30.) Form No. 19 — Order Assessing Betterment. (G. L. c. 80, Sec. 1.) Form No. 20 — Petition for Writ of Certiorari to Quash Betterment. (See G. L. c. 80, Sees. 5-10 inc.) Form No. 21 — Answer or Return to Petition for Writ of Certiorari. (See G. L. c. 80, Sees. 5-10 inc.) Form No. 22-^-Declaration in Action to Recover Back Void or Un- constitutional Betterment. (G. L. c. 80, Sees. 5-10 inc.) Form No. 23 — Petition to Superior Court for Abatement of Better- ment. (G. L. c. 80, Sec. 7.) FORM NO. 1. Petition to Restrain Unlawful Exercise of Corporate Power under G. L. c. 40, Sec. 53. 1. The petitioners are all taxable inhabitants of the of ; the respondent is treasurer of the of 2. (State the vote or the proposed action complained of.) 3. Such action is in violation of the provisions of (or in excess of the legal authority of said city or town or said officers) ; no money can be legally appropriated by said city (or town) for such purpose, and the respondent has no legal right to expend the money of said city (or town) or to incur obligations purporting to bind said city (or town) in such a manner. Wherefore your petitioners pray 1. That the respondent (city, or town, or officers) be temporarily 762 Taxation in Massachusetts and after a hearing on the merits permanently enjoined and restrained from 2. That the respondent (treasurer) be temporarily and after a hearing on the merits permanently enjoined and restrained from expending any money of the of or from issuing obligations purporting to bind the of for the pay- ment of the expenses of FORM NO. 2. Application for Repayment of Illegal Corporation or Inherit- ance Tax under G. L. c. 58, Sec. 27. To the Commissioner of Corporations and Taxation of the Commonwealth of Massachusetts : Respectfully represents that it is a corporation estab- lished under the laws of (or that he is executor, administra- tor, trustee under the will of (or of the estate of) late of in the county of and ). That That notwithstanding these facts, the Commissioner of Corpora- tions and Taxation, purporting to act under the provisions of Chapter 63 (65) of the General Laws upon assessed upon the peti- tioner a tax of $ and has proceeded to cause payment of the same to be enforced and the petitioner on paid the same under protest (with interest amounting to $ ). Wherefore the petitioner prays that (the portion of) said tax thus wrongfully and illegally exacted be abated, and that the amount thereof (and interest) with interest thereon from the date of payment be repaid to it (him). FORM NO. 3 Collector's Warrant. (G. L. c. 59, Sec. 53.) (Prescribed by St. 1785, Chap. 50, sec. 6. The form relates to the state tax, but by sec. 7 the form of warrant for all other taxes Appendix 763 "shall also be made out by the Assessors thereof in the same tenor, mutatis mutandis.") '(Seal) ss.: To A. B., Constable or Collectors of the town of A, within the county of S, Greeting: In the name of the Commonwealth of Massachusetts you are required to levy and collect of the several persons named in the list herewith committed unto you, each one, his respective propor- tion therein set down, of the sum total of such list, it being this town's proportion of a tax or assessment of Pounds Shillings and Pence, granted and agreed upon by the General Court of said Commonwealth, at their session begun and held at B on the day of for defraying the necessary charges of securing, protecting and defending the same ; and you are to transmit and pay in the same unto T. S., Treasurer and Receiver General of this Commonwealth, or to his successor in that office, and to complete and make up an account of your collections of the whole sum on or before the day of ; and if any person shall refuse or neglect to pay the sum he is assessed in the said list, to distrain the goods or chattels of such person to the value thereof; and the distress so taken to keep for the space of four days at the cost and charge of the owner; and if he shall not pay the sum so assessed within the said four days, then you are to sell at public vendue the distress so taken for the payment thereof with charges; first giving forty-eight hours notice of such sale by posting up ad- vertisements thereof in some public place in the town, district or plantation (as the case may be) ; and the overplus arising by such sale, if any there be, besides the sum assessed, and the necessary charges of taking and keeping the distress, you are immediately to restore to the owner; and for want of goods and chattels whereon to make distress (besides tools or implements necessary for his trade or occu- pation, beasts of the plough necessary for the cultivation of his im- proved lands, arms, utensils for house-keeping necessary for upholding life, bedding and apparel necessary for himself and family) for the space of twelve days, you are to take the body of such person, so refusing or neglecting and him commit unto the common gaol of the county, there to remain until he pay the same, or such part thereof as shall not be abated by the Assessors for the time being, or the Court of General Sessions of the Peace, for the said county. 764 Taxation in Massachusetts Given under our hands and seals, by virtue of a warrant from the treasurer aforesaid, this day of 178 A. B.,1 \ Assessors. C. D.J FORM NO. 4 Collector's Warrant. (Form Now in Use in the City op Boston.) (G. L. c. 59, Sec. 53) (Seal) Boston, 19 . To Collector of Taxes of the City of Boston. Greeting: In the name of the Commonwealth of Massachusetts, you are required to levy and collect of the several persons named in the Tax List herewith committed to you, each one his respective proportion as therein set down of the sum total of such list, such sum being ( ) dollars, which has been assessed upon the polls and estates of the inhabitants of the city aforesaid in accord- ance with law ; and if any person shall refuse or neglect to pay to you the sum he is assessed in said list, you are required — to distrain the goods and chattels of such person to the value thereof, and to keep the distress so taken, for the space of four days at the least; and — to sell at public auction within seven days after the seizure, the distress so taken, for the payment of the sum so assessed and charges, first giving forty-eight hours' notice, at least, of such sale, by posting up advertisements thereof in some public place in said City of Boston; and — to return to the owner on demand, the over- plus arising from such sale, if any be besides the sum so assessed and the charges of keeping and taking the distress, with an account in writing of such sale and charges; and — (for the want of goods and chattels whereon to make distress besides tools or implements neces- sary for his trade or occupation, beasts of the plough necessary for the cultivation of his improved lands, military arms, utensils for housekeeping necessary for upholding life, and bedding and apparel necessary for himself and family, for the space of fourteen days), to take the body of such person so refusing or neglecting, and him Appendix 765 commit to the public jail of the county, there to remain until he pay the same, or such part thereof as shall not be abated by the assessors for the time being, or by the board of street commissioners of the said City of Boston. Given under our hands this day of , 19 . Assessors of the City of Boston. FORM NO. 5 Petition fot Abatement op Tax under G. L. c. 59, Sec. 59. To the Board of Assessors of the of : Respectfully represents of in the county of that the assessors of the of assessed a tax upon him for the year 19 , in the sum of $ ; that on ,19 , he filed with said assessors a true list of his (personal) estate not exempt from taxation in the form and manner prescribed by law, and that he is aggrieved by said tax in that he was taxed at more than his just proportion (or that his property was assessed in excess of its fair cash value, or that he was not subject to taxation in said city or town or that said tax was illegal and void) ; that a bill for said tax dated , 19 , was sent to him by the col- lector of taxes of said town. Wherefore he prays that said tax may be abated. FORM NO. 6 Complaint for Refusal to Abate Tax under G. L. c. 59, Secs. 64 or 65. Respectfully represents your petitioner that the assessors of the city (or town) of assessed a tax upon him for the year 19 in the sum of $ ; that on , 19 , he filed with said assessors a true list of his (personal) estate not exempt from taxation in the form and manner prescribed by law and that he was aggrieved by said tax in that he was taxed at more than his just proportion and that his property was assessed in excess of its fair cash value (or that he was not subject to taxation in said city or town, or that said tax 766 Taxation in Massachusetts was illegal and void) ; that a bill for said tax dated , 19 was sent to him by the collector of taxes of said town and , 19 he applied to said assessors for the abatement of said tax ; that , 19 said assessors notified your petitioner of their deci- sion wherein they refusal to abate said tax as requested by your petitioner (and he on , 19 paid said tax after protest in writing). And your petitioner represents that he is aggrieved by the refusal of said assessors to abate said tax and therefore he appeals from said decision of said assessors to this honorable court (or board) and prays that said tax may be abated (and judgment entered against the respondent for the amount of such abatement, and for costs and charges and interest on the amount of the abatement from the date of payment of said tax). FORM NO. 7 Certificate op Abatement under G. L. c. 59, Sec. 70 , Mass., . 19 . To the Collector of Taxes of the of : An abatement in the sum of $ has been made from the taxes assessed to in 19 (in Ward , Precinct ) on For the Board of Assessors (County Commissioners) of the of FORM NO. 8 Collector's Bond (G. L. c. 60, Sec. 13) Know All Men By These Presents that we of county of Commonwealth of Massachusetts, as principal, and of said as sureties, are holden and stand firmly bound and obliged unto the said of in the full and just sum of dollars, to be paid unto the said to which payment well and truly to be made, we hereby jointly and severally bind ourselves, our heirs, executors and adminis- trators, firmly by these presents. The Condition of this obligation is such, that, whereas, the said has been chosen collector of taxes for the said of for the current year, and has accepted said office, and Appendix 767 been duly sworn to the faithful discharge of the duties thereof — now, if the said shall, as collector as aforesaid, faithfully- collect, account for, and pay over all the taxes which he shall be legally required to collect, and also faithfully discharge all other legal duties of said office, then this obligation shall be void, otherwise to remain in full force and virtue. In Witness Whereof, we hereunto set our hands and seals this day of A. D. 19 . Signed and sealed in the presence of FORM NO. 9 Declaration in Action by Collector to Recover Tax under G. L. c. 60, Sec. 35. The plaintiff says that he is collector of taxes of the of (or that he was collector of taxes of the of for the year 19 ), that a tax for the year 19 in the sum of $ was assessed upon the defendant by the assessors of said town (or city) and committed by said assessors to the plaintiff 19 ; that the plaintiff notified the defendant of the amount of said tax, that the tax remained unpaid for three months after it was so committed to the plaintiff and is still unpaid ; where- fore the defendant owes the plairtiff the amount of said tax (with interest thereon from 19 ). FORM NO. 10 Offer to Surrender upon Illegal Sale under G. L. c. 60, Sec. 45. , Mass., 19 . To the Collector of Taxes of the of Whereas by deed dated , 19 , collector of taxes of the of sold to the following described premises in said for non-payment of the taxes assessed thereon for the year 19 , for the sum of $ , which was duly paid by said purchaser to said collector upon said date, and it subsequently appeared that by reason of an error, omission or informality in the assessment of said tax (or in said sale) said purchaser has no claim upon said property sold as aforesaid. 768 Taxation in Massachusetts I the said purchaser of said premises hereby offer to surrender and discharge my said deed or to assign and transfer to said all my right, title and interest in said premises, as you shall elect. The reason why I have no claim upon the land sold as aforesaid is as follows : The evidence upon which I rely is as follows : I refer to the following public records : Respectfully yours, FORM NO. 11 Certificate of Redemption by Payment to Collector under G. L. . c. 60, Secs. 62, 63. "Whereas I, collector of taxes for the of county of and Commonwealth of Massachusetts, for the year 19 , did sell and convey certain real estate to by deed dated , 19 , and recorded in the registry of deeds, in book page for the non-payment of a tax assessed thereon to in the year 19 , which real estate is described as follows, viz., And Whereas of in the county of and state of was assessed April 1, 19 , as owner of said property, and he alleges that at the time of said sale and deed he was the owner of said property and further alleges that he is now the owner of said Appendix 769 property, and as owner thereof desires to redeem the same from the sale in pursuance of sections 62 and 63 of chapter 60 of the General Laws. And Whereas the said has this day paid to me the following sums to redeem said property from said sale, to wit : Amount for which it was sold $ Interest at 8 per cent from date of sale . . Examination of title Deed of release Recording Additional sum as per statute '..... $ Therefore, I, the said collector of taxes, for the said of hereby certify that I have received from the said the said sum of dollars and cents ( ) for the purpose aforesaid. Dated this day of , A. D. 19 . Collector of Taxes for the of FORM NO. 12 Bill in Equity to Redeem from Tax Sale under 6. L. c. 60, Sec. 76. 1. The plaintiff is the owner in fee (or the holder of a mortgage recorded ,19 , in the registry of deeds for the county of , or is interested in the following manner • ) of (upon) the following described premises in the • of namely subject to the tax title hereinafter described. 2. 19 , the collector of taxes of said of sold to the defendant the aforesaid premises for the sum of $ for payment of taxes assessed thereon for the year 19 , by the assessors of said of and on , 19 , delivered to the defendant a deed thereof. (3. The plaintiff , 19 , tendered to the defendant the sum of $ , being an amount sufficient to cover the original sum paid by the defendant and intervening taxes, costs and interest at the rate of eight per cent per annum from the date of sale to the date of tender and demanded of the defendant a deed of release of said 770 Taxation in Massachusetts premises; but defendant refused and still refuses to deliver to the plaintiff such deed of release.) Wherefore the plaintiff prays that an accounting be had between the plaintiff and defendant and the sum payable to the defendant for the redemption of the premises from the sale for pay- ment of taxes for the year 19 , by deed dated ,19 , be ascertained ; and that it may be decreed that upon the plaintiff paying to the defendant the sum that shall so be ascertained the defendant execute and deliver to the plaintiff a deed releasing to the plaintiff all the defendant's right, title and interest in the aforesaid premises which defendant acquired by or under the aforesaid deed ; and that such further relief be granted as law and justice may require. FORM NO. 13 Bill in Equity to Remove Cloud on Title Consisting op Invalid Tax Deed (See G. L. c. 60, Sec. 76). 1. The plaintiff is the owner in fee of certain premises in the of bounded and described as follows: 2. , 19 , the collector of taxes of said of purported to sell to the defendant the aforesaid premises for pay- ment of taxes (purporting to be) assessed thereon for the year 19 and on , 19 , delivered to the defendant a deed thereof. 3. The aforesaid sale and deed of said collector were wholly void and conveyed no title to the defendant for the following reasons : 4. The plaintiff has remained and is now in possession of the aforesaid premises, but the defendant has refused to surrender said deed or to release to the plaintiff the title purporting to be conveyed therein, and has caused said deed to be recorded in the registry of deeds of said county and contended that he had obtained a title under said deed as security for the repayment of the purchase price, with all intervening costs, terms imposed for redemption and charges with interest thereon, which is indefeasible except by redemption in accord- ance with law. 5. Said deed constitutes a cloud upon the plaintiff's title to said premises, and the plaintiff has no plain and adequate remedy at law. Appendix 771 Wherefore the plaintiff prays: 1. That the deed of the collector of taxes of the of dated , 19 , purporting to convey to the defendant the premises . for payment of taxes for the year 19 , be declared void. 2. That the defendant execute and deliver to the plaintiff a deed releasing to the plaintiff all the defendant's right, title and interest in the aforesaid premises which defendant acquired by or under the aforesaid deed. 3. That such further relief be granted as law and justice may require. FORM NO. 14 Petition for Injunction against Foreign Corporation under G. L. c. 60, Sec. 91. The petitioner says he is the collector of taxes of the city (or town) of and that the defendant is a foreign corporation, organized under the laws of the state of and doing busi- ness in in the Commonwealth of Massachusetts. And the petitioner says that a tax of $ was duly and lawfully assessed upon the defendant by the assessors of said as the tax upon its personal estate subject to taxation in said for the year and said tax was upon , 19 , committed to the petitioner to collect. And upon , 19 , the petitioner made a demand upon the defendant for the payment of said tax, but the defendant neglected, refused and omitted to pay said tax for a period in excess of sixty days and still neglects, refuses and omits to pay it, and said tax is still due and payable. Wherefore the petitioner prays that the defendant be enjoined and restrained from doing business within this Commonwealth until said tax (with interest thereon at the rate per cent per annum from ,19 ) , and all incidental costs and charges, including the costs of this suit, shall have been paid. FORM NO. 15 Declaration in Action to Recover Back Illegal Tax. See G. L. c. 60, Sec. 98. The plaintiff says that the assessors of the defendant city (or town) assessed a tax upon him for the year 19 , in the sum of 772 Taxation in Massachusetts $ ; that said tax was wholly illegal and void; that plaintiff paid said tax (with interest thereon amounting to $ ) on , 19 , after a protest in writing signed by him (or arrest, levy, notice of sale) to the collector of taxes of the defendant city (or town) and the defendant has had and received the plaintiff's money so unlawfully taken from him. Wherefore the defendant owes the plaintiff the sum of $ with interest thereon from (date of payment) . FORM NO. 16 Complaint against Commissioner of Corporations and Taxation for Refusal to Abate Income Tax. (G. L. C. 62, Sec. 47.) 1. Respectfully represents of in the county of and Commonwealth of Massachusetts, that on an assessment was levied on him by the respondent as the tax (or as an additional tax) on his income under the provisions of chapter 62 of the General Laws, amounting to $ 2. Said assessment is illegal (or of said assessment a part, namely $ is excessive, disproportionate and illegal) for the follow- ing reasons. 3. The complainant duly filed his return for the year as required by law and on he filed with the respondent a petition for the abatement of said tax, and on the respondent notified the petitioner that he refused to abate said tax (or that he had abated said tax to the extent of $ , but that he refused to make any further abatement). That the complainant is aggrieved by the refusal of the respond- ent to abate said tax as prayed for, and he appeals from such refusal to this Honorable Court and prays that said tax may be abated in the amount herein set forth and for his costs. Appendix 773 FORM NO. 17 Petition for Abatement of Illegal Excise on Corporation under G. L. c. 63, Sec. 77. (Commonwealth to be made respondent.) To the Honorable the Justices of the Supreme Judicial Court, Respectfully represents the petitioner : (1) That the petitioner is a corporation organized under the laws of (2) That the petitioner has filed its returns in accordance with law. (3) That under the provisions of the Commonwealth of Massachusetts assessed upon the petitioner for the year 19 , an ex- cise tax of $ based upon (4) That upon , 19 , the petitioner paid said tax to the treasurer and receiver general of the Commonwealth after pro- test in writing. (5) That the petitioner is aggrieved by the exaction of said excise tax, for the following reasons; Wherefore, the petitioner prays that the treasurer and receiver general of the Commonwealth of Massachusetts may be ordered to pay to the petitioner the amount of said tax, with interest and costs. FORM NO. 18 Petition to Probate Court to Determine Liability to Inheritance Tax under G. L. c. 65, Sec. 30. To the Honorable, the Judges of the Probate Court in and for the County of Respectfully represents of in the county of that he brings this petition against treasurer and receiver general of the Commonwealth of Massachusetts and alleges him to be the one party interested in the matter of said petition, and petitioner further represents that he is executor (administrator, trus- tee) of That by the terms of said 774 Taxation in Massachusetts That the Commonwealth of Massachusetts claims that said estate is liable to a succession tax under the provisions of , but that your petitioner is advised that said estate is not liable under such provisions to such a tax. Wherefore, your petitioner prays that the court will determine whether or not said estate is liable to a succession tax under said provisions. FORM NO. 19 Order Assessing Betterment. (G. L. c. 80, Sec. 1.) Whereas has been located, constructed and completed and six months have not passed since the completion of said Now, therefore, this board acting under the provisions of Chapter 80 of the General Laws being of the opinion that each of the estates described in the following schedule received benefit and advantage from such location and construction beyond the general advantage to the community and that said estates are all the estates receiving such benefit and advantage do hereby determine that the amount of $ is the cost incurred by said city (or town) for such improve- ment and do hereby assess upon each of said estates the amount here- inafter set against the description thereof as the part of said cost proportionate to and not exceeding said benefit and advantage so received by the estate. FORM NO. 20 Petition for Writ of Certiorari to Quash Betterment. See G. L. c. 80, Secs. 5-10 inc. To the Honorable, the Justices of the Supreme Judicial Court, Respectfully represents of in the county of That upon , 19 , the board of of the of purporting to act under authority of Chapter 80 of the General Laws levied upon the land of your petitioner situated an assessment in the sum of for the benefit and advantage alleged to result from the laying out and construction of That said assessment is erroneous, void and illegal for the follow- ing reasons. Appendix 775 Wherefore your petitioner prays that a writ of certiorari may issue from this honorable court directed to said board of of the of commanding them to return to this court true and perfect records of their proceedings relative to to the end that all said proceedings may be quashed and further dealt with as law and justice may require. FORM NO. 21 Answer or Return to Petition for Writ of Certiorari. See G. L. c. 80, Secs. 5-10 inc. We, the board of of the of do certify and return that on , 19 , in pursuance of the au- thority vested in us by law we passed the following order, to-wit : And we, the respondents, further say that the assessment levied upon the petitioner under said order was proportional and reasonable and in accordance with law. And we, the respondents, further say (Here set up any extrinsic facts tending to show that justice does not require the quashing of the assessment.) In witness whereof we have this day of , 19 , severally subscribed our names. of the of FORM NO. 22 Declaration in Action to Recover Back Void or Unconstitutional Betterment. (G. L. c. 80, Secs. 5-10 inc.) The plaintiff says that upon , 19 , the board of of the defendant town (or city) purporting to act under authority 776 Taxation in Massachusetts of levied upon the land of the plaintiff situated an assessment in the sum of for the benefit and advantage alleged to result from the laying out and construction of ; that said assessment was committed to the collector of taxes of said town (or city) and the plaintiff upon , 19 , paid the same to said collector after protest in writing (or after said collector had published notice of the sale of said land for the non-payment of said assessment.) That said assessment is wholly illegal and void for the following reasons but the defendant has had and received the money of the plaintiff so unlawfully taken from him. Wherefore, the defendant owes the plaintiff the sum of $ with interest thereon at the rate of 6 per cent per annum from (date of payment). FORM NO. 23 Petition to Superior Court for Abatement of Betterment (G. L. c. 80, Sec. 7). Your petitioner says that he is the owner of a certain parcel of land on Street in the city (or town) of bounded and described as follows: That on the board of of said city (or town) of laid out said Street as a public way (or took certain land in the neighborhood of said land of petitioner for a cer- tain public improvement) and said way (or improvement) was there- after constructed by said city (or town) ; and on said board of levied an assessment for the laying out (or establishment of said way (or improvement) upon said parcel of petitioner in the sum of $ ; that said parcel of petitioner received from said laying Appendix 777 out (or establishment) and construction much less benefit than the amount of said assessment, and said assessment is disproportionate and excessive; and the Collector of said city (or town) on sent notice of said assessment to petitioner, and petitioner within six months thereafter, namely on filed with said board of a petition for the abatement of said assessment, and said board on rejected said petition and sent to petitioner writ- ten notice of its action thereon; and petitioner is aggrieved by the doings of said board as above set forth and appeals therefrom to this Honorable Court. INDEX INDEX [Citations are to pages] Abatement: application for, date of, 286. by assessors, 285. by county commissioners, necessity of list, 296. by county commissioners, payment not required, 295 certificate of, 301. form of, 766. not a judgment, 295. to be exhibited by taxpayer, 332. complaint for refusal to grant, form, 765. forbidden unless list filed, 287. judgment and costs on, 299. notice of decision of, 293. of assessment for drainage of wet lands, 729. of betterment assessments, 692. of corporation tax, 181, 573, 596. of corporation tax, form of petition for, 773. of income tax, 494. of inheritance tax, for illegality, 181, 651. of inheritance tax, for overvaluation, 650. of local tax on corporations, notice to commissioner, 303. of national bank stock tax, 511. of tax on public service companies, 583. of tax on real estate and machinery of corporations, 295. of tax on telephone or telegraph companies, 302. of tax on trust companies, 583. of uncollectible taxes, 302. on appeal to county commissioners, 293. on appeal to superior court, 297. on appeal to superior court, pro- cedure on, 298. only remedy for over-assessment, 344, 402. payment of costs by petitioner, 293. petition for, form of, 765. protest not necessary for, 300. Abatement — Continued: provision for speedy trial, 298. recording of required, 286. reference to commissioner, 299. recovery of expenses and costs by town, 300. repayment of, interest on, 300. right to, as affecting constitution- ality of tax, 127. superior court requires payment in advance, 299. Absence, Leave of: on half pay invalid, 109. Abstract: of the tax laws, 133. Academy: exemption of, from taxation, 200. blic aid to, forbidden, 110. Accounts: of collector, 396. probate, allowance of, necessary when executors are trustees, 246. probate, allowance of, prohibited until inheritance tax paid, 648. Accrual Basis: for determining income authorized, 465. Accrued Interest: taxable, 466. Accumulated Income: taxation of, 470. Action : against assessors for illegal assess- ment, 314. against collector, for breach of war- ranty, 362. for failing to collect taxes, 396. for illegal collection, 398. for unlawful arrest, 339. against corporation to collect excise tax, 572. against officer for unlawful arrest, 341. 781 782 Taxation in Massachusetts [Citations are to pages] Action — Continued: against person paying too little for redemption, 378. against purchaser at illegal sale, 385. against town, by fiduciary, 404. by partnership, 404. does not lie for over-assessment, 402. payment under duress or protest required, 406. for informality in assessment, 405. for omitted assessment, 404. to recover back betterment assess- ment, 689. to recover back betterment, form of declaration, 775. to recover back tax, 322, 400. to recover back tax, form of decla- ration, 762. by collector to collect tax, 11, 342. to collect tax, form of declaration, 762. to collect tax lies, though tax ex- cessive, 344. by commissioner on collector's bond, 166. by commonwealth to collect income tax, 493. by commonwealth to collect inheri- tance tax, 656. by owner who has surrendered land for value thereof, 682. by person paying tax against one who has agreed to pay it, 371. by person whose money has been withheld by town, 395. bv person whose tax has been abated 295. denned, 343. does not lie to collect apportioned tax, 310. does not lie to recover back exces- sive betterment, 689. does not lie to recover back exces- sive tax, 402. for legacy, liability for inheritance tax determined in, 655. in case of partial invalidity of tax, 311. of contract against collector, 396. of contract to collect special assess- ment, 685. of tort against assessors, 314. of tort against collector, 398. of tort against town, 408. to collect corporation tax, 594. Action — Continued: to collect income tax, 493. to collect inheritance tax, 656. to collect penalty on corporation, 599. to collect tax levied by another state, 31. to collect tax on national bank stock, 511. to recover money paid at invalid sale, 360. to recover property illegally sold, 337. Adjournment: of sale of goods distrained, 336. of sale of goods distrained, form of notice, 413. of tax sale, required before town can purchase, 363. of tax sale, what constitutes, 364. Administrator : accounts of, not allowed until in- heritance tax paid, 648. ancillary, taxation of, 78. appointment of, on application of commissioner, 747. compensation of, subject to inherit- ance tax, when, 643, filing inventory by, 647. filing list by, 260. foreign, liability for delivering assets to, 634. liability of, for income tax, 468. liability of, for inheritance tax, 627, 644. liability of, for tax assessed before appointment, 243. may appeal from commissioner's appraisal, 651. may apply for instructions as to inheritance tax, 654. may be ordered to pay inheritance tax, 657. of collector, to return books and papers, 325. provisions respecting, in income tax law, 475. returns of bank stock by, 188. situs of property in hands of, 78. taxable for estate of deceased, 243. to deduct or collect inheritance tax, 627. to repay legatee tax illegally col- lected, 646. See also Fiduciary. Index 783 Adopted Child: treated as real, for purposes of in- heritance tax, 609. Advertisement: of sale, fee for, 328. of sale, must be in English language, 353. of sale of land of low value, 365. Affidavit: of collector, 367. of collector, fee for, 329. of collector, prima facie evidence, 320. of demand and notice, form of, 422. of demand, form of, 421. of posting and publishing, form of, 422. that no person bid at tax sale, 363. that tax title is invalid, 390. Agencies: of non-resident dealers, taxation of, 36. of United States, state cannot tax, 49. Agent: assessor and collector not, of town, 408. of non-resident purchaser at tax sale, 362. Aggregates: tables of, 275. tables of, how filled, 278. Aggrieved Person: what constitutes, 285, 293. Agreement : among parties as to payment of tax, 744. by lessee to pay taxes, as including betterments, 119. different, between landlord and ten- ant, evidence of, 233. to pay income tax, by unincorpo- rated associations, 445. Agricultural College: Massachusetts, fraternity houses tax- able, 197. Agricultural Society: property of, exempt from taxation, 203. Aldermen, Board of: approval of collector's bond by, 328. assessment of cost of street sprink- ling by, 145. [Citations are to pages] Alienation: of land, what constitutes, 351. Aliens : discrimination against, in tax laws, 32. liability to poll tax, 188. Alimony: not taxable as annuity, 451. Allocation : of income of domestic business cor- porations, 554. of income of foreign corporations, 565. Almshouse : may be supported by taxation, 104. Alteration : of determination of value for in- heritance tax, 650. Amendment : of money bills permissible, 101. American Experience Tables: copy of, 639. valuation by, 636. Animals: kept in other states not taxable here, 210. of non-residents, taxable, 240. young, exemption of, 211. Annual Tax Acts: composition of, 168. history of, 184. Annuity : defined, 450. taxation of as income, 450. valuation of, for inheritance tax, 636. Answer : to petition for abatement not re- quired, 297. Appeal : Board of, see Board of Appeal. by person aggrieved by revised tax, 306. corporation may be required to take, 580. from apportionment of bank stock tax, 513. from apportionment of tax on real estate subsequently divided, 310. from county commissioners, by cer- tiorari, 296. from refusal to abate taxes, form of, 765. 784 Taxation in Massachusetts [Citations are to Pages] Appeal — Continued: from valuation for inheritance tax, 651. hearing on, satisfies constitution, 62. to Board of Appeal on corporation tax, 593. to Board of Appeal on income tax, 496. to county commissioners, on exces- sive betterment, 697. to county commissioner, on exces- sive tax, 293. to superior court, on excessive bet- terment, 693. to superior court, on excessive drain- age assessment, 730. to superior court, on excessive in- come tax, 498. to superior court, on excessive tax, 297. Apportionment: application for does not preclude abatement, 701. of betterment assessment, 700. of betterments on land subsequently divided, 702. of public burdens in discretion of legislature, 114. of state tax, 167. of tax among tenants in a building, 234. of tax between vendor and vendee, 745. of tax on real estate subsequently divided, 309. purchaser after, not liable for tax, 343. Appraisal : of property for inheritance tax, 649. probate, to be filed by adminis- trator, 647. of state institutions, 171. Appropriation : amount of, in discretion of town, 113. county, amount of, 136. for certain boards, assessed on public service companies, 141. illegal, restraint of, 147. illegal, whole tax not invalidated by, 311. municipal, amount of, 138. not required, to repay abated cor- poration tax, 597. purpose of, must be declared, 113. state, amount of, 136. April First: domicile as of, 224. ownership as of, 229. Arrest: by sheriff or constable, 341. certificate of, 339. for non-payment of tax, 338. for non-payment of tax, constitu- tional, 66. for non-payment of tax, fee for, 328. form of certificate of commitment, 413. form of certificate to be endorsed on copy of warrant, 415. illegal tax collected by, may be re- covered back, 406. liability of collector for illegal, 396. trustee in bankruptcy not subject to, 346. Assessment : at less than full value, effect of, 55. betterment, see Special Assessment, can be made only by assessors, 252. list, details of, 273. local on corporation not conclusive, 580. must be formal public record, 59. of annual tax, 253. of cost of private ways, 707. of deposits in state treasury, 181. of excise on corporations, 569. of income tax, 491. of inheritance tax, 651. of state, county and town taxes joined, 256. of tax on insurance companies, 528. of tax on omitted property, 304. partially invalid, effect of, 311. special, see -Special Assessment. Assessors : abatement of excessive taxes by, 285. abatement of uncollectible taxes by, 302. acts of, cannot be collaterally im- peached, 343. appointed by selectmen, when, 153. appointment of, cannot be collater- ally impeached, 348. apportionment of betterment assess- ment by, 701. are public officers, 408. assistant, appointment of, 155. assistant, election of, 150. books of, 271. Index 785 [Citations are to Pages] Assessors — Continued: cannot add items to list without in- quiry, 264. commission of tax list to collector by, 280. compensation of, 317. county commissioners appoint, when, 257. de facto, acts of, cannot be ques- tioned, 155. defined, 139. details in book to be kept by, 278. doom of, when no list filed, 266. duties of, fixed by law, 252. election of, 150. election of, cannot be collaterally im- peached, 348. enrollment of militia by, 142. estimate of property by, 266. failure to act, remedy for, 257. fixing of tax rate by, 253. furnishing of blank lists by, 261. inquiries by, 264. liability of, for failure to take oath, 157. liability of, to persons unlawfully assessed, 314. liability of, to town for negligence, 157, '317. listing of voters by, 164. majority of, may act, 154. may abate tax of their own motion, 302. may act notwithstanding death of one, 154. may appeal from apportionment of bank tax, 513. may apportion town among them- selves, 252. may be chosen collector, 151. may be prosecuted by commissioner, 165. may include all taxes in one assess- ment, 256. may make inquiries of taxpayer, 264. may make overlay, 255. may make re-assessment, 306. must act as board, 252. not agents of town, 408. not to abate tax unless list filed, 287. not to commit tax until collector's bond approved, 280. notice of building permits to be given to, 736. notice of decision on petition for abatement, 293. Assessors — Continued: notice of request for apportionment, 310. notice to commissioner of property of corporations, 313. notice to taxpayers to bring in lists, 258. notice to town where residence claimed, 221. oath of, 156. oath of, proof of, 317. oath of, to valuation list, 279. penalty on, for failure to keep books as required, 319. penalty on, for failing to swear to valuation, 279. penalty on, for false entry on tax list, 165. penalty on, for false valuation, 156. penalty on, for making unlawful agreement, 318. penalty on, for neglecting to assess taxes, 319. penalty on town, for not choosing, 150. personal liability of, 314. proof of appointment of, 154. reassessment of invalid taxes by, 306. removal of, 154. return of exempt property by, 313, 314. salary of, subject to trustee process when, 317. selectmen to act as, when, 151. state, county and town taxes as- sessed by, 251. statement of cause of diminished valuation, 313. street sprinkling assessments, inclu- sion of, in warrant, 145. supervisors of, appointment and duties. 165. term of, 154. to apportion tax on request, 309. to deposit tax list for public in- spection, 271. to deposit valuation with commis- sioner, 279. to determine value of bank stock. 506. to give certificate of abatement, 301. to give certificate of exemption from bank stock tax, 515. to re-assess when tax title proves invalid, 390. to receive lists as true, 264. to require oath by taxpayer, 261. 786 Taxation in Massachusetts [Citations are to Pages] Assessors — Continued: to report omitted assessments, 278. to sign tax warrant, 281. vacancy in, 154. valuation list of, 271. Assignee : for creditors, collection of tax from, 322, 345. for creditors, liability for income tax, 475. of lease, bound by covenant to pay tax, 234. Assistant Assessors: appointment of, 155. election of, 150. Associations: of employees, exempt from taxation, 204. with transferable shares, see Unin- corporated Associations. Auditing: of municipal accounts, assessment of expense of, 162. Bad Debts: deduction of, from income, 462. Bank: co-operative, see Co-operative Banks deposits, situs of, 77. deposits, tax on an excise, 14. early methods of taxing, 505. exemption of, in charter, a contract, 27. national, see National Banks, not a business corporation, 534. notes, situs of, for taxation, 76. notes, tax on, 8. savings, see Savings Banks, state, taxation of, 506. See also Trust Companies. Bankruptcy: collection of taxes, in case of, 346. discharge in, does not release tax, 346. of collector, does not discharge de- falcation, 397. proof of taxes in, 323. trustee in, liability to income tax, 475. trustee in; liable to taxation by state, 50. Beet Sugar: former exemption of, 92. Beneficiary: claim of exemption for, by trustee, 474. Beneficiary — Continued: liable for tax on income from foreign trustee, 473. taxation of trustee, 239. Benefits : actual, cannot be exceeded by bet- terment, 124, 679. classes of, defined, 672. general, cannot be assessed, 122, 123. how ascertained, 674. not essential to general tax, 116. set-off of, 673. Betterments : See Special Assessments. Bill in Equity: to enjoin foreign corporation, form of, 771. to redeem from tax title, form of, 769. to remove cloud from title, form of, 770. Bill of Lading: tax on foreign, invalid, 22. Bill, Tax: for corporation tax, when sent, 493. for income tax, when sent, 323. for local tax, when sent, 583. Board of Appeal: appeal to, on corporation tax, 593. appeal to, on distribution of national bank stock tax, 513. appeal to, on income tax, 496. determination of amounts to be dis- tributed, 179. membership of, 139. Bonds: collector's, form of, 766. collector's, liability on, 326. interest on, liability to income tax, 437. liability to inheritance tax, 617. liability to seizure on distress, 336. municipal, exempt from taxation, when, 213. secured by mortgage, taxation of, 231. serial, taxation to provide for pay- ment of, 142. situs of, for purposes of inheritance taxes, 82. situs of, for purposes of local tax, 76. state, taxation of, 24, 213. tax exempt in one state taxable in another, 31. taxation of, 192, 437. Index 787 [Citations Bonds — Continued: United States, exempt from state taxation, 48, 213. Books, Inspection of: constitutional rights, 63. for corporation taxes, 527, 570, 591. for income taxes, 486. Boston, City of: filing of lists in, 262. form of collector's warrant in, 764. sewer assessments in, 711. sidewalk assessments in, 722. street betterments in, 680. tax limit in, 160. Boston Elevated Railway Co: taxation of, 589. Bounties: constitutionality of, 108. Boxing Matches: taxation of gross receipts of, 737. Branch Stores: of non-resident dealers, taxation of, 36. Bridges: cost of, may be imposed on specified towns, 117. interstate, taxable as property, 43. Brokers: duties of, as to stock transfer tax, 603. interest deduction from income tax, 447. taxation of, on securities held on margin, 446. Brown-Tail Moths: assessment for exterminating, 732. Buildings: bank, taxable as real estate, 511, 517 constitute real estate for taxation purposes, 190. erected by lessee, taxation of, 235. erection of, in park, after better- ments assessed, 131. notice to assessors of new, 736. obligation of lessee to pay taxes on, 235. separate valuation of, for statistical purposes, 276. valuation of, 268. Burden of Proof: on one claiming change of domicile, 223. on petitioner for abatement of spe- cial assessment, 694. are to Pages] Burial Grounds, see Cemeteries. Business: corporations, see Corporations, defined, 453. doing, defined, 550. expenses of, what constitutes, 459. income, determination of, 458. income, taxation of, 451. place of, what constitutes, 36. situs, of intangible property, 76. Canal : toll for use of, not tax on interstate commerce, 34. Capital : distinguished from income, 434. distribution of, not taxable as in- come, 446. employed in business, situs of, 74. tax on, an excise, 14. Carriages: tax on, not a direct tax, 13. Cemeteries : exemption of, from special assess- ment, 675. exemption of, from taxation, 206. Certificate : of abatement, 301. of abatement, form of, 766. of payment to collector, 377. of payment to collector, form of, 768. of redemption, form of, 424. Certiorari: answer or return, form of, 775. procedure in, 687. to correct errors of county commis- sioners, 296. to quash betterment assessments, 687. to quash betterment assessments, form of petition, 774. to quash refusal of assessors to abate a tax, 298. Charges of Imprisonment: what constitute, 340. Charitable Institutions: bequests to, exempt from inherit- ance tax, 619. exemption of, from taxation, 197. exemption of, in charter a contract, 27. liability of, to betterment assess- ments, 675. 788 Taxation in Massachusetts [Citations are to Pages] Charitable Institutions — Continued: obligation of, to bring in lists, 258. refund to, of national bank stock tax, 515. Charitable Trusts: liability to income tax, 472. Charitable Uses: statute of, 198. Charter : acceptance of, as a contract, 27. exemption from taxation in, con- strued, 216. Province, excises under, 95. Province, provisions as to taxation in, 87. Check : payment of tax by, 323. Child Labor: tax on, constitutionality of, 8. Church: power of state to aid, 110. See also Religious Institutions. Cities, see Municipal Corporations. Citizen: of another state, discrimination against, 30. Claim : of uncertain validity not taxable as property, 57. Classification of Property: for statistical purposes, 277. for taxation, constitutionality of, 54. Clerk, Town: to demand return of tax records, 325. Clock, Town: may be established with public funds, 104. Cloud on Title: equitable relief from, 385. equitable relief from, form of bill, 770. Club: . taxable as partnership on income, 477. Collection : by arrest and imprisonment, 338. by distress, 335. by sale or taking of land, 346. Collection — Continued: by suit, 342. by withholding money due taxpayer, 395. due process of law in, 66. effect of change of statutes respect- ing, 68. from estates of deceased persons, 344. from insolvent estates of deceased persons, 748. from receivers, 749. from trustees in bankruptcy, 346. of betterment assessments, 684. of business corporation taxes, 572. of corporate -franchise taxes, 594. of income taxes, 493. of inheritance taxes, 656, 657. of insurance company taxes, 528. of national bank stock taxes, 511. of stock transfer taxes, 603. of taxes assessed after sale or taking, 373. Collector: accounts of, examination of, 396. action at law b3 r , 342. administrator of, to deliver books, 325. affidavit of, 320, 367. bond of, 326. bond of, form of, 766. books and records of, 324. charges and fees of, 328. commission of uncollected taxes to successor, 399. de facto, liability of, 396. deed executed by, 357. defalcation of, breach of fiduciary duty, 397. defined, 320. demand for tax by, 330. duties of, 321. election of, 150. is a public officer, 408. liability for breach of warranty on tax deed, 362. liability for collecting invalid tax. 398. liability for failure to arrest, 340. liability for failure to collect, 327. liability for illegal arrest or distress, 398." liability for unlawful acts, 396. liability for unlawful arrest, 339. liability on warrant for drainage assessment, 752. Index 789 [Citations Collector — Continued: list of, contents of, 280. may be authorized to use powers of treasurer, 158. may be required to serve demand at particular place, 352. may determine whether to sell or take, 393. may issue warrant to sheriffs or con- stables, 340. may require aid in performing duties, 340. may serve summons, 332. may take land for non-payment of tax, 365. penalties for violation of duties by, 412. proceedings by, if tax title invalid, 390. proof of election of, 151. protected by warrant, 397. removal of, 399. return of goods distrained by, 336. temporary, appointment of, 159. to accept partial payments, 333. to give certificate of payment, 370. to furnish statement of existing liens, 334. to notify assessors of uncollectible taxes, 302. to pay over taxes collected, 321. to purchase for town, when, 363. to send out tax bills, 323. to surrender books on resignation, 325. warrant of, form of, 762, 764. College : exemption of property of, 200. public aid to, constitutionality of, 110. Colonial Laws: abatement of taxes under, 285. appointment of assessors under, 151. assessment of taxes under, 183. collection of taxes under, 321 . collectors of taxes under, 158. exemptions under, 194. income taxes under, 452. poll taxes under, 186. proportional taxation under, 87. valuation under, 87. Commercial Traveller: taxation of, under state authority, 35. are to pages] Commissioner of Corporations and Taxation : abatement of taxes on worthless land, 302. annual reports of, 182. application for appointment of ad- ministrator by, 747. apportionment of state tax by, 167. determination of distributions by, 179. duties of, 140. establishment of office of, 141 forwarding of information to local assessors by, 167. notice of declarations of trust to, 144. to give notice of requirements of income tax law, 484. to prepare income tax returns, 484. to prepare lists of taxable property, 166. to prepare regulations for corpora- tion tax, 572. to prepare regulations for income tax, 493. supervision of local taxation by, 165. Commodity: what constitutes, 97. Commonwealth: bonds of, exempt from taxation. 213, 440. property of, exempt from taxation, 196. taxation of buildings on land of, 226. Commutation Tax: on street railways, 584. Compromise : of inheritance tax, commissioner may make, 640. of will does not affect inheritance tax, 614. Conduits, Underground: taxation of, 246. value of, deducted from corporate franchise, 539, 578. Conservation : of natural resources as public use, 111. Conservators : application of income tax to, 475. Consolidation of Corporations: as affecting exemption, 28. as affecting tax on capital stock, 37. 790 Taxation in Massachusetts [Citations are to Pages] Consideration Full: as making a grant not taxable, 615. Constable: compensation of, 158. issue of warrant to, by collector, 340. issue of warrant to, by treasurer, 393. to be collector, when, 158. Constitution of Massachusetts: Declaration of Rights, Art. 10, 102. Declaration of Rights, Art. 12, 63. Part 2, Chapter 1, Sec. 1, Art. .4, 86, 102. Part 2, Chapter 1, Sec. 3, Art. 6, 100. Part 2, Chapter 2, Sec. 1, Art. 11, 102. Eighteenth Amendment, 110. Thirty-ninth Amendment, 111. Forty-first Amendment, 91, 426. Forty-third Amendment, 111. Forty-fourth Amendment, 91, 433. Forty-sixth Amendment, 111. Forty-seventh Amendment, 111. Forty-ninth Amendment, 111. Fifty-first Amendment, 111. Fifty-ninth Amendment, 29. Constitution of United States: Article I, Section 7 (money bills), 101. Article I, Section 8 (duties and excises), 13. Article I, Section 8 (interstate com- merce), 33. Article I, Section 9 (direct taxes), 13. Article I, Section 10 (duties of ton- nage), 23. Article I, Section 10 (duties on im- ports), 21. Article I, Section 10 (impairing obligation of contracts), 24. Article IV, Section 1 (faith and credit to acts of other state), 31. Article IV, Section 2 (privileges of citizen of state), 30. Article VI, (treaties supreme law of land), 32. Fourteenth Amendment (due proc- ess of law), 52. Sixteenth Amendment (income tax), 14, 435. Constitutionality : depends upon practical operation, 4. presumption in favor of, 7. Construction : of tax laws as inapplicable to inter- state commerce, 39. of tax laws generally, 18. Contemplation of Death: . defined, 624. Contract: affected by change in tax laws, 69. exemption from taxation as, 26. impairment of obligation of, 24. with United States, taxation of one having, 50. Contribution: by private parties, effect of, 103. by joint owners to payment of tax, 391. Co-operative Banks: exemption of shares and property, 214. income from shares not taxable, 439. taxation of, 521. Corporate Excess: deductions allowed, 538. deductions not allowed, 547. defined, 536. employed within the commonwealth defined, 544. of foreign corporation, taxation of, 560. rate of tax upon, 548. taxation of, 505, 536. Corporations: abatement of excise on, 573. abatement of excise on, form of petition, 773. . abatement of tax on real estate and machinery of, 295. affiliated and subsidiary, taxation of, 550. amount derived from taxation of, 136. application for repayment of tax, form of, 762. application to Board of Appeal by, 593. chartered by United States, taxation of, 50. collection of taxes on, 594. development of franchise tax on, 531. disregarded when formed to evade taxation, 83. distribution of tax on, 175. Index 791 Corporations — Continued: domestic business, affiliated, taxation of, 550. allocation of income, 554. application for abatement by, 573. assessment of omitted tax on, 571. assessment of tax on, 569. collection of tax on, 572. correction of federal return, 553. deductions allowed, 538. deductions not allowed, 547. deductions of cash and bills out- side state, 543. deductions of intangible securities, 541. deductions of real estate, machin- ery and structures, 539. deductions of tangible property in another state, 542. deductions of value of machinery from income, 559. defined, 535. determination of corporate excess, 536. double assessment on failure to file return, 571. organization and filing fees, 737. penalty for failure to file return, 573. privacy of returns of, 553. rate of tax upon, 548. returns of, 551. taxation of, 529. valuation of shares of, 536. verification of returns of, 570. domestic, engaged in interstate com- merce, taxation of, 36. domicile of, 226. effect of unconstitutionality of tax on, 573. establishment of present system of taxing, 533. excises on special privileges retained, 591. foreign, action in United States courts by, 599. affiliated, taxation of, 560. allocation of income of, 565. application for abatement of tax, 573. assessment of, for omitted tax, 571. assessment of tax on, 569. collection of tax on, 572. collection of tax on, constitutional methods, 86. credit for dividends taxed to stockholders, 567. Corporations — Continued : deductions allowed, 538. deductions not allowed, 547. defined, 535. discrimination against, constitu- tionality of. 31. distribution of tax on, 176. dividend from, subject to income tax, 441. double assessment on failure to file return, 571. engaged in interstate commerce, taxation of, 40. excise on, constitutionality, 38. income tax on, constitutionality, 85. list of taxable property, 292. penalty for failure to file return, 573. permanent property, acquisition of, effect of, 43. personal property of, exempt, 208. restraint of, until tax paid, 394. restraint of, until tax paid, form of bill, 771. returns of, 565. taxation of, 560. form of application for repayment, 762. good- will of, taxation of, 544. inspection of books and papers of, 591. interest on overdue taxes on, 593. liable for inheritance tax, on trans- fer of stock, when, 628. list of shareholders of, 489. machinery of, taxation of, 242. may be required to collect tax on security holders, 64. may be subjected to income tax, 436. methods of taxing, 529. multi-state, liability of shares to inheritance tax, 625. net income of, 545. not citizens, 31. notice to commissioner of abate- ment of local taxes on, 303. notice to, of tax on stockholders, 61. penalty upon, for failure to file re- turn, 599. personal property of, exempt from taxation, 208. public service, additional excise on abatement of local tax, 583. application for correction of tax, 583. 792 Taxation in Massachusetts [Citations are to Pages] Corporations — Continued: conflict between state and local valuations, 580. deductions from corporate excess, 578. notice of tax, 583. rate of taxation, 582. returns by, 574. taxation of, 574. valuation of shares of, 578. remedy of, for illegal taxes, 596. re-organization of, taxation of, 456. return by assessors of property lo- cally taxable, 313. rules and regulations respecting tax- ation of, 572. sale of assets of, fraudulent, when, 595. ships and vessels of, taxation of, 589. special income taxes on, 757. stock of, exemption from local tax- ation, 215, situs of, 76. subject to inheritance tax, when, 617. tax on, disputed, as offset to state tax, 170. tax on income of, not a direct tax, 14. tax on, illegal, repayment of, 181. taxable for real estate, 228. taxation of, 505. taxation of, on property in another state, 37, 41. transfer tax, duties as to, 603. Corporations and Taxation: commissioner, see Commissioner of Corporations and Taxation, department of, 139. Costs: deposit of, on foreclosure proceeding, 382. imposition of, constitutional, 66. on abatement by assessors or county commissioners, 300. on abatement proceedings in supe- rior court, 299. on petition by ten taxpayers, 149. on petition for abatement of better- ment assessment, 696. on petition for abatement of tax, 293. Counsel Fee: on petition by ten taxpayers, 149. on petition for abatement, 300. County Commissioners: appeal to, from excessive better- ment, 697. appeal to, from excessive tax, 293. appointment of other persons, if assessors fail to act, 257. assessment of cost of relocation by, 705. decision of, on questions of fact final, 296. County Tax: amount of, 137. assessed with state and municipal taxes, 256. determination of, 143. reovery of, from town, 257. Coupons: receivable for taxes, when, 24. Covenants: against encumbrances, effect of as to taxes, 742. by lessee, to pay taxes, 234. Credit Unions: when exempt from taxation, 207. Curative Act: cannot validate void tax sale, 68. constitutionality of, 59, 65. Curtesy : when subject to inheritance tax, 615. Date: * of assessment of taxes, 237. Debt: arrest for tax not imprisonment for, 339. defined, 11. liability of, to inheritance tax, 617. situs of, 75. tax not a, 11. taxation of, 57, 192. Deceased Person: assessment of real estate of, 236. cannot be assessed, 246. collection from estate of, 344. income tax on estate of, 468. notice of sale of real estate of, 352. personal property of, where assessed, 243. petition for abatement of better- ment on, 695. settlement of income tax on estate of, 476. situs of property of, 78. Index 793 [Citations are to pages] Deceased persons — Continued: taxable as owner, when, 226. taxes preferred claim against, 748. December: omitted assessments in, 304. Declaration : in action by collector, form of, 767. in action to recover back better- ment, form of, 775. in action to recover back tax, form of, 771. Deductions: for corporation tax, see Corpora- tions, for income tax, see Income Tax. Deed of Land Sold for Taxes: contents of, 359. effect of mistake in, 360. form of, 415. must be acknowledged and recorded, 360. must be made to purchaser at sale, 360. provisions as to, 357. to a city or town, custody of, 365. form of, 417. recitals in, 364. when purchaser fails to pay, form of, 419. Deed of Reconveyance: by city or town when land is re- deemed, form of, 423. De Facto Officers: acts of, cannot be collaterally im- peached, 155, 396. Defects: in assessment, correction of, 65. in assessment, effect of, 271. in proceedings for sale, effect of, 347. Definitions : see Words and Phrases. Demand : for payment of tax, 330. for payment of tax, form of, 412. for tax on real estate, form of, 415. may be dispensed with, when, 332. mortgagee may require to be made to him, 352. owner may require at particular place, 352. Depletion : deduction for, 460. Deposit : required at tax sale, 354. Deposits: defined, 516. in banks, situs of, 77. in banks, when "securities," 541. in national banks, taxation of, 511. in savings banks, exempt from tax- ation, 518. taxation of interest on, 439. with state treasurer, assessment of. 181. Depreciation: deduction for, 460. Deputy Collectors: appointment of, 395. Description: of real estate in assessment, 275. of real estate in notice of sale, 353. Different Arrangement: what constitutes, 233. Direct Tax: defined, 13. Directory Provisions: non-compliance with does not make tax illegal, 405. Discharge: of person arrested for non-payment of tax, 339. Discontinuance: of improvement after assessment collected, 130. Discount: on inheritance tax, 635. on local taxes not permitted, 283. Discovery: of omitted property, what consti- tutes, 305. Discrimination : against aliens lawful, 32. against citizens of other states, 30. against foreign corporations permit- ted, 31. against goods from other states, 43. against national banks, 509. against non-residents in practice of assessors, 30. as affected by Fourteenth Amend- ment, 53. in excises, constitutionality of, 100. in practice, effect of, 54. 794 Taxation in Massachusetts Distress : collection of tax by, 335. constitutionality of, 66. denned, 335. detention, notice and sale, 336. not enforcement of lien, 335. notice of sale, on, form of, 413. of intangible property, 336. of stock or produce, to collect tax on land, 338. United States bonds may be seized on, 49. Distribution: of estate of deceased person, as sale. 457. by executors to themselves as trustees, 246. notice of, 244. what constitutes, 245. of tax among cities and towns, con- stitutionality of, 114. determination of amounts, 179. direction of, by mandamus, 411. of tax on corporations, 175. of tax on corporations, interest on, 179. of tax on foreign corporations, 176. of tax on incomes, 172. of tax on national bank stock, 512. of tax on public service companies, 178. of tax on street railway companies, 177. of tax on trust companies, 177. District: assessment of cost of improvement on, 116. special tax on, constitutionality of, 127. tax, assessment of, 164. tax, not a special assessment, 117. Dividend : distinguished from salary, 443. in liquidation, taxation of, 447. of non-resident, taxation of, uncon- stitutional, 97. of unincorporated association, tax- ation of, 443. on stock in foreign corporations, in- come tax on, 441. when income of taxpayer, 443. Division : of betterment, when land divided, 702. [Citations are to pages] Dog: excise on ownership of, valid, 12. Doing Business: defined, 490. Doing Business for Profit: defined, 550. Domestic Business Corporation: defined, 534. see also Corporations. Domicile: evidence of, 225. for purposes of income tax, 437. of beneficiary determines liability to income tax, 472. of corporation, 226. of partnership, 225. rules for determining, 221. taxpayer may lawfully change, 318. time of establishing as affecting in- come tax, 483. Dooming: by assessors, constitutionality of, 63. by assessors, in absence of list, 266. for purposes of income tax, 491. for purposes of inheritance tax, 654. Double Taxation: constitutionality of, 56. defined, 55. effect of, 57. exemption to prevent, 93. of dividends of foreign corporations avoided, 567. of intangible property, 73, 430. of trust property, 79. under inheritance tax acts, 83. Dower: when subject to inheritance tax, 614. Drainage: of swamps and wet lands, assess- ments for, 129, 727, 751, 753. Due Process of Law: defined, 52. Duty: defined, 103. of tonnage, defined, 23. on imports and exports, 21. Easement : considered as affecting value of land, 227. not extinguished by tax sale, 358. public, taxation of land subject to, 218. situs of, 70. Index 795 [Citations are to Pages] Educational Institution: exemption of, 200. Election : of assessors, 150. of collector, 150. Electric Light Companies: assessment of cost of regulating, 141. distribution of taxes on, 178. public use, 106. Electric Light Wires: assessment of cost of laying, 741. Electric Railroad Companies: returns of, 575. Emigration Agents: licensing of, 33. Eminent Domain: public use under, 102. taking by, under betterment laws, 667. Employee : denned, 490. Employer: furnishing of list of employees by, 64, 489. Encumbrances : covenants against, 742. Engaged in Business: denned, 550. Entirety, Tenancy by: application of inheritance tax to, 615. Entry, Writ of: not available unless possession taken, 377 Equal Protection of the Law: effect of requirement, 54. Equitable : defined, 717. Equity: bill in, see Bill in Equity. proceedings in, in tax matters, 408. redemption in, 383. removal of cloud upon title in, 385. suit in, intervention by collector in, 322. suit in, to collect tax, 343. Error, Omission or Informality: what constitutes, 391. Estate Tax: defined, 606. not a direct tax, 13. Estimate : of betterment assessment, 681. Estimated Receipts: deduction of, by assessors, 253. Estoppel: to contest validity of sale, 357. Evasion of Taxation: colorable transfer may be disre- garded, 49. formation of corporations for, 83. former practices, 429. Evidence of Indebtedness: defined, 491. Excess and Deficiency Account: origin and disposition of, 255. Excess Takings: constitutionality of, 111. Exchange : of intangible property, gain on, tax- able, 456. Excise : cannot be levied on privilege of ownership, 12. defined, 12. grading of, 100. limitations upon power to levy, 97. may apply to prohibited acts, 58. may apply to United States bonds. 49. may be enforced by injunction, 67. may be based on tax-exempt prop- erty, 13. may be enforced by lien, 68. may be graded according to value of property, 12. no formal act of assessment neces- sary, 59. on sales cannot be applied to im- ported goods, 22. reasonableness of, 99. taxes, during Revolution, 95. taxes, under Massachusetts consti- tution, 94. 84. territorial jurisdiction for levy of, what may be subject of, 58, 97. Executor : . bound to file inventory, 647. compensation of, liable to inherit- ance tax, when, 643. filing of list by, 260. foreign, liability for delivery of assets to, 634. 796 Taxation in Massachusetts Executor — Continued: liability of, for income tax, 468. liability of, for inheritance tax, 627, 644. liability of, for local tax, 246. liability of, for tax assessed before appointment, 243. provisions as to income tax, 475. return of bank stock held by, 180. situs of property in hands of, 78. See also Fiduciary. Exemptions : age, infirmity and poverty, 210. agreement for void, 216. assignability of, 28. associations of veterans, 203. bonds of state, 213. bonds of United States, 213. cemeteries, 206. charitable institutions, 197. children, 209. churches, 205. claim of, strictly construed, 19. clothing, furniture and tools, 210. constitutionality of, 194. constitutionality of, conditional, 94, 99. contract protected by constitution, 26. co-operative banks, 214, 521. credit unions, 207. forest lands, 214. fowls, 211. fraternal benefit societies, 204. fraternity houses, 196. from betterment assessments, 675. from distress, 335. from income tax, 467. from inheritance tax, 619. from street sprinkling assessments, 146. from taxation, history of, 193. horses and cattle, young, 211. horticultural societies, 203. household furniture, 210. illegal conduct bars, 194. intangible property otherwise taxed, 214. literary and educational institutions, 197. militia units, 203. municipal bonds, 213. municipal corporations, 218. national bank stock, 513. not granted by implication, 27. not violation of rights of town, 18. pension associations, 204. [Citations are to pages] Exemptions — Continued: personal property in other states, 210. power of legislature to grant, 91. presumption against, 194. property devoted to public use, 217. property of commonwealth, 196. property of United States, 196. property taxed on income, 214. public service companies, 218. railroad companies, 218, 740. reciprocal, of non-resident decedents, • 626. religious organizations, 205. repeal of, as breach of contract, 26. reserved right to alter, amend or repeal, 29. retirement associations, 204. savings deposits, 214, 516, 518. soldiers and sailors, 212. special statutes and charters, 215. stock in corporations, 215. unconstitutional, not a contract, 29. under colonial laws, 198. unincorporated associations, 214. veterans, 212. water companies, 207. women, 209. Expenses and Costs: of trial on abatement, what con- stitute, 300. Export: defined, 21. goods prepared for, when taxable, 22. tax on, forbidden states, 21. Express Company: taxable by unit system, 71. Fair Cash Value: defined, 267. of national bank stock, 510. Faith and Credit: obligation to give, to acts of other state, 31. Farm Products: marketing, held public use, 106. Farming Utensils: exemption of, 210. Federal Farm Loan Bonds: not taxable by state, 440. Federal Income Tax: construction of, as affecting state income tax, 434. return, basis of income tax on cor- porations, 545. Index 797 [Citations Federal Land Banks: bonds of not taxable by state, 440. Fees: disposition of, 329. for furnishing statement of liens, 334. for payment to collector, 377. for redemption do not carry interest 376. for summons, 332. of collector. 328. of land court, on foreclosure pro- ceedings, 382. -of sheriff collecting taxes, 393. on redemption from tax sale, 374. to be added to tax in case of taking, 366. Ferry: license fee, not duty of tonnage, 23. municipal, a public use, 105. Fiduciary: exemption of intangible property held by, 215. income tax returns by, 482. income tax upon, 437. personal liability for income tax, 494. remedy of, for excessive tax, 404. See also Administrator, Executor, Guardian and Trustee. Fifty Per Cent Penalty: imposition of, 287. Finance : commissioner of, election of, 151. county, 143. municipal, 159. state, 142. Fire: rebuilding after, not public use, 104. Fire District: taxation by, 162. Fixtures : not taxed as real estate, 191. Foreclosure : of tax titles, 379. petition for, 380. practice and procedure in, 380, 383. Foreign Corporations: defined, 535. See also Corporations. Forest Lands: classified, exemption of, 214. commutation tax, 427. are to pages] Forest Lands — Continued: .product tax, 427. taxation of, 426. Forfeiture: of goods used in evading tax, 66. of land for failure to enter on tax list, 63. Forms : appendix of, 760. in proceedings for collection, 412. of lists, to be furnished by assessors. 261. Fowls: domestic, exemption of, 211. Franchise: corporate, tax on, 574. corporate, tax on an excise, 14. grant of, not implied exemption from taxation, 27. may be subject of excise, 98. sale or lease of, as affecting exemp- tion, 28. situs of, 77. tax on, may apply to United States bonds, 49. to engage in interstate commerce taxable, 44. valuation of, 7k Fraternal Benefit Orders: exemption of, 204. Front Foot Rule: constitutionality of, 125, 126. in street sprinkling assessments, 145. Furniture: household, exemption of, 210. Future Interest: deposit or bond for payment of tax on, 642. payment of inheritance tax on, 640. valuation of, 636. Gas: supply of a public use, 106. Gas Companies: assessment of cost of regulation, 141. distribution of tax on, 178. Gas Pipes: assessment of cost of laying, 741. See also Pipes. General Benefits : defined, 672. 798 Taxation in Massachusetts [Citations are to pages] General Property Tax: denned, 11. Gift: in contemplation of death, liability to inheritance tax, 623. taxation of income from sale of, 457. when subject to inheritance tax, 615. Good Will: of corporations, taxation of, 544. Grand Army Post: exemption of property of, 203. not a public use, 108. Gratuities: not a public use, 107. Great Britain: money bills in, 101. Gross Income: defined, 458. Gross Receipts: as measure of tax, 37, 45. from interstate commerce, taxation of, 37, 45. tax on not a direct tax, 14. Guardians: provisions as to income tax, 475. return of bank stock by, 180. where taxed, 238. Gypsy Moths: assessment for exterminating, 732. Hall: for public meetings a public use, 104. Harbor Master's Fee: not a duty of tonnage, 23. Hearing: constitutional right to, 62. not necessarily in court, 62. on apportionment of public burdens not required, 115. on special assessment, right to, 128. what constitutes, 62, 128. Heirs of Deceased Person: assessment of real estate to, 228. demand for tax upon, 331. Highways: assessment for cost of, 706. compulsory work on, 10. public use, 104. Historical Landmarks: preservation of, a public use, 111. Holding Companies: liability to income tax, 445. Homes for Wage Earners: providing not a public use, 111. House of Representatives: tax acts originate in, 101. Household Furniture: exemption of, 210. valuation of, 269. Horses: young, exemption of, from taxation, 211. Horticultural Societies: exemption of, 203. Ice Plant: ~ municipal, held public use, 106. Immigrants: tax on, not an inspection fee, 22. Imports: can be taxed by state, when, 21. defined, 21. duties on, under province charter, 95. license fee for selling invalid, 35. Income: accruing after death of decedent, not liable to inheritance tax, 637. derived from property, what consti- tutes, 436. from investments outside the state, 71. includes gain from sale of capital assets, 455. inheritance tax not payable out of, 635. local tax chargeable to, 236. . net, of corporation, what constitutes, 545. of corporations, how taxable, 436. of corporations, rate of tax upon, 548. of foreign corporations, taxation of, 560. what constitutes, 434. Income Tax: abatement of, by commissioner, 494. accrual basis authorized, 465. allowance for dependents, 464. amendment to constitution author- ized, 433. appeal to Board of Appeal, 496. appeal to superior court, 498. Index 799 [Citations are to pages] Inoome Tax — Continued: applicable only to income, 434. application of commissioner to ap- point administrator, 747. assessment of persons who have filed returns, 491. assessment of persons who have not filed returns, 491 . basis for determining gain or loss on capital assets, 466. claim of exemption for beneficiary, 474. collection of, 493. complaint for refusal to abate, form of, 772. deduction for income attributable to capital, 463. deduction for interest on business debts, 461. deduction for loss and destruction of capital assets, 462. deduction for loss on bad debts, 462. deduction for taxes paid, 461. deduction from business income, 459. determination of business income, 458. direct tax or excise, 14, 431. distribution of capital not subject to, 446. distribution of proceeds, 172. dividends on stock in foreign cor- porations, 441. effect of partial unconstitutionality, 501. establishment of partners' exemp- tions, 478. estates held in trust, 470. estates of deceased persons, 468. exemptions from, 467. extension of time for filing returns, 486. fiduciary personally liable for, 494. fiduciary returns, 482. gains from sales of intangibles, 455. information at the source, 489. intangible personal property, 436. interest deduction, 447. interest from bonds, notes and other debts, 437. interest on overdue, 494. interstate commerce, income from subject to, 46. inventory, how taken, 466. limited by federal constitution, 434. loss of exemption by failure to re- turn income, 500. Income Tax — Continued: mandamus to compel filing of re- turn, 488. mortgage interest exempt from, 438. non-resident individuals, 85. non-resident trustees, 473. notice of, 450. notice of requirements of, 484. omitted assessment of, 492. omitted returns, 485. origin and purpose of, 428. partnerships, assessment of, 476. partnerships doing business outside the state, 479. partnerships, procedural provisions, 479. pawnbrokers, 438. penalties, 502. persons subject to, 436. privacy of returns, 488. professions, employments, trade or business, 451. property outside the state, 85. property received as income, 437. proportionality, requirement of, 91, 435. rate of, in discretion of legislature, 435. returns of income, 480. returns, preparation of, 484. rules and regulations of commis- sioner, 493. salaries of federal office holders, 433. savings deposits exempt from, 438, 439. school fund paid from, 664. securities held in pledge or on mar- gin, 446. settlement of taxes on fiduciary, 476. special, on corporations, 757. special, on individuals, 758. statutory remedies exclusive, 499. stock dividends, 442. supplementary returns, 485. territorial jurisdiction, 84. time as of when liability is fixed, 483. trust companies, on property held in trust, 475. unincorporated associations, 443, 457. uniformity required, 433. verification of returns, 486. Information: against corporation, 596. Inhabitant: defined, 221, 436. 800 Taxation in Massachusetts [Citations are to pages] Inheritance Tax: abatement of, for illegality, 651. alteration of determination of value, 650. application for repayment, 181. application for repayment, form of, 762. application of commissioner to ap- point administrator, 747. assessment and certification of, 651. chargeable to capital, 635. collection of, 656, 657. constitutionality of, 606. curtesy, application to, 615. deductions for other taxes and ex- penses, 637. delivery of assets to foreign execu- tor, 634. deposit or bond for payment on future interest, 642. determination of value, 649. discrimination against aliens, 32. dooming, on refusal of information, 654. dower, application to, 615. enforcement of lien on real estate, 656. examination on oath of persons having information, 653. excessive compensation of executor, 643. executor, administrator or trustee liable for, 644. exemptions from, 619. future interest, payment of, 631, 640. gifts in contemplation of death, 615, 623. history of, 605. insurance policies, 615. interest and discount, 635. inventory and appraisal, 647. jurisdiction of probate court, 654. legacy charged on real estate, 645. lien for, 633. non-resident decedents, 616. not direct tax, 13, 14. not retrospective, 660. papers not open to public inspection, 660. penalties, 660. persons liable for, 627. petition to probate court, form of, 773. powers of appointment, 621. probate accounts, not allowed until paid, 648. property subject to, 616. Inheritance Tax — Continued: provision for payment of not subject to, 646. reciprocal exemption of non-resident decedents, 626. repayment of illegal, 181. repayment of, on property returned, 646. sale of real estate for payment of, 647. settlement of, 642. shares in multi-state corporations, 625. situs for purpose of, 79. special additional, 759. subjects and rates, 608. survivorship, 615. time of payment, 627. transactions subject to, 613. United States bonds subject to, 49. valuation for purpose of, 636, 649. Injunction: against appropriation for illegal pur- pose, 148. against collection of tax, 408. against foreign corporation, 394. against non-resident, 394. against tax sale, 386. to enforce payment of excise, 67. Insane Asylum: exemption of, 198, 202. Insect Pests: assessments for exterminating, 732. Insolvent Estates: collection of taxes from, 344. of deceased persons, taxes preferred claim, 748. taxes preferred claim against, 749. Inspection Fee: amount of limited by cost of inspec- tion, 9, 22. distinguished from tax, 8. not a tax on imports, 22. tax may be called, 10. Inspection of Books and Papers: of corporations, 570, 591. of income taxpayers, 486. of insurance companies, 527. of taxpayers generally, 63. Insurance Companies: agents of, licensing, 33. assessment of taxes on, 528. collection of taxes on, 528. Index 801 [Citations are to pages] Insurance Companies — Continued: determination of amount of pre- miums tax, 526. foreign life, retaliatory tax on, 523. inspection of books of, 527. life, taxation of, 521. mutual, taxation of, 525. other than life, taxation of, 524. penalty for failure to file return, 527. returns by, 527. savings bank, taxation of, 520. situs of loans on policies, 76. tax on an excise, 14. taxation of, 84, 521, 742. Insurance, Contract of: defined, 525. Insurance Policy: dividends on not taxable, 442. inheritance tax on, 615. taxable as an annuity when, 451. Intangible Property: difficulties in taxation of, 429. gains from sale of, taxation of, 455. income from, not taxable as busi- ness income, 458. income from, taxation of, 436. seizure of, on distress, 336. situs of, 73. subject to taxation, 57. taxed on income not taxed as prop- erty, 214. transfer of, taxation of, 600. Interest: deduction of, from income tax, 447, 461. from bank deposits, taxable when, 439. from bonds, notes and other debts, income tax on, 437. on abated income tax, 497. on abated local tax, 300, 301. on betterment assessment, 700. on corporation taxes, 593. on corporation taxes, distribution of, 179. on fees for redemption, 376. on income tax, 494. on inheritance tax, 635. on insurance company tax, 528. on local property tax, 282. on national bank stock tax, 511. on state bonds, deduction of taxes from, 24. requirement of constitutional, 66. to purchaser at invalid sale, 360. Interpleader, Bill of: between two towns will not lie, 409. Interstate Commerce: agency for, 36. branch store, 36. bridge used for, 43. cab service, 33. canal toll, 34. consolidated corporation, 37. dealers, 35. domestic corporations, 36. exchange brokers, 33. foreign corporations, 38. franchise tax measured by capital stock, 27. franchise to engage in, 44. goods brought in from another state, 43. goods in transit, 44. goods prepared for export, 44. gross receipts, 37. income derived from, 46. insurance agents, 33. license for, 35. local business distinguished from, 39. local business interwoven with, 42. log boom charge, 34. motor vehicle license, 34. not imports or exports, 21. passengers, 35. peddlers, 35. privilege of, 33, 38. property used in, 43. quarantine fee, 36. receipts derived from, 37, 45. stock transfer, 33. taxation of, 33. telegraph pole fee, 34. travelling salesmen, 35 . vessels used for, 43. wharfage fee, 34. what constitutes, 33. Intoxicating Liquors : taxable as property, 190, See also Liquor, Intoxicating. Inventory: filing of, for inheritance tax, 647. taking of, for income tax, 466. to be sent to commissioner by regis- ter, 750. Joint Owners: assessment and collection of taxes on, 366. personal property of, where taxed, 246. 802 Taxation in Massachusetts [Citations are to pages] Joint Tenancy: inheritance tax on r urvivorship, 615. lien for taxes paid, 391. Judiciary : cannot levy taxes, 15. Jury Trial: no right to, on general tax, 62. no right to, on special assessment, 128. on proceeding for foreclosure of tax title, 382. Laborers : on public works, regulation of wages and hours of, 107. Laches : bars petition for certiorari, 688. bars ten taxpayers' petition, 149. Land Court: foreclosure of tax title in, 379, 747. Lease : provisions for taxes in, 233. Legacy Tax: defined, 606. Legislature: has power of taxation, 15. Lessee : contribution to betterment assess- ment, 697. liable for tax, when, 227. of corporation liable for tax, 594. Lessor : obligation of, to pay tax, 234. Levy: time of making, 331. without demand, authorized when, 332. License : cannot be required for selling goods from other state, 35. may be taxation or regulation, 7. payment of tax not, 8. Lien: for betterment assessments, 684. for betterment assessments, duration of, 699. for betterment assessments, encum- brance, 745. for cost of abating nuisance, 129. for inheritance tax, 633. for inheritance tax, enforcement of, 656. Lien — Continued: for re-assessed betterment, 703. for re-assessed tax, 307. for sewer assessments, 724. for sidewalk assessments, 724. for taxes as encumbrance, 743. for taxes, extent and duration of, 349. for taxes, may be assigned, 17. of co-tenants, 391. of person paying tax not assessed to him, 372. on land itself, 350. on national bank stock, 511. statement of, by collector, 334. to enforce excise, constitutional, 68. to enforce tax, constitutional, 67. Life Estate: valuation of, for inheritance tax, 636. Life Insurance Company: defined, 522. See also Insurance Companies. Life Tenant: cannot acquire tax title, 357. obligation of, to pay taxes, 235. Lighting of Streets: constitutes a public use, 104. Like Exemption : denned, 627. Limitations : to action by collector, 342. to action to recover back a tax, 400. to petition for abatement of better- ment, 692, 693, 694. to petition for abatement of corpora- tion tax, 573, 583, 593, 596. to petition for abatement of income tax, 495, 496, 498. to petition for abatement of in- heritance tax, 651. to petition for abatement of local tax, 282, 293, 297. Liquor, Intoxicating: excise on removal of a property tax, 12. license, whether a tax or regula- tion, 7. tax on sale, not necessarily license to sell, 8. taxable as property, 190. List of Taxable Property: constitutionality of dooming on fail- ure to file, 63. Index 803 [Citations are to pages] List of Taxable Property— Continued: effect of failure to file, 287. forms to be furnished by assessors, 261. must be on commissioner's forms, 290. necessity of, for abatement by as- sessors, 287. necessity of, for abatement by county commissioners, 296. not open to public inspection, 262. notice to bring in, 258. of corporation, 292. of national bank, 512. of property in storage warehouse, 263. penalty for filing false, 318. reasonable excuse for failure to file, 266. to be taken as true, 264. verification of, by oath of taxpayer, 261. what constitutes, 260. wilful omission by charitable insti- tution, 197, 202. Literary Institution: defined, 199. Local Benefits: defined, 672. Local Business: distinguished from interstate com- merce, 39. Log Boom: charge for use of not tax, 5, 34. Machinery: assessed separate from buildings, 243. certain, formerly exempt, 195. employed in manufacture, what con- stitutes, 242. in. other states not taxable, 210. not taxed as real estate, 277. taxation of, as personal property, 191. value of, deductions in corporation taxes, 539, 557. where taxed, 241. Majority: assessors may act by, 154. Mandamus : in tax matters generally, 409. to compel abatement of tax, 298. to compel acceptance of tax, 410. to compel assessment of tax, 26, 410. Mandamus — Continued: to compel filing of income tax re- turn, 488. to compel proper distribution of tax, 411. to prevent expenditure for illegal purpose, 150. Margin : stocks held on, how taxed, 446. Market House: constitutes a public use, 104. Market Value: meaning of, 267. Massachusetts Bay Company: charter of, 86. Massachusetts, Commonwealth of: see Commonwealth. Massachusetts, Constitution of: see Constitution. Massachusetts Hospital Life Insurance Co: deposits in exempt from income tax, 438. taxation of, 520. Meadows: compulsory joint drainage of, 129, 751. Memorial: war, a public use, 108. Merchandise : imported, taxation of, 43. in other states, not taxable, 210. in transit, taxation of, 44. prepared for export, taxation of, 44. Military Duty: assessors to enroll persons subject to, 142. Militia Unit: exempt from taxation, 203. Mill Privilege: taxation of, 191. Ministerial Fund: taxation of, 226, 230. Minor: domicile of, 223. exemption of, 209. obligation as to income tax, 437. See also Guardian. 804 Taxation in Massachusetts [Citations Misnomer: does not invalidate assessment, 332. does not invalidate betterment, 692. does not invalidate tax deed, 359. does not violate constitutional rights, 59. Mistake : effect of, in tax sale, 348. of name, see Misnomer, payment of taxes by, 373. Mobilia Sequuntur Personam: principle of, as applied to taxation, 71, 237. Money: ■ at interest, taxation of, 192, 437. constitutes tangible personal prop- erty, 73. of non-residents not taxable, 189. tax must be paid in, 323. Money Bill: what constitutes, 100. Moneyed Capital : what constitutes, 508. Money's Worth: what constitutes, 615. Mortgage : conditions in, as to payment of taxes, 369. extinguished by tax sale, 350. held by savings bank, deducted from franchise tax, 516. interest on, subject to income tax when, 438, 440. of building, taxable as real estate, 190. of personal property, taxation of, 250. of real estate, taxation of, 226, 230, 231, 232. situs of, 75, 81. value of, deducted in inheritance tax, 618. value of, deducted under corpora- tion tax, 540, 542. Mortgage Bonds: taxation of interest on, 438, 440. Mortgaged Land: taxation of, 226, 230, 231, 232. Mortgagee : cannot acquire tax title, 357. deemed joint owner with mortgagor 252. are to pages] Mortgagee — Continued: may file statement of amount of mortgage, 263. may pay tax and add to mortgage, 368. may require demand to be made on him, 352. receipt by collector to, form of, 424. rights of, against mortgagor, 368. rights of successive, 370. Mortgagor: cannot acquire tax title, 357. deemed joint owner with mortgagee, 232. may file statement of amount of mortgage, 263. rights of, against mortgagee, 368. Moths, Gypsy and Brown Tail: assessments for exterminating, 732. Motor Vehicle Fee: not tax on interstate commerce, 34. Mulct Tax: constitutionality of, 10. Multi-state Corporation: liability of shares in, to inheritance tax, 625. situs of shares of, 82. Municipal Bonds: exemption of from taxation, 213. exemption of income from taxation, 438. of municipalities in other states tax- able, 31. of municipalities in territories not taxable, 49. Municipal Corporation: abolition of, to escape debts, 26. apportionment of burdens among, 114. assessment on, of cost of regulating public service enterprises, 141. assessment on, of expense of audit- ing accounts, 162. authority to levy taxes limited to specified purposes, 112, bequests to, exempt from inheritance tax, 620. cannot be wholly deprived of taxing power, 18. cannot complain of change in tax laws, 69. change of name of, as affecting notice of sale, 353. Index 805 [Citations are to pages] Municipal Corporation — Continued: collection of taxes on land held by, 373. distribution of taxes to, 114. exemption of property of, 218. grant of taxing power to, not a con- tract, 18. implied grant of power of taxation to, 17. judgment against, may be enforced against inhabitants, 410. land bought by, at tax sale, dis- position of, 386. liability of, in action to recover back tax, 401. management of lands bought by, 365. may be given power of taxation, 17. may determine whether to sell or take, 393. may invest idle funds, 107. may rent property not needed, 106. not liable for acts of assessors or collector, 408. payment in lieu of taxes by, 218. power of taxation not inherent in, 17. private and proprietary rights of, 115. reimbursement of, for loss of taxes on public institutions, 171. repeal of betterment act violates no rights of, 124. required to levy tax to pay debts, 25. revenue of, 137. rights of local self-government, 115. sale of lands held by, 388. support of state institutions by, 114. taking of land by, for non-payment of taxes, 365. to purchase at tax sale, when, 363. to receive commission for collecting national bank stock tax, 513. Name: mistake in, see Misnomer of tax not controlling, 4. National Bank: collection of tax on, 511. establishment of exemption of stock- holders, 514. interest in savings departments tax- able, 439. in what place taxable, 510. petition for abatement by, 511. protected from discriminatory tax- ation, 509. National Bank — Continued: return by fiduciary or partnership holding stock in, 180. shares in, held by non-residents, omitted from valuation, 252. shares in, not subject to district taxes, 163. shares in, of charitable institutions, exemption of, 515. shares in, of savings banks, exemp- tion of, 514. shares in, taxation of, 505. shares in, valuation of, 510. taxation of deposits in, 511. taxation of real estate of, 511. Natural Right: excessive tax upon, validity of, 8. not a commodity subject to excise, 97. Necessities of Life: furnishing of, as public use, 111. Necessity: of improvement, no right to a hear- ing on, 129. Negligence : assessors not liable for, 316. of assessors or collector, munici- pality not liable for, 408. Net Income: defined, 545. Newspaper: publication in, what constitutes, 320. Non-Resident: application of inheritance tax to, 616, bound to bring in list of taxable property, 289. collection of taxes on, 86. demand for tax upon, 331. discrimination against, in income taxes, 85. discrimination against, what consti- tutes, 30. intangible, property of not taxable, 189. liable to arrest for non-payment of taxes, 339. may contest liability in federal court, 499. not subject to income tax, 454. purchasing tax title to appoint agent, 362. restrained from doing business until tax is paid, 394. • trustee, taxation of, 473. valuation of estate of, 638. 806 Taxation in Massachusetts [Citations are to pages] Notary Public: may administer oath as to truth of list, 261. Note, Promissory: situs of, for taxation, 75. taxation of interest on, 437. Notice: of assessment, a constitutional right, 60. of decision on abatement, 293. of distribution of estate, 244. of filing income tax returns, 484. of foreclosure of tax title, 380. of intention to take real estate, form of, 420. of petition for foreclosure, recording of, 382. of poll tax not required, 188. of request for apportionment, 310. of sale of distrained property, form of, 413. of sale of real estate, form of, 415. of sale of real estate, inaccuracy in, 353. of sewer assessment, 710. of tax, sending out of, 323. personal, not required, 61. to commissioner of abatement of tax on corporation, 303. to taxpayers to bring in list, 258. what constitutes constitutional, 60. when tax not dependent on valu- ation not required, 61. when tax title is deemed invalid, form of, 425. Nuisance : compulsorv abatement of not a tax, 24. Oath: of assessors, 156. of assessors to truth of valuation, 279. of poor debtor, by person arrested, 339. to truth of list, how administered, 261. to truth of list, mandatory, 262. Obsolescence: deduction for, 460. Occupant: real estate may be assessed to, 227. Offer of Surrender: by purchaser at invalid sale, 767. land assessed for betterment, 682. Oleomargarine: tax on, constitutionality of, 8. tax on, not a direct tax, 14. Omitted Assessment: action to recover back, 404. constitutionality of, 65. of corporation tax, 571. of income tax, 485, 492. of local tax, 304. Ordinance: may provide additional methods of collection, 322. Original Package: taxation of goods in, 43. taxation of sale of goods in, 35. when opened may be taxed, 21. Overlay: in assessment authorized, 255. Owner: defined, 227, 356. liable for tax on leased land, 235. naming of one, sufficient, 366. unknown, taxation of land to, 227. Papers: of deceased collector, to be returned, 325. private, right to inspect, 63. right to inspect for income tax, 486. right to inspect for inheritance tax, 653. right to inspect for tax on cor- porations, 591. relating to inheritance tax to be private, 660. Parcels, Separate: must be separately assessed, 276. must be separately sold, 350. must be separately valued, 276. Park: betterment may be levied for, 122. building may be constructed in, 131. Parsonage: not exempt from taxation, 205. Partnership : cannot be subject of excise, 97. dissolution of, 249. distinguished from trust, 249. domicile of, 225. establishment of partners' exemp- tions, 478. foreign, taxation of resident part' ners, 479. Index 807 Partnership — Continued: income tax on, 476. penalties for failure to comply with income tax law, 503. personal property of, taxation of, 248. procedural provisions as to income tax, 479. remedy of, for excessive tax, 404. return of bank stock by, 180. ships and vessels of, taxation of, 248. with transferable shares, taxation of, 443. See also Unincorporated Associa- tion. 4 Passengers: from foreign countries not taxable by state, 36. Patents: taxation bf, by state, 51. Paupers : support of, a public use, 104. Pawnbrokers: taxation of income of, 441. Payment : by purchaser at tax sale, time of, 360. of part of tax, authorized, 333. of taxes by mistake, 373. of taxes by mortgagee, 368. of taxes by mortgagor, 368. of taxes by person other than owner, 370. of taxes, evidence of, 399. of taxes, prerequisite to abatement by court, 299. of taxes under protest, effect of, 406. to collector, redemption by, 377. to purchaser at* tax sale, effect of, 375. Peddler: itinerant, taxable by state, 35. Penalty : fifty per cent for failure to bring in list, 287. for collecting excessive charge for redemption, 412. for disclosure of information by in- come tax officers, 502. for evasion of taxation, 318. for failure by assessor to keep books, 319. for failure by collector to pay over taxes, 412. [Citations are to pages] Penalty — Continued: for failure to file income tax return, 502. for failure to file return of bank stock, 180. for false entry on tax list, 165. for false valuation by assessor, 156. 318. for false return by corporation, 573. for false valuation by assessor, 156. for fraudulent income tax return, 502. for neglect by assessor to assess taxes, 319. for non-payment of tax, constitu- tionality of, 66. for refusal by collector to exhibit accounts, 412. for refusal to aid collector, 412. for refusal to deposit collector's records, 412. for refusal to give information to assessors, 318. for refusal to surrender collector's records, 412. for unlawful agreement with asses- sors, 318. on corporation, for failing to file return, 571, 573, 599. on insurance company, for failure to file return, 527. on partnership, with respect to in- come tax, 503. recovery of, with respect to inherit- ance tax, 660. Pensions: constitutionality of grant of, 108. exemption of certain, from taxation, 142. taxable as annuities, 451. Personal Property: intangible, situs of, 75. mortgaged or pledged, taxation of, 250. of deceased persons, where taxed, 243. of joint owners, where taxed, 246. of partnerships, where taxed, 248. subject to taxation, 171. tangible, situs of, 71. where and to whom assessed, 237. Petition : for abatement of corporation tax, form of, 773. for abatement of income tax, form. of, 772. 808 Taxation in Massachusetts Petition — Continued: for abatement of local tax, form of, 765. for certiorari to quash betterment, form of, 774. for repayment of illegal corporation or inheritance tax, form of, 762. to probate court, to determine in- heritance tax, form of, 773. to restrain illegal expenditure, form of, 761. to superior court, for abatement of betterment, form of, 776. Pilotage Fee: not duty of tonnage, 23. not tax on imports, 22. Pipes: taxation of, 246. value of, deducted from corporation tax, 539, 578. Place : meaning of, 248, 507. Place of Business: meaning of, 248. Plan: of land to be assessed for better- ment, 681. Pledge : of personal property, taxation of, 250. of securities, effect of, for income tax, 446. Poles: fee for maintenance in street not a tax, 5, 34. taxation of, 246. value of, deducted from corporation tax, 539, 578. Police Power : assessments under, 120, 129. distinguished from taxation, 6. Poll Tax: assessment of, 186. collection of, 324. imprisonment for non-payment of limited, 338. place of assessment of, 220. war bonus, 187. Poor: relief of, a public use, 104. Poor Debtor's Oath: taking of, by person arrested, 339. [Citations are to pages] Possession: of real estate, sufficient to base tax, 229. under tax sale limited, 358. Postal Savings Bank: interest on deposits not taxable, 439. Posting of Notice: of sale of land, 352. Poverty : as ground for exemption, 210. Power of Appointment: exercise of, subject to inheritance tax, 621. Practice : evidence of, in construing statutes, 20. in abatement proceedings, 298. in certiorari, 687. Preference: tax entitled to in bankruptcy, 344. Principal : distinguished from income, 434. special assessment to be paid from, 698. tax not to be paid from, 236. Privacy: of income tax returns, 488. of inheritance tax papers, 660. of returns of domestic business cor- porations, 553. of returns of public service com- panies, 577. Private Ways: assessment of cost of, 120, 707. Probate Court: jurisdiction of, over inheritance taxes, 654. petition to determine inheritance tax, form of, 773. register of, to send inventories to commissioner, 750. Procedural Rights: under constitution, 58, 60. Profits: accumulated, distribution of tax- able, 446. from sale of intangibles, how deter- mined, 483. from sale of intangibles, taxation of, 455. Index 809 [Citations are to pages] Prohibition : under guise of taxation, 7. Property: assessment of average amount, 44. income from, what constitutes, 435. ownership of cannot be subject of excise, 98. what, may be subject to taxation, 57, 188. Proportional Taxation: as affected by income tax, 435. as affecting exemptions, 91. as applied to special assessments, 126. does not require uniformity through- out state, 91. meaning of, 90. under Massachusetts constitution, 89. under Province charter, 87. . Protest, Payment under: not required as prerequisite to abatement, 300, 408. prerequisite to- action to reover back tax, 406. Province Laws: abatement under, 288. assessment under, 184 assessors under, 152. collector under, 152. excises under, 95. exemptions under, 194. valuation under, 87. Public Building: constitutes a public use, 104. Public Institution: reimbursement for loss of taxes on, 171. Public Records: requirements as to, 663. Public Schools: only schools which towns may aid, 110. Public Service Companies: exemption of property of, 218. franchise tax on, 574. may be assessed cost of supervi- sion. 9. Public Stocks: defined, 193. Public Use: academy, 110. Public Use — Continued: almshouse, 104. bounties, when, 108. church not, 110. college, 110. conservation of natural resources, 111. court house, 103. defined, 103. electric light plant, 106. excess takings, 111. extra compensation to contractor, 109. ferry, 105. fire, rebuilding after, not, 104. G. A. R. post not, 108. gas plant, 106. gifts not, 107. hall for public meetings, 104. highway, 104. historical landmarks, 111. homes for wage earners, 111. ice plant, 106. joined with private use, 103. lighting of street, 104. manufacturing enterprise not, 106. market house, 104, 106. marketing farm products, 106. motive may be inquired into, 104. necessities of life, sale of, 106, 111. paupers, relief of, 104. pensions, grant of, 108. railroad, 105 relief of poor, 104. religious society not, 110. salary to dependents of deceased employee, 109. special assessments, requirement of, 120. state house, 103. street railway, 105. subway, 105. taxes can be levied only for, 101. town clock, 104. town hall, 103. war memorial, 108. water supply, 106. when pretext, tax invalid, 103. Public Utilities: assessment of expenses of, 141. department of, 141. Public Ways: assessment of cost of laying out, 706. assessment of cost of relocating, 705. Publication : defined, 320. 810 Taxation in Massachusetts Publication — Continued: notice of assessment by, constitu- tionality of, 61. of notice of foreclosure, 380. of notice of sale, 352. Purchase: by city or town, of land sold for taxes, 363. defined, 456. for full consideration, defined, 615. Purchaser : cannot require reimbursement for unpaid taxes, 371. concealment by, effect of, 375. defined, 361. remedy of, in case of overvaluation, 405. Purpose: of statute, materiality of, 7. of tax, may be inquired into, 104. Quarantine Fee: not a duty of tonnage, 23. not a tonnage tax, 24. validity of, 36. Quitclaim Deed: vendor not bound to pay tax, 744. Railroad Companies: acceptance of charter by, a contract, 27. constitute a public use, 105. debt of town for, to be met by tax, 162. distribution of tax on, 178. exemption of property of, 218, 740. returns of, 575. rolling stock of, taxation of, 72. station of may be ground of special assessment, 120. taxation of, 574. taxation of, by unit system, 70. transcontinental, taxation of, 51. Rate of Taxation: determination of, 253. for use of sewers, 714. limit of local, 159. of 'bank stock, 505. of corporate excess, 548. of corporate franchise, 582. of corporate income, 548. of income from business, 451. of income from dividends and in- terest, 436. of income from sale of securities, 455. [Citations are to pages] Rate of Taxation — Continued: of inheritance tax, 608. of insurance companies, 521, 523, 524. of public service companies, 582. of savings banks, 515. of trust companies, 582. Real Estate: apportionment of taxes on, 309. collection of tax on by action at law, 343. collection of tax on by sale, 346. description of in valuation list, 275. of deceased person, assessment of, 236. separate lots separately assessed, 229. separate valuation of, 275. situs of, for inheritance tax, 80. situs of, for property tax, 70. valuation of, 268. value of, deducted from corporate franchise, 539, 578. what constitutes, 190. where and to whom assessed, 226. Real Estate Trust: liability of to income tax, 444. shares in, situs of, 80. Reasonableness : of excise, 99. of tax, required when, 8. Reasonable Excuse: for dela3% what constitutes, 290. Re-Assessment : of special assessment, 124, 703. of taxes, 306. of taxes, as affecting covenant against incumbrances, 744, 747. of taxes, as affecting lien, 350. of taxes, constitutionality of, 65. upon notice from collector as to in- validity, 391. Receipt: by collector to mortgagee, form of, 424. Receipts : derived from interstate commerce. how taxable, 45. gross, tax on not direct, 14. of boxing matches, tax on, 737. Receiver: tax preferred claim against, 345, 749. taxable on income, when, 476. taxation of, 239. Index 811 [Citations are to pages] Recitals: in deed to town, 364. in tax deed, prima facie evidence, 358. Record Owner: taxable for land, 228. Redemption : barring of, by decree of court, 381. by leave of court, 381. by payment to collector, 377. by person having partial interest, 372. cannot be treated as purchase, 376. certificate of, by payment to collec- tor, form of, 768. effect of change of law concerning, 68. from tax sale, 374. in case of non-resident purchaser, 363. in case of sale of land, 376. in equity, 383. penalty for charging excessive fees, 412. Refund : of inheritance tax, on property re- turned, 646. of stock transfer tax, 604. Register of Deeds: noting of instruments affecting tax deeds, 144. to notify commissioner of declara- tion of trust, 144. Registration Tax: on bonds unconstitutional, 97, 431. Registry of Deeds: betterment estimate to be recorded in, 681. defined, 320. Regular Employees: defined, 490. Regulation : distinguished from taxation, 6. Reimbursement : of purchaser at invalid sale, 360. Religious Institutions: exemption of, 93, 204. taxable for ministerial funds, 226, 230. Remainderman : payment of taxes by, 372. Remedies : for taxes illegally assessed, 400. Rent: for maintaining structures in street not a tax, 5. not taxable as business income, 453. owner may add portions of better- ment to, 697. tenant may deduct taxes from, 233. Repeal : of exemption in general laws not breach of contract, 27. of special assessment violates no right of town, 124. Replevin : of goods illegally distrained, 337. Reports: annual, of commissioner, 182. Reserve Fund: disposition of, 255. Reservoir: compensating, taxation of, 220. Residence: defined, 222. See also Domicile Retaliatory Provisions : in inheritance tax, 626. in tax on foreign life insurance com- panies, 523. Retirement System: exemption of, 142, 204. Retroactive Statute: inheritance tax not, 660. may authorize special assessment, 124. may provide for collection of taxes, 68. validity of, 64. Retroactive Tax: validity of, 64. Return Day: on petition for foreclosure of tax title, 380. Returns: destruction of, authorized, 182. of bank stock by fiduciaries, 180. of corporations, effect of failure to file, 571. of domestic business corporations, 551. of employees' salaries, 489. 812 Taxation in Massachusetts [Citations are to pages] Returns — Continued: of foreign corporations, 565. of income, by individual, 480. extension of time for filing, 486. mandamus to compel filing of, 488. omitted and supplementary, 485 penalty for failure to file, 502. prepared by commissioner, 484. of insurance companies, 527. of public service companies, 574. of savings banks, of amount of de- posits, 517. of taxable property, see Lists of trust companies, 574. privacy of, 488. taxpayer may be compelled to file, 63. verification of, 486. Revenue in the Nature of Rent: defined, 220. Revenue Stamps : taxation of, 48. Revision of Valuation: of taxable property, 306. Reward, Unstipulated: may be paid with public funds, when, 107. Rights: income from sale of, taxable, 456. Road Tax: constitutionality of, 10. Rules and Regulations : for corporation tax, 572. for income tax, 493. Salary: of assessors, 317. of assessors subject to trustee proc- ess when, 317. of collector, 329. of deceased employee, payment of, 109. of United States officer cannot be taxed by state, 49. Sale of assets of corporation fraudulent, when, 595. of commodity by town not a tax, 4. of goods distrained, 337. of intangible property, profit from, taxation of, 455. Sale of Land for Non-payment of Taxes: adjournment of, 355. cannot be based on invalid tax, 349. cannot be made for more than due, 356. cannot include taxes on other par- cels, 350. conduct of, 354. conveys a paramount title, 67, 350, 355. estoppel to contest validity of, 357. exessiveness of tax does not invali date, 349. invalid, bill to set aside, 385. invalid, reimbursement of purchaser at, 360. of parcels of small value, 365. origin and history of, 321, 346. publication and posting of notice of, 352. right of possession under, 356. title conveyed by, 358. to city or town when no one bids, 363. to city or town when purchaser fails to pay, 363. to non-resident, 362. to person assessed operates as pay- ment, 357. void, if excessive fees charged, 329. Sales Tax: not a direct tax, 13. Sanitarium : exemption of, from taxation, 202. Savings Bank Insurance: taxation of, 520. Savings Banks: deposits in, exempt from income tax, 438, 439. deposits in, exempt from local tax, 214, 518. effect of incapacity to do business, 519. franchise tax, portions of deposits exempt from, 516. national bank stock held by, ex- emption of, 514. returns of amount of deposits, 517. taxation of, 515. Savings Departments: see Trust Companies School Fund: establishment of, 664. Index 813 [Citations are to pages] Schools: aid of with public funds, 110. exemption of, 197. Seal: not required on collector's warrant, 281. Secondary Allocation : of bank stock tax, 181. Securities : defined, 541. non-taxable, deducted from corpo- rate excess, 541. United States, not taxable by state, 48. • Selectmen: act as assessors, when, 151. may be chosen collector, 151. notify assessors of approval of col- lector's bond, 151. Separate Parcel: valuation of, 276. what constitutes, 350. Service : defined, 320. of demand and notice, fee for, 328. of process against foreign corpora- tions, 395. of process not required in abatement appeal, 298. Set-off : of benefits compared with special assessment, 673. of money due person owing tax, 395. of taxes against claim for reimburse- ment, 362. Settlement: of betterment assessments, 667. of inheritance tax, 640. Sewage Disposal Plant: payment in lieu of taxes on, 218. Sewer Assessment : annual charge for use of sewer, 716. annual charge for use of sewer not cl l>cLX. O. constitutionality of, 122. determination of method, 717. extension of time for paying, 718. fee for use of sewers, 718. for maintenance of sewers, 122. for particular sewers, 719. for sewerage system, 714. in city of Boston, 711. Sewer Assessment — Continued: levy of, 709. lien for, 724. notice of, 710. on land abutting on more than one way, 718. payment for, privilege of sewer, 717. payment of part of cost by town, 719. time of levy, 710. under administrative provisions of betterment laws, 726. when sewer built by landowner, 719. Sheriff: collector may issue warrant to, 340. fees of, for collecting taxes, 393. to post list and warrant, 393. Ships : see Vessels Shortage : of collector, liability for, 326. Sidewalk Assessments: constitutionality of, 122, 130. for cost of removing snow, 727. in city of Boston, 722. levy of, 720. lien for, 724. under administrative provisions of betterment law, 726. Since Deceased: defined, 469. Situs : business, defined, 76. for excises, 84. for income taxes, 84. for inheritance taxes, 80. of capital employed in business, 74. of debt, 75, 82. of easement, 70. of franchise, 77. of intangible personal property, 73. of interstate line, 70. of loans on insurance policies, 76. of mill site, 70. of mortgage, 76, 81. of property generally, 69. of property of deceased person, 78, 81. of property subject to power of appointment. 83. of property used in several states, 72. of railroad rolling stock, 72. of real estate, 70, 80. 814 Taxation in Massachusetts [Citations Situs — Continued: of securities, 74, 81. of stock in corporations, 76, 81, 82. of stock in real estate trusts, 80. of tangible personal property, 71. of trust property, 78. of vessels, 72. property having, in other state not taxable, 41. state cannot establish, so as to affect other states, 31. Sixteenth Amendment : effect of, 14. Snow: assessment of cost of removal, 727. requiring abutters to remove, 129. Soldiers and Sailors: exemptions of, 212. Sources of Taxable Income: return of, 485. Special Assessments and Betterments: abatement of, petition for, 692. abatement of, petition for, by estate of deceased person, 695. abatement of, right of, as affecting constitutionality, 127. action to recover back, 689. action to recover back, form of declaration, 775. appeal to county commissioners; 697. appeal to superior court, 693. appeal to superior court, form of, 776. apportionment of, 700. apportionment of public burdens not, 114. assessment of, 669. assessment of, by appointive officers valid, 17. benefit assessable, 672. benefit must not be exceeded, 124, 679. by area or frontage, constitutionality of, 125. certiorari to quash, 687. certiorari to quash, form of petition. 774. collection of, 684. completed work, mav be authorized for, 124. constitutionality of, 119. cost of improvement limits, 123. covenants as to "taxes" applicable, when, 119. defined, 11. delegation of power to levy, 691. are to pages] Special Assessments and Betterments — Continued: determination of district by legis- lature, 127. disproportionate, invalid, 127. distinguished from set-off of bene- fits, 673. encumbrance from, 745. exemption from, 675. exemption from in charter, 217. exemption from, of cemeteries, 207. extension of time for filing petition for abatement, 693. for abatement of nuisances, 129. for drainage of wet lands,- 122, 727, 751. for exterminating insect pests, 732. for gas pipes and electric wires, 741. for laying out, altering or discon- tinuing public ways, 706. for private ways, 120, 707. for relocating public ways, 705. for reconstructing public works, 123. for removal of snow from sidewalks, 129, 727. for roads to swamps and quarries, 753. for sewer construction, 122, 709. for sewer maintenance, 122. for sidewalks, 122, 130, 720. for stations for railroads, 120, 122. for street watering, 122. general benefit cannot be basis of, 122, 123. hearing, right to, 128. improvement must be local, 121. in city of Boston, 680. interest upon unpaid, 700. irregularity invalidating, 690. jury trial, no right to, 128. lessee to contribute to, 697. lien for, duration of, 699. limited to actual cost, 678. may be levied years after comple- tion, 124. necessity of improvement not open, 129. on street railway for widening street, 740. order assessing, form of, 774. origin and development of, 116. part of cost may be subject of, 123. payment gives no right to have im- provement maintained, 122, 130. plan and estimate, 681. procedure in superior court, 696. Index 815 Special Assessments and Betterments — Continued: proportional to benefit valid when, 125. provisions of General Laws exclu- sive, 704. rate of, no right to hearing on, 129. reassessment of, 124, 703. remedies for 'excessive or illegal, 686. repeal of, violates no rights of town, 124. requirements for valid, 120. rights of owner of land assessed, 130. separate elements of improvement, 679. settlement and assumption of, 667. subsequent division of land assessed, 702. surrender of estate assessed, 682. though main object public benefit, 123. time of levy, 676. under police power, 120, 129. use must be public, 120. Special Benefits: defined, 672. Special Collector: appointment of, 328. Special Taxes: for temporary purposes, enumerated, 756. Spirit of Law: tax cannot be based on, 18. Stamp Tax: on bank notes, 48. on bills of exchange, 22. on bills of lading, 22. on sale by non-resident, 84. on sale of stock not a direct tax, 14. on stock transfers, 600. State Aid: for public schools, 664. State Tax: amount of, 135. apportionment of, 167. assessed with county and town taxes, 256. collection of, from towns, 257. Senate may institute inquiry con- cerning, 101. warrant for assessment of, 251. State Treasurer: assessment of deposits with, 181. formerly tax commissioner, 140. [Citations are to pages] State Treasurer — Continued: to adjust national bank stock credits, 513. to issue warrant for assessment of state tax, 251. Statement : of amount secured by mortgage, 263. of purchaser's residence, 362. Statute: construction of certain words in, 139. construed as exercise of valid power, if possible, 7. construed to require notice, 60. practical construction of, importance of, 20. tax, construction of, 19. tax, to be construed as part of sys- tem, 320. Stock: exemption of, from local taxation, 215. liability to seizure on distress, 336. of national banks, taxation of, 505. situs of, 76. valuation of, 536. Stock Dividends: taxation of, 442. Stock Exchange: membership in, taxation of, 57. Stock Transfer Tax: application to foreign corporations. 33. assessment of, 600. collection of, 603. refund of, 604. Storage Warehouse: list of property in, 263. Street Railway Companies: assessment of for widening public way, 740. commutation tax on, 584. distribution of tax on, 177. public use, 105. returns of, 575. taxation of, 587. taxation of wires and poles of, 246. Street Sprinkling: assessment for, 122, 144. Subrogation : to rights of collector, 371. Subway : a public use, 105. 816 Taxation in Massachusetts Succession Tax: denned, 606. Summons : collector may serve, 332. form of, 413. [Citations are to pages] Tariff on Imports — Continued: state cannot levy, 21. state levied under confederation, 95. Superior Court: appeal to, on betterment assessment, 693. appeal to on income tax, 498. appeal to on local tax, 297. appeal to on wet lands assessment. 730. procedure in, on abatement appeal, 298. procedure in, on betterment appeal. 696. Supervisors of Local Taxation: appointment of, 165. Supreme Judicial Court: certiorari to, 296. jurisdiction of ten taxpayers' peti- tion, 147. report to, on foreclosure of tax title, 382. Sureties : on collector's bond, liability of, 326. Surface Water: special assessment for drainage of, 122. Surplus: disposition of, on distress, 338. disposition of, on tax sale, 355. Surrender: by purchaser at invalid sale, 360. of estate assessed for betterment. 682. offer to, upon illegal sale, form of, 767. Suspension : of tax law, power to order, 16. Taking of Land for Non-Payment of Taxes : authorized, 365. form of, 420. instrument of. 366. Tangible Personal Property: in other states, taxation of, 189. in what town taxed, 237, 239. situs of, 71. Tariff on Imports: both regulation and taxation, 6. Tax: cannot be collected in another state, 31. defined, 3. direct, defined, 13. distinguished from excise, 11. distinguished from inspection fee, 8 distinguished from sale of commod- ity, 4. excessive, as indirect prohibition, 8. in specific sense defined, 11. includes special assessment when 119. must be for public use, 101. must be for use of district taxed, 113. must be paid in money, 323. . name of, not controlling, 14. not a contractual obligation, 24. not a debt, 11. partially invalid, 311. payment of in coupons, 24. preferred claim, 66, 345. real purpose of, may be inquired into, 104. recovery of, in common law action, 11, 342. toll not a, 5. upon one class of property for a par- ticular purpose, 116. water rates not, 5. Tax Bill: for corporation tax, 583. for income tax, 493. for local tax, 323. Tax Commissioner: establishment of office of, 140. See also Commissioner of Corpora- tions and Taxation. Tax Law: construction of, 19. not construed technically, 19. strictly construed, 18. Tax Limit: establishment of, 159. Tax Rate: determination of, 253. distinguished from tax limit, 161. fixed without non-resident bank stock, 252. Index 817 [Citations Tax Title: absolute only after foreclosure, 379. extinction of, by payment to col- lector, 377. holder of, taxable as owner, 228. form of notice, when deemed in- valid, 425. . not affected by unimportant errors, 350. not merged with any other interest in the land, 376. paramount title, 358. precariousness of, under former law, 348. procedure for testing validity of, 381. procedure if deemed invalid, 390. Taxable Year: defined, 547. Taxation, Increase of: table showing, 138. Taxation, Power of: defined, 3. delegation of, 16. distinguished from regulation, 6. distinguished from sale of commod- ity, 4. inherent in sovereignty, 15. legislative, 15. limitations of, in United States con- stitution, 20. use of, to enforce criminal law, 10. Taxpayer : remedy for excessive burden on his town, 115. remedy for tax for illegal purpose, 147. remedy for tax for illegal purpose, form of petition, 761. Telegraph Companies: abatement of taxes on, 302. distribution of taxes on, 178. • returns of, 271, 575. taxation of, 51, 70. valuation of structures of, 270. Telegraph Pole: fee for maintenance not a tax, 5. See also Poles. Telephone Companies: abatement of taxes on, 302. distribution of taxes on, 178. returns of, 271, 576. valuation of structures of, 270. Temporary Taxes: statement of, 756. are to pages] Tenant : application for abatement by, 285. may be compelled to pay tax, 64. obligation to pay tax on buildings, 235. paying taxes on real estate, rights of. 233. Tenants in Common: assessment of taxes on, 229, 366. collection of taxes on, 366. lien of, for taxes paid, 391. personal property of, where taxed, 246. Tender: to purchaser at tax sale, effect of, 375. when tax title has been transferred, 376. Territorial Jurisdiction: see Situs. Territories : bonds of, not taxable, 49. Three Mill Tax: constitutionality of, 90, 431. Tobacco: tax on not a direct tax, 14. Toll: not a duty of tonnage, 24. not a tax, 5. Tonnage, Duty of: defined, 23. toll not, 5. Tort, Action of: against assessors, 314. against city or town, 408. against collector, 396. for illegal distress, 337. Town Government: recognized by Massachusetts con- stitution, 18. Towns and Cities: see Municipal Corporations. Trading Stamps: excise on unconstitutional, 97. Transfer of Stock: taxation of, see Stock Transfer Tax Travelling Salesmen: taxation of, 35. Treasurer, State: see State Treasurer. S18 Taxation in Massachusetts [Citations are to pages] Treasurer, Town or City: acting as collector may appoint deputies, 157. collection of taxes by, 157. list of employees by, 490. may authorize suit on collector's bond, 328. may issue warrants to sheriffs or constables, 393. may withhold money due persons owing taxes, 395. Treaties : limitation of taxing power by, 32. Trees : taxation of, 426. See also Forest Lands True List: what constitutes, 290. Trust: declaration of, notice to be sent commissioner, 144. distinguished from partnership, 249. with transferable shares, taxation of, 443. Trust Companies: application for correction of tax by, 583. deduction of mortgages held by, 579. distribution of tax on, 177. income tax on trust property, 475. not entitled to double deduction, 518. notice of tax on, 583. rate of tax on, 582. returns of, 574. returns of stock held by fiduciary or partnership, 180. savings departments, deposits in exempt from income tax, when, 439. deposits in exempt from local tax, 214. taxation of, 515. taxation of, 574, 580. Trust Property: exemption of, 201. payment of taxes on, 236. taxation of income from, 84, 470, 473. where taxed, 238. Trustee : carrying on business, taxation of, 454. corporate, liable to income tax, 475. Trustee — Continued: deduction of expenses, 471. exemption of intangible property held by, 215. in bankruptcy, liable for tax, 346. filing of list by, 260. income tax upon, 470. inventory to be filed by, 647. liable for inheritance tax, 627, 644. may claim exemption for beneficiary. 474. non-resident, taxation of, 473. return of bank stock by, 180. situs of property of, 78. taxable as owner of real estate, 227. wrongful payment of taxes by, 373. Trustee Process: attachment of salary of assessor by, 317. Unincorporated Associations: franchise tax on unconstitutional, 97. interest deduction, 448. list of shareholders, 489. . not taxed as ordinary partnership, 479. shares in, exemption of, 214. situs of, 80. situs of, for inheritance tax, 99, 616. transfer tax on, 600. taxable on business income, 457. taxable under income tax, 443. when a partnership, 249. Unit System: taxation by, 70. United States: bonds, interest not taxable, 438. bonds not taxable by state, 48. bonds, subject to franchise tax, 532. bonds, subject to seizure on distress. 49. charter granted by, taxation of, 50. contract with, taxation of, 50. federal land bank bonds, taxation of, 49. franchise granted by, taxation of, 50. lands, taxation of property on, 47. not affected by state law as to re- cording liens, 52. officer of, not taxable, 49, 454. property of, not taxable, 46, 196. revenue stamps, not taxable, 48. takes precedence over state, 52. tax receipts, state cannot require publication, 52. Index 819 United States — Continued: taxes, amount collected in Massa- chusetts, 138. territories, bonds of, taxation of, 49. trustee in bankruptcy, taxation of, 50. warehouse, taxation of property in, 47. Use: change of, after assessment collect- ed, 130. Vacancy: in board of assessors, how filled, 257. in office of collector, how filled, 158, 159. Valuation: by formula, constitutionality of, 60. defined, 139, 264. determination of, 267. diminution of, statement of caus^ of, 313. false, penalty for, 156. for inheritance tax, 649. necessity of, for property tax, 59. of buildings, 268. of household furniture, 269. of property of public service com- panies, 71. of property of telephone and tele- graph companies, 270. of real estate, 268. of stock in business corporations, 536. of stock in public service companies, 578. of taxable property, 267. revision of, 306. Valuation List: constitutes a public record, 663. contents of, 273. deposit of, in office, 272. deposit of, with commissioner, 279 verification of, by oath, 279. Verification: of income tax returns, 486. of returns of corporations, 570. Vessels : excise on corporations owning, 589. of joint owners, taxation of, 248, 250. owned by corporations, taxation of, 589. owned bv individuals, taxation of, 220. situs of, 72. [Citations are to pages] Vessels — Continued: tax on not duty of tonnage, 23. tonnage tax on, prohibited, 23. used in interstate commerce taxable, 43. Vested Rights: impairment of, 68. Veterans : assessors to make return of exempt property of, 313. associations of, exemptions of, 203. exemptions of, 212. exemptions of, adjustment of, 171. have no preference in appointment as assessors, 154. Voluntary Associations: see Unincorporated Associations. Voters : listing of, by assessors, 164. Voting : deprivation of right, for non-pay- ment of tax, 66. not prerequisite to taxation, 91, 190. War Bonus Tax: assessment of, 187, 759. War Finance Corporation: bonds of, not taxable, 440. Warehouse : government, taxation of property in, 47. list of property in, 263. receipts not taxable property, 73. Warrant: by assessors, as protecting collector, 397. by assessors, form of, 762, 764. by assessors, to accompany tax list, 280. by collector, to distrain or commit, form of, 414. by collector, to sheriff or constable, 340. by treasurer, 157. defective, effect of, 282. destruction of, effect of, 280. for assessment of state tax, 251. for collection of drainage assess- ments, 753. treasury, taxation of, 48. Water Companies: assessment of cost of regulating, 141. distribution of tax on, 178. exemption of, from taxation, 207. 820 Taxation in Massachusetts [Citations are to pages] Water Districts: taxation by, 164. . Water Pipes: taxation of, 247. See also Pipes. Water Power: taxation of, 70, 191, 277. Water Rates: not taxes, 5. Water Supply: payment in lieu of taxes on, 218. public use, 106. Wharfage Fee: not a duty of tonnage, 23. not a tax, 5, 34. Wires : taxation of, 246. Women : domicile of, 223. exemption of, 209. liable to income tax, 437. Woodland : taxation of, 426. See also Forest Lands. Words and Phrases Defined: action, 343. adjournment, 364. aggrieved person, 293. alienation, 351. annuity, 450. assessors, 139. benefits, 672. business, 453, 550. business situs, 76. charges of imprisonment, 340. charitable institutions, 197. collector, 320. commodity, 97. contemplation of death, 624. corporate excess, 536. debt, 11. deposit, 516. different arrangement, 233. direct tax, 13. discovery, 305. distress, 335. doing business, 490. doing business for profit, 550. domestic business corporation, 534. domicile, 221. double taxation, 55. due process of law, 52. duty, 103. Words and Phrases Defined — Con- tinued: duty of tonnage, 23. employee, 490. engaged in business, 550. equitable, 717. error, omission or informality, 391. estate tax, 606. evidence of indebtedness, 491. excess and deficiency account, 255 excise, 12. expenses and costs, 300. export, 21. fair cash value, 267. foreign corporation. 535. front foot rule, 125. general benefit, 672. general property tax, 11. gross income, 458. hearing, 62, 128. import, 21. income, 434. inhabitant, 221, 436. inspection fee, 8. insurance, 525. interstate commerce, 33. legacy tax, 606. life insurance company, 522. like exemption, 627. list, 260. literary institution, 199. local benefit, 672. local business, 39. market value, 267. money bill, 100. moneyed capital, 508. money's worth, 615. net income, 545. notice, 60. owner, 227, 356. place, 248, 507. place of business, 248. police power, 6. proportional taxation, 90. public schools, 110. public stocks, 193. public use, 103. publication, 320. real estate, 190. reasonable excuse, 290. registry of deeds, 320. regular employee, 490. residence, 222. revenue in the nature of rent, 220. sale, 456. securities, 541. separate parcel, 350. Index 821 Words and Phrases Continued: service, 320. since deceased, 469. situs, 69. special assessment, 11. special benefit, 672. succession tax, 606. tax, 3. tax limit, 159. tax rate, 161, 253. tax title, 358. taxable year, 547. [Citations are to pages] Defined — Words and Phrases Defined — Continued: taxation, 3. three mill tax, 90. tonnage duty, 23. true list, 290. unit system, 70. valuation, 139, 264. Working Out: of taxes, 10, 323. Young Men's Christian Association: exemption of, 199. "T'nP 95 CENTS AN INITIAL FINE OF TO bETU rn A ^ ASSESSED FOR ^"V £ pENAUTY W lU- BE AS ^ S ^ H£ DAT E DUE. THE / foURT H THIS BOOK ON THt. w _ CNTS ON THE FOU " TH1=> D „_. c p TO 50 CEN'= ^evfnTH DAY wlU - INCREASE T O ^ ^ sEV ENTH DAY AND TO $1.0 __==£== OVERDUE. OCT 17 193! FEB 10 1933 JAN I 5 1934 rsi \$m i&\ lYln i 3? APR 15 W69 1 t-OAN Oei"T. LD 2l-50m-8,32 '^ 481740 UNIVERSITY OF CALIFORNIA LIBRARY If if *i 1 ill