Attleboro Trust Co. v. Comm'r of Corp.

• Decision Date: 17 September 1926
• Citation: 257 Mass. 43,153 N.E. 333
• Parties: ATTLEBORO TRUST CO. v. COMMISSIONER OF CORPORATIONS AND TAXATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

257 Mass. 43

153 N.E. 333

ATTLEBORO TRUST CO.

v.COMMISSIONER OF CORPORATIONS AND TAXATION.

Supreme Judicial Court of Massachusetts, Suffolk.

Sept. 17, 1926.

Exceptions from Supreme Judicial Court, Suffolk County.

Petition for mandamus by the Attleboro Trust Company against the Commissioner of Corporations and Taxation to compel respondent to submit to the Attorney General for approval a certificate of abatement of a tax. Consolidated for trial with twenty-two other cases. Writ denied by a single justice, and petitioner excepts. Exceptions sustained.

J. E. Perry, of Boston, for petitioner.

A. Lincoln, Asst. Atty. Gen., for respondent.

P. Nichols, of Boston, amicus curiae.

CROSBY, J.

This is a petition for mandamus to compel the respondent to submit to the Attorney General for approval a certificate of abatement of a tax under G. L. c. 58, § 27, as amended by St. 1922, c. 382. The case was heard by a single justice upon the petition, answer, and the report of an auditor appointed to find the facts and report the same to the court. This case and twenty-two others were consolidated, by order of the court, and tried together. The single justice found the facts as reported by the auditor, and disposed of the case as follows:

‘If the decision upon this petition rested in my discretion, I should allow the writ to issue, since money obtained by an illegal tax is being withheld by the commonwealth. As it does not, I must order that the writ be denied.’

We construe this statement as a ruling of law that the tax assessed and paid was in part at least illegal, but that the court had no power to order the issuance of the writ.

We consider first whether the tax assessed was excessive and unlawful. The petitioner contends that it was unlawful upon two grounds. Each of the petitioners is a trust companyorganized under the laws of the commonwealth, and having in addition to its commercial department a savings department. It is found by the auditor that, in estimating the fair cash value of all the shares of capital stock of the petitioners for the purpose of levying the franchise tax upon their several franchises, mortgages to the extent of the loans which they secured collaterally were not deducted under G. L. c. 63, § 55, cl. 5, as real estate subject to local taxation. This court has recently decided that under that statute such mortgages to the extent of the loans of the trust company which they secure collaterally must be deducted as real estate. United States Trust Co. v. Commonwealth, 245 Mass. 75, 139 N. E. 794.

The second ground upon which it is contended that the tax was illegally assessed is that the commissioner erred in failing to deduct the average amount of the deposits in excess of $2,000 in the petitioner's savings departments invested in loans secured by mortgages on real estate taxable in this commonwealth under the provisions of G. L. c. 63, § 11. This question has never been decided by the court. The petitioner contends that the average amount of deposits in excess of $2,000 so invested should have been deducted under section 55. G. L. c. 63, § 14, provides that:

‘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 bases for any deduction allowed in computing any other tax which trust companies are required by law to pay.’

The respondent contends that by the enactment of this statute the Legislature intended that investment of deposits in the savings department which belonged to the class exempted by section 12 should not be deductible under section 55. The tax authorized by section 11 was a tax on the deposits ‘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’; namely, deposits each of which did not exceed in amount the sum of $2,000. The exemption provided for in section 12 (b) relates to ‘loans secured by mortgage of real estate taxable in this commonwealth.’ Both section 11 and the exemption provided in section 12 applied only to deposits not in excess of $2,000. By section 12 the petitioner was not entitled to any exemption for deposits in excess of that amount. Under section 55, Fifth, in the light of section 14, so much of every deposit in excess of $2,000 in the petitioner's savings department as was invested in mortgages of real estate in this Commonwealth should have been deducted as real estate subject to local taxation in assessing the petitioner's franchise tax. United States Trust Co. v. Commonwealth, supra. See Old Colony Trust Co. v. Commonwealth, 220 Mass. 409, 107 N. E. 950.

The questions whether under the statute the petitioners severally made application for the correction and abatement of the tax assessed and whether it was the duty of the respondent to consider such applications remain to be considered. The auditor found that the applications were made more than six months after the payment of the tax but before the expiration of two years from the date of the tax bills rendered; also, that ‘the respondent, in accordance with his general practice, denied the petitioners' applications for abatement and * * * his failure to grant relief was due solely to the fact that the applications were not filed within six months after the date of payment of the tax bills rendered, and that in refusing to grant relief he followed his usual custom in cases where petitioners have lost their legal rights by failure to bring suit within the statutory limit of time, in the exercise of the discretion, as he claims, granted to him’ by G. L. c. 58, § 27, as amended by St. 1922, c. 382. We construe this finding to mean that the commissioner believed the taxes assessed were in part at least illegal, and that his sole ground for denying the applications for abatement was that they were not filed within six months after the date of payment of the tax bills rendered as provided by G. L. c. 63, § 77.

The statute under which the applications were made and under which he was empowered to act (G. L. c. 58, § 27, as amended by St. 1922, c. 382), provides that:

‘No certificate for the abatement of any tax or excise shall be issued under this section unless application therefor is made to the commissioner within two years after the date of the bill for said tax or excise. * * *’

The franchise tax assessed to the petitioners was levied and assessed on the sworn returns made by them respectively as of April 1, 1922, in accordance with G. L. c. 63, as amended, and bills for said tax were dated September 20, 1922, and were duly paid on or before October 20, 1922, their due date. It thus appears that the statutory period for making applications for abatement was cut down by the commissioner from two years after the date of the tax bill to about seven months. We are of opinion that the construction of the statute by the commissioner and of his duties thereunder was erroneous. The two years after the date of the tax bills in which applications could be made could not be limited or shortened by the commissioner. At any time within that period an applicant was entitled to apply for an abatement.

[4] The statute provides in substance that if the tax was in whole or in part illegally assessed or levied, or was excessive or unwarranted, ‘the commissioner may, with the approval of the Attorney General, issue a certificate that the party aggrieved by such tax or excise is entitled to an abatement, stating the amount thereof.’ The respondent contends, and the single justice ruled, that the authority so vested in the commissioner is discretionary not only as to the determination of amount to be abated, but upon the question whether, even if it should appear that the tax sought to be abated was in whole or in part illegally assessed or levied or was excessive or unwarranted, an abatement should be granted. The word ‘may’ ordinarily construed is permissive and not mandatory. In the construction of statutes when applied to a public officer in connection with a duty to be performed it is construed as ‘must’ or ‘shall,’ if such appears to have been the intention of the Legislature. Inhabitants of the County of Worcester v. Schlesinger, 16 Gray, 166, 168;Bay State Street Railway v. Woburn, 232 Mass. 201, 203, 122 N. E. 268. It was said in Commonwealth v. Mekelburg, 235 Mass. 383, at page 384 (126 N. E. 790, 791):

‘In the construction of statutes the rule seems to be that the word ‘may’ means ‘must’ or ‘shall’ only in cases where the public interest is concerned, or where the public or third persons have a claim de jure that the power should be exercised.'

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