Boston Five Cents Sav. Bank v. City of Boston

• Decision Date: 07 May 1945
• Parties: BOSTON FIVE CENTS SAVINGS BANK v. CITY OF BOSTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

318 Mass. 183

61 N.E.2d 124

BOSTON FIVE CENTS SAVINGS BANK v. CITY OF BOSTON.

Supreme Judicial Court of Massachusetts, Suffolk.

May 7, 1945

December 5, 1944.

Present: FIELD, C.

J., QUA, DOLAN RONAN, & WILKINS, JJ.

Taxation, Real estate tax: withholding of amount of tax, certification personal obligation of person assessed, lien.

The certification of a real estate tax by the collector of taxes to the city treasurer for addition to an outstanding tax title account pursuant to G. L. (Ter. Ed.) c. 60, Section 61, as amended and the crediting of the collector for the amount of the tax under Section 95, as amended, did not prevent the treasurer from subsequently withholding the amount of the tax from money owed to the taxpayer by the city and paying the amount so withheld to the collector pursuant to Section 93 as it stood before the 1943 amendment.

The primary liability to pay a real estate tax is upon the person assessed; the lien upon the land is merely security for its payment.

CONTRACT OR TORT. Writ in the Superior Court dated July 20, 1943. The action was heard by Greenhalge, J.

J. F. Sullivan, for the plaintiff.

J. W. Kelleher Assistant Corporation Counsel, (W.

H. Kerr, with him,) for the defendant.

WILKINS, J. This is an action of contract or tort for reimbursement to the amount of an abatement on a real estate tax which had been paid by the plaintiff bank. The defendant city refused to pay the abatement in full, asserting a right to withhold the amount of unpaid taxes on another parcel of real estate. See G. L (Ter. Ed.) c. 59, Section 69, as amended by St. 1939, c. 366, Section 3; G. L. (Ter. Ed.) c. 60, Section 98.

The case was heard upon a case stated by a judge, who "found" for the bank in the lesser amount admittedly due. This was in effect an order for judgment. Edinburg v. Allen-Squire Co. 299 Mass. 206 , 207. See F. & M. Skirt Co. Inc. v. Rhode Island Ins. Co. 316 Mass. 314 , 315. The bank appealed. G. L. (Ter. Ed.) c. 231, Section 96.

As of January 1, 1939, the assessors assessed to the bank, as owner of real estate at 24-30 School Street, Boston, a tax of $61,845, and on September 1, 1939, committed the tax with their warrant to the collector of taxes. On September 25, 1939, the bank paid the tax in full, but instituted abatement proceedings, during the pendency of which the bank and the assessors agreed that there had been an overvaluation of $375,000. On February 20, 1942, the assessors issued to the bank a certificate of abatement in the amount of $14,962.

50. G. L.

(Ter. Ed.) c. 59, Section 70.

On January 1, 1939, and on January 1, 1940, the bank was also the owner of real estate at 347-351 Congress Street and 332-336 A Street, Boston, apparently having acquired title by foreclosure of a mortgage. As of January 1, 1939, the assessors assessed to the bank a tax of $6,583.50 upon the said real estate, and on September 1, 1939, committed the tax with their warrant to the collector. As of January 1, 1940, a similar tax of $7,183.44 was assessed, and on September 5, 1940, was committed to the collector with the warrant of the assessors. The collector demanded of the bank payment of the 1939 tax on January 9, 1940, and of the 1940 tax on January 3, 1941. On July 20, 1940, and on May 3, 1941, respectively, the collector certified to the treasurer the 1939 tax and the 1940 tax for addition to a tax title account set up on the books of the city in the possession of the treasurer. G. L. (Ter. Ed.) c. 60, Section 50, as amended. In each instance the treasurer gave the collector a certificate stating that the amount of such tax had been added to the tax title account and the collector credited as if the tax had been paid in money. G. L. (Ter. Ed.) c. 60, Section 61, as last amended by St. 1936, c. 93, Section 1. On March 13, 1940, the collector had taken for the city the real estate at Congress and A streets for nonpayment of a

1935 tax assessed to the heirs or devisees of one Redding as owners, ^[1] and on the same day set up the said tax title account. G. L. (Ter. Ed.) c. 60, Section 50, as amended. The tax title has never been foreclosed nor redeemed, and no sum has ever been paid or tendered on account of redemption. During 1941 the bank ceased to be the owner of this property.

On July 20, 1943, the bank demanded of the treasurer the sum of $16,409.07, which was the amount of the abatement on the School Street property with interest from the date of payment of the tax to the date of abatement. Simultaneously with the demand the collector requested the treasurer in writing "to withhold, pursuant to General Laws, chapter 41, section 38A, and chapter 60, section 93, the sum of $14,797.79 from any money payable to Boston Five Cents Savings Bank, from whom taxes or other charges or accounts in that sum are now due the city of Boston." The treasurer thereupon withheld from the $16,409.07 payable to the bank, and paid to the collector, the sum of $14,797.79, which the collector forthwith paid back to the treasurer with detailed information as to the items it satisfied. The treasurer then applied the $14,797.79 to the payment of the 1939 and 1940 taxes, including interest and costs, on the property at Congress and A streets. The treasurer tendered to the bank the sum of $1,611.28, together with a receipt showing the application of the $14,797.79, which the bank refused to accept. The order for judgment for the bank was in the amount of $1,611.28 without interest.

The question for decision is whether on July 20, 1943, the treasurer was entitled to withhold the amount of the taxes on the real estate at Congress and A streets notwithstanding that such taxes had been certified for addition to a tax title account under G. L. (Ter. Ed.) c. 60, Section 61, as amended, and the collector had been credited "as if the tax had been paid in money" under Section 95, as amended. Taxes are not the subject of set-off except by statute. Peirce v.

Boston, 3 Met. 520. Nichols v. Commissioner of Corporations & Taxation, 314 Mass. 285, 305. Authority for the treasurer's action, therefore, must be found in G. L. (Ter. Ed.) c. 60, Section 93, as it stood on July 20, 1943, prior to the effective date of its amendment by St. 1943, c. 199. Section 93 before amendment read as follows: "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 interest and costs. The sum withheld shall be paid or credited to the collector, 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 tax after a levy upon his goods. The collector's rights under this section shall not be affected by any assignment or trustee process." This language is broad in scope. It authorizes the treasurer to "withhold payment of any money payable to any person" whose taxes are unpaid in whole or in part. It empowers the treasurer to withhold voluntarily, and makes such action mandatory on him if the collector so requests. The only limitation is that the amount withheld shall not exceed the unpaid tax with interest and costs. By St. 1943, c. 199, the first sentence of Section 93 was amended so as to read, "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 from whom there are then due taxes, assessments, rates or other charges committed to such collector, which are wholly or partly unpaid, whether or not secured by a tax title held by the town, to an amount not exceeding the total of the unpaid taxes, assessments, rates and other charges, with interest and costs." We are of opinion that the inclusion of the words, "whether or not secured by a tax title held by the town," is declaratory of the effect of this section as it stood before the amendment.

Clearly the withholding in question was authorized by Section 93 unless it was expressly or impliedly prohibited by some other provision of law. There is no express prohibitory provision, but the bank contends that the right to withhold had been lost by implication because the collector was credited under Section 95 after he certified such taxes to the treasurer, who had added them to a tax title account and included them in the terms of redemption from a tax title taken by the city for nonpayment of 1935 taxes. See G. L. (Ter. Ed.) c. 60, Section 61, as amended, which in part reads, "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 payment 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 nonpayment of said subsequent taxes, costs and interest; and on redemption from such taking or purchase, said subsequent taxes, costs and interest shall be paid to the town, and the payment shall be made a part of the terms of redemption, except that if any of the said subsequent taxes have not been certified by the collector to the treasurer to be added to the tax title account, then redemption may be made by payment only of the amount of the tax for which the estate was purchased or taken and of such...