Boston Gas Co. v. Assessors of Boston

• Decision Date: 24 September 1956
• Parties: BOSTON GAS CO. v. ASSESSORS OF BOSTON (sixteen cases). ASSESSORS OF BOSTON v. BOSTON GAS CO. (eight cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 462

137 N.E.2d 462

334 Mass. 549

BOSTON GAS CO. v. ASSESSORS OF BOSTON (sixteen cases).

ASSESSORS OF BOSTON v. BOSTON GAS CO. (eight cases).

Supreme Judicial Court of Massachusetts, Suffolk.

Argued April 5, 1956.

Decided Sept. 24, 1956.

Edward B. Hanify and James S. Eastham, Boston (Donald R. Grant and John A. Gage, Boston, with him), for taxpayer.

Lewis H. Weinstein, Sp. Asst. Corp. Counsel, Boston (William L. Baxter, Corp. Counsel, and Jerome Preston, Jr., Boston, with him), for Assessors of Boston.

Before WILKINS, C. J., and WILLIAMS, COUNIHAN and WHITTEMORE, JJ.

WILKINS, Chief Justice.

Of these twenty-four appeals from decisions of the Appellate Tax Board, sixteen are by Boston Gas Company (formerly Boston Consolidated Gas Company) and eight are by the board of assessors of Boston. The controversies relate to the taxes paid upon personal property by the company for the years 1944 to 1951, inclusive. The tax board granted a partial abatement of each tax but much less than the company sought. For each year the gas company has two appeals and the assessors one. The reasons for the double appeals by the company are procedural.

Before the tax board the company's appeals for each of the eight years were consolidated and heard at length from January 22, 1952, until December 12, 1952. On December 17, 1954, the tax board promulgated its decision, which was terse, comprised only mathematical conclusions, and, as now printed, covers less than two pages of the printed record in this court. There also were brief findings made in passing on the assessors' requests for rulings. The assessors filed a request for findings of fact and a report. G.L.(Ter.Ed.) c. 58A, § 13, as appearing in St.1933, c. 321, § 7, as amended by St.1953, c. 654, § 27. On April 22, 1955, ¹ the tax board promulgated its findings of fact and report, which cover more than fifty pages of the printed record.

The company's first set of eight claims of appeal was filed with the tax board on January 4, 1955, and its second set, which reaffirms all the specifications of error appearing in the earlier claims of appeal, was filed on May 9, 1955. The assessors' claims of appeal were filed with the tax board on May 11, 1955. The company's first set of claims of appeal was filed because of a doubt as to the effect of G.L. (Ter.Ed.) c. 58A, § 13, as appearing in St.1933, c. 321, § 7, and amended by St.1953, c. 654, § 27, which provided that a 'claim of appeal shall be filed with the clerk of the board within twenty days after the date of the decision of the board, or within twenty days after the date of a report of findings of fact, if such report is made on request of a party after the decision. * * *' We hold that the second set of claims of appeal was seasonably filed, as were the assessors' claims of appeals. The company's first set of appeals to this court is to be dismissed, and we shall consider the second set.

The company is a Massachusetts corporation created and existing by special acts. St.1903, c. 417; St.1905, c. 421; St.1906, c. 422; St.1926, c. 186; St.1951, c. 446. During the years now material it engaged in the manufacture and purchase of gas at Everett, and the distribution of gas in Boston and nineteen other cities and towns, of which Everett is not one. The company also engaged in distributing electricity in the Charlestown district of Boston which it purchased from Boston Edison Company.

These cases do not concern real estate or intangible personal property, but involve those portions of the gas and electric distribution systems situated in Boston and taxable as personal property under G.L. (Ter.Ed.) c. 59, § 2 and section 5, Sixteenth, as appearing in St.1941, c. 467. ² By G.L. (Ter.Ed.) c. 59, § 2, 'All property, real and personal, situated within the commonwealth * * * unless expressly exempt, shall be subject to taxation.' Section 5, as amended, provides: 'The following property * * * shall be exempt from taxation: * * * Sixteenth, Property, other than real estate, poles, underground conduits, wires and pipes, and other than machinery used in manufacture * * *, owned by * * * Massachusetts corporations subject to taxation under chapter sixty-three * * *'. The company in the years now material was subject to tax under c. 63. G.L.(Ter.Ed.) c. 63, § 53, as then amended. See St.1933, c. 254, § 60; St.1934, c. 323, § 6; St.1941, c. 509, § 7.

The company's property 'exempt' under section 5, Sixteenth, is not exempt in the absolute sense, but is subject indirectly to taxation by inclusion in the valuation of its capital stock thus increasing the franchise tax payable to the Commonwealth. For the years now material, see G.L. (Ter.Ed.) c. 63, § 55, as amended by St.1936, c. 134, as St.1939, c. 24, § 7. ³ Eliminating the backhanded approach and paraphrasing the language of G.L. (Ter.Ed.) c. 59, §§ 2, 5, Sixteenth, real estate, 'poles, underground conduits, wires and pipes,' and machinery used in manufacture are taxable where situated. Cases dealing with true exemptions, such as those of charities, which are relied upon by the assessors as resolving any doubt against the company, are not in point. See Boston Symphony Orchestra, Inc., v. Board of Assessors of City of Boston, 294 Mass. 248, 257, 1 N.E.2d 6; American Institute for Economic Research v. Assessors of Great Barrington, 324 Mass. 509, 512, 87 N.E.2d 186. The allusion to such a principle in Collector of Taxes of Boston v. Cigarette Service Co., Inc., 325 Mass. 162, 167, 89 N.E.2d 787, must be viewed as an inadvertence. See Dudley v. Jamaica Pond Aqueduct Corp., 100 Mass. 183, 184-185.

It will be convenient at this point to quote another statute, as to the effect of which there is dispute. General Laws (Ter.Ed.) c. 59, § 18, as amended by St.1933, c. 254, § 30, provides: 'All taxable personal estate within or without the commonwealth shall be assessed to the owner in the town where he is an inhabitant on January first, except as provided in chapter sixty-three and in the following clauses of this section: * * * Second [amended by St.1936, c. 362, s. 2], Machinery employed in any branch of manufacture * * * shall be assessed where such machinery * * * is situated * * *.'

The tax board granted the company's thirteenth request for a ruling: 'The words 'machinery used in manufacture' as appearing in G.L. (Ter.Ed.) c. 59, § 5, cl. 16, as amended, and the words 'machinery employed in any branch of manufacture' as appearing in G.L. (Ter.Ed.) c. 59, § 18, cl. 2, as amended, have the same meaning.' We think that this ruling was correct.

The tax board also granted the company's fifteenth request: 'General Laws (Ter.Ed.) c. 59, § 18, as amended, is not effective to impose tax liability but is merely declaratory of which particular municipality has power to assess and collect taxes upon the types of property enumerated therein if they are otherwise taxable under other and different provisions of the General Laws.' We need not now express an opinion as to the correctness of this ruling.

The Assessors' Contention That the Company Did Not File True and Correct Lists of Its Taxable Property.

The tax board found that each list filed was accepted by the assessors without putting any officer of the company under oath as to the nature and amount of its property; that at the time each list was filed the company believed it to be an accurate report of its property; and that each list was made and filed in good faith. 'So far as it is a matter of fact, we find that each list was sufficient.'

The assessors complain (1) that there was no evidence warranting these findings; and (2) that, while the company was not required to set forth valuations of the listed property, Assessors of Quincy v. Boston Consolidated Gas Co., 309 Mass. 60, 69-72, 34 N.E.2d 623, it could not set forth in its lists statements of fair cash value substantially different from the opinions of fair cash value later given by its witnesses. No authority is cited for this proposition, and we have been referred to nothing in the statute which requires such a result. ⁴ Indeed the statute says: 'Assessors shall receive as true, except as to valuation, 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.' G.L.(Ter.Ed.) c. 59, § 35. The statute seems conclusive, but even if there was no evidence warranting the findings, there was likewise no evidence from which it could have been found that any officer was questioned under oath or that the lists were filed in other than good faith.

The Issues Before the Appellate Tax Board.

At the hearing before the tax board, it was agreed that the following property was taxable: In the gas department, (1) yard piping at compressor and governor stations; (2) mains; (3) services (connections with consumers' premises); and (4) lamp services. In the electric department, (1) poles and fixtures; (2) underground conduits; (3) underground conductors; and (4) street lighting equipment. It was agreed that transportation and office equipment in Boston was not subject to local taxation.

The disputed items, which the company contends were not taxable and which the tax board held were taxable, are: In the gas department, (1) compressors and governors; and (2) consumers' meters. In the electric department, (1) substation equipment; (2) overhead conductors; (3) consumers' meters; (4) line transformers; and (5) transformer installations.

There is the further broad question as to the fair cash valuation ⁵ of the personal property subject to taxation under c. 59, § 2 and § 5, Sixteenth, as amended. The accompanying table summarizes the tax board's findings as to the valuation of 'Poles, underground conduits, wires and pipes, and machinery used in manufacture.'

Findings of the Tax Board--The Gas Department.

The company's principal business is to manufacture...