Boston Molasses Co. v. Com.

Decision Date01 January 1907
Citation193 Mass. 387,79 N.E. 827
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Louis D. Brandeis and Wm. H. Dunbar, for petitioner.

Dana Malone and Fred T. Field, for the Commonwealth.



It seems clear to us that the taxes to be assessed under St 1904, p. 340, c. 385, were to be imposed upon the lands mentioned in that act and not merely upon the leasehold interest of the tenant, to whom they were to be assessed. The act provides expressly for the taxation of 'the lands of the commonwealth' if leased for business purposes; it provides that they shall be taxed 'in the same manner as the lands and buildings thereon would be taxed to [the] lessees if they were the owners of the fee,'--words which plainly could be satisfied only by a taxation of the fee simple estate to its full value. The fact that the tax is in terms to be assessed to the lessees is not decisive against this view. All taxes on real estate may be assessed to the person who is in actual possession thereof on the 1st day of May, as well as to the owner at that time. Rev. Laws, c. 12 § 15; St. 1902, p. 74, c. 113; Lynde v. Brown, 143 Mass. 337, 340, 19 N.E. 735; Kerslake v. Cummings, 180 Mass. 65, 67, 61 N.E. 760. This statute, like Rev. Laws c. 12, § 15, merely provides how the tax shall be laid, to whom it shall be assessed, and who is to be held for its payment in the first instance; it does not in any way determine upon whom the final burden is to be cast. Nor does the fact that the tax is not secured, as in most cases, by a lien upon the whole estate taxed, but only upon the leasehold interest in the lands and upon the buildings thereon, require a different conclusion. This is in substance merely a provision that the ordinary lien for taxes shall not be enforced against the commonwealth, a restraint which it is clearly within the power of the Legislature to impose. This again has no tendency to show that the whole of the estate is not to be taxed, under words of a statute which plainly contemplates such taxation.

This tax having been duly assessed to the petitioner, and having been paid by it, its present rights to recover from the commonwealth as the general owner of the property the amount of this tax must depend in the first instance upon the terms of its lease from the commonwealth. And it must be remembered that in giving this lease the commonwealth was not acting in its political character as sovereign, but merely as the owner of property, about which it was making a contract. As to this contract it put itself into the position of a private citizen, and the lease must be construed as if it were made between two individuals. Com. v. Andre, 3 Pick. 224, 225. Having chosen to descend from the plane of its sovereignty and to make this contract with a private person, it is to be regarded as itself a private person, and is bound as such. Hall v. Wisconsin, 103 U.S. 5, 11, 26 L.Ed. 302. As was said in People v. Stephens, 71 N.Y. 527, 549, 'The state, in all its contracts and dealings with individuals, must be adjudged and abide by the rules which govern in determining the rights of private citizens contracting and dealing with each other. There is not one law for the sovereign and another for the subject; but when the sovereign engages in business and the conduct of business enterprises, and contracts with individuals, although an action may not lie against the sovereign for a breach of the contract, whenever the contract in any form comes before the courts, the rights and obligations of the contracting parties must be adjusted upon the same principles as if both contracting parties were private persons. Both stand upon equality before the law, and the sovereign is merged in the contractor, dealer and suitor.' To the same effect are Danolds v. People, 89 N.Y. 36, 44, 42 Am. Rep. 277; Carr v. State, 127 Ind. 204, 26 N.E. 778, 11 L. R. A. 370, 22 Am. St. Rep. 624; Patton v. Gilmer, 42 Ala. 548, 94 Am. Dec. 665; Calloway v. Cossart, 45 Ark. 81; and Chapman v. State, 104 Cal. 690, 38 P. 457, 43 Am. St. Rep. 158.

The lease given by the commonwealth to the petitioner was dated on the 20th day of May, 1902, and was delivered on or about that date. It demised to the petitioner the land therein described, for the term of 15 years from the 1st day of July 1903, at an annual rental of $9,500. After divers other covenants on the part of the commonwealth, the lessor, which are not now material, it contained the following stipulation: 'And the said lessor covenants and agrees with the said lessee and its representatives that those paying the rent aforesaid and performing the covenants herein contained on their part to be paid and performed, shall peaceably hold and enjoy the said premises without hindrance or interruption by the said lessor or any person or persons whomsoever.' Then followed covenants by the lessee, the petitioner, to pay the rent, 'and also water-rates and all taxes which may be assessed upon any buildings, fixtures or other property put upon said premises by the lessee, and which are between the parties hereto treated as and agreed to be personal property.' ...

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