Central National Bank v. City of Lynn

• Decision Date: 12 March 1927
• Citation: 259 Mass. 1
• Parties: CENTRAL NATIONAL BANK v. CITY OF LYNN. SAME v. SAME.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

259 Mass. 1

CENTRAL NATIONAL BANK v. CITY OF LYNN. SAME v. SAME.

Supreme Judicial Court of Massachusetts, Essex.

March 12, 1927

November 29, 1926.

Present: RUGG, C.

J., BRALEY, CROSBY PIERCE, & SANDERSON, JJ.

National Bank Taxation. Tax, Abatement, Assessment. Jurisdiction. Waiver. Practice, Civil, Complaint for abatement of tax. Statute Construction. Constitutional Law, Taxation. Words "Rate."

A statement by a national bank to assessors of taxes does not fulfil the requirement of G.L.c. 63, Section 4, unless it is "on oath." The Superior Court has no jurisdiction to consider a petition under G.L.c.

59, Section 61, by a national bank for abatement of taxes assessed under G.L.c. 63, Section 1, unless the statement required by G.L.c. 63,

Section 4, has been filed "on oath"; the requirement of the oath being jurisdictional, it cannot be waived.

An action of contract under G.L.c. 60, Section 98, to recover a tax assessed upon a national bank under G.L.c. 63, Section 1, and paid under protest cannot be maintained unless the tax was wholly void: where there is property subject to taxation and the essential ground for complaint is excessive valuation or excessive tax, the sole and sufficient remedy is by a petition for abatement, which is a remedy open to national banks as well as to all other taxpayers.

The tax upon shares of a national bank authorized by G.L.c. 63, Section 1, is intended to be assessed in accordance with the requirements of U.S.

Rev. Sts.

Section 5219, that it shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State, and that the "rate" established shall be such that an assessment shall be levied upon the valuation ascertained according to the standard of "fair cash value" established by another part of the section so as to impose upon the shares of stock in national banks "such practical equality of taxation" as is reasonably attainable in view of the differing situations of that property as compared with other moneyed capital coming into competition with national banks and subject to taxation within the Commonwealth.

If, by reason of changes, since the enactment of the statutory provisions now embodied in G.L.c. 63, Section 1, in the law as to taxation of

"other moneyed capital" than that of national banks, the "rate" hitherto used in assessing taxes upon shares of stock in national banks works general discrimination against those shares, it becomes the duty of assessors to fix a rate which will avoid discrimination and comply with the dominant purpose of the statute that the burden of taxation borne by such shares of stock be substantially equal to and not in excess of that borne by "other moneyed capital" of the kind described. A failure by the assessors to fix a rate for a tax under G.L.c. 63, Section

1, to conform to the requirements of U.S. Rev. Sts. Section 5219 after the statutory changes above described, which results in a rate as established by them upon the national bank shares being greater than that upon "other moneyed capital" in the Commonwealth, renders the tax excessive but not wholly void; and the remedy of the national bank therefore is by complaint for abatement under G.L.c. 59, Section 65, and not by an action of contract under G.L.c. 60, Section 98.

COMPLAINT, filed in the Superior Court on November 22, 1921, for the abatement of a tax assessed under G.L.c. 63, Section 1. Also, an action of

CONTRACT for recovery of taxes alleged to have been exacted illegally. Writ dated November 21, 1921.

In the Superior Court, the cases were heard together by Quinn, J., without a jury. Material evidence is stated in the opinion.

In the first case the judge ruled at the request of the respondent that the list filed by the complainant with the assessors did not meet the requirements of law and dismissed the complaint. The complainant alleged exceptions.

In the second case the judge found for the plaintiff in the sum of $17,297.58, and the defendant alleged exceptions.

H.R. Mayo, for the complainant and plaintiff. S.H. Hollis, for the respondent and defendant.

RUGG, C.J. These are proceedings to recover a tax for the year 1921 paid under protest by the plaintiff to the defendant. One is a complaint under G.L.c. 59, Section 65, for refusal by the assessors to grant an abatement of the tax; the other is an action of contract to recover the tax under G.L.c. 60, Section 98. Both rest on the ground, as alleged, that the tax was illegally assessed. Each proceeding was seasonably brought.

The complainant and plaintiff is a national banking association established under the statutes of the United States, having its usual place of business at Lynn. Its contention is that, although the provisions of our statutes respecting the taxation of shares in national banks as they existed prior to 1917 had been held to be valid and in conformity to the provisions of the controlling act of Congress, in Bank of Redemption v. Boston, 125 U.S. 60, yet since the passage of the income tax law, now G.L.c. 62, which became effective as to taxation for the year 1917, the previously established method of taxation of shares of stock in national banks has become illegal, because other moneyed capital in the hands of individual citizens of the Commonwealth employed in competition with national banks now is taxed at a much lower rate.

1. The complainant is not entitled to relief upon the complaint for abatement. The reason is that there has been no compliance with all the statutory mandates which must be met before there can be an abatement. It is provided by G.L.c. 63, Section 4, that the cashier of every national "bank shall make and deliver to the assessors . . . a statement on oath showing the name of each shareholder" in such detail as is there specified. The cashier of the complainant bank in fact did file with the assessors a list satisfying the statute in every particular except that it was not sworn to. The oath is imperative under our statutes. The requirement for the oath was not enacted for the benefit of the assessors, but for the protection of the public and in the general interest. It cannot be waived by any act of the assessors. Winnisimmet Co. v. Chelsea, 6 Cush. 477, 483. Amherst College v. Amherst, 193 Mass. 168 . Boston Rubber Shoe Co. v. Malden, 216 Mass. 508 , 511. Parsons v. Lenox, 228 Mass. 231 . Dexter v. Beverly, 249 Mass. 167 , 169. The filing of the "statement on oath" is a condition precedent to the maintenance by the taxpayer of a petition for an abatement. The right to maintain a complaint for abatement does not come into existence until the sworn statement described in the statute has been filed. No tribunal has jurisdiction to consider the question whether an abatement ought to be made unless such sworn statement has first been filed. Otis Co. v. Ware, 8 Gray, 509, 511. Charlestown v. County Commissioners, 101 Mass. 87 , 90. Sears v. Nahant, 205 Mass. 558 , 569. Boston Rubber Shoe Co. v. Malden, 216 Mass. 508, 512. Dexter v. Beverly, supra. Compare Sterling v. Leyland & Co. Ltd. 242 Mass. 8 , 13; Miller v. Rosenthal, 258 Mass. 368; William Danzer & Co. Inc. v. Gulf & Ship Island Railroad, 268 U.S. 633, 636, 637. The words of G.L.c. 59, Section 61, are that "A person shall not have an abatement" unless the required list has been filed with the assessors. Language hardly can be more explicit. "Person" as thus used includes a national bank. National Bank of Commerce v. New Bedford, 155 Mass. 313 , 316. Said Section 61 comprehends and is applicable to the statement on oath to be filed by the cashier of a national bank. While this was not categorically decided in the case last cited, it there was held that the filing of the list by the cashier of the bank was sufficient basis for a petition for abatement by the bank. As disposing of the argument that the list must be filed by the shareholders, it was said at page 316 that "we are of opinion that the substitution of the bank for the shareholders is more thorough-going than is recognized by this argument. The bank is the person to file the list, as it is the person to pay the tax, to petition for abatement, and to take an appeal." The irresistible inference from this decision is that the filing of a list as required by c. 63, Section 4, is a condition precedent to the maintenance of a petition for abatement under c. 59, Section 61, by a national bank.

This is the reasonable construction of the statutes. There is nothing to indicate that the Legislature intended to except national banks from a general requirement as to filing sworn lists resting upon other members of the community. While a complaint for abatement may be maintained where the tax is wholly illegal, the filing of the list is nevertheless a condition precedent to the existence of the right to abatement.

Milford Water Co. v. Hopkinton, 192 Mass. 491 , 498. The cases of Lowell v. County Commissioners, 146 Mass. 403 , and Essex Company v. Lawrence, 214 Mass. 79, afford no support to any contrary theory because they relate to a different statute and divergent facts.

It follows, from the terms of the governing statutes and the decisions rendered touching them already cited, that the circumstance that the chairman of the board of assessors of the defendant accepted, within the time specified in the statute and without objection and in accordance with a practice of many years, the unsworn statement of the cashier of the complainant containing the requisite information, is of no consequence in this connection. Plainly the sovereign power may create reasonable conditions as prerequisites to the enforcement of rights in the courts. No further discussion is needed to demonstrate that a statement...