Comm'r of Corps. & Taxation v. City of Springfield

• Citation: 321 Mass. 31,71 N.E.2d 593
• Court: United States State Supreme Judicial Court of Massachusetts
• Decision Date: 13 February 1947
• Parties: COMMISSIONER OF CORPORATIONS & TAXATION v. CITY OF SPRINGFIELD (two cases).

321 Mass. 31

71 N.E.2d 593

COMMISSIONER OF CORPORATIONS & TAXATION

v.CITY OF SPRINGFIELD (two cases).

Supreme Judicial Court of Massachusetts, Suffolk.

Feb. 13, 1947.

Appeal from decisions of the Appellate Tax Board.

Consolidated actions by Commissioner of Corporations and Taxation against City of Springfield relating to distribution of proceeds of corporate franchise taxes assessed and collected by the commissioner. From decisions of the Appellate Tax Board, the Commissioner of Corporations and Taxation appeals.

Decisions in accordance with opinion.

Before FIELD, C. J., and LUMMUS, QUA, DOLAN, and RONAN, JJ.

S. A. Moynahan, City Sol., and C. D. Sloan Asst. City Sol., both of Springfield, for City of Springfield.

C. A. Barnes, Atty. Gen., and W. G. Perrin, Asst. Atty. Gen., for Com'r of Corporations and Taxation.

RONAN, Justice.

These are two appeals by the commissioner of corporations and taxation from decisions of the Appellate Tax Board that the city of Springfield is entitled to have distributed, credited and paid to it out of the corporate franchise tax paid by the United Electric Light Company to the commissioner in 1942 the sum of $44,650.41, and out of a similar tax paid by the Western Massachusetts Electric Company to the said commissioner in 1943 the sum of $36,793.04.

The distribution of the proceeds of corporate franchise taxes assessed and collected by the commissioner in accordance with G.L.(Ter.Ed.) c. 63 is governed by G.L.(Ter.Ed.) c. 58, § 24, as amended by St.1933, c. 254, § 23, which provides that the portion of the ‘corporate franchise tax paid by gas, electric light, gas and electric light and water companies' on account of stock owned by nonresidents of the State shall be retained by the Commonwealth and the remainder of the tax shall be distributed, credited and paid to the town in this Commonwealth where the company conducts its business and, if its business is carried on in more than one town, then to those towns in certain proportions. Interest paid on said taxes shall be treated as principal in distributing the tax, and abatements shall be deducted in such distribution. Section 24A of said c. 58, as appearing in St.1934, c. 323, § 2. The commissioner shall determine the amount due to each town, shall notify the treasurer of the town, and shall certify to the State treasurer the amount so determined, and the latter shall pay the said amount to the town. The decision of the commissioner is subject to appeal to the Appellate Tax Board, G.L. (Ter.Ed.) c. 58, § 25, as appearing in St.1934, c. 323, § 3, and as amended by St.1939, c. 451, § 17; St.1941, c. 729, § 11; c. 58A, § 6, as appearing in St.1938, c. 478, § 4, and as amended by St.1941, c. 609, § 2; c. 726, § 1. See now St.1945, c. 687.

The United Electric Light Company was engaged in the business of furnishing electricity for light and power principally in Springfield and also in four towns in the immediate vicinity. It was merged on January 1, 1943, with the Western Massachusetts Electric Company. The sole stockholder of these two companies was the Western Massachusetts Companies, an association formed by a declaration of trust.

The commissioner on November 19, 1942, certified in a written communication to the Treasurer and Receiver General that there was due to Springfield, for the years 1940 and 1941, $11,540.75 and $58,063.56, respectively, on account of franchise taxes collected from gas, electric light and water companies under G.L.(Ter.Ed.) c. 58, § 24, as amended. The State treasurer on the next day notified the city to the same effect. Under date of November 27, 1942, the commissioner sent a letter to the treasurer and assessors of Springfield stating that there had been credited to the city certain amounts from taxes collected in 1942 and previous years. The letter then continued with a list of three items, the last one being ‘On account of Gas, Electric Light & Water Corporations Chapter 58, Section 24 . . . $69,604.31.’ Then came a statement that there had been previously forwarded to the city in 1942 certain amounts shown on a list of five items but with the amounts stated in three items. One of the items for which no amount was mentioned read, ‘on account of Gas, Electric Light & Water Corporations Chapter 58, Section 24 . . . $ none.’ A letter similar in form to that of November 22, 1942, was sent to the treasurer and assessors of Springfield on November 22, 1943, but this letter did not refer to any corporate franchise taxes collected for any year.

The city brought a petition for a writ of mandamus sometime in 1944 to compel the commissioner to determine, and notify the city of, the amounts due to it from the corporate franchise taxes collected in 1942 and 1943 from the two companies we have mentioned. When the petition came on for a hearing before the single justice on August 9, 1944, the commissioner entered into a stipulation with the city in which he stated that he had determined that nothing was due to the city from these taxes and that he would forthwith give notice of this determination to the city treasurer, and the parties stipulated that the petition might be dismissed. The commissioner on the same date gave such notice to the city treasurer. The city filed with the board on August 14, 1944, an appeal from the decision of the commissioner on the 1942 tax, and a second appeal with reference to the 1942 tax. The board found that the notices of November 27, 1942, and November 22, 1943, were insufficient and that the first and only notices of the decisions of the commissioner that nothing was due to that city from the 1942 and 1943 taxes were his letters of August 9, 1944.

The letters of November 27, 1942, and November 22, 1943, to the assessors and the city treasurer, even if read with the letter of November 20, 1942, from the State treasurer, did not comply with G.L. (Ter.Ed.) c. 58, § 25, as amended. The letter of the State treasurer made no mention whatever of the 1942 tax. The letters of November 27, 1942, and November 22, 1943, from the commissioner did not in terms or by reasonable inference state that he had determined that the city was not entitled to any part of the 1942 or 1943 tax. On the other hand, the statement that the city was credited with the ‘following amounts received from taxes collected in 1942 and previous years' fairly indicates that some part of the 1942 tax was credited to the city. The letters of the commissioner are not wholly consistent with the letter of the State treasurer. In the next place, the lump sum stated by the commissioner was the city's share from the 1942 tax and the taxes for previous years. The number of years included in the phrase ‘previous years' is not disclosed and, whatever their number, the amount due for each year is not segregated or stated. These letters are not merely lacking in details but they utterly fail to furnish any definite and particular information as to what amount, if any, the commissioner had determined was due to the city from the 1942 or 1943 tax. Notices required by law or by contract to be given by one party to the other in order to establish rights or obligations must state with reasonable certainty the essential facts required by law or by contract, as the case may be. Fitchburg R. v. Fitchburg, 121 Mass. 132.Shea v. Lowell, 132 Mass. 187.Wilson v. Crooker, 145 Mass. 571, 14 N.E. 798.Inhabitants of Carver v. City of Taunton, 152 Mass. 484, 25 N.E. 965;Boston v. Acton, 167 Mass. 579, 46 N.E. 111.Loanes v. Gast, 216 Mass. 197, 103 N.E. 473.DePrizio v. F. W. Woolworth Co., 291 Mass. 143, 196 N.E. 910.Pecorelli v. Worcester, 307 Mass. 425, 30 N.E.2d 230.Bacon v. Paradise, 318 Mass. 649, 63 N.E.2d 571.

The commissioner points out that under G.L.(Ter.Ed.) c. 58, § 25, as amended, he is required only to ‘ascertain and determine the amount due to each town’ from the proceeds of three different taxes collected by him, to certify ‘the amount as determined’ to the State treasurer and to notify the treasurer of each town thereof, and that he complies with this statute by stating a single amount as due from the proceeds of these three taxes. This contention is based upon the first sentence of this statute, but that sentence must be construed with the last sentence, which provides for an appeal from any decision of the commissioner with reference to the corporate franchise tax. The legislative intent is to be ascertained from all the terms of a statute, giving to each part its appropriate effect and without emphasizing one part at the expense of another, so that together they all make an effectual piece of legislation in harmony with common sense and sound reason. Tilton v. City of Haverhill, 311 Mass. 572, 42 N.E.2d 588.Commissioner of Corporations and Taxation v. Chilton Club, 318 Mass. 285, 61 N.E.2d 335. The last sentence of the statute selects the corporate franchise tax alone, and specifies as to that particular tax that the decision of the commissioner shall be subject to an appeal. The right to appeal would be of little value unless the decision of the commissioner with reference to the corporate franchise tax appears upon the face of the notice sent the the treasurer of the town or city. Certainly no one could tell from a lump sum alone what, if anything, is included therein from the proceeds of a particular tax.

The notices given on November 27, 1942, and November 22, 1943, were insufficient, and the board was right in finding that the city treasurer was not notified of the decision of the commissioner that the city was not entitled to share in the proceeds of the 1942 and 1943 taxes paid by the two electric light companies until he received the notices of August 9, 1944, from the commissioner. Brown v. Winthrop, 275 Mass. 43, 46, 175 N.E. 50.DePrisio v. F. W. Woolworth Co., 291 Mass. 143, 196 N.E. 910.King v. Boston, 300 Mass. 377, 15 N.E.2d 191.

The United Electric Light Company was incorporated ‘for the purpose of...