Commissioner of Corporations and Taxation v. City of Malden

• Decision Date: 13 February 1947
• Citation: 321 Mass. 46,71 N.E.2d 601
• Parties: COMMISSIONER OF CORPORATIONS AND TAXATION v. CITY OF MALDEN (and two companion cases between the same parties).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

321 Mass. 46

71 N.E.2d 601

COMMISSIONER OF CORPORATIONS AND TAXATION

v.

CITY OF MALDEN (and two companion cases between the same parties).

Supreme Judicial Court of Massachusetts, Suffolk.

February 13, 1947

December 4, 1946.

Present: FIELD, C.

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

Taxation Distribution of taxes; Corporate franchise tax; Appellate Tax Board: appeal to Supreme Judicial Court, appeal to board. Notice. Municipal Corporations. Officers and agents. Time.

Where a statute provides for the giving of a notice to or the filing of a statement with a designated municipal officer, the giving of a notice to or the filing of a statement with a different municipal officer is invalid; and this is so even though the officer designated by the statute to receive the notice or statement knows that it has been given to or filed with the other officer. Per RONAN, J.

A letter by the commissioner of corporations and taxation to the mayor of a city stating "that there was no sum distributable to" the city in 1943 or 1944, did not comply with the provisions of G. L. (Ter. Ed.) c. 58,

Section 25, as amended, calling for a notice to the treasurer of the city and did not entitle the city to appeal to the Appellate Tax Board from the commissioner's decision.

Upon an appeal from a decision of the Appellate Tax Board which recited, as to a notice by the commissioner of corporations and taxation to the treasurer of a city purporting to have been given under G. L. (Ter. Ed.) c. 58, Section 25, as amended, "both parties treated [this letter] as a notice of determination by the commissioner that there was nothing due the city on account of franchise taxes paid by the electric company for the year 1944," no question of law as to the sufficiency of the notice was open in this court.

In the absence of a provision in Section 25 of G. L. (Ter. Ed.) c. 58 as it stood in 1944, respecting the time within which an appeal to the

Appellate Tax Board from the decision of the commissioner of corporations and taxation therein described should be taken, a reasonable time was allowed.

In the circumstances, an appeal under G. L. (Ter. Ed.) c. 58, Section 25, as it stood in 1944, to the Appellate Tax Board from a decision by the commissioner of corporations and taxation, filed a little more than a month after notice of his decision, was taken within a reasonable time.

APPEALS from decisions of the Appellate Tax Board.

C. A. Barnes, Attorney General, & W.

G. Perrin, Assistant Attorney General, for the Commissioner of Corporations and Taxation, submitted a brief.

B. Kaplan, City Solicitor, for the city of Malden.

RONAN, J. These are three appeals by the commissioner of corporations and taxation from decisions of the Appellate Tax Board that the city of Malden is entitled to share in the proceeds of the corporate franchise tax paid in 1943 by the Malden Electric Company to the extent of $28,532.57, and to share in a similar tax paid by this company in 1944 to the extent of $29,894.76, and that the city is also entitled to share in the proceeds of the corporate franchise tax paid in 1943 by the Malden and Melrose Gas Light Company to the extent of $3,526.18.

The electric company was incorporated under the laws of this Commonwealth in 1888 for the purpose of "generating, selling and distributing electricity for light, heat and mechanical power, and carrying on a general electric light, heat and power business." It conducts this business in Malden Melrose, Medford and Everett. Its principal place of business is located in Malden.

The gas company is a domestic corporation which, since its organization in 1854, has engaged in the business of manufacturing, distributing and selling gas for illumination, cooking, heating, commercial and industrial purposes to customers in Malden, Medford, Melrose, Everett, Reading, Stoneham and Wakefield. Its principal place of business is in Malden.

While the commissioner has contended that the notices sent to the treasurer and assessors of the city under the dates of November 22, 1943, and November 13, 1944, were valid notices that he had decided that the city was not entitled to any portion of the corporate franchise taxes paid in 1943 and 1944 by the gas and electric companies, yet he has also contended that, if these notices were insufficient, the three appeals to the board ought to have been dismissed because no appeal would lie until after the city treasurer had been notified by the commissioner of his decision.

We first decide whether the two appeals by the city with reference to the 1943 taxes were prematurely taken because they were filed with the board before a proper notice had been given to the city treasurer.

The commissioner on November 22, 1943, sent to the treasurer and assessors of Malden a form letter advising them that the city had been credited with certain amounts received from the collection of taxes in 1943, listing and describing three items, with the statutory references, and showing the specific amount due to the city on each of these items. The letter, however, made no mention whatever of the corporate franchise taxes that had been collected from the gas and electric companies. There was nothing in it indicating that the commissioner had made any decision as to the share of the city in these taxes, much less that he had decided that nothing was due to the city. This letter cannot be held to constitute a notice that the commissioner had ascertained that no part of the proceeds of these taxes should be paid to the city. Commissioner of Corporations & Taxation v. Springfield, decided this day.

The mayor of Malden under date of September 18, 1944, wrote to the commissioner, stating that he had learned from the city controller that the city had not received its proportionate share of the corporate franchise taxes for the years 1943 and 1944, and requesting that the commissioner inform him the reason the city had not been paid. The commissioner replied on September 21, 1944, "that there was no sum distributable to Malden in 1943 or 1944." The board found that this was the only notice that the city had received of the commissioner's determination that the city was not entitled to any share of the corporate franchise taxes paid in 1943 by the gas and electric companies, and that the letter to the mayor was a proper notice of the decision of the commissioner. The question is whether the letter constitutes the notice required by G. L. (Ter. Ed.) c. 58, Section 25, as appearing in St. 1934, c. 323, Section 3, as amended by St. 1941, c. 729, Section 11. See now St. 1945, c. 687. It was the duty of the commissioner under Section 25 to ascertain what amount, if any, was due to each town and to "notify the treasurer of each town thereof." Notice thereof must refer to a decision already made, Checkoway v. Cashman Brothers Co. 305 Mass. 470 , 471, and notification imports actual receipt of the notice. Liberty Mutual Ins. Co., petitioner, 298 Mass. 75 . Hobart-Farrell Plumbing & Heating Co. v. Klayman, 302 Mass. 508 , 509.

The mayor is the chief executive officer of the city, having general supervision over the various municipal departments and the conduct of its officers and employees. A notice to him concerning a matter in which the city has a pecuniary or proprietary interest, or a right to protect or enforce, is generally regarded, in the absence of a statute to the contrary, to be a sufficient notice to the city. Nichols v. Boston, 98 Mass. 39. Commercial Wharf Corp. v. Boston, 194 Mass. 460 . Rollins v. Salem, 251 Mass. 468 . Eastern Massachusetts Street Railway v. Mayor of Fall River, 308 Mass. 232 . But a statute may prescribe, as does Section 25, the city official to whom notice is to be given or with whom a notice is to be filed. The purpose of Section 25 providing for notice to the city treasurer is to make certain that the municipal officer who is in immediate charge of its financial affairs, the receipt of its revenues and the disbursement of its funds, is apprised of the decision of the commissioner, in order that he may see that all sums to which the city is entitled are credited to it in settling its accounts with the

Commonwealth and if the decision of the commissioner appears to be erroneous, consult with the appropriate municipal officials in order that an appeal may be taken. The decision becomes operative as to the city when notice is received by the city treasurer. Notice fixes the rights of the city, which may accept the decision or seek to reverse it by an appeal -- a remedy that we do not think becomes available until an actual notice is given to the treasurer. The simple and expedient method devised by the Legislature for the protection of the rights of the city in the proceeds of the corporate franchise taxes paid by corporations engaged there in the business of manufacturing and selling gas and electricity merely requires a notice to the city treasurer...