Commonwealth v. Norman

Citation144 N.E. 66,249 Mass. 123
PartiesCOMMONWEALTH v. NORMAN.
Decision Date23 May 1924
CourtUnited States State Supreme Judicial Court of Massachusetts

OPINION TEXT STARTS HERE

Appeal from Superior Court, Suffolk County; Wait, Judge.

Action of contract by the Commonwealth of Masschusetts against Maxwell Norman, brought in the superior court. From an order accepting defendant's petition and bond for removal of cause to District Court of United States, plaintiff appeals. Order reversed.

A. Lincoln, Asst. Atty. Gen., for the Commonwealth.

W. A. Dane, of Boston, for appellee.

RUGG, C. J.

This is an action of contract. It was brought originally in our superior court. It comes before us on appeal from an order of that court accepting the defendant's petition and bond for removal of the cause from that court to the District Court of the United States for the District of Massachusetts. It is rightly before us. Long v. Quinn Bros., 215 Mass. 85, 86, 102 N. E. 348;Samuel v. Page Storms Drop Forge Co., 243 Mass. 133, 134, 137 N. E. 169. No question is raised as to the form or seasonableness of the petition for removal, the sufficiency of the bond, or the jurisdictional amount involved.

The petition alleges that at all times crucial to the decision of issues here raised he was a citizen of the state of Rhode Island; that, both individually and as trustee with another by appointment of the appropriate court of the state of Rhode Island under a will duly admitted to probate in that state, he has been unlawfully assessed a tax on income under the laws of this commonwealth and that the action is to recover such tax; that the present action is a proceeding by Henry F. Long, ‘commissioner of corporations and taxation, brought in the name of the commonwealth of Massachusetts to enforce unlawful exactions * * * under the alleged authority of the said income tax law of Massachusetts and that it is a confiscatory and unconstitutional enforcement of said income tax law in violation of the ‘due process' and ‘equal protection’ clauses' of the Fourteenth Amendment of the United States Constitution; that the present action is for the collection of such income taxes; that the assessment of such taxes was ‘an unlawful exaction and a confiscatory and unconstitutional enforcement of said income tax law * * * is wholly unauthorized and is therefore the personal act of the commissioner of corporations and taxation, the said Henry F. Long, so that he, the said Henry F. Long, and not the commonwealth of Massachusetts, is the real party plaintiff,’ and that he is a citizen of Masachusetts, and that accordingly the action is between citizens of different states. The sole question for decision is whether on this record the action is removable on the ground that it ‘is wholly between citizens of different states' and can be fully determined as between them under section 28 of the Judicial Code (36 U. S. Stats. at large, c. 231, Act March 3, 1911 [U. S. Comp. St. § 1010]).

[1][2][3][4][5] It is the duty of the state court, in passing upon a petition for removal of an action to a District Court of the United States, to determine whether on the face of the record a cause for removal is made out. It any issues of fact are raised, these cannot be tried in the state court but must be heard and decided in the federal court on a petition to remand. All allegations of fact in the petition for removal must be accepted as true by the state court for the purpose of determining whether it ought to surrender jurisdiction. Long v. Quinn Brothers, 215 Mass. 85, 87, 102 N. E. 348;Chesapeake & Ohio Railway v. Cockrell, 232 U. S. 146, 154, 34 Sup. Ct. 278, 58 L. Ed. 544. Whether a cause for removal is made out on the face of the record is a question of law which must be decided by the state court subject to review by the Supreme Court of the United States. Eaton v. Walker, 24 Mass. 23, 27,138 N. E. 798, and cases there collected. It follows as an inevitable corollary to this proposition that the allegations of law inserted in a petition for removal are not accepted as sound or binding. So far as material they must be critically examined and stand or fall on their own merits.

It has bee held repeatedly that under the removal statute a state is not a citizen and hence diversity of citizenship cannot be predicated on an averment to that effect. An action between a state and a citizen, therefore, cannot be removed. Postal Telegraph Cable Co. v. Alabama, 155 U. S. 482, 487, 15 Sup. Ct. 192, 39 L. Ed. 231;Title Guaranty Co. v. Allen, 240 U. S. 136, 140, 36 Sup. Ct. 345, 60 L. Ed. 566;Arkansas v. Kansas & Texas Coal Co. 183 U. S. 185, 188, 22 Sup. Ct. 47, 46 L. Ed. 144;McAllister v. Chesapeake & Ohio Railway, 243 U. S. 302, 305, 37 Sup. Ct. 274, 61 L. Ed. 735;Alabama Southern Railway v. Thompson, 200 U. S. 206, 216, 26 Sup. Ct. 161, 50 L. Ed. 441, 4 Ann. Cas. 1147;Great Northern Railway v. Alexander, 246 U. S. 276, 280, 281, 38 Sup. Ct. 237, 62 L. Ed. 713.

[7] The defendant does not dispute this principle. He seeks by the allegations of his petition to show that the action is not by the commonwealth as plaintiff, but by one Long. For the purpose of deciding this question we accept as controlling a principle stated in another connection for determining whether a state is a party:

‘As to what is to be deemed a suit against a state, the early suggestion that the inhibition might be confined to those in which the state was a party to the record (Osborn v. United States Bank, 9 Wheat. 738, 846, 850, 857), has long since been abandoned, and it is now established that the question is to be determined not by the mere names of the titular parties but by the essential nature and effect of the proceeding, as it appears from the entire record.’ Ex parte State of New York, No. 1, 256 U. S. 490, 500, 41 Sup. Ct. 588, 590 (65 L. Ed. 1057).

[8] This confessedly is an action to collect a tax assessed under the statutes of this commonwealth. The attempt is made to enforce it according to the statutes of this commonwealth. The question who is entitled to bring action to collect such a tax depends upon the interpretation of the statutes of this commonwealth. The collection of income taxes under our statutes is governed by G. L. c. 62, § 41, as amended by St. 1923, c. 287, § 3:

‘If a tax assessed under this chapter remains unpaid after the expiration of fourteen days from the date when due, interest at the rate of six per cent. per annum from the due date shall be added to and become part of the tax. The commissioner, and the income tax assessors in their respective districts, shall have for the collection of taxes assessed under this chapter all the remedies provided by chaptersixty for the collection of taxes on personal estate by collectors of taxes of towns, and shall be allowed charges and fees as therein provided. Any action of contract brought to recover any such tax shall be brought in the name of the commonwealth.’

The express words of the statute are that actions to collect such taxes shall be brought in the name of the commonwealth. That requirement of the statute but conforms to the nature of income taxation under our statutes. The income tax is a state tax. It is levied, collected and disbursed by state officers. The entire proceeds of the tax find their way into the treasury of the commonwealth and are disbursed exclusively for public uses. Duffy v. Treasurer and Receiver General, 234 Mass. 42, 47, 125 N. E. 135.

The commonwealth is named as party to this action. Its name alone is in the writ and caption. It is not a mere nominal party. It is the real party in interest. No one else has any interest in the outcome of the action. It is difficult to conceive of any administrative or executive subject in which the commonwealth is more deeply or more directly concerned than the collection of the income and other state taxes. We do not deem it necessary to go through the statutes with meticulous detail to demonstrate that the state has a primary, intimate and inherently essential relation to the collection of this tax. The gain therefrom is the gain of the commonwealth alone. Loss from failure to collect is loss to the commonwealth alone.

Proceedings for abatement of income taxes or for recovery of such taxes unlawfully exacted, although brought by mandate of G. L. c. 62, §§ 43, 47, against the commissioner of corporations and taxation, are in substance and effect against the commonwealth. No judgment or decree in ordinary form is made up and no execution...

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    ...systematically and intentionally by a governmental agency for the continuing benefit of the Commonwealth"); Commonwealth v. Norman, 249 Mass. 123, 130-131, 144 N.E. 66 (1924) ("A suit in equity to restrain a State officer from executing an unconstitutional statute to the irreparable damage ......
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