Farr Alpaca Co. v. Com.
| Decision Date | 24 May 1912 |
| Citation | 212 Mass. 156,98 N.E. 1078 |
| Parties | FARR ALPACA CO. v. COMMONWEALTH. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Green & Bennett, of Springfield, for plaintiff.
J. M Swift, Atty. Gen., and A. Marshall, Asst. Atty. Gen., for the Commonwealth.
This is a petition for abatement of an excise levied under St. 1909 c. 490, part 3, §§ 41, 43, upon a corporation organized under the laws of this commonwealth. The petitioner owned wool valued at $549,190.32 purchased in a foreign country, brought by it to this county, and entered for warehousing by it in a United States bonded warehouse at Holyoke in this commonwealth. The controversy revolves about this item. It was in the original packages subject to an unpaid duty to the United States, and it had remained the property of the petitioner from the time of its purchase abroad. The tax commissioner ascertained the true market value of the shares of the capital stock of the petitioner from its return to be $9,840,000, and this was 'taken as the true value of its corporate franchise,' under section 41. From this was deducted the value of the petitioner's real estate and machinery in Holyoke subject to local taxation. Section 43 provides that every corporation, subject to its provisions shall pay an annual excise tax 'upon its corporate franchise, after making the deductions provided for in section 41' at a specified rate, with the further provision that the 'tax upon the value of the corporate franchise of a domestic business corporation, after making the deductions provided for in section 41, shall not exceed a tax levied at the rate aforesaid upon an amount, less said deductions, 20 per cent. in excess of the value, as found by the tax commissioner, of the works, structures, real estate, machinery, underground conduits, wires and pipes, and merchandise, and of securities which if owned by a natural person resident in this commonwealth would be liable to taxation.' The value of the petitioner's corporate franchise was so large that its tax was required to be levied under the clause just quoted. The tax provided by this section is an excise upon the franchise of the corporation, and not a tax upon its property. Our statutes, however, levying an excise upon corporate franchises, exhibit a progressive tendency to prevent the technical distinction between excises and property taxes from resulting in double taxation. Tremont & Suffolk Mills v. Lowell, 178 Mass. 469, 471, 59 N.E. 1007. The 20 per cent. limitation appeared first in St. 1903, c. 437, § 74, and in view of the report of the committee which was the basis of this statute may have been enacted for the purpose of putting domestic corporations more nearly upon an equality with foreign corporations, and lessening the discrimination against domestic corporations which had theretofore existed. See N.E. & Savannah Steamship Co. v. Com., 195 Mass. 385, 389, 390, 81 N.E. 286, 11 Ann. Cas. 678. But the act and the report of the committee manifest no intention to put the excise levied upon a domestic corporation upon an equality with the property taxes to be assessed upon individuals. An examination of the details of the successive corporation taxes and the deductions which they severally provide from the value of the franchise before levying the tax, show merely a policy of avoiding what might in some instances be double taxation as to property located outside of the commonwealth, and lessening the rigor of the domestic corporation tax. See St. 1864, c. 208, § 5; St. 1865, c. 283, § 5; Pub. Sts. c. 13, § 14; R. L. c. 14, §§ 38, 40; St. 1902, c. 342, § 3; St. 1903, c. 437, §§ 72, 74; St. 1904, c. 261. In determining the true value of the petitioner's corporate franchise, the wool which it owned in the bonded warehouse necessarily was taken into account. The first question is whether it should be included under clause 3 of section 41, which provides that the value of 'the works, structures, real estate, machinery, * * * also the value of its property situated in another state or country and subject to taxation therein,' shall be deducted from the true value of the corporate franchise before the excise is computed. It is plain that the wool should not have been deducted under this clause. Whether it could be said to be constructively in another state or country because in a bonded warehouse from which it might have been exported without the payment of duty, although physically in this state, it certainly was not 'subject to taxation therein.' Hence it was not within the description of property that should be deducted.
It is strongly urged, however, that it should not have been included as a part of the value 'of the works, structures, real estate, machinery * * * and merchandise, and of securities which if owned by a natural person resident in this commonwealth would be liable to taxation,' to which 20 per cent. may be added before the excise is computed. The determination of this question depends upon the definition and scope of 'merchandise' as used in the statute. Plainly, it does not refer to merchandise which 'if owned by a natural person in the commonwealth would be liable to taxation.' That fraction going to make up the total value is confined to 'securities' as the last antecedent by the punctuation and by the grammatical construction of the sentence. Moreover, in the interpretation of the franchise excise law, the court has uniformly followed the general principle of statutory interpretation that express mention of items by implication excludes other matters not mentioned. Com. v. N.E. Slate & Tile Co., 13 Allen, 391; American Glue Co. v. Com., 195 Mass. 528, 530, 81 N.E. 302, 122 Am. St. Rep. 268. It seems clear that the word 'merchandise,' as used in this statute, includes wool. It was said in N.E. & Savannah Steamship Co. v. Com., 195 Mass. 385, 81 N.E. 286, 11 Ann. Cas. 678, referring to the same word in the earlier statute, 'The word 'merchandise,' so far at least as respects chattels, must be construed as including tangible property which may be the subject of sale.' There is nothing in the context to indicate that it is used in any other than its natural significance. It includes the merchandise of the petitioner wherever situated, and under whatever circumstances it may be held, provided only that it is not subject to taxation in some other state or country. Great reliance is placed by the petitioner upon the sentence in the opinion of American Glue Co. v. Com., 195 Mass. 528, at page 531, 81 N.E. 302, at page 303 (122 Am. St. Rep. 268), to the effect that 'the object of this later section [now section 43] is to limit the taxation, by establishing a maximum which is founded upon the amount of property held by the corporation that would be taxable if held by an individual, apart from the value of its franchise and other assets which are not subject to taxation as property and to prohibit a charge in excess of 20 per cent. above the percentage upon this amount.' Strictly construed, this language gives some color to the petitioner's contention, but it was used with an entirely different purpose as to a quite different state of facts, and was not intended to apply to a case like the present. Every judgment must read with respect to the facts with which it was dealing. As contended by the commonwealth, the language referred to property of a taxable nature, and not property technically subject to taxation in this commonwealth. The point now to be determined is not whether the merchandise would be taxable if held by an individual, but whether the Legislature has directed that it be included or excluded in determining the amount upon which the excise shall be computed. It is included in the ascertainment of true franchise value provided for in the first part of section 41. It is not included in the deductions mentioned in clause 3 of the same section. It is comprehended by fair intendment in the enumeration of items for determining the value of the property to which the 20 per cent. shall be added before the excise is computed. That in ascertaining the franchise value for the purpose of levying the excise, consideration has been given to the ownership of property which is not subject to taxation does not impair the validity of the excise. Com. v. Hamilton Mfg. Co., 12 Allen, 298.
As thus construed, the...
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