First Nat. Bank of Boston v. Comm'r of Corp. & Taxation

• Decision Date: 11 January 1927
• Citation: 258 Mass. 253,154 N.E. 844
• Parties: FIRST NAT. BANK OF BOSTON et al. v. COMMISSIONER OF CORPORATIONS AND TAXATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

258 Mass. 253

154 N.E. 844

FIRST NAT. BANK OF BOSTON et al.

v.COMMISSIONER OF CORPORATIONS AND TAXATION.

Supreme Judicial Court of Massachusetts, Essex.

Jan. 11, 1927.

Case Reserved and Report from Probate Court, Essex County; H. R. Dow, Judge.

Petition by the First National Bank of Boston and others against the Commissioner of Corporations and Taxation to recover transfer assessments. On reservation and report on a case stated. Tax and interest ordered abated.

L. M. Lombard, of Boston, for petitioners.

Melville Fuller Weston, Asst. Atty. Gen., for respondent.

PIERCE, J.

The case comes to this court by report and reservation from the probate court upon a case stated, which, it was agreed by the parties, contains all the ultimate material facts. The judge of probate found ‘in so far as it is my duty and within my power to do so [the facts] to be as stated in the case stated.’

The pertinent facts are as follows:

‘Edward H. Winslow * * * died September 13, 1918, leaving as a part of his estate assets consisting of his distributive share of the estate of Sidney W. Winslow, who died subsequent to September 13, 1913. * * * Said assets * * * had been taxed by the federal government under the provisions of the federal Revenue Act in force at the time of the death of said Sidney W. Winslow, but in the federal act of 1918 (40 Stat. 1057) no provision was included whereby a credit for said estate previously taxed within five years could be given in computing the federal estate tax on the estate of said Edward H. Winslow, so that a federal estate tax amounting to $34,159.80 was imposed upon the estate of Edward H. Winslow and was paid.’

In computing the legacy and succession tax due the commonwealth of Massachusetts upon the estate of Edward H. Winslow, the commissioner of corporations and taxation deducted the amount of the federal tax, $34,159.80, which had been paid. An amendment to the federal Revenue Act, approved November 23, 1921-section 403 (a) (2), 42 Stat. at 23, 1921-section 403(a)(2), 42 Stat. at that one of the deductions from the gross estate of a decedent, in arriving at the net estate for estate tax purposes, should be, in substance, an amount equal to the value of any property received by the decedent within five years prior to the death of the decedent by gift, bequest, devise, or inheritance from a prior decedent in whose estate the property had already been the subject of a federal estate tax and that tax had been paid by or on behalf of the estate of the prior decedent. The act provided that:

‘This deduction shall be made in case of the estates of all decedents who have died since September 8, 1916.’

As a consequence of this act, the estate of Edward H. Winslow received from the federal government on October 5, 1923, a payment of $18,511.11, and on April 25, 1924, an additional payment of $5,703.63. On these sums the commissioner claimed the right to assess additional inheritance taxes upon the estate of Edward H. Winslow as upon ‘subsequently disclosed assets,’ and assessed upon the total sum, $24,214.74, thus receiving an additional legacy and succession tax. This tax was paid, and the petitioners as administrators of the estate of Edward H. Winslow have brought this petition to receive back these additional assessments.

The question intended to be presented by the case is shown by the closing words of the report, which are as follows:

‘Said additional assessments were based upon the said repayments by the United States, and are correct in amount and otherwise valid, provided that upon the facts disclosed by this case stated, which contains all the ultimate material facts, it was lawful for the respondent to assess and collect any legacy and succession tax upon said estate, and upon petitioners as administrators thereof, by reason of their having received from the United States the aforesaid repayments, and by reason of the sums thus repaid passing by intestate succession in the estate of the...