Hemenway v. Town of Milton

• Decision Date: 27 February 1914
• Citation: 217 Mass. 230,104 N.E. 362
• Parties: HEMENWAY et al. v. TOWN OF MILTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

217 Mass. 230

104 N.E. 362

HEMENWAY et al. v. TOWN OF MILTON.

Supreme Judicial Court of Massachusetts, Norfolk.

February 27, 1914

COUNSEL

Fred

T. Field, of Boston, for complainants.

Geo. C Coit, of Boston, for defendant.

OPINION

RUGG C.J.

The plaintiffs are residents of Massachusetts, but not in Milton. They have been appointed by the probate court for Norfolk county trustees generally under the will of a testator who deceased a resident of Massachusetts. They also have been appointed by the appropriate court of the state of New York trustees under the sixth clause of the will whereby the testator disposed of all his 'land and real estate lying in the state of New York.' As trustees they hold certain personal property acquired in substitution for a part of this real estate. The bonds and other securities part of which are notes secured by mortgage upon real estate in New York, physically were in this commonwealth. The trustees have kept separate accounts touching the property held under the sixth clause and consistently have treated it as not a part of the residuary trust created by the seventh clause. The beneficiaries under the two clauses are substantially the same but the provisions as to termination of the trusts are different. The two beneficiaries, the tax upon whose shares is now in question, reside in Milton.

The point to be decided is whether this personal property was taxed rightly to the trustees in town of residence of the beneficiaries under St. 1909, c. 490, pt. 1, § 23, cl. 5 which is as follows:

'Personal property held in trust by an executor, administrator or trustee, the income of which is payable to another person, shall be assessed to the executor, administrator or trustee in the city or town in which such other person resides, if within the commonwealth; and if he resides out of the commonwealth it shall be assessed in the place where the executor, administrator or trustee resides; and if there are two or more executors, administrators or trustees residing in different places, the property shall be assessed to them in equal portions in such places, and the tax thereon shall be paid out of said income. If the executor, administrator or trustee is not an inhabitant of the commonwealth, it shall be assessed to the person to whom the income is payable, in the place where he resides, if it is not legally taxed to an executor, administrator or trustee under a testamentary trust in any other state.'

It is plain that the words of this clause of the statute interpreted literally cover the facts of the present case. The trustees, being residents of the commonwealth, hold personal property in trust the income of which is payable to other persons resident in Milton in this commonwealth. It is equally plain that this state has the power to tax such personal property. The legal title to it is in the trustees who are residents here and the beneficial interest is also in residents of this state. This is enough to support the exercise of the taxing power. It even has been held that the interest of a beneficiary is subject to taxation here, where the trust fund was created by the will of a testator who resided and died in another state and whose will there alone was proved and allowed and the trustees were appointed by and lived within that jurisdiction. Hunt v. Perry, 165 Mass. 287, 43 N.E. 103. That case goes much further in upholding the taxing power of the state than it is necessary to go in order to sustain the present tax.

The legal title to the property is in the trustees who are residents here. This has been held to be enough to support a tax even though the beneficiaries lived elsewhere, and the testator was a nonresident. Ailman, Petitioner, 17 R.I. 362 22 A. 279. See Hess v. Reynolds, 113 U.S. 73, 5 S.Ct. 377, 28 L.Ed. 927; Lewis v....