Hunt v. Perry

• Citation: 43 N.E. 103,165 Mass. 287
• Parties: HUNT v. PERRY et al.
• Decision Date: 26 February 1896
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

165 Mass. 287

43 N.E. 103

HUNT v. PERRY et al.

Supreme Judicial Court of Massachusetts, Norfolk.

February 26, 1896

COUNSEL

Edward Avery and Albert E. Avery, for plaintiff.

George R. Swasey and Wm. H. Brown, for defendants.

OPINION

ALLEN J.

1. The defendants object that no statute authorizes the taxes which were assessed upon them. By Pub.St. c. 11, § 20, cl. 5, it is provided in respect to personal property held in trust by an executor, administrator, or trustee, the income of which is payable to another person, that, "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." The defendants contend that this provision does not apply to a case where the trust was created by the will of a testator who lived and died in another state, and whose will was proved and allowed in such other state, and was never proved here. But we can have no doubt that it was the intention of the legislature to include cases like the present. It has long been the policy of the legislature to tax a resident owner in the place where he lives for his personal property, wherever it may be situated and whether within or without the state. St.1821, c. 167, § 2; Rev.St. c. 7, § 4; Iron Factory Co. v. Danvers, 10 Mass. 514. Inhabitants of Great Barrington v. County Com'rs of Berkshire, 16 Pick. 572. In relation to trust funds, it was provided by St.1828-31, c. 143, § 2, that "persons entitled to the income of any personal property held by others in trust for them shall be liable to be taxed for the capital or principal sum in the town where such persons reside." By Rev.St. c. 7, § 10, cl. 5, "all personal property held in trust by any executor administrator or trustee, the income of which is to be paid to any married woman or other person, shall be assessed to the husband of such married woman or to such other person, respectively, in the town of which he is an inhabitant; but if such married woman or other person reside out of the state the same shall be assessed to said executor, administrator or trustee in the town where he resides." In the case of Dorr v. Boston, 6 Gray, 131, which arose under this section in 1856, it was held that an unmarried woman, an inhabitant of this state, was not taxable for shares in corporations held in trust by trustees residing in another state to pay the income to her. The reason for this decision was that the revising commissioners had submitted to the legislature a section providing in terms that if personal property should be held in trust by a person residing without the state, and the person for whose benefit it was held resided within the state, then the person entitled to such benefit should be assessed for the same, in like manner as if the legal title thereof were vested in him. But these provisions were stricken out by the legislative committee to whom the work of the commissioners was referred, and sections 4 and 10 were reported as they were enacted by the legislature. The court held this to be decisive proof that it was the will of the legislature to reject the provision reported by the commissioners. By Gen.St. c. 11, § 12, cl. 5, the provision was adopted which, in substance, followed the provision reported by the commissioners on the Revised Statutes, and which was re-enacted without change in Pub.St. c. 11, § 20, cl. 5, as hereinbefore quoted, and it is now the law. Attention was called to this change in the law in Bemis v. Boston, 14 Allen, 366, where it was held that, if one living here is a partner in a firm carrying on business elsewhere, his interest in the property of the firm is taxable here. See, also, Dallinger v. Rapallo, 15 F. 434, ad finem. The statute under consideration rests on the ground that the cestuis que trustent residing here have a beneficial interest in the trust fund, which is valuable, and that they are, in effect, the equitable owners thereof. An interest of this kind is property which the legislature may subject to taxation. Bates v. Boston, 5 Cush. 93; Willisten Seminary v. County Com'rs, 147 Mass. 427, 18 N.E. 210; Hathaway v. Fish, 13 Allen, 267. In Anthony v. Caswell, 15 R.I. 159, 1 A. 290, cited by the defendants as in point, the statute contained no such provision as that above copied.

2. The defendants contend that the statute, if such is its true construction, is unconstitutional. This argument rests on the ground that the property is situated out of the state; that the beneficial interest of a cestui que trust is nowhere else made taxable; and that this statute selects for taxation a kind of interest not otherwise taxable, and so imposes a tax which is disproportionate. This argument, however, is met by the suggestions already made that the cestui que trust is here, and his ownership or title is here, namely, the right to the income of the trust fund. The fact that...