International Paper Co. v. Commonwealth

Decision Date06 January 1919
PartiesINTERNATIONAL PAPER COMPANY v. COMMONWEALTH.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

December 2, 1918.

Present: RUGG, C.

J., LORING, BRALEY DE COURCY, & PIERCE, JJ.

Tax, Remedy for unlawful taxation. Jurisdiction. Limitations, Statute of. Words, "Proceedings."

Where a remedy is created by statute and the time within which and the method according to which it must be pursued are prescribed by the statute as the conditions under which the remedy can be availed of, a court has no jurisdiction to entertain proceedings for relief begun at a later time or prosecuted in a different manner. This rule governs proceedings designed to afford relief against unlawful taxation and applies to the provisions of St. 1909, c. 490, Part III, Section 70.

Under St. 1909, c 490, Part III, Section 70, which provides that an application by petition to recover the amount of a tax or excise alleged to have been exacted unlawfully shall be made "within six months after the payment of the same," and which also provides that, "The proceedings upon such petition shall conform, as nearly as may be, to proceedings in equity," it is not sufficient that the petition was filed in court and that the subpoena upon it was taken out within the designated six months, if no service of the subpoena was made upon the Treasurer and Receiver General or upon the Attorney

General within that time and no reasonable effort was made to serve such subpoena seasonably. Where there was no such service nor attempt at service the petition must be dismissed.

PETITION, filed in the Supreme Judicial Court on November 12, 1917, under St 1909, c. 490, Part III, Section 70, by the International Paper Company, a corporation organized under the laws of the State of New York, to recover $5,500 as the amount of an excise paid by the petitioner to the Commonwealth on May 21, 1917, and alleged to have been exacted unlawfully.

An order of notice to be served on the Treasurer and Receiver General and the Attorney General was issued on the date of the filing of the petition, but it appears never to have been served.

More than four months later, on March 14, 1918, another order of notice was issued, which was served upon the Treasurer and Receiver General and upon the Attorney General on April 4, 1918.

On May 22, 1918, the Attorney General in behalf of the Commonwealth filed a motion to dismiss the petition upon the following grounds:

"1. The petition is not an application for the abatement of the tax described therein duly made within the time and in accordance with the conditions set forth in St. 1909, c. 490, Part III, Section 70.

"2. The petition is not brought within six months of the payment of the tax as required by St. 1909, c. 490, Part III, Section 70.

"3. No service of the original order of notice issued on the filing of the petition was ever made upon the respondent as required by St. 1909, c. 490, Part III, Section 70.

"4. The service of an order of notice issued upon this petition long after the filing thereof and more than six months after the payment of the tax is not a compliance with the conditions imposed by St. 1909, c. 490, Part III, Section 70."

The case was heard by Crosby, J., upon the petition and the respondent's motion to dismiss. It was admitted by the counsel for the respondent that the motion to dismiss was based exclusively upon the Commonwealth's contention as to the proper construction of St. 1909, c. 490, Part III, Section 70.

The petitioner introduced the testimony of the assistant clerk of the Supreme Judicial Court as to the long continued practice in equity in that Court to the effect that alias orders of notice and subpoenas are issued upon the request of the plaintiff at any time, whenever the original order of notice or subpoena has not been served; also the existing and former rules in equity of the Supreme Court of the United States to the same effect.

The single justice reported and reserved the motion to dismiss for determination by the full court. If the motion should be denied, a decree was to be entered for the petitioner to recover the tax, with interest and costs, as prayed for in the petition. If the motion should be granted, a decree was to be entered dismissing the petition.

St. 1909, c.

490, Part III, Section 70, is as follows: "Any corporation or association aggrieved by the exaction of said tax or excise or of any portion thereof may, within six months after the payment of the same, whether such payment be after or before the issue of the warrant mentioned in the preceding section, apply by petition to the Supreme Judicial Court, setting forth the amount of the tax or excise and costs thereon so paid, the general legal grounds and the specific grounds in fact, if any, upon which it is claimed such tax or excise should not have been exacted. Said petition shall be the exclusive remedy and shall be entered and heard in the county of Suffolk. A copy of the same shall be served upon the Treasurer and Receiver General and upon the Attorney General. The proceedings upon such petition shall conform, as nearly as may be, to proceedings in equity, and an abatement shall be made of only such portion of the tax or excise as was assessed without authority of law. In case said tax or excise has heretofore been exacted or is hereafter exacted in consequence of any law or statute of any other State of the United States, then the application above provided for may be made at any time within six years after the exaction of said tax or excise or any portion thereof."

G. L. Mayberry & C.

A. Snow, (F.

T. Benner & W. P. Everts with them,) for the petitioner.

W. H. Hitchcock, Assistant Attorney General, for the Commonwealth.

RUGG, C. J. This is a petition under St. 1909, c. 490, Part III, Section 70, to recover an excise tax alleged to have been exacted contrary to law. The petition, which avers that the tax was paid on May 21,

1917, was filed on November 12, 1917. On the same day an order of notice was issued returnable on the first Monday of December following, which, so far as appears, never was in the hands of an officer and never was served. On March 14, 1918, another order of notice issued, service of which was acknowledged on the same day. The Attorney General filed a motion to dismiss the petition on the general ground that the petition was not brought and notice thereof served within the time prescribed by law. The decision of the question thus raised depends upon the terms of said Section 70 printed on page 9. There must be direct compliance with the terms of this statute. The Commonwealth has consented to be impleaded only on the conditions there set forth. McArthur Brothers Co. v. Commonwealth, 197 Mass. 137.

Where a remedy is created by statute and the time within which and the method according to which it must be pursued are prescribed as conditions under which it can be availed of, the court has no jurisdiction to entertain proceedings for relief begun at a later time or prosecuted in a different method. Peterson v. Waltham, 150 Mass. 564 . Lancy v. Boston, 185 Mass. 219. Partridge v. Arlington, 193 Mass. 530 . Wheatland v. Boston, 202 Mass. 258. This rule governs proceedings designed to afford relief against illegal taxation. Cheney v. Assessors of Dover, 205 Mass. 501 , 503. It is applicable to the provisions of said Section 70.

Application for abatement of the tax must be made by filing the petition within six months after the payment of the excise. That is the only express requirement as to time found in the section. It is to be noted, however, that it is not provided in Section 70 that the filing of a petition without process should constitute the commencement of proceedings, although express language to that end often has been used in statutes, presumably when so intended by the Legislature. See, for example, R.L.c. 48, Section 111; c. 197, Section 9. The parties are not in court on the mere filing of the petition. Something more is necessary. The only specific provision in the statute as to service of process on the petition is that a copy "shall be served upon the Treasurer and Receiver General and upon the Attorney General." No time is named for such service. But it is provided that "the proceedings upon such petition shall conform, as nearly as may be, to proceedings in equity." In this connection the word "proceedings" is of broad signification. It comprehends every step from the filing of the petition until the final determination of the controversy. It includes the issuance and service of process by which the Commonwealth is to be summoned into court. Lait v. Sears, 226 Mass. 119, 124. Section 70 of the tax act states the conditions under which a petition may be filed. One of these is in the nature of a limitation as to time. Whether this limitation arises in determining a condition of jurisdiction or in determining whether the statute of limitations had been barred, it is one and the same question and must be governed by the same principles. The real question, therefore, is whether a statute of limitations ordinarily is barred by the simple filing of a petition in equity, or whether in addition there must be the taking out of a subpoena and an attempt in good faith to serve it.

That point has never been presented for decision in this Commonwealth. It has arisen in the courts of numerous other jurisdictions. The decisions are not in harmony. It was early held by Chancellor Walworth in Hayden v. Bucklin, 9 Paige, 512, that "the filing of a bill and taking out a subpoena thereon, and making a bona fide attempt to serve it without delay, may be considered as the commencement of the suit for the purpose of preventing the operation of the statute of...

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