O'keeffe v. City of Somerville

• Citation: 190 Mass. 110,76 N.E. 457
• Parties: O'KEEFFE v. CITY OF SOMERVILLE.
• Decision Date: 03 January 1906
• Court: United States State Supreme Judicial Court of Massachusetts

190 Mass. 110

76 N.E. 457

O'KEEFFE v. CITY OF SOMERVILLE.

Supreme Judicial Court of Massachusetts, Middlesex.

January 3, 1906

COUNSEL

Adler &amp Hall, for plaintiff.

Frank W. Kann and Ralph E. Joslin, for defendant.

OPINION

KNOWLTON, C.J.

This is an action of contract to recover the amount of a tax, levied upon the plaintiff's business under St. 1904, c. 403, p 376, and paid to the defendant under protest. This statute is entitled, 'An act to impose an excise tax on the business of selling, giving or delivering trading stamps, checks coupons or similar devices, in connection with the sale of articles.' The first section is as follows: 'Every person, firm or corporation selling, giving or delivering trading stamps, checks, coupons or similar devices, in connection with the sale of articles, entitling the holders to receive articles other than the articles so sold, shall pay an excise tax for carrying on such business, equivalent to 3 per cent. of the gross receipts, by such person, firm or corporation, from the sale of the articles so sold and from the trading stamps, checks, coupons or similar devices sold given or delivered in connection therewith.' The second section requires returns to be made semiannually by persons carrying on the business mentioned in section 1, showing their gross receipts from sales, and provides for the collection of the prescribed tax by the collector of taxes, upon a warrant issued by the town treasurer. Section 3 prescribes a penalty for a failure to make the returns required. Upon the stipulation of the parties and the report of the presiding justice, the sole question presented is whether this statute is valid. The plaintiff contends that it is unconstitutional, and if his contention is correct, he is entitled to recover. Plainly it cannot stand under the first part of section 1, c. 1, art. 4, of the Constitution of Massachusetts, which gives the Legislature power to 'impose and levy proportional and reasonable assessments, rates and taxes,' etc., for such taxes are assessed upon property, and they must be proportional as well as reasonable. The defendant's contention is that the tax is valid under the provision, in the same article, which gives the Legislature authority 'to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise, and commodities whatsoever, brought into, produced, manufactured or being within the same,' etc. It is conceded that a tax under this statute is not a tax upon goods, wares or merchandise. The first and principal question before us is whether the right to conduct the business, in the manner described in the first section, is a commodity within the meaning of the constitution.

The word 'commodities,' as used in this article, was considered in Portland Bank v. Apthorp, 12 Mass. 252, and was given a very broad meaning, which was derived by the court in part from the early practice of the Legislature in imposing excise duties and customs upon various articles of merchandise, and upon certain kinds of business. See St. 1781, pp. 525, 573, cc. 17, 33; St. 1782. p. 91, c. 33; St. 1783, p. 506, c. 12; St. 1789, p. 462, c. 48. In some of the later cases similar language has been used, but in others the court seems to have held that the statement, in reference to the taxation of the business of an auctioneer, or an attorney, or a tavern keeper, or a retailer of spirituous liquors, that the Legislature 'may impose the same condition upon any other employment or handicraft,' is too broad. In Gleason v. McKay, 134 Mass. 419, it was held that a statute, imposing an excise tax upon partnerships and similar associations 'in which a beneficiary interest is held in shares which are assignable without consent of the other associates specifically authorizing such transfer,' was unconstitutional. In giving the opinion of the court Chief Justice Morton said: 'This imposition is clearly not in the nature of a license fee, but is an excise upon a franchise or privilege. The right to levy excises upon franchises has never been extended further than to corporate franchises, specially granted by the government, or enjoyed and exercised by its permission. * * * We do not see how this peculiar feature can be called a commodity, subject to a special excise, any more than the agreement of copartnership itself, or any clause or part of it, or any other agreement, right, or mode of transacting any business can be called a commodity, and so liable to taxation at the will of the Legislature. If this tax can be upheld, it seems to us that the necessary result will be that the Legislature has the power to select any business, occupation, or calling carried on, or any natural right enjoyed, under the protection of our laws, and impose upon it, at its will, a special tax or excise. This would be extending the meaning of the word commodities beyond any reasonable limits.' In Minot v. Winthrop, 162 Mass. 113, 38 N.E. 512, 26 L. R. A. 259, this court decided that the right or privilege of transmitting property to one's heirs, legatees, or devisees in succession, after one's death, is a commodity, within the meaning of the Constitution, and so may be made the subject of an excise tax. Chief Justice Field said in the opinion, 'The language of the Constitution of Massachusetts is general, and may well be held to authorize the laying of excises upon all such gainful employments and privileges as are created or may be regulated by law, and commonly have been considered legitimate subjects of taxation in other states and countries.'

It is not necessary in the present case to determine the meaning of the word 'commod...