Liquid Carbonic Co. v. Commonwealth

• Decision Date: 09 January 1919
• Parties: LIQUID CARBONIC CO. v. COMMONWEALTH.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

232 Mass. 19

121 N.E. 514

LIQUID CARBONIC CO.

v.COMMONWEALTH.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 9, 1919.

Report and Case Reserved from Supreme Judicial Court, Suffolk County.

Petition to recover an illegal excise tax paid by the Liquid Carbonic Company against the Commonwealth. On report and reservation by a single justice of the Supreme Judicial Court for the determination of the full court. Decree ordered for petitioner.

Charles A. Snow and W. P. Evarts, both of Boston, for petitioner.

Wm. Harold Hitchcock, Asst. Atty. Gen., for the Commonwealth.

RUGG, C. J.

The petitioner, a foreign corporation organized under the laws of Illinois, seeks by this petition under St. 1909, c. 490, part 3, § 70, to recover an excise tax amounting to $1,100 alleged to have been exacted illegally and paid in January, 1918. The excise was levied at the rate of one-fiftieth of 1 per cent. on the entire capital stock of $5,500,000 of the petitioner, pursuant to St. 1909, c. 490, part 3, § 56. St. 1914, c. 724, was not repealed until March 18, 1918. St. 1918, c. 76. Therefore the excise here in question was levied while both said section 56 and said chapter 724 stood upon the statute books without repeal or modification of either. The agreed facts show that the petitioner was maintaining within the commonwealth a place of business for the transaction of local and domestic business entirely separable from its interstate business. It therefore could have been taxed under part 3, § 56, of the tax act, if that section stood alone, under Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 34 Sup. Ct. 15, 58 L. Ed. 127, and Cheney Bros. Co. v. Massachusetts, 246 U. S. 147, 38 Sup. Ct. 295, 62 L. Ed. 632.

The excise here in question stands on precisely the same footing with respect to St. 1909, c. 490, part 3, § 56, and St. 1914, c. 724, as did the excise tax assessed upon the Locomobile Company of America, which was before this court in Locomobile Company of America v. Commonwealth, 228 Mass. 117, 117 N. E. 5. Said section 56 imposed an excise tax upon foreign corporations, for the privilege of doing a local as distinguished from an interstate business within this commonwealth, of one-fiftieth of 1 per cent. on the par value of its authorized capital stock, the amount of the excise in any one year not to exceed $2,000. Said chapter 724 imposed an excise of one one-hundredth of 1 per cent. on the par value of the authorized capital stock of such corporations in excess of $10,000,000. We thought that, because the excise imposed by said section 56, as applied to foreign corporations in situation similar to the Locomobile Company of America, doing local business within the commonwealth, had been held not to offend against any provision of the Constitution of the United States in Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 34 Sup. Ct. 15, 58 L. Ed. 127, it followed that corporations with an aggregate capital stock of less than $10,000,000, and hence not directly affected by said chapter 724, could still legally be taxed under said section 56, regardless of said chapter 724. We said that it was not even necessary in that connection to discuss said chapter 724. But it has been held that we were in error upon that point. Our judgment was reversed in Locomobile Co. of America v. Massachusetts, 246 U. S. 146, 38 Sup. Ct. 298, 62 L. Ed. 631. It there was decided on writ of error to this court that the excise was illegal and that the petitioner was entitled to recover the entire amount paid. That decision was made although the amount of the excise was ascertained wholly pursuant to the terms of said section 56 unaffected by said chapter 724, and although, but for the enactment of said chapter 724, the excise would have been valid under Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 34 Sup. Ct. 15, 58 L. Ed. 127. We recognize the binding nature of that decision. Our only concern now is to apply it to this and other cases accurately so far as we are able to understand it. It seems to us to cover the case at bar in every essential particular.

It is argued by the Attorney General that the question now presented is merely one of construction of statutes of this commonwealth, as to which it is the settled practice of the Supreme Court of the United States to follow the interpretations of state courts (Old Colony Trust Co. v. Omaha, 230 U. S. 100, 116, 33 Sup. Ct. 967, 57 L. Ed. 1410;Northern Pacific Railway Co. v. Meese, 239 U. S. 614, 619, 36 Sup. Ct. 223, 60 L. Ed. 467), and further that the true construction of said section 56 and said chapter 724 is that they are separable and that the first should be upheld even if the latter is...