Longyear v. Comm'r of Corps. & Taxation

• Decision Date: 08 January 1929
• Citation: 265 Mass. 585,164 N.E. 459
• Parties: LONGYEAR v. COMMISSIONER OF CORPORATIONS AND TAXATION (three cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

265 Mass. 585

164 N.E. 459

LONGYEAR

v.COMMISSIONER OF CORPORATIONS AND TAXATION (three cases).

Supreme Judicial Court of Massachusetts, Norfolk.

Jan. 8, 1929.

Report from Superior Court, Norfolk County; Marcus Morton, Judge.

Three suits by Mary B. Longyear against the Commissioner of Corporations and Taxation. On report from the Superior Court. Complaints dismissed.

R. Spring and S. Gottieb, both of Boston, for petitioner.

R. A. Cutter, Asst. Atty. Gen., for respondent.

CARROLL. J.

These three complaints are brought under the provisions of G. L. c. 62, § 47, as amended, for an abatement of income taxes assessed to the complainant upon income received by her during the years 1924, 1925, and 1926. The same question of law is involved in each complaint. It was agreed that the pleadings in one case only should be printed.

[1] The complainant during the years in question was, and she still is, a resident of Brookline. In these years she received payments of income from the executors of the will of her late husband, formerly a resident of Michigan where his will was probated. None of his executors was a resident of this commonwealth. One third of the residue of her husband's estate was bequeathed to the complainant. He died May 28, 1922, and his estate during the whole period here in question was in process of settlement, the executors carrying on certain business enterprises of the testator. The executors during each year in issue paid to the complainant the income in controversy received by them from an undivided third part of the residue. All the income thus received by the complainant, it was agreed, ‘was income which would have been taxable to a resident of Massachusetts if received directly by such Massachusetts resident either under G. L. c. 62, § 1, as taxable interest or dividends, or under G. L. c. 62, § 5, as taxable business income or as taxable gains.’ The executors never qualified as trustees, and performed only such duties as they were authorized to perform as executors.

G. L. c. 62, § 11, provides: ‘If an inhabitant of the commonwealth receives income from one or more trustees, none of whom is an inhabitant of the commonwealth or has derived his appointment from a court of the commonwealth, such income shall be subject to the taxes imposed by this chapter, according to the nature of the income received by the trustees.’ By section 13 of this chapter sections 10 to 12, inclusive, so far as apt, apply to executors, ‘to the income received by them and to their beneficiaries; except that clauses (a)(b), (c) and (d) of section ten authorizing certain deductions, shall apply only to trustees and guardinans.’ The complainant's contention is that G. L. c. 62, particularly sections 10 to 13, does not purport to tax income received by a Massachusetts resident from a foreign executor. The defendant commissioner, who dismissed the applications for abatement, contends that section 11 of G. L. c. 62, by section 13 is made applicable to beneficiaries receiving income from foreign executors, since section 13 expressly makes sections 10 to 12 inclusive, so far as apt, apply ‘to executors * * * to the income received by them and to their beneficiaries.’

[2] St. 1916, c. 269, § 9, enacted, so far as material to this decision, that taxes were to be assessed on income received by an inhabitant of this commonwealth from a foreign executor as well as from a foreign trustee ‘according to the nature of the income received by the executors * * * or trustees.’ See St. 1918, c. 207. The change in the language of the statute which causes the present controversy resulted from the condification and revision of the laws in 1920. In this revision and codification the words of the section of the statute 1916 above referred to, providing for the assessment of taxes on income received by an inhabitant of this Commonwealth from a foreign executor, St. 1916, c. 269, § 9; St. 1918, c. 207, were omitted. But G. L. c. 62, § 11, provides that if an inhabitant of Massachusetts receives income from a foreign trustee such income shall be taxed; and by section 13 of this chapter section 11 shall ‘so far as apt’ apply to executors, ‘to the income received by them and to their beneficiaries.’ There was a change in the...