Mallory v. White, 5418.
| Decision Date | 09 November 1934 |
| Docket Number | No. 5418.,5418. |
| Citation | 8 F. Supp. 989 |
| Parties | MALLORY v. WHITE. |
| Court | U.S. District Court — District of Massachusetts |
H. Murray Pakulski, Asst. Corp. Counsel, of Boston, Mass., for plaintiff.
Francis J. W. Ford, U. S. Atty., and J. Duke Smith, Sp. Asst. to U. S. Atty., both of Boston, Mass., for defendant.
This action at law for the recovery of a tax alleged to have been illegally collected from the plaintiff, was heard on October 30, 1934, and was submitted for decision on a written stipulation of facts and upon briefs. The hearing having been adjourned until today, I dealt with the motions for judgment and requests for rulings as hereinafter appears.
The plaintiff is and was on the dates hereinafter named a citizen and resident of the city of Boston, Mass., and the defendant was on the dates hereinafter named the duly appointed and acting United States collector of internal revenue for the district of Massachusetts. On or about March 15, 1930, plaintiff filed with the defendant his income tax return covering the taxable year 1929, showing a tax due in the sum of $2,415.07. As the result of investigation of the plaintiff's tax liability for 1929, an additional assessment was duly made by the Commissioner of Internal Revenue in November, 1931, in the sum of $923.33 tax and $94.50 interest, or a total of $1,017.63, which amount was demanded by the defendant and paid by the plaintiff under protest on December 17, 1931. On May 6, 1932, plaintiff filed two claims for refund with the Commissioner of Internal Revenue for the year 1929 for the respective sums of $1,017.63 and $765.66, on the grounds that the income to the plaintiff, on which the above amounts of tax were paid, was received as salary during the year 1929 from the city of Boston for services rendered as pathologist at the Boston City Hospital, which amount was claimed by the plaintiff as being exempt under the provisions of article 643, Regulations 74, that such salary was received by plaintiff as an employee of a political subdivision of said state, and that the Legislature of said state had authorized the city of Boston to conduct such hospital as a municipal institution. These claims were rejected by the Commissioner, and this action was seasonably filed thereafter.
During the year 1929 the plaintiff, in addition to the services rendered as pathologist at the Boston City Hospital, was employed by and received compensation in the amount of $7,040 as pathologist from Harvard University and United Fruit Company, which amount was reported by the plaintiff in his return for the year 1929.
The additional tax above mentioned was based upon the income received by the plaintiff for his services performed for and on behalf of the Boston City Hospital as pathologist in chief during the year 1929, which position is created by rule 97 of the Rules of the Boston City Hospital in the following language:
The hours during which the plaintiff rendered services to the hospital were week days from 9 a. m. to 5 p. m. and without additional compensation practically every Sunday for four hours, every holiday, and many evenings. The plaintiff has rendered services to the city of Boston since 1897, and was appointed to the position as pathologist in chief in 1906 by the trustees of the Boston City Hospital at a compensation of $5,500 per year, from which was deducted 4 per cent. for his pension under state law (chapter 521, Acts of 1922). The plaintiff has, since the beginning of this action, been compulsorily retired, having arrived at the age of 70 years. The plaintiff was required to sign the regular hospital pay roll sheet and was paid by the regular city paymaster. The city of Boston is a municipal corporation and therefore a political subdivision of the state.
During the year 1929, and while the plaintiff was engaged as pathologist in chief at the Boston City Hospital, the hospital was in charge of five trustees, appointed by the mayor. Only sick and injured persons who, by reason of poverty or accident, required temporary relief, except for good cause shown, were admitted to said hospital. Under certain circumstances and under the authority of the trustees, a limited number of pay patients were admitted, but never to the exclusion of free patients. During the year 1929 compensation for hospital services and treatment was collected by the hospital from private patients, such compensation so received being turned over to the city collector. The rates of board for the year 1929 were fixed by the trustees, persons nonresident or not settled in Boston during that year were admitted only as private pay patients; the total cost of operating the hospital for the year 1929 was in the sum of $2,364,269.44; and the income from private pay patients during that time amounted to $197,985.61, made up as follows:
From the state................... $ 26,250.00
From cities and towns............ 16,171.16
From ward and private patients
Miscellaneous cases ........... 93,589.04
X-ray cases ................... 10,331.00
Physiotherapy cases ........... 9,145.45
From insurance cases
House cases ................... 9,268.18
Out-patient cases ............. 2,382.00
X-ray cases ................... 1,910.00
Physiotherapy cases ........... 40.00
From contagious cases ............ 26,023.78
From record fees ................. 2,875.00 (see letter
__________ 11/9/34 on
Total........................ $197,985.61 file)
The amounts of $26,250 received from the state and $16,171.16 received from cities and towns are derived from so-called "nonsettlement cases," i. e., persons who are taken sick or are injured while in the city of Boston, and by state law must be afforded medical treatment; reasonable charge for same being chargeable to the city or town of settlement, or, if the person is without settlement, then chargeable to the state .
The pertinent statutes, regulations and ordinances follow:
Revenue Act of 1928, c. 852, 45 Stat. 791:
Regulations 74:
Chapter 17 of the Revised Ordinances of the City of Boston of 1925:
Chapter 113, Acts of Massachusetts of 1858, authorizes the city of Boston to erect, establish, and maintain a hospital for the reception of persons who by misfortune or poverty may require relief during temporary sickness, and gives the city council power to make ordinances, rules, and regulations for the appointment of trustees and all other necessary officers, agents, and servants for managing the hospital.
Chapter 174, Acts of...
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