Shaughnessy v. Commissioner of Corporations and Taxation

• Decision Date: 06 May 1975
• Citation: 3 Mass.App.Ct. 249,326 N.E.2d 912
• Parties: John J. SHAUGHNESSY et al., executors, v. COMMISSIONER OF CORPORATIONS AND TAXATION.
• Court: Appeals Court of Massachusetts

Page 912

326 N.E.2d 912

3 Mass.App.Ct. 249

John J. SHAUGHNESSY et al., executors, v.COMMISSIONER OF CORPORATIONS AND TAXATION.

Appeals Court of Massachusetts, Norfolk.

Argued April 16, 1975.

Decided May 6, 1975.

Virginia C. Hall, Boston, for petitioners.

Robert H. Quinn, Atty. Gen., Walter H. Mayo, III, Asst. Atty. Gen., and John F. Hurley, Deputy Asst. Atty. Gen., for the Commissioner of Corporations & Taxation.

Before HALE, C.J., and ROSE and ARMSTRONG, JJ.

HALE, Chief Justice.

This petition for abatement of an inheritance tax(G.L. c. 65, § 27) was heard in a Probate Court on the pleadings and on a statement of agreed facts.The judge reserved and reported the case.G.L. c. 215, § 13.

The decedent, Herbert A. Shaughnessy, was president and treasurer of Shaughnessy & Ahern Company at the time of his death on March 6, 1968.At a 'special meeting' held on May 27, 1968, the stockholders and directors of the company voted to pay the decedent's widow 'at the annual rate of $16,250 for two years,' such payments to be made in equal weekly installments.The Commissioner subsequently certified an inheritance tax on those payments in the sum of $1,880.81.The executors paid that amount plus interest prior to filing this petition.The parties stipulated that '(t)he Company was under no contractual or other obligation to the decedent to make such payments' and that the company had never before made payments of that type to the estate or relatives of any deceased officer or employee.

General Laws c. 65, § 1(as amended through St.1967, c. 463, §§ 1, 2), provides in part that '(a)ll property within the jurisdiction of the commonwealth, corporeal or incorporeal, and any interest therein, . . . which shall pass by . . . deed, grant or gift, . . . made or intended to take effect in possession or enjoyment after . . . death (of the grantor or donor) . . . shall be subject to a tax.'The executors contend that the payments authorized to be paid to the widow are not subject to an inheritance tax because the decedent at no time had any interest in the property subsequently transferred to his widow.We agree.In this case the decedent had entered into no agreement, written or oral, with the company to provide benefits for his widow in the event of his death.SeeFirst Natl. Bank of Boston v. Commissioner of Corps. & Tax'n, 258 Mass. 253, 255--256, 154 N.E. 844(1927).Contrast National Shawmut Bank v. Commissioner of Corps. & Tax'n (also known as the Bird case)354 Mass. 350, 351--353, 237 N.E.2d 290(1968);Narva v. Commissioner of Corps. & Tax'n, 358 Mass. 648, 649, 266 N.E.2d 638(1971).The payments...