Sloane v. Commonwealth

• Citation: 149 N.E. 407,253 Mass. 529
• Parties: W. & J. SLOANE v. COMMONWEALTH.
• Decision Date: 30 October 1925
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

253 Mass. 529

149 N.E. 407

W. & J. SLOANE

v.COMMONWEALTH.

Supreme Judicial Court of Massachusetts, Suffolk.

Oct. 30, 1925.

Case Reserved from Supreme Judicial Court, Suffolk County.

Petition by W. & J. Sloane, a corporation, against the Commonwealth of Massachusetts to recover excise tax paid by it. On reservation. Petition dismissed.

H. M. Davis and F. Rackemann, both of Boston, for petitioner.

A. Smith, Asst. Atty. Gen., for the Commonwealth.

RUGG, C. J.

This is a petition by a foreign corporation transacting within this commonwealth interstate commerce alone to recover an excise tax assessed to it under G. L. c. 63, and St. 1923, c. 487, on September 20, 1924, and paid by it on October 20, 1924. The petition was filed on June 19, 1925. It purports to be brought under G. L. c. 63, § 77. It is provided in that section, as amended by St. 1922, c. 520, § 14, in substance that a corporation aggrieved by the exaction of an excise tax may ‘within six months after the payment of the same’ apply to the court by petition setting forth the grounds upon which it is claimed that the excise was illegally exacted, and that such ‘petition shall be the exclusive remedy.’ The grounds set forth in the petition are that the petitioner was not subject to such excise tax because engaged exclusively in interstate commerce within the commonwealth, that G. L. c. 63, § 39, and St. 1923, c. 487, § 6, purporting to authorize the excise, were declared ‘illegal, unconstitutional and void’ as applied to the petitioner by the Supreme Court of the United States in a judgment rendered on May 4, 1925, in Alpha Portland Cement Co. v. Massachusetts, 268 U. S. 203, 45 S. Ct. 477, 69 L. Ed. 916, reversing the decisions of this court in Alpha Portland Cement Co. v. Commonwealth, 244 Mass. 530, 139 N. E. 158, and Id.,248 Mass. 156, 142 N. E. 762, and that ‘the effect of said judgment of the Supreme Court of the United States was to extend for a period of six months from May 4, 1925, the time for the filing of this petition’ by virtue of section 52 of G. L. c. 63. That section provides:

‘If the excise imposed by section thirty-two on domestic business corporations, or that imposed by section thirty-nine on foreign corporations, is declared unconstitutional by a final judgment, order or decree of the United States Supreme Court or the Supreme Judicial Court of the commonwealth, sections thirty to fifty-one inclusive, shall be null and void, and all laws repealed or made inoperative by chapter three hundred and fifty-five of the General Acts of Nineteen Hundred and Nineteen shall thereupon be revived and continue in full force and effect as if the said chapter had not been enacted. In such case the commissioner and local assessors shall forthwith assess all taxes that have become due under such prior laws, and the time for making any assessment or performing any other duty imposed or privilege granted by such laws shall be extended for a period of six months after the date when they are thus determined to be in force, and the time within which corporations may apply by petition to the Supreme Judicial Court under section seventy-seven for the abstement of the excise imposed by section thirty-two, or of that imposed by section thirty-nine, shall be extended for the same period. It any part, section or subdivision of said sections thirty to fifty-one, inclusive, other than the provisions in sections thirty-two and thirty-nine imposing an excise, shall be declared unconstitutional, the validity of the remaining parts of said sections thirty to fifty-one, inclusive, shall not be affected thereby.’

The respondent moved to dismiss the petition on the grounds appearing on the face of the record that:

‘1. The petition is not an application for the abstement of a tax or excise illegally exacted, under G. L. c. 63, § 77, as amended by St. 1922, c. 520, § 14.

‘2. The petition is not brought within six months of payment of the tax as required by G. L. c. 63, § 77, as amended by St. 1922, c. 520, § 14.’

The case is reserved for our consideration upon the petition and motion to dismiss.

[1] The petitioner, being a foreign corporation engaged exclusively in interstate commerce within this commonwealth was not subject to the excise tax established by G. L. c. 63, § 39. That is settled by Alpha Portland Cement Co. v. Massachusetts, 268 U. S. 203, 45 S. Ct. 477, 69 L. Ed. 916. The excise tax of which complaint is made in the present petition was illegal. That, however, does not dispose of the case at bar. If the present petition had been filed within six months after payment of the excise, the petitioner would be entitled to prevail. But the petition was not filed within that time. The petitioner cannot prevail unless the time within which its petition could be filed was extended by operation of G. L. c. 63, § 52, already quoted. The precise question presented is whether the excise imposed by G. L. c. 63, § 39, on foreign corporations has been ‘declared unconstitutional by a final judgment, order or decree of the United States Supreme Court,’ as those words are used in said section 52, as a consequence of Alpha Portland Cement Co. v. Massachusetts, 268 U. S. 203, 45 S. Ct. 477, 69 L. Ed. 916. It was said in that decision at pages 216, 217 (45 S. Ct. 480):

‘The inquiry comes to this: May a state impose upon a foreign corporation which transacts only interstate business within her borders an excise tax measured by a combination of two factors-the proportion of the total value of capital shares sttributed to transactions therein, and the proportion of net income attributed to such transactions?’

Apparently that was the only question considered or undertaken to be decided in that case. The inquiry thus posited was confined to foreign corporations transacting interstate business alone within the state. The decision was adverse to the excise. We do not understand that the result of that decision was to declare G. L. c. 63, § 39, void because unconstitutional as to all foreign corporations, both those transacting interstate commerce alone and those transacting intrastate commerce either alone or in combination with interstate commerce. It is stated in the brief for the petitioner that ‘as to all other foreign corporations doing business in Massachusetts,’ except those engaged exclusively in interstate commerce, ‘the validity of the excise is not affected by the Supreme Court of the United States.’

This court decided in Judson Freight Forwarding Co. v. Commonwealth, 242 Mass. 47, 136 N. E. 375, 27 A. L. R. 1131, that the excise, there levied under St. 1919, c. 355, § 15, now G. L. c. 63, § 39, on foreign corporations engaged in this commonwealth in the transaction of both interstate and intrastate commerce, violated no provision of the Constitution of the United States. That decision stands. It was not dealt with in the decision in 268 U. S. 203, 45 S. Ct. 477, 69 L. Ed. 916.

The decisions of this court in the Alpha Portland Cement Co. Cases in 244 Mass. 530, 139 N. E. 158, and 248 Mass. 156, 142 N. E. 762, were wrong in holding that the excise could be levied upon corporations doing exclusively an interstate business within the commonwealth. Those decisions attempted to extend the excise statute into a field to which it was not applicable. The ground for those decisions was the view, then entertained but now held to be erroneous in 268 U. S. 203, 45 S. Ct. 477, 69 L. Ed. 916, that the statute so interpreted would not offend any provision of the federal Constitution. It was said that the words of the statute as matter of verbal construction were broad enough to include such corporations. But the principle was recognized that the intention ought not to be imputed to the Legislature to enact an unconstitutional statute, provided the statute could be construed as applicable to matters within its constitutional power if that...