Tilton v. Trefry

• Decision Date: 31 May 1921
• Parties: TILTON v. TREFRY, Tax Com'r (two cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

238 Mass. 596

131 N.E. 219

TILTON

v.TREFRY, Tax Com'r (two cases).

Supreme Judicial Court of Massachusetts, Middlesex.

May 31, 1921.

Report from Superior Court, Middlesex County; Frederick Lawton, Judge.

Petitions by Louis O. Tilton and Florence M. Tilton, respectively, to William D. F. Trefry, as Tax Commissioner, for abatement of taxes. Upon refusal by the Tax Commissioner of the petitions, the complainants severally appealed to the superior court. Cases reported. Judgment ordered for respondent in each case.

Joseph W. Bartlett, Frederick E. Jennings, and Arthur Thad Smith, all of Boston, for plaintiffs.

J. Weston Allen, Atty. Gen., and Charles R. Cabot, Asst. Atty. Gen., for respondent.

PIERCE, J.

The complainants in these two cases are husband and wife. During the time mentioned in these actions they were citizens of this commonwealth and resided in the city of Newton. They duly filed with the respondent returns of income received during the calendar year 1917, and they were duly assessed by the respondent upon their incomes for that year income taxes amounting to $1,961.59 and $415.69 respectively and said amounts were levied upon each of them by said respondent under authority of St. 1916, c. 269. On October 15, 1918, they duly paid, under protest, one the said sum of $1,961.59 and the other the said sum of $415.69 to the income tax deputy of the commonwealth of Massachusetts; the said sum of $1,961.59 consisting of $1,783.26 income tax for the calendar year ending December 31, 1917, and $178.33 war tax under St. 1918, c. 252, and the said sum of $415.69 consisting of $377.90 income tax for the calendar year ending December 31, 1917, and $38.79 war tax under the provisions of St. 1918, c. 252. On November 27, 1918, they each duly filed with the respondent a petition for the abatement of their said taxes. The respondent refused to abate either one of said taxes in whole or in part, and duly notified each of the complainants of his refusal so to do. Thereupon the complainants duly severally appealed to the superior court under St. 1916, c. 269, § 20, and a judge of that court reported the cases to this court without decision.

The complainants in the year 1917 were stockholders in the Bronx Company, a corporation organized under the laws of the state of West Virginia. The accumulated profits of its business and the appreciation in inventory value of the land and buildings of this corporation equalled in value the original capital stock and were capitalized by the board of directors in 1917. The board of directors by meetings duly called for the purpose doubled the capital stock of the corporation and voted that ‘in distribution of capital from increase of market value of capital investment’ each stockholder should receive in addition to his original holdings a like number of shares of stock of the company. As a result of this vote the complainant Louis O. Tilton received $5,000 in par value of stock and the complainant Florence M. Tilton received $27,050 in par value of said stock. The property against which the additional stock was issued consisted of property of the value of $202,000 acquired from earnings or profits of the company prior to the year 1910; and...