Warr v. Collector of Taxes of Taunton

• Decision Date: 05 January 1920
• Parties: IDA M. WARR v. COLLECTOR OF TAXES OF TAUNTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

234 Mass. 279

IDA M. WARR v. COLLECTOR OF TAXES OF TAUNTON.

Supreme Judicial Court of Massachusetts, Bristol.

January 5, 1920

October 27, 1919.

Present: RUGG, C.

J., BRALEY, DE COURCY, CROSBY, & CARROLL, JJ.

Tax, Collector. Corporation, Reaching shares for collection of debt. Statute Repeal. Equity Jurisdiction, To enjoin illegal collection of tax.

The provision of St. 1909, c. 490, Part II, Sections 21, 24, conferring upon a collector of taxes special power to levy, for the collection of a tax, upon shares of stock in a corporation by a sale of its shares after leaving with designated corporate officers an attested copy of the tax warrant and a certificate of seizure, was repealed by implication by the provisions of St 1910, c. 171, which in Section 13 provides that no attachment nor levy upon shares for which a certificate is outstanding shall be valid until the certificate actually is seized or is surrendered or its transfer by the holder is enjoined.

When the Legislature has dealt in a comprehensive way with an entire subject, the general principle is that previous conflicting provisions of law are not continued in force. A collector of taxes is given power by St. 1909, c. 490, Part II, Section

33, and R.L.c. 159 Section 3, cl. 7, as extended and amended by St. 1910, c 531, Section 2, to proceed in an orderly way to secure a lien upon and a sale of shares of stock in a corporation for the collection of a tax without violating any of the provisions of St. 1910, c. 171.

A bill in equity to restrain a collector of taxes from proceeding illegally to collect a tax by sale of shares of corporate stock under

St. 1909, c.

490, Part II, Sections 21, 24, after those provisions were repealed in effect by St. 1910, c. 171, will be dismissed upon a demurrer on the ground that the plaintiff has an adequate remedy at law, where there are no allegations in the bill which show that the acts of the defendant sought to be restrained would result in injury to the plaintiff for which he would not receive adequate remedy in an action at law.

In the suit above described, it was said, that it was not necessary to go so far as to state that no case possibly could arise where equities would exist of such a nature as to warrant injunctive relief against a collector of taxes acting in excess of his powers.

BILL IN EQUITY, filed in the Superior Court on May 10, 1919, and afterwards amended, by one alleging herself to be the owner of certain shares of stock in a corporation against the collector of taxes of the city of Taunton to restrain the defendant from proceeding with a sale of the plaintiff's shares without seizure or surrender of the certificate and without the transfer of the certificate being enjoined.

In the Superior Court the defendant demurred for want of equity and because the plaintiff had an adequate remedy at law. The demurrer was heard by Cox, J., and was sustained. A final decree was entered dismissing the bill. The plaintiff appealed.

St. 1909, c.

490, Part II, Section 33, is as follows: "If a tax remains unpaid for three months after it has been committed to the collector, he may maintain an action in his own name against the person assessed therefor in the same manner as for his own debt."

S. P. Hall, (W.

A. Bellamy with him,) for the plaintiff.

J. B. Tracy, (J.

E. Welch with him,) for the defendant.

RUGG, C. J. This is a suit in equity to restrain the tax collector from levying upon shares of stock, owned by the plaintiff individually and not as administratrix, in a corporation, to satisfy a tax assessed upon her as administratrix of the estate of Louis Busiere in the city of Taunton. It is alleged in the bill that the defendant is threatening and attempting to levy upon and sell at public auction such shares of stock by virtue of his tax warrant and without seizure or surrender of the certificate and without its transfer having been enjoined. These allegations of fact must be accepted as true because the case is presented on demurrer.

The levy upon shares of stock in corporations by a tax collector for the satisfaction of unpaid taxes, to be accomplished by leaving with designated corporate officers an attested copy of the tax warrant and a certificate of seizure followed by a sale of such stock, was authorized by the general tax act, St 1909, c. 490, Part II, Sections 21 and 24. Such sale was to be made subject to the provisions of R.L.c. 177, Sections 49 and 50, which provided amongst other matters for the issue of a new certificate to the purchaser.

All this was changed, however, by the General Court in 1910. "The Uniform Stock Transfer Act," c. 171 of the acts of that year, covers the whole field of the transfer of certificates of stock in corporations. By Section 1 it is provided that title to such shares shall be transferred only by delivery of the certificate either (1) with indorsement thereon of the person named on the face as owner, or (2) with a separate document of assignment by such person. It further is provided by Section 13 that "No attachment or levy upon shares of stock for which a certificate is outstanding shall be valid until such certificate be actually seized by the officer making the attachment or levy, or be surrendered to the corporation which issued it, or its transfer by the holder be enjoined." By Section 19 the purpose of the act is declared to be uniformity of the law in the several States which enact it. By St. 1910, c. 531, provision is made that shares of stock in corporations shall be attached only in equity. By Section 1 of said c. 531 there is repeal of Sections 49 and 50 of R.L.c. 177, subject to which the tax collector was required to proceed in making the levy authorized by Section 24, Part II of the general tax act. By Section 2 the provisions of R.L.c. 159, Section 3, cl. 7, are extended so as to permit suits to reach and apply shares of stock in corporations, whether the plaintiff is a creditor or not and whether the suit is founded on a debt or not. That remedy is open to the tax collector. Boston v. Turner, 201 Mass. 190 . H. G. Kilbourne Co. v. Standard Stamp Affixer Co. 216 Mass. 118 .

These statutes of 1910 have the effect of repealing the special power conferred upon the tax collector by Part II, Sections 21 and 24 of the general tax act to levy upon the shares of stock in a corporation in satisfaction of the amount due from a delinquent taxpayer. This conclusion is required by the sweeping language and manifest purpose of said c. 171. Its design as expressed in its title and elsewhere in its provisions is to establish uniformity as to the transfer of shares of stock in corporations. That end could not be accomplished if specific exceptions to its general rules were permitted to survive. Doubtless a further purpose was to prevent the loss and confusion that well might result from two certificates being outstanding at the same time representing the same stock. See Parkhurst v. Almy, 222 Mass. 27 . Those ends are of importance in a multitude of commercial transactions. The Legislature by these two statutes of 1910 in substance has declared that in general there shall be safety in dealing with certificates of stock on the footing that they show their true title by their face, by their indorsernent, or by their written assignment.

The purpose of the act was to enable those dealing with certificates of stock to rely as to title upon the facts disclosed within the four corners of the document itself or its accompanying assignment. See in this connection, Baker v. Davie, 211 Mass. 429 . The security of a large bulk of credit and banking business may be thought to rest upon reliance on the provisions of the uniform stock transfer act. Under these circumstances urgent reasons would be required to lead to the adoption of a construction of ...