Wheelwright v. Trefry

• Decision Date: 20 May 1920
• Citation: 127 N.E. 523,235 Mass. 584
• Parties: WHEELWRIGHT et al. v. TREFRY, Txa Commissioner.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

235 Mass. 584

127 N.E. 523

WHEELWRIGHT et al.

v.TREFRY, Txa Commissioner.

Supreme Judicial Court of Massachusetts, Suffolk.

May 20, 1920.

Report from Superior Court, Suffolk County; Franklin T. Hammond, Judge.

Complaint for abatement of tax by Arthur W. Wheelwright and others, executors of the will of John W. Wheelwright, deceased, against William D. T. Trefry, Tax Commissioner. On report to the Supreme Judicial Court. Judgment ordered for the Commissioner for his expenses and costs.

Hutchins & Wheeler, of Boston, for petitioners.

J. Weston Allen, Atty. Gen., and Leland Powers and Edwin H. Abbot, Jr., Asst. Attys. Gen., for respondent.

RUGG, C. J.

This is a complaint under St. 1916, c. 269, § 20, by the executors of the will of a deceased resident of this commonwealth for the abatement of a tax. The single question presented is whether the executors of a will who receive income payable to inhabitants of this commonwealth are entitled, in the assessment upon them of income taxes, to the same deductions for taxes and expenses paid as are allowed by the income tax law to trustees.

Provision is made by the income tax law (St. 1916, c. 269) for the assessment of taxes upon certain incomes received both by executors or administrators and by trustees. Under the divisional heading of the statute ‘Estates of Deceased Persons,’ is section 8, which provides at some length for a tax upon incomes received by ‘persons since deceased’ and by ‘estates of deceased persons.’ The last sentence of that section is in these words:

‘The provisions of this act with reference to the taxation of income received by trustees shall, so far as apt, and except as otherwise provided herein, apply to the income received by executors and administrators.’

This is followed immediately by the divisional heading ‘Property Held in Trust,’ and section 9, wherein provision is made in considerable detail for the taxation of ‘the income received by estates held in trust by trustees.’ No specific deductions were allowed in this or in the preceding section, although of course those provided by the general terms of section 3 were applicable. An amendment of section 9 was made by St. 1918, c. 207, whereby several clauses were inserted to the effect that--

‘In the computation of the tax the trustee,’ in addition to deductions previously allowed under section 3, ‘shall be entitled to the following deductions from income taxable under sections two, five (a) and five (c) of this act, respectively, before the taxable income of the beneficiary or beneficiaries shall finally be determined. * * *’

The follows an enumeration of four different kinds of permissible deductions.

[1] The form of said chapter 207 is that the original section 9 ‘is hereby amended by inserting’ at places identified by lines and preceding word, the specified words, ‘so as to read as follows.’ There then is printed the full section 9 as it stands in its amended form. The effect of this phraseology is that the original section 9 has become a thing of the past, valuable only as matter of history and has been superseded by the new section 9. Other statutory provisions relating to the old and not inconsistent with the new section are applicable to the latter. Fitzerald v. Lewis, 164 Mass. 495, 41 N. E. 687;Merrill v. Page, 229 Mass. 511, 118 N. E. 862. The statute now is to be treated and interpreted as if the new section 9 had been a part of the original emactment, except that light may be thrown upon its meaning by the fact that it is an amendment and by comparison of the old form with the amendment.

The precise point to be decided is whether the final sentence of section 8, quoted above, extends to executors the right to make deductions created by the words of the amending chapter 207 for the benefit of trustees. That amending chapter in substance creates an exemption from taxation of part of the income of trustees. Exemptions from taxation are not to be lightly inferred, but must appear plainly either from the express words are necessary intendment of the statute. Milford v. County Commissioners, 213 Mass. 162, 165, 100 N. E. 60.

By the specific terms of said chapter 207, the deductions allowed to trustees are denied to guardians, conservators, trustees in bankruptcy, receivers and assignees for the benefit of creditors. If the had been the purpose of the Legislature to authorize these deductions from income for the benefit of executors, it would seem under these circumstances that direct manifestation of such purpose would appear in the words of the amending act rather than that that purpose be left to be worked out by reference to general words...