(224 Mass. 516) NEWCOMB, Tax Collector, v. PAIGE. (Supreme Judicial Court of Massachusetts. Worcester. June 22, 1916.) 1. TAXATION 93(2)-PROPERTY SUBJECTSITUS OF PROPERTY-DECEDENT'S ESTATE UNDER ANCILLARY ADMINISTRATION. The provisions of St. 1909, c. 490, pt. 1, § 23, cl. 5, providing for taxation of personal property held in trust, and concluding by providing that, where the trustee is a nonresident, trust property "shall be assessed to the person to whom the income is payable, in the place where he resides if it is not legally taxed to * * * trustee under a testamentary trust in any other state," do not subject to a property tax personal property held by several trustees, only one of whom resides in Massachusetts, appointed by a court of another state under the will of a testator resident in that state, to be executed according to its law; such property being actually deposited and continuously kept in such foreign state in the hands of a cotrustee, there resident, and there subject to and paying taxes thereon. [Ed. Note. For other cases, see Taxation, Cent. Dig. § 183; Dec. Dig. 93(2).] 2. TAXATION 93(2)-PROPERTY SUBJECT TRUST FUND OF ESTATE. A state by law may establish a taxing jurisdiction over a trust fund of personal property created by will of a resident, administered by appointees of its own courts, of which the evidences of title, securities, and assets are kept in the possession of a resident trustee, though he shares his fiduciary duties with nonresident associates. [Ed. Note.-For other cases, see Taxation, Cent. Dig. § 183; Dec. Dig. 93(2).] 3. TAXATION 93(2)-PROPERTY SUBJECTPROPERTY IN POSSESSION OF TRUSTEE. When there are several trustees, one or more of whom is domiciled in the state of origin of the trust, and the corporeal custody of the securities of the trust is with that trustee at his domicile, and the title of the trustees is joint, and their powers must be exercised as a unit, there is no such several ownership in one trustee, resident outside the state of the establishment of the trust, but resident in Massachusetts, as brings him within the scope of the tax law as to trust property; St. 1909, c. 490, pt. 1, § 23, cl. 5, providing that as to personal property held in trust, the income of which is payable to another person, if there are two or more trustees residing in different places, the property shall be assessed to them in equal proportions in such places. [Ed. Note. For other cases, see Taxation, Cent. Dig. § 183; Dec. Dig. 93(2).] Report from Superior Court, Worcester County. Action by Williams A. Newcomb, Tax Collector, against Timothy Paige. Finding for plaintiff, and case reported to the full court. Judgment for defendant. Ernest H. Vaughan, Edward T. Esty, and Jay Clark, Jr., all of Worcester, for plaintiff. George D. Storrs, of Ware, for defendant. RUGG, C. J. This is an action by the tax collector of the town of Hardwick to recover a tax assessed to the defendant for the year 1911. The pertinent facts are that the defendant, a resident of Hardwick, in this commonwealth, together with one Monteagle, a resident of California, and one Wright, a resident of New York, was appointed executor of and trustee under the will of Calvin Paige, who was domiciled at the time of his decease in the city of New York. They were duly appointed to this trust by the appropriate court of the state of New York. They have not been appointed by the courts of this or any other state except New York. These executors, in accordance with the will, paid to themselves as trustees a legacy of $150,000, to be held during his life for the benefit of Joseph C. Paige, also a resident of Hardwick. This trust fund was invested in intangible securities, a part of which are not subject to direct taxation in the state of New York, and a part of which are so subject to taxation, and as to this part a tax was paid in that state for the year 1911. So far as taxable the fund as a whole is there subject to taxation. All the securities, documents and other evidences respecting the trust at all times since the creation of the trust have been kept physically in New York in the exclusive custody and control of the trustee there resident, by concurrent assent of all the trustees. Under the law of the state of New York the trustees must act as a unit and all power possessed by them must be exercised by them as a body; and the trust fund still forms a part of the estate of the testator, and if the trust should fail for want of takers, the property would become vested in the Supreme Court of New York to be distributed according to law. The law of New York relative to the taxation of personal property kept within that state in the hands of executors and trustees appointed by the courts of that state is in substance that when "the will of a deceased resident of New York appoints as executors and trustees a resident of the state of New Jersey and two residents of the state of New York, the amount of an assessment for personal property under the control of the executors and trustees in the state of New York is not by reason of the nonresidence of the third executor and trustee limited to two-thirds of the amount of such personal property," but extends to the whole. People ex rel. Farmers' Loan & Trust Co. v. Wells, 94 App. Div. 463, 465, 87 N. Y. Supp. 745, 88 N. Y. Supp. 1113, affirmed in 179 N. Y. 566, 71 N. E. 1136. We interpret this statement of the law of New York to mean that all personal property held by executors and trustees appointed by the courts of New York acting within their jurisdiction and actually situated in the state of New York is taxable there in case such property is held by executors or trustees one or more of whom reside in the state of New York and one or more of whom reside in another state. People ex rel. McHarg v. Gaus, 169 N. Y. 19, 61 N. E. 987. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes This statement of facts shows that in sub-light of the entire act, and of the general stance and effect, where one or more of several trustees is a resident of New York and the securities in which the trust is invested are kept physically in New York, the laws of New York have established a kind of custody in the courts of that state for a trust fund administered as is the one at bar, and a domicile of the trust fund for purposes of taxation, with the trustee resident in that state. principles of law as to taxation, do not subject to a property tax here personal property held by several trustees, only one of whom is a resident of this commonwealth, under appointment of the court of a sister state of the Union by virtue of the will of a testator resident in that state, to be executed according to its law and actually deposited and continuously kept in such foreign state in the hands of a cotrustee there resident, where it is subject to taxation and a tax there is paid on its account. The final sen the trustee is not a resident of this common- [1, 2]. The Massachusetts tax law apparently was not phrased with a view to the exact situation here presented. But in clause 7, §tence of the clause, to the effect that when 23, pt. 1, c. 490, of St. 1909, the right of the Legislature to establish a domicile for an estate in process of settlement in the probate court is asserted by a provision to the effect that personal property of a deceased resident shall be assessed to the estate until after the appointment of an executor or administrator, and then to such executor or administrator for three years (unless sooner distributed and the statute complied with) "in the city or town in which the deceased last dwelt." It would be a hard thing to say that a nonresident executor or administrator might be taxed lawfully for the same property at his domicile on the theory that the title to such personal property was in him. Seemingly it also would be difficult to deny to the Legisla-ed in some jurisdiction,2 and is not supported ture power to enact that a trust fund held by one or more resident and one or more nonresident trustees under appointment from our courts, to be administered according to our law, should not have a domicile for taxation purposes within this commonwealth. The maxim "mobilia sequuntur personam" is of general application. Kirtland v. Hotchkiss, 100 U. S. 491, 497, 25 L. Ed. 558; State Tax on Foreign Held Bonds, 15 Wall. 300, 21 L. Ed. 179; Bellows Falls Power Co. v. Commonwealth, 222 Mass. 57, 60, 109 N. E. 891. But there are numerous cases where it is held that a state may establish a taxation situs for personal property intangible in nature physically within its control, although this may not always and necessarily exclude taxation by the state of the domicile of the See, for example, Liverpool & London & Globe Insurance Co. v. Assessors for the Parish of Orleans, 221 U. S. 346, 31 Sup. Ct. 550, 55 L. Ed. 762, L. R. A. 1915C, 903, and cases there collected. The provisions of clause 5, § 23, of the tax act, read in the 1 St. 1909, c. 490, pt. 1, § 23: "Fifth. Personal property held in trust by trustee, the income of which is payable to another person, shall be assessed to the *** trustee in the city or town in which such other person resides, if within the commonwealth; and if he resides out of the commonwealth it shall be assessed in the place where the trustee resides; and if there are two or more trustees residing in different places, the property shall be assessed to them in equal proportions in such places. ** If the * * trustee is not an inhabitant of the commonwealth, it shall be assessed to the person to whom the income is payable, in the place where he resides, if it is not legally taxed to trustee under a testamentary trust in any other by the weight of authority. Welch v. Boston, 221 Mass. 155, and cases collected at page 161, 109 N. E. 174. But a state by law may establish a taxing jurisdiction over a trust fund of personal property created by wills of its residents, administered by appointees of its own courts, evidences of title, securities and assets of which are kept within its borders in the possession of a resident trustee, although sharing such fiduciary duty with nonresident associates. When that is the law of a sister state, as in the case at bar, interstate comity would require plain and unequivocal statutory words to indicate an intention by the Legislature to subject such trust property to taxation in this state. simply because of the residence here of one of several trustees. Johnson v. Oregon City. 3 Or. 13; Rand v. Pittsfield, 70 N. H. 530. 49 Atl. 88. [3] When there are several trustees, one or more of whom is domiciled in the state of origin of the trust, and the corporeal custody of the securities of the trust is with that trustee at his domicile, and the title of the trustees is joint and their powers must be exercised as a unit, there is no such several ownership in one trustee resident outside the state of the establishment of the trust, but resident in Massachusetts, as brings him within the scope of our tax law as to the trust property. St. 1909, c. 490, pt. 1, § 23. 2 Gallup v. Schmidt, 154 Ind. 196, 200, 55 N. E. 443; Commonwealth v. Peebles, 134 Ky. 125, 119 S. W. 774, 23 L. R. A. (N. S.) 1130, 20 Ann. Cas. 724; [Ed. Note.-For other cases, see Master and Servant, Dec. Dig. 405(2). For other definitions, see Words and Phrases, First and Second Series, Servant; Usual Course of Business.] 2. MASTER AND SERVANT 367-INJURIES"INDEPENDENT CONTRACTOR." material in his own way, through his own servWhere one is hired to move some building ants, he is an "independent contractor." [Ed. Note.-For other cases, see Master and Servant, Dec. Dig. 367. Under these circumstances he alone as resi- [ the Workmen's Compensation Act (St. 1911, dent of this commonwealth does not hold the c. 751). title as owner within the commonwealth in such sense as to bring him within the terms of the tax act. He cannot exercise ownership as a resident in this commonwealth, but only by conjoint action with his fellow trustees, none of whom are resident here, as to a fund in substance in the custody of the courts of another jurisdiction. His ownership is not of such character as to bring the taxable domicile of the trust within the terms of our law. The practical consequences of taxation of the entire trust fund by each state in which one of a number of trustees might live cannot be overlooked. A fund designed to benefit relatives and kindred might by diversity of laws as to taxation and exemptions in such instances be greatly depleted in income by the payment of taxes and prove a barren benefaction. Such an interpretation of the tax law ought not to be given unless re-pensation to the employés, the association shall quired by words of unmistakable meaning. See Kingsbury v. Chapin, 196 Mass. 533, 82 N. E. 700, 13 Ann. Cas. 738. The case at bar is distinguishable from Welch v. Boston, 221 Mass. 155, 109 N. E. 174, where all the trustees resided in Massachusetts and nothing appeared as to the law of the state where the trust was established. It is also different from Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51, 109 N. E. 891, where the owner of shares of corporate stock was held subject to taxation notwithstanding the laws of the state of domicile of the corporation. The tax in the case at bar is not assessed to the beneficiary and it is not necessary to consider that aspect of the tax law. The present statute does not go to the length of expressing a clear intent to levy a tax upon the defendant in respect of the New York trust under the circumstances here disclosed. It is unnecessary to discuss the constitutional questions which in that event would arise. Judgment for defendant. (224 Mass. 571) In re COMERFORD. In re CONTRACTORS' MUT. LIABILITY (Supreme Judicial Court of Massachusetts. First and Second Series, Independent ContracFor other definitions, see Words and Phrases, tor.] 3. MASTER AND SERVANT 367-INJURIES WORKMEN'S COMPENSATION ACT INDE- 3, § 17, providing that if a subscriber contracts pay the employés such compensation as would be payable if the contractor were a subscriber. where claimant's employer was requested by contractors to send a teamster to load and carry concrete sills, wheelbarrows, etc., from a storehouse to premises where they were to be used,, and claimant, a teamster, was so sent, and injured in such work, he comes within the statute, if the work was a part of the contractor's business, and not merely ancillary and incidental thereto. [Ed. Note. For other cases, see Master and Servant, Dec. Dig. 367.] Appeal from Superior Court; Suffolk County. Proceeding under the Workmen's Compensation Act by Patrick Comerford, employé, opposed by the McDonald & Joslin Company, employer, and the Contractor's Mutual Liadecree of the superior court, approving findbility Insurance Company, insurer. From a Board for the employé, the insurer appeals. ing and decision of Industrial Accident Recommitted, to allow further evidence. Norman F. Hesseltine and J. Frank Scannell, both of Boston, for appellant. E. M. Shanley, of Boston, for appellee. PIERCE, J. [1] The evidence shows that the employé, Comerford, was and had been for three years before the accident, in the employment of one Connors as a teamster; that the subscribers, McDonald & Joslin Company speaking through a son of Joslin, the evening before the accident told Connors that they "wanted a teamster to take some concrete window sills, wheelbarrows, picks and shovels out to Mattapan the next morning"; that these things to be taken were in the That claimant's employer was requested locker or inclosure at the corner of Langdon by contractors to send a teamster to carry and and Roswell streets; that the "locker" is load some concrete sills, and that claimant was sent and, while assisted by the son of one of just a storehouse where odds and ends of the contractors in carrying to his team some tools and staging are kept; that the subsills selected by the contractors, he was injur- scribers' business was contracting, building ed, does not show claimant to be a "servant" of the contractors, or engaged in the "usual and construction work; that at the time of course of business" of the contractors, within the accident the subscribers were construct 1. MASTER AND SERVANT 405(2)-INJURIES -WORKMEN'S COMPENSATION ACT "USUAL COURSE OF BUSINESS"-"SERVANT." For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes ing a small brick garage in Mattapan; that these reinforced concrete window sills were wanted for the garage then being built; that on the morning of the accident the employé drove into the "locker" or inclosure, as directed by the son who had given the order to Connors, and backed up near to a pile of stone; that the son told the employé that "he wanted to get four of these sills on the team"; that there were some broken ones on the top of the pile, and they moved these off and laid them down on one side; that they carried two of the sills to the team, and were carrying the third, when the employé slipped and the sill fell on him. These facts do not warrant the findings of the Industrial Accident Board that: "During all the time that Comerford was on the premises, after he had driven the team into the 'locker,' he was engaged in the usual course of the business of the subscribers and was the servant of such subscribers during his employment on said premises." Nor do they warrant the further and more specific finding that: Comerford, in the performance of the work of lifting and moving sills, was under the control and direction of the subscribers, and was the servant and employé of the subscribers in the performance of this work, which was in the usual course of their business as building contractors." Upon the facts in this case the employé can be found to be the servant of the general employer, Connors, because of his duty to care for and to manage the team of Connors, and cannot be found to be the servant of the subscriber, because he was to carry and to load concrete sills which were to be selected from a pile of sills by the subscriber, or because in lifting and carrying the sills he was assisted by the son of the subscriber. Pigeon's Case, 216 Mass. 51, 102 N. E. 932, Ann. Cas. 1915A, 737; King's Case, 220 Mass. 290, 107 N. E. 959; Tornroos v. R. H. White Co., 220 Mass. 336, 107 N. E. 1015; Quinby v. Estey, 221 Mass. 56, 108 N. E. 908. [2] So far as the record discloses, the work of loading and of transportation was to be performed by Connors, through his servant, in his own way. Connors was, therefore, an independent agent or contractor. The sub scribers entered into an oral contract with the independent contractor, Connors, to do that part of the subscribers' work which consisted in conveying specific articles from the premises of the subscribers to the place where the "material" was designed to be used in the performance of the subscribers' contract. [3] The conveyance of picks, shovels, wheelbarrows and of constructed and fabricated parts of a building from the storehouse of a builder and contractor, to the premises where they are to be used or are to be combined into a proposed structure, may be found to be a part of the trade or business of a contractor and is not necessarily an act merely ancillary and incidental to the business of that contractor. Section 17, c. 751, pt. 3, St. 1911, in part reads: ten or oral, with an independent contractor to "If a subscriber enters into a contract, writdo such subscriber's work, or if such a contractor enters into a contract with a subcontractor to do all or any part of the work comprised in such contract with the subscriber, and the association would, if such work were executed by employés immediately employed by the subscriber, be liable to pay compensation under this act to those employés, the association which would be payable to them under tion shall pay to such employés any compensathis act if the independent or subcontractors were subscribers." We are of opinion that the facts of the case at bar may be found to bring it within this statute. Sundine's Case, 218 Mass. 1, 105 N. E. 433, L. R. A. 1916A, 318. The case is to be recommitted to the Industrial Accident Board, where the employé may move for a hearing and for the introduction of further evidence upon the questio whether the work performed by Comerford was a part of the business of McDonald & Joslin Company or was merely ancillary and incidental thereto. If such motion is granted the case should be considered anew upon all the evidence in troduced by all parties, and such decision should be made upon the facts as the Industrial Accident Board thinks is required by the evidence. So ordered. (224 Mass. 564) 106- GENERAL RELEASE 1. CORPORATIONS -CONSTRUCTION-SCOPE. original certificate was part of an attempted fraudulent overissue of the defendant's capital stock after it and all of it had been issued and for that reason that it was void. The contention on which the plaintiff based his claim was that the defendant was estopIn an action against a corporation for wrong-ped to dispute the trust company's claim that fully refusing to issue a new stock certificate for it was a stockholder because it took the origan old one, part of a fraudulent overissue, plaintiff claimed as assignee of a bona fide pledgee inal certificate as collateral for a loan in thereof. The certificate had been issued by a good faith and for value. The defendant's former treasurer of the corporation and de- answer to this contention was that the trust posited with plaintiff's assignor as collateral for his personal notes. Parties endeavoring to company was put upon inquiry by the form reorganize the corporation bought from plain- of the certificate and if it had made the inciff's assignor its money demands against the cor- quiry which it should have made, it would poration, evidenced by an assignment to their representatives of "all claims and demands of ev- have learned that the original certificate was ery description and kind," against the corpora- part of a fraudulent overissue of capital tion, which were described as annexed to the as- stock and so void. signment, but were not annexed; but plaintiff's assignor knew that the purchaser intended to purchase all such shares held by it. Held, that the assignment released the claim based on the fraudulent overissue of stock. [Ed. Note.-For other cases, see Corporations, Cent. Dig. §§ 456-458; Dec. Dig. 106.] 2. CORPORATIONS 102 - "CERTIFICATE OF SHARES OF STOCK"-OVERISSUE-FRAUD. A certificate issued as part of an attempted fraudulent overissue of stock is not a "certificate of shares of stock." [Ed. Note.-For other cases, see Corporations, Cent. Dig. § 452; Dec. Dig. 102.] 3. CORPORATIONS 104-STOCK ISSUE OF CERTIFICATES ESTOPPEL TO ALLEGE INVALIDITY-EFFECT. An estoppel of a corporation to deny that holder of certificates representing part of an overissue of stock is a stockholder does not make him one, but merely gives him a right of action based thereon. [Ed. Note.-For other cases, see Corporations, Cent. Dig. § 454; Dec. Dig. 104.] 4. APPEAL AND ERROR QUESTIONS OF LAW. 842(1)-REVIEW The question of the true construction of an assignment claimed to be a release is a question of law, reviewable on exception; but it must be determined in the light of what the trial judge was warranted in finding. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 3316-3318, 3323; Dec. Dig. mm 842(1).] Exceptions from Superior Court, Suffolk County; John H. Hardy, Judge. Action by B. Farnham Smith against the Worcester & Southbridge Street Railway Company. To findings of the superior court, plaintiff excepted. Exceptions overruled. Robert M. Morse and John R. Lazenby, both of Boston, for plaintiff. Choate, Hall & Stewart and E. S. Kochersperger, all of Boston, for defendant. LORING, J. This is an action for wrongfully refusing to issue to the plaintiff a new certificate for shares in the capital stock of the defendant corporation on the surrender of a certificate for shares dated February 11, 1903. The action was really brought by the International Trust Company for which the plaintiff held the certificate as a volunteer. The judge before whom the case was tried without a jury found that the We do not find it necessary to pass upon that question. The judge found that: "The assignment dated January 18, 1904, evidenced by Exhibit 16, by the International Trust Company to Rice and Hoar released any claim in favor of the International Trust Company against the Worcester & Southbridge Street Railway Company arising out of the possession by the said trust company" of the original certificate here in question. To that finding the plaintiff took an exception. [1] By the assignment of January 18th,1 1 Exhibit 16: Know all men by these presents that International Trust Company (of Boston), in consideration of one dollar and other valuable considerations to it paid by William E. Rice and Rockwood Hoar, the receipt whereof is hereby acknowledged, does hereby assign, transfer and convey to said William E. Rice and Rockwood Hoar, their heirs and assigns, all claims and demands of every description and kind against the Worcester & Southbridge Street Railway Company, said claims together with interest thereon to January 4, 1904, amounting to seventy-seven thousand and sixty-two 22/100 dollars, which claims or demands are annexed to this assignment. And the said corporation does hereby appoint said William E. Rice and Rockwood Hoar, or either of them, its attorney or attorneys irrevocable, in its name and for its account, but without expense to it, to sue for, recover, release, discharge, compromise, prove in bankruptcy or with the receivers of said company said claim, or to bring suit against any person or partnership or corporation who may be liable thereon directly or indirectly, and to assent or object to any action of the receivers, and generally to deal with the same as fully and completely as it could do if acting through its officers. Meaning and intending by this ed assignees all claims which it may have against the said Worcester Street Railway Company, or any person or persons who may be liable in any way for said claims. instrument to transfer and assign to the above nam In witness whereof the said International Trust Company (of Boston) has caused its name to be signed, and its seal affixed by Henry L. Jewett, its treasurer duly authorized by vote, a copy of which is annexed, this 18th day of January, in the year one thousand nine hundred and four. [Seal.] International Trust Company, By Henry L. Jewett, Treasurer. At a meeting of the directors of the International Trust Co. held on Monday, Jan. 18th, a quorum being present, it was unanimously voted: That Henry L. Jewett, treasurer, be authorized to execute on behalf of this company an assignment of its claims against the Worcester & Southbridge Street Railway Company, amounting to $77,062.22, to William E. Rice and Rockwood Hoar. Henry L. Jewett, Secretary. A true copy. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |