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(146 N.E.) ties, then, under command of the statute, it, the Bankruptcy Act there must be a partmust be done by the trustee. But there is ing with the bankrupt's property for the nothing in section 68a which prevents the benefit of the creditor and a consequent dimparties from voluntarily doing, before the inution of the bankrupt's estate." Conpetition is filed, what the law itself requires tinental & Commercial Trust & Savings Bank to be done after proceedings in bankruptcy V. Chicago Title & Trust Co., 229 U. S. 435, are instituted." Studley v. Boylston Nation- 443, 33 S. Ct. 829, 831, 57 L. Ed. 1268. See al Bank, supra, page 528, 33 S. Ct. 808. By Morgan v. Wordell, supra; King v. Cram, section 688 of the bankruptcy statute (Comp. 185 Mass. 103, 104, 69 N, E. 1049. St. U. S. $ 9652), mutual debts and mutual [6] As we construe the record, it was credits may be set off against each other. By agreed that the stocks held as collateral for section 1, paragraph 11 (section 9585), debts the overdue notes “were not to be considinclude any debt, demand or claim provable ered in the determination of the controverin bankruptcy. By section 63 (section 9647), sy.” Even if we are wrong in this construcclaims provable in bankruptcy comprise those tion, the defendants were not obliged to real“founded upon an open account, or upon a ize on the collateral before enforcing the contract, express or implied,” including such principal debt. Real Estate & Building Co. as are unliquidated but capable of liquida- v. Tufts, 127 Mass. 391. Burtis v. Bradford, tion. A claim against a broker, growing out 122 Mass. 129. of a marginal account, is a provable claim. It follows that the defendants' exceptions Crawford v. Burke, 195 U. S. 176, 187, 25 to the refusal to give their requests numS. Ct. 9, 49 L. Ed. 147. No trust existed be-bered 14 and 19 must be sustained. The tween Smith and the defendants. Their re- plaintiff's exceptions are overruled. Judglation was purely contractual. The titlement for the defendants is to stand. to the stocks bought by the defendants and So ordered. carried in the margin account, belonged to them. The title was not in Smith, Crehan v. Megargel, 235 Mass. 279, 126 N. E. 477;

W. R. GRACE & CO. V. SHAGHALIAN'S,
Brown v. Rushton, 223 Mass. 80, 111 N. E.

Inc.
884. Cases where the pledgee violates the
terms of the pledge, or there is a breach of

(Supreme Judicial Court of Massachusetts.

Suffolk. Feb. 27, 1925.) trust, have no application to the case at bar.

[5] The defendants had the right to close 1. New trial em 26-One cannot raise, on mo. all of Smith's contracts under the rules of tion for new trial, questions which might the stock exchange, and also had the right have been raised at trial. to set off against the notes the proceeds of One cannot raise, on hearing of motion for the margin account by applying the proceeds new trial, questions which might have been of the account to the notes. We have not, raised at trial. therefore, considered it necessary to discuss 2. New trial em 6—Generally disposition of the cases relied on by the plaintiff, dealing motion for new trial rests in discretion. with the question of set-off. The defendants

Generally disposition of motion for new did not hold any stocks of Smith on the mar- trial rests in sound discretion. gin account, in pledge or under a power of sale. See Tallman v. New Bedford Five 3. Appeal and error Ow977(1)-When ruling

on motion for new trial set aside stated. Cents Savings Bank, 138 Mass. 330; Brown v. New Bedford Institution for Savings, 137

Trial judge's action on motion for new trial Mass. 262. We find nothing in G. L. c. 137, of judicial discretion, or excess of jurisdiction,

will not be set aside, unless it amounts to abuse § 4, in conflict with this conclusion. In the

or some similar gross error. view which we take of this case, it is not important to pass on the question whether the 4. Appeal and error Om979(5)–Exception that plaintiff, in any event under the pleadings,

denial of new trial on condition of remittitur could recover under the contract counts, the

was against weight of evidence, and against defendants contending that no money was

the law, raised no question of law.

Plaintiff's exception that denial of new received by the defendants to Smith's use.

trial on condition of remittitur was against See Hawks v. Hawks, 124 Mass. 457. Nor weight of evidence, and against the law, raised is it necessary to consider the question of no question of law. the plaintiff's right to recover upon the counts in tort, based on a conversion of the 5. Appeal and error Om978(1)-Denial of new plaintiff's property. See Crehan v. Megargel,

trial for insufficiency of evidence to show consupra. Rice v. Winslow, 180 Mass. 500, 502,

formity of goods with sample was not error

of law, where no request was made for in62 N. E. 1057. There was no preference un- struction. der the bankruptcy statute. The judge was

Error of law cannot be predicated on the right in ruling that a valid set-off was no denial of motion for new trial because of inpreference. None of the debtor's property sufficiency of evidence to show that goods conwas delivered to the creditor. "To constitute formed to sample, where the question was not a preferential transfer within the meaning of raised by request for instruction.

wFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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6. Appeal and error @ww978(1)-Denial of new Pof motion for a new trial questions which

trial, because there was no evidence that might have been raised at the trial. It is peanuts delivered corresponded to sample, the general rule that the disposition of a held to present no question of law, Where question as to sufficiency of evidence cial discretion. The action of the trial judge

motion for a new trial rests in sound judi. to show that peanuts delivered corresponded to sample could have been raised by request on such a motion will not be set aside unfor instruction, denial of new trial because less it amounts to an abuse of judicial disthere was no evidence that they were suitable cretion or excess of jurisdiction or some sim. raises no question of law.

ilar gross error. 7. Appeal and error Om 1004(3)-Inclusion of

[4, 5] The judge in the case at bar made

He unauthorized items in verdict held not to taint no rulings of law for findings of fact. validity of jury's action.

simply denied the motion provided the plainApparent inclusion in verdict of items for tiff remitted the stated amount. It is mancartage, storage, insurance, and demurrage, de-ifest that a denial of the motion in respect ducted as total by judge from verdict, as con- to its grounds that the verdict was against dition on which plaintiff could retain verdict the evidence and the weight of the evidence, for its balance, held not to manifest such mis- and against the law, that it was excessive take, error, misunderstanding, dereliction of duty, or abuse of trust by jury, as to taint va- to the defendant no question of law at this

and contrary to the law as to damages, opens lidity of its action.

stage of the case. The ground that there Exceptions from Superior Court, Suffolk was no evidence that the peanuts were suitCounty; R. W. Irwin, Judge.

able for the purpose for which they were

understood to be used by the defendant also Action of contract by W. R. Grace & Co. presents no question of law at present. That against Shaghalian's, Inc., to recover price

question of law could have been raised by of 20 tons of ungraded peanuts. Verdict

appropriate request for an instruction to the for plaintiff. Defendant's motion for new

jury. Moreover, the only evidence that that trial was denied, on condition of plaintiff's

purpose was made known to the plaintiff remittitur, and defendant excepts. Excep

came from the defendant. The agent who tions overruled.

made the sale for the plaintiff denied that R. H. Oveson, of Boston, for plaintiff. he knew that purpose. The instruction to

W. B. Grant, of Boston (H. E. Whittemore, the jury on this point was sufficiently favor. of Boston, on the brief), for defendant. able to the defendant.

[6] The same observations apply to the RUGG, C. J. This is an action of con- contention that there was no evidence that tract to recover the price of twenty tons of the peanuts delivered corresponded to the 1919 crop fair average quality ungraded sample. Moreover, it appears that the sample Chinese shelled peanuts. The peanuts were shown at the time of sale was a "type samsold by written contract. The defendant re-ple," defined to mean "a sample of a previous fused to ccept or receive them on the groun crop showing how the peanuts generally that they did not correspond to a "type sam- run.” ple" shown at the time the contract was [7] The apparant inclusion in the verdict made. The case was tried to a jury. No ex- of certain items deducted as a total by the ceptions were saved by the plaintiff at the judge from the verdict, as the condition on jury trial. The verdict was in favor of the which the plaintiff could retain the verdict plaintiff in the sum of $4,175.29. The de for its balance, did not manifest such mig. fendant thereupon filed a motion for a new take, error, misunderstanding, dereliction of trial on numerous grounds. One of these duty or abuse of trust on the part of the juwas founded on a calculation to the effect ry as to taint the validity of its action as a that the verdict as returned must have in- whole as matter of law. The judge had seen cluded specified items for cartage and the witnesses and the jury and watched the storage, insurance, demurrage and handling course of the trial. He was in a better po charges aggregating a certain amount. The sition than anybody else to reach a right judge denied the motion for a new trial, pro- conclusion on the point whether the verdict vided the plaintiff would remit that amount, ought to stand or be set aside in its entirety. which it did.

No error of law or abuse of sound judicial [1-3] The defendant thereupon filed this discretion is revealed on this record in the bill of exceptions touching the disallowance disposition made by the judge of the motion of its motion for a new trial. It is familiar for a new trial. law that a party cannot raise on a hearing Exceptions overruled.

For other cases see same topic and KEY-NUMBER in all Key-Numhered Digests and Indexes

(146 N.E.)

mestic corporation, “the value of its propAMERICAN MFG. CO. V. COMMON. erty situated in another state

and WEALTH.

subject to taxation therein." The petitioner

owned merchandise located in New York on (Supreme Judicial Court of Massachusetts. Suffolk. March 6, 1925.)

April 1, 1918, the value of which the tax

commissioner declined to deduct from the 1. Taxation Om 376(3) - To require value of value of its corporate franchise as otherwise

property in another state to be deducted from determined according to law. The precise corporate franchise, tax must be actually lev. question is whether that merchandise was ied on property; "subject to."

in New York "subject to taxation" within the To require deduction under St. 1909, c. 490, meaning of those words in said section 41, pt. 3, § 41, providing that there shall be de

third. ducted from value of corporate franchise value

Prior to the enactment of St. 1903, c. 437, of property in another state, and “subject to" taxation therein, tax must be actually levied op $ 72, no deduction was allowed in computing property in another state; “subject to” mean the value of the franchise of a domestic coring that property actually bears financial burden poration as a basis for the excise tax, on acthereby indicated.

count of the value of its personal property [Ed. Note.-For other definitions, see Words actually situated in another state or foreign and Phrases, First and Second Series, Subject country, whether there taxed or not. The to.)

last-cited statute first introduced into our tax

law the words of deduction found in said 2. Taxation am 117—Franchise tax of New section 41, third. That deduction was limitYork held to be tax on income itself.

ed (1) to tangible property; and (2) to propNew York corporation franchise tax, though in name and form a franchise tax, is 'in sub- erty subject to taxation in that other state. stance, tendency, and practical operation a tax There has been a progressive tendency in on income itself.

our statutes imposing excise taxes on domes

tic corporations, to deduct from the value 3. Taxation 376(3)–Merchandise of domes of the franchise for tax purposes the value

tic corporation situated in New York held not of property otherwise taxed. See, for review subject to taxation there, within statute as to of such statutes, New England & Savannah deduction from franchise value. Merchandise of domestic corporation situat

Steamship Co. v. Commonwealth, 195 Mass. ed in New York held not subject to taxation in 385, 81 N. E. 286, 11 Ann. Cas. 678. In most, New York, within St. 1909, c. 490, pt. 3, § 41, if not all, of those provisions the operative providing that there shall be deducted from val? / words have authorized such deduction only ue of corporatė franchise value of its property when the other property is otherwise "subsituated in another state, and subject to taxa- ject to taxation. These words bear an im. tion therein.

plication that, since such other property ac4. Taxation Ew l-Tax on income from proper. tually bears its burden of taxation in some ty is in essence a tax on property:

other form according to its fair value, that A tax on income derived from property is chise value to the end that the corporation

value ought to be deducted from the franin essence a tax on the property.

be not to that extent made liable to double Reserved and Reported from Supreme Ju- taxation. Indeed, the history of the develdicial Court, Suffolk County.

opment of the corporation franchise tax law

indicates that avoidance of double taxation Petition by the American Manufacturing

was the legislative purpose impelling the sucCompany against the Commonwealth of Mas

cessive deductions authorized. Commonsachusetts for abatement of excise tax as- wealth v. Hamilton Manuf. Co., 12 Allen, 298; sessed for year 1918. Petitioner excepted to findings of fact, and case was reserved and Mass. 80; Farr Alpaca Co. v. Common

Fireman's Ins. Co. v. Commonwealth, 137 reporter. Exceptions overruled; petition

wealth, 212 Mass. 156, 98 N. E. 1078. This dismissed.

purpose has been to avoid an actual double C. H. Walker, of Boston, for petitioner. taxation in fact and not a theoretical pos

A. Lincoln, Asst. Atty. Gen., for the Com-sibility of double taxation. Deduction of the monwealth.

value of shares of stock in a foreign corpo

ration, which bears its full burden of taxaRUGG, C. J. [1] This is a petition under tion on all its property when located in some St. 1909, c. 490, pt. 3, § 70, by a Massachu- other state, never has been allowed. Money setts corporation for the abatement of an ex

on deposit in a bank in another state and cise tax assessed upon it for the year 1918. there actually taxed, is not allowed as a deThe petitioner was subject to a tax upon its duction. So, also, accounts, receivable from corporate franchise under St. 1909, c. 490, debtors resident in and payable in another pt. 3, 88 39–43. It is provided by said sec- state, are not allowed as a deduction.. Simtion 41, third, that there shall be deducted plex Electric Heating Co. v. Commonwealth, from the value of the corporate franchise, 227 Mass. 225, 116 N. E. 501. as there defined and ascertained, of a do The words “subject to," in describing title

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
146 N.E.-51

to property, followed by such words as [3, 4] Upon these facts, the merchandise of “mortgage," "lien," or "other incumbrance" the petitioner was not “subject to taxation" mean that the property actually bears the in New York. Manifestly, it is not taxed difinancial burden thereby indicated. It was rectly, but is expressly exempted from taxasaid with reference to this section of the tion. The franchise tax upon the income of statute in Bellows Falls Power Co. v. Com the corporation bears no direct relation to monwealth, 222 Mass. 51, 63, 109 N. E. 891, the value of the merchandise in New York. Ann. Cas. 1916C, 834:

The value of that merchandise is a factor in "The context in which these words occur in calculating the net income upon which the our tax law, and its other general provisions, franchise tax is based. The franchise tax is demonstrate that these words refer to the kind not upon the income derived from the merof property which, if owned by an individual and chandise located in New York. That income situated and taxed in another state, would be is merely a part of the net income upon exempt from taxation here.” Simplex Electric which the tax is assessed. It is quite posHeating Co. v. Commonwealth, 227 Mass. 225, sible under the law of New York that a 229, 116 N. E. 501.

franchise tax might be levied on a corpora

tion which may have derived no income from All these considerations lead to the conclusion that, in order to require the deduc- its New York property or business. A tax tion under said section 41, third, there must upon income derived from property is in esbe actually levied upon the property situat- sence a tax upon the property. Opinion of ed in another state à tax under its taxation Justices, 220 Mass. 613, 624, 108 N. E. 570.

But that principle has no relevancy to the laws.

facts of this record. The franchise tax up[2] The further question arises whether this merchandise of the petitioner situated lege of there doing business is too remote

on the petitioner in New York for the privi. in New York was thus “subject to taxation” from the income of its merchandise situated in that state. During 1918 there was in force in New York a franchise tax levied up the merchandise is there “subject to taxa

in New York to permit the conclusion that on corporations such as the petitioner for

tion," as those words are used in said section the privilege of “exercising their franchises

41, third. in this state in a corporate or organized ca

Petitioner's exceptions overruled. pacity.” Such a corporation was required

Petition dismissed, with costs. to file a report stating the amount of its net income for the last preceding fiscal or calendar year. The allocation of net income to New York, in the case of corporations doing HEDGE v. STATE STREET TRUST CO. et al. business both in that state and elsewhere, was made in the main upon a basis of the (Supreme Judicial Court of Massachusetts.

Norfolk. March 2, 1925.) proportion which certain assets, regarded as having a situs or origin in New York, bore 1. Wills em 449Intent to dispose of all propto the corporation's total like assets wherev erty presumed, and will so construed, if pos. er located. Corporations taxable under that

sible. law were given complete exemption from tax There is a general presumption that one ation, state and local, upon or in respect to making will intends to dispose of all his proper. their personal property situate in New York, ty, and construction of will resulting in partial so far as here material. Franklin Mills intestacy will not be adopted, unless plainly re

quired. Corp. v. Collins, 109 Misc. Rep. 1, 178 N. Y. S. 65; affirmed on opinion below, by the Ap 2. Wills 629_Law favors vested rather than pellate Division in 193 App. Div. 925, 184 N. contingent estates in construction of wills. Y. S. 944, and by the Court of Appeals in The law favors creation of vested rather 232 N. Y. 502, 134 N. E. 547. Though in than contingent estates, and those created by name and form a franchise tax, the corpora- will will be regarded as vesting at once, unless tion income tax law has been held to be, in opposite intent of testator clearly appears. substance, tendency, and practical operation, 3. Wills 534–Existence of life estate in tes. a tax 'upon the income itself. Alpha Port tatrix's daughter held not to deprive her of land Cement Co. v. Knapp, 230 N. Y. 48, 129 vested remainder. N. E. 202; motion for reargument denied, A life tenant may be a remainderman in es. 231 N. Y. 516, 132 N. E. 870; petition for tate after his life estate, and fact that testatrix's writ of certiorari denied, 256 U. S. 702. Up- daughter was life tenant held not to deprive ber on the findings of the single justice the cases of vested remainder. just cited are taken as the law of New York. 4. Wills 534-Will creating life estate with Compare Bass, Ratcliff & Gretton, Ltd., v. remainder to testatrix's three children held State Tax Commissioner, 232 N. Y. 42, 133 N. to create vested interest in such children, E. 122; Id., 266 U. S. 271, 45 S. Ct. 82, 69 L. though one of them was life tenant. Ed. .; Northern Finance Corp. v. Law, Where will gave to testatrix's daughter life 236 N. Y. 286, 140 N. E. 700.

estate in certain property, with provision that, For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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(146 N.E.) if it became necessary or expedient to dispose [1] The life estate to the husband of Lucy of such property, then proceeds should be equal. W. Heath, as well as the life estate to her ly divided between testatrix's three children, daughter Eadith, have now ended, and the held, such children took vested remainders, and question to be decided is, To whom are the that on death of daughter, who was life tenant, her estate was entitled to one-third of property. proceeds of the estate to be distributed. The

testatrix, Mrs. Heath, intended to dispose of Appeal from Probate Court, Norfolk Coun-ber entire property and not to die intestate. ty; McCoole, Judge..

There is a general presumption that when

one makes a will, it is his intention to disIn the matter of the estate of Lucy W.

pose of all his property and leave no intestate Heath, deceased. From a decree of the pro- l estate. A construction of a will resulting in bate court, on petition of Eadith H. Hedge intestacy is not to be adopted unless plainly for distribution of proceeds, the State ștreet required. Ames v. Ames, 238 Mass. 270, 276, Trust Company and Harold Williams, Jr., as 130 N. P. 681; Bates v. Kingsley, 215 Mass. executors of Eadith Heath, and Charles 62, 63, 102 N. E. 306; Miller v. Idaho IndusHeath appeal. Reversed, with directions.

trial Institute, 222 Mass. 188, 110 N. D. 274; Harold Williams, Jr., of Boston, for ap- Shattuck v. Stickney, 211 Mass. 327, 333, 97 pellant trustees.

N: E. 774.
H. D. White, of Boston (F. $. White, of [2] As she desired to dispose of her entire
Boston, on the brief), for appellant Heath.

estate, the testatrix directed that “if it L M. Lombard, of Boston, for appellee. should become necessary or expedient at any

time to dispose of said Cohasset estate, then CARROLL, J. Lucy W. Heath died in I direct the proceeds to be divided equally February, 1899. She was survived by her between my three children, Ada, Charles and husband and three children, Ada, Charles Eadith." The law favors the creation of and Eadith. By her will she left to her vested, rather than contingent estates, and daughter Eadith "the use and improvements those given by will should always be regardof my estate at Cobasset, Massachusetts, ed as vesting at once, unless it clearly apduring her life, subject, however, to the life pears from the language of the will that it interest of my husband, Charles E. Heath. was the intention of the testator that the But if it should become necessary or expe-estate should be contingent upon some fudient at any time to dispose of said Cohassetture event. Blume v. Kimball, 222 Mass. 412, estate, then I direct the proceeds thereof be 110 N. E. 1036; Whitman v. Huefner, 221 divided equally between my three children, Mass. 265, 108 N. E. 1054; Gibbens v. GibAda, Charles and Eadith.” The will was ad- bens, 140 Mass. 102, 3 N. E. 1, 54 Am. Rep. mitted to probate in March, 1899. The hus- 453; Darling v. Blanchard, 109 Mass. 176, band of the testatrix died in February 16, 177. Where the remainder is to the chil1905. Ada married Thomas Doliber, and dren of the testatrix, as in the case at bar, died January 3, 1910, leaving to her hus- the presumption that a vested rather than a band all her interest in this property. He contingent estate was created as strengthdied in 1912, by will giving to his surviving ened. Whitman v. Huefner, supra; Mullaney children born of the marriage with Ada his v. Monahan, 232 Mass. 279, 283, 122 N. E.. interest in the Cohasset real estate devised 387. There is nothing in the will indicating to him by his wife. The children of Ada and that a contingent remainder was intended, Thomas Doliber are Eadith H. Hedge and and nothing to indicate the naming of a class Margaret F. Robinson. The daughter of Lu- where the survivors would inherit. The cy W. Heath, Eadith Heath, retained the use testatrix mentioned each of her three chilof the Cohasset estate during her life. She dren by name, and the property was to be didied February 16, 1923, unmarried, leaving a vided equally between Ada, Charles and will in which the State Street Trust Com-Eadith. We do not consider Towne v. Wespany and Harold Williams, Jr., were named ton, 132 Mass. 513, in conflict with this prinas executors and trustees. They have duly ciple. qualified as such. Charles Heath (the son of [3] The word "then,” following the stateLucy W. Heath), Eadith H. Hedge and Mar- ment “if it should become necessary or expegaret E. Robinson (daughters of Ada Doli- dient at any time to dispose of said Cohasber) are now living. The land has been sold set estate,” refers merely to the time at by a commissioner, and the proceeds are held which the distribution of the proceeds is to by him, subject to the determination of the take effect, and not to the time for determincourt as to the rights of the parties therein. ing the person in whom the estate is to vest. In the probate court a decree was entered di- The word “then” is used conjunc vely; it recting that one-quarter of the proceeds means "in that case or in that event.” Bosshould be paid to Eadith H. Hedge, one-quar- ton Safe Deposit & Trust Co. v. Parker, 197 ter to Margaret E. Robinson, and one-half Mass. 70, 73, 83 N. E. 307; Dove v. Torr, 128 to Charles H. Heath. The trustees under the Mass. 38. A life tenant may be a remainderwill of Eadith Heath and Charles Heath ap- man in an estate, after his life estate, and pealed.

the circumstance that Eadith was the life

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