Remedies for Taxes Illegally Assessed

[G. L. c. 60, § 98

SECTION 98. No action to recover back a tax shall be maintained, except as provided in sections sixty and eighty-five, unless commenced within three months after payment of the tax nor unless such tax is paid either after an arrest of the person paying it, a levy on his goods, a notice of a sale of his land, a written protest signed by him, or a withholding of money due him under section ninetythree. In an action founded on an error or irregularity in the assessment or apportionment of a tax, only the amount in excess of the tax for which the plaintiff was liable shall be recoverable; and no sale, contract or levy shall be avoided solely by reason of such error or irregularity.

ACTION AT COMMON LAW TO RECOVER BACK A TAX

The method of contesting the validity of a tax so familiar in recent years of paying the tax under protest and bringing an action of contract against the city or town for money had and received to recover it back is of comparatively recent origin. Up to the end of the eighteenth century it was generally considered that a corporation, whether municipal or private, could not be bound except by writing under its corporate seal, and for that and other more or less technical reasons could not be liable in an action based upon a tort or a simple or an implied contract. It was the practice when one had a grievance against a corporation to bring an action against the individual officers or agents of the corporation who committed the wrong; in case of taxes illegally assessed and collected by distress or imprisonment to bring an action of trespass against the assessors.1 When corporations of the modern type began to become really important factors in the life of the people, to have exempted them wholly from liability except upon agreement under the corporate seal would have led to such undesirable results that the academic notion of corporate powers yielded swiftly to more practical views, and the technical difficulties were readily swept away.

1 In Stetson v. Kempton, 13 Mass. 272 (1816)), an action of trespass was maintained against the assessors of a town for assessing a tax in accordance with an invalid vote of the town, whereby plaintiff's property was distrained and sold, the court saying: "If they (the assessors) are not liable to an action for causing an arrest, or the seizure of property, for the non-payment of an illegal tax, it is difficult to find any remedy for an injured citizen in cases of this nature." As to liability of assessors for assessing an illegal tax see supra page 314.

G. L. c. 60, § 98]

5

In 1807 a private corporation was first held liable in Massachusetts on an implied contract, and three years later in tort,3 and soon afterward we find actions of assumpsit and trespass on the case being maintained against municipal corporations. In 1823 a statute was enacted materially restricting the personal liability of assessors for wrongfully assessing a tax, and almost immediately thereafter it was held that an action of assumpsit for money had and received could be maintained against a parish to recover the amount of a tax illegally assessed against a person who was not a member of the parish and collected by distress and sale of his property. This was probably the authority upon which since that time many similar actions have been brought against cities and towns; and it has been uniformly held that when a tax is wholly void and has been paid under duress an action lies to recover it back."

8

The action however is strictly an action for money had and received and not one for damages. When a tax illegally assessed is collected by distress and sale of the property of a person so assessed, he can recover only the amount of the tax and interest, although the value of the property sold may have been far greater than what it brought at the forced sale, and the costs of the distress as well as the amount of the tax were deducted from the proceeds.10 When the property distrained is not actually seized, and the sale is void on its face, the owner can recover nothing as neither his possession nor ownership in the property has been interfered with.11

11

2 Gray v. Portland Bank, 3 Mass. 364 (1807).

3 Riddle v. Proprietors of the Locks and Canals, 7 Mass. 169 (1810). 4 Fiske v. Needham, 11 Mass. 452 (1814); Taft v. Montague, 14 Mass. 281 (1817); Jones v. Lancaster, 4 Pick. 149 (1826). In the two cases first cited the plaintiffs did not recover; but it was assumed that the defendant was liable to the action if the facts warranted it.

5 Baker v. Boston, 12 Pick. 184 (1835); Thayer v. Boston, 19 Pick. 511

(1837); Anthony v. Adams, 1 Met. 284 (1840).

6 St. 1823, c. 138, now G. L. c. 59, § 87, supra page 314.

7 Sumner v. First Parish in Dorchester, 4 Pick. 361 (1826).

8 Lincoln v. Worcester, 8 Cush. 55, 60 (1851).

9 Preston v. Boston, 12 Pick. 7 (1831), and other cases too numerous to cite. The most recent is Williams v. Acton, 219 Mass. 520, 524 (1914).

10 Dow v. First Parish in Sudbury, 5 Met. 73 (1842); Shaw v. Becket, 7 Cush. 442 (1851).

11 Noyes v. Haverhill, 11 Cush. 338 (1853).

[G. L. c. 60, § 98

ACTION AT COMMON LAW IN CASE OF OVER-ASSESSMENT

There is an important limitation upon the right to maintain an action of contract at common law to recover a tax illegally assessed; the action does not lie unless the entire tax assessed against the plaintiff is void. If the taxpayer's complaint is merely that the tax assessed upon him is excessive in amount, whether such excess is due to the over-valuation of property which he owns and which is subject to taxation, or the inclusion in the tax assessed against him of property which he does not own or which is not subject to taxation, or some error or irregularity in the assessment of part of his property, his only remedy is a petition for abatement in the statutory form. This proposition was established within two years of the time when it was first decided that such an action would lie at all,12 and there are few legal doctrines that have been more frequently reiterated.

This doctrine is not based upon technicalities, nor is its principal service a trap for unwary litigants. The statutes have provided a procedure for the abatement of taxes, have carefully guarded the rights of the public by requiring the filing of a sworn list as preliminary to an abatement and the bringing of the petition within six months of the date of the tax bill, have arranged for speedy hearing and disposition of the application and have endeavored to secure a tribunal better qualified to pass upon the questions involved than a jury. If the taxpayer's remedy by action of contract at common law was concurrent with that by petition for abatement he might by bringing suit any time within six years from the time of payment, after the assessors had been changed and perhaps some of them had died, and evidence had been lost, and without filing a sworn list, transfer the duty and business of forming a valuation and assessing and levying taxes from the domestic tribunal to which the law has committed it to a court of justice settling facts on evidence by a jury, and with very inadequate means for the performance of that duty to the satisfaction of anybody. The existence of the statutory provisions for abatement, with their carefully drawn restrictions and conditions, is almost equivalent to a declaration of the legislative intention that another unre12 Osborn v. Danvers, 6 Pick. 98 (1828).

G. L. c. 60, § 98]

stricted remedy shall not exist. The decision that such action. will not lie is not based upon the mere form of the remedy where a real grievance is shown, but it results from a view of the fundamental principles on which the whole system of public taxation is founded.13

There are however some limitations and qualifications upon this rule. Real estate and personal property are treated as separate objects of taxation, so that a person who is not taxable for any real estate but is wrongly assessed upon a parcel of land which he does not own or which is exempt from taxation may pay the tax under protest and recover it back notwithstanding that he is rightly taxed on personal property in the same city or town;14 but separate parcels of real estate are not considered as separate objects of taxation for this purpose even if they are separately assessed, and a person who is rightly taxed upon one parcel cannot maintain an action to recover back a tax upon another parcel in the same city or town on which he was improperly assessed.15

The same rule applies to personal property. An inhabitant of a city or town who is properly taxable on his poll or on some items of personal estate cannot maintain an action of contract to recover back a tax upon certain other items of personal estate for which he should not have been taxed; 16 and a non-resident who is wrongly taxed on certain items of personal property in a city or town is left to his remedy by petition for abatement if he owns any personal property which is properly taxed in the city or town in question;" but a non-resident who has no

13 Lincoln v. Worcester, 8 Cush. 55 (1851).

14 Preston v. Boston, 12 Pick. 7 (1831); Middlesex Railroad v. Charlestown, 8 Allen 330 (1864); Hicks v. Westport, 130 Mass. 478 (1881); Ingram v. Cowles, 150 Mass. 155 (1889).

15 Boston Water Power Co. v. Boston, 9 Met. 199 (1845); Howe v. Boston, 7 Cush. 273 (1851); Lincoln v. Worcester, 8 Cush. 55 (1851); Salmond v. Hanover, 13 Allen 119 (1866); Massachusetts General Hospital v. Somerville, 101 Mass. 319 (1869); Chapel of the Good Shepherd v. Boston, 120 Mass. 212 (1876); Richardson v. Boston, 148 Mass. 508 (1889); Schwartz v. Boston, 151 Mass. 226 (1890); St. James Educational Institute v. Salem, 153 Mass. 185 (1891); Bates v. Sharon, 175 Mass. 293 (1900); All Saints Parish v. Brookline, 178 Mass. 404 (1901); Lancy v. Boston, 186 Mass. 128, 132 (1904); Sullivan v. Boston, 198 Mass. 119 (1908).

16 Watson v. Princeton, 4 Met. 599 (1842); Bates v. Boston, 5 Cush. 93 (1849); Lincoln v. Worcester, 8 Cush. 55 (1851); Middlesex Railroad v. Charlestown, 18 Allen 330 (1864); Wellington v. Belmont, 164 Mass. 142 (1895).

17 Hicks v. Westport, 130 Mass. 478 (1881); Norcross v. Milford, 150 Mass. 237 (1889); Sullivan v. Ashfield, 227 Mass. 24 (1917).

[G. L. c. 60, § 98

personal property in the city or town that is properly taxable there is not barred by his ownership of real estate in the city or town from maintaining an action of contract to recover a tax improperly assessed to him in respect to personal property.18

The same principles apply to a fiduciary as to a person assessed in his individual capacity. A fiduciary cannot maintain a common law action to recover a portion of a tax assessed upon him, upon the ground that the tax is excessive; 19 and this rule applies when the entire tax assessed upon him as a fiduciary is invalid, if he is properly taxable in any amount however small in his individual capacity;20 but if he is not properly taxable in the city or town either as a fiduciary or in his individual capacity he may recover in an action at common law a tax assessed upon him as fiduciary." A tax on a partnership is on the other hand a separate tax, and although if the partnership holds any taxable property of the class assessed its only remedy for overassessment is a petition for abatement, it is not barred from recovering a tax that is wholly invalid by reason of the ownership of taxable property by the partners individually.23

22

An omitted assessment on newly discovered property is part of the annual tax though assessed at a different time, and a person whose original tax was valid cannot recover back such an assessment in an action of contract although none of the newly discovered property assessed was really taxable to him."4 With regard to betterment assessments that have been paid under protest, any ground of objection which does not go to show the whole proceeding to be a nullity is not a proper basis for an action of contract to recover back the money paid; 25 but when such an assessment is void the person assessed is not precluded from recovering it back by reason of his ownership of

18 Preston v. Boston, 12 Pick. 7 (1831).

19 Sears v. Nahant, 221 Mass. 435 (1915).

20 Bourne v. Boston, 2 Gray 494 (1854); Harrington v. Glidden, 179 Mass. 486 (1901).

21 Williams v. Acton, 219 Mass. 520 (1914).

22 Oliver v. Lynn, 130 Mass. 143 (1881).

23 Little v. Cambridge, 9 Cush. 298 (1852); Oliver v. Lynn, 130 Mass. 143 (1881); Spinney v. Lynn, 172 Mass. 464 (1899).

24 Harwood v. North Brookfield, 130 Mass. 561 (1881).

25 Wright v. Boston, 9 Cush. 233 (1852); Stark v. Boston, 180 Mass. 293 (1902). For a discussion of the irregularities in assessing a betterment assessment that will render it void see infra page 690.