Boott Cotton Mills v. City of Lowell

Barker, J. 1. The abatement which assessors or county commissioners may make under the provisions of Pub. Sts. c. 11, §§ 69, 71, when a taxpayer is overrated, is not in itself a judgment for money, and it is not returned to a court and cannot be entered in any court either by a taxpayer or by the authority which makes the abatement. If the tax has not been paid, it gives no right to ask for the payment of money, but merely the right to discharge the tax by the payment of less than the amount assessed. If the tax has been paid, the taxpayer, under the provisions of Pub. Sts. c. 11, § 75, has the right to be reimbursed out of the treasury of the city or town to the amount of the abatement, with all charges except legal costs previously accrued, and he is also entitled to a certificate of the abatement. See Pub. Sts. c. 11, § 76. But this certificate cannot be entered in court, and no court can make up a judgment upon it alone. If the reimbursement is not duly made, the taxpayer may have his action, founded on the breach of the statutory obligation to reimburse, and, if he obtains judgment, it is upon establishing in court all the facts essential to his right of recovery, of which the making of the abatement is but one. The provisions of Pub. Sts. c. 171, § 8, authorizing the computation of interest, when judgment is made up upon an award, from the time when the award is made to the time of making up the judgment, are therefore not applicable to the present case, and give the plaintiff no right to recover interest from the times when the abatements were made. 2. Nor is interest included in the charges which are also to be [386] reimbursed. A collector of taxes may proceed in either of several ways to enforce payment, while the application for an abatement is pending or before it is made, and may thus create charges other than legal costs, and such charges are in effect added to the tax. It is such charges only which the section (Pub. Sts.-c. 11, § 75) says shall be reimbursed with the amount of the abatement. 3. The doctrine that taxes illegally assessed may be recovered with interest from the time of payment if paid under protest, and from the time of demand if paid without protest, (see Boston & Sandwich Glass Co. v. Boston, 4 Met. 181, and Boston Water Power Co. v. Boston, 9 Met. 199,) is not applicable to the present case. In such cases the tax is void; and the proceedings for its collection are without legal sanction, and the money paid is the property of the taxpayer of which the municipality has obtained wrongful possession. But a tax abatable because the taxpayer is overrated is nevertheless a valid tax; proceedings to enforce its payment have the sanction of law, and when it is paid and the proceeds turned into the municipal treasury the money is the proper money of the city or town. The municipality has no right or duty to reimburse any portion of it until an abatement has been made. Under our system of taxation the State and county taxes are included in one assessment with the city or town levy, and the treasurer of the municipality is often a different person from the collector of taxes, and has no official knowledge of the particular sources from which are derived moneys turned into the treasury as the proceeds of taxes. If he knows that an abatement has been made in favor of a particular taxpayer, he has no official knowledge whether the tax has or has not been paid. Nor is it a treasurer’s duty to volunteer to make such a reimbursement. Some proper demand must be made before it is his duty to pay, and before the municipality is placed in default by mere non-payment. But in the case of taxes illegally assessed the municipality is in default when, without warrant of law, it receives money which it is informed by the protest that it takes illegally, or when it retains it after a demand. But the duty to reimburse an overrated taxpayer springs solely from the statute. Although the assessors may have erred in judgment, the city or town has not been [387] at.fault in the assessment or collection of the tax, nor in the retention of the money paid; and it is not compelled to make the reimbursement because of its default, but because for that purpose it is the designated instrument of the government. Its duty to reimburse, therefore, cannot begin until the abatement is made, and this disposes of the contention that the plaintiff ought to recover interest from the times when the respective taxes were paid. 4. The same considerations negative any obligation on the part of the municipality to make reimbursement until demand therefor is made. The sums received into the treasury are not earmarked. They are the property of the municipality, and it is under no obligation to the taxpayer until his abatement is allowed. Whether its allowance gives him a right to reimbursement depends upon whether the tax has been paid, a fact not to be presumed to be within the knowledge of the treasurer. It follows that the municipality is in no default in not making reimbursement until demand, and as interest is not given by the statute which devolves upon the city or town the duty to make reimbursement, only such interest can be included in the judgment as is given for the improper detention of money, which would not be until after a demand. We notice in this connection that the government of the United States does not pay interest except where the demand is under a special contract or special law providing for the payment of interest, and that no obligation to pay interest is to be implied against the government from the mere fact that it has detained the principal after the creditor’s right to receive it has accrued. United States v. Sherman, 98 U. S. 565. Stephani’s case, 26 Int. Rev. Rec. 313. Tillson v. United States, 100 U. S. 43. U. S. Rev. Sts. §§ 1091, 3011, as amended by U. S. St. of February 1, 1888. 25 U. S. Sts. at Large, 6. 9 Atty. Gen. Op. 57, 59. 16 Atty. Gen. Op. 97. 5. Nor has the plaintiff any right to recover on the ground that the defendant has received the profits or earnings of a fund belonging to the plaintiff. As we have seen, the taxes, though in part abatable, were legal, and their proceeds when paid were the property of the city, and not of the taxpayer. If it ’could be demonstrated that the sums on which the city received [388] interest were in part composed of the moneys paid by the plaintiff, they were not the plaintiff’s property, and it has no right in the earnings of the fund. The result is, that interest should have been allowed only from the time of demand, and not from the dates' when the abatements were made. The finding is set aside, and judgment is to be entered for a sum to be ascertained by the rule above given. If necessary to determine the amount of the judgment, the case will stand for further hearing in the Superior Court. Finding set aside.