Court Opinion

ID: 3991340
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:51:11.008055+00
Date Added: 2024-06-11T07:44:24.627040
License: Public Domain

I concur with the majority's conclusion that timely filing *Page 573 
of proof of shipment outside the state is a necessary condition to the right of exemption under Rem. Rev. Stat., § 11130 [P.P.C. § 979-103], as amended by chapter 66, p. 187, of the Laws of 1939; but I do not agree with the majority's conclusion that a court of equity may not relieve against the consequences of a mistake in the proof filed by a taxpayer unless such mistake is corrected prior to the time provided in the statute.
In 51 Am. Jur. 629, § 667, the rule is stated to be that a mistake in a tax return does not preclude a taxpayer from showing the actual facts and from having his tax liability determined by correct principles of law applicable to such facts, where he acted in good faith and did not intend to mislead the taxing authorities. Cited in support of that rule is Commissioner ofCorporations and Taxation v. Ford Motor Co., 308 Mass. 558,33 N.E.2d 318, 139 A.L.R. 936, in which case the return made by the taxpayer showed receipts of $32,967,492.26, subject to excise taxes of the state of Massachusetts, and excise taxes were paid on that amount. This was the total amount of sales in the state and included sales in interstate commerce which were not subject to the excise tax. The Ford Motor Company sought a rebate of so much of the tax as had been paid on sales in interstate commerce:
"The taxpayer filed a return from which it appeared that the gross receipts assignable to Massachusetts amounted to $32,967,492.26. The amount stated represented the total sales made by the Somerville branch. There is no contention that the company was not acting in good faith or that it intended to mislead the commissioner. Such a mistake does not preclude the taxpayer from showing the actual facts and from having its tax liability determined by correct principles of law applicable to these facts. Dunnell Manuf. Co. v. Pawtucket, 7 Gray, 277.Charlestown v. County Commissioners of Middlesex,109 Mass. 270. Milford Water Co. v. Hopkinton, 192 Mass. 491. Sears v.Nahant, 221 Mass. 437. Hamilton Manuf. Co. v. Lowell,274 Mass. 477."
Judge Thomas M. Cooley says:
"Ordinarily, a property owner is bound by a schedule of his taxable property given by him to the assessor; but *Page 574 
handing in a list which, by mistake of the owner's rights, is made to embrace property not liable to taxation, will not estop him from claiming an abatement as to such exempt property; there being no reason of justice or public policy why it should." 3 Cooley, Taxation (4th ed.) 2195, § 1086.
In Charlestown v. County Commissioners of Middlesex,109 Mass. 270, the facts were that Daniel Chamberlain, a resident of Boston, operated a hotel in Charlestown; the furniture in the hotel was taxable in the town of his residence, but he had filed a return showing it to be taxable in Charlestown. The county commissioners had abated the tax as the result of a complaint by Chamberlain, and the city of Charlestown was attempting to quash the proceeding, claiming that the tax could not be abated because Chamberlain included the furniture in his sworn list, as property liable to taxation. Answering this contention, the court said:
"We can see no reasons, of justice or public policy, why, if he by a mistake of his rights returns to the assessors as liable to taxation property which is by law exempt, he should be thereby estopped to claim a reasonable abatement, and compelled to pay more than his just proportion of the taxes. This question was substantially decided in Dunnell Manufacturing Co. v.Pawtucket, 7 Gray, 277."
Another well-reasoned case is Chicago, B.  Q.R. Co. v. CassCounty, 51 Neb. 369, 70 N.W. 955. The facts are set forth in the portion of the opinion here quoted:
"In the case at bar the evidence shows that the tax agent of the railroad company listed the west half of this bridge for taxation in said school district No. 2 because he erroneously believed that said half of the bridge was in the boundary limits of said school district. His mistake was a mistake of fact. It is neither pleaded nor proved by the defendants in error that any of them believed that the bridge was in fact within the limits of school district No. 2; nor that they believed the statement of the tax agent, if he made one, that it was within the limits of said district; nor that they changed their status in any respect by reason of the tax agent so listing the property. All that appears is that the tax agent so listed the property as being in school district No. 2; that he did this because of a mistake of fact as to the actual location of the bridge and that the mistake *Page 575 
was innocently made; but it does not appear that the school district was in any manner prejudiced by such listing or representation of the railroad company's tax agent, and we conclude, therefore, that the conduct of the railroad company in listing its property as being in school district No. 2 in the year 1895, and prior years, does not estop it from maintaining this action; and if the court based its decree upon a finding of law made by it, that the company was estopped by reason of its conduct in the premises, the decree is contrary to law."
I am of the opinion that the appellant, by its amended complaint, has set forth such a mistake as may entitle it to equitable relief. It is the public policy of the state, clearly expressed, that goods, wares, and merchandise, under the circumstances here existing, should not be taxed if shipped out of the state by April 30th. If the mistake in the return was not due to willful neglect (which is negatived by the allegations of the complaint) and the granting of the relief sought will not cause the other parties interested any serious loss (apart from the loss of the tax) or inconvenience, the relief should be granted. Any serious loss or inconvenience that might constitute a countervailing equity would be in the nature of an affirmative defense.
The judgment of dismissal should be reversed, with instruction to the trial court to overrule the demurrer.
STEINERT, MILLARD, and SIMPSON, JJ., concur with ROBINSON, J.
May 27, 1948. Petition for rehearing denied. *Page 576