WILLIAMS v. BROOKLINE

Tax. Partnership. Executor and Administrator. Estoppel. Where articles of copartnership provide that on the death of one of the partners his share of the capital shall remain in the business for two years, the surviving partner paying interest thereon to the estate of the deceased partner, and, upon the death of one of the partners, the surviving partner agrees with the executor of the will of the deceased partner as to the balance due from the partnership to the testator which still is used under the agreement as part of the capital of the firm, the debt to the estate can be taxed in the hands of the executor as personal property, although this results in double taxation.

Where the executors of a will, who also are trustees thereunder, as executors pay under protest a tax on personal property consisting of a debt acknowledged by an instrument under seal made to them as executors, and represent to the assessors that their relation to the property is wholly as executors, on a petition for an abatement of the tax it is not open to them to contend that the tax is invalid because assessed to them as executors rather than as trustees.

HAMMOND, J.

The death of Williams dissolved the partnership in every other respect except that his share of the capital was to remain in the business for two years, the surviving partner to pay interest thereon at the rate of six per cent per annum. This was not a provision for the continuation of the business by the executor of the deceased partner, and there is much to be said in favor of the view that the intention of the parties was that the interest of the deceased partner should be regarded merely as a loan to the firm. But however that may be, there can be no doubt that by the agreement of May, 1904, the relation of partnership between the surviving partners and the estate was entirely severed, and that the sum due had taken the form of a debt owing from the surviving partners. It is the same in result as though the sum due the estate had been paid to the petitioners and then lent by them to the firm. That was the substance of the transaction.

It is said by the petitioners that this leads to double taxation, — a result which it is said courts are slow to reach. But the answer is that the taxation of a debt, especially where the debtor has property enough to pay, generally results in double taxation; and while it is true that in cases of debts secured by mortgages on taxable real estate the Legislature has made provision to relieve to some extent from double taxation, there still stands liability to double taxation in other kinds of debts.

Under the circumstances of this case we think that the question whether the tax is invalid by reason of being assessed to the petitioners as executors rather than as trustees is not open to the petitioners. They are executors and trustees under the will, and seem to have considered this property as held by themselves as executors, and so represented to the assessors. It is not a case where the property is not taxable, as in Milford Water Co. v. Hopkinton, 192 Mass. 491.

Judgment affirmed.