President of Harvard College v. Board of Aldermen , 104 Mass. 470 ( 1870 )

Wells, J.

By the colony law of 1650, incorporating Harvard College, the corporation was authorized to “ purchase and acquire to themselves, or take and receive upon free gift and donation, any lands, tenements or hereditaments within this jurisdiction of the Massachusetts, not exceeding the value of five hundred pounds per annum.” It was also provided “ that all the lands, tenements and hereditaments, houses or revenues, within this jurisdiction, to the aforesaid president or college ap pertaining, not exceeding the value of five hundred pounds per annum, shall from henceforth be freed from all civil impositions, taxes and rates; all goods to the said corporation, or to any scholars thereof, appertaining, shall be exempt from all manner of toll, customs and excise whatsoever ; and that the said president, fellows and scholars, together with the servants and other necessary officers to the said president or college appertaining, not exceeding ten, viz: three to the president and seven to the college belonging, shall be exempted from all personal civil offices, military exercise or services, watchings and wordings, and such of the ’.r estates, not exceeding one hundred pounds a man, shall be freed from all country taxes and rates whatsoever, and no other.”

Two questions are presented for our decision in this case: First. Whether this exemption in favor of the college applies to assessments upon its lands under the Sts. of 1866, c. 174, and 1868, c. 276, for the expenses of widening streets upon which they abut. Second. Whether the exemption attaches to the particular estate to which this controversy relates, and extends to the whole amount of that estate, notwithstanding the facts that its present value greatly exceeds the original limit of the exemption, and that the college holds other lands, also exceeding that limit in value, aside from lands exempted by the provisions of the general tax acts.

I. The terms of the exemption are as broad as language can make them. “All civil impositions, taxes and rates” include burdens and duties, to be rendered in money or otherwise, imposed by the civil authority, either specifically upon the lands, or upon the owner or occupant in respect thereof, as well as those contributions to the public revenue exacted from citizens and subjects according to their several abilities; the measure of those abilities being rated by the estimated value of their real and personal estates. That it was intended to be made thus broad, without reservation or qualification, is made apparent by the restricted manner in which the other exemptions, provided for in the same section, are defined. The association and order of the terms used may indicate that “ civil impositions” are to be limited to such as are in the nature of taxes ; but at the same time they show that the taxes thereby intended are not to be taken in a narrow or restricted sense.

The assessment laid by the board of aldermen of Boston upon this estate of the college, for the expenses of widening Devonshire Street, is, in the strictest sense, a “ civil imposition.” It is, in its legal character, a tax; for it is levied, and can only be levied, under the power of taxation confided by the Constitution to the legislature, and exercised by the board of aldermen under authority delegated to them by the legislature. Dorgan v. Boston, 12 Allen, 223. People v. Brooklyn, 4 Comst. 419. Burnett v. Sacramento, 12 Cal. 76. Brewster v. Syracuse, 19 N. Y. 116. Nichols v. Bridgeport, 23 Conn. 189. That this is the essential character of such an assessment is recognized by most if not all of the decisions. But in the interpretation of covenants, and statutes of exemption, a distinction is often made between ordinary taxation in the usual mode, for general expenditures or current revenue, and that which is special an local in its character and purpose. In a covenant for the payment of taxes by a lessee, it is to be ascertained by construction what was contemplated by the parties in the use of the terms employed. Those terms are not necessarily to be taken in their strict legal signification. In a lease for years, especially if for a short term, containing a covenant that the tenant shall pay all taxes assessed upon or in respect of the premises during the term, it would hardly be supposed that the parties intended that the lessee should pay an extraordinary assessment laid upon the premises in view of the permanently increased value of the estate by reason of a public improvement in its vicinity, unless the terms used were such as to admit of no other construction. The contrary presumption is stronger or weaker according to the length of the term of lease. It may be affected by the character, situation and condition of the estate, the mode and purpose of the occupation by the tenant, and by all the circumstances of the particular case. Much weight is sometimes given to the consideration that the assessment in question is of a kind in use or authorized at the time the covenant was entered into; or, on the other hand, of a novel and newly authorized nature. By the aid of such surrounding circumstances, very general words in a covenant may doubtless be construed in a limited sense. But when the words appear to have been chosen advisedly, and are such as to indicate an intent to provide for all possible forms of taxation, all other considerations yield to the intent of the parties, as manifested in the terms of their contract. Such covenants have been held to require a tenant for years to pay assessments like the present. Walker v. Andrews 3 M. & W. 312. Giles v. Hooper, Carth. 135. Thompson v Lapworth, Law Rep. 3 C. P. 149. Bleecker v. Ballou, 3 Wend. 263.

But it is obvious that considerations like these, although of much importance in the construction of the terms of a covenant, have little or no applicability to the interpretation of a statute containing like words in a provision for exemption. In the latter case, words so used are the language of the body by whose authority alone taxes and impositions in the nature of taxes can be levied. They import, not a contract of indemnity, or of payment or release of taxes to become due, but a renunciation of the taxing power. They are not used with reference to present and temporary conditions, but have respect to the indefinite future. Unless limited in terms, or by the effect of collocation, recitals or coordinate provisions, an exemption from taxation by statute must imply freedom from the imposition of taxes, not only in the forms and modes already established and in use at the time, but in all forms and modes in which the legislature may from time to time see fit to exercise the power, or authorize it to be exercised, over property within its jurisdiction. The question of exemption must be determined by the essential character of the imposition sought to be made, and not by the basis or mode of its distribution, or the form of its assessment»

It will be seen that the foregoing proposition does not apply to exemptions contained in what are called general tax acts. The effect of such an exemption upon an assessment like the present one, we have no occasion now to consider. Several of the decisions relied upon by the respondents relate to exemptions of that character. This is true of the case of The Mayor &c., of New York, 11 Johns. 77, which has been followed in its reasoning, as well as in its result, by nearly all the cases in which it has been held that an assessment for a local improvement is not included in a general exemption from taxation.

The opinion of Chief Justice Bradley of Rhode Island In the Matter of College Street, a copy of which is attached to the brief of the respondents, reviews the authorities in which such i estricted interpretation had been put upon words of exemption, in some cases contained in general laws, in others forming a special provision in a legislative charter, and follows the review with this statement: “ The principle upon which all these decisions rests does not authorize any distinction in the meaning of the same words of exemption when used in a private charter, from that which they have when used in a general statute.”

In the case then under consideration, there was a general exemption from taxation, applicable to the property in question, and also a provision in the charter of the college that “the college estate” “shall be freed and exempted from all taxes.” It was held that neither provision freed the college estate from an assessment made thereon for the expenses of widening a street. As the terms of the exemption in that case were somewhat narrower than in the case before us, we need not discuss the propriety or correctness of that decision. But the ground on which it is mainly supported, and which we suppose to be “ the principle” referred to as that upon which all the decisions cited were said to rest, does not meet with our concurrence. As stated in the same opinion, the principle is, that such assessments “ are, both in the theory of the law and in fact, but the return of a portion of the benefit specially conferred by the improvement; ” and that “ provisions for exemption from taxes or impositions, whether existing in general statute laws or in special charters, are not to be deemed to include assessments for the improvement primarily of certain special localities, and derived from and carved out of the benefit conferred upon those special localities by these improvements.” It must be conceded that, in several of the cases cited, similar propositions are announced.

An application of this doctrine was made in a case in New Jersey, which seems to us to illustrate its fallacy. In State v. Newark, 3 Dutcher, 185, a railroad corporation being required to pay a direct tax to the state, it was provided that no further or other “tax or imposition shall be levied or imposed upon the company.” By the law authorizing commissioners to widen streets, and assess the expenses thereof upon the parties made liable therefor, it was provided that whenever the track of any railroad was laid in any street so to be widened, the commissioners might assess upon the corporation owning such track so much of the expenses of the widening as they should deem equitable and just; and the rest upon adjoining proprietors, in proportion to the advantages received thereby. A portion of the expense of widening a street through which the track of a railroad extended was assessed to the railroad corporation di rectly, and another portion was assessed to certain lands owned by the corporation adjoining the street. It was held that so much of the assessment as was made to the corporation directly, in respect of its track running through the street, was a tax, and void because contrary to the law which provided for exemption ; but that so much of the assessment as was made in respect of its lands adjoining.the street, on the ground of a corresponding benefit thereto, was not a tax, and was not in violation of the provision for exemption.

Notwithstanding the number and respectability of these decisions, which have been followed in several states, we are constrained to regard such impositions differently. In our view, their character as a tax or otherwise does not depend upon the mode in which the distribution is made, or the reasons which justify, or may be assigned for, the particular mode of distribution adopted. If the object be one of public necessity, convenience or interest, and the expenditure one which may properly constitute a public burden, the assessment to meet the expenditure is not the less a tax because, in the distribution of public burdens, that particular expenditure is imposed upon a part only of the persons or property subject to taxation within the Commonwealth, and that part designated or ascertained by local limits, or relations of vicinity to or benefit from the proposed improvement or object of expenditure. Dorgan v. Boston, 12 Allen, 223. In whatever mode the distribution is made, the imposition is to be sustained, upon the ground that the mode is adopted by the legislature in the legitimate exercise of its proper function' to apportion the burden with reference to the benefit to be received from the expenditure. This is effected, after first determining the district within which to assess the amount, sometimes by an assessment upon all polls and estates within that district, according to their number and value; sometimes by an assessment upon the lands included within the district, or abutting upon the improvement, according to the value of those lands ; sometimes according to the area thereof, or the extent of frontage upon the improvement. In either of these modes, if the expenditure be for a public object, it is still taxation.

Under the statutes in question, the subjects of taxation are ascertained in like manner; but the ratio of assessment is sought to be fixed by an estimation of actual benefit to each estate. It is not necessary, for the purposes of this suit, to maintain the propriety, or even the validity, of this mode of exercising the power of taxation. It is enough to show that it is an attempted exercise of that power, and therefore a civil imposition, in the sense of the clause of exemption. Its validity as such has, however, been sustained in the recent case of Jones v. Aldermen of Boston, ante, 461.

The improvement in question is manifestly and avowedly one undertaken as a matter of public convenience and necessity. We need not consider whether it could be justified as a measure intended for the improvement" of private property, and directed to that end, like the provisions for improvement of meadows, to which it is compared in the decisions before referred to. It is decisive against that view of the case, that neither the statute nor the proceedings of the aldermen are based upon any such ground, but distinctly regard it as a measure of public concern—as much so as any action authorized or taken for laying out, altering or constructing highways or streets.

Our conclusion is, that an assessment of the cost of a public improvement so authorized and made, whatever may be the mode of its distribution and levy, is a civil imposition within the meaning of the exemption in the statute relating to Harvard College.

II. The second question presents itself in two aspects : 1st. As affected by the fact that the corporation holds other property more than sufficient in amount to exhaust the right of exemption, thus raising the question whether the exemption attaches to or can be applied for the protection of this particular estate; 2d. As affected by the increased value of the property to which this controversy relates.

1. This estate was acquired by the college in the year 1660. It is admitted that, at that time, it was within the limit, and covered by the operation of the provision for exemption. The identity of the property, thus originally covered by the exemption, with that upon which the disputed assessment was laid, is not denied. It is alleged in the petition, not denied in the answer, and was assumed in the argument, that “ no tax or other civil imposition has ever been paid ” by the corporation, or “ ever before been assessed or charged upon said estate.” These facts, that the estate was acquired and originally held under the statute assurance of exemption, and that the immunity, so secured, was enjoyed, without any claim to the contrary, down to the time of the adoption of the Constitution of the Commonwealth, have an important bearing upon the interpretation of the provisions of part 2, c. 5, § 1, of that instrument, as affecting this question. It is therein declared that the President and Fellows of Harvard College and their successors, in their corporate capacity, shall have and-enjoy all the rights, immunities, &c., which they then had or were entitled to have and enjoy and the same were ratified and confirmed unto them. It is also declared that all “ gifts, grants, devises, legacies and conveyances ” theretofore made to said college “ are hereby forever confirmed ” unto them “ according to the true intent and meaning” of the donors.

In Hardy v. Waltham, 7 Pick. 108, it was held that these provisions applied to the immunity enjoyed by the college in respect to its lands previously acquired, and which had been until, then protected from taxation under the exemption contained in the St. of 1650. That decision was in 1828. The legislation of the Commonwealth, before and since that time, accords with the result in that case.

By St. 1813, c. 113, the corporation was authorized to take and hold real estate “to the clear yearly value of twelve thousand dollars, in additipn to what they are now by law authorized to hold, and in addition to the public buildings of the said university occupied by the students and for other public purposes.’

In the acts to ascertain the ratable estate within the Commonwealth, Sts. 1810, c. 79, 1820, c. 64, and 1830, c. 130, all the estates belonging to Harvard College were excepted. And in the annual tax acts a similar general exemption was made with certain exceptions in favor of local taxation in Cambridge. Harvard College v. Kettell, 16 Mass. 204. Sts. 1821, c. 107, & 6; 1830, c. 151, § 6. This course of legislation led to the adoption of the qualified general exemption contained in the Rev. Sts. c. 7, § 5.

These considerations, as well as the force of the salutary rule stare decisis, would impel us to follow the legal results of the decision in Hardy v. Waltham, even if we were of opinion that otherwise, as an original question, a different construction from that adopted by the court, in the opinion in that case, should be put upon the terms of the statute of 1650.

This construction of the exemption does not involve the result suggested by the respondents, that the right must consequently pass from the college to the purchaser of the property, in case of a conveyance. That may be the case where the exemption is coupled with a grant of the land, and thus made a quality of the title that is derived from the government which confers the exemption. But this is strictly a provision of immunity to the college in respect of its lands, and cannot enure to the benefit of any other party by virtue of any title he may acquire therein.

For the same reason it will remain for the benefit and protection of the corporation after a sale of the lands to which it originally applied. In what manner and to what extent the corporation will be entitled to make it available in that event, does not concern us now.

We do not consider the question whether the legislature might constitutionally repeal or modify an exemption like that in the statute of 1650; because, in the first place, the statute under which this assessment was made does not indicate any intention so to repeal or modify it; and in the next place, this exemption is itself fortified by a constitutional protection, as was decided in Hardy v. Waltham.

2. The considerations already mentioned seem to be equally applicable to the case in its other aspect, namely, as affected by uhe increased value of the estate upon which the assessment was laid.

That, however, which is most decisive to our minds, is the fact that the exemption is coupled in the same statute with the grant of authority to take and hold real estate; and the extent of the privileges thus conferred, both that of proprietorship and that of immunity from public burdens, is defined by precisely the same measure. This would indicate the intent of the statute to be, that lands acquired and held under the authority therein granted were to be held with the privilege of exemption so coupled with the grant. That being so, whatever right or power there might be in the Commonwealth, in case of an advance in the value of the lands beyond the established limit, to require the corporation to reduce its possessions, or to withdraw the exemption from the excess, so long as that power is not exercised all lands properly acquired under that authority may be legally held under it, with the accompanying privilege of immunity, notwithstanding such subsequent advance in value.

This last consideration, which doubtless influenced the decision in Hardy v. Waltham, seems to us to vindicate the correctness of the law as declared in that case. The result must follow, that the exemption, as applied to this estate, extends to the entire value of the estate.

We deem it proper to advert to one feature in the St. of 1866, c. 174, which, although an additional reason for carefully weighing the grounds of decision, we have not been able to regard as affecting the principle which should govern.

The statute separates the estimation of benefits from the assessment of damages, and requires that damages in full shall first be paid, without any deduction on account of the benefit to the property of the party by reason of the improvement; whereas, in the ordinary mode of laying out or altering streets or ways, the damages and benefits are both included in one estimate, and set off against each other, and the award is only of the excess of damages over and above the amount of the benefits.

This deduction of benefits is sometimes classed with civil impositions in the nature of taxes, and referred to the taxing power for its justification. But we are satisfied that it is equally con eistent with, and may be supported under, the right of exercise of the power of eminent domain. The damages thus awarded are properly an estimate of the amount of injury occasioned to the claimant as the net result of the whole proceedings in their effect upon bis estate.

But in this statute the legislature has seen fit, by clear and unequivocal provisions, to make the assessment of the expenses upon the estates benefited a civil imposition in the nature of a tax. It does not affect its character, that it might have been accomplished, in great part, by way of deduction from the damages to the respective estates. To the landowner it may operate as a deduction or set-off, in substantial result. But in mode of proceeding it is distinct from and independent of any previous award of damages in his favor. It was manifestly intended to stand upon some independent ground of authority. We think it must be regarded as an exercise by the legislature of its authority to distribute public burdens, under the taxing power. An assessment so made is a civil imposition, from which this estate is to be held exempt. Certiorari to issue.