Forman Schools, Inc. v. Town of Litchfield

The plaintiff appealed to the Court of Common Pleas from the action of the board of tax review of the defendant town in placing its property on the tax list, claiming that it was exempt, as belonging to a Connecticut corporation organized exclusively for educational purposes, under 1163 of the General Statutes. The trial court sustained the action of the board and the plaintiff has appealed to this court.

Previous to 1925, our statutes had for many years included a provision exempting from taxation "buildings or portions of buildings exclusively occupied as colleges, academies, churches or public schoolhouses," with an addition made in 1921 to include "the land on which they stand." General Statutes, Rev. 1888, 3820; Rev. 1902, 2315; Rev. 1918, 1160; Public Acts, 1921, Chap. 109. We considered the scope of the exemption in Yale University v. New Haven (1899), 71 Conn. 316, 42 A. 87; Brunswick School v. Greenwich (1914), 88 Conn. 241,90 A. 801, and Corbin v. Baldwin (1917), 92 Conn. 99,101 A. 834. The case of Pomfret School v. Pomfret,105 Conn. 456, 136 A. 88, while not decided until 1927, arose under the act of 1921; and in it (p. 459) we formulated, upon the basis of the earlier decisions, certain conditions which must exist before the property of a school would be exempt: "First, is the property devoted to the public use; second, was the property so received and is it so held as to be dedicated to public benefit instead of to private advantage or gain?" In explanation of the significance of the first question, we said (p. 460): "The situation presented is not in accord with the conception of public education and public benefit which is at the root of the exemption claimed — the performance, though by private persons, of functions which otherwise would devolve upon the State or municipal government." We held that the school involved in that case did not meet this requirement because it was, like the school involved in Brunswick School v. Greenwich, supra, not a public institution offering instruction to all comers, but was in essence "a private school, calculated, manifestly, to interest only those who have the means and disposition to separate their children from the public schools." In Female Academy v. Darien, 108 Conn. 136, 142 A. 678, decided by us in 1928, but arising under the 1921 act, we reached a like conclusion.

In 1925, a special commission appointed under authority of the General Assembly particularly to study exemptions from taxation made a report, and as a result an act was passed which, in place of the general exemption of colleges, academies and schools quoted above and certain other institutions, contained a provision which, although somewhat altered in detail by chapter 319 of the Public Acts of 1927, is essentially the same as that now found in 1163 of the General Statutes. Subject to certain other sections of the statutes not relevant to the issue before us, subsection (7) exempted "the real property of, or held in trust for, a Connecticut corporation organized exclusively for scientific, educational, literary, historical or charitable purposes or for two or more such purposes and used exclusively for carrying out one or more of such purposes and the personal property of, or held in trust for, any such corporation, provided (a) any officer, member or employee thereof does not receive or at any future time shall not receive any pecuniary profit from the operations thereof, except reasonable compensation for services in effecting one or more of such purposes or as proper beneficiary of its strictly charitable purposes, and provided (b)" that a quadrennial statement of the claimed exemption shall be made to the taxing officials.

Since the adoption of the 1927 act we have decided four cases directly involving claims by institutions that their property was exempt as devoted to educational purposes. In Canterbury School v. New Milford,111 Conn. 203, 149 A. 685, we held the property of the plaintiff not exempt, solely because the requirements of proviso (a) in the statute were not met. In Stamford Jewish Center, Inc. v. Stamford,117 Conn. 379, 385, 168 A. 5, we said, in holding the property of the plaintiff not exempt: "Considered as a school, this is not a public one, ``offering instruction therein to all comers.' Brunswick School v. Greenwich, supra, 243. It does not discharge educational functions which would otherwise rest upon municipal or other governmental agencies, but membership in and the privileges of the corporation except voting privileges, are open to all persons of good moral character." In Connecticut Junior Republic Assn. v. Litchfield, 119 Conn. 106, 109, 174 A. 304, it was claimed that, as in the Brunswick case, the plaintiff was "a private school, calculated, manifestly, to interest only those who have the means and disposition to separate their children from the public schools"; but, in holding the plaintiff entitled to an exemption, we distinguished it from the schools involved in that case and the cases of the Pomfret School and the Female Academy. Finally, in Edgewood School, Inc. v. Greenwich, 131 Conn. 179,38 A.2d 792, in holding the plaintiff entitled to exemption, we said (p. 183) that its property was "sequestered for educational uses and neither it nor any person can secure any profit from its operations. This brings it squarely within the four corners of the statute. The only two requirements stated therein are fulfilled. The holdings and dicta . . . in cases decided both before and after the 1927 amendment do not require a contrary conclusion." Two of the judges dissented, substantially upon the ground that the school fell within the class of private schools held in the Brunswick case not to be entitled to an exemption.

In the cases decided by us under the statute as it stood before the 1927 amendments, the question was as to the institutions which the legislature intended to include in the general word "academy." As long as the exemption was expressed in such a general word, it was our right and duty to inquire what institutions it was the intent of the General Assembly to include in that word; it was our conclusion that the General Assembly could not in reason have meant that every institution falling within the scope of the general terms of the statute should be entitled to an exemption, but that it must have intended the law to apply only to institutions having characteristics which would bring them within the purposes for which exemptions from taxation are ordinarily granted; and, accordingly, we construed the broad words of the statute to be inapplicable where those purposes were not being served. See National Fireproofing Co. v. Huntington, 81 Conn. 632, 633,71 A. 911; Dorman v. Carlson, 106 Conn. 200, 203,137 A. 749; State v. Nelson, 126 Conn. 412, 417,11 A.2d 856. We can properly presume that, when the act of 1927 was adopted, the General Assembly acted with knowledge of our previous decisions construing the former provision; Stamford v. Stamford,107 Conn. 596, 606, 141 A. 891; and in this instance such a presumption gains great weight because the report of the special commission on tax exemptions, to which we have referred, contains quotations from our decisions in Yale University v. New Haven, supra, and Corbin v. Baldwin, supra, in which the two bases of exemption formulated in Pomfret School v. Pomfret, supra, are stated at length. The 1927 act codified the requirement that any institution coming within the terms of the provision, to be exempt, must be so constituted as to eliminate the possibility of private profit; but it made no mention of any requirement that such an institution should be so conducted as to assume some of the public burden of education. In fact, the special commission on tax exemptions, discussing its recommendations for amending the statute, stated that one of its purposes was to confine the exemption to institutions where there was no possibility of private gain, but it made no mention of any requirement that to secure the exemption institutions must bear some portion of the public burden.

In omitting the previous general provision as to colleges, academies and public schools and in bringing them within the broad scope of "scientific, educational, literary, historical or charitable institutions," the act indicates clearly an intent to do away with any such test. See Westport Bank Trust Co. v. Fable, 126 Conn. 665, 668, 13 A.2d 862. This conclusion is fortified by the fact that in the subsection just preceding that which we are considering an exemption is granted as regards the property of volunteer fire companies if certain conditions are met, among them that the property is used "by the public in lieu of public property which would otherwise be required or authorized by any general statute or special act"; and, if the legislature intended a similar condition to apply to the property of a corporation organized exclusively for scientific, educational, literary or historical purposes, it would naturally have so stated. Reasons for omitting the requirement that a school to be exempt must lighten the burden of public taxation may be found in these circumstances: The general provision exempting the property of such corporations includes institutions as to which such a test would be inapplicable; the report of the special commission states that a law granting exemptions "should set up as nearly as possible plain and simple rules by which assessors could promptly determine whether property is taxable or not," and it would be difficult to draw the line at the point where the education of Connecticut children in a school not public does in fact lighten the public burden.

For us to import into the law a requirement that a school, to be exempt, must not only come within the terms of the statute but must also appreciably relieve the state of the burden of educating the children within it would be to add a limitation which the General Assembly not only has not made but which it refused to make. When the General Assembly has undertaken to state definitely the requirements necessary to secure an exemption, we cannot read into them other requirements having no sanction in the language it has used. Simmons v. Holcomb, 98 Conn. 770,775, 120 A. 510; State v. Nelson, supra, 416. In studying the various claims as to exemptions of schools and like institutions which have come before us, the conviction has grown upon us that it is our duty to give effect to the terms of the statute as it stands and that we have no justification for reading into it limitations finding no sanction in its language; if it is to be broadened or narrowed, it is for the General Assembly to take the necessary steps to that end. As we held in Edgewood School, Inc. v. Greenwich, supra, the statute specifies two conditions which must be met before a school is entitled to an exemption; it must be an "educational institution," and it must be so constituted that no person can make private gain from it except as specified in the law. If it meets these requirements it is entitled to an exemption.

The defendant's contention that to construe the act as we have done would make it invalid as in effect a use of public funds for private purposes is without merit. Education in itself serves a public purpose. Lyman v. Adorno, 133 Conn. 511, 516, 52 A.2d 702. "It is much too late to argue that legislation intended to facilitate the opportunity of children to get a secular education serves no public purpose." Everson v. Board of Education of Ewing, 330 U.S. 1, 7,67 S.Ct. 504, 91 L.Ed. 472. Of the clause in question as it stood previous to the 1927 amendments, we have said that it "does not exempt any individuals from the burden of taxation that is common to all; it does not grant to one, particular privileges denied to all others; it declares that lands and buildings sequestered to certain public uses, i.e., taken out of the body of private property and devoted exclusively to the common good, from which no individual can derive any profit, are not taxable property. And this has been, not the exception, but the rule from the foundation of our government." Yale University v. New Haven,71 Conn. 316, 329, 42 A. 87. This statement makes peculiarly apropos our statement in Baker v. West Hartford, 89 Conn. 394, 399, 94 A. 283, with reference to a statute which under certain conditions exempted tree plantations from taxation: "In deciding whether in a given case, the object for which taxes are assessed falls upon the one side or the other of this line of public use, courts must be governed mainly by the course and usage of the government, the objects for which taxes have been customarily and by long course of legislation levied, and what objects or purposes have been considered necessary to the support and for the proper use of the government, whether State or municipal. Whatever lawfully pertains to this and is sanctioned by time and the acquiescence of the people may well be held to belong to the public use, and to be proper for the maintenance of good government, though this may not be the only criterion of rightful taxation." An exemption from taxation of property which is devoted exclusively to educational purposes and from which no individual can make a private gain is not invalid on the ground claimed.

It is unnecessary to consider at any length the facts involved in the case before us. Unattacked conclusions of the trial court are that the plaintiff was organized exclusively for educational purposes and that it met the express requirements of the statute under which it claimed exemption; but the court denied its claim on the ground that its property was not devoted to public use because it did not perform functions which otherwise would devolve upon the state or municipal government. This conclusion was based upon findings that the school was largely for boarding pupils, although it took a few day pupils; that its charges were relatively high; that it did not give much scholarship aid, and in bestowing that aid no preference was given to students from Connecticut; and that the larger number of pupils came from outside Connecticut and few came from the defendant town. As the plaintiff was found fully to comply with the requirements for exemption stated in the statute, it could not properly be denied relief on the ground taken by the trial court.

There is error, the judgment is set aside and the case is remanded with direction to sustain the plaintiff's appeal and order the board of tax review to strike the plaintiff's property from the tax fist.

In this opinion JENNINGS and INGLIS, Js., concurred.