DocketNumber: No. 3400.
Citation Numbers: 31 A.2d 52, 92 N.H. 348, 1943 N.H. LEXIS 91
Judges: Allen
Filed Date: 3/2/1943
Status: Precedential
Modified Date: 11/11/2024
The statute (R. L., c. 73, s. 24) upon which the plaintiff relies, so far as applicable to the case, exempts from taxation the real estate of local charitable institutions owned and occupied by them for their charitable purposes, upon the condition that none of the institution's income or profits is applied for other purposes.
The main questions are whether the Society's status is that of a charitable institution, and if so, whether its real estate is occupied for its charitable purposes. In reasonable construction of the statute, if these conditions are met, the exemption is granted. The condition that no income or profits of the institution shall be applied except to charitable purposes, refers to income or profits derived from other sources than its real estate which it occupies for its purposes of charity. Obviously, if the real estate is devoted to charitable uses, the income or profits from it cannot be used otherwise.
As a matter preliminary to the main question, the special features of Folsom Tavern are properly considered. This is an old building of historic interest, given the plaintiff in 1929, moved to its land, and partially restored. The plaintiff plans to further restore it and to place in it furnishings of the Revolutionary Period when and if funds therefor become available. The building now has no actual use. The trial court declined to find the claimed purpose of its eventual use as "a public historical museum," on the ground that the public is entitled to no rights to such use. But if such a purpose might be found, at best the use is prospective. There is, and has been, none *Page 351 either in aid of the final purpose or directly for that purpose. The statute contemplates occupancy as more than bare possession. Such possession is not an existing use for the owner's purposes, even with a plan and purpose of future use therefor. Clearly, if the building were rented, it would be taxable, and it is no less so while it remains indefinitely idle.
The authorities support this construction of the statute. In St. Mary's School v. Concord,
If the tract in the St. Mary's School case had been wholly of wild land, it might have been treated as an investment for profit as was done in respect to timber and land, held to be occupied in furtherance of the owner's "primary objectives," in the case of Hedding c Ass'n v. Epping,
In the St. Mary's School and Hedding cases, the present use may not have been a full use, but some present use was found to attach to the occupancy. They are distinguished from the more recent case of Trustees c Academy v. Exeter,
The question of the plaintiff's status as a charitable institution and of the use it makes of its real estate occupied by it are in many aspects interrelated and not readily considered separately. If it is public charity, the fact bears on the issue of its use of its real estate for purposes of public service, and, reciprocally, the use of its real estate for such service tends to denote its character as a charity.
The test of a charitable institution within the scope of the exemption statute, as stated in Young Women's c Association v. Portsmouth,
Examination of the plaintiff's charter shows purposes mostly confined for the benefit of its members. The only purpose expressed for the benefit of the general public is of a special range of patriotism. To maintain in the public mind the patriotic spirit of those who led the forces which won our country's independence and "to perpetuate the remembrance" of the War of the Revolution and its successful event, is an inspiration to patriotism, and patriotism is an objective within the subjects of public charity. Sargent v. Cornish,
Whether the charter purpose to stimulate and maintain patriotism among the members of the plaintiff sufficiently classifies it as a charitable trust, is a question presenting a number of factors. That a trust for their benefit and for that purpose is imposed upon the plaintiff's property, may not be questioned, but its character as public rather than private is not determined by any sharply defined formula. Purposes other than those regarded as public or charitable in their bearing in predominance or importance, and the divisibility of the property of the trust in use between charitable and noncharitable purposes, call for consideration. Rules relating to them are set forth, with comments, in Restatement, Trusts, s. 398.
The Society's charter, read in the light of the extrinsic facts, discloses non-charitable purposes. The charter in express terms makes no test of membership and therefore empowers the members to determine the tests. By the Society's rules membership is primarily dependent upon the accident of ancestry. The Society is "coordinated to act as a unit" with other State Societies, under a General Society which" serves as a coordinating vehicle" to maintain general uniformity among them. "The General Society is organized for the purposes set forth in and is bound by the original Institution." By this Institution, "The officers of the American Army . . . combine themselves into one Society of friends, to endure" for themselves, their posterity, and finally in collateral branches. The element of friendship thus appears to be a pervasive and essential factor in the formation and maintenance of the Society, and the conditions and requirements of membership are designed to secure it. If not a directive of the charter, the Society's policy and scheme to maintain *Page 354 associations among its members who must have qualifications of special distinction is inherent, and in no wise inconsistent with, or in excess of, its charter authority. The corporate status of the local Society does not isolate it from its relations with the General Society, beyond its separate entity if it were unincorporated, and the maintenance of the relations is a contractual requirement.
No prevalence of charitable over non-charitable purposes appears with any certainty. Broadly, the Society is legally comparable with social and fraternal organizations having among their purposes that of benefit to their members regarded as charitable, using the word in its popular sense. The claim of a public standing cannot be maintained, except with reference to property held exclusively or primarily for charitable purposes, for organizations such as the Masonic bodies, Odd Fellows, Knights of Columbus and Elks, even with their important branches of mutual aid and relief, such as a college fraternity with a purpose among others of educational and cultural improvement, or even such as a country club having as one of its objectives the promotion of membership, health and recreation, similar to that of a public park or playground as a gathering place for such purposes. In these cases the element of privacy is too controlling to give the State authority to enforce a member's charitable rights. The rights are contractual and no trust in favor of the public is created. Internal control and management is exclusive, and only by private litigation may there be redress for wrong.
The exception has been noted of a public trust imposed upon the property of a non-charitable institution held for the charitable benefit of its members. The exception seems unfortunate and unnecessary. It arose as a justified escape from the rigor of the common-law rule that a private trust is void without a definite beneficiary. The rule being otherwise as to charitable trusts, trusts private in nature have been held to be public charities, on the ground that the uncertain beneficiaries form "a definite section of the public" (Roberts v. Corson,
In Goodale v. Mooney,
In a trustee's authorized exercise of discretion to determine needs of named beneficiaries, or unnamed ones, within a family group, and to apply the trust property pursuant to the determination, a public interest is declaratory rather than actual. No case except that of Gafney v. Kenison is found which holds that the trust in such a case is charitable. To impress the trust with public relations is contrary to general legal policy and to actual practice. And to draw the line between trusts for groups of family or personal formation and those of groups giving only membership aid and having additional objects of association seems arbitrary and undesirable. The donor's benevolence must be bestowed upon persons entitled, who would in general view be regarded, as forming a body of the public. The public membership that every individual has is not enough, and a collection of individuals does not of itself set them off as a part of the public.
The need of a definite beneficiary in a private trust is supplied if a method of selection is provided by the trust instrument which in final outcome will result in his ascertainment. The rule of executory devises saves the trust from objection as bestowing contingent interests, and the equitable reasons for the rule make it equally applicable to a trust established by its creator in his lifetime. It should make no difference whether a trust for the benefit of the donor's oldest grandchild living at the decease of all of the donor's children is created by will or otherwise. Actually there is a contingency which the strategy of the law, in good policy, treats as vested. The beneficiary is in fact indefinite until the time for selection comes, but he is regarded as potentially or "defeasibly" definite meanwhile.
A private trust for a definite person is invalid only when no legal method exists for ultimate ascertainment. Uncertainty of a definite person's rights to benefit from the trust and uncertainty who the beneficiaries may be are of equitable equality. In the former uncertainty, validity of the trust does not fail if the uncertainty may eventually become transformed into certainty, and in parallel the same rule governs cases of beneficiaries prospectively definite although not presently so. Failure of conditions may lead to failure of the trust, but the trust does not lapse because of inherent invalidity. *Page 356
It is said in Clark v. Campbell,
From the standpoint of the public interest, it is true that the indefinite beneficiaries of a public charity may be within a limited class or group, with the result that they have been held to become entitled to rights because they are members of the public. But a section of the public so segregated and so specialized that benefits to its members are essentially private in nature seems public only by strained reasoning. The public interest, though confined to few in numbers, ought not only to be an interest of a public nature, but it also ought to be a matter of public concern because of an actual public benefit. If a trust is charitable, the Attorney-General may enforce it. It should not be his duty, nor even his right, to appear in legal proceedings for a claimant for relief in a trust of a private nature. The assumption of governmental participation or interference is undue. Any claimant may seek relief in his own name, whether he be a destitute relative of the donor (Goodale v. Mooney; Gafney v. Kenison, supra), or a member of a Masonic order holding a fund for the relief of needy members (Roberts v. Corson, supra). If the trusts in these cases are charitable, then in consistency a group of two persons entitled to benefits of benevolence under a trust would form a public class. Groups formed by close ties of blood or association are not properly to be regarded as such when the benefits of a trust are limited to them. The public interest in the right of needy members of the Society to be aided and relieved is difficult to find. Fairly, in common understanding, the members constitute no defined section of the public, but are regarded as a private group with no public interest attaching.
But if, in observance of the authority of precedents, the reasoning in Roberts v. Corson is to be accepted, the conclusion that the trustee thereby becomes a charitable institution does not demand adoption. A group of persons selecting their membership and combining in self-interest for their own betterment lacks the altruistic spirit inherent in a legal charity. The members serve themselves mutually, but not others. If there may be additions in broadening the definition of a charitable institution that it is one dispensing public charity as its sole or primary engagement, the Society does not qualify.
On another ground, the Society is not a charitable institution within the meaning of the exemption statute. After the general *Page 357 reference to the property of "institutions devoted to educational purposes, charitable and religious societies, and . . . temperance societies," the statute specially adds certain organizations, well known to be constituted for objects of patriotism and of benevolence among their members. The intent not to classify them as charitable societies is apparent, and the omission of the plaintiff in the list, though it has like objects, evidences the legislative purpose to exclude it from the benefit of the statute as well as other similar ones not named. Although the specified organizations may be national, — some of them have local branches, similar to the Society's relation in its coordination with that of the General Society, and these branches are separate legal entities. The statute does not undertake to differentiate between the national organizations and their local branches.
In the aspect of the case from the statutory condition that a charitable institution's real estate must be occupied by it for its purposes of charity, the Society, even as such an institution, does not meet the condition. As already has appeared, its use of its real estate for patriotic purposes, being non-obligatory to the public, imposes no public trust on it. And the obligation to aid needy members, if held charitable trust, is not one affecting its use of its real estate. The aid is furnished from the Society's funds, and its real estate is not occupied in any real manner of use in extending the aid. The suggestion is made that the fact that aid of over a certain amount in case must be approved by the Society's standing committee which meets three times each year in its main building shows some use of the real estate in dispensing the aid. No finding of occupancy for the purpose has been made and, if it were a fact, it would be by itself too slight and insignificant to constitute an occupancy sufficient to warrant a conclusion of use for the Society's purposes, such as the statute requires. The use must be more than trivial and negligible to give reasonable effect to the demand of the statute. The suggestion is unacceptable.
When and not until property becomes devoted to use for the benefit of the public, or some class of persons who may be reasonably part of the public, does a charitable trust exist. If there is some trust of public service it must be assignable predominantly, or in ascertainable proportions, to definite property, to subject it to public enforcement. The need of specific, or at least determinable, property or funds held in trust for charity must appear. Clark v. Cummings,
In summary, the plaintiff's charter shows no purpose that its real estate shall be devoted to charitable uses, the plaintiff is not a charitable institution, within the meaning of the statute exempting its real estate from taxation, and its real estate is not owned and occupied for purposes of a public charity.
Case discharged.
All concurred.
Roberts v. Corson , 79 N.H. 215 ( 1919 )
Trustees of Phillips Exeter Academy v. Exeter , 90 N.H. 472 ( 1940 )
Gafney v. Kenison , 64 N.H. 354 ( 1887 )
Petition of Burnham , 74 N.H. 492 ( 1908 )
Haynes v. Carr , 70 N.H. 463 ( 1900 )
Goodale v. Mooney , 60 N.H. 528 ( 1881 )
Hedding Camp Meeting Ass'n v. Epping , 88 N.H. 321 ( 1937 )
Young Women's Christian Ass'n v. Portsmouth , 89 N.H. 40 ( 1937 )
St. Mary's School for Girls v. Concord , 80 N.H. 436 ( 1922 )
Clark v. Campbell , 82 N.H. 281 ( 1926 )
Cuthrell v. Milwaukee Mechanics Insurance , 234 N.C. 137 ( 1951 )
Appeal of City of Concord , 161 N.H. 344 ( 2011 )
reliance-insurance-company-v-dean-jones-waynoka-cooperative-elevator , 296 F.2d 71 ( 1961 )
Bowers v. Anti-Defamation League of B 'Nai B'rith , 4 Ohio App. 2d 284 ( 1964 )
Winston-Salem Fire Fighters Club, Inc. v. State Farm Fire & ... , 259 N.C. 582 ( 1963 )
Haines v. St. Petersburg Methodist Home, Inc. , 173 So. 2d 176 ( 1965 )
Town of Peterborough v. MacDowell Colony, Inc. , 157 N.H. 1 ( 2008 )
Eldertrust of Florida, Inc. v. Town of Epsom , 154 N.H. 693 ( 2007 )
Christian Science Pleasant View Home v. City of Concord , 117 N.H. 239 ( 1977 )