American Institute for Economic Research v. Assessors of Great Barrington

• Decision Date: 05 July 1949
• Citation: 87 N.E.2d 186,324 Mass. 509
• Parties: AMERICAN INSTITUTE FOR ECONOMIC RESEARCH v. ASSESSORS OF GREAT BARRINGTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

324 Mass. 509

87 N.E.2d 186

AMERICAN INSTITUTE FOR ECONOMIC RESEARCH v. ASSESSORS OF GREAT BARRINGTON.

Supreme Judicial Court of Massachusetts, Berkshire.

July 5, 1949

December 9, 1948.

Present: QUA, C.

J., LUMMUS, RONAN SPALDING, & WILLIAMS, JJ.

Charity. Corporation, Charitable corporation.

Taxation, Real estate tax: exemption.

A conclusion by the Appellate Tax Board, that a certain corporation organized for the purposes of conducting "scientific research" in economics and of disseminating economic information to the public and so advancing the public welfare had not sustained the burden of proving that it was a public charity entitled to exemption from taxation of its real estate under G. L (Ter. Ed.) c. 59, Section 5, Third, was justified where the facts found by the board as to the actual operation of the corporation, including the facts that it disseminated information by means of publications which were chiefly sold to subscribers and other purchasers as a business, that nearly all its income was derived therefrom, and that such publications were not distributed gratuitously to the public to any great extent, showed that it was not conducted as a public charity.

A ruling, in effect that a taxpayer had sustained the burden of proving his real estate exempt from taxation "if the evidence introduced by . . . [him] is true," could not properly have been given by the Appellate Tax

Board where such evidence was susceptible of more than one rational inference.

APPEAL from a decision by the Appellate Tax Board.

J. M. Rosenthal (A.

R. Pike with him,) for the taxpayer.

G. R. McCormick for the assessors of Great Barrington.

WILLIAMS, J. This is an appeal from a decision of the Appellate Tax Board denying exemption from a local tax assessed on the real estate of the taxpayer in Great Barrington for the year 1946. The taxpayer, American Institute for Economic Research, was incorporated in 1939 under G. L. (Ter. Ed.) c. 180, for the following declared purposes: "To conduct scientific research in the general economic field and to disseminate the results of such research in order to educate individual students and the general public, so that there may be more widespread understanding of the fundamental economic relationships affecting the citizens of the United States, both as individuals and as members of a complex economic society, with the ultimate object of advancing the welfare of the American people." The originator of the institute was Edward C. Harwood, a graduate of West Point and a retired army officer. In 1933 he formed an organization to carry on scientific research in the field of economics. In 1939 real estate was acquired in Cambridge for the work of the organization, title to the property being taken by him as trustee under a declaration of trust. After incorporation this property was conveyed to the institute. The property in Great Barrington was purchased in 1945 and the institute moved to that location from Cambridge. The property comprises about eighty acres of land of which some seventy-eight acres with two buildings thereon are located in Great Barrington. In the larger or main building, containing thirty-one rooms, are the faculty offices, the library of some five thousand volumes, offices for clerical assistants, two dining rooms, a large kitchen, pantry, sleeping room for the cook, and a cold room, all located on the ground floor. The upper stories are used as living quarters for the trustee (Mr. Harwood) and his family, the faculty, graduate students and some employees. The other building, described as a tea house, is located some distance away overlooking a lake and is used mainly for recreation purposes.

The by-laws provide that "The trustee who has served under the aforementioned declaration of trust shall serve as trustee under the provisions of these by-laws until his death or voluntary resignation given in writing, and upon the occurrence of either of such events his successor shall be appointed by the faculty of American Institute for Economic Research." "The trustee shall, in behalf of the institute, have the power to collect, sue for, receive and receipt for all sums of money at any time coming due to the said institute; to buy and sell property, both real and personal; to employ counsel; to borrow money and issue notes to evidence such debts; to mortgage the corporate property; and to do anything else necessary for accomplishing the purposes of the institute. He shall manage such property and exercise the above enumerated powers in accordance with instructions given him from time to time by the faculty of said institute." The governing board of the corporation under its by-laws is a faculty, so called, possessing the powers of directors. The faculty is to consist of those persons who had been associated with Mr. Harwood under the earlier declaration of trust and such others as may be appointed by the executive officer or director with the consent of the faculty. As of 1946 the faculty was composed of four members.

As found by the board, "Research is carried on into the causes of the business cycle, testing the various business cycle theories studies are made of regional trends in the United States, with special study of the industrial production in the United States, particularly with reference to the variations from what was found to exist with the Federal Reserve...