Brattleboro Retreat v. Town of Brattleboro
| Decision Date | 01 May 1934 |
| Parties | BRATTLEBORO RETREAT v. TOWN OF BRATTLEBORO et al. |
| Court | Vermont Supreme Court |
On Motion June 23, 1934.
Appeal in Chancery; Fred G. Bicknell, Chancellor.
Suit by Brattleboro Retreat against the Town of Brattleboro and others, in which the state entered as party defendant. From an adverse decree, plaintiff appeals.
Reversed and remanded, with directions.
Argued before POWERS, C. J., and SLACK, MOULTON, THOMPSON, and GRAHAM, JJ.
Stickney, Sargent & Chase, of Ludlow, for appellant.
Frank E. Barber and Ernest W. Gibson, Jr., both of Brattleboro, for appellees.
Lawrence Jones, of Rutland (E. M. Harvey, Tax Com'r, of Montpelier, of counsel), for the State.
This suit involves the validity of taxes assessed against plaintiff on the grand-lists of the town of Brattleboro for the years 1930 and 1931.
The grand-list for 1930 includes all real estate acquired by plaintiff since the passage of No. 108 of the Acts of 1858. The taxes assessed thereon were paid by plaintiff, under protest, and suits are now pending in Windham county court against the town of Brattleboro and the town school district of Brattleboro wherein plaintiff is seeking to recover the amount of such tax received by each. The grand-list for 1931 includes the real estate above mentioned, certain buildings erected on land acquired by plaintiff prior to the passage of said act, and certain personal property. The taxes assessed on this list have not been paid, but collection of them was threatened at the time these proceedings were commenced. The prayer of the bill is for a temporary injunction restraining defendants from attempting to collect the 1931 taxes until further order of court; that the town of Brattleboro and the town school district of Brattleboro be adjudged and decreed to pay to plaintiff such sum as it shall be found each received of the 1930 taxes with interest thereon; and that defendants be permanently enjoined from attempting to levy, assess, or collect any tax on the real or personal estate of the plaintiff.
By agreement of parties the suits pending in Windham county court were transferred to the court of chancery and heard with this case. The state had leave to, and did, enter as party defendant. Each defendant filed an answer, issue was joined thereon, the facts were found by a chancellor, and it was adjudged and decreed that plaintiff pay to the town of Brattleboro the taxes assessed for the years 3931 and 1932, together with interest and taxable costs. The case is here on plaintiff's appeal and exceptions to the exclusion of certain evidence.
The questions presented for review by the findings are: (1) Is the property defendants are attempting to tax exempt from taxation, in whole or in part, under G. L. 684, subdiv. 6, and (2) is plaintiff's property exempt from taxation under section 9 of plaintiff's charter? The statute referred to provides that "real and personal estate granted, sequestered or used for public, pious or charitable uses" shall be exempt from taxation. The material findings are these: One Anna Marsh died in 1834 leaving a will whereby she created a trust fund of $10,000 for the purpose of establishing a hospital for the insane in Windham county. She appointed four men trustees of such fund, and directed that they procure an act of incorporation as soon as might be after her decease. Those men accepted the trust and procured an act of incorporation from the General Assembly in 1834 (Priv. Acts No. 46). Section 1 of such act provides that the persons named as trustees in the Marsh will, "and their successors, appointed as hereinafter directed, be, and they hereby are, incorporated * * * by the name of 'The Vermont Asylum for the Insane,' with all the powers and privileges incident to such corporations," etc. Section 2 provides: "That the said corporation may take and receive, hold, purchase and possess, of and from all persons disposed to aid the benevolent purposes of said institution, any grants and devises of lands and tenements m fee simple or otherwise, and any donations and bequests and subscriptions of money, or other property, to be used and improved for the erection, support and maintenance of an asylum as aforesaid, provided the income of said corporation, from its real and personal estate, does not exceed the sum of ten thousand dollars per annum."
Other provisions of the act are that the incorporators and their successors, not to exceed four at any time, shall constitute a board of trustees, who shall have the sole superintendence of the asylum, shall keep, or cause to be kept, accurate books of account of all funds, income, donations, receipts, and expenditures of the corporation which shall at all times be open to the inspection of the board of visitors provided by the act, and shall report annually to the General Assembly the amount of funds of the corporation, its receipts and disbursements, the number of patients admitted and discharged, and any other information necessary to show the effect and operations of the institution; that the "judges" of the court of chancery shall constitute the board of visitors of said asylum, and may visit and inspect the same whenever they think proper, etc., and shall have authority to correct any and all abuses of the trust done or permitted by the corporation or its officers.
Section 9 provides: "The estate, both real and personal, and all other, the funds of said institution, shall, at all times hereafter, be exempt from all taxes."
Section 10 provides: "Any future legislature shall have power to modify, alter and amend this act, so far as to provide for the more perfect and effectual accomplishment of the objects of this act."
In September, 1835, the trustees named in the act organized the corporation and chose officers thereof. The General Assembly of that year appropriated $10,000 "to enable said trustees the more effectually to promote the benevolent designs of said institution." The following May the corporation purchased the property described in Plaintiff's Exhibit. No. 1 upon which its main buildings, Lawton Hall, Tyler Hall, Ripley Nurses Home, and the new Infirmary now stand, and in December of that year the institution was opened for the reception of patients, and since that time has been, and still is, conducted as a hospital for the care and treatment of insane persons. Prior to the fall of 1858 the corporation had received various appropriations from the state which, including the one above mentioned, amounted to $23,000, a donation from Dr. Rockwell of $400, had acquired real estate valued at approximately $125,000, and its gross income for the year ending July 31, 1859 was $59,433.70. The General Assembly of 1858 passed an act, No. 108, which provided: "Whenever the valuation of the real estate of the Vermont Asylum for the Insane shall be increased from its present value, by gift, grant, devise, or purchase, such increase shall not be exempt from taxation." This act was approved November 19, 1858, and took effect from its passage.
Thereafter the corporation received other appropriations from the state amounting to $14,000, donations from various sources amounting to $125,548.06, and acquired considerable other real estate. The value of all its real estate in 1932 was $1,018,079 and the value of its personal property was $219,745.02. Its net income for the year ending June 30, 1930, was $112,236.61; for the year ending June 30, 1931, was $137,379.21; and for the year ending June 30, 1932, was $131,166.36. It has no endowment fund, but derives its income from support of its patients, bequests, and donations. All of its property, both real and personal, has been used for the upkeep and development of its plant, or is intended for those purposes. It receives three classes of patients: Those supported by the state; persons becoming suddenly dangerous to the public and requiring restraint, who are supported by the town from which they are committed, or otherwise; and private patients, who are suffering from some mental or nervous trouble. It has no duty that, it must perform toward the public at large, or any part thereof, except such as results from contract, and no person has the light to be received as a patient at a less price than is agreed to by the trustees, but no person has ever been turned out of the institution because he did not pay as promised. Since 1908, at least, it has cared for an ever increasing number of state patients, and 367 of its total of 644 in 1932 were of that character. Its pay for such patients has been less than the actual cost of caring for them, not considering returns on capital invested or the expense of the plant, and the standard of care they have received is higher than it could have been if only such patients had been received at the institution.
Pursuant to the right contained in its charter, the corporation in 1892 changed its name to "Brattleboro Retreat," see Act No. 230, Laws 1892, under which name it has since done business.
What constitutes a public charity has been stated recently by this court. In re Downer's Estate, 101 Vt. 167, 142 A. 78; Boyce et al. v. Sumner, 97 Vt. 473, 124 A. 853. The distinctive features of a charitable organization, the property of which is exempt from taxation, are that it has no capital stock and no provision for making dividends and profits, but derives its funds mainly from public and private charity, and holds them in trust for the objects and purposes expressed in its charter; the test being whether it exists to carry out a purpose recognized in law as charitable or whether it is maintained for gain, profit, or private advantage. Cong. Sunday School & Pub. Soc. v. Board of Review, 290 Ill. 108, 125 N. E. 7; New England Sanitarium v. Inhabitants of Stoneham, 205 Mass. 335, 343, 91 N. E. 385; Comm. v. Young Men's Christian Ass'n, 116 Ky. 711, 76 S. W. 522, 25 Ky. Law Rep. 940, 105 Am. St. Rep. 234; M. E....
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