Connecticut College for Women v. Town of Groton

• Decision Date: 22 July 1937
• Court: Connecticut Supreme Court
• Parties: CONNECTICUT COLLEGE FOR WOMEN v. TOWN OF GROTON.

193 A. 873

123 Conn. 196

CONNECTICUT COLLEGE FOR WOMEN v. TOWN OF GROTON.

Supreme Court of Errors of Connecticut.

July 22, 1937

Appeal from Superior Court, New London County; Edwin C. Dickenson and Alfred C. Baldwin, Judge.

Action by the Connecticut College for Women against the Town of Groton to recover taxes paid, and for a declaratory judgment as to plaintiff's liability for other taxes assessed but not paid. A demurrer to the complaint was sustained, judgment was rendered for the defendant, and the plaintiff appeals.

No error.

Francis F. McGuire and Frank L. McGuire, both of New London, for appellant.

Benjamin H. Hewitt, of Mystic, for appellee.

Argued before MALTBIE, C.J., and HINMAN, BANKS and BROWN, JJ.

HINMAN, Judge.

The complaint and amendments thereto alleged that Julia A. Bill late of Groton, died December 24, 1932, leaving a will, made a part of the complaint, by which she gave the residue of her estate to the plaintiff college, which residue consisted in part of real property located in Groton; that her estate was in process of administration until November 14, 1935, when the residue was distributed to the plaintiff; and that by section 1173 of the General Statutes any funds and estate which have been or may be given by any person or persons to the board of trustees of the plaintiff and by them invested and held for the use of that institution, with the income thereof, are exempt from taxation. The first count also alleged that taxes were assessed by the defendant against the real property above mentioned for the years 1933 and 1934 amounting to $1,351.42, and were paid by the executor out of the residue and " in making such payments said executor did not know that said residue was exempt from taxation *** and paid said taxes by mistake and without full knowledge of the facts relating to the invalidity of said assessments." In the second count it was alleged that the tax collector of the defendant town has a warrant to collect taxes assessed against this real estate as of October 1, 1935. The prayers for relief are for recovery on account of the taxes paid as alleged in the first count for a declaratory judgment determining whether or not the plaintiff owes the tax assessed for 1935, and for any other appropriate relief.

The defendant demurred to each count on several grounds, but the gist of those on which the demurrer was sustained is that the plaintiff was not the owner of the property at the time the taxes were assessed, and that it was not exempt from taxation under the statute upon which the plaintiff bases its claim to a right of exemption, until it was distributed to the plaintiff. The assignments of error pertain to the sustaining of the demurrer.

The superior court ruled, it appears from the memorandum of decision, that the residue of Mrs. Bill's estate, including the real estate here involved which was distributed as a part of it, did not so vest in the plaintiff that exemption from taxation would attach until distributed to it, also that, under the statute relied on, the exemption does not attach until the property is " invested and held for the use of the plaintiff college. If the court was correct in holding that the real estate did not so become property of the plaintiff as to be subject to exemption as such until the date of distribution, which was subsequent not only to the assessment and payment of the taxes involved in the first count but also to the date as of which the tax was assessed which the second count concerns, it becomes unimportant to determine whether or not the real estate, to be exempt, must, under the statute, not only have become the property of the plaintiff but also be " invested and held for the use of such institution" as the statute, literally applied, would seem to require. The latter question aside, if this real estate was so devised to the plaintiff as to come under the general rule that the title passed to the beneficiary at the decedent's death, the exemption would apply to it, whereas it would not if, as the court held, the intention evinced by the will and the situation thereunder were such that, for purposes of taxation by the defendant town, the status of this property is to be regarded as that of personalty, the legal title to which is in the executor until distributed, the rights of the beneficiary being, until then, equitable only. " It is only upon the delivery of personal property to the beneficiary through legal distribution after administration is complete that he acquires the legal title to it. *** It is distribution, not the death of the decedent, which transfers the title and ownership of personalty to the beneficiary." Blodgett v. Bridgeport City Trust Co., 115 Conn. 127, 145 161 A. 83, 89.

The construction by the superior court of the gift to the plaintiff as being one of personalty in our opinion is confirmed by consideration of the will as a whole. The second paragraph, after making a specific devise of certain real estate on Monument Street to the Bill Memorial Library Association, provides that " all the rest, residue and remainder" of the testatrix's real estate shall be sold by the executor " and the proceeds thereof become a part of my general estate." All of the provisions made for numerous individuals and organizations in succeeding paragraphs are definitely pecuniary in character. The clause (thirteenth) disposing of " all the rest, residue and remainder," in two instances, perhaps accidentally or, as the court below suggests, as a precautionary measure, included expressions which ordinarily would be appropriate to real property, but as a whole it manifestly contemplates a gift purely of personalty. In addition to the prior positive direction of the executor to sell all of the real estate except that specifically devised, in this residuary clause the property passing thereunder is repeatedly referred to as " funds," it is provided that the " total amount of funds" passing to the college shall not exceed $300,000 " at the time of the payment of said funds as valued at that time by my executor," and there is a further residuary bequest, if the residue exceeds that sum, to the Bill Memorial Library Association. The complaint alleges, however, that the residue at no time exceeded the $300,000 " as valued in the manner stated by the will." The succeeding paragraph (fourteenth) also provides that in payment of any of the foregoing legacies the executor " may deliver either cash or stocks or bonds *** the same to be delivered and received in payment of said legacies, at the market value at the date of delivery as determined by my executor," but makes no mention of any similar provision pertaining to delivery of any real estate.

If, as we agree, the predominating intent manifested by the will was that the gift to the plaintiff should be one of personalty only, the further question is presented as to the effect upon taxibility or exemption therefrom of the facts, imported by the complaint and conceded, that the executor, instead of selling the real estate here involved, as unequivocally directed by the will, retained it unsold and distributed it to the plaintiff as part of the residuary estate, and this in turn, depends upon whether or not the doctrine of equitable conversion is applicable, as the court below held, so as to give that real estate, for the purposes of the present inquiry, the status of personal property. The...