Freeport School District v. Armstrong County
| Decision Date | 08 March 1948 |
| Docket Number | 2513 |
| Citation | 57 A.2d 692,162 Pa.Super. 237 |
| Parties | Freeport School District, Appellant, v. County of Armstrong et al |
| Court | Pennsylvania Superior Court |
Argued November 13, 1947.
Appeal, No. 100, April T., 1948, from decree of C. P Armstrong Co., Dec. T., 1946, in Equity, No. 94, in case of School District of Borough of Freeport v. County of Armstrong et al.
Case stated upon a bill in equity to set aside tax assessment of real estate.
Order entered dismissing bill, opinion by Graff, P. J. Plaintiff appealed.
Harry C. Golden, for appellant.
Wade E. Heilman, County Solicitor, with him John W Rohrer, for appellee.
OPINION
The fourth class School District of the Borough of Freeport availed itself of the Act of May 17, 1921, P. L. 837 (24 PS § 721), and purchased a residence for its supervising principal, who paid a rental of $ 35.00 per month. On a case stated in equity the court below held that this real estate was subject to taxes levied by the borough and the county (sixth class) of Armstrong.
The Act of 1921 merely conferred the power on fourth class school districts to expend their funds to purchase or build a residence for principals, teachers or janitors, and to charge a rental therefor. It alone conferred no immunity from taxation, and the title gives no intimation that such real estate shall be exempt therefrom. The last sentence reading: "All property acquired under this act shall be held by said school district the same as other school property," must therefore relate to matters of title and conveyancing.
The Fourth to Eighth Class County Assessment Law (72 PS § 5453.101 et seq.) provides for exemptions from taxation (72 PS § 5453.202). As far as pertinent here these sections read: (Emphasis supplied.)
This real estate, not being a school house or grounds, does not fall within the definition of subsection (a) (4). It is significant that although the Act of 1921 had been in force for more than twenty years, the Fourth to Eighth Class County Assessment Law, enacted in 1943, did not provide an exemption for "school property" generally, nor for all property owned by the district.
The real estate here is not exempt under subsection (a) (7), for it is not held for public purposes. The public cannot use it directly or indirectly. It is to be occupied only by designated employes of the district and other persons are excluded from occupancy by the Act of 1921. That it may be an indirect benefit or convenience to the district is not sufficient to stamp it as being held for a public purpose, for even where the district receives from real estate a large income paid directly into its treasury, the purpose was held to be not public, but commercial: Pittsburgh School District v. Allegheny County, 347 Pa. 101, 31 A.2d 707. In that case, as here, the acquisition of the real estate in question was entirely lawful, having been originally acquired for school buildings. When this use became impractical, the vacant lots were utilized by the school district as a public and commercial parking place in the city of Pittsburgh. The revenues derived from this use were paid directly to the school district treasury, and aggregated over $ 27,000 per year. This income was devoted solely to a public purpose: general revenue, and was of greater public benefit than the residence for the supervising principal in the instant case.
The test of exemption is neither the lawfulness of the acquisition nor the integrity of the use after the acquisition: Pittsburgh School District v. Allegheny County, supra, where all the revenue derived from the commercial use of the real estate went into the general school treasury, and was undoubtedly in furtherance of the public interest, but the land was held not to be exempt.
Under subsection (b), except as to public libraries, it is provided: ". . . all property [including real estate] . . . other than that which is in actual use . . . for the purposes specified in this section [§ 202], and all such property from which any income or revenue is derived, other than from recipients of the bounty of the institution or charity, shall be subject to taxation, except where exempted by law for state purposes, and nothing herein contained shall exempt same therefrom." (Emphasis supplied.) The real estate in the instant case is revenue-producing. The actual use is not for any of the purposes specified in § 202; and the real estate is income-producing and is taxable thereunder.
The Assessment Law clearly shows in subsection (b) that no income-producing property is exempt from taxation merely because it is owned by a municipality. Cf. County of Franklin v. W. A. McClean, 93 Pa.Super. 165, 171; Cooley on Taxation, 4th Ed. § 621. A school district is not a sovereign power: Philadelphia v. Barber, 160 Pa 123, 128, 28 A. 644; Pittsburgh v. Sterrett Subdistrict School, 204 Pa. 635, 640, 641, 54 A. 463; 61 A. L. R. 183. See also Kittanning Borough v. Armstrong County et al., 347 Pa. 108, 31 A.2d 710, and Cf. Commonwealth of Pennsylvania, State Employes' Retirement System v. Dauphin County et al., 335 Pa. 177, 180, 6 A.2d 870. That this residence property was to be used and occupied by a school employe does not make that use a public one. If after acquisition no employe of the school district would rent the property, and it was then rented to a non-employe, it would be assessable and nonexempt, just as the land in the Pittsburgh School District case, supra. Certainly the exemption from taxation cannot depend upon...
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