Massachusetts Gen. Hosp. v. Inhabitants of Belmont 

• Decision Date: 23 June 1919
• Parties: MASSACHUSETTS GENERAL HOSPITAL v. INHABITANTS OF BELMONT (two cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

233 Mass. 190

124 N.E. 21

MASSACHUSETTS GENERAL HOSPITAL

v.INHABITANTS OF BELMONT (two cases).

Supreme Judicial Court of Massachusetts, Middlesex.

June 23, 1919.

Report from Superior Court, Middlesex County; Jabez Fox, Judge.

Petitions for abatement of taxes by the Massachusetts General Hospital against the Inhabitants of Belmont. On report to the Supreme Judicial Court. Case ordered to stand for further hearing.

The requests for rulings referred to in the opinion, with the exception of 14 and 20, given in a footnote, were as follows:

(13) The term ‘fair cash value,’ as used in St. 1909, c. 490, pt. 1, § 72, means the amount of cash which could, at the date as of which the assessment is made, be obtained for the property in the open market after fair and reasonable efforts have been made to find a purchaser was will give the highest price for it.

(15) The ‘fair cash value’ of the real estate in question is no greater than it would be if such real estate were owned by a person to whom the buildings and other improvements were of no use.

(16) The ‘fair cash value’ of the real estate in question is the value which the petitioner could have obtained for it at the date as of which the assessment is made, if it had then desired to sell said real estate, after fair and reasonable efforts had been made to find a purchaser who would give the highest price for it.

(17) The ‘fair cash value’ of the real estate in question is the value which it would have had on April 1, 1915, in the hands of any owner.

(18) The ‘fair cash value’ of the petitioner's property is not its value for the uses of an endowed institution, although, in determining its ‘fair cash value,’ whatever value may arise from the chance that a purchaser for this use or for any other use might appear may be considered.

(19) The ‘fair cash value’ of the real estate now in question is not the value to the petitioner, but its value in the hands of any owner, and in fixing that value, the chance that it may be desired for any particular purpose may be considered.

(21) If there is a possibility that, by reason of the buildings and other improvements or by reason of the use to which the real estate now in question is put, a person desirous of acquiring property for use as an asylum or hospital would be willing to pay more for such real estate than purchasers in general would be willing to pay, the existence of this possibility is material for the purpose of determining the fair cash value only in so far as it may add something to the fair cash value of the real estate in the minds of purchasers in general.

(22) The ‘fair cash value’ is not the sum which a person desirous of acquiring property for use as an asylum or hospital might be willing to pay for the real estate now in question but the amount that could be realized at a fair sale in the open market in view of all the uses to which the real estate is reasonably adapted.

(23) The ‘fair cash value’ of the real estate in question consists of the value of the property in the market apart from its special adaptability for hospital purposes, plus such sum as a purchaser might add to that value because of the chance that the property might at some time be sought for use as a hospital.

The seventeenth request for ruling was modified by adding ‘including the present owner’ and made as modified.

Moorfield Storey, John Abbott, and Harold S. Davis, all of Boston, for complainant.

Amos L. Taylor, Town Counsel, and Conrad P. Richardson, both of Boston, for respondent.

RUGG, C. J.

There are two complaints under section 77, pt. 1, of the General Tax Act (St. 1909, c. 490), appealing from the refusal of the assessors of the town of Belmont to abate taxes alleged to have been assessed illegally for the years 1915 and 1916 respectively upon real estate of the complainant devoted to the care of the insane under a department known as the McLean Asylum and located in the town of Belmont. The taxes were assessed pursuant to St. 1914, c. 518, § 1, which amended the exemption from taxation of the personal estate of charitable institutions and their real estate actually occupied for their corporate purposes set forth in the General Tax Act, § 5, Third, by adding a proviso in these words:

‘Nor shall the personal property or real estate owned by such institutions or corporations and occupied by them or any department thereof wholly or partly as and for an insane asylum, insane hospital, institution for the insane or for the treatment of mental or nervous diseases, be exempt from taxation unless at least one fourth of all property so occupied wholly or partly, on the basis of valuation thereof, and one fourth of the income of all trust and other funds and property held for the benefit of such asylum, hospital or institution and not actually occupied by it for such purposes, be used and expended entirely for the treatment, board, lodging or other direct benefit of indigent insane persons, or indigent persons in need of treatment for mental diseases, as resident patients, without any charge therefor to such persons either directly or indirectly.’

The meaning and the constitutionality of St. 1914, c. 518, § 1, are questions which lie at the threshold of the case.

1. The contentions made by the complainant as to the construction of the statute summarily stated are that the words ‘without any charge therefor’ in the last clause of the amendment mean, in substance, without any charge for the use of the property occupied by the institution or department in question for the purposes stated or for benefits received through the expenditure of the income of trust or other funds and property held for the use of the institution or department and not actually occupied for such purposes, and that the word ‘therefor’ refers to the use of property and income and not to ‘treatment, board, lodging or other direct benefit.’ We are of opinion that these contentions cannot be adopted. The word ‘therefor,’ according to the approved usages of language, ordinarily refers to the last and not to a more remote antecedent noun or phrase. It is the natural import of the proviso as a whole that the exoneration from charge relates to service rendered or furnished and not alone to use of property or income. The legislative history of the statute appears to disclose a purpose to make a material change respecting the exemption from taxation of property of such charitable institutions. Seemingly in its practical working little, if any, change would result from the construction put forward in behalf of the complainant. It is difficult and perhaps not desirable to attempt to lay down a precise and technical definition of ‘indigent persons' such as exists respecting the word ‘paupers.’ See Opinion of Justices, 11 Pick. 538. But in a broad sense in this connection ‘indigent persons' include those insane persons who by reason of poverty are unable, having due regard to other imperative obligations resting upon them, to contribute any substantial amount to their support in the asylum. Weeks v. Mansfield, 84 Conn. 544, 80 Atl. 784;In re Hybart, 119 N. C. 359, 25 S. E. 963.

The other parts of the statute present no insuperable difficulty in construction. One-fourth of the property occupied wholly or partly for the insane asylum or other designated use, on the basis of valuation, and one-fourth of the income from property held for its benefit must be devoted to the direct benefit of indigent insane without charge. This does not of necessity require a physical line of demarcation between the portions of the real estate devoted to pay patients and those given over to the use of free patients. Plainly it does not mean a fractional use of the property based on numbers of patients. It signifies that on a fair basis of computation, having reference both to numbers of patients treated so far as concerns enjoyment of property adapted for and applied to a use in common by pay and free patients and to definite property so far as there is a strict separation between pay and free patients, one-fourth in value shall be employed for the benefit of the latter. The same method, so far as practicable, may be employed in determining the expenditure of income. The statute is intended to be given a rational construction. Its operation must be adapted to the practical solution of a specified problem. Within these somewhat comprehensive lines, the calculation of the required proportions of properties doubtless can be accomplished without undue friction. The statute does not appear to be an unworkable piece of legislation. Hemenway v. Milton, 217 Mass. 230, 104 N. E. 362, L. R. A. 1915C, 949.

[5] 2. We are not able to perceive that any constitutional right of the complainant is infringed by the statute.

The complainant does not claim that it has any special exemption from taxation as a part of its charter rights. See St. 1811, c. 94. Whatever exemption it heretofore has enjoyed rested upon general law declaratory of a scheme of public policy. That may be changed by the general court provided no other constitutional guaranty is offended. Christ's Church v. Philadelphia, 24 How. 30, 15 L. Ed. 802;Grand Lodge v. New Orleans, 166 U. S. 143, 17 Sup. Ct. 523, 41 L. Ed. 951;Stanislaus v. San Joaquin & King's River Canal & Irrigation Co., 192 U. S. 201, 24 Sup. Ct. 241, 48 L. Ed. 406;Choate v. Trapp, 224 U. S. 665, 674, 32 Sup. Ct. 565, 56 L. Ed. 941. The question somewhat argued respecting the ethics of inviting contributions from charitably disposed persons on the footing that the beneficiary of their gifts is to be exempt from taxation, and then revoking that exemption after large gifts have been made, is wholly legislative and not judicial in its nature. It presents no question of constitutional law. The law of taxation may be changed. In the absence of some binding contract, no one has a legal right to the continuance of such laws. Hanscom v. Malden & Melrose Gaslight Co., 220 Mass....