Mercersburg College v. Borough

• Decision Date: 21 April 1913
• Docket Number: 61-1912
• Citation: 53 Pa.Super. 388
• Parties: Mercersburg College v. Mercersburg Borough, Appellant
• Court: Pennsylvania Superior Court

53 Pa.Super. 388

Mercersburg College v. Mercersburg Borough, Appellant

No. 61-1912

Superior Court of Pennsylvania

April 21, 1913

Argued October 22, 1912 [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter]

Appeal by defendant, from decree of C.P. Franklin Co., Equity Docket, Vol. 3, p. 118, on bill in equity in case of Regents of Mercersburg College v. Burgess and Town Council of Mercersburg Borough.

Bill in equity for an injunction.

Shull, P. J., found the facts and conclusions of law to be as follows:

FINDINGS OF FACT.

1. The plaintiff corporation was chartered by decree of court, October 30, 1865, under articles of association as " A college for the education of youth in the learned languages, the arts, sciences and useful literature," with power to confer degrees as have been usually granted in other colleges and universities. The management and control, under the charter, is vested in regents, to be elected or chosen as provided in its charter, some of whom shall be elected by the Synod of the Potomac of the Reformed Church of the United States.

2. The powers, inter alia, conferred upon the regents in the government and perpetuation of the institution is to acquire and hold personal property and real estate, repair and erect buildings for the general advantage and prosperity of the institution, conduct and manage its affairs, etc.

3. The corporation owns in fee about 112 1/2 acres of land, situate partly in the borough of Mercersburg and partly in the township of Montgomery, Franklin county, Pa. A portion of this land has erected thereon suitable buildings, a part is used for campus and other actual necessary purposes in the operation and management of the institution. Another portion of the plot owned in fee, comprising about seventy-five acres, is used for trucking and the general and ordinary agricultural purposes.

4. In addition to the lands owned in fee the plaintiff has leased for a period of ninety-nine years, from the Theological Seminary of the German Reformed Church of the United States, four acres of land in the borough of Mercersburg upon which are erected some of the halls and buildings of the institution. This is leased at a nominal rental, the lessee to pay taxes, and shall use it for no other than the purposes designated, viz.: as an institution of learning.

5. The college was founded by charitable bequests and by individual gifts and bequests, and may reasonably expect to receive additional donations and contributions, to further its usefulness. For many years the institution was not prosperous, and its perpetuation was despaired by its managers. But, in the past decade, under wise management and the skillful guidance of a most capable and efficient principal, it has developed into a growing concern, the revenues from which now yield a surplus revenue of several thousand dollars over the actual operating expenses.

6. In addition to the income from tuition and boarding, etc., there is derived certain profits from that portion of the lands not in actual use and immediately necessary for school purposes. From this land vegetables are raised and consumed upon the table. Hay and grain are raised, a part of which is consumed by the live stock on the premises, and the balance is sold and the receipts therefrom passed to the general account of the institution.

7. Hogs are fattened from the offal of the college kitchen and table, and from the feeding of hogs a profit is derived yielding in the past ten years an annual net profit of over $ 400.

8. A store is conducted in a room of Main Hall for the convenience, accommodation and better discipline of students of the institution, and is patronized only by the students. For this business, a mercantile license is paid, and the profits go to the support of the athletics of the school.

9. The entire income of the college in excess of the sum used for its maintenance is consumed in betterments, such as extensions in grounds and buildings, equipment, apparatus, necessary and essential to its proper and successful operation, and for the payment of interest on existing indebtedness now exceeding the sum of sixty thousand dollars.

10. The regents serve without compensation. No stock has ever been issued nor has any individual received any pecuniary advantage or profit from the earnings. A large number of the students act in the capacity of table-waiters and in the performance of other duties in consideration of reduced price for boarding and tuition at the institution.

11. The institution so far as its accommodations admit is open to all white male students without discrimination as to religious beliefs or creed. No sectarian test is applied in the employment of instructors. The rates of board and tuition to those able to pay the full price is $ 400, being an increase over the sum charged in past years, but is much less than that charged in similar institutions. The enrollment numbers approximately 450 pupils.

12. Since the year 1909 the plaintiff has purchased a tract of land for the sum of $ 4,500, which is all paid but about ten per cent of the purchase price. It has recently completed an electric light plant costing over $ 25,000, much of which was raised by voluntary contributions or private subscriptions, in the nature of gifts or donations.

13. There is also at present in process of construction a gymnasium that will cost approximately, when completed and equipped, $ 100,000.

14. The lands and various plots with buildings are not separately assessed. For the year 1910, the county of Franklin levied taxes on real estate in Mercersburg borough against plaintiff the sum of $ 129.13; the borough authorities for borough purposes, $ 284.08; the school board of the independent school district levied the sum of $ 206.20, and for lands lying in the township of Montgomery there was levied for county purposes $ 25.00; by the school board, $ 40.00, and for road purposes, $ 30.00.

15. Taxes for the year 1910 were also assessed upon the personal property of defendant, which said taxes were duly paid.

CONCLUSIONS OF LAW.

1. The plaintiff corporation is a college or institution of learning founded, endowed and was at the time of the assessment of the taxes in the years 1910 and 1911 maintained by private charity.

2. That the grounds occupied by the buildings, together with such other lands annexed thereto, and necessary for the occupancy and enjoyment of the institution, is exempt from taxation.

3. That an athletic association is necessary for the proper conduct and operation of the school, and that the grounds used therefor is a part and parcel of the institution.

4. That the land used as a truck garden and farm, comprising about 75 acres, not being presently used and immediately necessary for the occupancy and enjoyment of the institution, is not exempt from taxation; but the lands so acquired may and doubtless will in the future be actually necessary for the proper and successful operation of the institution.

5. That the entire revenue derived by plaintiffs in the conduct of the school is being used in the support of the school to increase the efficiency and facilities thereof, make repairs, and for the necessary increase of grounds and buildings, and for no other purpose.

And now, August 16, this cause came on to be heard upon bill, answer, evidence and argument of counsel, and it is ordered, adjudged and decreed that the prothonotary enter a decree nisi in accordance with the findings, viz.: That the defendants respectively be enjoined from collecting any of the assessed taxes upon the buildings and grounds described in the bill, in so far as the same are annexed to the lands covered by the bill necessary for the occupancy and enjoyment of the same, comprising about thirty-seven and one-half acres, notice to be given to the parties or their counsel of record sec reg.

The court subsequently entered a final decree in accordance with the conclusions of law.

Error assigned among others was the decree of the court.

M. W. Jacobs, with him T. Z. Minehart, for appellant. -- The act of 1909 is inoperative to change existing law, because it purports to amend a nonexisting statute: Billings v. Harvey, 6 Cal. 381; Wall v. Garrison, 11 Colo. 515 (19 P. 469); In re House Resolution, 12 Colo. 359 (21 P. 485); Lampkin v. Pike, 115 Ga. 827 (42 S.E. 213); Louisville, etc., R. R. Co. v. East St. Louis, 134 Ill. 656 (25 N.E. 962); Draper v. Falley, 33 Ind. 465; Blakemore v. Dolan, 50 Ind. 194; Ford v. Booker, 53 Ind. 395; Reissner v. Hurle, 50 Ind. 424; Cowley v. Rushville, 60 Ind. 327; Niblack v. Goodman, 67 Ind. 174; Lawson v. DeBolt, 78 Ind. 563; McIntyre v. Marine, 93 Ind. 193; Hall v. Craig, 125 Ind. 523 (25 N.E. 538); Eversole v. Chase, 127 Ind. 297 (26 N.E. 835); Boring v. State, 141 Ind. 640 (41 N.E. 270); State v. Wheeler, 172 Ind. 578 (89 N.E. 1); Shutt v. State, 89 N.E. 6; State v. Cognevich, 124 La. 414 (50 So. 439); State v. Benton, 33 Neb. 823 (51 N.W. 140); Robertson v. State, 12 Tex.App. 541.

The title of the act of 1909 is misleading: Phoenixville Boro. Road, 109 Pa. 44; Sewickley Boro. v. Sholes, 118 Pa. 165; Mt. Joy Borough v. Turnpike Co., 182 Pa. 581; Hood v. Norton, 202 Pa. 114; Com. v. Hazen, 207 Pa. 52; Com. v. Samuels, 163 Pa. 283; Penna. R. R. Co. v. Riblet, 66 Pa. 164; Bennett v. Sullivan County, 29 Pa.Super. 120.

The act of 1909 was intended, not to enlarge, but to restrict exemption: Ihmsen v. Nav. Co., 32 Pa. 153; Cope's Est., 191 Pa. 1; Portuondo's Estate, 6 Pa. Dist. 748; Dugan v. Bridge Co., 27 Pa. 303; Jones v. Tatham, 20 Pa. 398; Shewell Avenue, 20 Pa.C.C. 278; Com. v. Hough, 8 Pa. Dist. 685.

Exemption from taxation is never to be implied; it is always presumed against...