Piper v. Town of Meredith

Citation139 A. 294
Decision Date04 October 1927
CourtSupreme Court of New Hampshire

Transferred from Superior Court, Belknap County.

Application by Oscar G. riper for the abatement of a tax, imposed by the Town of Meredith. Transferred without ruling. Petition dismissed.

Petition under the statute (P. S. c. 59, § 11) for the abatement of a tax. Facts agreed. Transferred without ruling by Matthews, J.

The agreed facts are, in substance, as follows: By deed dated June 5, 1876, Josiah T. Sturtevant conveyed to the defendant town a parcel of land in Meredith village. From the recitals of this deed it appears that there was an agreement of the same date between Sturtevant and the town, by the terms of which the town employed Sturtevant to erect a two-story building upon the land conveyed, according to specifications prepared by him, "to be used as a town house and for other purposes," and agreed that upon completion of this building it would execute to him "a perpetual lease of the first story of said building, except the stairway leading to the hall, the said first story and foundation under the same to be kept in repair by said Sturtevant, his heirs, executors, administrators and assigns," with certain exceptions which are not material in this case. The town also agreed that it would forever maintain upon said lot a two-story building similar to the one then contemplated, and that Sturtevant and his successors should have a perpetual lease of the first story.

The deed provides that if the town shall fail to carry out its part of the foregoing agreement, "then the above described lot of land shall revert to and become the property of said Sturtevant, his heirs and assigns forever." Upon December 22, 1876, in accordance with this agreement, the defendant and Sturtevant executed an indenture, by the terms of which the town leased to him "all the first story" of "the new two-story building recently built by said Sturtevant for said town containing a town hall. * * * To have and to hold the said first story * * * unto the said Sturtevant, his heirs, executors, administrators and assigns forever, commencing on the day of the date of this indenture." On his part, Sturtevant covenanted that he and his successors in title would "forever maintain and keep in sufficient repair the foundation under said building * * * and every part of the building aforesaid, inside and outside, below the flooring timbers of the hall." The lease also contains a provision that if Sturtevant, or his successors in title, shall fail to keep the first story of the building in repair in accordance with the foregoing covenant for a space of two months after receiving notice from the town of a want of repairs, the town shall have the right to expel him and the lease shall be void.

All the rights of Sturtevant under the abovementioned conveyances have passed by successive deeds to the plaintiff, his deed being dated February 25, 1910. After the execution of the lease, no taxes were assessed against Sturtevant or any of his successors on account of their interest in the town hall building until the year 1925, when the tax in question was assessed against the plaintiff. In the invoice of estates liable to be taxed in the town of Meredith on April 1, 1925, the selectmen appraised the plaintiff's premises, which were described as "the lower story, town hall building," at $6,000, and assessed thereon a tax of $210. The ground of relief set forth in the petition is "that the said premises so taxed against the plaintiff are owned by the defendant, and the plaintiff is merely lessee of the same and is not taxable therefor." There is no evidence of an agreement in regard to the taxation or exemption of Sturtevant's interest, unless by inference from the agreed facts.

Stanton Owen, of Laconia, for plaintiff.

Bertram Blaisdell, of Meredith, and Frank P. Tilton, of Laconia, for defendant.

BRANCH, J. 1. In his petition the plaintiff takes the position that he is not taxable because he has only a leasehold interest in the premises. If his lease ran for a definite term of years, the question thus presented would not be free from doubt. In Hampton, etc., Co. v. Hampton, 77 N. H. 373, 92 A. 549, L. R. A. 1915C. 698, and Granite, etc., Co. v. Hampton. 76 N. H. 1, 79 A. 25, it seems to have been assumed without question by the parties and the court that the interest of a lessee under a long-term lease is taxable. But in Donovan v. Haverhill, 247 Mass. 69, 141 N. E. 564, 30 A. L. R. 358, it was held that "an assessment may not be laid upon leases as an interest in the land which is to be assessed, nor upon the owner of such interest in his position as lessee."

Whether the rule in New Hampshire differs from that which prevails in Massachusetts and other jurisdictions (3 Cool. Tax. [4th Ed.] § 1069), because of the statutory provisions that "any separate interest in land shall be taken to be real estate" (P. S. c. 61, § 21; P. L. c. 66, § 38), and separately appraised upon request (P. S. c. 58, § 2; P. L. c. 63, § 2), is a question which was touched upon but not decided in Granite, etc., Co. v. Hampton, supra, 8 (79 A. 25), and which need not be decided in the present case, for in regard to tenancies for life, defeasible estates, and perpetual leaseholds, different considerations apply.

For the purpose of taxation, it is immaterial who is the ultimate owner of the fee. Title is not the test of taxability.

"Real and personal property shall be taxed to the person claiming the same, or to the person who is in possession and actual occupancy thereof, if such person will consent to be taxed for the same." P. S. c. 56, § 14; P. L. c. 61, § 10.

"A tenant for life, being either landlord and collector of the rent (which includes the tax of the remainder as well as the tax of the life estate), or occupier of the land, is taxed for the land, and not merely for his life estate. Peirce v. Burroughs, 58 N. H. 302, 304; Deraismes v. Deraismes, 72 N. Y. 154, 158. A holder of a defeasible title having the income or use of the land, may be taxable for the land, and not merely for his title. An ordinary land tax is an ordinary expense and burden of the land, and is naturally borne by those who have the benefit of the land. * * * The positions of rent-paying tenants, tenants for life, and holders of defeasible titles, as tax payers, are illustrations of the rule that title is not the test of taxability. Such persons, enjoying the product out of which the land tax may be taken, may be regarded, for the purpose of taxation, as the owners of the land, although the value of their title may be much less than the value of the land. The justice of taxing a piece of land to its tenant for life, who draws a great annual income from it, is apparent; and he is none the less taxable for the land when his term has so nearly expired as to have no substantial value. He is the owner for the purpose of taxation, though not for every other purpose. The plaintiff's first proposition, that one can be taxed only for what he owns, is at variance with the natural law by which the ordinary taxes, like other ordinary expenses of land, are chargeable upon its rents and profits, and eventually fall upon the occupier, who may be a tenant for life, or a tenant at will." Morrison v. Manchester, 58 N. H. 538, 557.

In the present case the plaintiff holds not only a perpetual lease of the first story of the town hall building, but the reversion of the fee in the land in case the town commits a breach of the conditions contained in its deed from Sturtevant. His covenant to keep the foundations and walls in repair imposes upon him nothing more than a property owner's ordinary burden of keeping up his buildings. The entire beneficial interest in the first story of the building belongs to him. Under these circumstances it is not illogical or unreasonable to hold that, since he enjoys all benefits of ownership, he should bear an owner's share of the public expense.

In reality the plaintiff's estate is not a leasehold at all, for it is well settled law that a perpetual lease upon condition conveys to the lessee a determinable or base fee. "Every estate which may be of perpetual duration is deemed to be a fee, and may come within the definition of Lord Coke, of a fee-simple absolute, conditional, qualified or base fee." 1 Washb. Real Prop. § 162. The propriety of taxing the holder of such an estate as the owner of the property is obvious, and has been uniformly recognized by the courts in almost every jurisdiction where the question has arisen. 37 Cyc. Taxation, 790; Note to Penick v. Atkinson, 46 L. R. A. (N. S.) 284; 16 R. C. L. Landlord and Tenant, § 99; Wells v. Savannah, 181 U. S. 531, 21 S. Ct. 697, 45 L. Ed. 986; Id., 87 Ga. 397, 13 S. E. 442. The plaintiff, therefore, cannot escape taxation for that part of the town hall building which he holds under lease, because of the nature of his estate.

2. The next position of the plaintiff is that the property in question always has been, and is today, exempt from taxation under the statutes. It is argued that in 1876 when the Sturtevant lease was executed, no tax could have been levied upon the property because the law then exempted the real estate of towns, other than town poor farms from taxation (G. S. c. 49, § 2); and that this situation was not altered by the change in the law which now limits the nontaxable real estate of towns to that Which is used for public purposes (P. S. c. 55, § 2; P. L. c. 60, § 5). The argument in support of the last proposition is that since, under the covenants of the lease, the plaintiff is bound to relieve...

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