Shelburne Museum, Inc. v. Town of Shelburne, 86-70

• Decision Date: 07 April 1971
• Docket Number: No. 86-70,86-70
• Citation: 129 Vt. 341,278 A.2d 719
• Court: Vermont Supreme Court
• Parties: SHELBURNE MUSEUM, INC. v. The TOWN OF SHELBURNE and Edna Cole, Treasurer.

Page 719

278 A.2d 719

129 Vt. 341

SHELBURNE MUSEUM, INC. v. The TOWN OF SHELBURNE and Edna Cole, Treasurer.

No. 86-70.

Supreme Court of Vermont.

April 7, 1971.

Rehearing Denied June 1, 1971.

Wick, Dinse & Allen, Burlington, for plaintiff.

John T. Ewing, Burlington, for defendant.

Before HOLDEN, C. J., BARNEY, SMITH and KEYSER, JJ., and HILL, superior judge.

HOLDEN, Chief Justice.

The plaintiff is a non-profit corporation established in 1949 by Electra Havemayer Webb. It is engaged in the procurement, restoration, care, maintenance and display of artifacts, works of art, antiques and buildings of earlier periods of lasting and historical interest to the public at large. Under the sponsorship of the museum, seminars and courses of instruction, in collaboration with various educational institutions, have been conducted and learned publications produced which relate to this particular period in Armerican culture. The publications have been widely disseminated to schools and liberaries throughout the country.

The site of the museum is in the defendant town and consists of a large tract of land and an historical building complex. Prior to 1969 none of the real or personal estate of the museum had been assessed as taxable properties and no tax revenues were collected by the town. In that year the defendant appraised and assessed taxes on two homes. One is located at the entrance to the exhibit area and is occupied as a dwelling by the director of the museum, Sterling Emerson, and his family. The other home, located at the exist, serves as a dwelling for Duncan Munro, a fulltime employee of the plaintiff, engaged as a landscape artist. Neither of the occupants pays rent, as such, yet the free use of the homes is part of their compensation as employees of the museum. For convenience and security reasons, both residences are connected to internal telephone systems maintained by the museum. This arrangement establishes communication with a security staff of eight uniformed guards who provide twenty-four hour surveillance of the museum property.

The plaintiff petitioned the chancery court to declare these properties exempt from taxation and to order a refund of taxes paid by the plaintiff under protest. The chancellor entered a decree based on his findings of fact which granted the full relief requested by the plaintiff as to both properties. The defendant town appeals.

All are agreed that the plaintiff is engaged in a charitbale enterprise and that the taxability of the two properties is controlled by 32 V.S.A. § 3802(4). This subsection provides:

Real and personal estate granted, sequestered or used for public, pious or charitable uses; real property owned by churches or church societies or conferences and used as parsonages and personal property therein used by ministers engaged in full time work in the care of the churches of their fellowship within the state; real and personal estate set apart for library uses and used by the public and private circulating libraries, open to the public and not used for profit; lands leased by towns or town school districts for educational purposes; and lands owned or leased by colleges, academies or other public schools or leased by towns for the support of the gospel; and lands and buildings owned and used by towns for the support of the poor therein; but private buildings on such lands shall be set in the list to the owners thereof, and shall not be exempt. The exemption of lands owned or leased by colleges, academies or other public schools, shall not apply to lands or buildings rented for general commercial purposes, nor to farming or timber lands owned or leased thereby; but this provision shall not affect the exemption of so-called school or college lands, sequestered to such use prior to January 28, 1911.

That both of the subject properties are owned by a corporation dedicated to charitable purposes does not establish their exemption. The ownership must be for the appropriate use and benefit of the institution in carrying out the charitable purpose for which it was established. Willard v. Pike, 59 Vt. 202, 218, 9 A. 907. To achieve exempt status, the property must confer a benefit upon that segment of the public which the institution was designed to serve. The New York Institute for Education of Blind v. Town of Wolcott (Vt. 1970), 262 A.2d 451, 454; Gifford Memorial Hospital v. Town of Randolph, 119 Vt. 66, 72, 118 A.2d 480. See also, Experiment in International Living, Inc. v. Town of Brattleboro, 127 Vt. 41, 48, 238 A.2d 782. The governing consideration is the direct and immediate benefit derived from the use of the property, rather than the remote or incidental benefit produced by its primary function. Gifford Memorial Hospital v. Town of Randolph, supra, 119 Vt. at 72, 118 A.2d 480; Middlebury College v. Town of Hancock, 115 Vt. 157, 164, 55 A.2d 194.

The chancellor's findings make it clear that, apart from their common use...