Soc'y Of Cincinnati v. Exeter.

• Decision Date: 02 March 1943
• Citation: 31 A.2d 52
• Parties: SOCIETY OF CINCINNATI v. EXETER.
• Court: New Hampshire Supreme Court

31 A.2d 52

SOCIETY OF CINCINNATI

v.EXETER.

Supreme Court of New Hampshire.

March 2, 1943.

COPYRIGHT MATERIAL OMITTED.

Transferred from Superior Court, Rockingham County; Lorimer, Judge.

Proceeding by the Society of Cincinnati in the State of New Hampshire against one Exeter for abatement of 1941 real estate taxes on ground that the plaintiff was a charitable institution within statutory exemption.The case transferred certain exceptions taken during and after the hearing, and also transferred without ruling the main question of the validity of the claim of exemption.

Case discharged.

Petition, for abatement of 1941 real estate taxes, on the claim that the plaintiff is a charitable institution within the statutory exemption (R.L. c. 73, § 24).

The plaintiff is a local voluntary corporation organized in 1897.Its articles of incorporation state its objects to be

“*** to keep alive among ourselves and our descendants and in the community at large the patriotic spirit of the officers of the New Hampshire Continental Line who, upon the dissolution of the American Army *** [in 1783] formally organized and instituted in the Town of Exeter, the New Hampshire Society of the Cincinnati in accordance with the provisions of the original institution of the Society.

“To perpetuate the remembrance of that great event which gave independence to the Colonies of North America, as well as the mutual friendships which were formed under the pressure of common dangers, and in many instances cemented by the blood of the parties.

“To extend the most substantial acts of beneficence to those members who unfortunately, may be under the necessity of receiving the same.”

The case transfers certain exceptions taken during and after the hearing, and also transfers without ruling the main question of the validity of the claim of exemption.

So far as material, the exceptions and further facts appear in the opinion.Transferred by Lorimer, J.

Demond, Sulloway, Piper & Jones, of Concord, for plaintiff.

George R. Scammon, of Exeter, for defendant.

ALLEN, Chief Justice.

The statute(R.L. c. 73, § 24) upon which the plaintiff relies, so far as applicable to the case, exempts from taxation the real estate of local charitable institutions owned and occupied by them for their charitable purposes, upon the condition that none of the institution's income or profits is applied for other purposes.

The main questions are whether the Society's status is that of a charitable institution, and if so, whether its real estate is occupied for its charitable purposes.In reasonable construction of the statute, if these conditions are met, the exemption is granted.The condition that no income or profits of the institution shall be applied except to charitable purposes, refers to income or profits derived from other sources than its real estate which it occupies for its purposes of charity.Obviously, if the real estate is devoted to charitable uses, the income or profits from it cannot be used otherwise.

As a matter preliminary to the main question, the special features of Folsom Tavern are properly considered.This is an old building of historic interest, given the plaintiff in 1929, moved to its land, and partially restored.The plaintiff plans to further restore it and to place in it furnishings of the Revolutionary Period when and if funds therefor become available.The building now has no actual use.The trial court declined to find the claimed purpose of its eventual use as “a public historical museum”, on the ground that the public is entitled to no rights to such use.But if such a purpose might be found, at best the use is prospective.There is, and has been, none either in aid of the final purpose or directly for that purpose.The statute contemplates occupancy as more than bare possession.Such possession is not an existing use for the owner's purposes, even with a plan and purpose of future use therefor.Clearly, if the building were rented, it would be taxable, and it is no less so while it remains indefinitely idle.

The authorities support this construction of the statute.In St. Mary's School v. Concord, 80 N.H. 436, 118 A. 608, a tract of land was held to be occupied and in some use of service towards the owner's charitable purposes.While part of the tract was unimproved, it was a single tract, the improved part was used productively, and the unimproved part was occupied as far as it was capable of occupancy.The argument is made that the Tavern is occupied as far as it is capable of occupancy at this time.It assumes incapacity by reason of the plaintiff's financial inability to an occupancy of use, whereas the test is of its inherent capacity for use.Inability to use denotes no incapacity of use.

If the tract in the St. Mary's School case had been wholly of wild land, it might have been treated as an investment for profit as was done in respect to timber and land, held to be occupied in furtherance of the owner's “primary objectives”, in the case of Hedding, etc., Ass'n v. Epping, 88 N.H. 321, 189 A. 347.In both cases there was the same “actual character of use.”Id., 88 N.H. 324, 189 A. 350.In this latter case, aside from the investment feature, there was a present use of the land in making tenancies of adjoining lands of the owner more desirable, although the tenants were not entitled to the enjoyment as a matter of right.It compares with the Society's lands which were bought for fire protection and maintenance of an open view for its main building, found to have been reasonable in amount.

In the St. Mary's School and Hedding cases, the present use may not have been a full use, but some present use was found to attach to the occupancy.They are distinguished from the more recent case of Trustees, etc., Academy v. Exeter, 90 N.H. 472, 506, 11 A.2d 569, 592, in which it was held that a disused building of the Academy held for future adaptation to nontaxable purposes was taxable, “not being in any present use”.The Folsom Tavern stands on the same basis.When it will be in use as a historical museum is uncertain, and even a probable occupancy in some manner of charitable use in the indefinite future is not a present one such as the statute demands.The special facts affecting the Tavern nullify any possible claim that it is tax exempt.

The question of the plaintiff's status as a charitable institution and of the use it makes of its real estate occupied by it are in many aspects interrelated and not readily considered separately.If it is a public charity, the fact bears on the issue of its use of its real estate for purposes of public service, and, reciprocally, the use of its real estate for such service tends to denote its character as a charity.

The test of a charitable institution within the scope of the exemption statute, as stated in Young Women's, etc., Ass'n v. Portsmouth, 89 N.H. 40, 43, 192 A. 617, 619, is that it be “organized and conducted to perform some service of public good or welfare, with no pecuniary profit to its officers or members, and with no restrictions which confine benefits to them”.Implied in the test, or as a corollary to it, the public service to be performed must be obligatory.It is of the essence of a privately organized public charity, termed in the law as a charitable trust, that it hold property in trust for the public benefit. “*** in the case of a charitable trust property is devoted to purposes beneficial to the community.”Restatement of the Law of Trusts, 1091.It is a “fiduciary relationship with respect to property” imposing upon the trustee“equitable duties to deal with the property for charitable purposes.”Ib., 1095. “and the trust is enforceable by some officer in behalf of the state.”Ib., 1083. “*** the trustee of a charitable trust owes duties, *** not owing to any person or persons in particular, although they are enforceable at the suit of a public officer for the benefit of the community.”Scott, Trusts, 1917.The local law has these requisites.Haynes v. Carr, 70 N.H. 463, 484, 49 A. 638;Petition of Burnham, 74 N.H. 492, 494, 69 A. 720;Clark v. Campbell, 82 N.H. 281, 282, 133 A. 166, 45 A.L.R. 1433;Souhegan Nat. Bank v. Kenison, N.H., 26 A.2d 26.

Examination of the plaintiff's charter shows purposes mostly confined for the benefit of its members.The only purpose expressed for the benefit of the general public is of a special range of patriotism.To maintain in the public mind the patriotic spirit of those who led the forces which won our country's independence and “to perpetuate the remembrance” of the War of the Revolution and its successful event, is an inspiration to patriotism, and patriotism is an objective within the subjects of public charity.Sargent v. Cornish, 54 N.H. 18.But construction of the plaintiff's charter leads to no conclusion of obligation on the plaintiff's part to foster patriotism among others than its members, either in the use of its property or otherwise.The charter dedicated to that purpose no property which might be acquired.The service in that respect was to be only such as it might at its option and in its uncontrolled discretion see fit to furnish.While the service would be an exercise of charter authority, only the members of the plaintiff may say whether and to what extent it shall be exercised.No fiduciary obligation, as a charge against its real estate or in any other way, is assumed except to the members.Clearly, officers of the State acting for the public cannot enforce the service, or through suit compel the use of the plaintiff's property therefor.The public have no right to receive patriotic inspiration in performance of any obligation of the plaintiff.They have no right to visit its property, but only a permissive privilege entirely in the plaintiff's control and subject to withdrawal at its pleasure.The state may neither regulate visits nor require that visits may be made under reasonable regulations...