Trs. of Phillips Exeter Acad. v. Exeter

• Decision Date: 06 February 1940
• Parties: TRUSTEES OF PHILLIPS EXETER ACADEMY v. EXETER (three cases).
• Court: New Hampshire Supreme Court

27 A.2d 569

90 N.H. 472

TRUSTEES OF PHILLIPS EXETER ACADEMY

v. EXETER (three cases).

Supreme Court of New Hampshire. Rockingham.

Feb. 6, 1940.

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

Petitions by trustees of Phillips Exeter Academy against Exeter for abatement of taxes for the years 1935, 1936, and 1937. The superior court transferred certain questions without ruling.

Questions answered in part, and case discharged.

Petitions for abatement of taxes for the years 1935, 1936, and 1937.

The plaintiff was incorporated by act of the General Assembly of the state in 1781, Laws 1776-1784, vol. 4, Laws 1781, c. 7, as an educational institution not conducted for private gain. Its preamble sets forth that "the Education of Youth has ever been considered by the wise & good, as an object of the highest consequence to the safety & happiness of a people", that the Honorable John Phillips desires to give certain property to trustees to be by them "forever appropriated & expended for the support of a public Free School or Academy" in Exeter, and that there is need for the trustees to act in a corporate capacity. It then proceeds to establish in Exeter "an Academy" to promote "piety & virtue, and for the education of Youth" in enumerated and unenumerated subjects, and incorporates the trustees to be and "continue a body-politic and corporate, by the same name [of the Trustees of the Phillips Exeter Academy] forever." One provision permits the trustees to remove the academy and establish it in another place within the state, consistently with the founder's intention. Another provision authorizes the trustees and their successors to take and receive by gift or otherwise real and personal property, "provided, that the annual income of the said real estate shall not exceed the sum of five hundred pounds; and the annual income of the said personal estate shall not exceed the sum of two thousand pounds; both sums to be valued in Silver at the rate of six shillings and eight pence by the ounce."

The final part of the charter is this: "And where as the said institution may be of very great and general advantage to this state, and deserves every encouragement—Be it therefore enacted * * * that all the Lands Tenements and personal Estate, that shall be given to said Trustees for the use of said Academy, shall be and forever are exempted from all Taxes whatsoever—"

The plaintiff charges its students tuition to aid in the expense of the education it furnishes them, and for room rent and board supplied them.

The plaintiff's real estate in Exeter is listed as follows:

Property Untaxed.

(a) Certain lands constituting parts of the Academy campus.

(b) Phillips Church, used for religious and musical instruction and as a house of public worship.

(c) Lamont Infirmary and Contagious Ward operated for the care of the students, without special charge except for private nurses and X-rays.

(d) The main academy building, containing recitation rooms and the chapel.

(e) Phillips Hall, built under the Harkness Plan for recitation purposes and containing recitation rooms, each equipped with a table and chairs for classes of 12 students.

(f) The Davis Library. This is the regular school library.

(g) Thompson Science Building, containing the laboratories for the science courses and used for class room and laboratory work.

(h) Administration Building, used for executive offices and general administration of academy affairs.

(i) Central Heating Plant, serving all the principal Academy buildings but not the Exeter Inn mentioned hereafter.

(j) Gymnasium and three other buildings used for students' physical culture and athletic sports.

(k) The principal's house which is located on the academy grounds and is the official residence of the principal. In it, quarters are provided and used for holding receptions, and faculty and other meetings connected with the administration of school affairs.

(l) The original academy building used as a faculty club.

(m) An obsolete building (two in 1935) used for storage and repair of academy equipment, principally furniture.

(n) A temporarily disused building ("Alumni Hall") formerly used as a general academy dining hall, which it is planned to convert into a student and academy publication plant, auditorium and theatre and a grill room for students desiring food outside regular meal hours.

(o) Two unimproved lots outside the campus, for which there is no present use.

Property Taxed.

1. The dormitories, some with dining halls.

2. Athletic and recreational properties.

3. Faculty, doctor's and employee houses.

4. Properties of mixed use, being:

(a) Gilman Field on Court Street between Gilman Street and Marston Street occupied by the gymnasium, baseball cage, ice hockey rink, the squash courts and the central heating plant.

(b) Properties assessed together as "Gilman Farm and Buildings", consisting partly of Plimpton Fields Beyond (portion of playing fields beyond river, exclusive of separately taxed new stadium), partly of woodland, and partly of an instructor's house (Gardiner Gilman House).

(c) Properties assessed in five units as "Dutch and Lamson Property", "Hunt Land", "Infirmary Land", "Julian Land", and "Field, Beaton, Porter, Hooper and Veazey Lots". Their open portions are parts of the academy campus, and the improved portions are occupied by the Administration Building, Infirmary, some of the student dormitories and instructors' houses, and the doctor's house and Faculty Club.

(d) Old Schoolhouse Property (assessed as "Academy Restaurant"), used partly for academy publication office and carpenter shop, and partly as a grill for students who desire food outside dining hall hours.

Gilman Field is used for the purpose of the gymnasium, baseball cage, ice hockey rink, squash courts and the central heating plant located thereon. The Perham House and Thompson House are also located on this tract.

The Gardiner Gilman Farm is on the east side of the Exeter River and is supposed to contain 250 acres or more of land. It includes Plimpton Playing Fields Beyond consisting of athletic fields largely used for various games and sports and is maintained in order to provide facilities for exercise and recreation on the part of the students. The balance consists of approximately 30 acres or more of tillage land and approximately 200 acres of woodland. The Gardiner Gilman House is located on the north end of the tillage land and is maintained as an instructors' house for two members of the faculty. The balance of the tillage land is not used. The woodland making up the balance of the "Gilman Farm and Buildings" was acquired as a part of the farm and is being developed as a model forest. Some cordwood is cut and sold each year. Some timber is cut therefrom each year and the lumber used by the academy, mostly for board walks.

The third group of properties under this heading so far as they are occupied by the Administration Building, Infirmary, dormitories, instructors' houses, Doctor's House and Faculty Club are maintained and used for the purposes of such buildings; so far as they are unoccupied they are maintained as a part of the academy campus and grounds.

The Old Schoolhouse Property contains offices for the editors of the Exonian, the students' paper, for which no charge is made, a carpenter shop for academy employees, and a grill room where students can purchase lunches outside of regular meal hours. Up to the school year 1937-38 the grill was operated by a tenant who paid no rent. Beginning with the school year 1937-38 it has been operated by the academy, and since then the net receipts have been sufficient to carry the expense of maintaining the entire building.

5. Commercial and unused properties.

(a) Gale land and Inn (public hotel), old Cooper Lot and Print Shop (rented for hire), and wood (in part sold to public).

(b) Goodwin Lot, New Cooper Lots, and Porter & Thyng land (unimproved lands outside campus), of which no academic use is yet made.

The Superior Court (Johnston, J.) has transferred without ruling the following questions:

1. Was Chapter 115 of the Laws of 1913 intended to repeal or modify in whole or in part the tax exemption provision contained in the plaintiff's charter?

2. If so, is such repeal or modification invalid in whole or in part as infringing the provision of Article I, Section 10 of the Constitution of the United States, U. S.C.A., prohibiting the states from passing any law impairing the obligation of contracts ?

3. Is the plaintiff now entitled to the benefit of the charter exemption as to any properties now held by it?

4. To what property or classes of property of the plaintiff does said charter exemption, if now in effect as a whole or in part, apply?

5. What property or classes of property of the plaintiff are exempt from taxation under the provision of Public Laws, Chapter 60, Section S, which excepts "seminaries of learning" from the category of taxable real estate?

6. Is the subject matter of any of the foregoing offers of proof material to the issues ?

The offers of proof referred to in the last question so far as there is occasion therefor, appear in the opinion, as well as the further facts deemed material.

Demond, Sulloway, Piper & Jones, of Concord (Jonathan Piper, of Concord, orally), for plaintiff.

Richard F. Upton, of Concord, Batchelder & Wheeler, of Exeter, and Robert W. Upton, of Concord, for defendant.

ALLEN, Chief Justice.

1. By the 1913 enactment, Laws 1913, c. 115, the legislature intended to repeal in its entirety the tax exemption clause of the plaintiff's charter, so far as it had constitutional power to do so and so far as it had not already been repealed by earlier enactment, Rev. St. c. 39, § 2. An...