Trustees of Phillips Academy v. Inhabitants of Andover

• Decision Date: 04 January 1900
• Citation: 175 Mass. 118,55 N.E. 841
• Parties: TRUSTEES OF PHILLIPS ACADEMY v. INHABITANTS OF ANDOVER.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

175 Mass. 118

55 N.E. 841

TRUSTEES OF PHILLIPS ACADEMY v. INHABITANTS OF ANDOVER.

Supreme Judicial Court of Massachusetts, Essex.

January 4, 1900

COUNSEL

T. H. Russell, for plaintiffs.

Wm Odlin, for defendants.

OPINION

MORTON J.

This case was heard on agreed facts, and the principal question is whether the property for which the plaintiffs were assessed was exempt from taxation by virtue of Pub. St. c. 11, § 5 cl. 3, as amended by St. 1889, c. 465, which provides that 'the personal property of literary, benevolent charitable and scientific institutions and temperance societies incorporated within this commonwealth and the real estate belonging to such institutions occupied by them or their officers for the purposes for which they are incorporated' shall be exempt from taxation. There can be no doubt that Phillips Academy is an institution within the meaning of the exempting clause, and that, with perhaps a possible doubt in the case of Prof. Park, the persons occupying the various houses were officers of the institution. Williams College v. Assessors of Williamstown, 167 Mass. 505, 46 N.E. 394. The more difficult question is whether the property was occupied by them for the purposes for which the institution was incorporated. It is not easy, and perhaps not possible, to define what will constitute such an occupancy under all circumstances, and we shall not atempt it; but there are some general rules and considerations which we deem it proper to state, notwithstanding the disposition which is made of this case.

The occupancy referred to usually will result from the official connection of the office with the institution, and commonly will continue only so long as such connection lasts. The legislature could have provided, as it did formerly in the case of Harvard College (in tax act of 1818, and prior and subsequent tax acts), that such occupancy of itself should exempt the estate from taxation, or even that all of the real estate belonging to any of the favored institutions should be exempt. Previous to the adoption of the Revised Statutes this seems to have been the case, with a qualification after a time in regard to Harvard College and Phillips Academy. The exemptions were incorporated each year in the annual tax acts, and the institutions exempted were described by name, except that, beginning with 1801, there was in each act a general provision exempting academies established by the law of this commonwealth. Phillips Academy came under this general provision, but by a proviso in the act of 1821 (chapter 107, § 6) and in succeeding acts it was provided (and this is the qualification referred to above) that nothing contained in the act should 'prevent the town of Andover from taxing such real estate belonging to the corporation of Phillips Academy situate in said town as shall not be under the immediate occupation and improvement of said corporation, or of any person or persons connected with said corporation exempted from taxation by this act.' The persons who were exempted from taxation that were connected or likely to be connected with Phillips Academy were ministers of the gospel, preceptors of academies, and Latin grammar school masters. These and other personal exemptions relating to 'the president, professors, tutors, librarians and students of Harvard, Williams and Amherst Colleges and of all other theological, medical and literary institutions,' were repealed by St. 1828, c. 143. The effect of this repeal, so far as Phillips Academy was concerned, seems to have been to cause the omission in subsequent tax acts from the proviso of the concluding clause, which had provided by implication that real estate belonging to the corporation, and occupied by any person connected with it, should be exempt from taxation. By the Revised Statutes a general rule was established, which described in a single phrase the institutions to be exempted, and limited the exemption to the real estate belonging to them, and 'actually occupied by them or by the officers of such institutions for the purposes for which they are incorporated.' Rev. St. c. 7,§ 5, cl. 2. This statute, with certain additions and amendments not now material, has been continued by successive re-enactments to the present time. It is manifest that under the Revised Statutes and succeeding statutes the mere fact that real estate belonging to an exempted institution was occupied by it or by one of its officers could not be regarded as sufficient, without anything more to exempt the property from taxation, and it has not been so regarded. Pierce v. Inhabitants of Cambridge, 2 Cush. 611; Williams College v. Assessors of Williams-town, 167 Mass. 505, 46 N.E. 394; Trustees of Amherst College v. Assessors of Amherst (Mass.) 53 N.E. 815. In any other view the words 'for the purposes for which they are incorporated' would be unnecessary and meaningless. The omission from subsequent statutes of the word 'actually,' which was in the Revised Statutes, does not affect the construction. Association v. Lynn, 136 Mass. 283, 285. Whatever else, therefore, may be said of the occupancy, it must be for the purposes for which the institution was incorporated, and this renders it necessary to inquire into the nature and character of the occupancy. If they are such that, taking all of the circumstances, and all the legitimate considerations into account, it can be fairly said that the purpose of the occupancy is that for which the institution was incorporated, then the property is exempt; otherwise, not.

The occupancy contemplated by the statute means, we think something more than that which results from ownership and possession on the part of the institution, or the use of the property for investment purposes. It must have, or be supposed to have, direct reference to the purposes for which the institution was incorporated, and must tend, or be supposed to tend, directly to promote them. In a sense, any occupancy on the part of the institution or its officers may be said to have reference to those purposes, and to promote them. But the language of the statute implies, we think, a direct, or what is supposed to be a direct, connection between the occupation and the purposes for which the institution was incorporated, and not an indirect one. It is not enough, for instance, that an income is derived from the occupancy, which is applied to carrying on the institution. Trustees of Chapel of Good Shepherd v. City of Boston, 120 Mass. 212. At the same time the occupancy may be of the sort contemplated by the statute, notwithstanding that, as incident to it, rent is received, or the pecuniary value to the officer occupying it is taken into account in some other manner. Massachusetts General Hospital v. Inhabitants of Somerville, 101 Mass. 319. The distinction lies, it seems to us, between an occupancy which is for the private benefit and convenience of the officer, and which is so regarded by the parties, as in the ordinary case of landlord and tenant, and an occupancy where, although necessarily to some extent the relation of landlord and tenant enters into it, the dominant or principal matter of consideration is the effect of the occupancy in promoting the objects of the institution, and upon the efficiency and influence of the officer as such, and upon those whom the institution is designed to benefit. In the former case the property would not be exempt, and in the latter it would; and the fact that the institution incidentally derived some pecuniary advantage from the occupancy would not deprive the property of the exemption to which it otherwise would be entitled. In considering whether property is occupied so as to be exempt, regard may be had, among other things, to the situation of the institution. If, for instance, it is so situated that desirable residences are not or may not be easily obtainable, and those in charge of it are of opinion that such officers as the best interests of the institution and of those resorting to it require can be more readily obtained if the institution provides places for them to live in, and it does so, this may be taken into account in determining whether the occupancy is for the purposes for which the institution was incorporated. Or, again, if, with the best interests of the institution as an educational institution in view, and for the purpose of enhancing its...