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Timestamp: 2019-04-21 04:50:34+00:00

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ASSESSORS OF BOSTON vs. GARLAND SCHOOL OF HOME MAKING.
Whether conclusions of fact and a general finding by the board of tax appeals upon an agreed statement of facts were warranted is a question of law reviewable by this court on appeal under G. L. (Ter. Ed.) c. 58A, s. 13, as amended by St. 1933, c. 321, s. 7.
Statement by FIELD, J., as to what constitute "literary, benevolent, charitable and scientific institutions" within G. L. (Ter. Ed.) c. 59, s. 5, Third.
Facts respecting an institution which was incorporated for the purpose of "training young women in the principles of home making" and gave practical courses to that end, and which from substantial fees charged to its students supported itself without endowment or gifts and made profits which were devoted to capital improvements and to the reduction of the principal of mortgages on real estate owned and used by it for its corporate purposes, and none of whose income or profits properly could be or ever was divided among its members, warranted conclusions that it was not incorporated nor conducted for private profit and was an educational institution and a "literary, benevolent, charitable and scientific" institution within G. L. (Ter. Ed.) c. 59, s. 5, Third, so that its real estate was exempt from local taxation.
which . . . [it was] incorporated" within G. L. (Ter. Ed.) c. 59, s. 5, Third; nor did such facts require a finding that the income or profits were "used or appropriated for other than literary, educational, benevolent, charitable, scientific or religious purposes" within the meaning of that statute.
APPEAL, filed in the Supreme Judicial Court for the county of Suffolk on September 24, 1935, from a decision by the Board of Tax Appeals.
L. H. Weinstein, Assistant Corporation Counsel, for the board of assessors.
L. S. Apsey, for the taxpayer.
FIELD, J. This is an appeal by the board of assessors of the city of Boston (herein called the assessors) from a decision of the board of tax appeals (herein called the board). G. L. (Ter. Ed.) c. 58A, s. 13, as amended by St. 1933, c. 321, s. 7. The Garland School of Home Making (herein called the taxpayer) was assessed as the owner of certain parcels of land and the buildings thereon in said city as of April 1, 1932, and April 1, 1933. It seasonably filed applications for abatement, which were not acted upon by the assessors within four months, and appealed to the board. The board decided that the taxpayer was entitled to an abatement for the year 1932 in the amount of $5,143.95 and an abatement for the year 1933 in the amount of $2,952 - being the whole amounts of the taxes on those parcels for these years because the real estate was exempt from taxation. From this decision the assessors appealed to this court.
income or profits of the business of the institution or corporation is divided among the stockholders or members, or is used or appropriated for other than literary, educational, benevolent, charitable, scientific or religious purposes, its property shall not be exempt." If the decision that the taxpayer was exempt was without error of law no further question requires consideration. This issue of law was raised in the proceedings before the board by various requests for rulings which were dealt with by the board and is brought before us by specific assignments of error. Discussion of those requests and assignments separately is not required.
The case was heard by the board on an "agreed statement of facts" and a "supplementary additional agreed statement of facts" - obviously as evidence and expressly providing that the board might " make inferences " therefrom - which are incorporated in the record on this appeal.
House; Home Cookery and Table Service; Quantity Cookery; Elementary Clothing; Advanced Clothing; Crafts; and supplementary lectures on related topics. A building at 409 Commonwealth Avenue (not involved in these petitions) houses the class rooms, laboratories and offices and is used exclusively for class room work, teaching and administration. The other three buildings, the subject matter of these appeals, are used as dormitories, dining and practice houses and are designated 'Home Houses.' They were purchased by the appellant in 1931 and 1932, subject to mortgages placed thereon. All resident students are required to live and take their meals at the houses, and of a total enrollment of 65 in the school year 1931-1932 and 68 in 1932-1933, 26 students lived at the houses each year. Each house is in charge of a teacher who resides there and who instructs the students living at the houses in the work of managing homes. Under her direction three of the students successively, for a period of two weeks, take over the entire operation of each house. One of the three acts as housekeeper, one as home maker and one as comptroller of the budget. Each house is on a strict budget and the students are required to keep track of all bills, to know exactly what the operation of each house costs, plan meals, order food, do some of the cooking, supervise the help and do a large part of the housework. In addition to the rooms set apart for the teacher and the students, one room is reserved for guests and one room for sick students. In the judgment of the managing officers the houses are occupied to the fullest extent possible in keeping with orderly and efficient fulfillment of the purposes of the corporation and were acquired and have been maintained because their use and operation are reasonably necessary for the accomplishment of the corporate purposes."
tuition is $1,850 a year for one year students and $1,800 a year for two year students. No salaries are paid to members of the corporation other than teachers and employees. During the school year 1931-1932 there were 19 teachers receiving salaries ranging from $300 to $3,425; during the following year there were 20 teachers receiving salaries ranging from $300 to $3,500 a year. The total payroll of the teaching staff for 1931-1932 was $23,095, and in 1932-1933 $25,430."
As conclusions of fact the board found that "none of the income or profits is or ever has been divided among the members of the corporation or used or appropriated for other than literary, educational, benevolent, charitable, scientific or religious purposes . . . that the appellant is a literary and educational institution and that its real estate is occupied by it for the purposes for which it was incorporated."
are set out in a footnote. [Note p383] The other facts agreed need not be recited. So far as here material they are the same as the facts above, recited as found by the board - exclusive of those described as conclusions of fact - though stated in somewhat different form. Except as herein appears, the findings described above as conclusions of fact were not matter of express agreement and were reached by way of inference.
able in accordance with these principles. Such conclusions and general finding must stand so far as warranted by the facts agreed and not necessarily inconsistent. Duralith Corp. v. Leonard, 274 Mass. 397, 401.
The burden of establishing that the real estate in question was exempt from taxation rested upon the taxpayer. Boston Symphony Orchestra, Inc. v. Assessors of Boston, 294 Mass. 248, 257. The assessors contend that the burden has not been sustained. The taxpayer was "incorporated in the commonwealth." The assessors argue that the taxpayer has not proved (a) that it is within the class of corporations described in G. L. (Ter. Ed.) c. 59, s. 5, Third, as "literary, benevolent, charitable and scientific institutions" (obviously it is not a temperance society), (b) that the real estate in question was "owned and occupied by . . . [it or its] officers for the purposes for which . . . [it is] incorporated," or (c) that none of the "income or profits of the business" of the taxpayer was "used or appropriated for other than literary, educational, benevolent, charitable, scientific or religious purposes." All these facts must be established to entitle the taxpayer to the exemption claimed. The conclusion that they have been established was warranted.
First. A finding was warranted that the taxpayer was within the class of corporations described in the statute as "literary, benevolent, charitable and scientific institutions."
The answer to the question "whether the institution is in its character literary, benevolent, charitable or scientific within the meaning of those words in the statutes" "will depend upon the language of its charter or articles of association, constitution and by-laws, and upon the objects which it serves and the method of its administration" (Little v. Newburyport, 210 Mass. 414, 415), that is, "upon its purposes declared and the work done." Parkhurst v. Treasurer & Receiver General, 228 Mass. 196, 199-201. See also Mount Hermon Boys' School v. Gill, 145 Mass. 139, 148.
they are to be interpreted, like the word "benevolent," in the light of their use in connection with the word "charitable" and do not extend the exemption to 'literary or scientific institutions which are not in the nature of public charities. This interpretation is in accord with the underlying reason of the exemption, that it is given in return for the performance of functions which benefit the public. See Opinion of the Justices, 195 Mass. 607, 608-609; Davis v. Treasurer & Receiver General, 208 Mass. 343, 345; Massachusetts General Hospital v. Belmont, 233 Mass. 190, 203; Boston Symphony Orchestra, Inc. v. Assessors of Boston, 294 Mass. 248, 255.
The statute does not in terms exempt educational institutions, though "educational" purposes are named specifically among the purposes for which income or profits of an institution within the exempted class may be used or appropriated without loss of the exemption. It is, however, settled that educational institutions of a public charitable nature are within the class of "literary, benevolent, charitable and scientific institutions" which are exempt from taxation even if the education given is not strictly "literary" or "scientific" within the ordinary meaning of these words. Mount Hermon Boys' School y. Gill, 145 Mass. 139, 146. Parkhurst v. Treasurer & Receiver General, 228 Mass. 196, 198-199. South Lancaster Academy v. Lancaster, 242 Mass. 553, 558.
scope of its stated corporate purpose, dominantly educational (see Little v. Newburyport, 210 Mass. 414, 415), and not merely incidental to some other dominant purpose. Compare New England Theosophical Corp. v. Assessors of Boston, 172 Mass. 60 (as explained in Molly Varnum Chapter, D. A. R. v. Lowell, 204 Mass. 487, 49 1); Phi Beta Epsilon Corp. v. Boston, 182 Mass. 457; Boston Lodge Order of Elks v. Boston, 217 Mass. 176.
An educational purpose without special reference to the poor is a charitable purpose (Dexter v. Harvard College, 176 Mass. 192 194; see also American Academy of Arts & Sciences v. Harvard College, 12 Gray, 582, 589; Bowditch v. Attorney General, 241 Mass. 168, 176) if, like charitable purposes generally, it is not to be carried out for private profit (Boston Symphony Orchestra, Inc. v. Assessors of Boston, 294 Mass. 248, 253-255) and is for the benefit of "the public at large or some part thereof, or an indefinite class of persons." Old South Society in Boston v. Crocker, 119 Mass. 1, 23. Sherman v. Shaw, 243 Mass. 257, 259.
other pecuniary benefit of its members. See Parkhurst v. Treasurer & Receiver General, 228 Mass. 196, 199. Compare Newcomb v. Boston Protective Department, 151 Mass. 215, 217-218. Furthermore, the facts that the taxpayer's activities were carried on with profit to itself, and that such profit was used to increase its capital account through "the purchase of new furniture and equipment needed for the purposes of the School" and payments on account of principal of mortgages on the real estate used by the school did not require a finding that such activities were carried on for private profit nor, on that ground, preclude a finding that the taxpayer was a charitable institution. New England Sanitarium v. Stoneham, 205 Mass. 335, 342, 343. See Williston Seminary v. County Commissioners, 147 Mass. 427. It could have been found that this profit was used for educational purposes within the scope of the taxpayer's corporate purpose, and that, unless the taxpayer was noncharitable on some other ground, the members of the corporation acquired no private interests in the property for which this profit was expended.
as in others, the case differs from Boston Symphony Orchestra, Inc. v. Assessors of Boston, 294 Mass. 248; see pages 255-256.
able to pay full tuition has some tendency to show that it is charitable in nature, but, even if it does not receive students under these conditions, such an institution may be a public charity if the class of persons benefited by it is indefinite. Though the taxpayer's charge for tuition upon each student was substantial in amount it cannot be ruled as matter of law that for this reason the class of persons benefited was so restricted as not to be indefinite within the meaning of the law of public charities. There well might be a large number of persons, many of whom would not ordinarily be regarded as rich, who would wish to avail themselves of the benefits of the taxpayer's institution upon the terms prescribed.
through its making educational advantages available to them, as a part of the public, for reasonable fees. The express provision of the statute denying exemption to an institution otherwise within its terms if "any of the income or profits of the business of the institution . . . is used or appropriated for other than literary, educational, benevolent, charitable, scientific or religious purposes" (G. L. [Ter. Ed.] c. 59, s. 5, Third [a] implies, at least, that the fact that it derives "income or profits" from carrying out directly its charitable purposes, which is used or appropriated for the described purposes, does not exclude the institution from the exempted class. The case of Needham v. Bowers, 21 Q. B. D. 436, relied on by the assessors, is distinguishable.
bounds of reasonableness and good faith the taxpayer's officers and members could determine what uses of real estate would promote directly its corporate purposes. Massachusetts General Hospital v. Somerville, 101 Mass. 319, 322. Emerson v. Milton Academy, 185 Mass. 414, 415-418. It cannot be ruled as matter of law that this discretion was wrongly exercised.
There is no merit in the assessors' contention that the premises were not occupied for "literary" purposes. As already pointed out, it could have been found that the taxpayer's purposes as carried out were educational, even if only in part strictly "literary," and that the premises were actually occupied for those purposes.
which the institution was incorporated is not within the statute, while an occupation whose dominant purpose is directly to accomplish some one of the objects for which the corporation was established is within it. If incidentally there are results of the use which would not entitle the property to exemption, that is immaterial, so long as the dominant purpose of the occupation is within the statute." The statements in Mount Hermon Boys' School v. Gill, 145 Mass. 139, 148, and New England Sanitarium v. Stoneham, 205 Mass. 335, 343, relied on by the assessors, to the effect that occupation of real estate for the purpose of accumulating profits to maintain the institution in the future is not occupation directly for its corporate purposes, are not decisive of a case where, as here, it could be found that the real estate was occupied by the institution directly to accomplish its corporate purposes, though incidentally profit resulted and was used somewhat less directly for these purposes.
Third. A finding was warranted that none of the "income or profits of the business" of the taxpayer was "used or appropriated for other than literary, educational, benevolent, charitable, scientific or religious purposes." If the taxpayer was an educational institution of a public charitable nature, clearly it could have been found that "the purchase of new furniture and equipment needed for the purposes of the school" and payments on account of principal of mortgages on the real estate used by the school out of profits were uses or appropriations of such profits for educational purposes. The recognition by the express terms of the statute that there may be "profits of the business of the institution" implies that the uses of profits for purposes described in the statute, permissible without loss of exemption, are not limited to expenditures for current expenses.
a different conclusion of fact could have been reached without error of law need not be decided. See South Lancaster Academy v. Lancaster, 242 Mass. 553, 558.
It follows that an order is to be entered granting abatement in the sum of $5,143.95 for the year 1932, and an order granting abatement in the amount of $2,952 for the year 1933.
[Note p383] The taxpayer acquired title to two of the parcels of real estate by deeds recorded July 1, 1931. One of these parcels was purchased for $22,500, of which $1,000 was paid in cash and the balance by a first mortgage of $15,000 for three yew at five and a half per cent to a savings bank, and a second mortgage "to the vendor for $6500. at 6%, principal payable $500. on July 1, 1933, and $1000. on July 1st of each succeeding year, balance payable on July 1, 1936." Another of these parcels was purchased for $23,000, of which $1,000 was paid in cash and the balance by a first mortgage for $22,000 to the vendor "with interest at 5 1/2%, principal to be amortized by quarterly payments of $500. beginning July 1, 1932, and the balance payable October 1, 1935." The third parcel was acquired by deed recorded January 23, 1932. It was purchased for $22,000 by giving a first mortgage in this amount to the vendor "at 6%, interest, payments on account of principal to be made $250. in one (1) year and $250, every three (3) months thereafter, the balance payable in three (3) years."

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