Appeal Tax Court v. St. Peter's Academy

Miller, J., delivered the opinion of the Court. In this case the petition claims that certain property, consisting of two lots, with the buildings and improvements thereon erected, and a small amount of furniture therein used, constituting “St. Peter’s Academy,” and situated on the corner of Booth street and Calendar alley, in the city of Baltimore, is exempt from taxation, under the clause of the second section of the Act of 1876, ch. 260, which expressly exempts from State, county or municipal taxation “ hospitals or asylums, charitable or benevolent institutions, so far as used for the benefit of the indigent and afflicted, and the ground which the buildings used as such hospitals, asylums, charitable or benevolent institutions shall actually cover, and the equipments owned by such corporations or institutions.” By affidavits and other proof taken by agreement, and submitted to this Court as constituting a part of the record, it appears that the title to this property is held by an association formed under the Act of 1852, ch. 231, called “The Sisters of Mercy in the City of Baltimore.” The objects of this corporation, as declared in their articles of association, is “to establish and maintain an Academy and free school in said city for the education of female ³⁴⁰ children, to open and maintain a house of protection for homeless indigent females, to qualify them by training and education for the discharge of such domestic duties as will enable them to procure protection and support, to visit and nurse the sick, and for that purpose to establish and maintain an infirmary, or more than one, in the discretion of the corporation, if deemed convenient and necessary for such purpose.” It is also further provided that “ any female child of good morals shall be entitled to the advantages of the school, provided that all pupils shall in all respects be subject to the regulations of the school.” From the affidavit of the Rev. Edward McColgan, it is shown that this St. Peter’s Academy is a building in which there is a private chapel, and the rest of the building is occupied as a residence for the Sisters of Mercy, who conduct in the same building a school free in whole to some of the pupils, and to others the education is given when they are willing and able to contribute a small sum towards the expenses of the school, which entire amount annually falls far below the expenses of the academy, and the deficiency is made up by contributions of the charitably disposed; that there is no income or revenue which can be capitalized for assessment and taxation, but the academy is a source of yearly expense to the said Sisters who hold the title to the property; that it is in no sense constituted for private gain, but is essentially a charitable institution; that the school-house upon the lot, also assessed, is in reality a building in which is conducted a female parochial school, connected with the congregation of St. Peter’s Church, in the nature of a free school for the indigent children belonging to said church; that all children of good morals are admitted free, but only those who are willing and able to contribute give an insignificant sum in aid of the expenses, which fall largely upon the members of the church; that there is no income or revenue whatsoever derived from said school which could be capi ³⁴¹ talized for assessment and taxation; “ that no tuition fees are charged as a requirement for attendance on the school, but the same is conducted on money derived from charitable donations.” From the character of this institution, as thus shown by the proof, we have no hesitation in declaring that these lots and the buildings covering the same, with the furniture therein, occupied and used for the purposes stated, are exempt from taxation under the clause in question. In so deciding we in nowise contravene, but re-affirm what we have said in the case of The County Commissioners of Frederick County vs. The Sisters of Charity of Saint Joseph, 48 Md., 34 . In that case the proof disclosed the fact that among other improvements for which exemption was claimed, there were one or more buildings used for academic purposes, in which, at the time of the assessment, there were seventy-two scholars receiving education, who paid, and were required to pay therefor, at the rate of $250 per annum, and it was held that so much of this property as was appropriated to this secular and educational purpose “for revenue” was liable to taxation, and that the fact that the surplus revenue thus derived was devoted to charitable uses did not entitle the property from which it accrued, to exemption.

Then, after a review of the authorities, it is said: “The conclusion to he drawn from these premises is, that all the property of the appellees, real and personal, used and occupied in the maintenance and conduct of an academy or school for the education of young females, so far as it is a source of revenue to the appellees, is a proper object for assessment, notwithstanding the same buildings or property may be partially used for hospital purposes, or religious worship. If the property is indivisible, so that the value of the several parts cannot be ascertained, the amount of the net income from the academy or school may be capitalized as the basis of assessment.” If in the present case there was proof that any income or revenue ³⁴² was derived from the education of children at this academy or school hy means of charges or tuition fees, or if it were not, on the contrary, clearly proved that no revenue was in fact so derived, that there was no charge for tuition, and that voluntary contributions only were made by those willing and able to pay, then the principal of capitalization would have to be applied. But, as we have seen, the proof on this point is too clear and explicit to admit of doubt; and the order directing this property to he stricken from the list of property valued to the owner must be affirmed. (Decided 31st January, 1879.) Order affirmed.

In the case of “St. Alphonsus Hall” the right to exemption is equally plain. By the affidavit of the Rev. Andrew Ziegler, taken and submitted under the same agreement as in the preceding case, it appears that the title to the property known as St. Alphonsus Hall or School is held by the Society of “ The Redemptorists,” a corporation created by the Act of 1842, ch. 26, and perpetuated by the Act of 1870, ch. 173, and organized for the purpose of affording “gratuitous education” to indigent children; that the schools conducted in this Hall are parochial schools connected with St. Alphonsus Church, and carried on for the education of the indigent children of the congregation, the great body of whom contribute nothing whatever to their support, but a few make small voluntary donations, which are expended in the purchase of books; that the schools are literally free schools for the education of those children who are indigent; that the schools yield no income or revenue whatsoever, but are a source of yearly expense to the congregation of St. Alphonsus Church, who supply them with private contributions; that no charge is made for the instruction and education of such children; and that the schools are supported as a ³⁴³ charity by private persons charitably disposed. It is plain therefore that the order appealed from in this case must be affirmed. Order affirmed.

(Decided 31st January, 1879.) The same thing is true in regard to “St. Lawrence’s School,” situated on Fort Avenue, Locust Point, and assessed to St. Lawrence’s Church. The affidavit of Rev. Peter McCoy, taken in the same way, shows that the building in which this school is conducted is built upon ground the title to which is in the Roman Catholic Archbishop of Baltimore, a corporation sole created by the Acts of 1832, ch. 308, and 1868, ch. 268, and that the school is conducted by charitable offerings for the children of indigent members of St. Lawrence’s Church; that it is a free school and yields no income or révenue, but is a source of yearly expense to the congregation of St. Lawrence’s Church; that indigent children are instructed in this school- and it is free to all of such class of good morals and willing to be subject to its regulations; that no charge is made for the instruction and education of these children, and it is supported as a charity by money derived from and contributed by private persons charitably disposed; that some of the children who are able make small voluntary donations, which are expended in the purchase of books, but no exaction is made upon them nor tuition fees charged, and the school is purely a charitable institution. The order in this case must also be affirmed. Order affirmed.

(Decided 31st. January, 1879.) More difficulty attends the disposition of the case of “St. Mary’s Seminary,” the grounds and buildings of which are located on Pennsylvania Avenue, near Franklin ³⁴⁴ Street. The property which' the order appealed from declares to he exempt from taxation, consists not only of the lots and buildings thereon erected, a library, and a certain amount of silver composing, as alleged, the silver vessels used in the administration of the sacrament, hut also of quite a large amount of city, State and railroad stocks, and of a carriage, a horse, and three cows. By the affidavit of the President of the institution, taken and submitted under the agreement mentioned in the preceding cases, it appears that .this property belongs to “The Associated Professors of St. Mary’s Seminary in Baltimore City,” a corporation created by the Acts of 1838, ch. 137, and 1860, ch. 184; that this Seminary is a college connected with the Roman Catholic Church, for the education of indigent students who have no means of subsistence except from the offerings of charity; that it was founded for the promotion of piety and learning, and its students are supported by the contributions of the members of the church in the respective dioceses from which such students severally come; that no charge or exaction is made or demanded for their education; that one or two of them from time to time are able and willing to meet their expenses, and that the services of the Faculty, President and Professors are given voluntarily and without reward of any sort.

The affidavit then further states that the stocks held by the institution were donations dedicated to the use of the indigent students, and the income thereof is applied to such use in accordance with the donors’ intentions; that all the resources of the institution are applied to the education of these students, and none of the property earns any income from rents, nor are there any tuition fees, receipts from hoard, charges for education or other revenue which can he capitalized for valuation and taxation; and that the institution is purely charitable and furnishes gratuitous education to students for the priesthood. ³⁴⁵ We have no difficulty in deciding that the facts thus proved bring the lots, buildings, library, and silver vessels within the terms of the exemption clause relied on. But in view of the construction placed upon that clause in the case of County Commissioners vs. The Sisters of Charity of St. Joseph, ( 48 Md., 34 ,) we cannot reach the same conclusion in regard to the stocks and other personal property referred to. In that case attention is called to the extremely guarded language used in describing the property to be exempted, and to the fact that the enumeration of the exemptions is followed by the imperative declararation that “all other property in this State of every kind, nature and description whatsoever, shall be liable to valuation, assessment and taxation,” as plainly indicating that no latitude of construction is to be indulged in ascertaining the objects of exemption. The revenue or income derived from the paying pupils in the academic department of that institution was devoted and applied to the charitable purpose of educating the indigent pupils in the same establishment, and yet it was emphatically decided that this fact did not entitle the property from which such revenue accrued to exemption.

It would seem then to follow as an inevitable conclusion, that the fact that the revenue and income derived in the present case from these investments in stocks was applied and devoted to the charitable purposes of this institution, does not entitle the stocks themselves from which it arose to exemption. The question here is not what constitutes a “charity ” or a “ charitable institution” in the broad sense of the terms, but what is the meaning of the terms as used in the particular clause of the particular statute now before us? The term “institution” is sometimes used as descriptive of the building, establishment or place where the business or operations of a society or association are carried on, and at other times it is used to designate the organized hody. Gerke vs. Purcell, 25 Ohio State Rep., 244.

It seems to us very ³⁴⁶ clear that in the first part of the clause in question, it is used in the former sense exclusively. The words are “hospitals or asylums, charitable or benevolent institutions, so far as used for the benefit of the indigent and afflicted, and the ground which the buildings used as such hospitals, asylums, charitable or benevolent institutions actually cover.” Thus far the description is of institutions used for a particular purpose, and of buildings used as such institutions. This language is appropriately descriptive of a building, establishment or place where the operations of an association or corporation are conducted, but wholly inappropriate as the designation of organized corporate bodies or associations. But it is added, “ and the equipments owned by such corporations or institutions.” The word “owned,” in connection with “corporations,” indicates that the term “institutions” is here used in the latter and broader sense.

But this gives exemption only to “ equipments,” a term which plainly means the visible, tangible furniture, fixtures and apparatus on the premises, which are usual and necessary for the operations there conducted. In this case it clearly embraces the library and silver vessels, as well as the necessary furniture for the