Summary
In Franciscan Fathers, we recognized that certain property may be exempt, while other property, not used for religious activity, would not be exempt from taxation.
Summary of this case from Appeal of Emissaries of Divine LightOpinion
No. 4116.
Decided July 1, 1952.
While the real estate of religious societies acquired after the enactment of Laws 1931, c. 148, became taxable except for subsequent improvements therein and thereon, such after-acquired real estate of religious societies "occupied by their pastors or clergy in active service" was again rendered tax exempt by virtue of Laws 1937, c. 175. Members of the Franciscan Fathers order, a religious society and charitable organization composed of Catholic clergymen engaged in missions to aid the poor, religious guidance and teaching, and as temporary substitutes in Catholic parishes, whose services are rendered to the public without charge qualify as "clergy in active service" within the meaning of R.L., c. 73, s. 28, and real estate owned and occupied by such order is tax exempt under s. 24. However, an artificial pond from which fish are caught and consumed by members of such order is not sufficiently "occupied" within the meaning of the statute to qualify for tax exemption. The use made of the land for hunting, hiking and fishing was not so related to religious activities as to bring the land within the statutory exemption. Other woodland partially cleared with the intention of converting it into a hayfield did not qualify as "occupied" real estate under the statute. The fact that other real estate occupied by such order was also used by retreatants visiting the order for instruction and prayer did not render it taxable. Nor did the fact that contributions were received by the order from such retreatants defeat the order's eligibility to tax exemption. A caretaker's house upon such premises was tax exempt as property occupied by the order's agent.
PETITION, for abatement of taxes for the year 1950 assessed by the defendant town of Pittsfield against the plaintiff on certain real estate, formerly known as Maplehurst Fruit Farm, situate in Pittsfield. Pursuant to an agreed statement of facts submitted by the parties, the Court (Goodnow, C.J.) transferred without ruling, in advance of further proceedings, the following questions of law: "1. Is the real estate of the plaintiff as herein described owned by a religious society incorporated within this state and occupied by its pastors or clergy in active service within the meaning of Section 28, Chapter 73, Revised Laws as amended? If the answer to the first question is in the affirmative, does all or any part of the real estate of the plaintiff qualify for the institutional tax exemption contained in Section 24, Chapter 73, Revised Laws as amended?"
The plaintiff is a voluntary corporation (R.L., c. 272) and is a religious society and charitable organization whose members belong to the Franciscan. Order and are Catholic clergymen. The Franciscan Order is a worldwide order composed of certain members of the Catholic clergy. The chief characteristic of the order is that its members are obliged to take vows of poverty and may own no private property. The order engages extensively in the teaching of religion and in missions to aid the poor. During 1950 there were nine members of the order occupying the real estate in question, headed by a superior. In addition to the activities which the members of the order carried on on the real estate in question during 1950, the individual members of the order engaged in missions to aid the poor and also acted as temporary substitutes in the various Catholic parishes in this region whose regularly assigned priests might be ill or absent on vacation. Voluntary offerings were made by the parishes thus served to the plaintiff corporation. The premises of the plaintiff are at all times open to members of the general public who may desire religious guidance and teaching or a place for meditation and prayer.
During the tax year 1950 approximately two hundred persons visited the order either individually or as members of a group on such retreats, and received religious instruction during their stay on the property. The average retreat was about three days per person. During retreats by organized groups the major portion of the schedule is devoted to religious instruction and prayer, and only an occasional hour is allotted to recreation. No charge is made to retreatants by the order, but individuals may and generally do leave an offering in an amount which they can afford to give and in 1950 total offerings amounted to approximately $2,000. Sums received as offerings are devoted exclusively to the religious and charitable purposes of the organization, including food and maintenance of the retreatants, and no income accrues to any member of the order.
There are four buildings on the premises, a house, a barn, a caretaker's house and a shed. The first floor in the house contains a chapel valued at a thousand dollars which has been exempted as a "house of public worship" under the provisions of R.L., c. 73, s. 7, as to which there is no dispute. In addition the house contains a conference room, kitchen, dining room, workshop and sleeping quarters for each member of the order. The barn has been remodeled to be available for use by individuals or groups who may visit the order from time to, time as guests on religious retreats. It also contains assembly and lecture halls for lectures and religious group instructions during retreats. During a portion of the year 1950, one of the lecture halls was used by the Catholic parish of Pittsfield for conducting "beano" games, the proceeds of which were used exclusively for the religious purposes of the Catholic parish of Pittsfield. The caretaker's house was occupied by a caretaker employed by the members and was also used for storage. The shed was used to house a small amount of livestock.
The food produced on the premises was consumed by the members of the order and guests, bartered for other groceries, used as part payment for wages for employees on the premises or given to the poor.
The land consists of one hundred thirteen acres, of which twenty-six acres is an artificial pond. A tract of twenty acres upon which the buildings are situated is also used as an orchard, hayfield and pasture. Another twenty acre tract is occupied by a vegetable garden and an apple orchard in rather poor condition. Another twenty acre tract contains an orchard in very poor condition and hay land; some cordwood was cut from this tract. Another thirty acre tract, formerly an orchard, had so far deteriorated in 1950 that it produced few or no apples. Some work, including the cutting of firewood, was done on this tract with the intention of eventually transforming it into a hayfield.
Additional agreed facts are referred to in the opinion.
Upton, Sanders Upton (Mr. Richard F. Upton orally), for the plaintiff.
H. Thornton Lorimer and Francis E. Perkins (Mr. Lorimer orally), for the defendant.
The pertinent part of Revised Laws, chapter 73, section 28, as amended by Laws 1945, chapter 141, section 2, reads as follows: "The exemptions referred to in sections 24, 26 and 27 of this chapter, as regards real estate hereafter acquired by such institutions, shall apply only to subsequent improvements therein and thereon, and the real estate so acquired shall be assessed and taxed as other similar land and real estate in the vicinity is assessed and taxed. This section shall not apply to real estate owned by religious societies incorporated or organized within this state and occupied by their pastors or clergy in active service . . . ." (Emphasis supplied). A clerical error in the 1945 amendment in referring to section 24 as section 23 was corrected by Laws 1951, chapter 8. However, the defendant raises no question in this case concerning the application of the defective 1945 amendment on the taxation of plaintiff's property in 1950.
Prior to 1931 qualified religious societies organized within this state were entitled to an exemption of one hundred and fifty thousand dollars on property owned and occupied by them. P.L., c. 60, ss. 22, 23, which is now R.L., c. 73, ss. 24, 25. An amendment effective May 6, 1931 (Laws 1931, c. 148) provided that this institutional exemption should not apply to real estate thereafter acquired and should be limited to subsequent improvements made by the taxpayer after its acquisition. The effect of this amendment was to make the acquisition value of religious property taxable and to delimit the expanding extent of tax exempt property. This appears as the first sentence in R.L., c. 73, s. 28, supra. Thereafter another amendment (Laws 1937, c. 175) provided that section 28 should not apply to the real estate owned by qualified religious societies and occupied by their pastors or clergy in active service. That amendment, quoted in the preceding paragraph now appears as the second sentence in section 28. The effect of the 1937 amendment was to restore what the 1931 amendment had taken away with the result that the institutional tax exemption was again available to such religious societies if their property was occupied by "clergy in active service." Changes in the law made by Laws 1945, chapter 141, and the technical correction of Laws 1951, chapter 8, do not affect the present case.
Whether the plaintiff's property is occupied by its clergy "in active service" is not free from doubt. In construing the phrase we do not adopt a liberal attitude because it is charity nor a hostile attitude because it seeks exemption from taxation. Y.W.C.A. v. Portsmouth, 89 N.H. 40, 42, 43. The legislative intention is sought without regard to rules requiring strict or liberal construction for certain classes of legislation. Academy v. Exeter, 90 N.H. 472, 504. The present legislative approach to the problem of exempting charities from taxation is handicapped by its previous inability to obtain accurate data on the nature and extent of such exemptions within the state. Laws 1947, c. 328; Laws 1949, c. 339; Laws 1951, c. 277.
It appears that the retreats conducted by the plaintiff are primarily devoted to religious instruction and prayer and that recreation and diversion are definitely subordinate to their primary purpose. Without adopting the tax policy and interpretation of other jurisdictions, it may be noted that retreats have been considered of a religious nature and entitled to tax exemption in other states. 1950 Annual Survey of American Law 195; Serra Retreat v. Los Angeles County, 35 Cal. (2d) 755. Cf. People ex rel Marsters v. Missionaries, 409 Ill. 370; Woodstock v. The Retreat, 125 Conn. 52; Laymen's Week-End Retreat League of Philadelphia v. Butler, 83 Pa. Super. 1.
The members of the plaintiff's order are admittedly clergymen within the meaning of the statute. In re Swenson, 183 Minn. 602. They are in no sense inactive or retired as was the case of the clergymen in Methodist Conference v. Sandown, 87 N.H. 47. It is urged that they are not in active service because that implies a specific church or body of churches with a specific congregation. Since the retreatants who receive religious instructions have no official specific relationship with the order as a local church or parish, it is argued that Catholic clergy of the plaintiff are not in active service. While this is a possible construction of the statute, it reads more limitations into the legislation than its words warrant. The members of the plaintiff's order were not merely serving their own spiritual needs but in the conduct of the retreats were in active service for the retreatants. If the statute is to be restricted in the manner urged by the defendant, some phrase other than "active service" is required to accomplish that result. We conclude that members of the plaintiff's order occupy that portion of the premises that is tax exempt as clergymen in active service within the meaning of the last sentence of R.L., c. 73, s. 28.
All of the plaintiff's farm is not occupied by its members in active service within the meaning of the statute. The artificial pond of twenty-six acres is not so occupied within any practical, common sense meaning of the word even though it is used by its members to fish and such fish as are caught are consumed on the premises. A use which is slight and insignificant is not "an occupancy sufficient to warrant a conclusion of use for the Society's purposes, such as the statute requires." Society of Cincinnati v. Exeter, 92 N.H. 348, 357. The use of land for hunting, hiking and fishing is not the type of activity related to religious activities which the Legislature sought to exempt from taxation. Possession, ownership and use of land, which is part of a larger tract, must be more than negligible to give reasonable effect to the demand of the statute that it be occupied. Academy v. Exeter, 90 N.H. 472, 506. Sisters of Mercy v. Hooksett, 93 N.H. 301, 312; Academy v. Exeter, 92 N.H. 473, 476. Likewise the thirty acre tract north of the artificial pond is not occupied by the plaintiff's order within the statute. The clearing that has been done with the intention eventually to transform it into a hayfield does not constitute occupancy. Society of Cincinnati v. Exeter, supra, 351. Previous cases have noted that the distinction between taxable and nontaxable land "may be a narrow one, but the authority for it is sufficiently well established." Academy v. Exeter, 90 N.H. 472, 503.
The balance of plaintiff's land and buildings are sufficiently occupied by its clergy in active service to be tax exempt. The contributions made by the retreatants did not defeat the plaintiff's eligibility to a tax exemption (Y. W. C. A. v. Portsmouth, 89 N.H. 40; Portsmouth Historical Society v. Portsmouth, 89 N.H. 283) and the general occupancy of the members of the plaintiff's order was not destroyed by the presence of the retreatants. Hedding c. Association v. Epping, 88 N.H. 321. The Hedding case (p. 324) clearly establishes the exemption of the caretaker's house: "The caretaker was an agent and not a tenant and his occupancy was that of the plaintiff." With the exception of the two tracts mentioned in the previous paragraph, the land and buildings were sufficiently occupied by the plaintiff to be exempt from taxation.
Case discharged.
All concurred.