57 A.2d 692 | Pa. Super. Ct. | 1947
Argued November 13, 1947. The fourth class School District of the Borough of Freeport availed itself of the Act of May 17, 1921, P.L. 837 (24 P. S. § 721), and purchased a residence for its supervising principal, who paid a rental of $35.00 per month. On a case stated in equity the court below held that this real estate was subject to taxes levied by the borough and the county (sixth class) of Armstrong.
The Act of 1921 merely conferred the power on fourth class school districts to expend their funds to purchase or build a residence for principals, teachers or janitors, and to charge a rental therefor. It alone conferred no immunity from taxation, and the title gives no intimation that such real estate shall be exempt therefrom. The last sentence reading: "All property acquired under this act shall be held by said school district the same as other school property," must therefore relate to matters of title and conveyancing.
The Fourth to Eighth Class County Assessment Law (
This real estate, not being a school house or grounds, does not fall within the definition of subsection (a) (4). It is significant that although the Act of 1921 had been in force for more than twenty years, the Fourth to Eighth Class County Assessment Law, enacted in 1943, did not provide an exemption for "school property" generally, nor for all property owned by the district.
The real estate here is not exempt under subsection (a) (7), for it is not held for public purposes. The public cannot use it directly or indirectly. It is to be occupied only by designated employes of the district and other persons are excluded from occupancy by the Act of 1921. That it may be an indirect benefit or convenience to the district is not sufficient to stamp it as being held for a public purpose, for even where the district receives from real estate a large income paid directly into its treasury, the purpose was held to be not public, but commercial:Pittsburgh School District v. Allegheny County,
The test of exemption is neither the lawfulness of the acquisition nor the integrity of the use after the acquisition:Pittsburgh School District v. Allegheny County, supra, where all the revenue derived from the commercial use of the real estate went into the general school treasury, and was undoubtedly in furtherance of the public interest, but the land was held not to be exempt. *241
Under subsection (b), except as to public libraries, it is provided: ". . . all property [including real estate] . . . other than that which is in actual use . . . for the purposes specified in this section [§ 202], and all such property from which anyincome or revenue is derived, other than from recipients of the bounty of the institution or charity, shall be subject totaxation, except where exempted by law for state purposes, and nothing herein contained shall exempt same therefrom." (Emphasis supplied.) The real estate in the instant case is revenue-producing. The actual use is not for any of the purposes specified in § 202; and the real estate is income-producing and is taxable thereunder.
The Assessment Law clearly shows in subsection (b) that no income-producing property is exempt from taxation merely because it is owned by a municipality. Cf. County of Franklin v. W.A.McClean,
The appellant also claims exemption under § 631 of the School Code of 1911, 24 P. S. § 741, reading: "All school [real] property owned by any school district, . . . that is occupied and used . . . for public school, recreation, or any other purposes providedfor by this act, shall be, . . . exempt from . . . county, . . . borough, . . . tax . . ." (Emphasis supplied). This residence property is not occupied and owned for a public school, nor for recreation. As to the clause reading, "or any other purposes provided for by this act", it may be pointed out that the title to the School Code is "An Act To establish a public school system in the Commonwealth of Pennsylvania, together with the provisions by which it shall be administered . . .; providing revenue to establish and maintain the same, and the method of collecting such revenue; and repealing all laws, . . . that are or may be inconsistent therewith." The residence is not a part of the "public school system" in the Commonwealth, for under the Act of 1921 none but a fourth *243 class school district may acquire a residence for a professional employe. If such residence constituted a part of a "public school system" it would necessarily be related to districts of all classes, because any reason for giving such right to a Fourth Class School District applies with much greater force to the districts of the first, second and third classes. The question of "classification" is not raised in this appeal but seeCommonwealth ex rel. Brown v. Gumbert et al.,
The section of the School Code authorizing school districts to accept devises, etc., § 126 (24 P. S. § 37) reads: "It shall be lawful for any school district . . . to receive and hold any devise . . . [or] donation of any property, real, personal, or mixed, which shall be made to said school district or for any ofthe purposes of this act . . ." (Emphasis supplied.) Thus substantially the same words, "purposes of the act", are used in § 126 as in § 631. If appellant's contention is correct, then in the Pittsburgh School District parking lot case if the real estate had been devised to the school district, it was exempt from taxation. We think "purposes of the act" must be construed as synonymous with public school system.
Although lawfully acquired, this real estate is not used nor to be used for public purposes, nor for the establishing of a public school system in the Commonwealth, nor for administering the same. Its use, on the contrary, is a private one, being at most a convenience to the school district, and at the same time that use is a commercial one, producing revenue. We do not deem it important that actual rent was charged, rather than a scheme of lowering the salary of the principal and giving the property rent-free. Unless specifically exempted by the Legislature, it is subject to taxation.
Decree affirmed at cost of appellant. *244