Lord v. Town of Litchfield

| Conn. | Aug 15, 1869

Carpenter, J.

The statute of 1859 provides that “ whenever any ecclesiastical society, or any public or charitable institution, shall have leased or otherwise conveyed any real estáte, from which said society or institution does not receive an annu'al income''or rent, or where such conveyance is intended to be a perpetual conveyance, such estate shall not be exempt from taxation.” The court below has found that neither the town of Litchfield, nor the ecclesiastical society; has ever received any annual income or rent from the property here in question. The case then is brought within the language of the act, and must be governed by it, unless the statute, so far as it was designed to affect this class of cases, is inoperative, for the reason that it impairs the obligation of a contract. In Brainard v. Colchester, 31 Conn., 407" court="Conn." date_filed="1863-03-15" href="https://app.midpage.ai/document/brainard-v-town-of-colchester-6578140?utm_source=webapp" opinion_id="6578140">31 Conn., 407, it was held by this court that the act was not unconstitutional. We are not disposed to question the correctness of that decision. The reasons given for it, however, would seem to indicate that that case was not within the purview of the act of 1702, inasmuch as the conveyance in that case defeated the end' sought to be accomplished by the statute. A careful examination of the present case has led us to the conclusion that it stands substantially upon the same ground. We are aware that this question, in its application to this identical land, was decided in Landon v. Litchfield, 11 Conn., 251" court="Conn." date_filed="1836-06-15" href="https://app.midpage.ai/document/landon-v-town-of-litchfield-6574947?utm_source=webapp" opinion_id="6574947">11 Conn., 251, in accordance with the plaintiff’s claim. But that decision was by a divided court, and was virtually overruled by the case of Brainard v. Colchester. It is not therefore binding upon us, but we are at liberty to decide this ease upon principle'.

The statute of 1702, so far as it relates to the present inquiry, is as follows: “.That all such lands, tenements, hereditaments and other estates, that either formerly have been, or hereafter shall be, given and granted, either by the General Assembly of this Colony, or by any town, village or particular person or persons, for "the maintenance of the ministry of the gospel in any part of this Colony, or schools of learning, or for the relief of poor people, or for any other public and charitable use, shall forever remain and be continued to the use or uses to which such lands, tenements, hereditaments or other estates have been or shall be given and granted, according to the true intent and meaning of the grantors, and to no other use whatsoever; and shall also be exempted out of the general lists of estates and free from the payment of rates.”

It is obvious from an inspection of the statute that its chief object was to secure the estates therein named for the uses and purposes intended by the grantors, and to prevent their misapplication to other purposes. Brainard v. Colchester, supra; New Haven v. Sheffield, 30 Conn., 160" court="Conn." date_filed="1861-09-15" href="https://app.midpage.ai/document/town-of-new-haven-v-sheffield-6577937?utm_source=webapp" opinion_id="6577937">30 Conn., 160. The exemption from taxation was a secondary matter, and clearly contingent upon the former provision. It has always been the settled policy of the state to exempt from taxation the property of all religious societies. Hence it was the obvious intention of the legislature to exempt it so long as it continued to the uses and purposes for which it was designed; and it is a fair inference that, whenever such property should be diverted from such use, the legislature intended that it should not be so exempt. In this case the lands granted remained in the hands of the society from 1719 to 1753. In the latter year the Rev. Mr. Champion was settled over the society, in consideration of a gross sum, ¿£2000, and an annual salary of ¿£800. The former sum was paid, in part at least, by a lease of the land in question for 999 years. They, therefore, during the continuance of the lease, parted with their whole interest in the property for a gross sum, and expended the proceeds in paying an obligation resting upon them; so that neither the land nor its avails produced an annual income to the society. If the land had been leased to other parties for cash, and the money had been used to pay an existing debt, it would hardly be claimed that the transaction was not a diversion. The case does not materially differ from the one supposed. The society had contracted to pay *2000, and leased the land in question to raise money for that purpose. The circumstance that the party to whom the money was due agreed to take the land in lieu of money cannot change the nature or character of the transaction. It was doubtless supposed that the society had no power to sell, and that a conveyance in fee would work a forfeiture of the estate. Hence a long lease was resorted to. Nevertheless, for all purposes involved in the present inquiry, it was a practical sale, and contrary to the letter and spirit of the act of 1702. We think therefore, notwithstanding the case of Landon v. Litchfield, that the implied condition contained in the act had not been kept, and consequently that the land ought not to be exempt from taxation. Such in effect is the decision in Brainard v. Colchester, and we may safely rest our decision upon the authority of that case.

But we think the constitutionality of the act of 1859 can be vindicated upon higher grounds; and as the question is an important one, in which many towns in the state are particularly interested, we feel constrained to go further and express at length our views and conclusions upon that branch of the case. We are clearly of the opinion that the act of 1702 is in no sense a contract. A public as well as a private statute may form the basis of a. contract. In either case, as in contracts between individuals, there must be all the essential elements of a contract;—a subject matter—parties capable of contracting—a good and sufficient consideration—and an actual contract or agreement of minds. If any one of these requisites is wanting, there is no more reason for holding the state bound by the transaction than there would be for holding ah individual bound under similar circumstances.

It may be useful, in the first place, to inquire who is the party with whom the state is supposed to have made a contract? Was it with the 'grantors or the society? If the former, then, inasmuch as the immunity did not attach to the land until after the title passed from them to the society, it is manifest that the plaintiff is not in privity with either of the contracting parties; and being neither party nor privy to the contract, it is difficult to see what right she has to derive any advantage from it, or what reason she has to complain of its violation, if indeed it has been violated. If such a contract in fact exists, perhaps the heirs or successor's of the grantors might, if a proper case should arise, insist upon the fulfillment of the contract by the state. But how is such a case to arise ? The grantors parted with all their interest in the property absolutely. Exemption from taxation will not benefit them or their successors, and on the other hand taxation will not injure them. In fact they have not the slightest interest in the question. Again, regarding them as the party, what evidence is there that exemption from the payment of rates had the slightest influence upon their minds ? Their sole motive was to benefit the grantees. The donation in their hands would be slightly enhanced in value by the operation of the statute; but that was a mere incident, and there is hardly room for presuming that it had any perceptible influence. The property they parted with was the same in value to them whether taxable or otherwise; and we have no reason to suppose that they would have parted with it any sooner in the one case than the other. These considerations show pretty conclusively, in the first place, that there was no contract in fact with the grantors ; and in the second place, if the transaction can in any sense be viewed in the light of a contract, that the plaintiff is a stranger to it and cannot enforce it.

But if it be claimed that the town or society is the other contracting party, then the plaintiff encounters another difficulty which is equally fatal to her claim; and that is this, that there is no consideration to support the contract. It will not be pretended that the state received any advantage, direct or indirect, which can be regarded as a sufficient legal consideration. The grantees parted with nothing of value, they contracted to do nothing, and there was pro agreement, express or implied, on their part, which can be treated as a consideration for the undertaking of the state. It may be said that the consideration moved from the grantors. If it could be made to appear that the exemption was intended to induce gifts of this kind, and that the conveyance was actually made in consideration of such exemption, there would be force in this claim. But if the statute was not intended or designed for any such purpose, and the grantors parted with their property, as they certainly may have done, upon other eonsid©rations, independent of that, it would be going too far to hold that the grantor’s deed was a sufficient consideration for the act of the state. One reason is that neither party, so far as we know or can know, in the day and time of it looked upon the transaction in that light. The exemption was purely a gratuity, given and accepted as such. To give it the force and validity of a contract, beyond the reach of subsequent legislative control, is going farther than any adjudged case has.gone, aside from the cases above referred to. Before we can give such effect to a statute we ought to be satisfied, without the aid of presumptions, that the parties so intended it. No such intention appears in this case, and the presumptions are the other way.

But there are other considerations, arising from the motives which prompted the act of 17 02, and from the language of the act itself, which confirm us in filie view we take of this question. It will be conceded that the design of the legislature was to benefit, not the grantees of the society, but the society itself. It would seem to follow, as a necessary consequence, that the exemption attached to the title of the society, and not to the land. If therefore the society sell the land, and with the avails create a permanent fund, from which an annual income is derived, the fund should be exempt from taxation, and not the land. Otherwise the manifest intention of the legislature would be defeated. It will hardly be claimed that both the fund and the land should be exempt, as that would be a double exemption, neither intended nor contemplated by the legislature. But suppose the society, instead of investing the money in a permanent fund, exhaust it, as in this case, by the payment of a debt. In such a case the exemption must attach to the land or nothing. If it does so attach, and not in the case of a permanent investment, then we come to this result, that the land would or would not be exempt, according as the society used its avails for one purpose or another. It would seem to be trifling to impute to the legislature any such intention. The immunity, if it attached to the land at all in the hands of the purchaser, cannot be affected by any subsequent act of the society. It 'may be suggested, iu the ease last supposed, that the society received all the benefit the legislature intended, in the enhanced price of the land, and that the purchaser, by paying a larger price, has purchased the exemption, and therefore it is reasonable that he should enjoy it. A perfect answer to this is, that the legislature did not contemplate a sale for any such purpose, but, on the contrary, the chief object was to prevent such a disposition of the property. They intended that land, *or other estates so given, should be and remain a permanent source of revenue. That intention is defeated in the case supposed, as we have attempted to show, and therefore the purchaser has no legal or equitable claim to the exemption.

But again, the statute in terms applies to land previously given, as well as to that given subsequently. It cannot be successfully claimed that any contract exists in respect to such donations; certainly none with the donors. This would seem to be too clear for argument. However this may be, the point was substantially decided by the Supreme Court of the United States, in Armstrong v. The Treasurer of Athens County, 16 Pet., 281" court="SCOTUS" date_filed="1842-03-12" href="https://app.midpage.ai/document/armstrong-v-the-treasurer-of-athens-county-86213?utm_source=webapp" opinion_id="86213">16 Peters, 281. It appears in that case that in the year 1804 the legislature of Ohio by statute exempted from taxation forever certain lands previously granted by Congress for the purpose of founding a university in that state. In 1826 the legislature authorized the board of trustees to sell the land in question upon certain terms, but the act was silent in respect to the matter of taxation. The court held, affirming the decision of the Supreme Court of Ohio, that the land was taxable in the hands of the purchasers. If this point is established it is certainly true that the act in question is not a contract in respect to a part of the property therein referred to. In respect to the other part we ought to give the statute the s°ame interpretation, unless its language, or the nature of the case, requires a different construction. We see no reason for construing the statute as meaning one thing when applied to one piece of property and another thing when applied to other property.

There is another feature of this statute which deserves particular attention. It expressly applies to all property which had been, or which should thereafter be, granted by the General Assembly of this state. Now upon the supposition that the contract contended for was with the grantors,—and that is the ground of the decisions of this court in Atwater v. Woodbridge, 6 Conn., 223" court="Conn." date_filed="1826-07-15" href="https://app.midpage.ai/document/atwater-v-town-of-woodbridge-6574052?utm_source=webapp" opinion_id="6574052">6 Conn., 223, and Osborne v. Humphrey, 7 Conn., 335" court="Conn." date_filed="1829-06-15" href="https://app.midpage.ai/document/osborne-v-humphrey-6574276?utm_source=webapp" opinion_id="6574276">7 Conn., 335, cases upon which Landon v. Litchfield, rests,—we are driven to the necessity of holding that the state entered into a contract with itself, and pledged its faith to itself, that such property should never be taxed. If the statute applied only to cases of this description, no one would contend that it was a contract which tied up the hands of succeeding legislatures.

On the whole, we think it reasonable, and the only reasonable course, that the statute, in relation to all the property named in it, should receive the same construction; that the legislature intended to place all such property upon the same footing. That can only be done by rejecting the idea of a contract.

We will close this branch of the case by a reference to the language of Judge Bissell in Parker v. Redfield, 10 Conn., 495. In speaking upon this question, and in relation to the cases of Atwater v. Woodbridge, and Osborne v. Humphrey, he says:—“ Were this now an open question we might well doubt whether it be in the power of one legislature by a general law to tie up the hands of succeeding legislatures; and whether a statute, exempting a particular species of property from taxation, is in the nature of a contract of perpetual obligation.” It is- true he yielded to the authority of those cases; but as that authority is somewhat shaken by Brainard v. Colchester, we have felt at liberty to examine the question upon principle, and upon such examination, being satisfied that those decisions are not founded in correct principles, ye feel constrained to disregard their authority and to declare the law to be otherwise.

The plaintiff claims that the judgment of the Superior Court in Landon v. Litchfield estops the defendants from making this defense. To render a former judgment conclusive on any matter it is necessary that it should appear that the precise point was in issue and decided, and that this should appear from the record itself. Kennedy v. Scovill, 14 Conn., 61" court="Conn." date_filed="1840-07-15" href="https://app.midpage.ai/document/kennedy-v-scovil-6575347?utm_source=webapp" opinion_id="6575347">14 Conn., 61, and authorities there cited. The record in that case consists of the declaration, the plea, and the judgment. The declaration was in assumpsit, containing the common counts only, the plea was the general issue, and judgment was finally rendered on a default. It does not appear from the record that the question now involved was put in issue, much less that it was tried and determined. The finding of the Superior Court, which was merely for the purpose of taking the opinion of the Supreme Court upon certain questions of law therein raised, is not, strictly speaking, a part of the record. But even if it is, still, it does not appear that the question was tried and decided in the Superior Court. A judgment by default determines nothing except the plaintiff’s light to recover in that action. Notwithstanding that judgment, it was competent for the defendants at any time to assert their right to tax this property, and, if that right was disputed, to have the question directly presented and judicially determined. Standish v. Parker, 2 Pick., 20; Arnold v. Arnold, 17 Pick., 4. But another conclusive answer' to this claim is, that the statute of 1859 has materially changed the legal aspect of the question. The most that can be claimed for the former judgment is, that the land was not taxable as the law then stood. The question involved in the present suit is the right to tax the property as the law now stands.

We advise the Superior Court to render judgment for the defendants.

In this opinion the other judges concurred.