170 Pa. 257 | Pa. | 1895
Opinion by
The city of Philadelphia sought to enforce a lien for registered taxes against lots 8 and 10 on west side of Twelfth street,
These grants of 1701, 1708 and 1711 defined the object of them to be the establishment and maintenance of a public school, wherein the children of the rich might be educated at reasonable rates, and the poor gratuitously; the school to be under the care and management of a board of overseers. The school was kept up from the date of its foundation, until the year 1874, when it had run down to very few pupils. The corporation at this time having an income from investments,, these, to a considerable amount, were put into the present property, and additional money borrowed on mortgage; the present lots and buildings represent a total cost of $75,721.12. In 1874, the overseers made a contract with Richard M. Jones as head master, which stipulated, the corporation would furnish the buildings, furniture, school apparatus, fuel and repairs, while it should receive one eighth of the gross receipts for tuition, including in this estimate the tuition fees of such poor children as were educated gratuitously, at the expense of the corporation ; the head master to receive the seven eighths of all the receipts, and pay thereout the salaries of all subordinate teachers; the teachers selected to be subject to the approval of the overseers. It was further guaranteed the head master’s compensation should not be less than $2,000; if in any year there was a deficiency it should be made up from the funds of the corporation.
The overseers receive no compensation for their time or services. Bequests and legacies, since the school was established, have been made to it, from which is derived an annual average income of about $8,800. Under the management of head master Jones, the school has enjoyed almost phenomenal prosperity. Soon after he took charge, in 1876, the number of pupils was 52 ; of these, 41 were paying students and 11 free ; six years afterwards, they numbered 135, of whom 20 were free; in 1892, the number reached 359, of whom 16 were free. The amount received from pay scholars, this year, is not given, probably because, at the date of the hearing, the accounts for that year had not been summarized; but in the year previous, 1891, when
There is no doubt, the institution in its foundation was, so far as pupils were taught free, a charity school, and although its operations prior to 1874 and 1875 are not shown, probably, up to that time, it was carried on as originally founded. But at that date, the undisputed testimony is, it was incapable of survival on its ancient foundation and methods of management. It had but 17 free pupils to be educated from a fund worth, probably, more than $60,000. Obviously, in a large city like Philadelphia, neither the benevolent intentions of the founder, nor the desires of those who had charge of the school, were being accomplished. The results were in no way commensurate with the scope of the project nor even with the means provided for carrying it out. This evidently was the alternative which then presented itself to the overseers; the school must be put on a paying basis, or must stop. Although this conclusion is not distinctly stated in these words by any witness, a fair consideration of the testimony of head master Jones, overseers Thomas Wister Brown, James Whitall and clerk Edward Bettle shows that it was practically the one at which they arrived, and doubtless, too, a correct one. They then, instead of persisting in the old way which at best gave a sickly existence to a small school, wisely resolved to adopt a new plan which would make it self supporting, greatly increase the number of pupils, and thereby enlarge its usefulness. A new location for the sehool was adopted, larger and more commodious buildings erected; a contract was made, as the event showed, with a most capable head master; his energy and efficiency were stimulated by a provision whereby his money receipts in a large degree depended on the success of the school. In other words, the school was to be made to pay, and it did pay. But by the new method, was there any promotion of the charity element which
It seems to us this school is a business enterprise; that the benefit from its success is largely gathered from those whom the founder termed the “ rich,” and by the head master, Mr. Jones, instead of by the corporation, is significant of its character. He receives seven eighths of the income, the corporation one-eighth, the latter furnishing the building, fuel and light; for tuition of the free scholars, it pays at fixed rates out of its income raised from the foundation, endowments and legacies. In substance, the corporation leases its property to master Jones for one eighth of the gross receipts from all the pupils for tuition. If the corporation contracted with a private school for the tuition of ten to fifteen pupils annually, and paid this out of the income from the charity funds, or from the rents of real estate in which the funds were invested, such private school would not, as an institution of purely public charity, be exempt from taxation. When lots are purchased and buildings erected, and these, practically, let as an educational venture for a rental equal to one eighth of the gross receipts, to an individual, the corporation paying to him from the charity fund tuition fees for the instruction of the free pupils, certainly the property is not a purely public charity. The school, thus established and carried on, has not the elements of a pub-
We have no word of dissent from the entirely commendable sentiment of the learned referee, approved by the court below, when he says : “ It may now be said, that educational institutions, of a distinctly non-sectarian character, conducted solely for the benefit of the public, without any element of private gain, relieving the state from taxation, and extending knowledge to some who would otherwise not be able to obtain it, are institutions of a purely charitable nature, and exempt from taxation.”
The trouble in the application of this sentiment to the case in hand is, that it does not fit the facts as found by the referee; this institution is not conducted solely for the benefit of the public, any more than is the street passenger railway conducted for the benefit of the public; those of the public who can pay can ride; here, those of the public who can pay tuition fees are benefited by an education, just as they might be benefited in many other excellent private schools in Philadelphia, where exemption from taxation is not thought of. Nor is this institution without an element of private gain ; we doubt, if there be anywhere else in the land, in a school of like grade, an educator in receipt of a salary equal to the one thousand dollars per month received in 1891 by master Jones, as his share of the profits in this enterprise —for this last is clearly what it is— notwithstanding this share is denominated salary in the argument, by no stretch of construction can it be so denominated in the instrument, which reads thus: — “ The corporation, to provide the building, furniture, school apparatus, fuel and repairs; and to receive one-eighth the gross receipts, including in the estimate of receipts, the tuition fees of such poor children as may be schooled at the expense of the corporation; the head master to receive the remaining seven-eighths, and pay thereout the salaries of all his subordinates, and all expenses pertaining to conducting the school, other than are hereinafter mentioned as chargeable to the corporation. The assistant teachers
Nor does the school relieve the state from taxation. Under authority from the state, the municipality of Philadelphia, by taxation, provides for the education of every child within its limits, and this burden is in no appreciable degree lightened by the establishment of private schools. The charity had its foundation when no such complete and beneficent system of education as that created by the commonwealth had an existence, or was dreamed of by William Penn. If such a system had been in operation in the small town on the Delaware, in 1708, or if at that time he had had reason to anticipate such an one would be adopted in the future, it is probable his benevolence would have taken some other direction. At this day, when the city raises by taxation and expends sufficient money to educate every child, rich and poor, the private school in no sensible degree relieves the public burden; if it be exempted from taxation, the public burden is increased by imposition of the exempted tax upon, others who share not in the gain from the private enterprise.
It may be properly said of the managers and head master of this school, when its methods had fallen behind the times, and in its struggle alongside the public school its life had almost ended, they, by wisdom and energy, infused into it a new life; have made it highly prosperous, and not only prosperous but highly beneficial to all who are able to pay for its privileges; but this does not make it purely charitable; the 343 pay scholars of 1892, who paid nearly $50,000 for their tuition, would hardly take that view. We certainly do not.
None of the cases cited by the referee reaches the facts of this case. The rule applied in Miller’s App., 10 W. N. C. 168;
The judgment is reversed, and judgment is now entered for the city of Philadelphia, and against defendant, on the facts found by the referee.