This is an appeal from the board of tax review of the city of New Haven for its refusal to exempt from taxation sixteen items of property, set forth in exhibit B attached to the appeal, which the plaintiff claims were illegally added to the tax list of June 1, 1949.
The matter was heard upon a written stipulation of the parties, on file, supplemented by oral evidence presented.
The main question is whether these sixteen items of property, owned by Yale University and used by it for the housing of married veteran students, with wives and families, are nontaxable.
The properties involved are the land and buildings at 37 Hill-house Avenue, 51 Hillhouse Avenue, 40-2 Lake Place, 46-8 Lake Place, 56-8 Lake Place, 62-4 Lake Place, 68 Lake Place, 72-4 Lake Place, 310-2 Temple Street, 325-7 Temple Street, 74, 76 and 78 Wall Street, 125-7 College Street, also known as 96 Wall Street, and thirty-two Quonset huts on Pierson-Sage Square, Whitney Avenue (exclusive of the tax-exempt land connected therewith) and sixty-eight Quonset huts on the Yale Armory tract, Forest Road (exclusive of the tax-exempt land connected with it). Until 1949, all sixteen units were tax exempt because of the educational nature of their use made. Of these, the fourteen units involving land and buildings were acquired by purchase between 1917 and 1935, of which one became a dormitory and tax exempt in 1946 when a pre-existing
The use of .the Quonset huts was acquired in 1946 by contract with the federal housing administration. The title to these huts was later given to Yale.
'Had these properties continued being used as formerly, apparently no question would have arisen as to their taxability.
The total assessed valuation of the properties involved in this action, added to the .tax list of 1949, is $730,300.
On the tax list of 1949, the assessed value of Yale’s property which was exempt from taxation was $63,972,440. However, taxes on the list of 1949 upon taxable property of Yale, payable in 1950, amount to over $140,000.
Beginning in the fall of 1945 and through 1946, the properties here in question were reconverted and subsequently occupied and used by married veteran students with their wives and children.
The claims of the city are that the use of the property here involved was thus converted to a private purpose for which Yale charged prevailing rentals, that the use made of the same is not for a public educational purpose, that the properties involved were not “granted” or “given” within the meaning of the exempting laws (General Statutes § 1775) and that the properties in question should be taxable so long as student-family use is continued.
The determinative issue is whether the property in dispute in being used by married students and their wives and families, is nevertheless devoted to the public use of education. If so, it is not taxable. If it is not so devoted and it comes within the proviso clause of § 1775, it would be taxable as so-called “productive land,” as explained in Yale University v. New Haven,
All the property of Yale is held and devoted to educational and charitable uses, as is declared in Yale University v. New Haven, supra, in Corbin v. Baldwin, 92 Conn. 99, and other decisions.
All of the personal and real property of Yale held for the use of the institution is nontaxable, as is declared by § 1775, excepting only the real property described in the proviso of this section.
All the property of Yale is and always has been held, possessed, operated and managed by it subject to the public charitable trust of instructing youth “in the arts and sciences.” (Act for liberty to Erect a Collegiate School, 1701).
Before and ever since the adoption of the constitution of 1818 of this state, and particularly ever since the passage in the year 1745 by the General Assembly of the “Act for the more full and Complete Establishment of Yale College, in New Haven and for enlarging the powers and privileges thereof,” the property of Yale has been and now is sequestered to the public use of education (excepting only “productive real estate” described in the proviso in § 1775) and is not and has not been taxable property.
The provisions thus made for the charitable purposes of education in the case of Yale were all in pursuance of the general public policy of Connecticut declared by the General Assembly in the year 1684, ever since maintained, and now contained in the General Statute known as § 7082, sometimes variously known as the “Statute of Elisabeth” or as “The Statute of Charitable Uses” or as “The Statute of 1702.”
In Yale University v. New Haven,
This same public policy, being the underlying basis of the nontaxability of property held by Yale under its charter, therefore requires that the exemption laws in the present case must be construed, not strictly as generally is the rule with statutory exemptions, but reasonably so as to give full effect to the policy declared, as well as to avoid abuse and frustrate evasion.
An examination of the surrounding circumstances and conditions and of the intentions and purposes of those in charge of Yale, as disclosed by the evidence, which led to the use by married veteran students and their wives and families of the property here in dispute is relevant and material upon the question whether the properties are nevertheless devoted to the public use of education and tax exempt or. whether they are “productive land” within the proviso of § 1775 and taxable.
It was evident to the Yale authorities by the end of the war that the needs of the returning veterans whose education had been interrupted, together with the normal influx of those seeking college education, would tax the facilities of the university beyond anything previously experienced. The discharge of these requirements amounted to what was regarded by the Yale authorities as a real and unusual emergency.
By February, 1946, droves of veterans and candidates sought admission and readmission to Yale. Of an average age older than in normal times, many of these had been married in the course of the abnormal war conditions and had become parents.
Stimulated by the G. I. bill of rights, which made possible the return to schools of married veterans who otherwise would probably never have been able to continue their college education, the Yale student enrollment shortly after the war was over double that of the prewar population.
Aware of its public responsibility in the field of public education and of its duty to provide to the utmost limit of its capacity for education to returning veterans and candidates for college training whose service in the armed forces had compelled them to interrupt or forego college work, whether they be married or not, the university authorities were not willing to rule either that marriage of a veteran disqualified him from continuing his education at Yale or that in order to achieve it he should be further separated from his wife and children.
To the extent that it found expression in a temporary policy of the university, it was to take these married veterans back, provide accommodations for them and their families, and let them finish or undertake the education that had been interrupted or prevented. Many came from great distances. Some found lodgings for themselves.in New Haven and other towns in Connecticut located as far as Greenwich. It is agreed that the housing situation in New Haven and adjoining towns was such that normal accommodations for such a large influx of veteran students and their families were wholly inadequate.
Of these, 136 married veterans with families were housed m Quonset huts on Forest Road upon the Yale armory tract, sixty-four married veterans with families were housed in Quonset huts on the Whitney Avenue property, and the balance in reconverted buildings which had been previously used mostly for dormitory purposes, located on Lake Place, Hillhouse Avenue, Temple Street, College Street, and Wall Street.
The waiting list of married students who had applied for entrance or readmission to Yale equaled double the number so accommodated.
All the Quonset huts erected had been procured from the federal public housing administration under the provisions of the Lanham Act, under contract which required their use only by United States veterans and families. Until the university became the owner of' the huts, Yale accounted to the government for income and expenses and paid over to it any surplus. The cost of site preparation and equipment for the 100 huts was $109,288.28, with a reserve of $44,099.13, deemed now inadequate for their removal and restoration of the site. The huts on the Forest Road property rented for $43 per month, and those on the Whitney Avenue property for $47 per month, including heat and utilities furnished.
The cost of reconversion of the dormitory properties, other than the Quonset huts, amounted to $78,374. The rentals ranged from $32.50 to $55 monthly, with heat and utilities furnished.
The rental rates in all cases included the reconversion costs of the property, depreciated over a five-year period, but no depreciation factor for the original cost of acquiring the properties. No element covering any payment to the city of New Haven of either taxes or any amount in lieu of taxes was included in the rental rates.
No question as to the exempt status of the properties here in dispute would arise if they were occupied by unmarried students.
That college dormitories so used are tax exempt was settled in this state by the leading and often cited case of Yale University v. New Haven,
It remains to inquire whether, under the circumstances of this case, the fact that Yale has undertaken to furnish quarters for married veterans with wives and families divests the property here involved of the educational nature of its use.
Previous to the last world war, married students were not permitted to live in college buildings and the college furnished no quarters for them. In coping with the post-war emergency conditions, however, the college broke with this tradition to the extent mentioned. Presently, in the graduate schools, no married student is admitted unless he is a veteran, nor is a student allowed to remain who marries unless he is a veteran, unless the family lives off the college premises.
It is agreed by the parties that Yale does not intend and never has intended to continue providing housing accommodations for the families of married students after it has finished its task of caring for the educational needs of married veterans of World War II, as such task has been presented to it in the emergency here described, and that all of the facilities provided by it for this purpose were intended to be and are of a wholly temporary character, designed, constructed and operated for the sole and limited purpose indicated in coping with the post-war emergency conditions.
It is clear that the university authorities never contemplated making any money or profit, and in fact suffered loss, from the operation of the married veteran students’ quarters. For the year in question, the operation of the Quonset huts resulted in a loss of about $5,000, and the operation of the other dwelling houses in question resulted in a loss of about $10,000.
Upon the question whether the property here is intended or fitted for trade purposes, it is notable that it would not be usable for rental purposes in normal times. The two Hillhouse Avenue properties, as presently used, are by virtue of temporary zoning waivers from the city. The converted buildings, with few exceptions, require shared baths and shared kitchen facilities, and it is doubtful that established separate families would or could tolerate the close proximity of the living conditions they would be compelled to endure on these premises.
It is further conceded that Yale derives no net income from the facilities here in question, that the amount received as rent is not sufficient to pay the operating expenses and depreciation of the properties, that the over-all financial results of operations of Yale for the fiscal year ending June 30, 1949, resulted in a deficit of $525,029, that the fees of students in that fiscal year covered only approximately 44 per cent of the expenses for that period, that the balance of the current receipts was almost wholly derived from past and present gifts and that the deficit had to be and was met out of principal endowment.
The problem of the taxability of post-war emergency housing on the college level, particularly as used by married veteran students and families, presents a question of first impression in this state, and there appears to be little authority elsewhere.
The highest court of the state of New York recently considered such a problem in the case of People ex rel. Clarkson Memorial College v. Haggett,
The considerations which there operated to support a finding in favor of the exemption of the post-war emergency housing occupied by the faculty and family (
In the instant case, as there, it is plain that the exclusive use to which the university has devoted the property is to house married veteran students with families; that such use is one which is incident to and in direct furtherance of an expanded and unusual and temporary program of education in coping with post-war conditions; that the use of the instant properties was not merely an expedient one but necessary to the fulfillment of and was a part of that very program; that it was not a case of choosing whether to do so as a matter of business acumen or as a policy or plan to offer accommodations and conveniences to those of its married students who in turn might exercise choice in availing themselves of accommodations thus afforded; that the temporary policy of providing housing accommodations to married veteran students was a result of the lack of housing facilities in this area; that these housing accommodations were used by the married veteran students as both study and living quarters under the control and management of the universiy authorities; that the use of the properties here made by the university under the emergency circumstances may be considered separate and apart from the actual use which the married veteran students made of the premises; that although an element of a relationship of landlord and tenant may incidentally enter the situation, such a fact still leaves undisturbed a reasonably clear view that the actual use made by the university is incident and necessary to, and has a direct connection with, its corporate purposes.
It is also worthy of note that in the Clar\son Memorial case, supra, one of the properties in question was a trailer camp for the use of married veteran students and their wives and families and that it was held exempt from taxation.
In our state it has been held that the governing authorities of Yale University have a broad power in determining the use of the property for charter purposes. Yale University v. New Haven,
In Phillips Academy v. Andover,
Though the question of the exemption of college property occupied and used as residences by teachers or officers of a university necessarily depends upon the particular statutory or constitutional provisions involved and the particular facts of the case under consideration, nevertheless the basic principles of those cases are helpful in the consideration of the instant matter. “As a general rule, residences for teachers erected upon or near the college grounds are held to be exempt, and similarly, the exemption of a school is not lost because the principal of the school and his family reside in the school building.”
In Phillips Academy v. Andover, supra, 123, the court says: “The distinction lies, it seems to us, between an occupancy which is for the private benefit and convenience of the officer, and which is so regarded by the parties, as in the ordinary case of landlord and tenant, and an occupancy where, although necessarily to some extent the relation of landlord and tenant enters into it, the dominant or principal matter of consideration is the effect of the occupancy in promoting the objects of the institution in the various ways in which such occupancy may or
As an example, it is noted that in the case of Yale University v. New Haven, supra, it was held that, “the observatory build' ings, the two houses furnished by the College for the officers of the observatory, the adjoining land found to be reasonably neces' sary for the purposes of the observatory,” together with other properties, were exempt from taxation as “buildings exclusively occupied as colleges.”
Broadly spealdng, it seems that the test of taxability in this regard is not whether a landlord'tenant relationship exists or whether the educational institution derives some incidental re' venue from the property but rather whether, on the one hand, the occupancy promotes the educational interests of the school, or, on the other, merely a commercial relationship has been established.
It is self'evident that students and faculty are both necessary counterparts of a functioning college. In the present case, the married veteran had to be an enrolled student in order to obtain the college housing in dispute. No one not a student was or would have been provided with any of the emergency housing here involved.
Also, it is difficult to reason convincingly that housing, whether called a dormitory or- court or apartment, which is unquestionably devoted to a public educational use when occupied and used by a student who is unmarried, suddenly loses the educational nature of its use when occupied, it may be assumed, by that very student, when married, even though with family attached. The marriage status may multiply and vary the na' ture of the use of the property but it has not lessened the educa' tional nature of the use previously made. In either case, the occupancy by the student, whether single or married or with or without family, particularly in the face of the post'war emergency housing conditions, is one the dominant or principal and direct effect of which tends to and does directly promote the objects of the institution.
In Yale University v. New Haven, supra, 337, it was held that a college dormitory was not deprived of its character as a college building, exempting it from taxation (under the statute,
It appears that, as the more acute veteran pressure slackened, a few non-United States war veterans were accommodated in the housing in dispute. The number increased to eighteen up to the time of the trial. These were mainly non-United States veterans who variously had served in the armed forces of other nations, in the Merchant Marine, the Red Cross, the American Field Service and such other nonmilitary organisations associated with the war effort. They were not eligible for occupancy in the Quonset huts, which were restricted to United States veterans. All were hardship cases, however, in relation to the need for housing. These eighteen non-United States war veterans constituted but 6 per cent of the 299 married students and families accommodated in the disputed housing. Such a use under the existing emergency circumstances does not operate to divest the property of the educational character of the use being made of it, a use which under the circumstances was within the reasonable discretion of the university authorities, in their effort to cope with the post-war emergency conditions.
The new use made of the properties here involved, in being occupied by married students with wives and families during the post-war emergency, has not essentially divested the property of, nor changed, its educational status so as to render it being used for trade under the circumstances.
With apologies to Tennyson and Carlyle, it might be said that the world spins forward down the ringing grooves of change and that today is not yesterday any more.
For an illuminating example of the ever'expanding scope of modern education, where the changing concept of what con' stitutes public educational purposes goes liberally beyond a devotion of property solely to academic ends, see People ex rel. Goodman v. University of Illinois Foundation,
The mere fact that there is no precedent here for use by mar' ried veteran students and families of college owned and main' tained property held and devoted to the use of the university is a circumstance to be considered as to some extent indicative of the general sense of the community that it is not, or is beyond, an educational use, but the essential inquiry is not whether such a use in the past has constituted an educational use, but whether it does under existing conditions.
That Yale did not anticipate the claim of the city for taxes on the Quonset huts and include in the contract with the gov' ernment a provision for a payment to the city in lieu of taxes has no pertinency to the question whether the property is de' voted to a public educational use. Furthermore, the Lanham Act, (54 Stat. 1125, 42 U. S. C. § 1521 et seq.), under the terms of which Yale received the Quonset huts from the govern' ment, appears to contain no mandatory provision requiring pay' ment to a municipality in lieu of property taxes in connection with housing facilities turned over to educational institutions (59 Stat. 1127, 42 U. S. C. § 1571 et seq.), although providing for such payment in the case of ordinary federal housing pro' jects. 42 U. S. C. § 1546.
A further claim of the city is that the property in question here is not being “exclusively” used for educational purposes and hence is not. tax exempt. This qualification appears in General Statutes, § 1761 (7). It does not appear in § 1775, which contains the Yale charter provisions, and the provisions of which as to tax exemptions are to be “construed reasonably so as to give full effect to the policy declared, as well as to avoid abuse and frustrate evasion.” (Cf. Yale University v. New Haven, supra, 333.) Furthermore, § 1775 expressly provides that “No provision of section 1761 concerning exemption of proper' ty used for educational purposes [being subsection 7 of the same} shall be construed to affect any provision of this section.” But even if this qualification of § 1761 (7), that the property shall be used “exclusively” for educational purposes to be tax exempt, should be deemed to be read together with § 1775, it does not appear that in this connection the word “exclusively” has been strictly construed. Rather, giving the effect to a reason' able construction of the policy underlying the exemption of property devoted to educational purposes, we have recognized as being within this requirement of educational use, in the above mentioned case of Yale University v. New Haven, that dormitories, dining halls, observatories, houses for observatory officers, college yards connected with college buildings (p. 334) and empty lots (p. 337) are tax exempt, all to the end that the statutes should be so applied as to give effect to the charter and statutory provisions and the public policy underlying the ex' eruptions granted thereby. See also People ex rel. Clarkson Memorial College v. Haggett, 191 Misc. (N. Y.) 621, 624.
The defendant also questions whether the property here in dispute is property or estate which “have been or may be grant' ed . . . or given by any person or persons” to Yale so as to re'
No evidence appearing to the contrary, it is presumed that the land and dwellings here in question, acquired many years ago and previously used and tax exempt as dormitories, were purchased with funds and estate “granted, provided by the state, or given by . . . person or persons,” and hence are tax exempt within the scope and meaning of § 1775.
A consideration of the scope and purpose of tax exemptions of charitable and educational institutions as cogency.
Our Supreme Court, in Corbin v. Baldwin, supra, stated (pp. 107, 108, 109, 110) : “It is to be borne in mind that exemptions are made, and can be made lawfully, only in recognition of a public service performed by the beneficiary of the exemption. They are not bestowed ... as a matter of grace or favor. If lawfully granted . . . they are granted in aid of the accomplishment of a public benefit and for the advancement of the public interest. It is in recognition of their position as an agency in the doing of things which the public, in the performance of its governmental duties, would otherwise be called upon to do at its own expense, or which ought to be done in the public interest and without private intervention would remain undone. ... In
The parties hereto have stipulated that the findings and judgment of this court in this case, subject to the right of appeal by either party, and the action of the Supreme Court of Errors in case of an appeal, shall be binding and conclusive upon the parties with respect to the properties here in question not only as to the taxable list of Yale University as of June 1, 1949, here in controversy, but also with respect to the same as to the taxable list of June 1, 1950.
The conclusions of the court are that the properties here involved are devoted and used for the public use of education, that they do not constitute “productive land” within the proviso of General Statutes § 1775, and that each of the sixteen items added to the tax list of June 1, 1949, by the assessors is not taxable.
Judgment is hereby entered for the appellant, without costs, to recover any overpayment of taxes made to the respondent-city, and the board of tax review of the respondent-city is ordered to strike from the appellant’s tax list of June 1, 1949, all the sixteen items added by the assessors thereto, as more fully set forth in schedule “B” attached to the above-entitled appeal.