Catlin v. Trustees of Trinity College

The Collateral Inheritance Tax Act (Chap. 713, Laws of 1887), among other things, subjects to its provisions all property which shall pass by will to any “ body politic or corporate * * * other than to * * * the societies, corporations and institutions now exempted by law from taxation.”

Stephen M. Buckingham, a resident of. Dutchess county, died December 1, 1887, leaving a will by which he gave a legacy of $50,000 to Trinity College, a Connecticut corporation incorporated in 1823, located at Hartford in that state, and a legacy of $10,000 to the St. Paul’s Protestant Episcopal Church of Poughkeepsie, a religious society in this state, incorporated under the general act for the incorporation of religious societies, passed in 1813. The sole question is, whether these corporations were, at the time of the passage of the act of 1887, “ exempted by law from taxation ” within the meaning of that act. There is no exemption from taxation of the property of religious corporations organized under the act of 1813 by any provision therein, .and the property of St. Paul’s Church has not been exempted by any special statute. By a law of the state of Connecticut, passed in 1882, Trinity College is exempted from taxation on the principal and income of its invested funds and on its real estate, within certain limits measured by income. In determining the question presented, it will be convenient, in the first instance, to regard Trinity College as a domestic corporation, governed in respect to its liability to taxation by the same rules which apply to incorporated colleges in this state, not specially exempted from taxation by their charters or special acts.

The law regulating the taxation of corporations, in the absence of special legislation, is to be found in the general .statutes of the state. The general rule of taxation is declared

This contention assumes that incorporated colleges and religious societies are “ incorporated companies ” within this subdivision. By reference to this fourth title it will be found that it deals exclusively with the subject of taxation of moneyed or stock corporations, and contains no reference to-the taxation of charitable, religious, literary or other corporations or institutions not organized for business purposes, and this class of corporations is not made liable by that chapter to - any taxation whatever, either on their real or personal estate. It must follow, therefore, if incorporated colleges, churches- and eleemosynary institutions are “incorporated companies” within the meaning of subdivision 7 above quoted, as is claimed by the plaintiffs, then the subdivision operates as an entire and complete exemption from taxation of all the personal property held by such institutions in this state. But on looking at the other subdivisions of section 4, we find special and

But coming more directly to the consideration of subdivision 7, and construing it in the light of the antecedent legislation in this state on the subject of taxation, and also in connection with chapter 4, to- which it refers,, we are of opinion that the words “incorporated company”' used in that subdivision, were intended to designate only business and stock corporations, which by chapter 4 were,, under the special circumstances therein stated, exempted from taxation on their capital, and that they do not embrace incorporations not having a capital, or not being moneyed or stock corporations using their capital for the purpose of income or profit. The tax system in the Revised Statutes was a revision of previous legislation perfected by additional provisions recommended by the revisers or adopted by the legislature. Prior to the enactment of the Revised Statutes the general system of taxation was prescribed by chapter 262 of the Laws of 1823..

The general features of the act of 1823 for the taxation of incorporated companies were incorporated into the Eevised Statutes as chapter 4, title 12. Chapter 4 is entitled “ Eegu.lations concerning the assessment of taxes on incorporated ■companies, and the commutation or collection thereof.” It is sufficient for our present purpose to say that the general scheme •of the legislature, as indicated by the provisions of this title, was to subject all moneyed and stock corporations to taxation •on their capital, excepting, however, such of those corporations as were not in receipt of any profits or income (§ 9), and ;also all turnpike, bridge or canal companies whose net annual income did not exceed five per cent of the capital stock paid in, or secured to be paid in (§ 12); and manufacturing and marine insurance companies were permitted to commute their taxes when not in receipt of an actual income of more than five per cent on their capital (§ 11). Having in view this general scheme, it is quite obvious that the phrase “ incorporated ■companies,” used in the seventh subdivision of section 4, title 1, referred to business corporations which, by the provisions of "title 4, were exempted from taxation on their capital, because in .receipt of no income, or of income not beyond a certain amount. These companies, although belonging to the class of moneyed •or stock corporations, were not- taxable on their capital, or on their stock, and the purpose of subdivision 1 was to exempt "their personal property, eo nomine, from taxation, and thereby make the intention to exempt them from taxation on personal estate in any form clear and unmistakable. It is plain, we

The practical construction by the legislature is in accord with the view that the subdivision does not apply to religious, literary or charitable corporations. The legislature has in numerous instances exempted the real and personal property of particular corporations of this character from taxation. But this has been done under special laws designating the-particular corporation intended to be benefited. Reference to a large number of statutes of this character, relating to charitable and other institutions in the city of Hew York, will he found, in the valuable work of Mr. Davies on “ System of Taxation,” at page 288; and the statutes abound in instances of similar legislation affecting charitable and other institutions located in other parts of the state. These special acts were unnecessary so far as they exempted the personal property of the institutions mentioned from taxation, if they were embraced within the phrase “incorporated companies” in subdivision 7 of section 4, title 1, of the Revised Statutes.

It has never been the -general policy of the state to wholly exempt the property, either real or personal, of incorporated, churches, colleges, or charitable institutions from taxation. There was a limited exemption of real estate and personal property in the Revised Statutes. The policy of complete

Trinity College, as has been stated, is exempted from taxation by the law of Connecticut. It has no exemption under the laws of this state; and it seems plain that the words “ now -exempted by law,” in the act of 1887, refer to exemptions under our laws, and that exemption of a foreign corporation from taxation under the laws of the jurisdiction of origin -does not withdraw it from the operation of the inheritance tax law. There is certainly no comity which requires that ■colleges existing under the laws of other states should be placed in a more favorable situation under the act of 1887 than colleges organized under the laws of this state.

We think the judgment is right, and it should be affirmed.

All concur.

Judgment affirmed.