Haverford College v. Rhoads

Opinion by Porter, J., This is an appeal by the township of Haverford from the decree of the court of common pleas of Delaware county, restraining the collection of road taxes, assessed and levied against the plaintiff corporation. The cause was referred to a master whose report the court below adopted without supplemental opinion. Little can be added by us to the report, which is comprehensive and well considered. Some of the findings of fact have been challenged, but an examination of the testimony has not served to convict the master of error. The “Plaverford School Association ” an incorporated association, was, by act of assembly of March 15, 1856, “ authorized to establish and maintain a college for the education of youth and other persons in the various branches of science, literature and arts” and to-confer degrees. By decree of the court of common pleas of Delaware county oh December 6, 1875, an amendment was made to the charter, changing the name of the Institution to “The Corporation of Haverford College.” A further amendment was similarly made September 19, 1878, by the consent of all of the stockholders, providing that “ The representation and ownership of the property and franchises of the corporation of Haverford College by means of capital stock divided into shares, is hereby terminated ” etc. A still further amendment on June 23, 1886, provided that the corporation might take and hold for the purposes of its incorporation, such amount of personal estate as might be bequeathed or given to it from time to time, and that no estate of the corporation, real or personal, should ever be divided among the members thereof. [85] The premises, upon which the tax is levied, are the educational plant of the institution. They are occupied by buildings for lecture and class-rooms, laboratories, dining-room, kitchen, college offices, quarters for the employees, gymnasium, dormitories, study rooms, observatories, etc. The remainder of the ground sought to be exempted is used for athletic purposes, recreation grounds, lawn, etc. We have thus a college or institution of learning “with the grounds thereto annexed and necessary for the occupancy of the same” which if “founded, endowed and maintained by public or private charity ” and conducted as “ a purely public charity,” is exempted from taxation under the act of May 14,1874, passed pursuant to the Constitutional provision. We have thus seen how the corporation was legally founded. Although the original subscriptions were represented by certificates of stock, they were not made with the anticipation that there should be a return in profit. Subsequently these subscriptions were changed, by amendments of the charter, into donations and all private interests in the assets of the corporation were (if any existed) swept away. ' The original subscriptions to the college have been supplemented from time to time by charitable gifts to maintain the organization and extend its facilities until the valuable property now sought to be made the subject of taxation, has been acquired. At the stated annual meeting of “ Haverford School Association ” held May 10, 1847, the stamp of charitable foundation was set upon the general fund of the institution by the following resolution: “Resolved, That the sum of $50,000 having been subscribed by a number of Friends for the aid and support of Haverford School by the gratuitous admission of young men or otherwise, it being expressly understood that the interest only of the sum thus raised shall be expended, the treasurer is hereby authorized to collect the sums of money thus subscribed and under the direction of the board of managers- securely to invest the same, the interest thereof to be applied to the purposes above recited, it being expressly understood that when any part of the principal sum shall he paid in, it shall as early thereafter as practicable be reinvested and in no case shall the said principal sum be expended or diminished.” There can, therefore, be no doubt that the foundation and endowment have been by private charity. [86] . It-remains still to consider whether the institution is maintained by public or private charity. The sources of maintenance are from unconditional gifts, from special gifts or legacies in trust for specific purposes, and from the fees paid by a part of the students. The first is palpably charitable maintenance. The second equally charitable although charged with a trust for certain educational uses or for preferred students. The third source of maintenance is derived from full-pay students and the payments made by the holders of partial scholarships. The holders of scholarships, whole or partial, as found by the master, constitute, probably about one half of the whole attendance at the college. The fact that some of the students are so-called full-pay students, does not deprive the institution of its character as a charity. There is no profit derived therefrom. The total receipts are expended in the carrying out of the charitable design. This, however, was settled by the Episcopal Academy v. Phila., 150 Pa. 565. The maintenance of the college is, therefore, of the kind comprehended by the act of 1874. Is there anything in the method of conducting the institution to make it other than a public charity ? The only complaints seem to be that the board of managers is controlled by members of the Society of Friends and that youth of that particular sect are preferred as recipients of the benefits of the college. The first objection if sustained, might require an inquiry to be made as to the denominational connection of every member of the boards of all of the great charitable institutions, lest perchance a majority might belong to a particular sect or denomination. In point of fact, if the matter were carefully examined, it might be found that the management of some of the largest hospitals, homes and institutions of learning has, by design or accident, fallen into the control of those belonging to a particular sect. So prevalent is this that when the contrary is true, the charity is apt to announce the fact that it is nonsectarian, as if its case were exceptional. There is nothing in the objection that a majority of the managers (all of whom serve gratuitously) are of a particular sect. Finally: Is there anything in the assertion that the college ' gives a preference to students of a particular sect, and thus deprives itself of the claim to be a “ public ” charity ? The [87] decision above cited lias answered the question against the defendant. Further than this, however, the master finds as facts: “ That the plaintiff admits to its benefits all persons educationally qualified upon the same terms; that there are no restrictions, no bars across the road in either its charter or practice, and that the funds of the institution do not go to the education of Friends or any other sect in preference to others; that while-some of the free scholarships are restricted to Friends, others are free to all who apply.” We do not regard it as necessary to retravel the path already well marked out by the master, through the decisions of the Supreme Court on this general question. Counsel for the defendant has endeavored to show that the master has gone astray, but the distinctions drawn do not convince us that any mistake has been made. We therefore conclude that this college (with its college grounds) is founded, endowed, and maintained by private char-' ity as required by the act of 1874; that its doors open to the public under reasonable restrictions make it a purely public charity within the meaning of the constitutional provision, and that its property is exempt from the tax'sought to be collected. The decree of the court below is affirmed.