Rice v. Wadsworth, 27 N.H. 104

Gilchrist, C. J. The question, in this case, is whether the assessment of taxes was or was not legal, and in order to determine that question, it is necessary to inquire into the relation of towns to ministerial and school funds of this description. In the case of the Baptist Society v. Wilton, 2 N. H. Rep. 508, the manner in which these funds are held by towns is considered by the court. Richardson, C. J., examines the question with considerable care, the point being whether the funds were the property of the towns.

His language is as follows: “ A general opinion seems to have prevailed in this State that the lots, reserved by the proprietors of townships for the ministry and for schools, were intended to aid the first inhabitants in educating their children and in procuring religious instruction, and thus to induce individuals to become inhabitants of the town; that those lots were intended as an absolute gift to the inhabitants of the towns, to be applied to those purposes at their discretion, and that, in fact, they were not intended to be vested in the towns in trust, to apply the rents and profits to those objects, but were in truth given as a temporary aid to the first inhabitants.

It is certain that towns have always claimed and exercised the right of selling and conveying the lots reserved for the ministry and for schools, at their pleasure, and we are not aware that this right has ever been called in question. * * * * The manner in which these reservations were made, gave some countenance to the general opinion that prevailed on the subject.

The reservation, in this case, was ‘ one share for the first settled minister, and one for the ministry, and one for the school there forever.’ No doubt was ever entertained that the first settled minister became the absolute owner of his share in fee simple, free from all trusts, and it was not very unnatural that towns should suppose that they were- the owners of the other two shares in like manner. “ Whether these reservations might not have been considered originally as trusts, which towns were bound to apply specifically to their' intended objects, it is unnecessary now to inquire.

It is enough that the inhabitants of our towns have generally viewed them in a different light, and have acted accordingly, and that they cannot now be viewed as trusts without great public inconvenience. If we should now decide these reservations to be trusts, and hold towns to a specific performance of the trust, it would lead to endless litigation and expense, without any essential service to the cause of religion or education.

It would be much better, in every point of view, to' compel, by a general law, every town in the State to raise a fund for the use of the ministry and for schools, than to attempt, through the medium of courts of justice, to collect the disjecta membra of these reservations, and convert them into funds for those purposes. * * * * It was not intended that the towns should hold the reservations in trust, to apply them specifically to those purposes; but they were absolute gifts, intended merely to augment the ability of the inhabitants to procure instruction for themselves and their children.” Consistently with the foregoing views, it was held that the Baptist Society could not recover of the town any portion of the fund, or of the interest of it, the lands having been sold, and the proceeds kept as a fund, the interest of which had been appropriated for religious instruction.

In Candia v. French, 8 N. H. Rep. 133, the above case is cited, and the powers of towns are recognized to divide among the religious societies any funds in the possession of the town, which had been before that time lawfully devoted to the support of the gospel. The ministerial lands, then, were lawfully sold By the town. The proceeds of the sale constituted a fund, the interest of which was devoted to the support of the gospel and of schools.

The town had, of course, the same power over the fund that they had over the land which produced the fund, and having this power, they appropriated the fund to the purchase of a poor-farm. Now it is a matter entirely immaterial, that when the town made this appropriation, it was coupled with a proviso that the money “ should be refunded back to said town,” whenever the town should so vote, that is, the town made a contract with the town, that the town would refund to the town the money appropriated, whenever the town should so vote.

This is a practical absurdity, for the town could not bring an action against itself, or maintain a bill in equity to compel itself to a specific performance of the contract. The fund is gone irretrievably, for it has been expended, and has lost all distinctive character as a fund. No interest can be due the town, according to the vote of 1839, for there is no principal to yield interest.

The vote in 1836 was “that what is now due to the town, of interest arising from the ministerial funds, be collected and paid oveivto the different religious denominations, as it formerly had been previous to 1837.” This sum, which the town chose to call interest, was so divided, amounting to about $86 per year, up to 1842, when the town voted that the ministerial interest money be appropriated the same as last year, and for the future, until otherwise ordered by said town,” and the case finds that the amount so divided and paid over in 1836, was the sum of $86,53.

This action was brought to recover damages for taking the plaintiff’s property for the taxes for the year 1846. Of course, the plaintiff’s tax included a portion of this sum of $86,53, and that is enough to make the tax illegal. As to the literary fund, this was also appropriated in the year 1837, with the ministerial fund, to the purchase of a poor-farm. The act of December, 1828, N. H. Laws 327, (ed. of 1830,) appropriating the literary fund, made the towns liable to a penalty for misappropriating any part of it. By the Revised Statutes 486, this act is repealed.

Different provisions are made on the subject of a literary fund by the Revised Statutes 154, ch. 75, and the towns are made liable to a penalty for misappropriating the fund, to be recovered by indictment, for the use of the county. But the statute of limitations has barred all remedy for the penalty at law. The Revised Statutes 430, § 9, provide that all suits for the penalties, &c., shall be brought within two years from the commission of the offence, and this offence was committed before the year 1846.

A suit cannot now be maintained for the penalty, and there is no precedent for a bill in equity being maintained in the name of the county or of the State. Neither has any pecuniary interest in the matter, and- after the fund has been entrusted to the town, and the remedy has been barred by the statute of limitations, there would seem to be no power competent to call the town to account, unless some proceeding, the nature of which is doubtful, could be maintained in the name of the State. This sum having been expended, the same remarks are applicable to it as to the ministerial fund.

No interest could be produced by it. But the town voted, in the year 1845, to appropriate $150, yearly, of the arrearages of the interest, for schooling — a laudable purpose, without doubt, but which, however praiseworthy, must be pursued in a legal manner. After the town had voted to raise this sum, they voted to raise the sum of $2,300, to defray the necessary charges and expenses of the town. This sum, as we take it, was intended to include the' sum of $150^ otherwise the insertion of the matter relating to the literary fund has no meaning, and this is the plain inference to be drawn from the case.

A portion of this sum of $150 must also have been included in the plaintiff’s taxes. The question is raised by the case, whether what was done in relation to the literary fund makes the tax illegal. It is not, however, necessary to settle the point, as it is sufficiently determined by our decision upon the question relating to the ministerial fund, that the assessment was illegal.

As to the surplus revenue, it had been expended, excepting the sum of about $500, but the town voted to divide the interest of it among the tax paying polls, as if the money had not been expended, and the town voted to raise $2,300 for this among other purposes. This matter is substantially settled by the case of Brown v. Marsh, 1 Foster’s Rep. 81, where it was held that raising money to pay the interest on the surplus revenue fund, when no fund existed, was merely raising money for the purpose of distribution, which the town could not legally do.

Our decision is, that the action can be maintained, and according to the provision in the case, there must be Judgment for the plaintiff.