Cornell Alumni News - eCommons@Cornell - Cornell University

Volume 47, Number 15 February 1, 1945 Price, 20 Cents
CORNELL ALUMNI NEWS
Subscription price $4 a year. Entered as second class matter, Ithaca, N.Y. Published the first and fifteenth of every month.
Fraternity Houses Ruled Taxable
APPEALS to exempt from taxes
-£*• the Psi Upsilon and Sigma Phi
fraternity houses were denied in an
order written by the late State' Supreme
Court Justice Ely W. Personius
'98, received in Ithaca January 17.
Certiorari proceedings were instituted
by the fraternities and the University,
protesting the inclusion of the
houses in the 1943 Ithaca tax roll on
the grounds that they are owned by
the University as part of the dormitory
system.
Justice Personius, who died December
12, 1944, wrote in what is
thought to be his last official ruling:
"Controlling is the fact that the buildings
in question are not used exclusively
for educational purposes, any more
than a fraternity off the Campus. We
(the court) hold that these buildings
are used as private fraternity houses,
the same as fraternity houses, either
on or off the Campus, which are not
exempt."
The court discounted the argument
of the University that it owned the
land and had ordered construction of
the fraternities as a part of the dormitory
system by pointing out that the
University's title to the buildings is
limited, at least so far as beneficial
use of the buildings is concerned, because
the University could rent rooms
in the houses only to persons designated
by the fraternity.
"We have seen that in a case of
doubt, an exemption statute is strictly
construed," the opinion continued.
"Was there a doubt in the minds of
these parties (the University and fraternities)
when they provided by the
contract that the occupants should
pay an amount equal to any tax lawfully
levied or agreed to by the University?"
Justice Personius explained that
two conditions are involved in an exemption:
1. That the realtor (Cornell)
owns the property, and 2. That it be
used exclusively for carrying out its
purposes. "While there are certain
limitations or conditions on the realtor's
absolute ownership, we consider
mainly the question whether the
property is exclusively used for the
realtor's educational purposes."
The order recalls the history of the
fraternities which were originally lo-
cated on the Campus but removed to
make way for Myron Taylor Hall.
Both received from the University
the appraised value of the properties.
Subsequently, the fraternities negotiated
with Cornell for permission to
erect new houses on the Campus at
their own expense and then "by gifts
the units became the property of the
University, but to be used only by
undergraduate members of the fraternity."
Differentiating between dormitories
and fraternities. Justice Personius
said the allocation of students to
dormitories is made on a scholastic
basis while the allocation of rooms in
the fraternities is made on the basis
of membership in the fraternity and
by the fraternity on no scholastic
basis. "The former allocation is for
educational purposes, the latter is
not exclusively for educational purposes,"
he continued. "Can it be denied
that the latter allocation is not
exclusively for educational purposes
but is made upon a social basis?"
In the Supreme Court proceedings,
University Attorney Allan H. Treman
'21 and L. Nelson Simmons '12
represented the University; John M.
Parker '96 and Judge Nathan Turk
of Owego represented the fraterni-
ties; and Ithaca City Attorney Truman
K. Powers '30 was counsel for
the City and board of assessors of
which Henry C. Thome '10 is chairman.
In the ALUMNI NEWS for July 1,
1943, Edward R. Eastman, chairman
of the University Trustees' subcommittee
on government relations, explained
the circumstances of the tax
proceedings then being started. He
pointed out that for many years the
University had made annual contributions
to the City of Ithaca to
recompense the city for services rendered,
such as police and fire protection
and sewage disposal. The previous
year, the University contribution
was $10,950. But the preliminary assessment
roll for 1943 had added to it
taxable valuations of University property
totalling $475,000 including besides
the Psi Upsilon and Sigma Phi
houses, parts of Willard Straight Hall
and Barnes Hall, the Johnny Parson
Club, and five University-owned residences.
Friendly conferences between
University and city officials brought
compromise agreements for that year
on payment and foregoing of taxes on
all the properties except the two fraternity
houses. It was agreed also
that whatever taxes should be paid
on University properties would be
deducted in future from the customary
University contribution to the city,
SIGMA PHI AND PSI UPSILON HOUSES BELOW MEN'S DORMITORIES
State Supreme Court order rules that these University properties are not exempt
from taxation.