Bd. Of Sup'rs Of Nansemond County v. City Of Norfolk. *

• Decision Date: 16 January 1930
• Citation: 151 S.E. 143
• Court: Virginia Supreme Court
• Parties: BOARD OF SUP'RS OF NANSEMOND COUNTY. v. CITY OF NORFOLK. *

151 S.E. 143

BOARD OF SUP'RS OF NANSEMOND COUNTY.

v.CITY OF NORFOLK. ^*

Supreme Court of Appeals of Virginia.

Jan. 16, 1930.

Error to Circuit Court, Nansemond County.

Proceeding by the City of Norfolk to set aside certain assessments of land for taxation in the County of Nansemond. From a judgment for the City, the Board of Supervisors of Nansemond County brings error. Affirmed.

W. P. Lipscomb, of Suffolk, for plaintiff in error.

James H. Corbitt, of Suffolk, and R. W. Peatross, of Norfolk, for defendant in error.

HOLT, J. This is a proceeding brought to set aside certain assessments of land for taxation in the county of Nansemond, owned by the city of Norfolk. That city asks that it be relieved therefrom and released from all taxation, state and local, thereon, so long as it is held for city purposes.

The petitioner prevailed in the trial court, and from its order the county has appealed.

In 1919, there was a shortage of water in Norfolk and the situation had become serious. What is known in the record as Lake Prince appeared available to meet this emergency, and its development was undertaken. A dam was there built and about 900 acres were flooded, besides which the city purchased about 2, 000 additional acres for the protection from pollution of waters so impounded. The land bought consisted of four farms, and the following statement shows from whom they were bought, the prices paid, and rents received:

B. G. and Alice M. Ferguson property: Purchase price, $50,000. Total rents received for the years 1921 to 1926, inclusive, $2,674.48. Average yearly rent over period of six years $445.75, or a return of less than 1 per cent. on the purchase price.

J. B. Matthews property: Purchase price, $17,852.57. Total rents received for the years 1921 to 1926, inclusive, $1,675. Average yearly rent over period of six years $279.16, or a return of about 1.5 per cent. on the purchase price.

Nathaniel J. Oliver property: Purchase price, $20,000. Total rents, received for the years 1921 to 1926, inclusive, $2,775. Average yearly rent over period of six years $462.50, or a return of about 2.3 per cent. on the purchase price.

Virtley A. Nelms property: Purchase price, $20,000. Total rents received for the years 1921 to 1926, inclusive, $1,500. Average yearly rent over period of six years $250, or a return of 1.25 per cent, on the purchase price.

Total cost of the four properties, $107,852.57. Total rents received in six years therefrom, $8,624.48. Average total yearly rent over period of six years, $1,437.41, or about 1.3 per cent. on the total purchase price, against which rentals must be charged the cost of repairs and unkeep.

These lands have been assessed for taxation by the county upon the theory that they are not used wholly and exclusively for municipal purposes, but have been during all of the intervening years leased for profit. To sustain this claim, section 183 of the Constitution is relied upon.

The following excerpts from this section, as they appear in the Constitution of 1902 and in its revision of 1928 (see Acts 1928, c. 46), are pertinent:

                -------------------------------------------------------------------------------
                |Constitution of 1902.                 |Constitution as Amended 1928.         |
                |--------------------------------------|--------------------------------------|
                |"Sec. 183. Property exempt from       |                                      |
                |taxation.—Except as otherwise       |"Sec. 183. Property exempt from       |
                |provided in this Constitution, the    |taxation.—Unless otherwise provided |
                |following property and no other, shall|in this Constitution, the following   |
                |be exempt from taxation, State and    |property and no other shall be exempt |
                |local; but the General Assembly may   |from taxation, State and local,       |
                |hereafter tax any of the property     |including inheritance taxes:          |
                |hereby exempted save that mentioned in|                                      |
                |sub-section (a):                      |                                      |
                |--------------------------------------|--------------------------------------|
                |"(a) Property directly or indirectly  |                                      |
                |owned by the State, however held, and |"(a) Property owned directly or       |
                |property lawfully owned and held by   |indirectly by the United States, the  |
                |counties, cities, towns, or school    |Commonwealth or any political         |
                |districts, used wholly and exclusively|subdivision thereof, * * *            |
                |for county, city, town, or public     |                                      |
                |school purposes, * * *                |                                      |
                |--------------------------------------|--------------------------------------|
                |"(g) * * * and whenever any building  |"(g) * * * Whenever any building or   |
                |or land, or part thereof, mentioned in|land, or part thereof, mentioned in   |
                |this section and not belonging to the |this section, and not belonging to the|
                |State, shall be leased or shall be a  |State, shall be leased or shall       |
                |source of revenue or profit, all of   |otherwise be a source of revenue or   |
                |such buildings and land shall be      |profit, all of such buildings and land|
                |liable to taxation as other land and  |shall be liable to taxation as other  |
                |buildings in the same county, city, or|land and buildings in the same county,|
                |town. * * *"                          |city or town. * * *"                  |
                -------------------------------------------------------------------------------
                

In this same section like exemptions, subject to like limitations, are extended to incorporated institutions of learning and to religious associations, such as the Young Men's Christian Association, etc.

In its petition for a writ of error the county claims: (1) That the lands involved are leased for profit and so are taxable under this constitutional provision; and (2) that the reservations are excessive.

In support of the first proposition, these cases are cited and relied upon: Commonwealth v. Trustees of Hampton Normal &amp Agricultural Institute, 106 Va. 614, 56 S. E. 594, 597; Commonwealth v. Lynchburg Young Men's Christian Association, 115 Va. 745, 80 S. E. 589, 592, 50 L. E. A. (N. S.) 1197; Commonwealth v. City of Richmond, 116 Va. 69, 81 S. E. 69, 73 L R. A. 1915A, 1118.

They do not sustain the county's claim. The Hampton Institute Case dealt with property owned by an industrial school and not by a city. That school leased a tract of 43 acres of land, not used for any educational purposes whatever, to the National Soldiers' Home. It leased a number of houses upon other lands to various persons for fixed rentals and a strip of land 30 feet wide through a portion of its property to a street railway. It also owned another farm, called the "Hemenway Farm, " which is operated as a dairy farm, and in addition to its use for purposes of instruction sold to persons not connected with the school dairy products valued at several thousand dollars a year. The court was of opinion that the Hemenway farm could not be taxed but that the other properties were subject to such assessments. These other properties, when leased, were in no sense used for school purposes but for profit only. The Hemenway farm was used for school purposes, and its excess productions were, as an incident to such use, sold to outsiders, just as the farms in judgment are used for municipal purposes, namely, for the protection from pollution of the city's water supply, and the profits from them were but an incident which did not interfere with this use. It follows that this case does not sustain the...