Board or Directors of the Chicago Theological Seminary v. Peoule of the State of Illinois Samuel Raymond

• Decision Date: 23 February 1903
• Docket Number: Nos. 140 and 265,s. 140 and 265
• Citation: 188 U.S. 662,23 S.Ct. 386,47 L.Ed. 641
• Parties: BOARD OR DIRECTORS OF THE CHICAGO THEOLOGICAL SEMINARY, Plff. in Err. , v. PEOULE OF THE STATE OF ILLINOIS ex rel. SAMUEL B. RAYMOND, County Treasurer and ex offcio Collector of Cook County, Illinois
• Court: U.S. Supreme Court

188 U.S. 662

23 S.Ct. 386

47 L.Ed. 641

BOARD OR DIRECTORS OF THE CHICAGO THEOLOGICAL SEMINARY, Plff. in Err.,

v PEOULE OF THE STATE OF ILLINOIS ex rel. SAMUEL B. RAYMOND, County Treasurer and ex offcio Collector of Cook County, Illinois.

Nos. 140 and 265.

Argued and Submitted January 20, 21, 1903.

Decided February 23, 1903.

These cases, between the same parties, come here by writs of error to the supreme court of Illinois, which held certain property of the plaintiff in error not exempt from taxation. 189 Ill. 439, 59 N. E. 977.

The case No. 140 involves taxes for the year 1899, and No. 265 for the year 1900.

The plaintiff in error claims exemption under its charter, passed in 1855, entitled 'An Act to Incorporate the Chicago Theological Seminary,' a copy of which is set forth in the margin.

The supreme court of the state held that the provision granting the exemption from taxation in § 5 referred only to property used in connection with the seminary, and did not include other property which might be owned, rented, or held by the seminary as an investment, although the income thereof was used solely for school purposes. Accordingly, property which was not so included, and which is involved in these actions, was taxed under the general taxing law of the state, enacted in

Sec. 1. Be it enacted by the People of the state of Illinois, represented in the General Assembly, That Stephen Peet (and twenty-three other persons, named in the act), and their successors be, and they hereby are, created a body politic and corporate, to be styled 'The Board of Directors of the Chicago Theological Seminary,' and by that name and style to remain and have perpetual succession, with full power to sue and be sued, plead and be impleaded; to acquire, Lold, and convey property, real and personal; to have and use a common seal; to alter and renew the same at pleasure; to make and alter a constitution and by-laws for the conducting and government of said institution, and fully to do whatever may be necessary to carry out the object of this act of incorporation.

Sec. 2. That the seminary shall be located in or near the city of Chicago. The object shall be to furnish instruction and the means of education to young men preparing for the gospel ministry, and the institution shall be equally open to all denominations of Christians for this purpose.

Sec. 3. That the board of directors shall consist of twenty-four members, nine of whom shall constitute a quorum for the transaction of business. The directors shall hereafter be elected in accordance with the provisions of the constitution under which they act, and shall hold their office until their successors are appointed.

Sec. 4. The board of directors shall have power to appoint an executive committee and such agents as they may deem necessary, and such officers, professors, and teachers as the government and instruction of the seminary may require, and prescribe their duties, to remove any of them for sufficient reasons, and prescribe and direct the course of studies to be pursued in the institution; also to confer such degrees as are consistent with the object of the institution.

Sec. 5. That the property, of whatever kind or description, belonging or appertaining to said seminary, shall be forever free and exempt from all taxation, for all purposes whatsoever.

Sec. 6. This act to take effect and be in force from and after its passage, and it shall be deemed a public act, and shall be construed liberally in all courts for the purposes therein expressed. 1872. In enforcing the taxation of the outside property of plaintiff in error under that act, it is claimed that the obligation of the contract contained in the act of 1855, the charter of the plaintiff in error, was impaired.

It is conceded that the charter of incorporation was duly accepted, and that, acting on the faith of its provision, the plaintiff in error has acquired by donation and purchase a part of the real estate on which the taxes in question were levied, and, in addition, has expended in the erection and purchase of buildings on the real estate owned by it an amount exceeding $200,000, and a large number of students have been and are being instructed by it in pursuance of its charter. The pieces of real estate upon which the taxes in these cases were levied were acquired by the plaintiff in error by gift or purchase, and were held by it to promote the objects for which it was incorporated, and the rentals received from such real estate are used for those purposes, although the property is not used in immediate connection with the seminary.

Messrs. John J. Herrick and David Fales for plaintiff in error.

[Argument of Counsel from pages 664-670 intentionally omitted] Messrs. Edwin W. Sims, Frank L. Shepard, and William F. Struckman for defendant in error.

[Argument of Counsel from pages 670-672 intentionally omitted] Mr. Justice Peckham, after making the foregoing statement of facts, delivered the opinion of the court:

The supreme court of Illinois, by its decision in this case, has but followed its prior decision upon the same question between these parties, reported in 174 Ill. 177, 51 N. E. 198, decided in 1898. It there held that the exemption was limited to property used in immediate connection with the seminary, and did not include such property as is involved in these cases, which was not property used in immediate connection with the seminary, but was other property separate and apart therefrom, and owned or rented or held by the seminary as an investment, the income from which was nevertheless used solely for school purposes.

The rule of construction followed by the supreme court of Illinois in construing this act exempting property from taxation is so well established by this and other courts as scarcely to need the citation of authorities. One or two, however, from this court may be given. Tucker v. Ferguson, 22 Wall. 527, 22 L. ed. 805; New Orleans City & Lake R. Co. v. New Orleans, 143 U. S. 192, 195, 26 L. ed. 121, 122, 12 Sup. Ct. Rep. 406; Bank of Commerce v. Tennessee Use of Memphis, 161 U. S. 134, 146, 40 L. ed. 645, 649, 16 Sup. Ct. Rep. 456.

The rule is that, in claims for exemption from taxation under legislative authority, the exemption must be plainly and unmistakably granted; it cannot exist by implication only; a doubt is fatal to the claim.

The reasoning of the supreme court of Illinois (174 Ill. 177, 51 N. E. 198), in refusing the exemption claimed, so far as relates to the property not connected with the seminary, is best stated in the language of the opinion of that court. After stating the rule of construction, as above mentioned, the court said (p. 181, N. E. p. 199):

'If, however, taking the express words of the act, and with- out extending their meaning by implication, they may be held to include all property belonging or appertaining to the 'seminary' mentioned in the 2d section, or to include all the property belonging or appertaining to the corporation, and there is reasonable ground for doubt which was intended by the legislature, that doubt must be resolved in favor of the state. In other words, if the language is capable of a broad or more restricted meaning, the latter must be adopted. The 2d section of the charter mentioning certain property to be located in or near the city of Chicago, and which is denominated 'the seminary,' we think the words in the 5th section, 'said seminary,' refer to that particular property, and to so hold seems to do no more than to give the language of the two sections their literal and ordinarily understood meaning. To say, as is contended by appellee, that 'said seminary' was intended to mean the corporation is to extend the meaning of those words by implication, which is not permissible.

'It is said that the only entity mentioned in the charter capable of owning property is the corporation, and therefore it could not have been intended that property belonging or appertaining to the seminary was meant by § 5. We think this position is based upon a too limited meaning of the words 'belonging or appertaining,' as here used. Of course, if the language of § 5 had been that the property, of whatever kind or description, owned by the said seminary shall be forever free from all taxation, etc., or if, as counsel seem to assume, the words 'belonging or appertaining' here necessarily meant ownership of the property, then there would be force in this argument of counsel. It is undoubtedly true that the word 'belonging' may mean ownership, and very often does. But that is not its only meaning. Wester's International Dictionary defines it: '2. That which is connected with a principal or greater thing; an appendage, an appurtenance.' He also defines the word 'pertain' as meaning 'to belong or pertain, whether by right of nature, appointment, or custom; to relate, as 'things pertaining to life." Manifestly, the purpose of § 5 was to exempt property owned by the corporation, but it does not follow that the intention was to include in that exemption all property owned by it used for purposes of the school.'

We think there is force in this reasoning, and we are disposed to concur in the result arrived at.

It is contended by counsel for plaintiff in error that the words 'said seminary,' contained in § 5 of the charter, referred to the corporation created by the act, and not to the school buildings and grounds, and that, therefore, the exemption necessarily exempted from taxation all the property against which the judgments below were rendered.

Here are two different constructions of the exemption clause, each of which might be maintained with some plausibility. That view which limits the range of the exemption to property used in immediate connection with the seminary might seem to many to be the correct one, while in the opinion of others the broader claim of total exemption would be the best founded. The judges of the supreme court of...