City Of Staunton v. Baldwin

• Decision Date: 12 September 1901
• Citation: 39 S.E. 596,99 Va. 653
• Court: Virginia Supreme Court
• Parties: CITY OF STAUNTON. v. MARY BALDWIN SEMINARY.

39 S.E. 596

99 Va. 653

CITY OF STAUNTON.

v. MARY BALDWINSEMINARY.

Supreme Court of Appeals of Virginia.

Sept. 12, 1901.

TAXATION—EXEMPTION—POWER OF LEGISLATURE — CHARITABLE INSTITUTIONS — CONSTRUCTION OF STATUTES—INJUNCTION.

1. Const. art. 10, § 3, authorizing the legislature to exempt from taxation all property used exclusively for state, county, municipal, benevolent, charitable, educational, and religious purposes, authorizes the legislature to exempt property the proceeds of which are used for such purposes.

2. Code, § 457, as amended by Act Jan. 28, 1896 (Acts 1895-96, p. 218), entitled "An act relating to real estate which is exempt from taxation, " provides that real estate owned by benevolent and educational institutions, the proceeds of which are devoted exclusively to charitable and educational purposes, shall be exempt, and when part of a lot or building or its proceeds is used for such purposes "the same" shall be exempt from taxation to that extent. Held, that a building rented and the proceeds used for charitable purposes is exempt, and not merely the proceeds thereof.

3. Injunction will lie to prevent the enforcement of a tax levied on exempt property.

Appeal from hustings court of Staunton.

Injunction by the Mary Baldwin Seminary against the city of Staunton to restrain the collection of an illegal tax. From a decree in favor of plaintiff, defendant appeals. Affirmed.

Patrick & Gordon, for appellant.

A. F. Robertson, for appellee.

BUCHANAN, J. The question involved in this case is the right of the city of Staunton to tax certain houses and lots owned by the Mary Baldwin Seminary, an incorporated educational institution.

Section 457 of the Code, as amended by an act of the general assembly approved January 28, 1896 (Acts 1895-96, p. 218), provides, among other things, that real estate belonging to certain classes of educational institutions and charitable associations shall be ex empt from taxation where the proceeds arising from such property are devoted exclusively to charitable or educational purposes, with the proviso that nothing contained in the section shall be construed to exempt from taxation any part of a lot or building used for any private purpose or for profit; but where a part of the property or its proceeds is used for charitable or school purposes, then to that extent the same shall be exempt from taxation.

The house and lots in question are leased by the seminary, and the rents derived therefrom are used exclusively for the purposes of the school.

The city of Staunton insists that the legislature had no power under the constitution to exempt any property from taxation which was not used by the seminary for school purposes, although the rents or proceeds of the property were devoted exclusively to such purposes, and that even if the legislature had such power, section 457 of the Code, as amended, does not exempt the property in question from taxation, but only exempts the proceeds of such property.

The power of the general assembly to exempt property where the rents or proceeds of the property, and not the property itself, are used for charitable purposes, was decided in the case of City of Petersburg v. Petersburg Benev. Mechanics' Ass'n, 78 Va. 431. It was there held that section 3, art. 10, of the constitution, which provided that the legislature may exempt all property "used exclusively for state, county, municipal, benevolent, charitable, educational and religious purposes, " carried with it the power to exempt property the proceeds of which are devoted to any of the purposes named.

The constitutional power of the general assembly to exempt the property in question from taxation must be considered as settled and controlled by that case.

The next question is, does section 457 of the Code, as amended, exempt the property itself, or does it only, as the city insists, exempt the rents or proceeds of the property from taxation?

The act of January 28, 1896, under which the seminary claims that its houses and lots in question are exempt from taxation, does not, upon the point under consideration, differ in its legal construction from the act of April 2, 1877 (Acts 1876-77, p. 302), which was in...