Commonwealth v. Trustees of Hamilton College

• Decision Date: 16 April 1907
• Citation: 101 S.W. 405,125 Ky. 329
• Parties: COMMONWEALTH v. TRUSTEES OF HAMILTON COLLEGE.
• Court: Kentucky Court of Appeals

101 S.W. 405

125 Ky. 329

COMMONWEALTH v. TRUSTEES OF HAMILTON COLLEGE.

Court of Appeals of Kentucky.

April 16, 1907

Appeal from Circuit Court, Fayette County.

"To be officially reported."

Action by the commonwealth, through its auditor's agents against the trustees of Hamilton College. From a judgment for defendant, the commonwealth appeals. Affirmed.

Hawkins & Williamson, for the Commonwealth. C.J. Bronston and Mat Walton, for appellee.

CARROLL C.

This is an effort by the commonwealth, through its auditor's agents, to tax the property of Hamilton College for the years 1898 to 1902, inclusive, it being conceded that the property thus sought to be taxed was not assessed or taxed for the years named. The appellee claims that it is exempt from taxation under section 170 of the Constitution, providing in part that "there shall be exempt from taxation * * * institutions of education not used or employed for gain by any person or corporation, and the income of which is devoted solely to the cause of education." The following agreed state of facts is filed with the record: "It is agreed between the parties hereto that the following facts are to be taken as true in the consideration of this case: That during the years 1898, 1899, 1900, 1901, 1902, and on the 15th day of each of said years, the property under consideration which is sought to be assessed for taxation, was run by Prof B. C. Haggerman at a yearly rental of $______, and that during said years, and on the 15th day of each of said years and during the months of January and June, inclusive, of the year 1903, the said Haggerman conducted said school as a private enterprise, and that he secured therefrom a personal pecuniary profit over and above the rental paid to said corporation, which profit was used by him for his own personal benefit." It was further agreed that during the years mentioned, and for many years prior thereto, "Hamilton College has never declared any dividend on its capital stock, and that no one of its officers or stockholders as such has ever received any personal profit from the rental or other funds or revenues derived from said school or property, and that all said rents or revenues have ______ used in paying interest on the mortgage debt, and maintaining the school known as Hamilton College, and for the repairs and betterment of said college property;" and that during said years a majority of the stock in the college was owned by the Kentucky University, which is purely an educational institution, not used or employed for gain by any person or corporation, its income being devoted solely to the cause of education.

Appellant bases its right to tax this institution for the years mentioned upon the theory that during those years it was leased to a private individual, who conducted it as a private school, and made for his own benefit a pecuniary profit therefrom over and above the amount of rental paid to the trustees of the college. It is therefore argued that during those years Hamilton College was not "an institution of education not used or employed for gain by any person or corporation"; but, on the contrary, was used and enjoyed by an individual who made profit therefrom for his private and personal gain. And it is said that if educational property used in this manner can be exempted from taxation that all the private schools and educational institutions in the state now being operated for private gain, and hence subject to...