Cumberland Lodge No. 8, F. & A.M. v. City of Nashville

• Decision Date: 08 March 1913
• Parties: CUMBERLAND LODGE, NO. 8, F. & A. M., v. MAYOR AND CITY COUNCIL OF NASHVILLE et al.
• Court: Tennessee Supreme Court

154 S.W. 1141

127 Tenn. 248

CUMBERLAND LODGE, NO. 8, F. & A. M., v. MAYOR AND CITY COUNCIL OF NASHVILLE et al.

Supreme Court of Tennessee.

March 8, 1913

Appeal from Chancery Court, Davidson County; John Allison Chancellor.

Suit by Cumberland Lodge, No. 8, Free and Accepted Masons, against the Mayor and City Council of Nashville and others. From a decree for complainant, defendants appeal. Affirmed.

Albert Ewing, City Atty., Frank Garard, and E. J. Smith, all of Nashville, for appellants.

Parks & Bell, of Nashville, for appellee.

BUCHANAN J.

The single question presented by this record is whether or not the property of the above lodge is exempt from municipal taxes under the Constitution and laws of the state of Tennessee. The taxes as claimed by the municipality are for the year 1910, and amount to $1,609.50 and interest thereon at 6 per cent. From December 14, 1910. The pleadings consist of the original bill of the lodge, seeking a decree perpetually enjoining the collection of the taxes, and setting up the claim of exemption therefrom, the answer and cross-bill of the municipality, denying the right of exemption, and seeking a decree for the amount of the taxes costs, etc., and the answer of the lodge to the cross-bill.

The proof was supplied by a stipulation of counsel. The final decree of the chancery court, rendered by Hon. John Allison Chancellor, declared the property of the lodge to be exempt from taxes, and perpetually enjoined the municipality from collecting the taxes in question, and from this decree the case is before this court on appeal.

The assignments of error are four in number, but may be treated as raising only one question, which is: Was there error in the decree?

Article 1, § 26, of the Constitution of the state of Tennessee of 1796, provided that "all lands liable to taxation in this state, held by deed, grant or entry, shall be taxed equal and uniform, in such manner that no one hundred acres shall be taxed higher than another, except town lots, which shall not be taxed higher than two hundred acres of land each; no free man shall be taxed higher than one hundred acres, and no slave higher than two hundred acres, on each poll."

The provision in the Constitution of 1834 on the same subject is found in article 2, § 28, of that Constitution, and is as follows: "All lands liable to taxation, held by deed, grant or entry, town lots, bank stock, slaves between the ages of 12 and 50 years, and such other property as the Legislature may from time to time deem expedient shall be taxable. All property shall be taxed according to its value; that value to be ascertained in such manner as the Legislature shall direct, so that the same shall be equal and uniform throughout the state. No one species of property from which a tax may be collected, shall be taxed higher than any other species of property of equal value. But the Legislature shall have power to tax merchants, peddlers, and privileges, in such manner as they may, from time to time, direct. A tax on white polls shall be laid in such manner and of such amount as may be provided by law."

The section of the Constitution of 1870, corresponding to the above-quoted sections from each of the other Constitutions, is found in article 2, § 28, of the Constitution of 1870, and is as follows:

"All property, real, personal or mixed, shall be taxed, but the Legislature may except such as may be held by the state, by counties, cities or towns, and used exclusively for public or corporation purposes, and such as may be held and used for purposes purely religious, charitable, scientific, literary or educational, and shall except one thousand dollars' worth of personal property in the hands of each taxpayer, and the direct product of the soil in the hands of the producer, and his immediate vendee. All property shall be taxed according to its value, that value to be ascertained in such manner as the Legislature shall direct, so that taxes shall be equal and uniform throughout the state. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of the same value, but the Legislature shall have power to tax merchants, peddlers and privileges, in such manner as they may from time to time direct. The portion of a merchant's capital used in the purchase of merchandise sold by him to nonresidents and sent beyond the state, shall not be taxed at a rate higher than the ad valorem tax on property. The Legislature shall have power to levy a tax upon incomes derived from stocks and bonds that are not taxed ad valorem. All male citizens of this state over the age of twenty-one years except such persons as may be exempted by law on account of age or other infirmity shall be liable to a poll tax of not less than fifty cents nor more than one dollar per annum. Nor shall any county or corporation levy a poll tax exceeding the amount levied by the state."

It is to be observed that under the Constitution of 1796 the provision was: "All lands liable to taxation in this state *** shall be taxed." And under the Constitution of 1834 the provision was: "All lands liable to taxation, held by deed, grant or entry, *** shall be taxable." But under the Constitution of 1870 the provision was: "All property, real, personal or mixed, shall be taxed, but the Legislature may except such as may be held by the state, by counties, cities or towns, and used exclusively for public corporation purposes, and such as may be held and used for purposes purely religious, charitable, scientific, literary or educational," etc.

The wider range of discretion allowed to the Legislature by the provision of the Constitution of 1796, and by the provision of the Constitution of 1834, above quoted, resulted in holdings by this court that a grant of immunity from taxation by a legislative act in the charter of a corporation was a contract by which the state was bound, the obligation of which might not be impaired by subsequent legislation, or constitutional provision. State v. Bank of Commerce, 95 Tenn. 226, 31 S.W. 993, and authorities there cited. But the limitations placed upon the Legislature in article 2, § 28, of the Constitution of 1870, that "all property, real, personal or mixed, shall be taxed," resulted in the holding by this court that after the adoption of the Constitution of 1870 the Legislature was thereby prohibited from granting any other exemption than such as was authorized by that Constitution. Railway v. Wilson County, 89 Tenn. 608, 15 S.W. 446, and authorities there cited.

Complainant lodge was founded June 24, 1812, by a dispensation from the Grand Lodge of North Carolina, under the name of Cumberland Lodge, No. 60, Free and Accepted Masons. On December 27, 1813, the Grand Lodge of Tennessee was established, and complainant surrendered the dispensation from the Grand Lodge of North Carolina, and secured a dispensation from the Grand Lodge of Tennessee, dated February 8, 1814, and a charter was granted to it under the name of Cumberland Lodge, No. 8, Free and Accepted Masons. It has held its regular meetings in Nashville ever since its first organization. It works under its by-laws, and under the Grand Lodge of Tennessee. It was incorporated by act of the General Assembly of the state of Tennessee for the years 1857 and 1858, under the name of Cumberland Lodge, No. 8, of Free and Accepted Masons, in the City of Nashville, of date March 8, 1858. Laws 1857-58, c. 117. This charter of incorporation contained no provision exempting its property from taxation, and no such claim is made. Its claim of exemption is based on the authority conferred on the Legislature by the above-quoted section of the Constitution of 1870, and upon what it insists was an exercise of that authority by a legislative act. Numerous acts of the Legislature have been passed in the exercise of the authority since the adoption of the Constitution of 1870, namely: 1879, chapter 112; 1883, chapter 105; 1889, chapter 96; 1895, chapter 120; 1897, chapter 1; 1899, chapter 435; 1901, chapter 174; 1903, chapter 258; 1907, chapter 602. But the claim of exemption made by complainant is based on subsection 2 of section 2 of the act of 1907, viz.: "All property belonging to any religious, charitable, scientific, or educational institution when used exclusively for the purpose for which said institution was created, or is unimproved and yields no income. All property, belonging to such institution used in secular business and competing with a like business, that pays taxes to the state shall be taxed on its whole or partial value in proportion as the same may be used in competition with secular business."

It is to be noted that the last above quotation is divisible in two parts or sentences. The first part begins with the word "all" and ends with the word "income" the second part begins with the word "all," and ends with the word "business"; and it is manifest that the second part is a qualification of, or limitation upon, the first part. The use made by the complainant of its property, as disclosed by the stipulation of counsel in this record, is in no material respect different from, or other than, the use made by the Vanderbilt University of its property, as disclosed in the case of University v. Cheney, 116 Tenn. 260, 94 S.W. 90. In that case it appears that the insistence was made on behalf of the city that the use made by the University of its property brought it within the second or last part of subsection 2 of section 2 of the act of 1899; but this court held in that that the mere act of renting out its property by the University was only an incident to ownership, and was not a carrying on of business within the meaning of subsection 2 of section 2 of the...