Ferguson v. Townsend
| Decision Date | 26 January 1932 |
| Docket Number | 7209. |
| Parties | FERGUSON et al. v. TOWNSEND, State Tax Commissioner. |
| Court | West Virginia Supreme Court |
Submitted January 20, 1932.
Syllabus by the Court.
Lands within state conveyed for benefit of foreign corporation engaged in educational and charitable purposes outside state held not exempt from taxation (Code 1931, 11-3-9; Const. art. 10, § 1).
Lands in this state conveyed to trustees and directed by the vendor to be sold for the use and benefit of a foreign corporation engaged in educational and charitable purposes conducted wholly without the borders of this state, and pending such sale the rents and profits therefrom to be paid annually to such foreign corporation, are not exempt from taxes under Constitution, article 10, § 1, and chapter 11 article 3, § 9, Code 1931.
Original petition by Homer L. Ferguson, trustee, and others for a writ of mandamus prayed to be directed to T. C. Townsend, State Tax Commissioner.
Writ of mandamus denied.
John T Simms, of Charleston, for respondent.
Relators' petition for mandamus against Townsend, state tax commissioner, to compel him to indorse his approval upon a deed of trust dated March 14, 1931, executed by Archer Milton Huntington and wife to relators, Ferguson and First National Bank, trustees, conveying to said trustees lands in the counties of Kanawha, Nicholas, and Clay in this state for alleged educational and charitable purposes, so that said lands may be listed as exempt from taxation under the Constitution, article 10, § 1, and under the provisions of chapter 11, article 3, section 9 of the Official Code of 1931. Relator Mariners' Museum is a corporation under the laws of Virginia, created and organized for the purpose of building, maintaining, and operating in Warwick county, Va at the head of Hampton Roads, a museum and library pertaining to nautical subjects. Its purposes and powers are: To build own, equip, maintain, and operate a museum and library pertaining to nautical subjects and things of interest, and otherwise to advance learning; the arts and sciences relating to, or bearing on, water craft, the marine and marine navigation, thus to promote the public welfare, and provides means for encouraging and carrying on the above-mentioned purposes. The tax commissioner, by his demurrer, return, and brief, contends that the lands conveyed in the trust for the purposes set out are not to be used for educational or charitable purposes as contemplated by the Constitution and the statute exempting properties from taxation; and that property in this state cannot be exempted from taxation where an educational or charitable purpose is conducted without the borders of the state. On the other hand, relators affirm that the purposes of the Mariners' Museum are educational and charitable, and that property used for such purposes is exempt from taxation, whether the educational or charitable purposes are conducted within or without the state.
To meet a call in the return for full proof as to whether said Mariners' Museum is existent and active and proceeding to carry on its work within the limits of its charter powers, and that it was engaged in educational work within the meaning of the Constitution and statutes of this state, relators took depositions of witnesses which show that Archer M. Huntington, a man of great wealth (the grantor of the property here involved), some years ago conceived the idea and plan of establishing a museum and library pertaining to all marine interests, open and free to the public, with a view of stimulating interest in and educating the public in maritime affairs and water transportation. The idea was crystallized in the incorporation of the Mariners' Museum. Its affairs are conducted by five trustees, who serve without pay. These trustees have acquired about 900 acres of land on upper water front of Hampton Roads, a deep harbor way on the Virginia coast. An artificial lake covering 165 acres has been constructed or impounded. About five miles of roads have been built and are being hard surfaced, and the entire boundary is in process of inclosure by fence; a costly granite bridge has been completed on the ground, and some of the lesser buildings have been almost completed. Plans for the museum building to house ship models, pictures, charts, maps, a photostatic room, and a library to accommodate about 170,000 volumes (a part of which have been acquired), have been agreed upon, after much time spent and investigation of plans of buildings in this country and in Europe. These plans are now reduced to blueprints. There has been spent something like one-half million dollars, and the work is in progress. The grounds have been opened and are free to the public during certain hours of the day; and it appears that money is obtainable for completion of the plans.
The controversy involves the construction of article 10, section 1, of the Constitution. which says that all properties shall be taxed in proportion to its value; but property used for educational, literary, scientific, religious, or charitable purposes may, by law, be exempt from taxation; and section 9, article 3, chapter 11, Official Code 1931, which carries into effect the grant of the constitutional power of exemption to the Legislature, which section provides: ***" The remainder of the proviso provides for examination and visitation by the tax commissioner in order that he may determine whether the trust is carried on in a bona fide way, or is created or carried on for the purpose of evading taxation; and, if he determines from that examination and visitation that it was so created or is not so carried on, he may withdraw his approval, and in the manner in which he shall withdraw it, including appeals from his action thereon.
The taxes for all purposes upon the lands involved approximate $15,000 annually, and the present income therefrom is about $7,000. Assuming that the Mariners' Museum is educational and charitable in character and is being projected and carried on bona fide, and that, when such facts appear, the tax commissioner may be compelled to indorse the trust deed thus directing the nonassessment or noncollection of taxes thereon, all of which is here made controversial, we are confronted with the primary contention that lands in this state and the income therefrom shall not be exempt from taxation to support educational or charitable purposes carried on in other states or nations. If waiver of taxation to assist or carry on such purposes without the borders of the state can be had, then the location of such institutions is immaterial, whether they be in the western or eastern hemisphere; or whether they be for the benefit of American or foreign people. Was it the intention of the framers of the Constitution that taxes on properties in this state should be waived in order to carry on educational or charitable purposes wheresoever undertaken on the globe? The...
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