Howard University v. District of Columbia

• Decision Date: 18 March 1946
• Docket Number: No. 9137.,9137.
• Citation: 81 US App. DC 40,155 F.2d 10
• Parties: HOWARD UNIVERSITY v. DISTRICT OF COLUMBIA.
• Court: U.S. Court of Appeals — District of Columbia Circuit

81 US App. DC 40, 155 F.2d 10 (1946)

HOWARD UNIVERSITY v. DISTRICT OF COLUMBIA.

No. 9137.

United States Court of Appeals District of Columbia.

Argued February 8, 1946.

Decided March 18, 1946.

Mr. George E. C. Hayes, of Washington, D. C., for petitioner.

Mr. G. C. Updegraff, Asst. Corporation Counsel, District of Columbia, of Washington, D. C., with whom Messrs. Vernon E. West, Corporation Counsel, and Chester H. Gray, Principal Asst. Corporation Counsel, both of Washington, D. C., were on the brief, for respondent.

Before GRONER, C. J., and CLARK and PRETTYMAN, JJ.

GRONER, C. J.

Petitioner asks us to review and reverse an order of the District of Columbia Board of Tax Appeals.

The controversy involves the validity of an assessment of taxes for the fiscal year 1945 against real estate owned by Howard University.

The University was created by Act of Congress approved March 2, 1867.¹ The Act established "in the District of Columbia, a university for the education of youth in the liberal arts and sciences, under the name * * * of `The Howard University.'" The incorporators are declared to be a body politic and corporate, with perpetual succession, and with the right to take to themselves and their successors, for the use of the University, any lands, moneys and effects by gift, devise, grant and sale, and to receive the rents, issues and profits, income and interest, and to apply the same for the proper use and benefit of the University. The incorporating Act contains no specific provision for exemption from taxation, but in 1882² Congress, in consideration of the conveyance to the United States of certain lands then held by Howard University (since reconveyed), provided: "That the property, real and personal, of the said University shall be exempt from taxation so long as such property shall be used only for the purposes set forth in the charter of said institution: * * *."

The record shows that from time to time Howard University has secured large grants of money from the United States for the purchase of lands, the construction of buildings, the maintenance of its plant, and for educational activities. None of such properties are involved in this controversy. In the seventy odd years of its existence Howard has grown to be one of the nation's leading Negro educational institutions of higher learning, its student body being drawn from practically every State of the United States and many foreign countries. Its outstanding contribution in its particular field is universally recognized.

In 1929 its Board of Trustees, realizing the necessity of provision for future expansion, established what is now known as the "Twenty-Year Plan Extension Fund," and to this fund in that year, at the solicitation of the University, the General Education Board and the Julius Rosenwald Foundation contributed approximately $900,000.

With these donations and the resulting increment the University had acquired by July 1, 1944, real estate of the approximate value of $1,100,000, of which a little less than one-third had been "appropriated to the direct educational purposes of petitioner." Such appropriated properties, together with some $84,000 of other real estate holdings which were in the tax year vacant and non-productive of income, were not taxed, and are not involved. The real estate investment which is involved is located in proximity to the University campus and consists of dwelling houses, stores and apartments, from which Howard receives a considerable sum of money in rentals, the net proceeds of which, under the Extension Plan, have gone into a fund, and is used only in the purchase of additional property. The plan contemplates an ultimate fund of $15,000,000, to be expended in the erection of buildings on the lands in question for use in connection with the University's educational activities.

In addition to the land and buildings acquired under the "Plan," the University owns other pieces of improved real estate acquired from "Endowment Funds." These properties are not specifically designed for use in future extensions to the University, but are rented to various tenants and the income is used for the payment of salaries, scholarships and other expenses in the operation of the University.

In August, 1944, the Assessor of the District of Columbia imposed a tax assessment of $5,662.42 for the fiscal year ending June 30, 1945, against the improved properties carried in the Extension Plan and a tax of $1,152.72 against the same class of properties carried in the Endowment Fund. All of the involved properties were at the time rented to private tenants by the University.

In 1942³ Congress passed a comprehensive Act in relation to the exemption from taxation of real property in the District of Columbia. The Act exempts, inter alia, property belonging to hospitals, churches, cemeteries, libraries, schools, colleges and universities, provided, however, that if such properties, or any part thereof, are used to secure a rent or income for any activity other than that for which the exemption is granted, such property shall be assessed for taxation. The Act likewise exempts "property heretofore specifically exempted from taxation by any special Act of Congress, in force December 24, 1942, so long as such property is used for the purposes for which such exemption is granted."

It is under this last clause that the claim for exemption is made. Both parties agree that the result depends upon whether the real estate upon which the assessment is levied, and which admittedly is now being used only for the purpose of securing income from rents, is under the exemption provision of the 1882 Act, property "used only for the purposes set forth in the charter" of the University, i. e., "the education of youth." Counsel for the University says the question should be answered in the affirmative because, as he insists, the primary purpose in the acquisition of these properties was educational. Cou...