In re Dille

• Decision Date: 10 February 1903
• Citation: 93 N.W. 571,119 Iowa 575
• Parties: IN THE MATTER OF THE APPEAL OF J. B. DILLE FROM THE ACTION OF THE CITY COUNCIL SITTING AS A BOARD OF REVIEW
• Court: Iowa Supreme Court

93 N.W. 571

119 Iowa 575

IN THE MATTER OF THE APPEAL OF J. B. DILLE FROM THE ACTION OF THE CITY COUNCIL SITTING AS A BOARD OF REVIEW

Supreme Court of Iowa, Des Moines

February 10, 1903

Appeal from Polk District Court.--HON. S. F. PROUTY, Judge.

THIS is an appeal from a decision of the district court holding that certain property belonging to plaintiff and devoted to educational purposes was subject to assessment and taxation.

Affirmed.

Clark & McLaughlin for appellant.

W. H Bremner, M. H. Cohen and Raymond B. Alberson for appellee.

OPINION

DEEMER, J.

There is little or no dispute in the facts. Appellant, Dille, is the owner of five lots in the city of Des Moines, on which is located what is known as "Highland Park College." He is also the owner of the equipment of the college consisting of certain personal property used by the aforesaid school. The city assessor listed the real estate and personal property for taxation for the years 1899 and 1900, assessing the real estate at $ 100,600 and the personal property at $ 20,000. Appellant appeared before the city council, acting as a board of review, and claimed that the property was exempt from taxation. He also asked that, if held not exempt, the valuation be reduced. The city council refused to take any action, and he appealed to the district court. Upon a hearing in that court it was found that the property was not exempt, but the assessable value of the real estate was reduced to $ 65,000 and of the personal property to $ 6,000. The appeal is from the ruling finding the property not exempt.

The property was at one time owned by the Oak & Highland Park Improvement Company, a corporation organized under the laws of this state "to equip, endow own, and dispose of a college in Highland Park, erect buildings and other improvements, and to own and deal in real and personal property and choses in action." While owned by that corporation the property was devoted to educational purposes under the name of the "Highland Park College." In order to erect and equip the buildings, the corporation was compelled to borrow money and to execute a mortgage on the property. Failing to meet its obligation, the mortgage was foreclosed, and a sheriff's deed was executed to one Chas. N. Voss. Voss conveyed the property to J. K. and W. H. Gilcrest, and they in turn conveyed by warranty deed to plaintiff, Dille. Dille took his deed to the property August 24, 1896, and recorded it the same day. Since receiving his deed Dille has used the property for school purposes, and has maintained and conducted a literary and scientific institution thereon, which has retained its original name of "Highland Park College"; but he has so owned and used it with a view to procuring profit. On June 2, 1896, and while the original corporation was still the owner of the property, that corporation brought action in the district court of Polk county against the city council, acting as a board of equalization, for the purpose of having the real estate and personal property then owned by it declared exempt from taxation, and after a full hearing a decree was entered holding that the property was exempt. There has been no material change in the character of the use of the property since that decree was entered, and, as it has never been appealed from. Dille insists that the decree is res adjudicata of the question now presented and determinative of the issues in this case.

The appeal presents two questions: First, is the property because of its use exempt from taxation? and, second, is the decree to which we have referred binding on the parties to this appeal? Determination of the first question involves the construction of section 1304 of the Code, the material part of which is as follows: "The following classes of property are not to be taxed: All grounds and buildings used for public libraries, * * * and for literary and scientific institutions and societies, devoted solely to the appropriate objects of these institutions, * * * and not leased or otherwise used with a view to pecuniary profit; the books, papers and apparatus belonging to the above institutions, used solely for those purposes above contemplated, and the like property of students in any such institution used for their education; moneys and credits belonging exclusively to such institutions and devoted solely to sustaining them, but not exceeding the amount prescribed by their charters for articles of incorporations."

There is no doubt that the grounds and buildings were used by and for a literary and scientific institution, and devoted solely to the appropriate objects thereof. Nor is there any question but that the personal property was used solely for these purposes. But it is contended that, as Dille held and used the property with a view to pecuniary profit to himself, it is not exempt. This brings us down to the exact point for decision, and that is, what effect shall be given this language of the statute, "and not leased or otherwise used with a view to pecuniary profit?" The property was not leased, but is held and used by the owner thereof. He does use it, however, as a literary and a scientific institution, hoping to make some profit from this use. Is this the profit referred to in the statute? The question is not free from doubt; but in view of the rule that exemption statutes such as the one now under consideration are to be strictly construed, and that the burden is on him who claims the exemption to show by clear and satisfactory evidence that the property is within its scope, we are constrained to hold that, when such an institution is used and maintained with a view to pecuniary profit, it is not exempt.

The statute says that when buildings and grounds are used for and devoted solely to the appropriate objects of literary and scientific institutions, and are not leased or otherwise used with a view to pecuniary profit, they shall be exempt from taxation. The property involved in this case was used by the Highland Park College, but was not owned by that institution except as Dille may be said to be the College. In this respect the case is much like Laurent v. City of Muscatine, 59 Iowa 404, 13 N.W. 409, wherein it is said, among other things: "If the title to this property were in the church or in the school as a corporation, or possibly if it were shown that the plaintiff merely held the naked legal title in trust for the school or church, the case would be within the rule adopted in the case of Trustees of Griswold College v. State, 46...