Linton v. Lucy Cobb Institute
| Decision Date | 25 June 1903 |
| Citation | 45 S.E. 53,117 Ga. 678 |
| Parties | LINTON, Tax Collector, et al. v. LUCY COBB INSTITUTE. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. Under the Constitution, productive property is taxable, even though the income be used for charitable or educational purposes. But buildings used as a college may be exempt from taxation, even if, in the operation of the institution income is derived from tuition fees.
2. Tuition is a charge made for instruction, rather than as rent for the use of the buildings in which the instruction is imparted.
3. Prior to the adoption of the Constitution of 1877, "All buildings erected for and used as a college, incorporated academy, or other seminary of learning" were exempt from taxation, although students were charged for attendance.
4. The same language was incorporated in the Constitution of 1877 and was intended to continue the right of the Legislature to preserve existing exemptions; and the proviso that "the property so exempted be not used for purposes of private or corporate profit or income" was not intended to destroy the exemption already granted, where incidental income was derived from the operation of the charitable or educational institution.
5. Neither before nor since the present Constitution was a tax exemption lost by reason of the fact that tuition fees were charged, where the fees themselves were not used for the purpose of private or corporate profit or income, but were appropriated to the maintenance of the institution.
6. This ruling is supported by the contemporaneous, uniform, and long-continued construction of the Constitution by all taxing officers, and has been acquiesced in by the legisla tive department of the government.
7. The property sought to be taxed was donated and used solely for educational purposes. There was no capital stock, there were no dividends, and the owners received no profit therefrom. All the receipts were devoted exclusively to the pay of teachers, the maintenance of the institution, and the repair of the buildings. The injunction was properly granted to restrain the levy of the tax fi. fa.
Error from Superior Court, Clarke County; R. B. Russell, Judge.
Action by the Lucy Cobb Institute against H. H. Linton, tax collector, and others. Judgment for plaintiff, and defendants bring error. Affirmed.
C. H. Brand, Sol. Gen., for plaintiffs in error.
Erwin & Erwin, for defendant in error.
This case involves the question whether the Lucy Cobb Institute loses its exemption from taxation under Pol. Code 1895, § 762, because of the fact that it collects a tuition fee from its students. In 1857 the citizens of Athens subscribed to a fund which was subsequently used in the purchase of the present property. These subscriptions were entered on a book still kept, but beyond that no stock or other evidence of ownership was ever issued, and the subscribers have never at any time exercised any control of the school. In 1859 some of these subscribers and "their successors" were incorporated under the name of "The Lucy Cobb Institute," with authority "to hold property and do acts necessary for educational purposes." Land was bought, buildings were erected, and the school was organized and successfully conducted until 1882, when George I. Seney donated $10,000, which, with other subscriptions, was used for the erection of a chapel and commencement hall on the land of the institute. A successful college has since been conducted and is now in operation. The record shows that nothing in the nature of dividends has ever been declared, that all receipts from tuition or otherwise are appropriated exclusively to the maintenance of the school and its buildings, and that the property is in no manner used for corporate or individual income or profit, nor has any corporate or individual income been derived, but that the entire property and receipts are devoted solely and directly to the carrying on of the school. It does appear, however, that tuition fees are charged those in attendance on the college.
It is claimed that even though the property, as a college building, would ordinarily be exempt, it is subject to taxes because tuition is charged, and the ruling in Mundy v. Van Hoose, 104 Ga. 292, 30 S.E. 783, is cited in support of that contention. That case was undoubtedly rightly decided. The property there involved had once belonged to an educational corporation, but had been by it conveyed, by warranty deed, to Van Hoose and Pearce, and was in use by them as a source of personal income and support. They lived on the premises with their families. Part of the land was used for farming purposes, a small house was rented to tenants, and the main buildings were used for giving exhibitions, for which charges were made. In these buildings they conducted a boarding school, and all of the income and profit went to the private owners' individual and personal use. There was nothing to indicate that the property had been dedicated to public purposes. It was an educational business enterprise. What was said in the Mundy Case as to the effect of tuition being charged was therefore undoubtedly correct as applied to any property in use for private or corporate gain, and where the fees and other earnings were appropriated to the personal and individual support of the owners of the land. That ruling does not affect a case like this, where the facts are so entirely different--where there is no private ownership, no capital stock, no surplus, no dividends, and where the collections from the operation of the college are applied solely to maintaining the institution and repairing its buildings. Using the word "charity" in the broad sense of Civ. Code 1895, § 4008, if such collections destroy the exemption, every charity in the state is taxable. Such a construction affects every church building, every hospital, every orphan asylum, every library, every eleemosynary institution, in Georgia. The effect of the decision in the Mundy Case has given rise to so much controversy and doubt as to the meaning of the Constitution, the issue is so important, and the consequences of our decision so far-reaching, as to justify, if not require, a full discussion of the questions involved.
In pursuance of the power conferred by the Constitution (Civ. Code 1895, § 5884), the Legislature (Acts 1878-79, p. 33; Pol. Code 1895, § 762) enacted: "The following described property shall be exempt from taxation, to wit: All public property, places of religious worship, and places of burial; all institutions of purely public charity; all buildings erected for and used as a college, incorporated academy, or other seminary of learning; the real and personal estate of any public library, and that of any other literary association, used by or connected with such library; all books, philosophical apparatus, paintings, and statuary of any company or association, kept in a public hall, and not held as merchandise or for purposes of sale or gain: provided, the above-described property so exempted be not used for purposes of private or corporate profit or income." There is no room to apply the rule as to strict construction, for the exemption of college buildings is clear and unequivocal. The only question which can arise is whether the grant made at the beginning of the clause was taken away at the end--whether the exemption expressly allowed was nullified by the proviso. Long-continued and universally recognized canons of construction admit of but one answer. So far as we can learn, this is the first attempt in Georgia to tax a college building used solely for educational purposes. If it had ever before been attempted, the act of 1850 (Acts 1849-50, p. 379) exempted from taxation all property of colleges, and, when the convention met in 1877, section 798 of the Code of 1873 exempted "all buildings erected for and used as a college, incorporated academy, or other seminary of learning." This language was copied literally into the Constitution of 1877. To relieve college buildings is therefore no new thing, no departure from ancient usage, but the continuance of an old and well-established public policy; and when, to the clause specifying what might be exempt, the convention added, "provided, the property so exempted be not used for purposes of private or corporate profit or income," there was no intent to enact new law nor to depart from ancient policy. There was no purpose to make the grant ridiculous and ineffective, but only to guard against the perversion of a liberality extended by every state in the republic. The exemption was in recognition of the fact that these buildings had been set apart for a special purpose, dear to the heart of the state. Her sons and daughters had of their private means given funds to erect these seats of learning. The buildings were not for gain or barter, but for an unselfish and noble public use. It was almost inconceivable that, having been in effect given to the public, the public would ignore, if not repudiate, the generosity, and actually tax the gift, by imposing an annual burden on property solemnly dedicated to the cause of education.
In construing statutes it is the duty of the court, above all else, to give effect to the intent of the lawmaking power. That must be discovered primarily from the language used; but words and intent are not always the same, and hence the constant necessity for applying the rule which forbids a severe literalism at the sacrifice of the spirit. This is particularly applicable to constitutions, which are necessarily comprehensive and free from the details into which statutes more properly enter. Verbal niceties are to be ignored, for the controlling question is, what did the convention intend? To...
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