McColl v. Dallas County

• Decision Date: 15 October 1935
• Docket Number: 43142.
• Parties: McCOLL et al. v. DALLAS COUNTY et al.
• Court: Iowa Supreme Court

262 N.W. 824

220 Iowa 434

McCOLL et al. v. DALLAS COUNTY et al.

No. 43142.

Supreme Court of Iowa.

October 15, 1935

Appeal from District Court, Dallas County; E. W. Dingwell, Judge.

An action to enjoin the collection of taxes assessed against certain lands and to cancel the assessment on the ground that the real estate involved is exempt from taxation. There was a finding and decree in the trial court dismissing plaintiffs' petition. Plaintiffs appeal.

Reversed.

Realty in which county fund for creation of seminary of learning was invested was county property and was part of school fund of county, so as to be exempt from taxation by county or subdivision thereof under statute, notwithstanding that title to realty was in trustees of fund. Code 1931, § 6944, subd 11.

White & Clarke, of Adel, for appellants.

Curtis W. Gregory, of Adel, for appellees

ANDERSON, Justice.

The facts pertinent to a disposition of this appeal are not in controversy. It appears that about the year 1866, one Thomas D. Gregg, who was a resident of Dallas County, Iowa, conveyed to said county a certain tract of land in said county; the deed of conveyance containing the following clause: " The foregoing conveyance being made to aid in establishing in and for said County of Dallas, a seminary of learning wherein studies of the higher grade than is convenient to be taught in common free schools may be included in the course of instruction, wherein attention shall be given to training teachers of primary schools." By a resolution of the board of supervisors of Dallas county the said above-mentioned conveyance was accepted. Later the said land was sold by the county, and proceeds thereof, amounting to about $4,000, was carried by the county in a separate fund known as the " Thomas D. Gregg Fund." Some arrangements were then made by the board of supervisors, or a committee appointed by said board, to establish, in connection with the independent school district of Adel in Dallas county, a room or rooms suitable for the carrying out of the provisions contained in the deed heretofore mentioned. This arrangement, however, was not continued, and the " Thomas D. Gregg Fund" was continued and held by the county in a separate and distinct fund. Later the fund was augmented through the provisions of the will of Thomas D Gregg by something over $9,000, so that the total amount received by the county was approximately $12,000. The board of supervisors in a resolution set apart the aggregate amount " as a permanent fund to be known as the Gregg Fund to be managed in every respect in loaning and apportionment as the permanent school fund of the County." Later the county of Dallas through the authority of its board of supervisors filed a petition in the district court of Dallas county reciting the foregoing facts, asking that suitable persons be appointed by the court to administer the trust and to carry out the intention of the said Thomas D. Gregg in making the donations of the funds to the county as aforesaid. Upon a hearing on said petition, the district court found that it was necessary and expedient that trustees should be appointed to carry said trust into effect, and three trustees were appointed by the court with full power to act in the premises. The trustees so appointed were ordered to take charge, control, and possession of the trust fund, and the board of supervisors, county auditor, and treasurer of Dallas county were ordered to deliver to the trustees so named the trust fund. The trust fund amounting to approximately $12,000 was turned over to the trustees so appointed and has been administered by such trustees and their successors from that time until the present and, with accumulations, it now amounts to approximately $135,000. The fund was loaned by the said trustees upon real estate security, and the interest thereon has augmented the original fund to the amount indicated. Through the business of loaning the funds it became necessary for the said trustees to take title to several tracts of land, either by foreclosure or deed, and it is this land which is involved in the present controversy. The land is situated in different townships and no more than 160 acres is in any one civil township.

The real estate so held by the trustees of the Thomas D. Gregg Fund was listed for taxation for the years 1931, 1932, and 1933, and taxes and penalties extended on the tax books of Dallas county in the aggregate sum of $413.82, and plaintiffs seek in this action to cancel said assessments and enjoin the collection of said taxes, interest, and penalties.

Prior to the commencement of the action, the plaintiffs-trustees filed an application with the board of supervisors of Dallas county for the cancellation and remission of said levy of taxes, and this application was refused by the board. The fund has existed and been under the exclusive control and management of the present trustees and their predecessors for a great number of years, and no effort has been made to establish an institution of learning such as apparently was contemplated by Thomas D. Gregg in making the donations referred to; the trustees considering in their best judgment that the fund had not yet reached an amount sufficient to establish such an institution of learning and support the same. It is fair to say that no part of the funds or the proceeds of the investments have ever been used for any purpose, private or otherwise, and that none of the funds have been used directly in the purchase of real estate.

Upon the trial of the issues disclosed in the foregoing facts, the trial court found that the real estate involved was not exempt from taxation and dismissed plaintiffs' petition. From such ruling this appeal is prosecuted.

The first question raised by the appellants in their argument is that the property is exempt under the provisions of subdivision 2 of section 6944 of the 1931 Code, which provides that " the property of a county, township city, town, school district, or military company, when devoted to public use and not held for pecuniary profit" shall not be taxed. The appellants now claim in argument here that the real estate involved is owned by Dallas county, and the appellants complain that the trial court overlooked and ignored this provision of the statute.

It is apparent from the opinion filed by the trial court determining the issues that the court did not consider the provisions of subdivision 2 of section 6944 in its disposition of the case. This provision provides that any property of the county, township, city, town, or school district when devoted to public use and not held for pecuniary profit shall be exempt from taxation. It is probable that this particular section was not called to the attention of the trial court, as it was not mentioned at all in the opinion filed...