Southern Assembly v. Palmer

• Decision Date: 30 May 1914
• Docket Number: 627.
• Citation: 82 S.E. 18,166 N.C. 75
• Parties: SOUTHERN ASSEMBLY v. PALMER, SHERIFF & TAX COLLECTOR.
• Court: North Carolina Supreme Court

82 S.E. 18

166 N.C. 75

SOUTHERN ASSEMBLY v. PALMER, SHERIFF & TAX COLLECTOR.

No. 627.

Supreme Court of North Carolina

May 30, 1914

Appeal from Superior Court, Haywood County; Ferguson, Judge.

Action for injunction by the Southern Assembly against W. A. Palmer Sheriff, etc.Judgment for defendant, and plaintiff appeals.Affirmed.

The action was instituted to enjoin the defendant, the sheriff and tax collector of Haywood county, from collecting the tax assessed against plaintiff, and appearing on the regular tax lists of the county of Haywood, for the fiscal year 1911-1912, to the amount of $156.53, and which defendant was proceeding to collect by levy and sale.

Plaintiff alleged and claimed that plaintiff's property situate in Haywood county was exempt by article 5, § 5, of the Constitution of the state, and by chapter 419,Laws 1909 incorporating plaintiff, particularly section 9 of said act which, in express terms, exempts plaintiff from taxation.

Alley & Gilmer, of Waynesville, for appellant.

Ferguson & Silver, of Waynesville, for appellee.

HOKE J.(after stating the facts as above).

On the hearing it was properly made to appear: That in 1909 the General Assembly of North Carolina incorporated plaintiff company (Laws 1909, c. 419); the charter authorizing a capital stock of $250,000, in shares of $100 each par value raised to $500, by Priv.Laws 1911, c. 394, and conferring on plaintiff all the powers granted to corporations by section 1128 of the Revisal, including the powers in subsection 4, "to hold, purchase and convey real and personal estate in or out of the state, and to mortgage the same and its franchises," and in subsection 6, "to conduct business in this state, in other states, the District of Columbia, the territories, dependencies and the colonies of the United States, and in foreign countries, and have one or more offices in and out of this state," etc.Among other provisions of this act of incorporation, it is provided in section 2:

"That the purposes of said incorporation is to establish and maintain, in Haywood county, North Carolina, a municipality of the Methodist Episcopal Church, South, assemblies, conventions, conferences, public worship, missionary and school work, orphan homes, manual trades, training and other operations auxiliary and incidental thereto; also a religious resort, with permanent and temporary dwellings for health, rest, recreation, Christian work and fellowship."

Section 3 grants powers to acquire and deal in real estate, waterworks, sewerage, and the power to issue and secure bonds.

Section 4 grants the corporation power to license occupations.

Section 5, to establish cemeteries.

Section 6, that the board of commissioners of the corporation may levy taxes for municipal purposes and levy privilege taxes.

By section 7, the board of commissioners of the corporation may enact ordinances for the government of the municipality.

Section 8 deals with prohibition of liquors.

"Sec. 9.The property of the said corporation shall be exempt from taxation: Provided, this section shall not be so construed as to exempt the poll tax of any resident or the property owned by a resident or lot holder in said corporation and taxable by law.

Sec. 10.That the said corporation shall have power to purchase, build, construct, operate, and maintain hotels, auditoriums, and such other buildings as the said board of commissioners of the said corporation may deem advisable for the purpose of carrying out the business of the said corporation.

Sec. 11.The total authorized capital stock of the said corporation shall be two hundred and fifty thousand dollars divided into 2,500 shares of a par value of one hundred dollars, each, and at least three-fourths of the capital stock of the said corporation shall be held by members of the Methodist Episcopal Church, South."

Section 12 provides that the corporate powers can be exercised only by a board of commissioners, to consist of not less than six nor more than nine members, and this board shall be elected by the stockholders, at their annual meeting, etc.; and subsequent sections confer upon the corporation well-nigh all the powers contained in chapter 73, Revisal 1905, relating to cities and towns, in an extended plot or boundary of land owned by plaintiff in and adjacent to the town of Waynesville, and withdrawing all the territory embraced in said corporation and included in the corporation of Waynesville from the jurisdiction and corporate limits of the town, etc.That taxes, as stated, were duly assessed on the general property of the corporation situate within the county to the amount of $156.53, and for the fiscal year 1911 appearing upon the regular tax list for that year and same were due and owing, provided said property was liable to taxation.

Upon these, the facts chiefly relevant, it is contended for plaintiff that its property is exempt from taxation: First.Because it is a municipal corporation, and as such exempt from taxation by article 5, § 5, of the Constitution.Second.Because of the express exemption contained in section 9 of the charter.But, in our opinion, neither position can be sustained.

True, our Constitution provides (article 5, § 5) that "property belonging to the state or municipal corporations shall be exempt from taxation," and, further, that "the General Assembly may exempt cemeteries, and property held for educational, scientific, literary, charitable or religious purposes," and, some further, minor exemptions are then allowed, these last not to exceed the sum of $300 in value.But, if it be conceded that the Legislature could confer these extensive municipal powers on a corporation of this character, having its ultimate control, not in the inhabitants of the locality, as such, but in a body of stockholders, who may or may not be resident in the community or even in the state, we are well assured that the plaintiff is no such municipal corporation as is described and contemplated in this constitutional provision.

The term, as used in our Constitution, from the context and its primary significance, evidently refers to municipal corporations proper, as cities and towns, etc., and to those public quasi corporations, such as counties, townships, etc in which the inhabitants of designated portions of the state's territory are incorporated for the purpose of exercising certain governmental powers for the public benefit.This may be for the benefit of the general public, as for the state at large, and also for the public benefit of the particular locality; but it is as a governmental agency, and when established as exclusively such, and for that reason that this exemption is allowed, and it was never intended to embrace a corporation like the present plaintiff, which, however high its aims and purposes, is, in its form and controlling features, a business enterprise, and on which municipal powers have been incidentally conferred in promotion of the primary purpose.This concept of a municipal corporation, as embodying the elements (a) designated territory, (b) the inhabitants within the same, and (c) the existence of governmental powers conferred and to be exercised for the public benefit, both general and local, is recognized in many decisions here and elsewhere, and in authoritative text-books...