State Ex Rel. John S. Farr. v. Martin.

• Decision Date: 19 May 1928
• Docket Number: (No. 6220)
• Citation: 105 W.Va. 600
• Court: West Virginia Supreme Court
• Parties: State ex rel. John S. Farr et al. v. "W. M. Martin et al.

105 W.Va. 600

State ex rel. John S. Farr et al.

v."W. M. Martin et al.

(No. 6220)

Supreme Court of Appeals of West Virginia.

Submitted May 9, 1928.

Decided May 19, 1928.

Taxation Educational Use of Property, to Justify Exemption From Taxation, Must be Primary and Immediate, Not Secondary or Remote; Property Held in Trust for School Held Not Entitled to Exemption From Taxation for Year During Which School Received no Immediate Benefit (Const, art. 10, § 1; Amendment of 1917 to Code, c. 29, § 57).

Under section 1, Article 10, Constitution, the exemption of property from taxation depends on its use. To warrant such an exemption for a purpose there stated, the use must be primary and immediate, not secondary or remote.

(Taxation, 37 Cyc. pp. 936, 939.)

(Note: Parenthetical references by Eiditors, C. J. Cyc. Not part of syllabi.)

Miller, President, and Litz, Judge, absent.

Original proceeding by the State, on the relation of John S. Farr and others, for mandamus to be directed to W. M. Martin and others.

Peremptory writ to issue.

McClure & Winters, Charles Ritchie and A. P >. Duduit, for relators.

John H. Holt and E. L. Hogsett, for respondents.

Hatcher, Judge:

In 1926 Fred C. Priehard et al., conveyed to trustees certain real estate, in the city of Huntington, which by a later declaration was shown to be in trust for the Priehard School, a corporation. The School is an educational and eleemosynary institution. Liens against the property approximated $1,207, 203.00. The assessor of Cabell county entered the property for taxation in 1927 at the aggregate value of $990,100.00. Later the State Tax Commissioner approved the transfer, and the Board of Equalization and Review of Cabell county exempted the property from taxation.

The relators, who are citizens and taxpayers of Huntington, seek to have the property charged with taxes for the year 1927, which amount to about $21,800.00.

Respondents allege that the rentals of the property for 1927 amounted to $166,001.81. They do not state the net income from the property or the amount of the interest on its indebtedness for that year. Counsel for respondents admitted in argument, however, that none of the income for 1927 was applied to the Priehard School. They contend that the property should not be taxed because of the amendment of 1917 to section 57, Chapter 29 of the Code, which is as follows:

"Provided further that such exemption from taxes shall apply to all property, including the principal thereof, and the income therefrom held for a term of years or otherwise under a bona fide deed of trust, transfer or assignment, by a trustee or trustees required by the terms of such trust to apply annually the income derived from such property to education, religion, charity and cemeteries, when not used for private purposes or profit.''

Statutes exempting property from taxation are rigidly construed. See the scholarly discourse of Judge Lively on this subject in State v. McDowell Lodge, 96 W. Va. 611, 613-614. The above statute must be considered in connection with the Constitution. Section 1 of Article 10 permits the exemption of property "used" for educational purposes. Here the School holds the equitable title of the property in question. But ownership, even beneficial ownership alone, does not meet the constitutional requirement. Use for educational purposes is the test of the exemption. Washburn College v. Commissioners, 8 Kan. 344, 349. The use contemplated by the Constitution is primary, direct and immediate 'not secondary or remote. People v. Home, 312 Ill. 136; School of Eagle Park v. Board, 175 N. Y. Sup. 701; Masons v. Burlington, 85 Vt. 202, 208; Amherst College v. Assessors, 193 Mass. 168, 178, 79 N. E. 248, 250; Cooley Taxation (4th ed.) Vol. 2, page 1441, see. 687; 12 A. & E. Eney. Law,...