State v. Bishop Seabury Mission

• Decision Date: 26 June 1903
• Docket Number: 13,428 - (119)
• Parties: STATE v. BISHOP SEABURY MISSION
• Court: Minnesota Supreme Court

95 N.W. 882

90 Minn. 92

STATE v. BISHOP SEABURY MISSION

Nos. 13,428 - (119)

Supreme Court of Minnesota

June 26, 1903

In proceedings in the district court for Rice county to enforce payment of personal property taxes for the year 1901 defendant Bishop Seabury Mission interposed an answer claiming exemption from taxation under the provisions of section 3, article 9, of the Constitution of Minnesota. The case was tried before Buckham, J., who found in favor of defendant. From a judgment entered pursuant to the findings plaintiff appealed. Affirmed.

SYLLABUS

Taxation -- "Seminary of Learning."

Defendant, a corporation organized under and pursuant to the statutes of this state as an educational institution, and a "seminary of learning," within the meaning of section 3, article 9, of the state Constitution, has certain endowments, aggregating something like $275,000, which are invested in farm mortgages, the income from which is devoted exclusively to its maintenance and support. Held, that the endowment fund is exempt from taxation, within section 3, article 9, of the Constitution.

William W. Pye, County Attorney, for appellant.

The provisions of the Constitution and statute will be strictly construed, and when a doubt exists it will be construed in favor of the state and against the exemption. St. Peters Church v. Board of Co. Commrs., 12 Minn. 280 (395); County of Hennepin v. Bell, 43 Minn. 344; County of Ramsey v. Church of Good Shepherd, 45 Minn. 229; Nelson v. St. Paul Title Ins. & T. Co., 64 Minn. 101; Cincinnati v. State, 19 Ohio 110; Boston v. City, 129 Mass. 180; Hibernian v. Kelly, 28 Ore. 173; Chicago, B. & K.C.R. Co. v. Guffey, 120 U.S. 569; City v. Rising Virtue, 73 Me. 428; County v. Sisters, 48 Md. 34; Presbyterian v. People, 101 Ill. 578; Cooley, taxn. 204; 1 Desty, Taxn. 134; 12 Am. & Eng. Enc. (2d Ed.) 302.

Respondent is not an institution of purely public charity because: (1) Its real business is that of a seminary of learning for which a particular exemption is provided by the Constitution; (2) it is not a free institution, but derives a certain revenue from the business of education which it carries on, of sufficient amount to bar those of the public who should be the objects of charity; (3) its charities are confined to a particular class or denomination and not to the public generally. County of Hennepin v. Brotherhood of Church of Gethsemane, 27 Minn. 460; Attorney General v. Common Council, 113 Mich. 388; Philadelphia v. Masonic, 160 Pa. St. 572; City v. Rising Virtue, supra.

Neither as a seminary of learning nor as an institution of purely public charity would respondent be exempt from taxation on this property or any property used directly for profit. State v. Pioneer S. & L. Co., 63 Minn. 80.

The exemption goes to the property itself and the right to exemption is determined with reference to the exclusive use made of the property. Pierce v. Inhabitants, 2 Cush. 611; Trustees v. City, 120 Mass. 212; Cleveland v. Pelton, 36 Oh. St. 253; St. Josephs v. Assessors, 12 R.I. 19; Cincinnati v. State, supra; City v. St. Patricks, 28 La. An. 512; Hibernian v. Kelly, supra; St. Marys v. Crowl, 10 Kan. 442; Vail v. Beach, 10 Kan. 241; Washburn v. Commrs., 8 Kan. 344; County v. Sisters, 48 Md. 34; Baltimore v. Baltimore, 50 Md. 437; People v. Graceland, 86 Ill. 336; People v. Theological, 174 Ill. 177; Theological v. People, 189 Ill. 439; Fort v. County, 56 Iowa 34; County of Hennepin v. Brotherhood of Church of Gethsemane, supra; County of Hennepin v. Bell, supra; Ramsey County v. Macalester College, 51 Minn. 437; County of Ramsey v. Church of Good Shepherd, supra; People v. Board, 174 Ill. 177; Chicago Theological Seminary v. Illinois, 188 U.S. 662.

The application of the proceeds of property to the purposes of education or charity will not exempt the property itself from taxation. Cleveland v. Pelton, supra; Hibernian v. Kelly, supra; Cincinnati v. State, supra; Trustees v. City, supra; 1 Desty, Taxn. 119; St. Marys v. Crowl, supra; State v. Board, 35 La. An. 668; Stahl v. Kansas, 54 Kan. 542; Trustees v. Bohler, 80 Ga. 159; Northwestern v. People, 80 Ill. 333; Washburn v. Commrs., supra.

The fact that rents and revenues of property owned by a charitable corporation are devoted to charitable purposes will not exempt such property from taxation. It is only when the property itself is actually and directly used for charitable purposes that the law exempts it from taxation. City v. St. Annas, 31 La. An. 292; City v. Congregation, 15 La. An. 389; City v. New Orleans, 27 La. An. 436; Baltimore v. St. Marys, 50 Md. 343; Morris v. Lone Star, 68 Tex. 698; Trustees v. City, supra; American v. City, 161 Pa. St. 307; First M.E. Church v. City, 26 Ill. 482; Town of Mitchellville v. Board, 64 Iowa 554; State v. Krollman, 38 N.J.L. 574.

A. D. & A. L. Keyes and W. H. Lightner, for respondent.

OPINION

BROWN, J.

Proceedings to enforce the payment of personal property taxes alleged to be delinquent, in which defendant, the Bishop Seabury Mission, answered, claiming that the personal property sought to be taxed was exempt, under the provisions of section 3, article 9, of the state Constitution. Defendant had judgment in the court below, and plaintiff appealed.

The facts are as follows: Defendant is a corporation organized under and pursuant to the statutes of this state as an educational institution, having no capital stock, and is and always has been conducted without profit, or a view to profit, and has for its declared object the diffusion of religion and learning. It has for many years past continuously owned and conducted institutions of learning, consisting of two departments, Shattuck School and Seabury Divinity School, with suitable school buildings, completed and in process of construction, which have been specially designed, arranged, and erected therefor, at a cost of several hundred thousand dollars, on ground owned by it in the city of Faribault. It also has certain endowments, aggregating something like $275,000, which are invested in various ways; the income being used exclusively in the maintenance of the mission. The endowment fund was assessed for taxation by the authorities of Rice county, and a tax of $9,163.80 levied thereon. The tax was not paid. The usual citation was issued to defendant by the district court, in response to which it appeared, and made answer that, under the provisions of the Constitution of the state, the fund in question was exempt from taxation. The trial court, in addition to these general facts, found that the buildings and grounds owned by defendant were purchased and erected with funds donated by benevolent people; that such funds, including the endowment sought to be taxed, were given to the mission in trust, with the intent that the income therefrom should be used for the purpose and objects of the mission, viz., the advancement of education and religion; that the income derived by it from all sources, including that from the fund on which the taxes in controversy were assessed, is insufficient to operate the mission as the same is now conducted; and that it is operated, on the whole, at a loss.

Defendant claims immunity from taxation under the following provision of the state Constitution; the same being section 3, article 9:

"Laws shall be passed taxing all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise, and also all real and personal property, according to its true value in money; but public burying-grounds, public school-houses, public hospitals, academies, colleges, universities and all seminaries of learning, all churches, church property used for religious purposes, and houses of worship, institutions of purely public charity, public property used exclusively for any public purpose, and personal property, to an amount not exceeding in value two hundred dollars for each individual, shall, by general laws, be exempt from taxation."

Defendant comes within the class of institutions to which the exemption is thus extended, designated as "seminaries of learning." but is not an "institution of purely public charity." The Constitution recognizes, and the intention was to make, a distinction between "colleges, universities, * * * seminaries of learning," and "institutions of purely public charity." While all colleges and seminaries conducted without a view to profit, and with funds contributed by benevolent persons, are, in a legal sense, and for certain purposes, charitable institutions (State v. Board of Control, 85 Minn. 165, 88 N.W. 533), the Constitution is restrictive. The intention was to exclude from that class colleges and seminaries of learning. So that a "purely charitable institution," within the meaning of this constitutional provision, may be said to be an institution organized for the purpose of rendering aid, comfort, and assistance to the indigent and defective, open to the public generally, conducted without a view to profit, and supported and maintained by benevolent contributions. County of Hennepin v. Brotherhood of Church of Gethsemane, 27 Minn. 460, 8 N.W. 595. Defendant is therefore a "seminary of learning," and not a charitable institution, within the meaning of the Constitution; and the question presented for decision is whether its endowment fund, or the income therefrom, used and devoted exclusively to its maintenance is exempt from taxation.

The Constitution, in this respect, is self-executing; it creates the exemption. No legislation is necessary to give it force or effect, and statutory enactments can neither add to nor take from it. The question whether defendant's endowment fund is exempt from taxation must be determined, therefore, solely from the construction to be placed upon the...