State v. Waggoner

• Court: Tennessee Supreme Court
• Writing for the Court: GREEN, C.J.
• Citation: State v. Waggoner, 35 S.W.2d 389, 162 Tenn. 172 (Tenn. 1931)
• Decision Date: 21 February 1931
• Parties: STATE, for Use of Davidson County, v. WAGGONER et al.

35 S.W.2d 389

162 Tenn. 172

STATE, for Use of Davidson County, v. WAGGONER et al.

Supreme Court of Tennessee.

February 21, 1931

Appeal from Chancery Court, Davidson County; R. B. C. Howell Chancellor.

Suit by the State, for use of Davidson County, against Kate K Waggoner and others, including the Ward-Belmont School. From a decree for the Ward-Belmont School, the State appeals.

Reversed and rendered.

Albert G. Ewing, III, of Nashville, for complainant.

M. P O'Connor and Littell Rust, both of Nashville, for defendant.

GREEN C.J.

This suit was brought by the state for its own use and for the use of Davidson county to recover delinquent state and county taxes. Among other defendants is Ward-Belmont School. This defendant answered, denying liability on the ground that its property involved was used for educational purposes, and not liable to taxation. The chancellor decreed in favor of Ward-Belmont School, and the state has appealed.

Ward-Belmont School is a corporation for profit, as distinguished from an eleemosynary corporation or a corporation organized for the general welfare. It owns valuable real estate in Nashville, a large campus with handsome and commodious buildings, as well as other property in the city and county. The corporation is capitalized at $450,000.

Immediately across one of the streets bounding the campus of the school is a residence which belongs to the institution. During the years for which the taxes sued for in this case accrued, this residence was occupied by Eustice A. Hail. He and his family owned the majority of stock in the corporation, and he was vice president and business manager of the corporation. He took no part in the educational work of the institution, but managed all its business affairs. An office was provided for him in one of the buildings on the campus, in which office he attended to his duties in connection with the school. According to his testimony, he had no other employment, and devoted all his time to the business management of this institution. He said that he occupied his office on the campus the whole of every week day, and frequently returned there in the evening after dinner, giving about twelve hours a day to the duties mentioned. Under his contract with Ward-Belmont school, Hail was paid a salary and furnished the residence aforesaid for himself and his family.

Section 28 of article 2 of the Constitution of the state authorizes the Legislature to exempt from taxation property "held and used for purposes purely religious, charitable, scientific, literary, or educational." Section 2 of chapter 602 of the Acts of 1907 exempts property "belonging to any religious, charitable, scientific, or educational institutions when used exclusively for the purpose for which said institution was created."

In Ward Seminary v. City Council, 129 Tenn. 412, 167 S.W. 113, the court elaborately considered the nature of the exemptions to which Ward Seminary for young ladies, a predecessor of defendant herein, was entitled. That institution was organized under a charter similar to the charter under which Ward-Belmont School operates--both being corporations for profits.

In regard to such an institution, so chartered, we said: "The property *** which is in reality used in educational work, such as the school buildings, dormitories, exercise grounds, and the usual and appropriate equipment" of an institution of this character, is exempt from taxation.

In other words, to be exempt, the property of an institution of this sort must be used purely for educational purposes, as said in the Constitution, or exclusively for educational purposes, as said in the statute--purely and exclusively meaning the same thing. M. E. Church, South, v. Hinton, 92 Tenn. 188, 21 S.W. 321.

An exemption of an educational institution is not to be so narrowly construed as an exemption of a railroad corporation. State v. Fisk University, 87 Tenn. 233, 10 S.W. 284. Counsel for both parties agree that property of an educational institution may be regarded as used...