The Travelers' Insurance Company v. Kent

Decision Date24 May 1898
Docket Number18,353
Citation50 N.E. 562,151 Ind. 349
PartiesThe Travelers' Insurance Company v. Kent et al
CourtIndiana Supreme Court

Rehearing Denied October 26, 1898, Reported at: 151 Ind. 349 at 355.

From the White Circuit Court.


McConnell & Jenkines, M. Winfield and Guthrie & Bushnell, for appellant.

Sellers & Uhl, for appellees.


Howard, J.

The Brookston Academy was a private school corporation organized for the purpose of maintaining an institution of learning at Brookston, in White county, Indiana. In April, 1866, the academy purchased the land here in controversy, being about five acres, situated in Prairie township, adjoining the town of Brookston. A school building was erected upon the grounds so purchased, and a school was maintained by the corporation until the year 1871, when the building and grounds passed, on sheriff's sale, to one Cormican Hays, by deed dated February 7, 1871. On December 13, 1871, Hays executed a mortgage on the land to appellant, to secure a loan of $ 8,000. On October 8, 1874, a bond for a deed to the land was made by Hays to the trustee of Prairie township, the deed to be given on payment to Hays of the sum of $ 8,000, payable in eight years, in yearly installments of $ 1,000 each; and on the same day said trustee leased the land to the school trustees of the town of Brookston, for school purposes, for the term of ninety-nine years, the consideration being $ 4,000, payable in eight years, in yearly installments of $ 500 each. On August 14, 1883, in the United States Circuit Court for the district of Indiana, the mortgage given to appellant by Havs was foreclosed; and on September 14, 1883, the land was sold to appellant by the United States commissioner for $ 7,000. On October 22, 1884, the appellant received from the commissioner a deed for the land. On February 18, 1885, Hays and wife assumed the right, by written deed of assignment, to transfer to the appellant all their right, title, and interest in the title bond to, and contract with, the trustee of Prairie township, of date October 8, 1874. From 1866, when the Brookston Academy came into possession of the real estate in question, until 1885, after the appellant had become the owner, the property was not assessed for taxes, being considered as exempt by reason of its use for educational purposes. Beginning with 1885, however, the property was taxed to the appellant, as owner. On February 13, 1893, the taxes having remained unpaid, the land was sold to the appellee Kent, for delinquent taxes, by the auditor of White county; and on December 17, 1895, there having been no redemption from such sale, said real estate was duly conveyed by auditor's deed to said appellee. On January 15, 1896, the appellee Kent brought this action against appellant and others, to quiet his title to the property in controversy, or, in case his tax deed should be found insufficient to convey title, then to foreclose his lien for purchase money, together with taxes and other liens since paid. On March 9, 1896, appellant and other defendants were defaulted, and a decree entered in favor of the said appellee. On May 6, 1896, on application duly made, the default and decree as to appellant were set aside; and appellant filed its answer and cross-complaint, alleging that the taxes assessed upon the land were illegal, and asking to have them canceled, and for all other proper relief. On February 16, 1897, the court found again for the appellee, and on March 5, 1897, over a motion for a new trial, entered judgment foreclosing the lien, and ordering the property sold.

The sole question for decision is whether lands owned by one person, and used by another for school purposes, are subject to taxation. It would seem that there could not be any doubt that such lands are taxable, as against the owner. If the Brookston Academy, or Prairie school township, or the school town of Brookston, were here, as owner of the lands in controversy, there would be no question that, as to such school corporations, the property would not be taxable. But the Travelers' Insurance Company is not engaged in conducting a school; and, if its property should be held to be exempt from taxation because it is suffered to be used for school purposes, then it would follow that any person who rents a hall, a store building or a part of his house for the use of a school would thus be able to claim such hall, store building, or part of his dwelling free from taxes, at least during the time he was so receiving rent for the property.

The able and learned counsel for appellant base their ingenious argument wholly upon the words "used and set apart," as employed in the statute concerning exemptions from taxation. Article 10, section 1, of the constitution declares that "The General Assembly shall provide, by law, for a uniform and equal rate of assessment and taxation and shall prescribe such regulations as shall secure a just valuation for taxation of all property, both real and personal, excepting such only, for municipal, educational, literary, scientific, religious or charitable purposes, as may be especially exempted by law." The exemption authorized by law, under this provision of the constitution, so far as relates to the claim made by appellant, and in force when the taxes in question were levied, is found in clause 5, section 6276, R. S. 1881 (Acts 1881, p. 611), and is as follows: "Every building used and set apart for educational, * * * purposes by any institution, or by any individual or individuals, association or corporation, or used for the same purpose by any town, township, city, or county, and the tract of land on which such building is situated,...

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