Trustees of Kentucky Female Orphan School v. City of Louisville

• Decision Date: 23 May 1896
• Citation: 36 S.W. 921
• Parties: TRUSTEES OF KENTUCKY FEMALE ORPHAN SCHOOL v. CITY OF LOUISVILLE. SAME v. BELL, Sheriff.
• Court: Kentucky Court of Appeals

36 S.W. 921

TRUSTEES OF KENTUCKY FEMALE ORPHAN SCHOOL v. CITY OF LOUISVILLE.

SAME v. BELL, Sheriff.

Court of Appeals of Kentucky.

May 23, 1896

Appeals from chancery court, Jefferson county.

"To be officially reported."

Petitions of the trustees of Kentucky Female Orphan School against the city of Louisville and Henry A. Bell, as sheriff, to enjoin the collection of taxes on complainant's property. Judgments for defendants, and plaintiff appeals. Reversed.

Guffy and Du Relle, JJ., dissenting.

Stone &amp Sudduth, for appellant.

Laf. Joseph, for appellees.

HAZELRIGG J.

The question involved in this appeal is whether or not certain real estate, situated in the city of Louisville, and belonging to the Kentucky Female Orphan School, located at Midway, in Woodford county, is exempt from state, county, and municipal taxation, under the provisions of the constitution on that subject. The petitions of the trustees, seeking to enjoin the collection of the taxes, were dismissed on demurrer, and the facts to be considered are therefore undisputed. It appears that the appellant was incorporated by the Kentucky legislature in 1847, and its trustees were given the ordinary powers, rights, and privileges of trustees of any other seminary of learning or academy in the state, with power to acquire by purchase, donation, etc., lands and other property to the extent of not exceeding $50,000. This limit has been increased to $400,000 by subsequent legislative enactment. Section 7 of the charter provides "that the beneficiaries of the institution shall be female orphan children; and the board of trustees shall have power to determine the number that shall, at any time, be admitted into the institution; and out of any number of applicants they shall decide which shall be admitted; and shall also prescribe the time for which each beneficiary shall remain in the institution; and shall admit no one under nine years of age; and shall permit no one to remain longer than four years." Section 8 is as follows: "That the board of trustees shall be the guardian of each beneficiary of the institution until she shall arrive at the age of eighteen years; and shall have all such power to control the conduct and actions of each beneficiary, as guardians now have by law to control the conduct and actions of their wards." Section 9: "That pay pupils may be admitted into the institution, the number and terms of admission being decided by a majority of the board of trustees." A charter amendment of March, 1862, provides "that the property owned by the Kentucky Female Orphan School, at Midway Woodford county, shall be exempt from all taxes whatever so long as it exists as a school of charity." And by further amendment (March 3, 1876) it is provided that the trustees shall fill vacancies in their board with "persons who are members in good standing of some congregation of the Church of Christ in the state of Kentucky." It is alleged in the petition that the real estate sought to be sold for taxes was acquired by devise many years ago, and had been continuously rented out, and the annual income used solely for the purpose of educating female orphans at its institution of learning at Midway; that its property, both real and personal, from which it derives any income, including that in Louisville, constitutes an endowment fund for the purpose of carrying on its school of charity; that the pupils received are boarded and educated, and, when they are indigent, and not otherwise provided for, are also clothed, wholly or in part, by the appellant, while attending its institution; and that no part or parcel of its property has ever been used for gain by it or any person, and its income has always been devoted solely to the cause of education. The provisions of the constitution upon which the claim to exemption is based are as follows: "Sec. 170. There shall be exempt from taxation public property used for public purposes; places actually used for religious worship, with the grounds attached thereto and used and appurtenant to the house of worship, not exceeding one-half acre in cities or towns, and not exceeding two acres in the country; places of burial not held for private or corporate profit, institutions of purely public charity, and institutions of education not used or employed for gain by any person or corporation, and the income of which is devoted solely to the cause of education; public libraries, their endowments, and the income of such property as is used exclusively for their maintenance; all parsonages or residences owned by any religious society, and occupied as a home and for no other purpose by the minister of any religion, with not exceeding one-half acre of ground in towns and cities, and two acres of ground in the country appurtenant thereto; household goods, etc.; and all laws exempting or commuting property from taxation other than the property above mentioned shall be void. The general assembly may authorize any incorporated city or town to exempt manufacturing establishments from municipal taxation, for a period not exceeding five years as an inducement to their location."

Upon the admitted facts, and they are attested in the current history of this beneficent institution, we are of opinion that the appellant is an institution of "purely public charity," within the meaning of the foregoing constitutional provision, as well as an institution of education "not used or employed for gain by any person or corporation, and the income of which is devoted solely to the cause of education." The name of the appellant is a significant index to its character, and the provisions of its charter sufficiently indicate its aims and purposes. It is true that "pay pupils may be admitted into the institution," but manifestly this is merely that the "pay" may be devoted to the general and main purpose of educating and supporting those who are unable to provide for their own support and education. It is an exception, as is clearly inferable from the insertion of the provision, and not the rule, that pay pupils are admitted. An instructive definition of a "purely public charity" is found in Episcopal Academy v. Philadelphia, 150 Pa. St. 565, 25 Atl. 55, and is thus stated: "(1) Whatever is done or given gratuitously in relief of the public burdens or for the advancement of the public good is a public charity. When the public is the beneficiary, the charity is public; and when no private or pecuniary return is reserved to the giver, or to any particular person, but all the benefit resulting from the gift or act goes to the public, it is a purely public charity, the word 'purely' being equivalent to 'wholly.' (2) A denominational school property, vested in trustees, for the purpose of affording encouragement to the education of youth, is a purely public charity, although the school is not open in the same way to the general public as to persons connected with the religious denomination, but the general public are admitted as vacancies occur, and, when admitted, upon the same terms with all other pupils. (3) An institution founded and endowed as a purely public charity does not lose its character as such, under the tax laws, if it receives a revenue from the recipients of its bounty sufficient to keep it in operation." A most satisfactory discussion of this question is found in the case of Burd Orphan Asylum v. School Dist. of Upper Darby, 90 Pa. St. 21, where a testatrix, by her will, provided for the establishment of an asylum whose object should be the maintenance and education of (1) white female orphan children who shall have been baptized in the Protestant Episcopal Church in the city of Philadelphia, or in the state of Pennsylvania, and (2) all other white female orphan children, without respect to any other qualification, except that the orphan children of clergymen of that church should have the preference. The discussion of the right to tax the property of the asylum takes a wider range than is needed for the purposes of this case, but it is pertinent particularly to cases being considered in connection with the present one, and we therefore quote liberally from it. The reasoning of the court in that case is as follows: "It is conceded that the devise in question has created a charity which is public in the strict sense of that expression. But it is urged that it is not purely public, and hence that to apply the language of the act to this particular case would be a violation of the constitutional provision. Now, it must be conceded, and it has been decided, here and elsewhere, that the word 'purely' is not to have its largest and broadest significance when used in this connection. In the opposing line of thought it is admitted that the word is to have a limited meaning. It is not contended that a charity, to be purely public, must be open to the whole public, nor to any considerable portion of the public. Without doubt an asylum for the support of fifty blind men, or an equal number of paupers, would not be obnoxious to the objection that it was not purely 'public.' A charity for the maintenance of disabled seamen, or of aged and infirm stonemasons, resident in the city of Philadelphia, would undoubtedly be a purely public charity; and so, also, would a charity for the education and maintenance of the children of such persons. And if such a charity should be limited to the white female orphan children of such persons between the ages of four and eight years, such limitations, though they would very greatly restrict the class and the number of the beneficiaries, would constitute no valid objection to the purely public character of the charity. But seamen and stonemasons are only designated classes of persons, distinguished by their occupations. A charity for...