Trustees of William Jewell College v. Beavers

• Citation: 171 S.W.2d 604
• Decision Date: 29 January 1943
• Docket Number: No. 37789.,37789.
• Parties: TRUSTEES OF WILLIAM JEWELL COLLEGE OF LIBERTY, MISSOURI, a Corporation, v. SAM BEAVERS, Collector of Revenue of Worth County, Missouri, Appellant.
• Court: United States State Supreme Court of Missouri

171 S.W.2d 604

TRUSTEES OF WILLIAM JEWELL COLLEGE OF LIBERTY, MISSOURI, a Corporation, v. SAM BEAVERS, Collector of Revenue of Worth County, Missouri, Appellant.

No. 37789.

Supreme Court of Missouri.

Court en Banc, January 29, 1943.

Rehearing Denied in Opinion, April 5, 1943.

Rehearing on Opinion of April 5, 1943, Denied, June 3, 1943.

Appeal from Harrison Circuit Court. — Hon. V.C. Rose, Judge.

AFFIRMED.

Jennings B. Beavers, Du Bois & Miller and J.F. Allebach for appellant.

(1) The legislative charter granted the respondent in the year 1849 constitutes the only contract between the State of Missouri and the respondent and this contract contains no provisions relieving the respondent from the payment of taxes. Laws 1849, pp. 232-234; Trustees of Dartmouth College v. Woodward, 17 U.S. 518, 4 L. Ed. 629; Sec. 10, Art. I, U.S. Constitution; Washington University v. Baumann, 341 Mo. 708, 108 S.W. (2d) 403. (2) The Tax Exemption Act of 1851 did not constitute a contract between respondent corporation and the State of Missouri and the people and the Legislature have at all times retained the full right and authority to repeal it. Laws 1851, pp. 64, 65; Laws 1849, pp. 232-234; Trustees of Dartmouth College v. Woodward, 17 U.S. 518, 4 L. Ed. 629; Washington University v. Baumann, 341 Mo. 708, 108 S.W. (2d) 493; Grand Lodge of the State of Louisiana v. New Orleans, 166 U.S. 143, 41 L. Ed. 951; Christ Church v. Philadelphia County, 65 U.S. 204, 16 L. Ed. 602; Smith v. Sickenber, 202 S.W. 262; In Re Wood's Estate, 288 Mo. 588, 232 S.W. 671; Brown v. Irving, 269 S.W. 686; Duvall v. Duncan, 341 Mo. 1129, 111 S.W. (2d) 89. (3) The Act of 1851 was repealed by the Constitutions of 1865 and 1875 and by subsequently enacted Statutes. Sec. 16, Art. XI, Constitution of Missouri of 1865; Secs. 3, 6, 7, Art. X, Constitution of Missouri; Secs. 10936, 10937, R.S. 1939. (4) Construction given to a provision of the Federal Constitution by the Supreme Court of the United States is binding on all other courts in the land, Federal and State courts alike. 7 R.C.L., p. 1013; 111 Am. Jur., p. 740; State v. Warner, 165 Mo. 399; Sec. 10, Art. I, U.S. Constitution; Grand Lodge of the State of Louisiana v. New Orleans, 166 U.S. 143, 41 L. Ed. 951; Christ Church v. Philadelphia County, 65 U.S. 204, 16 L. Ed. 602; Washington University v. Gorman, 153 S.W. (2d) 35. (5) An analysis of the case of State ex rel. Waller v. Trustees William Jewell College. State ex rel. Waller v. Trustees of William Jewell College, 234 Mo. 299, 136 S.W. 397; State ex rel. v. Westminster College, 175 Mo. 52; St. Vincent's College v. Schaefer, 104 Mo. 261.

Frank E. Atwood and Lawson & Hale for respondent.

(1) The charter granted to the respondent in 1849 provided in Section 13 that the property, real and personal, of the corporation "shall be held and applied in good faith to the purposes of education according to the provisions of this act and for no other or different purpose." So that under this original act taxes could not be deducted from its property. Laws 1849, pp. 232-234; Dartmouth College v. Woodward, 4 L. Ed. 629; 18 C.J.S., p. 482. (2) The Act of 1851, an amendment as a fact to the 1849 act, but makes more certain the tax exemption, by specifically mentioning taxes. Laws, 1851, pp. 64-65; Grand River College v. Robertson, 67 Mo. App. 329; Hope Mutual Fire Ins. Co. v. Beckman, 47 Mo. 93. (3) The Acts of 1849 and 1851 were each a contract separately, and both of them a contract collectively, to the effect that if the corporation would collect money and establish a college, much needed then, thus carrying a part of the educational burden of the State, that on the other hand the State would contribute to the enterprise by waiving the right to tax the property of the corporation. 59 C.J., pp. 1042-47, and many cases cited; 18 C.J.S., p. 485. (4) A contract of that sort, made by the Legislature, when not prohibited by the Constitution, cannot be repealed. It stands as long as the property of the corporation is, in good faith, used for educational purposes. Washington University v. Baumann, 341 Mo. 708. (5) This court has held the property of the respondent is not taxable. As to real estate the opinion was unanimous, and as to personal property by a majority opinion. State ex rel. Waller v. Trustees of William Jewell College, 234 Mo. 299. (6) In cases affecting other corporations, the decisions have upheld the same principle. St. Vincent's College v. Schaefer, 104 Mo. 261; State ex rel. v. Board of Trustees, 175 Mo. 53; Washington University v. Baumann, 341 Mo. 708. (7) The tax exemption contained in the 1849 act, and restated in other terms in the Act of 1851, constituted contract rights that cannot be abolished so long as they are used in good faith by the beneficiary. State ex rel. Waller v. Trustees of William Jewell College, 234 Mo. 299; Washington University v. Baumann. 341 Mo. 708; Dartmouth College v. Woodward, 17 U.S. 518, 4 L. Ed. 629: Home of Friendless v. Rouse, 75 U.S. 430, 19 L. Ed. 495. (8) The Act of 1851, accepted by the college and persons donating property to the college, became a contract and cannot be avoided. The fact that it was passed two years later than the original grant does not avoid it. The consideration was the good of the State, a continuing growing thing. It has been held in other cases that where tax exemption was not granted, directly or otherwise, in the original grant, and was granted subsequently, and was accepted and the benefit to the State followed, the exemption was good. St. Vincent's College v. Schaefer, 104 Mo. 261; State ex rel. v. Board of Trustees, 175 Mo. 53; Washington University v. Baumann, 341 Mo. 708. (9) Tax exemptions are strictly construed against corporations organized for profit or gain, but not so as to educational institutions. State ex rel. Waller v. Trustees of William Jewell College, 234 Mo. 299; Washington University v. Baumann, 341 Mo. 708; Northwestern University v. The People, 99 U.S. 309, 25 L. Ed. 387; State v. Erickson, 13 A.L.R. 1189; Home of Friendless v. Rouse, 19 L. Ed. 495; Chicago Home, etc., v. Carr, 300 Ill. 478, 133 N.E. 344. (10) The tax exemption in this case is based on the terms of the 1849 act (Section 13) as amended by the Act of 1851, and on the 1851 act. (11) The taxing authorities of the State, for nearly a century, have not assessed the property of the college (except an attempt to tax the endowment in the Waller case), and such action on their part while not controlling is very persuasive. State ex rel. Waller v. Trustees of William Jewell College, 234 Mo. 299; Washington University v. Baumann, 341 Mo. 708; Brown University v. Granger, 36 L.R.A. 847. (12) Under the Constitution of 1820 (in force until 1865), "If, from the general scope of the act," the Act of 1851 was intended as an amendment to the 1849 act, or if it was a supplement, the court will so treat it. Hope Mut. Fire Ins. Co. v. Beckmann, 47 Mo. 93; Federal Trust Co. v. East Hartford, etc., 283 Fed. 95; State v. Davis, 314 Mo. 373; Scotland Co. v. M., I. & N. Ry. Co., 65 Mo. 123. (13) The Constitution of 1875 guarded the rights vested in the respondent by Acts of 1849 and 1851. Constitution 1875, Sec. 1, Art. XII. (14) If the Legislature merely made the 1849 act more clear, it was an amendment. If it granted additional powers in 1851 it was an amendment. 18 C.J.S., p. 483; Joy v. Jackson, etc., Road Co., 11 Mich. 155. (15) As applied to the Trustees of William Jewell College and its property, the constitutional provisions and statutes invoked by appellant are null and void, as being contrary to and in violation of Section 15 of Article 2 of the Constitution of Missouri, prohibiting laws impairing the obligation of contracts, and of Section 10 of Article I of the Constitution of the United States which provides that no state shall pass any law impairing the obligation of contracts.

William E. Kemp, City Counselor, and Arthur R. Wolfe, Assistant City Counselor, amicus curiae.

(1) The law is well settled, in decisions of the United States Supreme Court and the highest courts of all the states, including that of this State, that the reserved right to alter, suspend, or repeal, as contained in Section 7, Art. 34, R.S. 1845, became as much a part of the legislative charter subsequently granted, or any amendment or amplification thereof, as if expressly incorporated therein and became a condition upon which the charter was granted and accepted. Watson Seminary v. County Court of Pike County, 149 Mo. 57, 50 S.W. 880; Gregg v. Granby Mining & Smelting Co., 164 Mo. 616; 13 Am. Jur., p. 234, sec. 90, note 9, citing Northern C.R. Co. v. Maryland, 187 U.S. 258, and many other cases in the Supreme Court of the United States and from the various States, including Missouri. (2) The reserved right to alter, suspend and repeal, as contained in said Section 7, has been recognized and applied in Missouri decisions from the earliest times. Pacific Railroad v. Renshaw, 18 Mo. 210; Gregg v. Granby Mining & Smelting Co., 164 Mo. 616, 65 S.W. 312; Pennsylvania College Cases, 80 U.S. 190; Citizens' Savings Bank v. Owensboro, 173 U.S. 636; Louisville v. Bank of Louisville, 174 U.S. 439; Louisville Water Co. v. Clark, 143 U.S. 1; Tomlinson v. Jessup, 82 U.S. 454; Hogue v. Richmond & D.R. Co., 99 U.S. 348; Maine C.R. Co. v. Maine, 96 U.S. 499; Atlantic & G.R. Co. v. Georgia, 98 U.S. 359.

HYDE, C.

This is an action in equity seeking to have declared void real estate taxes assessed against land owned by plaintiff in Worth County; and also asking that defendant be enjoined from enforcement by sale to collect such taxes. The trial court found for plaintiff and entered a decree granting the relief sought. Defendant has appealed.

William Jewell College was chartered by special act of the Legislature in 1849. (Laws 1849, p. 232.) At the next session, in 1851, another act was adopted concerning William Jewell College. (Laws 1851, p. 64...