Trustees of Wofford College v. Burnett

• Decision Date: 12 August 1946
• Docket Number: 15865.
• Parties: TRUSTEES OF WOFFORD COLLEGE v. BURNETT, Special Tax Collector, et al. CONVERSE COLLEGE v. SAME.
• Court: South Carolina Supreme Court

39 S.E.2d 155

209 S.C. 92

TRUSTEES OF WOFFORD COLLEGE v. BURNETT, Special Tax Collector, et al.

CONVERSE COLLEGE v. SAME.

No. 15865.

Supreme Court of South Carolina

August 12, 1946

Carlisle, Brown & Carlisle and Lyles &amp Lyles, all of Spartanburg, for appellants.

H. K. Osborne and Thomas B. Butler, all of Spartanburg, for respondent.

STUKES, Justice.

As indicated in the caption, two cases are embraced in this appeal. They are aftermath of the litigation of the college-appellants in which the opinions of this court are reported, as to Wofford College v. City of Spartanburg, 201 S.C. 315, 23 S.E.2d 9, and, as to Converse College v. City of Spartanburg, 201 S.C 335, 23 S.E.2d 16. The controversies there were between them and the city of Spantanburg in their respective efforts to secure exemption from municipal taxation of the real estate in the city which was owned but not occupied by them, under the terms of Act No. 900 of the Acts of 1936, June 6, 1936 39 Stat. 1652. The legislation was held unconstitutional and void. Part of the effort in the present appeals is to obtain review and reversal of these former decisions, to which however, for the reasons stated in them and upon reconsideration, we adhere.

Separate decrees were made in the Circuit Court, after joint trial upon stipulations of the facts, but comprehensive judgment was entered only in the Wofford College case, that disposing of the claims of Converse College being formal except with respect to a single issue relating to it. We shall deal with the cases as if they were one and this opinion will be filed in both cases in the lower court for it disposes of the appeals in both.

The former decisions of this court in which the Act of 1936 was held unconstitutional were filed in November 1942 and the cases were ended in December of that year upon the filing of orders on petitions for rehearing. See the citations supra. Meanwhile, and before the final adjudication of unconstitutionality, the Comptroller General of the state had upon petitions of appellants issued abatements of the state, county and school taxes formerly assessed against the properties in question, upon the ex parte showing that they came within the terms of the 1936 Act, and the county officers made entries upon their records to the effect that the properties were exempt from taxes. After the decisions of this court and following the rule of them, the county officers reversed their former actions and reentered the properties for taxation and, because of non-payment, executions were issued and placed in the hands of the County Tax Collector. In December 1943 the colleges brought the present actions against the Tax Collector, the County Treasurer and the County Auditor, to enjoin them from proceeding further with the enforcement and collection of the taxes upon the ground that they had been abated by the Comptroller General, which abatements were binding upon the defendants. Upon verified complaints, the Circuit Court temporarily restrained the defendants as prayed. Thereafter the court continued the restraint pendente lite upon the giving of bonds by the appellants. The unappealed orders thereabout, dated December 20, 1943, became the law of the case, insofar as they went, and are important for they fixed the status of the litigants and provided that the defendants were restrained during the pendency of the actions from levying upon, advertising, or selling the properties involved under execution for taxes, without prejudice to the rights of the state and county with respect to said taxes and executions which existed at the time of the commencement of the actions. The following is a portion of the order in the Wofford College case:

'It appears that the Plaintiff has heretofore marketed and disposed of the major portion of the property described in the complaint and it is conceded that whatever liability, if any, may exist for taxes referred to in the complaint, will rest upon Wofford College and not upon the purchasers of said property. For that reason, the controversy, for all practical purposes, is one between Wofford College and the State of South Carolina and County of Spartanburg. Under these circumstances it seems to me necessary, as a condition precedent to the continuancy of this restraining order, that Wofford College shall execute a bond, in the penal sum of $3,500.00 conditioned upon the plaintiff paying to the obligees of said bond such damages as they may sustain by reason of the injunction granted in this proceeding, including payment by Wofford College of all taxes, penalties and costs for the year 1933 with respect to the properties, or any of the properties, referred to in the complaint, which it may ultimately be adjudged were due and owing to the County and State at the time of the commencement of this action, and the collection of which was, or is, prevented by the continuance of the injunction herein.'

The order in the Converse College case is identical with that in the Wofford College case, except that the order in the Converse College case contains this additional paragraph:

'The bond herein required shall be complementary and in addition to the liability of the plaintiff under the stipulation heretofore executed by it, and nothing herein provided shall be regarded as impairing or restricting any obligation of the plaintiff under such stipulation, but shall simply be in addition thereto.'

Bonds were duly given by both appellants pursuant to the orders and were afterward supplemented and increased during the litigation to protect the payment of taxes for succeeding years.

Counsel for the colleges and the defendants, now respondents, entered into the aforementioned stipulations of fact for the hearing of the cases on the merits, important parts of which are here reproduced:

'5. That heretofore and prior to the year 1933, the colleges had invested certain portions of their endowment funds in mortgages on the various parcels of real estate involved in these actions, such mortgages being executed by the several then owners of the several properties.

'6. That the several owners of the properties involved subsequently defaulted in the payment of the several mortgage debts and the colleges thereupon acquired title to all of the parcels of real estate involved, at different times, either by deeds executed by the owners of such property in satisfaction of the mortgage debts or by way of foreclosure of the mortgages held by the colleges. That there is attached to this Stipulation an abstract, marked Exhibit 'A', giving certain particulars of the acquisition of the several parcels of property by Wofford College, and a similar abstract, marked Exhibit 'C', giving certain particulars of the acquisition of the several parcels of property by Converse College, which separate abstracts are to be considered as part of the proofs in the two respective cases, applying to the particular college's case to which the respective abstracts are designated as applying.

'7. That the colleges either still own the said properties, or subsequent to the tax abatements hereinafter referred to, have conveyed the same to others, agreeing to indemnify and guarantee the colleges' respective grantees against the payment of any of the taxes involved in these actions.'

The stipulations then recite the regular return and assessment of the property for taxes, non-payment thereof, issuance of the usual executions, etc.; that thereafter the colleges filed applications with the Comptroller General for abatements upon the strength of the Act of 1936 and the fact that the properties were owned by the colleges which did not receive sufficient revenue to pay the taxes; that the Comptroller General thereupon issued to the county officers orders of abatement which were entered and credited as valid; and that the Tax Collector notified the colleges in writing about September 1, 1943 of his intention to levy upon and sell the properties for the delinquent taxes, which he prepared to do until enjoined in these proceedings. Paragraph eighteen of the stipulations is as follows:

'18. That if the taxes, penalties and costs involved in this proceeding, and covered by the orders of abatement aforesaid, were liens and collectible by levy, execution and sale at the time of the commencement of these actions, then as between the parties hereto, they are payable by the colleges without the defendants actually proceeding with formal execution and sale of the properties, and defendants need not take such steps, but the said taxes will be paid severally by the colleges, if and as ordered paid by the Court in these cases.'

The very lengthy stipulations also contain recitals of fact which are pertinent to minor issues and they will be referred to in the disposition of the latter later herein.

The cases were heard together in the lower court as has been said, and resulted in judgments against both colleges on all issues, whereupon this appeal was prosecuted by them upon exceptions which raise the questions which will be discussed. The eighth relates only to the contention that the former decisions of this Court hereabout (201 S.C. 315, 23 S.E.2d 9, and 201 S.C. 335, 23 S.E.2d 16) are erroneous and should be overruled. Disposition adverse to appellants has already been made of this.

The seventh exception concerns the course of the trial judge in awarding judgments in favor of the Tax Collector, for and in behalf of the state and county and against the colleges for the various items of taxes on the several properties involved; and it is objected that the state and county are not parties to the actions and no prayer for such relief was made. Referring to this exception, respondents duly noted 'additional sustaining grounds'...