20 N.W.2d 371 | S.D. | 1945
This action was brought by the city of Yankton against the treasurer of Yankton County to recover the amount of taxes levied against a certain property acquired by the city for a municipal airport. The city paid the taxes under protest. Judgment was rendered in favor of the city for recovery of the amount so paid and from which judgment the county treasurer and interveners, Common School District No. 9 and Mission Hill Township, Yankton County, appeal.
The sole question presented by the record is whether the property is exempt from taxation.
The applicable constitutional and statutory provisions are:
"The property of the United States and of the state, county and municipal corporations, both real and personal, shall be exempt from taxation, provided, however, that all *629 state owned lands acquired under the provisions of the rural credit act may be taxed by the local taxing districts for county, township and school purposes, in such manner as the legislature may provide." Section 5, Art. 11, State Constitution.
"Property and assets of every kind belonging to any municipality shall be exempt from taxation and levy * * *." SDC 45.1425.
Appellants contend that the city of Yankton is holding and using the property here involved in a proprietary and not in a governmental capacity; that a municipal corporation cannot engage in the business enterprise of acquiring real estate outside its boundaries and of leasing it for profit and hold the land exempt from taxation to the detriment of the county and other taxing districts in which such property is located. Pursuant to the provisions of SDC 2.02 and amendments thereto authorizing cities and towns to acquire and maintain airports either within or without the corporate limits, the city of Yankton purchased the land here involved. It is admitted that a part of the tract is leased by the city for use as an airport and the remainder of the tract is leased for agricultural purposes.
[1-3] Section 5 of art. 11 of the Constitution by which property owned by a municipal corporation is exempt from taxation is self-executing and without aid of legislation exempts all property within its terms from taxation by the state or by the political subdivisions of the state in which such property is located. In re Construction of Revenue Law,
"It follows that there is no constitutional reason arising out of the nature of the capacity in which the state functions in its rural credit operations which would render invalid the legislative declaration (section 10168, Rev. Code 1919) that all property acquired in such operations shall be tax exempt. Whether such tax exemption results, in its actual operation, in placing upon the taxpayers of local taxing districts where foreclosed rural credit land is located an unfair and disproportionate share of the burden arising from the activities of the state in the rural credit field, we do not undertake to say. But if it does, and if such burden is one which ought, in fairness and equity, to be borne by the taxpayers of the entire state generally, nevertheless that is not a matter which this court can change by any judicial interpretation in the present state of our law. We hold, therefore, that the learned trial judge erred in his determination that the tract of land in controversy was not exempt from assessment and taxation after title thereto vested in the state of South Dakota by deed issued pursuant to the foreclosure of the rural credit mortgage."
The provisions of the Constitution are without limitation or condition. The location of public property or its use is not made a condition of exemption and the provisions apply alike and with the same effect to the United States, the state (except rural credit lands), counties and municipal corporations. Decisions distinguishing between governmental and private ownership by municipal corporations are not determinative of the meaning of the language of the Constitution as applied to exemption of municipal corporations from payment of taxes. The unqualified exemption embraces all property of municipal corporations within the state irrespective of use. This conclusion in substance was reached by this court in Egan Consol. School Dist. v. Minnehaha *631
County,
Several of the states have identical or similar constitutional provisions, and they are generally construed to require the exemption of property owned by municipal corporations irrespective of use. In the case of City of Omaha v. Douglas County,
"The framers of the constitutional provision must have intended to exempt all classes of municipally owned property. That would seem to be the only fair interpretation which can be placed upon the language used in the Constitution and the statute. We do not feel at liberty to disregard the provision of the Constitution prepared by its framers, and adopted by the people when the instrument was voted upon and became the fundamental law of the state."
In the case entitled State v. Mayes,
"Section 6, art. 10, of the Constitution provides that `all property of the United States, and of this State, and of counties and of municipalities of this state * * * shall be exempt from taxation.' * * *
"There is no mention of the use to which property of a municipality is put as a condition to its being nontaxable. The provisions of the Constitution and the statute are without condition or limitation. * * * *632
"It is the general rule that where the Constitution and laws of a state exempt from taxation all property of municipalities within the state, without reference to the use to which the property is put, it is exempt from all taxation regardless of the character of the use thereof."
The state of North Dakota has a constitutional provision providing that "the property of * * * municipal corporations * * * shall be exempt from taxation." § 176. Concerning this provision the court in Otter Tail Power Co. v. Degnan,
"It does not say property used by the municipality, but property of the municipality. In this case ownership is the test of exemption. * * * Hence, so far as the property of the municipality is concerned, it is not taxable."
See also Anderson-Cottonwood Irr. Dist. v. Klukkert,
In Board of Financial Control v. Henderson County,
The other cases cited by appellants arose under constitutional and statutory provisions differently worded than the provisions of the Constitution of this state. In the case of Anoka County v. City of St. Paul,
[4] It is contended that authority to acquire an airport can not constitutionally be conferred upon a city and that title to the property here involved was not rightfully acquired by the city of Yankton. Assuming that appellants have the right to challenge the title of the city on the ground that acquisition of the property was ultra vires, we think that such contention must be decided adversely to them. The Legislature, as we have indicated, has authorized the acquisition and maintenance of airports by municipalties. In Hesse v. Rath,
We conclude that the trial court has correctly decided the question presented, and the judgment appealed from is affirmed.
SEACAT, Circuit Judge, sitting for POLLEY, J.
All the Judges concur.