171 S.W.2d 604 | Mo. | 1943
Lead Opinion
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.) These acts were considered and construed in State ex rel. Waller v. Trustees of William Jewell College,
The case was submitted upon an agreed statement of facts, which (omitting the legislative acts hereinabove mentioned) was, as follows:
"The plaintiff is a corporation organized under the name of `Trustees of William Jewell College,' of Liberty, Missouri, and that it has been such corporation continuously since February 27, 1849, when it was organized by an Act of the Legislature; . . . that the college generally known as `William Jewell College' belongs to the corporation of Trustees of William Jewell College; that the said college was located in Liberty, in Clay County, Missouri, on August 21, 1849, by a certificate showing the name and location of the College, which was duly filed in the office of the Recorder of Deeds for Clay County, Missouri, on August 25, 1849, in accordance with the provisions of the said incorporating act; that at the time the act was passed the College had not been definitely located but was to be located by a certificate setting out the name and location of the College, and that was accordingly done; that since on or about August 25, 1849, the plaintiff has conducted a College in Liberty, Missouri, in conformity with said act, and that its property has been, and now is used for the purpose of conducting said College exclusively and not for private gain or emolument as to any person or corporation, and that its work is solely educational. . . .
"That the plaintiff accepted the said charter from the State of Missouri during the year 1849 and at said time started operating as a corporation thereunder; that thereafter and prior to the year 1851, while the plaintiff was operating as such corporation the plaintiff *92 acquired title to lands in the Counties of Clay County, Mercer and Sullivan in the State of Missouri; that a purpose of said Act of 1851 was to exempt the property and lands then held or thereafter to be acquired by the plaintiff, and other institutions of learning, from taxation. . . .
"That the Trustees of William Jewell College takes title to land by foreclosures of mortgages in some instances, or in payment of mortgages or deeds of trust, but that it does not invest its endowment and other funds in purchasing real estate as an investment, except to protect its loans, and that it does not hold real estate that it takes in payment of, or on foreclosure of, mortgages longer than is necessary in order to procure a proper sale of the same and in order to protect its rights and finances; that the land mentioned in the suit above was obtained by the Trustees of William Jewell College on May 16, 1933, the date of the acknowledgment of said deed, and the deed was afterward recorded in Book 81 at page 471 of the Deed Records of Worth County, Missouri, in which said land lies, and that said deed was made to the Trustees of William Jewell College in settlement for mortgage for money loaned to the makers of said deed, Martha D. Elliott and John R. Elliott, her husband, and which was secured by mortgage on the same real estate so conveyed to the college.
"It is further stipulated and agreed that in the levying of the taxes against said land involved in said suit, the various steps necessary to be taken under the law assessing [606] and levying taxes were taken in this case, and that if said land is taxable, the proper steps have been taken and the taxes are valid, and that the only question at issue between the parties hereto is the liability of said real estate for taxes during the time it is owned by the Trustees of William Jewell College, and whether it is exempt from taxation or not during the ownership of said college;" (and) "that no part of the land herein described and involved is claimed to be exempt from taxation under the Constitution of 1875 and Section 9743 of the Revised Statutes of Missouri, 1929, and that no part of said land is claimed as the five acre tract or lots that was thereby exempted."
Defendant's contention is that: "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;" that "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;" and that "the Act of 1851 was repealed by the Constitutions of 1865 and 1875 and by subsequently enacted Statutes." *93
The theory of plaintiff and the trial court was thus set out in the findings of the court:
"Plaintiff is, . . . a non-profit educational corporation duly organized and existing under, pursuant to and by virtue of an Act of the General Assembly of the State of Missouri, approved February 27, 1849, entitled `An Act to Charter a College in the State of Missouri,' (Laws 1849, p. 234) and as amended and amplified by an Act of the General Assembly of the State of Missouri, approved on February 22, 1851, (Laws 1851, p. 64) and that pusuant to and in compliance with its charter powers, plaintiff has received, and is now receiving by donation, gift, grant, devise and bequest, lands and money, which it has at all times used, and is now using, for the sole purpose of maintaining and conducting William Jewell College at Liberty, Missouri, and thereby has been, and now is, carrying a part of the burden of education of the state and performing a distinct public service to the State of Missouri;" and "that under and by virtue of the provision of the aforesaid charter of plaintiff corporation all real estate by it owned, including that hereinabove described, was and is, so long as owned by plaintiff, exempt from liability for all taxes and assessments."
[1] Plaintiff points to the following provision, Section 13 of the 1849 Act, and says that it was intended by the Legislature to be a complete tax exemption, to-wit: "That the property, real and personal, authorized to be held by said corporation by virtue of this Act, 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." Plaintiff also says that Section 1 of the 1851 Act was intended to be a clarifying amendment making the intended exemption plain. It provided: "That all the land and improvements thereon now owned by the `William Jewell College' in the counties of Clay, of Grundy, Mercer and Sullivan, and all the lands that may hereafter be granted or devised to said college, or any other institution of learning in this state, for the benefit of education, be, and the same are hereby exempted from all taxes and assessments so long as said lands may be owned by said college." If these two acts are construed together so that these provisions of both acts can be considered together as part of plaintiff's charter (as they were by the trial court) then this exemption provision of its charter (when accepted and acted upon) constituted a contract with the state, which was protected under Section 10 of Article I of the United States Constitution. [Washington University v. Rouse, 8 Wall. 439,
[2] In State ex rel. Waller v. Trustees of William Jewell College,
As to the contention made in the Waller case, that the exemption had been repealed by subsequent constitutional and statutory provisions, this court therein held that "the question, however, has been fully settled by the adjudications of this court upon similar statutes, and we shall not re-open nor re-argue it." This court then cited St. Vincent's College v. Schaefer,
We think that the situation here is substantially the same. The present constitutional legislative requirements of specific titles to acts and other details to be observed in enactment of laws and amendments to laws were not in force in 1851. [See Article 4, Sections 24-42, Constitution of Missouri.] The Act of 1849 stated that "the United Baptists in Missouri and their friends are desirous of endowing and building up a college in the State, and for that purpose have under the direction of the General Association of Baptists in Missouri already secured pledges to the amount of about twenty thousand dollars, for the endowment of the same in shares of forty-eight dollars, each payable in installments of six dollars per share annually." This college was located at Liberty late in 1849. During the very next year, 1850, when Legislature began its next session, the Trustees came before it with a petition showing about 4000 acres of land "had been donated to them for the [608] cause of education," and asked for tax exemption. Early in 1851, the 1851 Act was adopted granting exemption, which this court in the Waller case construed to have intended exemption of all property constituting the endowment of the college. Since the 1849 act contemplated an eight-year period for collecting the original endowment, it is obvious that the college could not have completed its arrangements by February, 1851, for operation of the kind of institution contemplated when the 1851 act was adopted; that the Legislature was petitioned as soon as possible and acted promptly to make an exemption definite; and that acceptance by substantial performance according to the terms of both acts was thereafter actually made. In these circumstances, it seems reasonable to consider the two acts together as constituting plaintiff's entire *96 charter and its acceptance as such. This is the import of the ruling in the Waller case, and there can certainly be no question about plaintiff's good faith and full performance of all obligations imposed by such charter, as found by the trial court.
[3] Our Constitution (1875) was adopted after the decision of the Supreme Court in the Washington University and Home of the Friendless cases, supra. It prohibited the granting of tax exemptions by the Legislature (Art. 10, Sec. 2); and declared that laws granting exemptions beyond those specifically authorized by it "shall be void." (Art. 10, Sec. 7.) Thus future exemptions such as those under consideration here and in the Washington University cases cannot be made. However, this Constitution does not specifically undertake to abolish such exemptions made before its adoption, but only provided, in Art. 12, Sec. 1, that "all existing charters, or grants of special or exclusive privileges, under which a bona fide organization shall not have taken place, and business been commenced in good faith, at the adoption of this Constitution, shall thereafter have no validity." This court said in State ex rel. Wabash Ry. Co. v. Roach,
[4] Defendant relies principally upon Grand Lodge of Louisiana v. New Orleans,
The judgment is affirmed.
Addendum
The foregoing opinion by HYDE, C., in Division One is adopted as the opinion of the Court en Banc. Hyde, Tipton, Clark andDouglas, JJ., concur; Leedy, J., dubitante; Ellison, C.J., dissents; Gantt, J., absent.
Addendum
This contention was not fully discussed in the Divisional opinion because defendant's principal contention in the trial court, and before Division One, was that the Act of 1851 was no part of plaintiff's charter and therefore the tax exemption was not contractual at all. This latter point is also reargued in the motion for rehearing. We held that it was "reasonable to consider the two acts together as constituting plaintiff's entire charter and its acceptance as such," and we adhere to that ruling.
The point of reservation of the right of repeal is thus stated: *98
"Even if the Court should hold that the provisions for tax exemption in the Act of 1851 were contractual, the Court must hold that such tax exemption was revocable under the reserved power to alter, suspend or repeal contained in the corporation law under which the college was chartered and which statutory reservation became a part of the charter."
However, even this contention would not change the result we have reached. Defendant assumes that this tax exemption was repealed by the adoption of the Constitution of 1865 and 1875. However, this court held in Scotland County v. Missouri, Iowa
Nebraska R. Co.,
In the Convent of Mercy case, this court held that the same thing was also true of the provisions of the Constitution of 1875, saying:
"We are unable to see why the Constitution of 1875 should receive, as to these sections, a different construction from that of 1865. As to prospective legislation, they are both clear and specific, but in neither do we discover any intention that they should act retrospectively. . . .
"It would be violative of this almost universal canon of construction to hold that these general affirmative provisions should have a retroactive effect, and that they repeal this exemption under the general language of the Constitution in the section quoted."
This ruling as to the effect of the provisions of both Constitutions was again approved and followed in State ex rel. Morris v. Board of Trustees of Westminster College,
In the Granby Mining Company case, supra, the corporation had amended its original charter 30 years later, after the adoption of the 1875 Constitution, and the real basis of the decision was that this change and extension of its business thereunder estopped it from *99
claiming exemption from statutes passed under the authority of the provisions of that Constitution. In the Watson Seminary case, supra, the Seminary was not a private but a public corporation administered as a public trust by the County Court. "There were no private incorporators, share or stockholders" and "the control of the state is perpetuated as long as the charter is effectual." The court held that there could be no contract in that situation. Neither of these cases are authority for holding that there has been any repeal of plaintiff's charter or any part thereof. (See also State ex rel. Morgan v. Hemenway,
The motion for rehearing is overruled.