Colorado Seminary v. Board of County Commissioners

Chief Justice Campbell

delivered the opinion of the court.

The controversy is between the county of Arapahoe, represented by its board of commissioners, and the Colorado Seminary; the former asserting and the latter denying, that certain property of the Seminary is subject to taxation. The case calls for a construction of the charter of the Seminary which was granted by an act of the legislative assembly of the territory of Colorado in 1864. — Session Laws 1864, p. 209. Section 5 and a portion of section 1 are the only provisions which are material. Among other things, section 1 constitutes the trustees named therein a body corporate “for the purpose of founding, directing and maintaining an institution of learning, * * * with full power to * * * acquire, hold and convey property, real, personal and mixed, to the extent they may judge necessary for carrying into1 effect the objects of this incorporation.” Section 5 reads:

“Such property as may be necessary for carrying out the design of the Seminary in the best manner, while used exclusively for such purpose, shall be free from all taxation.”

At the threshold of the case we are confronted by a decision of this court (Commissioners v. Colorado Seminary, 12 Colo., 497) which, if not modified or overruled, the county attorney says is .conclusive against the contention of plaintiff in error. Its counsel, however, insist that there is such a material difference in the facts of the two cases as to render *509the decision there inapplicable here, at least as to a portion of the property involved. A careful examination of that opinion, and a comparison of the facts of the two cases satisfies us that if the construction of the Seminary charter which, in the closing words of the opinion, it was intimated that the court was inclined to adopt, controlled that decision, then, that construction, if adhered to, is decisive of this case in favor of the county. It becomes necessary, therefore, to determine, first, whether that decision is to be reconsidered; and, second, if so, what is the proper construction of the provisions of the charter of the plaintiff in error which arfe applicable to this controversy.

1. This court has gone possibly as far as any appellate tribunal in maintaining the maxim stare decisis. The rule, however, is not inflexible, and the maxim should not be allowed to stand as an absolute bar in the way of a re-examination of legal questions previously decided by the same court, if improperly determined, and particularly where the decision reviewed has not passed into a settled rule of property. This is well illustrated in Calhoun G. M. Co. v. Ajax G. M. Co., 27 Colo., 1, wherein this court overruled one of its former decisions- upon an important question of mining law announced fourteen years before and repeatedly re-affirmed.

So far as we are advised, no other corporation of the state has a charter similar to the one under consideration, hence, no general rule of property has been established, no private rights have been acquired by third persons upon the faith of its protection, and none such will be impaired if a review of the judgment results in a change of doctrine.

Yet, for another reason, we reluctantly enter upon a reconsideration of this cause. The writer of the opinion and his associates evidently gave to the *510important questions before the court diligent attention. For their judgment we have sincere respect, and their conclusion should not be lightly set aside. These considerations, however, should not deter us from reviewing the question if we- are thoroughly satisfied that their conclusion was wrong in whole or in part. We proceed, then, to the second proposition submitted.'

2. It is said by the learned judge in the case referred to that taxation is the rule and exemption the exception; that there is no presumption in favor of exemption, but that every reasonable doubt should be resolved against it. In a later case decided by this court (Bishop etc., v. Treasurer Arapahoe County, 29 Colo., 143, 68 Pac., 272), it was said: “Provisions exempting property used for educational purposes are less strictly construed than those exempting property used for ordinary gain or profit;” and it was also said that the meaning of words employed in the exemption statutes “must be ascertained from the intent of the people and the legislature in exempting from taxation property used for educational purposes. ’ ’ While the decision there was based upon the general exemption law, the same rule applies to a construction of the charter under consideration.

But if a stricter rule than the one indicated in our later decision should prevail, we think that the previous construction of the charter of plaintiff in error was too narrow, if the closing words of the opinion correctly announce the actual conclusion which the court reached. The construction should be reasonably strict, but not so strict as to defeat the obvious intention of the general assembly. Apparently the decision was based upon the meaning attributed to section 5 of the charter as thus stated in the opinion :. “ The language employed in the statute before *511us is perhaps not as plain ás it might he; hut a fair construction thereof points'fo the conclusion that it was the intention to relieve from taxation only such property as should be in actual,use, viz, the Seminary buildings, campus, and the like.”

In that opinion, University v. The People, 99 U. S., 309, is cited as a case which, when carefully studied, is an authority directly supporting the rule announced. Our study leads us to an opposite conclusion. The question before the federal court was whether certain property of the Northwestern University was exempt. The supreme court of Illinois had held it liable to taxation. The exemption claimed was based upon a section of an act of the Illinois legislature of 1885 providing: “All property, of whatver kind or description, belonging to, or owned by, said corporation, shall be forever free from taxation for any and all purposes. ’ ’ All parties conceded that this language was broad enough to cover the exemption, but the contention of the tax officers of the state was that the act was in violation of the constitution of 1848, which reads: “Such other property as the general assembly may deem necessary for school * * * purposes, may be exempt from taxation.” The property was listed for taxation in 1874 under the revenue act of 1872, which exempts from taxation only “the real estate on which the institutions of learning are located, not leased by such institutions or otherwise used with a view to profit. ’ ’ This act was passed under the Illinois constitution of 1870 which provides: ‘ ‘ Such other property as may be used exclusively for * * * school * * * purposes, may be exempted from taxation.” The argument for the state, to which the state supreme court yielded its assent, was that the revenue act of 1872 meant what the constitution of 1848 said, which was substantially what the consti*512tution of 1870 also said, and that this act was the limit to which the legislature could go in releasing property from taxation. But the supreme court of the United States reversed this holding. Mr. Justice Miller, who wrote the opinion, said: “The distinction is, we think,- very broad, between property contributing to the purposes of a school, made to aid in the education of persons in that school, and that which is directly or immediately subjected to use in the school. The purposes of the school and the school are not identical. The purpose of a college or university is to give youth an education. The money which comes from the sale or rent of land dedicated to that object aids this purpose. Land so held and leased is held for school purposes, in the fullest and clearest sense.” That learned jurist also said that the constitution of 1848 does not say “property used for schools,” and he further observes that if the language were that the legislature might “exempt property for the use of schools,” the conclusion of the Illinois court might be upheld. But he proceeds to say that the constitution said that the legislature might exempt from taxation “ ‘such property as they might deem necessary’ (not for the use of schools, but) ‘for school purposes ’.”

It is to be observed that the federal court did not say that the Illinois revenue act of 1872 was the full limit of the power which the legislature could exercise under the constitution of 1870, or that the property there in question could not be exempted thereunder, for that was not the question for decision. It merely observed upon this point that the supreme court of Illinois said that the revenue act of 1872 was what the constitution of 1848 meant; but the federal tribunal did not even intimate, as we read the opinion, that the act of 1872 was the full measure of exemption provided for by the later constitution. Justice Miller, *513it is true, remarked that the later constitution of 1870 was designed to limit the power of the one of 1848, but did not assume to indicate in what particulars or to what extent; for it was not essential to the determination of the matter before the court for him to do so. For aught that appears to the contrary in the opinion, the legislature of Illinois, under the constitution of 1870, might have exempted from taxation property exclusively used for school purposes, even though it was not property upon which the buildings of the institution were actually located. Indeed, such we think the fair inference from the opinion; and while, as we have just stated, the court did say that the later constitution was designed to limit the more enlarged power of the earlier one, there is no authority for saying that the federal court agreed with the supreme court of Illinois in its construction of the later constitution. But, if any intimation is given at all, it is that the supreme court of the United States, even under that constitution, would exempt from taxation such property as is involved in the case at bar.

If, as contended by our own court in its former opinion, “such property as may be necessary for carrying out the design of the seminary in the best manner, while used exclusively for such purpose” (which is the language of the charter before us), is, in its legal signification, synonymous with the language of the Illinois constitution of 1870, “property used exclusively for school purposes,” we are of opinion that both warrant the exemption claimed here.

In the light of the foregoing, and if the case were one of first impression, would we not unhesitatingly declare that the property here involved is not liable to taxation? Let us scrutinize carefully the charter provisions. One of the duties of the trustees of the Seminary thereunder is to maintain an institution of *514learning, and to that end they are authorized to hold property to the extent they judge necessary for carrying into effect the objects of the institution. The general assembly declared that “such property as may be necessary for carrying out the design of the Seminary in the best manner, while used exclusively for such purpose, shall be free from all taxation.” In the former opinion it was said that this section of the charter did not make ownership the test of exemption, but it was the use of the property that determined whether it should be liable to taxation. If use is the test, we do not believe that it was the intention of the legislature to exempt only such property as should be in actual use, viz, Seminary buildings, campus, and the like. Certainly the general assembly was intending in some material way to aid this educational institution. It was the pioneer school of higher learning in this state. When its charter was granted by the territorial assembly, no provision for advanced education at the expense of the people had been made. It is not reasonable to suppose that when the law-making power, desiring, as it did, to encourage the object of its incorporators, created this corporation and conferred a power and imposed a duty upon its trustees to maintain an institution of learning, and to that end authorized them to hold property to the extent they deemed necessary to carry out the general object, and exempted from taxation ‘ ‘ such property as may be necessary for carrying out the design of the Seminary in the best manner, while used exclusively for such purposes, ” it so far lost sight of the benefits it attempted to confer that it deliberately limited, that exemption to a species of property which, in the nature of things, constitutes but a very small part, m value and extent, of the property of any successful school of learning, and by so-limiting the scope of the aid materially hindered its *515managers in carrying ont the design of the school in the best manner. Eather must we suppose that, the general assembly in requiring the trustees to maintain an educational institution intended, by the exemption granted in section 5, to relieve from taxation all property of the corporation which in its use was exclusively devoted to, and which contributed or ministered to, the general design in the best manner. There is some significance in its use of the words we have italicized. Certainly The design could not be carried out “in the best manner” by the trustees if only that property actually used for buildings and the like was exempt. The general purpose could he accomplished in the best manner, so far as the legislature could give aid at all, only by exempting from taxation all its property, the income of which, and the use of which, were exclusively devoted to the purpose of founding and maintaining an institution of learning. It goes without saying that such real estate as is covered by buildings for the use of students and for recitation rooms would be a small part of the property, and not go far towards maintaining a school. Endowments of money from which an income is derived, and other income-producing property are vitally essential to enable the trustees to maintain the institution which the act authorizes them to carry on.

The language of the Illinois constitution of 1848 under which the supreme court of the United States held that the general assembly might exempt from taxation property similar (to the property involved in this case, is no broader than the language of the exempting clause of this charter. Both upon reason and authority we are of opinion that all property which the Seminary owns is exempt from all taxation while it is exclusively used for carrying out the designs of the Seminary in the best manner, though not *516directly and actually used in the school itself. The property herein involved comes within this class.

By the decree of the lower court some of the property described in the complaint was held exempt from, and some subject to, taxation. In so far as it exempted from taxation the property therein described, the decree is affirmed, and to the extent it held other property therein described as subject to taxation, it is reversed and the cause is remanded with instructions to the district court to vacate its former decree and enter a new decree exempting from taxation all the property described in the complaint.

Judgment modified.