State ex rel. Gaines v. Whitworth

McFarland, J.,

delivered the following dissenting opinion:

I cannot concur in the conclusion reached by the opinion of the majority of the court. I am of opin-. ion that the property in question should be held subject to taxation under the laws now in force. It is. conceded that the town lots sought to be taxed are embraced within the two hundred, and forty acre tract granted by the 7th section of the act of North Carolina of 1785, chartering Davidson Academy, to the-trustees of said institution. It appears that parts of said tracts were, after the date of said charter, and pre*617vious to 1806, when Cumberland College was chartered,, sold by said trustees under the second section of the-charter, giving them power to do so. All the property of Davidson Academy was, by the act of 1806, vested in the trustees of Cumberland College, and the charter of the former institution repealed.

This was done with the consent of the trustees of Davidson Academy, and no question can exist as to the validity of the act. The act, in terms, reserves to the trustees of Davidson Academy the right, and makes it their duty, to make conveyances for the lots of land previously sold by them, notwithstanding the repeal of the charter. The effect of the act of 1806, therefore, was to transfer to the trustees of Cumberland College all that , part of the two- hundred and forty acre tract, which at the time, remained unsold. The present owners who derive their title through sales made by the trustees of Davidson Academy previous to 1806, claim their exemption by virtue of the 6th section of the charter of 1785, for ninety-years. Such as derive their title from sales made by the trustees-of Cumberland College, or its successor, after 1806, claim also the benefit of the exemption in the 9th section of the charter of 1806, which was perpetual.

The owners of -the lots are not parties, but the trustee, in his answer or return to the suit, takes the position that the first named class are exempted for ninety-nine years, under the act .of 1785, and that the last named class are entitled to a perpetual exemption. He says that his information is, that the greater part of the two hundred and forty acre tract, perhaps nearly *618all of it, was sold and conveyed by said trustees of Davidson Academy, prior to the year 1806, but elsewhere, he says, “he does not know what portion of the property mentioned in the writ or petition was sold by Davidson Academy prior to 1806, or whether any of it was so sold.” There seems to be nothing else in the record to show how this fact is. It seems to me clear, that all those who claim • under pur■chases made from the trustees of Davidson Academy prior to 1806, must stand alone upon the 6th section ■of the act of 1785; and this I believe is not controverted. It seems to me, furthermore clear, that those who claim under purchases made after 1806, from the trustees of Cumberland College, must stand alone upon the 9th section of the «charter of 1806, and that they are not entitled to the benefits of the exemption contained in the 6th section of the charter •of 1785. It is claimed that the transfer of the property of Davidson Academy to Cumberland College, carried with it all the rights of exemption that attached to ' the property in the hands of the first named institution, and this by mere force, of the act transferring property without more. But I think it is noW regarded as well settled, that a mere purchaser or as-signee of property, does not take the benefit of an exemption to which the vendor or assignee of the prop■erty was entitled, and that this is so as to property transferred by express legislative authority, unless the Legislature assent to the exemption in favor of the new owner — and this must be especially so where the transfer was without consideration. This was settled *619in the case of Morgan v. Louisiana, by the Supreme Court of the United States, 3 Otto, and has been since several times followed. So that upon the transfer by the act of 1806, of the property of Davidson Academy to Cumberland College, the latter institution would not take the benefit of the exemption.contained in the former charter, unless the purpose to transfer to the new institution the benefit, or the, exemption appear upon the face of the last named act. So far from anything of this sort appearing, a contrary purpose is in terms expressed. The act of 1806 contains a new and independent exemption clause which not only applies to any other property the new institution might acquire, but in terms applies to the property which by the act was transferred to it. It says, “ that all property, real, personal or mixed, by this act appropriated and made over to the use and benefit of said College,” * * as well as other property afterwards acquired, etc., shall ’be exempt, etc. So that it is clear the purpose was not to transfer to the new institution the benefits of the exemption in the old charter, but to grant a new and independent exemption, and whatever right the new institution acquired, was under this new exemption. In the case of The State v. Hicks, Ewing & Co., “ that the College succeeded to all the rights of the Academy,” was assumed as one of the facts admitted by the agreed case, but was certainly not so, determined by the court upon consideration of the act itself; jor the opinion shows that the land owned by the defendants in that case had been sold off by the trustees of, Davidson Acad*620emy. Hence, that decision only relates to that portion of the two hundred and forty acres which had been sold off previous to 1806.

It may seem that the real interest of such of the property owners as hold under Cumberland College, is not to claim exemption under the 6th section of the charter of 1785, but rather .under the 9th section of the charter, of 1806. In the former, exemption is only for ninety-nine years, while the latter is perpetual. l{ Curiously enough,” however,’ the argument in favor of the exemption has been rested alone upon the exemption for ninety-nine years under the first charter, while a strong inclination has been manifested to repudiate the perpetual exemption in the last charter. This was evidently from the consciousness that it was dangerous to ask too much. That the court might sustain an exemption for ninety-nine years — which has nearly expired — upon grounds that would not be sufficient to sustain a perpetual exemption, though the grant of the exemption be in equally strong terms. I am of opinion that if any of the owners of parts of the two hundred and forty acres, who claim under Cumberland College, have any exemption, it is not for ninety-nine years — but perpetual. For the grant of exemption in the act of 1806, is equally as broad in its terms as that of 1785, if a perpetual exemption be valid; this seems to me to be beyond question.

But I am further of opinion, that whether they claim under Cumberland College or Davidson Academy, that they are in no event entitled to the ex-exmption. That no such exemption, either under the *621charter of 1785 or the charter of 1806, ought now to be allowed. The determination of this question depends upon whether the case of The State v. Hicks, Ewing & Co., 9 Yerg., 486, should now be followed or overruled. I understand the court to be of the unanimous opinion the that case was wrongly decided. The question is, shall it nevertheless be now followed in consideration of the fact that it has been so long acquiesced in, and has become, so to speak, a rule of property relative to this two hundred and forty acres of land upon faith of which the present owners have acquired their title?

I do not understand that it is seriously contended that it is an adjudication. It was an adjudication as to the right to recover the taxes claimed by the State for the year 1836, against so much of the property as was then owned by Hicks, Ewing & Co., but is no adjudication as to the right to recover the taxes now claimed: 5 Sneed, 106; 12 Hum., 34. It is direct authority, however, deciding the direct question, especially as to the right of exemption of so much of the land as was sold off by the trustees of Davidson Academy — and as such, is entitled to the very highest consideration, and ought not to be overruled, except for the most cogent reasons.

The question was whether the exemption related only to the property in the hands of the Academy, or did it attach to the land itself, and follow it into whosoever hands it might come? The court reached the latter conclusion. The section of the charier (sec. 6), granting the exemption, is in these words: “ That no *622lands, tenements or hereditaments, which may be vested in the trustees of the Acadamy of Davidson, for the sole use and behoof of the Acedemy, shall be subject to any tax for the space of ninety-nine years.” The grant of the two hundred and forty acres is contained in the next section.

It will be observed that the exemption has no special reference to the two hundred and forty acre tract, but would ajiply as well to any other lands, the title to which might become vested in the trustees for the use of the Academy. In deciding that the exemption attached to the land in the hands of a purchaser, the entire opinion of the court, after stating the facts, and the question raised, is as follows: “It seems to me that there ean be no doubt from the wording of the 6th section of the act, that it was the intention of the Legislature to exempt the land from taxation, into whose hands soever it might come; for by the second section of the same act, the trustees are 'empowered to sell any land of the institution unless the will of the grantee forbids it; and if the Legislature had designed that lands given by the State, or acquired from any other source, should only be exempt from taxation so long as they remained the property of the institution, and no longer, they would have so provided in express terms. We therefore think the tax imposed cannot be collected.”-

Thus it will be seen, that the decision was' placed upon the ground that as the language was susceptible of two constructions, the court held that the exemption attached to the land, because the act did not, in ex*623press terms, provide otherwise. The principle of this decision is directly opposed to what is now the well settled rule, established by a long line of decisions by the Supreme Court of the United States, as well as by this court, made since the decision in 9th Yerger. That is to say, that no exemption can be claimed unless the Legislature’s intent to grant it, appear beyond reasonable doubt; all presumptions are against the exemption and all doubts must be so resolved: Hoge v. Railway, 9 Otto, 354; 18 Wall., 225; 22 Wall., 498: Cooley on Taxation, 52; 7 Heis., 40, 389; 8 Heis., 388, 456, 663; 9 Heis., 349, and besides many other cases that might be cited. So, that if this were now an open question, no doubt can exist that the decision would be the other way, that is, that the exemption did not attach to the land in the hands of purchaser, but only in favor of the Academy. The conclusion would now be regarded as free from doubt. The .question, therefore, is, admitting the decision to-have been wrong, ought it nevertheless now to be followed upon the principle of stare decisis. This raises the question as to how and under what circumstances-former decisions ought to be overruled..

It is, perhaps, almost superflous for me to express my great veneration for the distinguished court that decided the ease of The State v. Hides, Ewing Co., or to say with what reluctance I venture to question its decisions. But I am not at liberty for this or any other reason, to avoid the responsibility of forming my own opinion, and in all proper cases, re-examining the grounds upon which former decisions rest. It is no *624■disparagement to any court to say that they sometimes make decisions, which, upon reconsideration in the light of subsequent authority and reflection, are deemed erroneous. The question involved in the decision has become of vastly increased importance since that date. ,

As the demands of taxation have increased, attempts to avoid sharing its burdens, by claiming exemptions, have produced the numerous decisions to some of which we have referred, and most of which have been made since the case in 9 Yerger was decided, and in the light of these authorities, from our present standpoint, the decision cannot now be regarded as sound law.

I agree that former decisons should be overruled with great caution; and that there are many considerations to be weighed in favor of uniformity. A vascillating and conflicting .'course of decisions is greatly to be deprecated. It tends to weaken public confidence in the courts, and creates uncertainty • and confusion in the law. ' But courts do not strengthen their claim to public confidence in all cases by adhering to erroneous decisions. Nevertheless, there are considerations on the other side of the question, and former decisions must sometimes be overruled; and notwitstanding the remarks so often made by our judges in favor of uniformity, yet our own reports contain, perhaps not less than fifty cases, that have been overruled. Some of them many years after they were rendered : See Overruled Cases, Kings Digest, 2d ed., vol. 3, sec. 3987.

At last it becomes a question for careful consideration, whether more injustice and greater confusion will *625result from overruling an erroneous decision, than by-following it. This is the question.

In all eases involving mere rules of property, as for instance, the construction of statutes or of writings, as in Talbolt v. McGavock, 1 Yerger, where there is generally no more real merit on the one side than the other, a decision, and especially a series of decisions once made, should be followed without question, for in such cases it is only necessary that there should be a uniform rule, and I agree that decisions of any character ought not to be overruled, when the question is merely doubtful. Decisions long acquiesced in, constituting rules' of property or trade, applicable to the whole people of the State, ought not to be disturbed. But where the decision stands alone and unsupported, is manifestly erroneous, and where it involves palpable injustice and wrong, courts ought not to perpetuate the error and repeat the injustice, unless, as I have said, a greater injustice will result from an attempt to correct the error. Settled, uniform rules, are of the highest importance, yet it must not be overlooked that it is also the purpose of the law to administer right and justice in the particluar case. And that the rules established shall be such as will favor the right, and not continue to work injustice for all time to come. The decision in the present case, though made many years ago, is in no one sense a rule of property, or a rule of right applicable to ihe whole people of the State, and their property. It was not the construction of a section in a special charter, and applicable to the two hundred and forty acre tract of land referred to, and *626upon the expiration of the period of exemption fixed by the decision, it would become a dead letter. It will not be insisted that the principle of the decision is to stand, that has long ago been overruled, and ■except as to the exemption of this particular property, it will no longer be authority.

It is true that it may fairly be supposed that pur•chasers of the property had notice of the decision, and that it affected the value of the property and the price paid for it; but it may also be assumed that they knew that courts sometimes' overrule their decisions, and that if they took legal advice, that they were most probably informed that the decision was, at least, a doubtful one. This they undertook to risk, and if the immunity which they have enjoyed up to the time this proceeding was instituted, is to remain undisturbed, they will certainly have but little cause to complain of bad faith in the exercise of the taxing power. That they have, under this decision, escaped taxation for more than forty years, will well repay the most of them. Overruling this decision will not disturb the rules of property and of right in regard to, the people at large, or in regard to any matter except this particular property. In other respects the law will remain unchanged, and the evils pointed out in many cases, the result of conflicting decisions, will not occur. It is but a question whether greater injustice will result to these property owners, by overruling the decision and requiring them to pay taxes than by adhering to it. The property is represented to be in the heart of a growing city, and of *627great value. The owners have the protection of the State, county and city governments, their streets are paved, they have the advantage of the police laws, schools, etc., and these burdens must all be borne by the other citizens, and these parties, so far as this property is concerned, be entirely exempt, and this too, when it is- now, for the argument, conceded that if the laws had been rightly decided, they not only would not now be entitled to the exemption, but in fact, would have been required to pay taxes for more than forty years past, which' they have entirely escaped. Under the ■ decision they have unjustly avoided these parts of the public burdens chargeable to the property, since in 1836, and it is now insisted, that it will be greater •injustice to require these property owners to pay their share of the taxes from now until the expiration of the ninety-nine years, than it will be to require the other property owners and citizens to continue as they have done, to pay it for them. In this I do not concur, I think the injustice' is so palpable that the court ought not to be precluded by the one decision from deciding what but for the decision, would undoubtedly now be the law. As the period of ninety-nine years will soon expire, the question is of less practical importance than it would otherwise be. But suppose the exemption were to last for another hundred years, or the decision in 9th Yerger had sustained the perpetual exemption contained in the 9th section of the charter of 1806, as undoubtedly in principle it does, as to all property derived from Cumberland College, would the court then sustain it? *628Would not the injustice of maintaining such an exemption, for all time to come, be so palpable as to constrain the court to overrule it? Would this one decision, then successfuly protect this property from its share of the public burdens? The principle is precisely the same, whether the exemption is to last two years or a hundred.

There is another view by which the same conclusion might probably be reached without overruling The State v. Hicks, Ewing & Co. That is, although this exemption is in a charter, it involves no element, or contract that ought to protect it from repeal. It does not appear that a dollar of private capital has been invested in the corporation upon the faith of the provisions of the charter, or otherwise. The grant of the exemption was purely gratuitous upon the part of the State. If repealable, the exemption was certainly repealed by the Constitution of 1870, expressly declaring all property taxable, with certain exceptions, which does not include this. But I need not pursue this subject.

There is only one consideration which would cause me to hesitate in declaring this property taxable, and that is the possibility that it might result that the property would be subject to back taxes without limit of time, and this I concede would be such an apparent hardship as probably to amount to greater wrong than to allow the exemption to continue to the end of the ninety-nine years, and if this question depended upon adopting one result or the other, I am not prepared to say that I would agree to a decision that *629would practically confiscate the property. But it is only proposed to levy the tax for the present and the future, and I think safe ground could be found upon which to protect the property from the hardships of back taxes.

That the hardship of holding the property, liable for back taxes, should this far constrain the court to adhere to the erroneous decision, because hitherto acquiesced in, is not a sufficient reason for continuing the unjust exemption, merely in the effort to be logically consistent, especially when the effort would be a signal failure.

Judge Fbeeman concurs in this dissent.