Detroit Home & Day School v. City of Detroit , 76 Mich. 521 ( 1889 )

Campbell, J.

The only question in this case is whether the corporation complainant is taxable for its realty in the city of Detroit, in reference to the tax law, which provides for exemption from taxation of the personal property of—

“Library, benevolent, charitable, and scientific institutions incorporated under the laws of this State, and such real * estate as shall be occupied by them for the purposes for which they were incorporated.” Laws of 1887, p. 415, § 3, subd. 2.

This corporation was organized under an act to provide for the incorporation of institutions of learning, approved February 9, 1855 (How. Stat. Chap. 138), and subsequently amended in some particulars. The only corporate purpose named in its charter is “to establish, maintain, and conduct a seminary of learning” in Detroit. Its only actual business has been the maintenance of such a seminary, with the usual studies pursued in such institutions, and its real estate is all occupied by the school buildings. Its expenses are met by tuition charges, and those have been exclusively used for its maintenance, except that one year, in 1886, a dividend of 3 per cent, was paid to the stockholders.

Unless the term “scientific institutions ” includes educational corporations, there is no statute exempting from taxation any schools, unless those in the hands of the public authorities, and those are only exempt by implication. And if it does not include the seminaries of learning, there is practically nothing exempted, for there are no other scientific institutions, properly so called. But it is matter of common knowledge that all general educational establishments have universally been known as “scientific institutions,” and fall naturally and directly within it. A “ scientific institution,” under the language of all civilized countries, means an institution for the advancement .or promotion of knowledge, which is the English rendering of “ science.” We need not, in our history, go beyond the ordinance of 1787, which declares that—

“Religion, morality, and knowledge being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged.”

Exemption from taxation is the only form of encouragement that our laws provide. That they have always provided, and they have not required tuition to be free, even in our public institutions, most, if not all, of which, except in favored circumstances, derive considerable revenue from pupils. The advantage of multiplying the facilities of learning has been rightly regarded as worth to any decent community very much more than can be counted in money.

The only condition imposed on the exemption is that the land exempted shall be “ occupied for the purposes for which they were incorporated.” That condition is fulfilled in this case, and, under repeated decisions of this Court, the line is very easily drawn. Young Men’s Society v. Detroit, 3 Mich. 172; Sisters of Charity v. Detroit, 9 Id. 94. It is worthy of remark that, after the Court equally divided in the last case upon the question whether property held by one corporation under lease from another could be regarded as belonging to the lessee, the statute was amended to its present form by making an exemption of the whole estate actually occupied for the purposes declared in the law, although the owners of the fee might collect rent.

The laws for the incorporation of libraries, all, so far as the statute books show, contemplate associations for the benefit of the stockholders alone; and while dividends are not usually, if at all, allowed directly on the stock, the funds all go to the augmentation of the private property of the shareholders. Yet there is no exception to library exemptions.

In all of these cases, the Legislature, by confining the exemption to corporations, have, by the incorporating acts, thrown such safeguards as they deemed necessary around the management of the business, so as to prevent its being abused into a mere scheme for money getting. If any corporation misuses its funds, the remedy is not by the action of assessing officers, who have no authority to punish it by taking away its exemption, but by direct proceedings to restrain and punish any corporate abuses. If it rs true that the dividend made was not lawfully made, the recipients can be made to refund it, and any one legally at fault can be made responsible according to law. But the assessment of taxes on exempt property is not a legal remedy.

Where language is so plain as to convey a clear and intelligible meaning, we have no right to go beyond it, and impose another meaning. The language of the Legislature in exempting from taxation is as much entitled to obedience as that imposing taxation. This law has been in force for a very long time, and has never been amended, except to enlarge the scope of the exemption. Its purpose, as expressed, does not appear ambiguous, and in the continued application of it has not impressed any Legislature as too liberal. When it is so regarded, it will have to be changed in form to narrow it.

The taxation was in violation of the exemption in the statute, and the court below erred in sustaining it, and the decree should be reversed, and relief granted, with costs of both courts.

Sherwood, C. J., Champlin and Long, JJ., concurred with Campbell, J.