Board of Sup'rs v. Gulf Coast Military Academy , 126 Miss. 729 ( 1921 )

Holden, J.,

delivered the opinion of the court.

This is an appeal by the board of supervisors of Harrison county from a judgment rendered by the circuit court exempting from taxation the property owned and used exclusively for educational purposes by the appellee, Gulf Coast Military Academy, a chartered educational institution operated for profit.

The main question presented by the appeal is whether a chartered educational institution operating for private profit can successfully claim its property exempt from taxation which is used directly and exclusively by the institution for the education of youth, or whether such exemption (section 4251, Code of 1906; section 6878, Hemingway’s Code) goes only to educational institutions not operated for profit. A consideration of the question presented involves directly, or incidentally, and brings into review, sections 112, 181, and 182 of our Constitution of 1890.

The pertinent part of the statute, paragraph D, under which the exemption is claimed, reads as follows:

“All property, real or personal belonging to any college or institution for the education of youth, used directly and exclusively for .such purpose,” shall be exempt from taxátion.

In the Codes of 1880 and 1892 the exemption allowed was only to snch institutions operated “not for profit.” But it will be observed that the legislature amended the statute so as to make the exemption apply to the property of all such educational institutions used directly and exclusively for such purpose, regardless of whether the institution was operated for profit or not. Therefore we are led to conclude that the property here involved, used by the appellee academy exclusively for educational purposes, even though the institution is operated for profit, is exempt from taxation. The policy of extending exemptions to persons and corporations operating educational institutions in our state is a matter of legislative discretion, with which we have no concern; and so long as the legislature acts within the bounds of constitutional restrictions its poAver to tax or exempt property is, generally speaking, without limit.

But it is contended by the appellant board of supervisors that the act exempting corporate educational institutions operated for profit is void, because in conflict with three sections of the Constitution, to-wit:

That it conflicts with the “uniform and equal” taxation clause of section 112.

This Anew is untenable. The section does not require that all property be taxed, and therefore does not prohibit exemptions. Miss. Mills v. Cook, 56 Miss. 40; Brennan v. Insurance Co., 70 Miss. 581, 13 So. 228; Adams v. Railroad, 77 Miss. 194, 24 So. 200, 317, 28 So. 596, 60 L. R. A. 33; Adams v. Tombigbee Mills, 78 Miss. 691, 29 So. 473; Vicksburg Bank v. Worrell, 67 Miss. 47, 7 So. 219.

Second, that it violates the provision of section 181 which requires that “the property of all private corporations for pecuniary gain shall be taxed in the same way and to the same extent as the property of individuals.” It is argued that the appellee institution is a private corporation for pecuniary gain, and that it must he taxed to the same extent as the property of individuals, and that this clause should be construed to mean that all private corporations for pecuniary gain should be taxed*, regardless of the character or class of the property or corporation involved.

We cannot agree with this construction of the section. It seems clear to us, and it has been so held by this court, that this section of the Constitution means, and ivas intended only to require, that the property of private corporations for gain should be taxed in the same way and to the same extent as the property of an individual. Its plain purpose was to prevent discrimination in taxation as between corporations and individuals; that, where one is taxed, the other, in the same class, cannot escape; that, when one is not exempted by the legislature, the other must not be. The simple language of the section, that property of private corporations shall be taxed like the property of individuals, does not mean that the property of all corporations must be taxed; but the requirement is that the state must tax the corporation the same as the individual under the Same circumstances. That is all it means, and that is true here. Adams v. Railroad Co., 77 Miss. 273, 24 So. 215, 317, 28 So. 956, 60 L. R. A. 33; Jackson v. Preston, 93 Miss. 366, 47 So. 547, 21 L. R. A. (N. S.) 164.

Third. It is further urged by the appellant that section 182 of our Constitution prohibits the exemption to the appellee, because it is contrary to the provision that: “The power to tax corporations and their property shall never be surrendered or abridged by any contract or grant to which the state or any political subdivision thereof may be a party, except,” etc.

It is claimed this section prohibits the exemption of property belonging to any corporation; that the legislature is without power to grant exemptions to corporations, regardless of class or character of the property.

We do not so understand the meaning of this section. The purpose of the provision was to prevent the legislature from irrepealably surrendering by contract or grant the power to tax corporations. Granting an exemption of corporation property, which exemption may be repealed at any session of the legislature, is certainly not a surrender or an abridgement, by contract or grant, of the power to tax the property of corporations. In other words, the power to tax corporations is not surrendered by a repealable legislative act of exemption. The makers of the Constitution very probably had in mind a restriction against perpetual grants of exemptions, perpetual immunity, and an irrepealable surrender of the power to tax, granted by contract in the charter of corporations. No doubt this was the evil intended to be provided against by the section. The section does not prohibit the exemption allowed in this case. Miss. Mills v. Cook, 56 Miss. 40; Adams v. Tombigbee Mills, 78 Miss. 676, 29 So. 470.

It is contended by the appellant that the appellee institution does not come within the statutory exemption, because it teaches military and naval science as well as a literary education, and that some of the buildings on the property of the appellee are used for dormitories, therefore that the property is not used exclusively for educational purposes.

We disagree with this contention, because the record shows that the academy is an educational institution, and that all of its property is used exclusively and directly in education of the youth; and we hold that the proof in this case shows the appellee institution is such as comes within the meaning of the exemption statute involved.

There is a further contention by the appellant that the property here in question cannot be exempted because there is a bonded indebtedness in the school, district in which this property is located, and that such bonded indebtedness is a lien hpon this school property.

This question cannot be properly raised by this record for obvious reasons, and we decline to pass upon it; but it may not be amiss to point out that the general rule may be that there is no lien upon this exempt property for general ad, valorem taxes to satisfy the bonded indebtedness. The lien probably in the mind of counsel for appellant is the lien given upon property for special improvements made whereby the property is specially benefited.

Counsel for appellant points out and complains that the exemption in such cases as the one before us is unjust and illegal, because the property acquired by the educational institution is so large, and may further increase, that the taxation against the remaining property in the district will be greatly increased, and might go to the extent of practical confiscation.

We appreciate the view entertained by counsel, and it is true that in the course of time this educational institution may acquire and have declared exempt all of the real property lying in the district. However, the courts can offer no remedy or solace in the premises; it is a matter to be dealt with solely by the legislature. It may be that our legislative policy has been too liberal in exempting millions of dollars worth of property in our state which, by rules of fairness and equity in the distribution of the tax burden, should not have been allowed; but we cannot deal with the question in this tribunal. The legislature has the only power and discretion, and it is, generally speaking, without limit to tax or exempt property, provided in doing so it stays within the restrictions of the organic law.

The judgment of the lower court is affirmed.

Affirmed.