
    Little, Treas. v. The United Presbyterian Theological Seminary.
    
      Endowment fund of college — Exempt from taxation, when — Sixth subdivision of section 2782, Revised Statutes — Valid law — • Under section 2 of article 12, constitution.
    
    1. The sixth subdivision, of section 2732, Revised Statutes, is ' within the authority which is conferred upon the general assembly by section 2 of article 12 of the constitution.
    2 It exempts from taxation an endowment fund of a college which belongs exclusively to it, and which is devoted solely to deriving an income for its support.
    (No. 9020
    Decided May 2, 1905.)
    Error to the Circuit Court of Greene county.
    The seminary brought suit against the treasurer in the court of common pleas for a decree perpetually enjoining him from the collection of a tax upon its endowment fund. A copy of its petition follows:
    “The plaintiff, The United Presbyterian Theo-. logical Seminary of Xenia, Ohio, is a corporation duly incorporated under the laws of the state of Ohio.
    “The said United Presbyterian Theological Seminary of Xenia, Ohio, is an educational institution for the training of young men for the gospel ministry, free and open to all upon the same conditions and is controlled and managed by synods of the United Presbyterian Church of North America.
    “The said institution has a large endowment, income from which it is authorized to use in carrying out its objects and purposes aforesaid. The plaintiff has invested and loaned the endowment fund so held by it and has used the income and revenue therefrom to pay its professors and expenses incidental to the institution. No part of the income from the fund has been or is diverted into private use or profit. Said institution is one of purely public charity.
    “The said defendant, Asa Little, is the duly elected and qualified treasurer of Greene county, state of Ohio, having given bond as such and is in the discharge of the duties of said office.
    “The plaintiff further says that the auditor of said Greene county has illegally and unlawfully entered and placed upon the duplicate for taxation the said endowment fund of the plaintiff in the sum of $77,590.00, and has without authority of law, directed the defendant, as treasurer of said county, to charge and collect from plaintiff upon said property the sum of twenty-four hundred and forty-four dollars ($2,444.00), taxes for the year 1903.
    “The defendant intends and threatens to enforce the collection of the said sums and amounts unlawfully demanded as aforesaid, and to impose penalties against plaintiff and to illegally seize or distrain plaintiff’s property therefor, to the great and irreparable damage and injury of plaintiff.
    “Wherefore plaintiff prays that a temporary restraining order may issue against said defendant and that upon a hearing the said defendant may be forever enjoined from demanding and collecting from plaintiff said taxes on said endowment fund or any part thereof and for such other and further relief to which plaintiff may be entitled to in law or equity.”
    In the court of common pleas a general demurrer to the petition was sustained and the seminary not desiring to plead further, its petition was dismissed. On appeal to the circuit court the demurrer was overruled and the treasurer not desiring to plead further a perpetual injunction was granted in accordance with the prayer of the petition.
    
      Mr. Charles F. Howard and Mr. Charles W. Whitmer, attorneys for plaintiff in error.
    In the consideration of this case three questions' are involved:
    First: Is. section 2732, Revised Statutes, constitutional?
    Second: If said section is constitutional, did the defendant in error bring itself within the limitation of the exemption therein provided?
    Third: Is the fund, and the income from the fund alleged to be invested and loaned, exempt under the sixth subdivision of section 3732?
    The part of this section we maintain to be unconstitutional is subdivision sixth, exempting all moneys and credits belonging to such institutions., and is in violation of section 2, article 12 of the Constitution of Ohio.
    The above section of the constitution provides., amongst other things, that personal property to an amount not exceeding in value two hundred dollars., for each individual, may by general laws be exempted from taxation.
    We submit that the section of the statutes above referred to goes beyond the provisions of section 2, article 12 of the Constitution and after excepting from taxation institutions of purely public charity,, undertakes to exempt all moneys and credits belonging to such institutions, without regard to the. amount.
    Moneys and credits are certainly personal property, and all the personal property that is authorized to be exempted is an amount not exceeding in value two hundred dollars for each individual; and taking the most liberal view of the matter, and conceding that such institutions have the same rights as individuals, the limit of exemption authorized by the constitution for personal property being two hundred dollars, it seems to us that the limit that could in .iany event be claimed by this institution would be two hundred dollars.
    Conceding for the sake of the argument that this statute is constitutional and that the legislature had the power to make the exemption, has the defendant in error brought itself within the provisions thereof? We submit not.
    Laws exempting property from taxation must be strictly construed. Cincinnati College v. State, 19 Ohio, 110; Lima v. Association, 42 Ohio St., 128; Lee v. Sturges, 46 Ohio St., 159; State ex rel v. Cappeller, 6 W. L. B., 339; Library Association v. Pelton, 36 Ohio St., 258; Sturges v. Carter, 114 U. S., 521 (5 O. F. D., 428); Montgomery v. Wyman, 130 Ill., 17; Railway v. Thomas, 132 U. S., 174; People v. Cook, 148 U. S., 397; Railway v. Maryland, 51 U. S., 376; Delaware Railroad Tax, 85 U. S., 206; Bailey v. Maguire, 89 U. S., 215; Railway v. Missouri, 122 U. S., 561; Railway v. New Orleans, 143 U. S., 192; Indianapolis v. Grand Lodge, 25 Ind., 518; Bank v. Billings, 29 U. S., 514; Gilfillan v. Canal Co., 109 U. S., 401; (?) 23 Wall., 527; Railway v. Supervisors, 93 U. S., 595.
    Intent to confer immunity from taxation must be clear beyond a reasonable doubt, for as in the case of a grant nothing can be taken against the state by presumption or inferred. Railway Co. v. Maguire, 87 U. S., 46; Railway Co. v. Gaines, 97 U. S., 697; Tennessee v. Whitworth, 117 U. S., 139; Railway Co. 
      v. Missouri, 152 U. S., 301; New York v. Cook, 148 U. S., 397; Lima v. Association, 42 Ohio St., 128.
    Exemptions from taxation should he confined to the clear and strict terms of the law. Matlock et al. v. Auditor, 13 O. D. Re., 2; Crumpaker v. Railway Co., 4 West, 655.
    Section 2732, Revised Statutes, amongst other things, provides that all moneys and credits appropriated solely to sustain and belonging exclusively to such institutions shall be exempt.
    
    Applying the rule that exemptions should be confined to the clear and strict terms of the law, we find that the first part of this section exempts all buildings together with the land actually occupied by such institutions not leased or otherwise used with a view to profit shall be exempt. Two conditions exist under the statute when such buildings become liable for taxation.
    First: When leased.
    Second: When otherwise used for profit.
    The words, “With a view to profit,” are omitted in the latter part of this section for the obvious reason that if appropriated solely to sustain the institution and belonging exclusively to said institutions and military organizations, they could use it in no other way and for no other purpose. If the legislature had intended .to exempt moneys and credits,, the income of which is used solely to sustain such: institutions, they would have said so. The legislature evidently had. in mind only the moneys and credits actually appropriated for such purpose, and nothing more. That the legislature did not intend to exempt either real or personal property used with a view to profit is very clear. Applying the rule of strict construction to this statute, it is evident that 310 exemption exists unless three things are made to appear:
    First: There must be an actual appropriation of the fund.
    Second: That appropriation must be for a specific purpose, namely, to sustain the institution.
    Third: The money and credits must belong ex-' clusively to said institution. ,
    The fact as alleged in the petition that the income is used solely to pay its professors, and the expenses incidental to the institution, will make no difference. To be exempt the fund itself must be so used.
    Government cannot discriminate between the uses which individuals and institutions will make of the proceeds of their business, and determine that this society or individual make a more worthy distribution of the proceeds of his or its business than the other. The legislature could not without a flagrant violation of the principles of equity make such a distinction. Cincinnati College v. State, 19 Ohio, 110; Gerke v. Purcell, 25 Ohio St., 229; Association v. Pelton, 36 Ohio St., 258; Humphreys v. Sisters, 29 Ohio St., 201; Kendrick v. Farquhar, 8 Ohio, 189; Association v. Brooks, 4 Circ. Dec., 478; 8 C. R. R., 439; Burrows on Taxation, 130; Trustees v. Boston, 120 Mass., 212; Men’s Soc. v. Mayor, 3 Mich., 172.
    
      Mr. C. H. Kyle and Mr. C. C. Shearer, attorneys for defendant in error.
    1. Institution for education of young men for minIstry, a purely public charity. An institution for the education of young men for the gospel ministry, and open to all, is a “purely public charity,” within the meaning of section 2, article 12 of the constitution of Ohio.
    
      2. Collegiate endowment funds exempt from taxation. The endowment fund of such institution, which is loaned, and the interest used solely for the salaries of the professors and expenses necessarily incident to such educational' work, is a “credit” within the meaning of section 2732, Revised Statutes, and is exempt from taxation.
    Two questions arise:
    First: Is the plaintiff, under its allegations of fact, as to its objects and purposes, really an “institution of purely public charity,” within the meaning of section 2, article 12 of the constitution of Ohio ?
    This is conceded by counsel; but that concession not being conclusive of the law, we are cited to authorities which seem to settle the matter beyond controversy. Gerke v. Purcell, 25 Ohio St., 229.
    To the same effect are the holdings in Meyers v. Akins, 4 Circ. Dec., 425 (8 R., 228); Sowers v. Cyrenius, 39 Ohio St., 29 (48 Am. Rep., 418); Mannix v. Purcell, 46 Ohio St., 102 (19 N. E. Rep., 572; 2 L. R. A., 753; 15 Am. St. Rep., 562); Davis v. Association, 57 Ohio St., 257 (49 N. E. Rep., 401); McIntire Poor School v. Manufacturing Co., 9 Ohio, 203 (34 Am. Dec., 436).
    Second: Is this fund, the principal of which is not touched, hut is loaned, and the interest only used for the purposes of the institution, exempt from taxation?
    Upon this question issue is taken. Defendant claims that while the fund itself, if reduced to money and kept in the treasury for use as needed, would not be taxable, the moment it is placed at interest and becomes a source of profit, it is analogous to the leasing of real estate for business purposes, and, following the doctrine of Cincinnati College v. State, 19 Ohio, 110, it becomes taxable.
    Inasmuch as the rental of real estate only was involved, the case (19 Ohio, 110) was necessarily decided upon a construction of section 3, subdivision 3 of the act then in force on the subject (44 O. L., 86).
    The learned judge who rendered the opinion, not satisfied with the undoubtedly correct conclusion to which the court had arrived as to subdivision 3 of the act in question, ventured to go beyond the single question then before that tribunal, and gave his individual views of what would be the construction of subdivision 4 of the act.
    But this construction of subdivision 4 is a mere dictum, and wholly obiter, as is expressly conceded by the judge, since he had previously stated that subdivision 3 was “the only one that we think could be supposed to have any bearing on this case. ” We, therefore, are not bound by it as an expression of the law by the Supreme Court.
    Such a fund when loaned cannot better be defined than to call it a “credit,” and such we believe was the purpose of the legislature in so using it.
    We also think it would be contrary to the policy of the state to hold otherwise.
    The ordinance of 1787, announces as the policy of the northwest territory, 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. ’ ’
    The constitution of 1802 reasserts this policy, and emphasizes it by introducing the word “essentially” before “necessary,” making it read, in section 3, article 8, “Religion, morality and knowledge being essentially necessary to good government.”
    
      And the constitution of 1851, section 7, article 1, in similar, hut somewhat less felicitious language, makes the same announcement.
    The consequence has been that a large number of educational institutions have been founded and liberally endowed, upon the faith of this wise state policy, and up to the present case, no attempt has been made, so far as the court is aware, to place the burdens of taxation upon them, except as to real estate diverted from educational use.
    Institutions of purely public charity may by general laws be exempt from taxation. 3 Rev. Stat., page 3731; art. 22, sec. 2, Const, of Ohio.
    The defendant in error is an institution of purely public charity, under article 12, section 2 of the constitution. Humphreys v. Sisters, 29 Ohio St., 201; Association v. Pelton, 36 Ohio St., 253.
    Laws have been passed as provided by the constitution, exempting institutions of purely public charity. Section 2732, Revised Statutes.
    Under section six alL “moneys” and “credits” appropriated solely to sustain and belonging to institutions of public charity are exempt from taxation.
    For the purposes of taxation we have these terms defined in section 2730, Revised Statutes.
    These terms “moneys” and “credits,” are as broad when applied to the exemptions of property .as they are when applied to the listing of property.
    The endowment fund of plaintiff is exempt from taxation. Mannix v. Purcell, 46 Ohio St., 102; Davis v. Association, 57 Ohio St., 257; Sowers v. Cyrenius, 39 Ohio St., 29.
   Shauck, J.

The seminary claims that its endowment fund is exempt from taxation under the provisions of section 2732 of the Revised Statutes, and that view was taken by the circuit court. Counsel for the treasurer challenge that interpretation of the section as well as its constitutional validity. The section describes the property which is exempt from taxation and the present discussion involves the sixth subdivision of the section which is:

“All buildings belonging to institution[s] of purely public charity, and all buildings belonging to and used exclusively for armory purposes by lawfully organized military organizations which are and shall continue to be fully armed and equipped at their own expense and by law made subject to all calls of the governor for troops in case of war, riot, insurrection or invasion together with the road [land] actually occupied by such institutions, and that owned and used as sites for such armory buildings of said military organizations not leased or otherwise used with a view to profit, and all moneys and credits appropriated solely to sustain and belonging exclusively to said institutions and military organizations.”

The constitutional authority for the exemption is found in section 2 of article 12 of the constitution which prescribes the general rule of uniformity of taxation as well as the subjects of taxation which may be omitted from its operation.

It provides “Laws shall be passed taxing by a uniform rule all moneys, credits, * * *; but * # # institutions of purely public charity # * * may, by general laws, be exempted from taxation; and all such laws shall be subject to alteration' or repeal * # *.”

While the section employs mandatory terms in prescribing the general rule of uniformity of taxation, it does not by force of its own terms provide any exceptions to that rule, but merely authorizes the general assembly to provide by general laws for the exemption of property of the. designated character. It is settled in Gerke et al. v. Purcell, 25 Ohio St., 229, and in cases following it, that an institution, such as the petition alleges the seminary to be, is “an institution of purely public charity” within the meaning of this section of the constitution. Since the particular authority conferred upon the general assembly is to exempt such institutions without limit or qualification, and since within the contemplation of taxing provisions the institution must consist wholly of its property, there appears to be no ground whatever for the constitutional point, raised by counsel for the treasurer. It must, however, be admitted that the meaning of the statute is not so clear as is that of the constitutional provision. The general assembly is not required to exercise all the power of exemption which is conferred, and some doubt has been raised respecting the extent to which it has seen fit to exercise it. It is said that in the court of common pleas the demurrer in the present case was sustained upon the supposed authority of the Cincinnati College v. The State, 19 Ohio, 110, where it was decided that where the assets of a similar institution are in lands which are leased, the lands are taxable although the rents are devoted wholly to the maintenance of the institution in the same manner as is the interest derived from the loaning of an endowment fund. The inability of the judge of the court of common pleas to find a philosophical reason why the land should be subject to taxation in one case and the fund exempt in the other starts sympathy. The consideration suggested may have influenced this court to decide in Davis, Auditor, v. The Cincinnati Camp Meeting Association, 57 Ohio St., 257, that “Where an association, organized and conducted for the purpose of a purely public, charity, as a camp meeting, under the supervision and control of some church, owns real estate devoted exclusively to the same use; and thereon provides privileges for the comfort and convenience of those who may attend the meeting, the fact that it makes charges for the use of these privileges, does not subject its property, nor the privileges so provided, to taxation under the laws of this state.” No attention was there given to the change in the language of the statute since the decision of the College v. The State. But that change was considered in the Cleveland Library Association v. Pelton, Treasurer, 36 Ohio St., 253, where it was held that the rented portion of the land of an institution- of that character is not within the exemption, although the rents are used for the purposes of maintenance. In all the cases cited conclusive effect was intended to be given to the terms of the statute without consideration of the reasons for its discriminations. The observation that the reason of the law is its life, so frequently helpful in the determination of questions' arising at common law, must have a restricted application to the interpretation of statutes. In the discharge of the duty of interpretation it is not required or permitted to courts to go beyond the plain meaning of the language which the legislature has used to express its intention. Assuming the correctness of the decisions cited with respect to the taxability of land belonging to such institutions and leased for income to be devoted to their maintenance, it is entirely clear that the legislature has deliberately prescribed a different rule with respect to an endowment'to be loaned for an income to be devoted to that purpose. There can be no conceivable condition of such a fund in which it is not either “money” or “credits” appropriated solely to sustain, and belonging exclusively to, such institution, and by the unambiguous terms of the statute it is exempt from taxation. When counsel for the treasurer ask us to follow the judge of the court of common pleas to the consideration of the sufficiency of the supposed reasons for the discrimination they invite us to an inquiry which is not open to us. The judgment of the circuit court will be affirmed.

Affirmed.

Davis, C. J., Price, Crew, Summers and Spear, JJ., concur.  