ASSESSMENTS.

[Montgomery Circuit Court,

June Term, 1889.]

Shauck, Shearer and Stewart, JJ.

#### LOUIS H. POOCK, TREASURER, v. JOSEPH ELY ET AL.

School Lands Exempt from City Assessments.

Lands donated by congress to the legislature of this state,'for school purposes, are exempt from assessment for the expense of local improvements.

Appeal from the Court of Common Pleas of Montgomery county.

This-cause is sfibmitted upon- a demurrer to-the answer.

Poock, as treasurer-'of Montgomery county, sues Joseph Ely, Samuel:Patillin and David Banker, as trustees of original surveyed township number 'one, range five, east, etc., of Warren -comity', Ohio, alleging-that prior to the proceedings by the county commissioners of Montgomery county- complained 'Of, The *409lands -in the petition described, ¿being .the -southeast -quarter of section tw.enty, town six, range 'four east, etc., were under acts -of congress of April ,30, .1802, and March 3, 1803, donated by the United States to the state of .Ohio,-in trust for'the support'of common schools, and were set aside-and assigned to said original surveyed township for school purposes and the use and benefit of the schools therein; that at and during said period, the said trustees held, managed and controlled said lands for the uses and purposes aforesaid, and that-defendants as such trustees now hold the same for said uses and purposes. That on the 30th ■day of January, 1880, a petition was presented to the commissioners -of -said Montgomery county, praying that body to lay out, establish and construct under the provisions of the act of the legislature of March 29, 1867, as amended May 6, 1876, entitled “An act-to authorize county commissioners to lay .out and construct free turnpike roads,” a certain county road, .known as “Bachman Road Improvement,” through said lands. That after due notice of the filing of said petition, viewers were appointed who, on the 19th day of March, 1880, reported in favor of-said improvement, that the same was necessary, and setting forth the lots and lands which would be benefited thereby, and ought to be assessed for the expense of the same, among which were the lands aforesaid. That a majority of the land-owners whose lands would be benefited by the-improvement having signed the -petition, such proceedings were had by sa'id commissioners as that said improvement was ordered to be made, and three disinterested freeholders appointed to apportion the expense, etc., and to report their action to the county auditor. That although said lands in question lie within the bounds of said road improvement, and were included within the report of said viewers and the order of the commissioners, and were benefited, and ought to have been assessed for said improvement, they were by mistake omitted by said freeholders in making said apportionment. That afterwards, October 22, 1885, such proceedings were had by the commissioners that a re-apportionment of said assessment was made, and the sum of' $510.34 apportioned to and assessed upon the lands described, for making • said -improvement, which upon. due notice and hearing was approved and confirmed by said commissioners, and said assessment duly placed upon a special duplicate, and-placed in the hands of the plaintiff for collection; that the same, although past due, has not been paid. Judgment is asked for the amount of said assessment, interest and penalty,-payable out of the rents, issues and profits of said lands, and other relief.

The trustees by their answer admit that they “hold and control Tor The use and benefit of the public schools of said township, the lands-anti Tenements in the petition described; and that.said lands were donated,-underThe acts óf congress named, by the United States-to-the state-■of" Ohio,rim trust-for The -support of common schools; and they further say that \sáid lánds’were accepted and hel’d'1 by the state of Ohio,-in trust,Tor the-suppo'rt-ofihe'public schools, ¡wltlr. the understanding and agreement that‘the* said lands-shottld'be and'remain,¿-so ¡long as held, for said purposes, by the state, exempt from-taxation,;arid-withThe'further agreement that, if sold, the proceeds should forever'be;preserved inviolate and undiminished. That sáíd obligation has been-ever since its organization, faithfully observed’by'the state, and all lands1 so received' have -been "held, and were, and are, exempt and free from taxation and-'from -assessment by’the state, for any purpose whatsoever.

“Defendants admit the establishment and construction of ¡said - free ¡turnpike* road through said premises, but deny that said lands ought to "be assessed fdr the expense thereof, or that it was by mistake that-said lands-were not.included in said apportionment; and aver that said omission-w-as■ intentional, and in accordance with law and usage, arid'in the-good faith’required-of'them towards the United'States; arid that the subsequent-action of the'commissioners in assessing said lands for *said*improvement, and of the auditor in .¡ placing said *assessment*upon the tax duplicate against said land,-were-unjust, illegal and void.”

*410S. Boltin, for plaintiff,

cited: State v. Com'rs, 17 O. S., 558; Reeves v. Treasurer of Wood Co., 8 O. S., 333; Hill v. Higdon, 5 D- S., 243; Lima v. Cemetery Assn,,-42.0. S., 128; Balto. v. Cemetery Co., 7 Md., 517; Sheehan v. Good Samaritan Hospital, 50 Mo., 155; St. Louis Public Schools v. St. Louis, 26 Mo., 468; Lockwood v. St. Louis, 24 Mo., 20; Cooley on Tax. (2 ed.), 207, 606, 607, 650, 652 and 653; 2 Dillon Municipal Corporations, sec. 777; sections 2264, 2274, 2276, 4833, 4835, 4836, 4838, 4842, 4843, 4844, Rev. Stat.; 1 Chase Stat., 72, 73, 74, 534; Chap. 1, Title X, and Chap. 1, title XI., Rev. Stat.; 18 How., pp. 173, 181, 182; 82 O. L., 70; 83 O. L., 156; 1 Greenleaf Evidence, sec. 490.

Gunckel & Rowe, for defendant,

cited: 1 Chase Stat., 72, 73, 74; 2 Chase Stat.', 1477; 3 Chase, 1802; Cooper v. Robinson, 6 McLean, 101; Cooper v. Robert's, 18 How., 173; 14 Plow., 267; Const. Ohio, art. VI., sec. 1; 5 Dillon, 445; 2 Dillon Municipal Corporations, secs. 773 and 614; Cooley on Taxation, 172, 173; State v. Purc-el, 31 O. S., 352; 84 111., 227; 42 Pa. St., 25; 116 Mass., 193; 36 Cal., 220; 47 Cal., -353; 4 S. & R., 354; 66 111., 322; 82 O. L., 122; 80 111., 384; 118 111., 52.

Shearer, J.

The question presented by the demurrer is whether lands donated by congress to the state of Ohio, for the benefit of common schools, can be lawfully assessed for the expense of the construction of free turnpike roads.

This involves an examination of the action of congress and of the legislature in respect to these lands.

By section seven of an act approved April 30, 1802 (1 Chase Stat., 72), congress offered to the convention of the eastern state of the territory northwest of the river Ohio, a proposition for “its full acceptance or rejection”; which if accepted was to be obligatory upon the United States: “First. That the section nqmber sixteen, in every township, and where such section has been sold, granted, or otherwise disposed of, other lands equivalent thereto, and most contiguous to the same, shall be granted to the inhabitants of such township, for the use of schools.”

On the 29th day of November, 1802, the convention resolved to accept said proposition, provided that like donations of unlocated lands in the United States Military tract and other government lands should be made for the support of schools in such other territory; and that “all lands before mentioned to be appropriated by the United States for the support of public schools should be vested in the legislature, in trust for said purpose.” (1 Chase, 74.)

This modification of the proposition was assented to by congress by the act of March 3,1803 (1 Chase, 72); which enacted that all said lands should be “vested in the legislature * * * in trust for the use aforesaid, and for no other use, intent, or purpose, whatever.”

This action constituted .a compact between congress and the people of Ohio, whereby the object of the grant was clearly defined, and limited to the .support of public schools in this state; and the state can not in good faith divert the subject of the trust to any other use.

To secure the faithful application of the trust property, it is ordained by the constitution, article VI., sec. 2, that “the principal of all funds arising from the sale, or other disposition of lands, or other property, granted or entrusted to this state for educational * * * purposes, shall forever be preserved in- | violate and undiminished; and the income arising therefrom shall be faithfully applied to the speaific objects of the original grants, or appropriations.”

So far as we know the trust created by the appropriation of these lands to I the use of the schools of the state has been maintained. The revenues arising from the lands have been faithfully applied to the support of schools, and where *411the lands have been sold, the proceeds have been preserved inviolate and undiminished, the interest only being used for school purposes. Conceding that the general assembly has exempted school lands from taxation, it is contended that such exemption is limited to taxation as distinguished from assessments. That inasmuch as the exemption refers expressly to taxation, all other exemptions are excluded, and therefore an assessment such as is sought to be upheld in this case is lawful.

In support of this view the case of Lima v. Cemetery Assn., 42 O. S., 128, is cited, which decides that an incorporated cemetery association is not relieved from an assessment for a street improvement by a statutory provision exempting its lands from taxation, such exemption being regarded as confined to taxes as distinguished from local assessments.

In that case the lands were the property of a private corporation, which but fór the express exemption by law, would have been liable for taxes. In other words, it is only by virtue of the statute that cemeteries and the like are exempt from taxation, and assessments as distinguished from taxes not being included within the exemption, may be lawfully levied upon the real estate of such corporations. But can this be so as to lands belonging to the state, and held for the support of public schools? The policy of the state from the time of its organization has been to encourage schools and the means of education. To hold that school lands may be assessed for the construction of roads, ditches and the like, and the rents sequestrated to pay the expense, would be to defeat the object of the trust upon which the state holds its title, and against state policy. We are bound to presume that the legislature, in whom is vested the title to these lands, did not intend, in exempting from taxation cemeteries and the like, to imply the right to assess lands, held by it for school purposes for local improvements, and thus impair, if not defeat, the very object of the grant.

The case of Lockwood v. St. Louis, 24 Mo., 20, cited by counsel for plaintiff, differs from this in that in that case the property assessed was private propverty, not held, as here, by the state for specific uses. The question there was whether an exemption ought to be implied in favor of church property, because by the law it was expressly exempted from taxation.

A statute excepting private property from a burden, to which but for the exception it would be subject, should be strictly construed. And the court in that case properly held the exemption not to embrace assessihents'. This is in accord with Lima v. Cemetery Ass’n, *supra.*But in the case at bar, as it seems to us, a different rule should be adopted.

These school lands are not private property, but a public trust, to be managed and administered for the benefit of the public schools of the state. The framers of the Constitution do not seem to have thought it necessary to throw any specific safeguard about this trust; but they did provide that “the principal of all funds arising from the sale or other disposition of lands or other property, granted or entrusted to this state for educational * * * purposes, shall forever be preserved invioláte and undiminished.” Constitution, article VI., sec, 1.

Is it not clear, the above provisión and the legislation by which this trust was created being considered, that the purpose of the law-givers was that school lands, and the proceeds of the sale thereof, and the rents arising therefrom, should be kept intact, and applied solely to the support of .the .schools of the state? _ , . , . ,

To hold otherwise is to recognize the right to destroy the school funds arising from such lands.

The policy seems to be to preserve, the integrity of the trust, applying the revenue to school purposes; and if the lands are sold, the proceeds must be held as a substitute therefor, and preserved “inviolate and undiminished.”

It was not necessary, in view of the plain terms of the compact between con*412gress and the state, to provide in the organic law for the preservation and application of the lands granted. There was propriety in a constitutional prohibition upon the diversion of the funds arising from the sale, although, as we think, it was unnecessary. '

Article 8, sec. 2, of the constitution of Illinois, provides that “all land, moneys or other property donated, granted or received for school, ¡college, seminary or university purposes, and the proceeds thereof, shall be faithfully applied to the objects for which such gifts or grants were .made.”

The difference between this provision and our own constitution in -this behalf, is rather verbal than substantial.

In Chicago v. The People ex rel., 80 Ill., 384, the judgment of the county court, against certain school lands for taxes, was reversed, the supreme court holding that the constitutional .provision above quoted * * * “clearly prohibits the perversion of the fund to other purposes.....The general assembly is prohibited from directly appropriating this fund to state, county or municipal purposes, or any portion of it, and they cannot accomplish the same end by indirect means. If they cannot so appropriate it directly, they cannot by the indirect means of taxation; because, -so much as would be taken from the fund by taxation would be an unconstitutional perversion of the fund to that extent.”

The People ex rel. v. Little, 118 Ill., 52, was a proceeding to obtain judgment .against "sec. 16, in Lee county, for a special drainage assessment. The county court gave judgment against the collector, who appealed. The supreme court affirmed the judgment, holding that “school property or school lands h.eld in trust for school purposes are exempt from special assessments as well as from general taxation.” ' '

The following extract from the opinion answers -two points made by (Counsel for plaintiff, viz.: that the benefits are compensation for the assessments, and that the rents may be sequestrated.for .the payment of the assessments.

The court say: “It does not meet the objection to a special assessment to say that it takes nothing from the property, and the assessment is only to .the extent of the benefit conferred upon it by the improvement. This may be so in theory, but not in certainty. The .property should be held sacred for the use to which it was appropriated. It may be sold, or it may be rented for school purposes, but.no authority is conferred upon any one to improve .it. It should not be exposed to the danger of being improved away, .by being made .to pay .for supposed benefits conferred upon it by said ,improvements.

> “It is said the purpose is not to have a sale made of the land to pay ¡.the .assessment, but .to obtain judgment, which may be paid out df any .moneys unappropriated, .of the township, or there may be the remedy by mandamus, requiring the board of the trusteesvto levy.a tax for the,.payment,of the judgment. But any payment so obtained would come .from the school moneys, ,qnd there would be equally involved a .perversion of the.school fund, as if .the ¿property itself should be sold to satisfy the judgment.”

The force.of the language just quoted is not broken by the fact-that insOhio school lands may be leased in consideration of improvements to be made. Certainly, it will not.be-claimed that the .legislature, by ¡authorizing trustees.of original surveyed townships to lease school lands in .a special and limited -manner, thereby impliedly authorized the assessment of the same for improvements.

We are of opinion that the school lands in Ohio are exempt from assessment for improvements, and it follows that the petition does not-state .a-cause of action. The answer is at least good as against a bad petition, and ¡the demurrer will be overruled.