. 

Hon. William J. 

County Attorney 

Lubbock County 

Lubbock, Texas 

0 EXAS 

AUSTIN aa. TEXAS 

March 8, 1957 

Gillespie Opinion No. WW-47 

Re: Exemption from ad valorem 

taxes of commercial property 

held in trust by the Board of 

Directors of Texas Technological 

Dear Mr. Gillespie: College for student loan fund. 

You have requested an opinion of this office on the above 

captioned subject and have advised us of the following facts. One - 

tenth of an estate was devised to the Board of Directors of Texas 

Technological College “as a revolving trust fund to be loaned to 

deserving poor boys and girls who may be endeavoring to obtain their 

education in Texas Technological College in Lubbock”. On March 10, 

1933, a Partitition Order was entered by the 99th Judicial District 

Court partitioning to the Board of Directors Lot 12, Block 134, 

Original Town of Lubbock, to be used in accordance with the bequest. 

A deed to the Board conveying an outstanding 19/128 interest in the 

property was delivered and recorded in 1938. The property is 

rented, ‘and the Comptroller of the College has filed an affidavit with 

the Tax Assessor-Collector of Lubbock County to the effect that the 

entire net income from the property has been used and is being used 

in accordance with the terms of the trust. 

It is universally recognized that gifts to promote education 

constitute charitable gifts; and it has been specifically held that a 

gift in trust to provide loans “to ambitious and worthy boys and girls, 

who are financially unable to secure an education and would otherwise 

be deprived thereof” created a charitable trust. Powers v. First Nat. 

Bank of Corsicana, 138 Tex., 604, 161 S.W.Zd 273, 280, 281 (1942) and 

authorities cited therein. 

Since the property in question constitutes the corpus of a 

ch,aritable trust, exe&ption could only be accorded under Section 7 of 

Article 7150, enacted in pursuance to the constitutional authorization 

of Section 2 of Article VIII to exempt “institutions of purely public 

charity”. Section 7 reads as follows: 

“Public charities. - All buildings belonging to 

institutions of purely public charity, together with 

the lands belonging to and occupied by such institutions not leased or otherwise used with a view to 

profit, unless such rents and profits and all moneys 

and credits are appropriated by such institutions 
. . . 

Hon. William J. Gillespie, page 2 (WW-47) 

solely to sustain such institutions and for the benefit of the sick and disabled members and their families 

and the burial of the same, or for the maintenance of 

persons when unable to provide for themselves, whether 

such persons are members of such institutions or not. 

An institution of purely public charity under this 

article is one which dispenses its aid to its members 

and others in sickness or distress, or at death, without 

regard to poverty or riches of the recipient, also when 

the funds, property and assets of such institutions are 

placed and bound by its laws to relieve, aid and 

administer in any way to the relief of its members when 

in want, sickness and distress, and provide homes for 

its helpless and dependent members and to educate and 

maintain the orphans of its deceased members or other 

persons.” 

The rule is well established in this State that the property 

exemption granted to “public charities” covers only real property and 

the improvements thereon with a further requisite that the charity 

must make an actual, direct and exclusive use of the property for 

charitable purposes. Property actually used for private purposes is 

not exempted even though the rental income arising from this private 

use may go to charity. Santa Rosa Infirmary v. City of San Antonio, 

Tex.Comm.App., 259 S.W. 926 (1924); Masonic Temple Ass’n v. Amarillo School Dist., 14 S.W.2d 128 (Tex.Civ.App. 1928, error ref.); 

Benevolent and Protective Order of Elks, Lodge 151 v. The City of 

Houston, 44 S.W.2d 488 (Tex.Civ.App. 1931, error ref.); City of 

Longview v. Markham - McRee Memorial Hospital, 137 Tex. 178, 152 

S.W.2d 1112 (1941); Markham Hospital v. City of Longview, 191 S.W.Zd 

695 (Tex.Civ.App. 1945, error ref.); Malone-Hogan Hospital Clinic 

Foundation, Inc., v. City of Big Spring, 288 S.W.Zd 550 (Tex.Civ.App. 

‘1956, error ref. n.r.e.). 

Under the facts submitted for our consideration, no exemption 

can be granted in this case since the charity does not make an actual, 

direct and exclusive use of the property for its charitable purposes. 

SUMMARY 

Rented property which is held by the Board of 

Directors of Texas Technological College in 

trust, is not exempt from State and county ad 

valorem taxes even though all the income therefrom is being used as a student loan fund because 
Hon. William J. Gillespie, page 3 (WW-47) 

the charity does not make an actual, direct 

and exclusive use of the property for 

charitable purposes. 

Yours very truly, 

WILL WILSON 

Attorney General 

APPROVED: 

OPINION COMMITTEE 

H. Grady Chandler, Chairman 

MMP: cs