Case Name: Curtis's Adm'r vs. Whipple and others
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1869-06
Citations: 24 Wis. 350
Docket Number: 
Parties: Curtis’s Adm’r vs. Whipple and others.
Judges: 
Reporter: Wisconsin Reports
Volume: 24
Pages: 350–360

Head Matter:
Curtis’s Adm’r vs. Whipple and others.
Limits of taxing power— Taxation for benefit of private corporation.
1. Tlie Jefferson Liberal Institute (incorporated by chapter 516, Private and Local Laws of 1866) is essentially a private educational institution, in which the town of Jefferson or its inhabitants, as such, have no interest or power of control; and acts empowering the town to raise by taxation of its inhabitants a sum to be paid over to the treasurer of said institution for its benefit (ch. 381, Private and Local Laws of 1867, and ch. 9, Private and Local Laws of 1868), are invalid.
2. The incidental benefits resulting to the people of a town from the location therein of any private business or institution, are no ground for the exercise of the taxing power in aid thereof.
Pause, J., assents to the decision, mainly on the ground that the constitutional provisions for public schools of every grade, to be supported by taxation, seem to be exclusive.
APPEAL from the Circuit Court for Jefferson County.
By an act of the legislature, approved April 6, 1867 (published as ch. 381, Private and Local Laws of 1867), the town of Jefferson was authorized to raise by tax $5,000, to aid in the erection of buildings for the “Jefferson Liberal Institute,” in said town, in case the majority of the votes cast upon that question at a special town meeting to be held on the 14th of May, 1867, should be in favor of said tax. The electors having decided affirmatively, the. tax was accordingly assessed upon the taxable property of the town in December, 1867, by direction of the supervisors of said town, and the defendant Whipple, as town treasurer, proceeded to collect the same; and Qyrus Qurtis having refused to pay so much of said tax as was assessed against his property, Whip ■ pie seized and sold certain personal property of said Qurtis, to raise the amount. Thereupon Qurtis brought this action for the wrongful taking and conversion of said property; and he made one Qopeland and one Grimm defendants with Whipple, as supervisors of said town. Whipple, by his answer, set up the facts above stated, and his warrant; and his co-defendants answered by a general denial. After the commencement of the action, Qyrus Qurtis died, and the. suit was continued in the name of his administrator. The court rendered judgment for the plaintiff; and defendants appealed.
.Gerrit T. Thorn, for appellants,
contended that the “ Jefferson Liberal Institute” was an eleemosynary corporation (A. & A. on Corp. 29Asylum v. Phoenix Bank, 4 Conn. 172); that the purposes for which it was established, and to which, by the terms of the charter, all the funds at its disposal must be devoted, rendered its maintenance an object of general interest to the inhabitants of the town; that the trustees, though elected by the stockholders, were under the supervision of the courts, which might, by mandamus or otherwise, compel a faithful and fair discharge of their duty for the public welfare (State ex rel. Graham v. Chamber of Commerce, 20 Wis. 63; Nourse v. Merriam, 8 Cush. 11; People ex rel. Bartlett v. Medical School, 32 N. Y. 187, and 24 Barb. 572; Fuller v. Plainfield Academic School, 6 Conn. 532; Comm. v. Penn. Beneficial Institute, 2 S. & R. 141.); and that, therefore, it was a proper object for the exercise of the taxing power. Soens v. Qity of Ha-cine, 10 Wis. 280 ; Merrick v. Inhabitants of Amherst, 12 Allen, 500; Kirby v. Shaw, 7 Harris, 258, and 19 Pa. St. 260; Thomas v. Leland, 24 Wend. 67; Sharpless v. Mayor, etc., 21 Pa. St. 147; Town of Guilford v. Supervisors of Chenango, 18 Barb. 615, and 13 N. Y. 143; People v. Mitchel, 25 Barb. 208, and 35 N. Y. 551; People v. Mayor, 4 N. Y. 419; Shaw v. Dennis, 5 Gilm. 405; 8 Leigh, 120. Under section 3, article 11 of the state constitution, it is for the legislature to judge when a town shall loan its credit. WeeTcs v. City of Milwatolcee, 10 Wis. 242. It has been held in many well-adjudicated cases in other states, that what should and what should not be a public tax is to be determined by the legislature {Booth v. Woodbury, 32 Conn. 128; Speer v. Blumsville, 50 Pa. St. 159); and under the decision of this court in Brodhead v. City of Milwaukee, 19 Wis. 652, to justify a court in holding this tax unconstitutional, it must appear that the “Institute” will not, in any degree, subserve the common interest or well-being of the town of Jefferson.
Enos & Hall, for respondent:
1. Article X of the constitution provides for a system of education, and for levying an annual tax for its support and maintenance. Expressio unius est exclusio alterius. In McCabe v. Mazzuchelli, 13 Wis. 480, it is held that sections 7 and 8 of this article prohibit the legislature from conferring power upon any person, other than the school land commissioners, to execute a conveyance of school lands. See also State v. Hastings, 10 Wis. 525. On the same principle of construction, the other sections of the same article prohibit the legislature from imposing a tax for educational purposes other than those specified in the article. 2. This tax is for a merely private purpose, and therefore void. The “Jefferson Liberal Institute” (Pr. Laws of 1866, p. 1261), is a private corporation, controlled exclusively by the stockholders, through the board of trustees. The town of Jefferson is not a stockholder, and has no voice in its management. If this is a valid tax, the legislature may take a portion of each tax payer’s property in any town, and give it to any individual or corporation that will establish, a school or manufacturing establishment in the town.

Opinion:
Dixon, C. J.
The counsel for the plaintiff correctly state the effect of the act of incorporation (Pr. and Local Laws of 1866, ch. 516), when they say that the "Jefferson Liberal Institute," for the benefit of which the taxes in question were attempted to be assessed and collected, is essentially a private educational institution, controlled exclusively by the stockholders, through a board of trustees. The town of Jefferson is not a stockholder, and has no voice in its management. The tax payers in the town, as such, are not stockholders, and have no privileges in the institute that are not common to all the people of this or any other state. The trustees may exclude any or all of the citizens of the town from the institution. The money, when collected, is to be paid to the treasurer of the institute, and the town is not secured the right to see or know that it is expended'for the purposes for which it was collected. Under these circumstances we feel no doubt in saying that the act (Pr. and Local Laws of 1867, ch. 381), and its amendment (Pr. and Local Laws of 1868, ch. 9), under which the proceedings to levy and collect the supposed tax are attempted to be justified, are unconstitutional and void. It strikes us, "at the first blush," that this is not the levy and collection of money for public purposes, as clearly as if the institute were not an incorporated body, but a mere association of private individuals resolved upon the establishment of a like institution. If it were such an institution, or a grammar or classical school, or a seminary built up and established by individual enterprise, as by persons engaged in the profession of teaching, or by others, and owned and controlled by those contributing toward it, and the emoluments belonging to them, we apprehend that no one would con tend that the people of Jefferson might be taxed for the pnrpose of donating the money to it. The fact that it is an institution incorporated by act of the legislature does not change its character in this respect. It is but a most frivolous pretext forgiving to a corporation, where there is no certain and definite personal responsibility, money exacted from the tax payers, which a just and honorable man engaged in the same business would hesitate to receive though paid without opposition, and to enforce the payment of which, against the will of the taxpayers, he would never think of resorting to coercive measures, provided the same were lawful. It can no more be supported by taxation than if it were unincorporated, or a private school or seminary of the kind above supposed. Nor will the location of the institution at Jefferson, and the incidental benefits which may thereby arise to the people of the town, sustain the tax. That is not the kind of public benefit and interest which will authorize a resort to the power of taxation. Such benefits accrue to the people of all communities from the exercise in their midst of any useful trade or employment, and the argument, pursued to its logical result, would prove that compulsory payment or taxation might be made use of for the purpose of building up and sustaining every such trade or employment, though carried on by private persons for private ends, or the purposes of mere individual gain and emolument. That there exists in the state no power to tax for such purposes, is a proposition too plain to admit of controversy. Such a power would be obviously incompatible with the genius and institutions of a free people; and the practice of all liberal governments, as well as all judicial authority, is against it. If we turn to the cases where taxation has been sustained as in pursuance of the power, we shall find in every one of them that there was some direct advantage accruing to the public from the outlay, either by its being the owner or part owner of tlie property or thing to be created or obtained with the money, or the party immediately interested in and benefited by the work to be performed, the same being matters of public concern; or because the proceeds of the tax were to be expended in defraying the legitimate expenses of government, and in promoting the peace, good order and welfare of society. Any direct public benefit or interest of this nature, no matter how slight, as distinguished from those public benefits or interests incidentally arising from the employment or business of private individuals or corporations, will undoubtedly sustain a tax. In thus .endeavoring to define how the public must be beneficially interested in order to justify the raising of money by taxation in cases like the present, we, of course, do not intend to include all the purposes for which money may be so raised. Taxes may be levied and collected for charitable purposes, but these constitute a peculiar ground for the exercise of the power, which does not exist here. So, claims founded in equity and justice in the largest sense, and in gratitude, will support a tax. Such claims, however, and we think all others where taxation is proper, except claims founded in charity, may be referred to the general principle above spoken of, of public interest in or benefits received by the transactions out of which the claims arose. And these principles will be found to have been always recognized and acted upon by this court, whenever the question has arisen. Knowlton v. Supervisors, etc., 9 Wis. 410; Soens v. Racine, 10 id. 271; Brodhead v. Milwaukee, 19 id. 624; Hasbrouck v. Milwaukee, 13 id. 37.
These remarks sufficiently answer the argument of counsel for the defendants, when he says that this tax should be sustained because special taxation in the towns and cities where the state normal schools have been located, is or has been sustained, for the purpose of raising funds to procure suitable grounds and to erect proper buildings for those schools. Conceding such taxation to be regular and valid, still the difference between the two cases is so marked and plain as to require no effort to distinguish them. The state normal schools are public, not private, schools, and the grounds, buildings, fixtures and apparatus belong to the public, and not to private individuals or corporations. Hence, if taxes have been levied and collected to aid in the construction of buildings or the purchase of grounds, it was not taxation for merely private purposes, as is the case here.
In conclusion, we refer to the Philadelphia Association, etc., v. Wood (39 Pa. St. 73) as a decision sustaining the principles enunciated in this opinion.