Court Opinion

ID: 6698162
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:00:35.990805+00
Date Added: 2024-06-11T16:01:18.915847
License: Public Domain

Stagy, C. J.,
concurring: It must be conceded that the current of authority on the question here presented is wanting in clarity, if not in consistency. A definitive decision is perhaps devoutly to be wished. But again it is discovered that we have studied the same books and learned different lessons; read the same lines and construed them not alike.
The focus of the eye has much to do with the range of vision. If we fix our gaze on a single tree, we may not perceive the forest. If we look intently at the fly on the window, we may not see the window. If we rivet our attention on a single sentence, we may not observe its surroundings or setting. The Constitution deals with governmental matters. Counties, cities and towns are created for the benefit of the public and charged with the administration of community affairs. Wells v. Housing Authority, 213 N. C., 744, 197 S. E., 693; Southern Assembly v. Palmer, 166 N. C., 75, 82 S. E., 18; Comrs. v. Webb, 160 N. C., 594, 76 S. E., 552; Smith v. School Trustees, 141 N. C., 143, 53 S. E., 524. It was never contemplated that they should engage in competitive, private business. Williamson v. High Point, 213 N. C., 96, 195 S. E., 90. Public funds may be expended only for a public purpose. Briggs v. Raleigh, 195 N. C., 223, 141 S. E., 597; Ketchie v. Hedrick, 186 N. C.. 392, 119 S. E.. 767.
*346The reason municipal property is granted immunity from taxation is, that it is supposed to be dedicated to a public use. Corporation Com. v. Const. Co., 160 N. C., 582, 76 S. E., 640. To exempt it for any other reason would run counter to the rule of fair play or the principle of equality. Such a purpose is not to be imputed to the framers of the Constitution. Rather a contrary implication should be indulged. It will be implied that the intention was to exempt such property only when devoted to a public purpose. Notes, 3 A. L. R., 1439, and 101 A. L. R., 787. When “the State steps down from her sovereignty and embarks with individuals in business enterprises,” its property so employed is not exempt from taxation under Art. Y, see. 5, of the Constitution. This was the pronouncement in R. R. v. Comrs., 75 N. C., 474.
Nor is it a solution of the problem simply to rest upon the ipse dixit of the Constitution that “Property belonging to the State, or to municipal corporations, shall be exempt from taxation,” and let it go at that, without looking any further into the matter. We should see the Constitution steadily and see it whole. Stedman v. Winston-Salem, 204 N. C., 203, 167 S. E., 813. Let us suppose, for example, that a municipal corporation of a neighboring state should acquire a water shed or other property within the boundaries of this State. Would anyone contend that such property, though owned by a municipal corporation, and perhaps used for a public purpose, would be exempt from taxation under the all-inclusive clause we are now considering? S. v. Holcomb, 85 Kan., 178, 116 Pac., 251, 50 L. R. A. (N. S.), 243; Ann. Cas., 1912-D, 800; Catholic Society v. Gentry, 210 N. C., 579, 187 S. E., 795; Rich v. Doughton, 192 N. C., 604, 135 S. E., 527. Cf. French Republic v. Jefferson County, 200 Ky., 18, 252 S. W., 124. Language is but a vehicle of thought and it may vary in color and content according to the circumstances of its use. Opinion of the Justices, 204 N. C., p. 813, 172 S. E., 474; Cole v. Fibre Co., 200 N. C., 484, 157 S. E., 857.
It is pointed out that the framers of the Constitution were fully aware of the difference between an absolute exemption and one depending upon the “purposes” for which the property is held, as witness the very next sentence: “The General Assembly may exempt . . . property held for educational, scientific, literary, charitable, or religious purposes”; etc. The answer to the suggestion is, that both the General Assembly, ch. 291, sec. 600, Public Laws 1937, and the Court, R. R. v. Comrs., supra, have interpreted the language of this section according to the circumstances of its use, as not importing tyrannical power or unrestrained caprice, and they have imputed to the framers an intention to deal fairly and equitably with those who are required to pay taxes upon their property, and at the same time, to meet competition in the field of private business. The power of unequal competition in commercial *347matters was not intentionally granted. The framers intended to say, and did say, in respect of these matters as they affect the citizen, “equal rights to all and special privilege to none.” 26 E. C. L., 332, et seq.
Perhaps the difficulty would be obviated if municipal corporations were required to operate strictly as local units of government, as was originally intended. Webb v. Port Commission, 205 N. C., 663, 172 S. E., 377; Wells v. Housing Authority, supra; Smith v. School Trustees, supra. It is only when they step over into the field of private enterprise that the question of taxation arises, and another section of the Constitution is thought to be applicable: “The power of taxation shall be exercised in a just and equitable manner. . . . Taxes on property shall be uniform as to each class of property taxed.” Art. Y, sec. 3. So long as the exemption is applied to circumstances to which it was originally intended, there is no occasion for interpretation, Latta v. Jenkins, 200 N. C., 255, 156 S. E., 857, but when new conditions arise and other provisions of the organic law are brought into play, the question occurs whether the reason underlying the exemption is overborne by the opposing reasons. Beardsley v. City of Hartford, 50 Conn., 529, 47 Am. Rep., 677.
In this situation, when two sections of the Constitution are to be harmonized, which shall be favored, the one which provides for uniformity of taxation or the one which grants immunity? The basic idea of the Constitution is equality. It eschews discrimination. Taxation is the rule; exemption the exception, with strict construction applicable to the latter. Benson v. Johnston County, 209 N. C., 751, 185 S. E., 6; Loan Assn. v. Comrs., 115 N. C., 410, 20 S. E., 526; Redmond v. Comrs., 106 N. C., 122, 10 S. E., 845; Building Assn. v. Board of Review, 217 Iowa, 1181, 251 N. W., 76. In the circumstances, should not the pervading purpose of the Constitution control? Hospital v. Rowan County, 205 N. C., 8, 169 S. E., 805. Exemption is granted in the capitol and in the city hall. Taxation is required in the market place. 26 E. C. L., 332. “A constitution should not receive a technical construction as if it were an ordinary instrument or statute. It should be interpreted so as to carry out the general principles of the government, and not defeat them” — Brown, J., in Jenkins v. Board of Elections, 180 N. C., 169, 85 S. E., 289.
Whether property owned by a church, United Brethren v. Comrs., 115 N. C., 489, 20 S. E., 626, or a school, Trustees v. Avery County, 184 N. C., 469, 114 S. E., 696, is exempt from taxation depends upon the purpose for which it is held. Oh. 291, sec. 600, Public Laws 1937. This is the effect of all the decisions. Southern Assembly v. Palmer, supra; Davis v. Salisbury, 161 N. C., 56, 76 S. E., 687. And even if the business income derived from church or school owned property be exempt *348from taxation, because devoted exclusively to religious or educational purposes, tbis would not perforce relieve tbe property itself of an ad valorem, assessment and taxation. United Brethren v. Comrs., supra. Tbe same may be said of property belonging to a charitable or eleemosynary institution. Hospital v. Rockingham County, 211 N. C., 205, 189 S. E., 494; Hospital v. Rowan County, supra. Likewise, whether municipal property is immune from taxation depends upon its use, where, as here, the municipal corporation has leased its property for operation as a private enterprise. Board of Financial Control v. Henderson County, 208 N. C., 569, 181 S. E., 636; Benson v. Johnston County, supra. Such is the express language of the statute: “The following real property, and no other, shall be exempted from taxation: . . . real property lawfully owned and held by counties, cities, townships, or school districts, used wholly and exclusively for public or school purposes.” Ch. 291, sec. 600, Public Laws 1937.
Immunity granted to an institution, though expressed in absolute terms, will not extend beyond the purposes for which, the institution was created at the time of the grant. "When the entity thus clothed with immunity departs from the land of its immunity and goes into the imperative field of taxation, it sheds its immunity, for, in this latter country, it operates neither in the territory nor in the character of its immunity. Stiles v. Newport, 76 Vt., 154, 56 Atl., 662. A privilege of immunity extends no farther than the reason on which it is founded. Cessante rations, cessat ipsa lex. This is the rationale of the entire section. The permissible exemptions provided for in the second sentence may be made applicable only to property held for one or more of the designated purposes, and not to property held for any other purpose. The section has back of it the history of mortmain. Allen v. Regents of University System, 304 U. S., 430—rehearing denied, 304 U. S., 590.
When the reason for an exemption ceases, the exemption ceases, for no exemption can survive the reason on which it is founded. A privilege bereft of its basic reason is regarded as lifeless in the law. If need be, the letter gives way to promote the equity of the spirit, but in the instant case the exemption was never intended to extend to property leased for use in a private venture. The meaning of the words, simply considered, is clear enough; the state of things upon which they are to operate is the circumstance which calls for an interpretation of the constitutional provision. The reason of the law is more potent in its interpretation than the language used to express it. Reason is its soul; language its outward form.
BarNhill and WiNBORNE, JJ., join in this opinion.