Horns, J\,
after stating tbe cas^: Article Y, sec. 5, of our State Constitution contains provision, among other things, “That tbe General Assembly may exempt from taxation 'property held for educational, scientific, literary, charitable, or religious purposes,’ and our legislation under said article on matters more directly relevant to tbis controversy, Public Laws 1911, cb. 50, sec. 71, enacts';
“The following real estate, and no other, shall be exempt from taxation, State and local:
"1. Keal estate directly or indirectly owned by tbe United States or tbis State, however held, and real estate lawfully owned and held by counties, cities, towns, or school districts, used wholly and exclusively for public and school purposes, and all property used exclusively for educational purposes.”
Subsection 4:
“4. Buildings, with tbe land they actually occupy, wholly devoted to educational purposes, belonging to and actually and ex
clusively occupied and used by churches, public libraries, incorporated colleges, academies, industrial schools, seminaries, or other corporate institutions of learning, together with such additional adjacent land owned by said churches, libraries, and educational institutions as may be reasonably necessary for the convenient uses of such buildings, respectively, and also the buildings thereon used as residences by the officers or instructors of such educational institutions.”'
Subsection 7, Clause 3 :
“3. The furniture, furnishings, books, and instruments contained in buildings wholly devoted to educational purposes, belonging to and actually and exclusively used by churches, public libraries, incorporated colleges, academies, industrial schools, seminaries, or other incorporated institutions.”
In the section of the Constitution referred to, a perusal of the words employed gives clear indication that it is the use to which the property is devoted and the extent of the interest so dedicated which should be regarded as controlling, rather than the title or other tenure by which it may be held, and while the language of the Constitution is very general in its terms, permitting to some extent of legislative definition
(Ferrall v. Ferrall,
153 N. C., pp. 174-179), these terms, in any aspect of them, are sufficiently broad and comprehensive to uphold the legislation applicable to the question presented.
The constitutional provision being altogether permissive in its nature, as shown in the well-considered case of
Congregation v. Commissioners,
115 N. C., 489, the Legislature may establish the exemption to the full constitutional limit or it may provide for a lesser one. And from this case and a further perusal of the present statute, it appears that in order to obtain the benefit of the exemption which is established, the property must be devoted exclusively to the favored purpose, and in case of “incorporated colleges, academies, industrial schools, seminaries,-or other corporate institutions of learning, the real estate exemption is confined to buildings, with the land they occupy, with such adjacent land, etc., which are wholly devoted to educational purposes and which belong to and are actually and exclusively occupied by these institutions, and to the buildings on
such laud used as residences by tbe “officers and instructors of sucb educational institutions.” • Where the property of one of these incorporated companies, • such as this, otherwise comes within the terms of the exemption, we find nothing in the Constitution or statute which distinguishes between public and private undertakings or between institutions which are in part conducted for the personal profit of the owner and proprietor and those which are run on a salary basis, using any profits which may arise in the extension of the work. Certainly in the statute there is no such distinction, for it exempts “property held by counties, towns, or school districts” used wholly and exclusively for public and school purposes,
and
all property used exclusively for educational purposes.” Both in the Constitution and statutes, it is the use to which the property is devoted which is made determinative, and not the presence or absence of consequential pecuniary benefit to the owner or proprietor. This being our view as to the meaning of the Constitution and statutes applicable, we may not approve the position that the exemption cannot be extended to cases where, as in this case, an incorporated college has for one of its objects the personal profit of the president and owner. The history of this Commonwealth affords full and ample evidence that its Government has always had the education of its people very closely at heart. In another article of our Constitution extended provision is made for this beneficent and enlightened purpose, beginning with the notable declaration taken from the act to establish a government for the Northwestern Territory, section 14, Article III, as follows: “Religion, morality, and knowledge being necessary to good government and the happiness of mankind, schools and the means of education shall be forever encouraged.” This same purpose appears in the State Constitution of 1776, and the legislation under both of these instruments, including the act now before us, is against the distinction which is now attempted to be made. Speaking to this subject on a different occasion, our Attorney-General has impressively said: “This declaration, embodied in our organic law, was a registration of the faith of our fathers that religion, education, and charity are the hand
maidens of civilization and worthy of peculiar favor at the hands of the State. All subsequent legislation must be viewed in the light of this constitutional declaration.”
Again it appears that for fifty years and more no taxes have been claimed, from this school by the sheriffs and tax collectors of the State and county; and this interpretation of the law by both the legislative and executive departments of the Government, unchallenged for this period of time, while not conclusive, is deserving of great weight on the construction which should finally prevail as to the proper meaning of the constitutional provision on the subject
(Gill v. Commissioners, ante,
176); and the position, assumed and acted on by these officials, finds ample support in authoritative decisions here and elsewhere construing constitutional and statutory provisions of similar import. Un
ited Brethren v. Commissioners,
115 N. C.,
supra; Stewart v. Davis, 7
N. C., 244;
Phillips County v. Sister Estelle,
42 Ark., 536;
Jose Cassiano, Collector, v. Ursuline Academy,
64 Tex., 673;
State and Englewood School v. Chamberlain, Assessor,
55 N. J. L., 292; 37 Cyc., pp. 932-33; 12 A. and E. (2d Ed.), pp. 324-325. In
Munday v. Van Moose,
104 Ga., 292, an authority much relied upon by the appellee, the Oourt, in holding that property used for purposes of private or corporate profit or income were not exempt from taxation, seems to have been construing a section of their Constitution which provided in express terms that the exemption should not obtain if the property was used for “purposes of private or corporate profit or income” (see 104 Ga., p.
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Horns, J\,
after stating tbe cas^: Article Y, sec. 5, of our State Constitution contains provision, among other things, “That tbe General Assembly may exempt from taxation 'property held for educational, scientific, literary, charitable, or religious purposes,’ and our legislation under said article on matters more directly relevant to tbis controversy, Public Laws 1911, cb. 50, sec. 71, enacts';
“The following real estate, and no other, shall be exempt from taxation, State and local:
"1. Keal estate directly or indirectly owned by tbe United States or tbis State, however held, and real estate lawfully owned and held by counties, cities, towns, or school districts, used wholly and exclusively for public and school purposes, and all property used exclusively for educational purposes.”
Subsection 4:
“4. Buildings, with tbe land they actually occupy, wholly devoted to educational purposes, belonging to and actually and ex
clusively occupied and used by churches, public libraries, incorporated colleges, academies, industrial schools, seminaries, or other corporate institutions of learning, together with such additional adjacent land owned by said churches, libraries, and educational institutions as may be reasonably necessary for the convenient uses of such buildings, respectively, and also the buildings thereon used as residences by the officers or instructors of such educational institutions.”'
Subsection 7, Clause 3 :
“3. The furniture, furnishings, books, and instruments contained in buildings wholly devoted to educational purposes, belonging to and actually and exclusively used by churches, public libraries, incorporated colleges, academies, industrial schools, seminaries, or other incorporated institutions.”
In the section of the Constitution referred to, a perusal of the words employed gives clear indication that it is the use to which the property is devoted and the extent of the interest so dedicated which should be regarded as controlling, rather than the title or other tenure by which it may be held, and while the language of the Constitution is very general in its terms, permitting to some extent of legislative definition
(Ferrall v. Ferrall,
153 N. C., pp. 174-179), these terms, in any aspect of them, are sufficiently broad and comprehensive to uphold the legislation applicable to the question presented.
The constitutional provision being altogether permissive in its nature, as shown in the well-considered case of
Congregation v. Commissioners,
115 N. C., 489, the Legislature may establish the exemption to the full constitutional limit or it may provide for a lesser one. And from this case and a further perusal of the present statute, it appears that in order to obtain the benefit of the exemption which is established, the property must be devoted exclusively to the favored purpose, and in case of “incorporated colleges, academies, industrial schools, seminaries,-or other corporate institutions of learning, the real estate exemption is confined to buildings, with the land they occupy, with such adjacent land, etc., which are wholly devoted to educational purposes and which belong to and are actually and exclusively occupied by these institutions, and to the buildings on
such laud used as residences by tbe “officers and instructors of sucb educational institutions.” • Where the property of one of these incorporated companies, • such as this, otherwise comes within the terms of the exemption, we find nothing in the Constitution or statute which distinguishes between public and private undertakings or between institutions which are in part conducted for the personal profit of the owner and proprietor and those which are run on a salary basis, using any profits which may arise in the extension of the work. Certainly in the statute there is no such distinction, for it exempts “property held by counties, towns, or school districts” used wholly and exclusively for public and school purposes,
and
all property used exclusively for educational purposes.” Both in the Constitution and statutes, it is the use to which the property is devoted which is made determinative, and not the presence or absence of consequential pecuniary benefit to the owner or proprietor. This being our view as to the meaning of the Constitution and statutes applicable, we may not approve the position that the exemption cannot be extended to cases where, as in this case, an incorporated college has for one of its objects the personal profit of the president and owner. The history of this Commonwealth affords full and ample evidence that its Government has always had the education of its people very closely at heart. In another article of our Constitution extended provision is made for this beneficent and enlightened purpose, beginning with the notable declaration taken from the act to establish a government for the Northwestern Territory, section 14, Article III, as follows: “Religion, morality, and knowledge being necessary to good government and the happiness of mankind, schools and the means of education shall be forever encouraged.” This same purpose appears in the State Constitution of 1776, and the legislation under both of these instruments, including the act now before us, is against the distinction which is now attempted to be made. Speaking to this subject on a different occasion, our Attorney-General has impressively said: “This declaration, embodied in our organic law, was a registration of the faith of our fathers that religion, education, and charity are the hand
maidens of civilization and worthy of peculiar favor at the hands of the State. All subsequent legislation must be viewed in the light of this constitutional declaration.”
Again it appears that for fifty years and more no taxes have been claimed, from this school by the sheriffs and tax collectors of the State and county; and this interpretation of the law by both the legislative and executive departments of the Government, unchallenged for this period of time, while not conclusive, is deserving of great weight on the construction which should finally prevail as to the proper meaning of the constitutional provision on the subject
(Gill v. Commissioners, ante,
176); and the position, assumed and acted on by these officials, finds ample support in authoritative decisions here and elsewhere construing constitutional and statutory provisions of similar import. Un
ited Brethren v. Commissioners,
115 N. C.,
supra; Stewart v. Davis, 7
N. C., 244;
Phillips County v. Sister Estelle,
42 Ark., 536;
Jose Cassiano, Collector, v. Ursuline Academy,
64 Tex., 673;
State and Englewood School v. Chamberlain, Assessor,
55 N. J. L., 292; 37 Cyc., pp. 932-33; 12 A. and E. (2d Ed.), pp. 324-325. In
Munday v. Van Moose,
104 Ga., 292, an authority much relied upon by the appellee, the Oourt, in holding that property used for purposes of private or corporate profit or income were not exempt from taxation, seems to have been construing a section of their Constitution which provided in express terms that the exemption should not obtain if the property was used for “purposes of private or corporate profit or income” (see 104 Ga., p. 298), but no such proviso appears in our Constitution or statutes, nor in our view is any such construction permissible. We are not inadvertent to the fact that the legal title to this property is in the corporation, and that the same has been rented to F. P. Hobgood, who conducts and controls the school, and we are in full accord with the well-considered decisions which hold that the words “used exclusively for school purposes” or “wholly devoted to educational purposes” do not ordinarily apply to the case where an owner builds a schoolhouse and rents it to another for purposes of a school.
United Brethren v. Commissioners,
115 N. C.,
supra; Travelers Insurance Co. v. Kent,
151 Ind., 349;
Tament v. City of Muscatine,
59 Iowa, 404;
St. Marys College v. Crowell,
10
Kan., 442;
Pratt Institute v. City of New York,
183 N. Y., 151. But looking through the form to the substance, it appears that for fifty years and more this school has been successfully conducted by F. P. Hobgood and his predecessors, who have consecrated their energies and talents to the education of the young-women of the State and from beyond its borders, and it having-become necessary to renew and enlarge the school buildings, resort was had to the form of incorporation in which F. P. Hob-good took 264 of the 543 shares and his friends and fellow-citizens the remainder in small amounts, this being done by them in recognition of his worth and of the great benefit that such a school had been and promised to be to this community. The funds available not being sufficient, the corporation, in order to complete the buildings exclusively devoted to school purposes, borrowed $10,000, secured by deed of trust on the property and the entire investment is turned over to the management and control of said -F. P. Hobgood, to be used exclusively for school purposes, at a nominal rental of $250, for the purpose of creating a- sinking fund with which to discharge the principal of the money borrowed. The other incorporators have thus far neither received nor asked anything for their own benefit, and assuredly until the debt is paid and some return is received or demanded from this property regarded as an investment, we are of opinion that the ownership and control and management should be considered as one and the same, and that this property comes within the exemption established by the statute, the same being- at present entirely dedicated to educational purposes. The learned and able commissioner who wrote
e opinion, with commendable frankness puts aside the view íat there was a severance in the ownership and management and rests his decision on the ground that no exemption should be recognized as to property exclusively devoted to school purposes when it is made to appear that “one of these purposes is the personal profit of the owner.”
For the reason stated, we are constrained to differ from this position of the commission, and the judgment of the Superior Court affirming their action must be reversed.
Reversed.