US SUPREME COURT DECISIONS

Section 5 of the act of 1855 of the General Assembly of Illinois, incorporating the plaintiff provides

"That the property of whatever kind or description belonging or appertaining to said seminary shall be forever free and exempt from all taxation for all purposes whatever."

Section 2 provides "[t]hat the seminary shall be located in or near the City of Chicago." Property of the incorporation other than the seminary buildings was taxed under the general taxing law of 1872. The Supreme Court of Illinois construed the statute of 1855 as meaning that the exemption was limited to property used in immediate connection with the seminary, and did not refer to other property held by the institution for investment, although the income was used solely for school purposes.

Held that as the rule of the Supreme Court of Illinois in construing an act exempting property from taxation under legislative property is that the exemption must be plainly and unmistakably granted, and cannot exist by implication only -- a doubt being fatal to the claim -- and as the construction placed on the act is not such an unnatural, strained or unreasonable construction as shows it to be erroneous, this Court will affirm the judgment even though it might be otherwise construed so as to affect a total exemption.

The act incorporating the seminary also provided that "[i]t shall be deemed a public act and be construed liberally in all courts for the purposes therein expressed."

Held that such provision should not be construed as a complete overthrow of the canon of construction adopted by the Supreme Court of Illinois in regard to exemption of property from taxation.

These cases, between the same parties, come here by writs of error to the Supreme Court of Illinois, which held certain property of the plaintiff in error not exempt from taxation. 189 Ill. 439.

The case No. 140 involves taxes for the year 1899, and No. 265 for the year 1900.

The plaintiff in error claims exemption under its charter, passed in 1855, entitled "An Act to Incorporate the Chicago chanrobles.com-red

Page 188 U. S. 663

Theological Seminary," a copy of which is set forth in the margin. *

The supreme court of the state held that the provision granting the exemption from taxation in section 5 referred only to property used in connection with the seminary, and did not include other property which might be owned, rented, or held by the seminary as an investment, although the income thereof was used solely for school purposes. Accordingly, property which was not so included, and which is involved in these actions, was taxed under the general taxing law of the state, enacted in chanrobles.com-red

Page 188 U. S. 664

1872. In enforcing the taxation of the outside property of plaintiff in error under that act, it is claimed that the obligation of the contract contained in the act of 1855, the charter of the plaintiff in error, was impaired.

It is conceded that the charter of incorporation was duly accepted, and that, acting on the faith of its provision, the plaintiff in error has acquired by donation and purchase a part of the real estate on which the taxes in question were levied, and, in addition, has expended in the erection and purchase of buildings on the real estate owned by it an amount exceeding $200,000, and a large number of students have been and are being instructed by it in pursuance of its charter. The pieces of real estate upon which the taxes in these cases were levied were acquired by the plaintiff in error by gift or purchase, and were held by it to promote the objects for which it was incorporated, and the rentals received from such real estate are used for those purposes, although the property is not used in immediate connection with the seminary. chanrobles.com-red

Page 188 U. S. 672