US SUPREME COURT DECISIONS

A statute of Illinois passed in 1865 declares that all the property of the Northwestern University shall be for ever free from taxation. As construed by the assessors and by the supreme court of the state, a statute of 1872 conforming taxation to the new constitution of 1870 limited this exemption to land and other property in immediate use by the institution.

Held:

1. That the latter statute impaired the obligation of the contract of exemption found in the statute of 1855.

2. That whether the statute of 1866 is a valid contract or is void by reason of its conflicting with the state constitution of 1848, under which it was made, is a question on which the judgment of that court can be reviewed here.

3. That the lots, lands, and other property of the university, the annual profits of which, by way of rent or otherwise, are devoted to the purposes of the institution as a school could, within the meaning of that constitution, be exempted by statute from taxation, and that the exempting power of the legislature was not limited to real estate occupied or in immediate use by the university.

At the June Term, 1875, of the County Court of Cook County, Illinois, application in the manner prescribed by the revenue law of the state was made by the county collector for a judgment against lands in that county, delinquent for the taxes levied and assessed upon them for the year 1874, for state, county, town, school, and municipal corporation purposes. In the list were embraced some four hundred and twenty-seven distinct parcels belonging to the Northwestern University.

Pending this application, the university appeared and filed chanrobles.com-red

Page 99 U. S. 310

its objections to judgment being entered against these parcels, and to their sale for delinquent taxes, alleging that by an act of the Legislature of Illinois approved Jan. 25, 1851, it was created a corporation, and that by an amendment to its charter made Feb. 14, 1855, all its property of whatever kind or description was declared to be for ever free from taxation for any and all purposes whatever; that by the terms of the charter and amendment, the state contracted with it that from and after the passage of the amendment all its property of whatever kind and description should be forever free from taxation for any and all purposes, that the charter and amendment had been accepted by it and were still in force, and that the taxes complained of had been levied without its assent and in violation of the charter and amendment.

At the trial, it having been admitted that the proper notice and return of the delinquent list had been made as required by law, the collector rested. The university thereupon offered in evidence a stipulation of counsel that at the time and before the taxes were assessed and levied the parcels enumerated in the objections belonged to, and still belong to, the university and are leased by it to different parties for a longer or a shorter period, and that all of the parcels are held for sale or lease, for its use and support, and for the objects contemplated in its charter; that the lands which are occupied by buildings or other direct appliances of education are not taxed or included in such parcels; that since the passage of the charter and amendment, the corporation has expended in the erection and purchase of buildings, apparatus, and other facilities and appliances for education, and for the promotion of the objects stated in the charter, over $200,000, realized from donations and the sale of lots and lands, and has built up a university with several departments, in which more than five hundred students are taught the higher branches of learning.

The charter was also offered in evidence. The first section constitutes certain individuals therein named a body corporate under the name of

"Trustees of the Northwestern university, with succession, and with power to acquire, hold, and convey real and personal property, and to make by laws for the government of the institution,"

&c. The second section regulates chanrobles.com-red

Page 99 U. S. 311

the term of office of the trustees and requires the board of trustees to hold the property of the institution for the purposes of education, and not as stock for their individual benefit.

The fourth section locates the institution in or near Chicago and gives the corporators power in their corporate name to take property by gift, grant, conveyance, or devise, and to grant, sell, devise, let, place out at interest, or otherwise dispose of the same for the use of the institution, and to apply the funds collected or the proceeds of the property to erecting buildings, supporting the teachers, officers, and servants of the institution, and procuring books and apparatus. It restricts the amount of land the corporation can hold to two thousand acres unless it receives the same by gift, grant, or devise.

An amendment to the act of incorporation was approved Feb. 14, 1855. Its third section authorizes the corporation to take, use, lease, and dispose of property coming to the corporation charged with any trust and to execute the trusts confided to it. Its fourth section is as follows: "That all property, of whatever kind or description, belonging to or owned by the corporation, shall be forever free from taxation." The fifth section declares the act to be public, and that it shall take effect from its passage.

Another amendment, in force Feb. 19, 1867, changing the name of the corporation to "Northwestern University," authorized it by the latter name to exercise the powers and immunities conferred on it, and making other changes in the number of the board of trustees.

The objections were overruled, and, July 14, 1875, judgment was entered for the delinquent taxes against the lands of the university.

That judgment having been affirmed by the supreme court, the corporation sued out this writ of error.

So far as they bear upon this case, the provisions of the Constitution of Illinois of 1848, which was in force when the charter and its amendments were enacted; those of the Constitution of 1870, and of the act of 1872, under which the tax was sought to be collected, are set forth in the opinion of the Court.

The assignment of errors is as follows: chanrobles.com-red

Page 99 U. S. 312

The Supreme Court erred in adjudging:

First, that no valid contract existed between the state and the plaintiff in error by virtue of the amended charter granted to and accepted by it, whereby it was protected by the Constitution of the United States from the taxation complained of.

Second, that the provision of the amended charter exempting the property of the plaintiff in error from taxation was in conflict with the constitution of the state, and void.

Third, that the parcels of land described in these proceedings were subject to taxation for state, county, and other purposes for the year 1874, under the constitution and laws of the state notwithstanding their exemption by the amended charter. chanrobles.com-red

Page 99 U. S. 318