may become purchasers.1 But, where an occupant of public lands of the United States, whether a pre-emptor or one without license, has placed improvements on them, he is liable to assessment and taxation, if made so by express statute of the State. This species of property, whose existence is recognized in many of the Western States as capable of being bought, sold, and taken in execution, is thus described by Sawyer, J.: "These possessions are recognized as a species of property subsisting in the hands of the citizen. It is not the land itself, nor the title to the land, nor is it the identical estate held by the United States. It is not the pre-emption right, but it is the possession and valuable use of the land, subsisting in the citizen." The preemption right is thus described in another State: "Strictly speaking it is not an estate within any definition known to the common law. It is not an interest in the legal title; but only a right of occupancy for the time being, with a privilege of purchasing at some future period, at a stipulated price. It is treated as property in this State, taken and sold on execution, passes to an assignee in bankruptcy, and may pass by deed or other transfer." So the possessory right in a mining claim is subject to taxation, and is not within the express exemption of the act admitting California into the Union, that "the State shall never lay any tax or assessment of any description whatever upon the public domain.” 4 3 The title to all land in this country is in the States, subject to the right of occupancy of the Indians, who have no right to sell or dispose of it, except by the consent of the State in which it is located. The State has the privilege of purchasing from the Indians. The lands occupied by the Indians are not subject to taxation by the State, but where there is a treaty by which the Indian title is extinguished, and which provides for their removal beyond the Mississippi within the period at which the purchaser at a tax sale would be entitled to possession, the lands are subject to taxation. Nor are these lands subject to taxation for the special purpose of surveying them and opening roads through them; and where the Indians, with the consent of the United States, have agreed to sell to private individuals, 5 1 People v. Shearer, 30 Cal. 645; Grand Gulf Railroad & B. Co. v. Bryan, 8 Smedes & M. 268. Parker v. Winsen, 5 Kansas, 362, seems to be to the contrary, but this was under a treaty with Indians, providing "none of such lands shall be subject to taxation until patents are issued therefor." 2 People v. Shearer, 30 Cal. 645. Delaney v. Barnett, 4 Gilm. (III.) 454, 492; Pierson v. David, 1 Iowa, 23; Bush v. Marshall, 6 How. 291; Thredgill v. Pintard, 12 How. 36. State v. Moore, 12 Cal. 56; affi'd in People v. Frisbie, 31 Id. 146; People v. Cohen, 31 Id. 210; People v. Black Diamond Co. 37 Id. 54. Fellows v. Deniston, 23 N. Y. 420. and to give possession within a certain period, it is only after the lapse of such period that they are taxable. Nor is the principle affected by the fact that the primitive habits and customs of the tribe, when in a savage state, have been largely changed by their intercourse with the whites, if they still retain their tribal organization, which is recognized by the national government, as shown by having its Indian agent among them, paying annuities and dealing otherwise with the "head men.' The Pacific Railroad Company claimed the benefit of the principle of McCulloch v. Maryland, upon the ground that the road was constructed under the direction and authority of Congress, for the use and purposes of the United States, and was part of a system of roads thus constructed, and that the aids granted by Congress to the road were in exercise of its powers to regulate commerce, establish post offices and post roads, to raise and support armies, and to suppress insurrection and invasion. The claim was not sustained, the court drawing the distinction between the means employed by the government and the property of agents employed by the government. The instrumentalities created by the government for its purposes are exempt, but a corporation deriving its existence from State law, exercising its franchise under State law, and holding its property within State jurisdiction, is liable to State taxation for its property. The railroad is only an agent employed by the government, which employment entitles it to no peculiar privileges as to the taxation of its property. The same principle applies to a telegraph company. It is not one of the instrumentalities of the government. 1 The New York Indians, 5 Wall, 761. The Kansas Indians, 5 Wall. 737. 3 Thomson v. Pacific Railroad, 9 Wall. 579; Railroad Co. v. Peniston, 18 Id. 5. ♦ Western Union Telegraph Co. v. City of Richmond, 26 Gratt. 1. CHAPTER VIII. EXEMPTIONS FROM TAXATION. § 70. General Rules.-The class of exemptions which we will now examine arises from express provisions of the statutes of the State, where the Constitution of the State does not prohibit exemptions. Where there is no such prohibition, it is the peculiar province of the legislature to determine what subjects shall bear the burden of taxation, and what subjects shall be exempt. It is the duty of all citizens who enjoy the protection of a government, either in their persons or property, to contribute to the payment of the expenses of the government that affords this protection, and it is not to be inferred that the legislature has discriminated among the citizens of a State, and violated so salutary a principle. Exemptions from taxation are never presumed or implied, and it is required of those who claim such a privilege to show that such was the intention of the legislature, and such intention must appear in terms clear and explicit.1 A statute imposing a tax on "all corporations not paying a tax upon dividends under existing laws," includes a corporation paying a tax on capital stock at a rate of one and one-half mills for every one per cent. of dividend; the latter is a tax measured by dividends only, not a tax on the dividends. In a State which had a large part of its territory along the Mississippi, overflown and submerged, an act exempting from taxation for a certain period submerged lands, was held not to apply to owners of town lots, but only to those whose farms or improvements were submerged and the crops destroyed.3 The mayor and aldermen of Mobile had a charter for supplying the city with water; they granted to Stein the sole right to supply the city with water for twenty years, the works to be erected at his own expense on a lot in the city to be purchased by him, the city to have 1 State of Delaware v. Bank of Smyrna, 2 Houst. 99-118; The Delaware Railroad Tax, 18 Wall. 225; Bank of Pennsylvania v. Com'th, 19 Penn. St. 144; Com'rs v. Brackenridge, 12 Kans. 114; Erie R. R. Co. v. Pennsylvania, 21 Wall. 492; State v. Woodruff, 37 N. J. L. 139; North. Mo. R. R. v. McGuire, 20 Wall. 46; Mayor of Macon v. Cent. R. R. Co. 50 Ga. 620. "Phoenix Iron Co. v. Com'th, 59 Penn. St. 104. Wetlig v. Bowman, 47 Ill. 17. free use of water for certain purposes; he had a right to charge water rates to all persons. The city, by a general ordinance, imposed an ad valorem tax on all real and personal property, of four-tenths of one per cent. Stein's property, independent of the privilege of supplying the city with water, was valued at $8,000, with it at $75,000. He claimed that he should be taxed only on $8,000. The court held that the value of property is to be estimated with reference to the advantages or profits that may be derived from it; that an intangible right or privilege attached to tangible property, must therefore be considered, in estimating the value of that with which it is connected; that the right of taxation is essential to all governments, as well a city with limited powers as any other; and that it is never to be presumed that this right is abandoned or surrendered, unless it clearly appears that such was the intention.' But it is said in Wisconsin, that the rule that statutes creating exemptions are to be strictly construed, does not apply where the legislature commutes the amount of tax imposed in the usual manner upon railroads, for a certain percentage upon their annual income; the percentage is regarded as a fair equivalent for the taxes released. The construction in such a case should not be strict against the company, nor liberal to the public, but a fair and liberal construction for the company. 3 § 71. Colleges, Seminaries, and Literary Societies.-A statute which exempts "colleges, incorporated academies and other seminaries of learning," does not include buildings erected and used for private unincorporated seminaries of learning. So a statute exempting from taxation any "literary institute" does not include a private boarding school, nor do exemptions of property used for schools include private schools. Where the property of literary institutions, or all their property used for literary purposes, is exempt, and a house is erected on the land of the college, and occupied by one of the professors of the college, at an annual rent, it is subject to taxation; but, it is said in one of the cases, it would be otherwise if the house was occupied free of rent. In New Jersey, under a statute exempting the property of "all colleges, academies and seminaries of learning," the houses and lots provided for the residence of the president, professors and stewards as part of their compensation for official services, are includ 1 Stein v. City of Mobile, 17 Ala. 234. 2 Milwaukee R. R. Co. v. Board, &c. of Crawford County, 29 Wis. 116. 3 Chegary v. The Mayor, &c. of New York, 13 N. Y. 220. 4 Indianapolis v. McLean, 7 Ind. 328; Gerke v. Purcell, 25 Ohio, N. S. 229. Pierce v. Cambridge, 2 Cush. 611; Kendrich v. Farquhar, 8 Ohio, 189. ed. But a building owned by the college, and occupied as a grammar school, by a person who pays an annual rent therefor, is not exempt, although it aids the college incidentally in preparing young men for the college.1 An exemption, in general terms, of all the property of a college or other literary institution, extends only to the property actually used by the institution for its legitimate purposes. Sometimes the exemption is in express terms of such property only as is used for literary purposes, but the same rule has been applied, whether the terms are express or general. The use must be direct and exclusive. The case in 4 Zabr. 103, was that of the Elizabeth Library Association, incorporated "to establish a library, with a view to advance the interests of learning generally." A small portion of the building was occupied by the association, and the remaining portions of the building were rented out to different persons and occupied for business operations; store-keepers, secret societies, lecturers and political conventions used it. The charter of the association exempts it from the payment of taxes on its property. The exemption applies only to such property as is necessary to the purposes for which the association was created, and where its funds are used for speculation or a direct profit, and not for the specific purposes contemplated by the charter, such property is liable to taxation, although the ultimate appropriation of such profits may be to the object specified. So in the case from Ohio, a portion of the college building was used as a merchants' exchange, and other portions for miscellaneous purposes. The fact that the rents were applied to college purposes did not exempt those portions of the building not used exclusively for college purposes. In a similar case in Michigan, the court say, only such distinct tenements as are actually occupied by such institutions for the purposes of their creation are exempt. The proper mode of assessing such property is to deduct the value of the part actually occupied by the corporation from the value of the whole estate, and the society or college should be assessed for the value of the rest of the property thus ascertained. Under a statute in Massachusetts, exempting from taxation the personal property of literary, benevolent, charitable and scientific institutions, incorporated, and real estate owned and occupied for the purposes of such institutions, a farm and farming stock, owned by a college, and kept solely to supply board to its students, at actual cost, 1 State v. Ross, 4 Zabr. 497. Cincinnati College v. The State, 19 Ohio, 110; Detroit Young Men's Society v. Mayor of Detroit, 497; State v. Elizabeth, Id. 103. 3 St. Mary's College v. Crowl, 10 Kansas, 442. Wyman v. St. Louis, 17 Mo. 335; |