Berryman v. Board of Trustees of Whitman College
Headline: Court strikes down a perpetual tax exemption granted to a college by territorial law, ruling such lifelong exemption an illegal 'especial privilege' and allowing local taxes to be applied.
Holding:
- Allows counties to tax the college’s property despite the old territorial exemption.
- Limits claims of perpetual tax immunity from pre-statehood territorial laws.
- Confirms federal courts can decide broad contract-exemption disputes based on the right’s full value.
Summary
Background
A private act in 1883 converted Whitman Seminary into Whitman College and declared the college’s property "not subject to taxation" in exchange for its promise to support education. By 1905 county assessors in Walla Walla levied taxes on college land not actually used for school purposes, and the college sued in federal court asking the court to enforce the claimed perpetual tax exemption as a contract right.
Reasoning
The Court first rejected the county’s claim that the small sum of taxed money barred federal review, saying the value of the claimed perpetual exemption itself made the dispute large enough for federal courts. On the main issue the Court compared the college’s exemption to an 1867 federal rule that territorial legislatures could not grant "especial privileges." The Court held a lifelong contract exempting a corporation’s property from taxation is precisely that kind of special privilege, beyond the territorial legislature’s power, so the claimed exemption could not be sustained even if supported by consideration.
Real world impact
Because the exemption was held unlawful, the college cannot rely on the territorial-era perpetual immunity to block local tax assessments on property. The decision sends disputes about old territorial grants to regular legal review rather than leaving them immune, and it reverses the lower court’s decree, remanding the case for further proceedings consistent with this opinion.
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