Parker v. Quinn

BARTCH,’ J. The appellants contend.that the court erred in holding that, under the laws of this State, the property in question is subject to taxation. The general rule is that all property of what kind soever and by whomsoever owned is subject to taxation, and when any kind of property is exempt it constitutes an exception to this rule. The reason of the rule is that it is just and equitable that every species of property within the State should bear its equal proportion of the burdens of the government. When, therefore, an owner claims that certain property is exempt from taxation, the burden is upon him to show that it falls within the exception. And an exemption will not be aided by judicial interpretation. It must be shown to exist by express terms of the enactment which, it is claimed grants it. “The presumption is that all exemptions intended to be granted were granted in express terms. In such eases the rule of strict construction applies, and, in order to relieve any species of property from its due and just proportion of the burdens of the government, the language relied on, as creating the exemption, should be so clear as not to admit of reasonable controversy about its meaning, for all doubts must be resolved against the exemption. The power to tax rests upon necessity, and is essential to the existence of the state.” Judge v. Spencer, 15 Utah 242; Stahl v. Educational Ass’n, 54 Kan. 542; Montgomery v. Wyman, 130 Ill. 17. Applying these principles, it remains to be seen whether the property, in question, in this case, is exempt under the provisions of the Constitution and statutes of this State. In section 3, article 13, Constitution, it is, so far as — 338 — material here, provided: “That the.property of the United States, of the State, counties, cities, towns, school districts, municipal corporations and public libraries, lots with the buildings thereon used exclusively for either religious worship or charitable purposes, and places of burial not held or used for private or corporate benefit, shall be exempt from taxation.” The statutory provision on this subject is found in seetion 2503, Revised Statutes, and reads: “The property of the United States, of the State, counties, cities, towns, school districts, and public libraries and lots with buildings thereon used exclusively for either religious worship or charitable purposes, and places of burial not held or used for private or corporate benefit, shall be exempt from taxation.” It will be noticed that the provisions of the Constitution and of the statute are practically the same, except that the statute omits the words “municipal corporations,” but this omission is not material in this case. The exemptions thus expressly granted, as we have seen, form an exception to the general rule that every species of property within the State is liable to bear its just proportion of the public burden. Any property falling within the exception is released from this burden, and such release is justified on the theory that the State derives some peculiar benefit, whatever that may be, from such property. Among the several classes of property exempt are “lots with the buildings thereon used exclusively for either religious worship or charitable purposes.” In the case at bar, the “relief society” which owns and manages the property, over which ’his controversy arose, was organized and acts exclusively for charitable purposes. It ministers to the poor, sick and destitute of the community. Its purposes are excellent and the means adopted commendable, and no doubt the State is measurably benefited by having its poor and helpless subjects under the benign protection and care of such a society. If, therefore, — 339 — in the fundamental law, in addition to specifying lots and buildings thereon used “exclusively” for charitable purposes, rentals derived from such buildings and used for such purposes were also enumerated, we would have no difficulty in this case in declaring the whole property, including the portion rented and held for rent, exempted from taxation, but the lawmakers did not see fit to exempt such rentals, in express terms, and we can furnish no aid by construction. Only such of the society’s property, therefore, as is occupied and used “exclusively” for charitable purposes is exempt from taxation. It follows that the exemption does not extend to that portion not appropriated by the society to its own use, but held as a source of revenue. Especially is this so since the value of each portion is ascertainable as appears from the findings of the court. Where, therefore, as in this case, a portion of certain property, owned by a charitable institution, is occupied and used by it for charitable purposes, and the other portion thereof is devoted to purposes of revenue, the portion used r and occupied for charitable purposes is exempt, and the portion not so used and occupied is subject to taxation. We are aware that a few eases hold that, under such circumstances, the exemption is lost as to the whole property, and that some, on the contrary, hold that the whole property is exempt. We think, however, that the weight of authority is in harmony with the rule above stated, and that the disposition of this case in accordance therewith is equitable and just. In Philadelphia v. Barber, 160 Pa. St. 123, it was held: “Where a part of a building is used for church purposes and certain rooms in the building are rented for a school, the building may be divided for the purposes of taxation, and the portion used solely for church purposes be declared exempt from taxation.” In County Comm’rs of Frederick Co. v. Sisters of Charity — 340 — of St. Joseph, 48 Md. 34, a case where the proof showed that, among other improvements which were claimed by the appel-lees, a society organized for charitable purposes, to be exempt, there were one or more buildings in which a number of scholars were required to pay tuition at the rate of $250 per annum, and the court held that so much of the property as was appropriated to this secular and educational purpose “for revenue” was taxable, notwithstanding the fact that the “surplus revenue” thus derived was devoted to charitable uses. Then, upon a review of authorities, it was said: “The conclusion to be drawn from -these premises is, that all of the property of the appellees, real and personal, used and occupied in the maintenance and conduct of an academy or school for the education of young females, so far as it is a source of revenue to the appel-lees, is a proper object for assessment, notwithstanding the same buildings or property may be partially used for hospital purposes or religious worship. If the property is indivisible, so that the value of the several parts can not be ascertained, the amount of the net income from the academy or school may be capitalized as the basis of assessment.” > So, in Proprietors of Meetinghouse in Lowell v. City of Lowell, 1 Metc. 538, the plaintiffs were specially incorporated for the purpose of purchasing a site for a meetinghouse, and erecting one. This they did and erected a building, the upper story of which was divided into pews, and furnished for religious purposes, while the lower story was fitted up for stores. Exemption from taxation having been claimed, Mr. Chief Justice Shaw speaking for the court, said: “Such being the nature of the property, the court are of opinion that the exemption in the statute extended to that part of the property only which was used as a place of worship, and for purposes connected with it; such as the vestry, the furnace and the like; but did not extend to separate tenements used for purposes exclusively — 341 — secular. The income raised from these tenements goes as directly to the use of the proprietors, by paying their debts, as if they made annual dividends. There may be several distinct tenements under the same roof; and tenements are as essentially distinct, when one is under the other, as when one is by the side of the other.” In Library Association v. Pelton, 36 Ohio St. 253, it was said: “The fact that the building is so constructed that the parts leased or otherwise used with a view to profit can not be separated from the residue by definite lines, is no obstacle to a valuation of such parts for purposes of taxation, having due reference to the taxable value of the entire property.” 12 Am. & Eng. Ency. of Law, 323; Sunday School Union v. Phila., 161 Pa. St. 307; Detroit Young Men’s Society v. Mayor, 3 Mich. 172; Chapel of the Good Shepard v. Boston, 120 Mass. 212; Cambridge v. County Commissioners, 114 Mass. 337; Appeal Tax Court of Balt. City v. St. Peters Academy, 50 Md. 321; Appeal Tax Court of Balt. City v. Grand Lodge of F. & A. M., Id. 421, 429; The Redemptionists v. The Co. Commissioners, Id., 449; Fort Des Moines Lodge, I. O. O. F. v. The County of Polk, 56 Iowa 34; Mulroy v. Churchman, 52 Iowa 238; Benevolent Society v. Kelley, 28 Ore 173; State v. City of Elizabeth, 28 N. J. L. 103; First M. E. Church v. Chicago, 26 Ill. 482; Theological Seminary v. The People, 101 Ill. 578; State ex rel. v. Board of Assessors, 35 La. Ann. 668; State v. Ross, 4 Zab. 497; Massenberg v. Grand Lodge, 81 Ga. 212; Morris v. Masons, 86 Texas 698; Bank v. Tennessee, 104 U. S. 493; Y. M. C. A. of N. Y. v. Mayor, etc. of N. Y., 113 N. Y. 187. We are of the opinion that the court erred in holding that all of the property in question was subject to taxation. That part of the building occupied and used exclusively by the society for charitable purposes is exempt while the other part not so — 342 — used may be taxed. Tbe case must, therefore, be reversed witb costs, and remanded, witb directions to tbe court below to set aside its decree and judgment of dismissal, reinstate the case and dispose of it in accordance berewitb. It is so ordered. Baskin■, Jand Hart, D. J., concur.