Page images
PDF
EPUB

ERROR to the Circuit Court for McDowell County to review a judgment dismissing a petition for a writ of certiorari, and striking from the docket a proceeding to subject defendant's property to taxation. Reversed. The facts are stated in the opinion of the court. Mr. John T. Simms, for plaintiff in

error:

Where property is used exclusively for lodge and charitable purposes it is not taxable; but where any part of property owned by the Masonic lodge or any other fraternal organization is let and used for commercial purposes, producing substantial rental or income, the whole of the property is subject to taxation, although a portion of the building is used for lodge purposes only.

Re Masonic Temple Soc. 90 W. Va. 441, 22 A.L.R. 892, 111 S. E. 637; Mason v. Zimmerman, 81 Kan. 799, 106 Pac. 1005; State ex rel. Bertel v. Board of Assessors, 34 La. Ann. 574; Episcopal Academy v. Philadelphia, 150 Pa. 574, 25 Atl. 55; Bangor v. Rising Virtue Lodge, 73 Me. 428, 40 Am. Rep. 369; Fitterer v. Crawford, 157 Mo. 51, 50 L.R.A. 191, 57 S. W. 532; Newport v. Masonic Temple Asso. 108 Ky. 333, 49 L.R.A. 252, 56 S. W. 405; Indianapolis v. Grand Master, 25 Ind. 518; Hibernian Benev. Soc. v. Kelly, 28 Or. 173, 30 L.R.A. 167, 52 Am. St. Rep. 769, 42 Pac. 3; Wyman v. St. Louis, 17 Mo. 335; Presbyterian Theological Seminary v. People, 101 Ill. 578; Washburn College v. Shawnee County, 8 Kan. 344; Cincinnati College v. State, 19 Ohio, 110; New Orleans v. St. Patrick's Hall Asso. 28 La. Ann. 512; New Orleans v. St. Anna's Asylum, 31 La. Ann. 292; Salem Lyceum v. Salem, 154 Mass. 15, 27 N. E. 672; Phillips Exeter Academy v. Exeter, 58 N. H. 306, 42 Am. Rep. 589; Morris v. Lone Star Chapter, 68 Tex. 698, 5 S. W. 519; Ft. Des Moines Lodge v. Polk County, 56 Iowa, 34, 8 N. W. 687.

Messrs. Strother, Sale, Curd, & Tucker, for defendant in error:

The whole property assessed is exempt from taxation.

Grand Lodge, A. F. A. M. v. Board of Review, 281 Ill. 480, 117 N. E. 1016; Curtis v. Androscoggin Lodge, 99 Me. 356, 59 Atl. 518; Cumberland Lodge v. Nashville, 127 Tenn. 248, 154 S. W. 1141; Petersburg v. Petersburg Benev. Mechanics Asso. 78 Va. 431; Hardin v. Rock Springs Lodge, 23 Wyo. 522, 154 Pac. 323; Henderson v. Strangers Rest Lodge, 17 Ky. L. Rep. 1041, 17 S. W. 215; State v. Kittle, 87 W. Va. 526, 105 S. E. 775; Com. v. Richmond, 116 Va.

69, L.R.A.1915A, 1118, 81 S. E. 69; Re Masonic Temple Soc. 90 W. Va. 441, 22 A.L.R. 892, 111 S. E. 637.

Lively, J., delivered the opinion of the court:

The crucial question involved in this litigation is whether the real property of a Masonic lodge, a part of which is rented for commercial purposes and which produces a substantial income, is subject to taxation.

McDowell Lodge, No. 112, A. F. & A. M., duly organized and chartered as a Masonic lodge under the laws, owns real estate in Welch, McDowell county, consisting of a lot on which it has erected a four-story building and basement, the third and fourth stories of which are used for lodge purposes; the first and second floors rented as offices to various persons, and the cellar leased for a printing office; the annual rentals. for basement, first and second floors, amount to $3,958.90. The rents are used by the lodge for purposes of its organization, including moneys in excess of $1,000 appropriated by it directly to charitable purposes. The rent received is expended for charitable purposes, the maintenance of the building, and to pay off and discharge a debt on the building, including the interest. cluding the interest. A sworn statement found in the record gives the income for the Masonic year ending September 30, 1922, as $10,337.12, made up of cash balance on hand, dues and fees collected, rents received from the building (which rents amount to $5,458.90), voluntary donations, and miscellaneous income. Disbursements include local charities, interest on the debt ($1,106.30), rent, salaries, supplies, funerals, grand lodge dues, for Masonic home, janitor, light, heat, water, repairs, miscellaneous expenses for lodge and building, insurance, taxes, and amount ($2,000) paid on debt. The property was entered on the land books

an

[ocr errors][ocr errors][ocr errors]

(96 W. Va. 611, 123 S. E. 561.)

and assessed at $25,000 for the year 1922, the total taxes amounting to $632.75, which were paid under protest by the lodge to the sheriff. Subsequently, in June, 1923, the lodge petitioned the county court for a refund of the taxes paid, claiming that the property was not subject to taxation and was erroneously assessed; the county court granted the prayer of the petition, holding that the property was exempt from taxation, and ordered the sheriff to refund the $632.75 theretofore paid. To this decision of the county court the circuit court awarded a writ of certiorari, on petition of the state, and a hearing was had on October 27, 1923, when relief was denied to the state, the petition for certiorari dismissed, and the cause stricken from the docket. The clerk was ordered to certify the disposition of the case to the county court. To this action of the court the state excepted, the proceeding stayed for the purpose of obtaining a writ of error, which writ was granted by this court.

Counsel for the Masonic lodge challenges the jurisdiction of this court to entertain this writ of error, claiming that the action of the county and circuit courts was purely administrative, and not judicial. To sustain that contention the cases of Pittsburg. C. & St. L. R. Co. v. Board of Public Works, 28 W. Va. 264, McLean v. State, 61 W. Va. 537, 56 S. E. 884, and Bluefield Waterworks & Improv. Co. v. State, 63 W. Va. 480, 60 S. E. 403, are cited. The question of the taxability of property is quite different from controversies over the valuation for taxation. The taxability of property is jurisdictional, and calls for judicial determination, whereas the fixing of values for taxation is merely ministerial. This distinction runs through all of our cases on the subject. Wherever the taxpayer raises a question of valuation which is decided adversely to him, he may go to the circuit court, and the judge thereof, in deciding the question, acts in a ministerial capacity, and

38 A.L.R.-3.

[ocr errors]

no appeal is given from his decision to this court. But where any tribunal having jurisdiction passes upon the taxability of the property, judicial review thereof may be had, and if the amount involved is in excess of $100, this court has jurisdiction to review. Our cases so holding are cited in Humphreys v. County Ct. 90 W. Va. 315, 110 S. E. 701, beginning with Charleston & S. Bridge Co. v. Kanawha County Ct. 41 W. Va. 658, 24 S. E. 1002. It would serve no useful purpose to make additional citations. Under $ 132a of chap. 29, Code, the county court is given authority to pass upon questions of the nontaxability of property, and its decision may be reviewed by certiorari from the circuit court, and from that court to the supreme court.

We come to the main question. Is the property of the McDowell Lodge, used in the manner above set out, subject to taxation? Our recent case of Re Masonic Temple Soc. 90 W. Va. 441, 22 A.L.R. 892, 111 S. E. 637, holds that lodges of Free and Accepted Masons are are charitable bodies, and their property, when used solely for charitable and benevolent purposes, and not held or leased out for profit, is exempt from taxation. We affirm that decision. Many of the decisions of other states are carefully reviewed by Judge Miller in the opinion, in which he points out that each decision is based upon the particular Constitution or laws under which it is rendered. The divergent holdings are thus accounted for. And so, on the question here presented. We must look to our own Constitution and statutes for a solution of the question before us. The general policy of this state, accentuated by § 1, art. 10, of the Constitution, is that all property shall contribute to the expenses of the government. Taxes must be equal and uniform, and no species of property can be taxed higher than any other species of property of equal value. One aim of government is to protect property rights, insure the possession and en

joyment thereof by the owners, and thus promote domestic tranquillity and the general welfare. The owners of property, whether they be individuals, corporations, or associations, should contribute to the expenses of the protection and stability of that property. There are exceptions to this general policy which may be made by the legislature, and which the Constitution confines to property which is used for educational, scientific, religious, or charitable purposes. These exceptions are clearly defined by § 57, chap. 29, Code, which provides, among other things, that "all property, real and personal, . . used for charitable purposes, and not held or leased out for profit," shall be exempt from taxation. The theory justifying exemption of this class of property so used is that the resultant benefits to the body politic will be equal to or in excess of the taxes which would otherwise be imposed, and such religious, scientific, literary, or charitable use of the property should be encouraged by relief from taxation. But the statute says it shall only be exempt when the property is used for these purposes, and not held or leased out for profit. It is a rule. It is a rule so well established as to need no citation of authority, that it is incumbent upon the person who claims his property as exempt from taxation to show that the use of that property clearly falls within the exception. The rule of strict construction applies, and, if any doubt arises as to the exemption, that doubt must be decided against the person who claims the exemption. While it must be borne in mind that the decisions of other jurisdictions are largely influenced by their constitutional and statutory provisions, it is quite generally held that where property belonging to a charitable institution is rented out or otherwise employed as a source of profit to the institution, it is not sufficient to save that property from taxation because the rent or income is devoted exclusively to charitable purposes; the exemption is generally

[ocr errors]

held to apply only to the property which is actually used and occupied for the charitable purposes for which the institution is organized. A few of the cases so holding are People ex rel. Krochersperger v. Chicago Theological Seminary, 174 Ill. 177, 51 N. E. 198; Brodie v. Fitzgerald, 57 Ark. 445, 22 S. W. 29; Indianapolis v. Grand Master, 25 Ind. 518; Ft. Des Moines Lodge v. Polk County, 56 Iowa, 34, 8 N. W. 687; Female Orphan Soc. v. Board of Assessors, 109 La. 537, 33 So. 592; Baltimore v. Grand Lodge, A. F. A. M. 60 Md. 280; Ridgeley Lodge v. Redus, 78 Miss. 352, 29 So. 163; People ex rel. Young Men's Asso. v. Sayles, 32 App. Div. 197, 53 N. Y. Supp. 67; Hibernian Benev. Soc. v. Kelly, 28 Or. 173, 30 L.R.A. 167, 52 Am. St. Rep. 769, 42 Pac. 3; Episcopal Academy v. Philadelphia, 150 Pa. 565, 25 Atl. 55; American Sunday School Union v. Philadelphia (American Sunday School Union v. Taylor) 161 Pa. 307, 23 L.R.A. 695, 29 Atl. 26; State ex rel. Hayes v. Board of Equalization, 16 S. D. 219, 92 N. W. 16; Morris v. Lone Star Chapter, 68 Tex. 698, 5 S. W. 519; Parker v. Quinn, 23 Utah, 332, 64 Pac. 961; Humphries v. Little Sisters of the Poor, 29 Ohio St. 201. Cases which hold to the contrary are Henderson v. Strangers Rest Lodge, 17 Ky. L. Rep. 1041, 17 S. W. 215 (but see Newport v. Masonic Temple Asso. 108 Ky. 333, 29 L.R.A. 252, 56 S. W. 405); Cooper Hospital v. Burdsall, 63 N. J. L. 85, 42 Atl. 853; Book Agents v. Hinton, 92 Tenn. 188, 19 L.R.A. 289, 21 S. W. 321; Cumberland Lodge v. Nashville, 127 Tenn. 248, 154 S. W. 1141; Staunton v. Mary Baldwin Seminary, 99 Va. 653, 39 S. E. 596; Petersburg v. Petersburg Benev. Mechanics Asso. 78 Va. 433. Space does not allow a comparison of these cases, and the organic and statute law under which they were rendered. The inquiring mind may do So. It is sufficient to say that the great weight of authority appears to be that, because the rents, issues, and profits of the property of a

(96 W. Va. 611, 123 S. E. 561.)

charitable institution are used for the purposes of charity, that fact will not exempt the property itself from taxation, under the rule of strict construction applicable where property is claimed to be exempt under the exceptions to the general rule that all property must bear its equal burdens of taxation. The Iowa statute under consideration in Ft. Des Moines Lodge v. Polk County, 56 Iowa, 34, 8 N. W. 687, exempted property devoted to religious, literary, charitable, etc., uses, "and not leased or otherwise used with a view of pecuniary profit." The court said it was immaterial to what purpose the income from leased property was devoted. The property was exempt only when not leased or used for profit, under the very terms of the statute. The Mississippi statute exempted property of a charitable institution used exclusively for that purpose, and not for profit. In Ridgeley Lodge v. Redus, 78 Miss. 352, 29 So. 163, the same contention was made as is asserted in the instant case; namely, that, the rents of the first floor of the Odd Fellows building being used for charity, that was, in effect, the use of the property for charity. The court said that contention was against the letter and spirit of the law.

Our statute says property used for charitable purposes, and not held or leased out for profit, shall be exempt. The property in question is not used wholly for charitable purposes. The character of use of the property itself determines its exemption from taxation, and not the proceeds from its use. The clause, The clause, "not held or leased out for profit," is significant. It is difficult to see how the property of charitable and benevolent associations could be rented except for profit to the association. If rented for profit to its members, and not for purposes of the association, it would be difficult to place such association in the class of charitable institutions, unless it could be justified under the familiar saying that "charity begins at

home." A reasonable and practicable meaning must be given to the phrase. Our case of State v. Kittle, 87 W. Va. 526, 105 S. E. 775, is relied upon to sustain the contention of the lodge. A lot of land on which was erected a parsonage had been omitted from the land books and not assessed for taxation, and the lower court held that it had been forfeited for nonentry, basing its holding apparently upon the theory that the statute which exempted "parsonages and the household goods and furniture pertaining thereto" was unconstitutional. The building had

been occupied by the resident minister for some time, but not being convenient for his use, or for some other reason, the trustees had rented the building to others, the proceeds being devoted to extinguishment of a debt on the building. This court reversed the lower court, holding that parsonages were in terms exempted from taxation by the statute, and the statute was not in contravention of the Constitution, practically construed by contemporaneous legislation and long acquiescence. The statute in terms exempts parsonages, and their status does not depend upon their use, so long as their use is devoted to church purposes. As regards parsonages, the qualification that they shall not be held or leased out for profit is not appended as in the case of the property of charitable or benevolent institutions. That case is easily distinguishable from this case.

The use of the property of the McDowell Lodge determines its status as taxable property,

Taxes-property and not the use for of Masonic

which the proceeds lodge.

are expended when it is held or leased out for profit. The property, having been leased out for commercial purposes and for profit, as shown by the agreed facts, is not exempt from taxation under the statute.

The judgment of the Circuit Court and the order of the County Court will be reversed, and the prayer of the petition for refund of taxes paid, refused.

ANNOTATION.

Exemption from taxation of property of fraternal or relief association.

The present annotation discussing the exemption from taxation of property of a fraternal or relief association is supplemental to an earlier annotation on the same topic in 22 A.L.R. 907.

The following recent cases support the view that property of a fraternal or relief association, used or occupied by it, is exempt from taxation: National Navy Club v. New York (1923) 122 Misc. 89, 203 N. Y. Supp. 114 (naval relief association); Re Dakota Wesleyan University (1925) S. D. 202 N. W. 284 (dictum). And see the reported case (STATE V. MCDOWELL LODGE, ante, 31) (Masons).

Thus, in National Navy Club v. New York (N. Y.) supra, it was held that a clubhouse operated entirely for the relief of enlisted men of the United States Navy was exempt from taxation as within the New York statute providing that "the real property of a corporation or association organized exclusively for the moral or mental improvement of men or women, or for charitable, benevolent,

or

[ocr errors]

. patriotic.

.

purposes. or for two or more such purposes, and used exclusively for carrying out thereupon one or more of such purposes, shall be exempt from taxation." It appeared in that case that the plaintiff corporation owned and operated a clubhouse in New York city for the purpose of providing entertainment and respectable sleeping quarters for enlisted men in active service in the United States Navy and Marine Corps at less than cost, by means of endowments and contributions. The nature of the relief afforded was outlined by one of the witnesses for plaintiff, who testified as follows: "The great number of our enlisted men come from the interior; they are all young boys, the average age being about twenty-one or twentytwo, and the minimum age eighteen. When these boys are granted liberty they have no homes; they go ashore in this city, and are subject to all the

temptations of a large city, and, being strangers, they are set upon by bootleggers, prostitutes, street walkers, gamblers, and degenerates. There is little escape for the men, because they have no place to go; at least, they have had none until the setting up of the National Navy Club. They are not welcome in hotels, and they haven't enough money, as a matter of fact, to go to the better places of entertainment, and as soon as the small amount of money which they have is gone, they are entirely adrift.

[ocr errors]

There is no question that the boys who come from this club come back in good condition and are free from the effects that we notice in boys who have spent the night along Broadway or drifting along the streets."

In a recent case the South Dakota court said: "Under our present Constitution and existing statute all property that is owned by religious, educational, charitable, or benevolent societies, regardless of its character, extent, location, or the purposes for which it is used, and all property, regardless of its character or extent, that is used exclusively for charitable, benevolent, religious, or educational purposes, is exempt from taxation." Re Dakota Wesleyan University (1925) S. D. 202 N. W. 284.

In the following recent cases it is held that property of a fraternal or relief association, used or occupied by it, is not exempt from taxation: Benevolent Asso. V. Wintersmith (1924) 204 Ky. 20, 263 S. W. 670 (Elks); People ex rel. Olean Masonic Corp. v. Breder (1923) 121 Misc. 553, 201 N. Y. Supp. 291 (Masons); Berger v. University of New Mexico (1923) 28 N. M. 666, 217 Pac. 245 (dictum).

In Benevolent Asso. v. Wintersmith (Ky.) supra, the court held that the Kentucky statute which exempted from taxation an institution purely in the nature of a public charity did not permit the exemption of a clubhouse of the Benevolent Association of Elks,

« PreviousContinue »