North St. Louis Gymnastic Society v. Hagerman

• Decision Date: 28 February 1911
• Citation: 135 S.W. 42,232 Mo. 693
• Parties: NORTH ST. LOUIS GYMNASTIC SOCIETY (NORD ST. LOUIS TURNVEREIN) v. JAMES HAGERMAN, Jr., Collector of the City of St. Louis, Appellant
• Court: Missouri Supreme Court

135 S.W. 42

232 Mo. 693

NORTH ST. LOUIS GYMNASTIC SOCIETY (NORD ST. LOUIS TURNVEREIN) v. JAMES HAGERMAN, Jr., Collector of the City of St. Louis, Appellant

Supreme Court of Missouri, First Division

February 28, 1911

Appeal from St. Louis City Circuit Court. -- Hon. Jas. E. Withrow Judge.

Affirmed.

Johnson Houts, Marlatt & Hawes for appellant.

(1) An exemption from taxation "so long as property is used exclusively for educational purposes" does not apply where property is leased and rented to the public for hire. Fitterer v. Crawford, 157 Mo. 64; Adelphia Lodge v. Crawford, 157 Mo. 358; State ex rel. v Macgurn, 187 Mo. 242; State ex rel. v. Johnston, 214 Mo. 668. (2) The question of the right of plaintiff to exemption of the property in question from taxation in 1906, is not rendered res adjudicata by the decision of the case of North St. Louis Gymnastic Society v. Hudson, 85 Mo. 32. (a) The weight of authority and of reason is to the effect that an adjudication with respect to the validity of a tax for one year does not render the question of the validity of taxes for another year res adjudicata; it is against public policy to apply the estoppel of a judgment against the sovereign in the exercise of its taxing powers. Railroad v. People, 46 Mich. 193; Bank v. Memphis, 101 Tenn. 167; Adams v. Railroad, 77 Miss. 266; Davenport v. Railroad, 38 Iowa 640; State ex rel. v. Enloe, 121 Tenn. 378; City v. Commonwealth, 106 Ky. 447; Georgia R. & B. Co. v. Wright, 124 Ga. 606; State v. Sugar Refining Co., 108 La. 603. (b) The fact and circumstances as shown by the record in the two cases are so different that the judgment in the former case cannot be urged as an estoppel in the case at bar.

Julius T. Muench for respondent.

(1) The property affected by the taxes in controversy in this suit is exempt from taxation under the provisions of respondent's charter. Gymnastic Soc. v. Hudson, 85 Mo. 32; Same Case, 12 Mo.App. 342. (2) The question of the liability of the respondent company's property to taxation, under the terms of its charter, having been previously concluded by the judgment in the case of North St. Louis Gymnastic Society v. Hudson, 85 Mo. 32, under circumstances and conditions practically identical with those in the case at bar, the question of such taxability is res adjudicata as to the points involved in this case. Exposition Driving Park v. Kansas City, 174 Mo. 425; New Orleans v. Bank, 167 U.S. 371; Baldwin v. Maryland, 179 U.S. 220; Chouteau v. Gibson, 76 Mo. 47. (3) The facts and circumstances upon which the decision in the former case was based are, with the exception of some unimportant details, identical with those existing at the time the taxes in controversy in this suit were assessed, and the property is the same as that involved in the former adjudication.

LAMM J. Valliant, J., is absent.

OPINION

LAMM, J.

Plaintiff sues in equity to remove the cloud on the title to certain of its real estate arising from a taxbill and a tax assessment for State, school and city taxes for the year 1906, and to cancel the taxbill and enjoin the collector from enforcing the same.

The bill runs on the theory, first, that under its charter its real estate is exempt from taxation; second, that the question is no longer open but is res judicata.

From a decree in plaintiff's favor, defendant comes up by appeal.

The pleadings are not challenged and we pass them by with the remark that they join issue on the questions of exemption and former adjudication, and are broad enough to make pertinent an agreed statement of facts on which the cause was submitted below. The substance of which is:

Plaintiff was incorporated under the name and style of "Nord St. Louis Turnschule und Kinder Garten" (followed by the legislative translation of "North St. Louis Gymnastic School and Infant Garden,)" by a special act of the General Assembly in 1864 -- at a time when special legislation was not unconstitutional. Its charter purpose was "educating children in gymnastics and the elementary branches of education." It had warrant of authority to hold and enjoy so much property, real, personal and mixed, as may be necessary to conduct its affairs. Section 3 of its charter authorizes its board of directors to employ, engage and discharge necessary professors, teachers, nurses, servants and agents, and to issue $ 50,000 in stock, each share for $ 25, but subscribers might take a fraction of a share. By section 4, the board was authorized to receive voluntary contributions from subscribers and to charge a reasonable tuition fee. Section 5 reads: "Personal and real property of this institute shall be exempt from taxation as long as said property is used only for purposes of education; provided the value thereof does not exceed $ 50,000."

In 1874 its name was changed by an act of the General Assembly and made to read as it does now. In 1881, an attempt was made to tax its property, then amounting to $ 7610 in real estate and $ 500 in chattels. It then owned lots 7 and 8 and the west 8 feet of lot 9 in city block 1174 on Salisbury Street. The then collector of revenue, Hudson, having a taxbill in hand and being about to enforce it, plaintiff sued in equity -- the life of its bill being to enjoin collection on the ground its property was exempt by force of its charter terms. Answer was filed in that case and it was submitted (like this one) on an agreed statement of facts, which (omitting caption) reads:

"The facts in this case, for the purposes of a judicial determination, are agreed to be (in addition to the documentary evidence, viz., taxbill and charters of plaintiff, herewith also submitted):

"That plaintiff is the owner of the real and personal property described in said taxbill; that it carries on a gymnastic school as averred in the petition; that the personal property by it owned is devoted wholly to the conduct and purposes of such school; that upon the real estate described in the petition, plaintiff erected a two-story brick building, paying for about one-half thereof out of sums realized on shares of stock issued pursuant to its charter, as also some other means, and the other half then remaining as a debt of said society; that the entire second floor, and a large part of the first floor of said building are used and occupied in the conduct of said school, and that two corner rooms on said first floor are let by plaintiff at a monthly rental paid to it; one of said rooms for a saloon and the other for a store; which said monthly rental so received is used by plaintiff in defraying the legitimate expenses of conducting said school, paying salary of teachers (so far as the same are not met by voluntary contributions of members); in keeping said building in repair; and in discharging the remaining indebtedness of plaintiff, incurred in building as aforesaid.

"That plaintiff has not devoted any money received by it to any purpose other than above designated. That the taxbill in question has been demanded as in the petition alleged.

"The above facts are to be considered by the court subject to defendant's objection that under the allegations of the petition, plaintiff is not entitled to any relief in the premises; in other words, that the petition does not state a cause of action and no testimony can be received to support it."

In that case a decree went for plaintiff in the circuit court. Defendant appealed to the St. Louis Court of Appeals, where the decree was affirmed (12 Mo.App. 342). Under the then practice, an appeal was taken to this court, and the decree was finally affirmed (85 Mo. 32). Such was the end of the first suit. (Nota bene: While the agreed statement of facts in the case at bar does not directly say so, yet the briefs proceed on the theory, and read between the lines the statement means, we think, that plaintiff acquired property and organized its school at once on its corporate birth in 1864; that no attempt to tax its property was made before 1881, and that after the first suit was determined in its favor no further attempt was made until in 1905-6. The case may also proceed on the theory that only a part of the capital stock was taken and that the original buildings and the new gymnasium were largely constructed by interest-bearing loans.) In 1905, plaintiff still owned the Salisbury lots, but at some time during the quarter of a century between the first attempt to tax and the last, it acquired lots 5 and 6 in the same city block on Mallinckrodt Street. These two properties were adjacent, but separated by an alley. At some time after the purchase of the Mallinckrodt lots, plaintiff erected a gymnasium on the latter and connected the same with the old buildings on the Salisbury lots by a covered passage over the alley -- making all its buildings usable as one. It is agreed that no part of the Mallinckrodt property was income-producing or was rented out, but the whole thereof was used by plaintiff for charter purposes. Defendant has no taxbill against the new property, nor were any taxes imposed thereon. However, in 1905, an assessment was made and taxes imposed against the Salisbury lots, to come due in 1906, and the taxbill is in the hands of defendant, ex officio, he is about to enforce it and will do so unless restrained by legal process. At this point (because of a contention raised) it may be well to reproduce more of the agreed statement of facts in haec verba, viz.:

"On June 1, 1905, and for a long time prior thereto, the buildings on lots 7 and 8 and the western eight feet of lot 9, in city block 1174, consisted of a group of buildings partly two-story and basement, and partly three stories in height. The saloon on the ground floor at the corner, with the living rooms adjoining it, were...