Bader Realty & Inv. V. St. Louis Housing Auth.
| Decision Date | 20 January 1949 |
| Docket Number | 41279. |
| Citation | 217 S.W.2d 489 |
| Parties | BADER REALTY AND INVESTMENT COMPANY, a Corporation, Appellant, of St. Louis; RICHARD E. GRUNER, as Collector of the City of St. LOUIS, a Municipal Corporation; EUGENE M. GUISE, as Assessor of the City of St. Louis; LOUIS NOLTE, as Comptroller of the City of St. Louis; RICHARD E. GRUNER, as Collector of the City of S.t Louis, Respondents. |
| Court | Missouri Supreme Court |
Appeal from Circuit Court of City of St. Louis. — Hon. Joseph J. Ward, Judge.
AFFIRMED.
Robert W. Herr for plaintiff-appellant.
(1) The properties of the defendant St. Louis Housing Authority are subject to and not exempt from ad valorem and sales taxes under the Constitution and the Revised Statutes of Missouri, because the properties of such Housing Authority are not used for purposes purely charitable. Exemptions from taxation are in derogation of equal rights and are not favored by the courts, but must be strictly construed against the property owner and in favor of the public. The burden is on the person claiming tax exemption to show beyond a reasonable doubt that he is entitled thereto. Art. X, Sec. 6, 1945 Constitution of Missouri; Sec. 10492.4, 4, R.S. 1939, as amended; Salvation Army v. Hoehn, 188 S.W. (2d) 826; Fitterer v. Crawford, 157 Mo. 51, 57 S.W. 532; Spillers v. Johnston, 214 Mo. 656; In re First Natl. Safe Deposit Co., 351 Mo. 423, 173 S.W. (2d) 403. (2) The right to exemption from taxation is grounded entirely upon the use made of the property sought to be exempted and not upon the motive of the property owner nor the character of the organization nor the purposes for which it was organized or incorporated. The fact that the purposes of the defendant Housing Authority may be benevolent, worthy and highly desirable is of no consequence in determining its claim to tax exemption, and the only test to be applied is the use made by such Housing Authority of its properties. Under this test, the Housing Authority clearly is not entitled to the claimed tax exemptions. Evangelical Lutheran Synod v. Hoehn, 355 Mo. 257, 196 S.W. (2d) 134; Salvation Army v. Hoehn, 354 Mo. 107, 188 S.W. (2d) 826; Young Men's Christian Assn. v. Gehner, 329 Mo. 1007, 47 S.W. (2d) 776; Y.M.C.A. of Germantown v. City of Philadelphia, 323 Pa. 401, 187 Atl. 704; Goodwill Industries v. Gruner, 210 S.W. (2d) 38; Art. 36, Chap. 38, R.S. 1939, Secs. 7853 through 7875. (3) The bonds, obligations, commitments, contracts and indentures of the defendant Housing Authority are debts and obligations of the defendant City of St. Louis and will constitute an indenbtedness of the defendant City of St. Louis contrary to the plain provisions of the Constitution of Missouri.
George L. Stemmler, City Counselor, and John P. McCammon, Associate City Counselor, for defendants-respondents.
These respondents adopt the statement of the appellant, and the brief and argument of the respondent St. Louis Housing Authority.
Paul J. Kaceney and R.M. Stout for defendant-respondent St. Louis Housing Authority.
(1) The properties of the defendant Housing Authority are used for purposes purely charitable and therefore are exempt from all taxes, ad valorem and excise. Missouri Goodwill Industries, etc., v. Gruner, Collector, 210 S.W. (2d) 38; Salvation Army v. Hoehn, Assessor, 354 Mo. 107, 188 S.W. (2d) 826; Springfield Housing Authority v. Overaker, Collector, 390 Ill. 403, 61 N.E. 373; Krause v. Peoria Housing Authority, 370 Ill. 356, 19 N.E. (2d) 193; Williamson v. Housing Authority of Augusta, 186 Ga. 673, 199 S.E. 43; Hogue v. Housing Authority of No. Little Rock, 144 S.W. (2d) 49; In re Burroughs Estate, 206 S.W. (2d) 340; People ex rel. Nelson, v. Rockford Masonic Home, 348 Ill. 567, 181 N.E. 428. (2) Tax exemption to a Housing Authority is also arrived at under a Constitution and statutes by reason of a public use and public purpose. Dornan v. Philadelphia Housing Authority, 331 Pa. 209, 200 Atl. 834; Knoxville Housing Authority v. City of Knoxville, 174 Tenn. 76, 123 S.W. (2d) 1085. (3) Bonds and obligations of the St. Louis Housing Authority are not debts or obligations of defendant City of St. Louis. Sec 7866, R.S. 1939; Commissioner of Internal Revenue v. White's Estate, 144 F. (2d) 1019; Commissioner of Internal Revenue v. Schamberg's Estate, 144 F. (2d) 998; Laret Inv. Co. v. Dickmann, 134 S.W. (2d) 65, 345 Mo. 449.
David M. Proctor, City Counselor, and John J. Cosgrove, Assistant City Counselor, for intervenor, Kansas City, Missouri.
The Housing Authority furnishes housing for a price considerably lower than what the house would ordinarily bring. To that extent it is doing charity.
This is an action for a declaratory judgment that the prior tax exempt status of defendant-respondent St. Louis Housing Authority shall no longer continue. The Chancellor adjudged all the property of Housing Authority to be tax exempt. Plaintiff appealed.
Plaintiff is a taxpayer and the owner and operator of many parcels of improved real estate in the City of St. Louis. In addition to the St. Louis Housing Authority, the City of St. Louis, its Assessor, Comptroller and Collector were also made defendants.
Judgment was sought declaring that since the effective date of our 1945 Constitution all real and personal property of Housing Authority has been subject to the payment of ad valorem taxes; that bonds of Housing Authority are debts of the City of St. Louis within the meaning of Sections 26, 27 and 28 of Article VI of the Constitution and that it is the duty of the City Assessor, Comptroller and Collector to proceed to collect the above mentioned taxes.
Defendants City of St. Louis, its Assessor and Collector by their joint answer asked the court to find plaintiff was not entitled to the relief prayed; in its separate answer Housing Authority asked the same; but the City Comptroller in his separate answer prayed the court to adjudge that Housing Authority's property was subject to ad valorem taxes. The City of Kansas City was permitted to intervene and file answer. At the request of the St. Louis Real Estate Board D. Calhoun Jones, Esq. was appointed Amicus Curiae.
The cause was submitted to the court below upon the pleadings, an agreed statement of facts and exhibits. The court adjudged that all of Housing Authority's properties are exclusively used "for purposes purely charitable" under Section 6 of Article X, of the Constitution and Mo. R.S.A. 10942.4, and are exempt from all ad valorem taxes; that the bonds of Housing Authority are not debts or obligations of the City of St. Louis, said bonds being authorized by Mo. R.S.A. Sec. 7866.
Upon stipulation the cause was submitted here without argument upon the briefs filed by appellant and Housing Authority. In the two page brief of the City of St. Louis, its Assessor and Collector, the only citations are from the Bard of Avon. In the two page brief of the intervenor we are cited only to the New Testament.
In Laret Inv. Co. v. Dickmann, 345 Mo. 449, 134 S.W. (2d) 65, decided in 1939 under the provisions of our Constitution of 1875, we held the property of Housing Authority tax exempt as the property of a "municipal corporation" within the meaning of that term as used in the 1875 Constitution. But plaintiff now contends that the property of Housing Authority is not used "for purposes purely charitable"; that under our present Constitution it is not a "political subdivision" and, therefore, its property is subject to ad valorem taxation. Housing Authority was organized under Mo. R.S.A. Secs. 7853 to 7875, inclusive, and ordinances of the City of St. Louis.
In exercising its functions in the City of St. Louis. Housing Authority has caused to be demolished and has eliminated 1134 slum housing units unfit for human habitation. The City of St. Louis has likewise caused to be demolished and has eliminated 184 slum housing units likewise unfit. The above was done under an agreement of January 31, 1940, between Housing Authority and the City wherein Housing Authority agreed to undertake construction of low rent housing projects for low income families. That Cooperation Agreement was authorized by Ordinance No. 41726.
Pursuant to contracts with the City, Housing Authority executed "Assistance Contracts" with the United States Housing Authority and Federal Public Housing Authority whereby it obtained funds and credit in excess of $7,000,000. It thereupon caused three large sites in the City's slum area to be razed. That cleared area approximated 21 square blocks.
Thereupon Housing Authority constructed and is now operating two housing projects providing low rent housing units for 1315 low income families. Six hundred fifty-eight are for negro families at Carr Square Village and six hundred fifty-seven are for white families in Clinton Peabody Terrace. To be eligible for tenancy families must be living in sub-standard accommodations, and must be of low income as per regulations adopted by Housing Authority. A long waiting list of eligible families exists for each project. All properties are exclusively used and will be used for housing low income families. There are no stores or commercial establishments. During its operation Housing Authority has operated the projects as directed by the statutes and has provided decent, safe and sanitary housing accommodations for low income families at a price they can pay. Upon the third site, now razed and cleared at a cost in excess of $3,000,000, Housing Authority intends immediately to construct another project to house 550 low income families. Included as part of the rent for each unit are the services of a night watchman, hot and cold running water, electricity for lighting, steam heat, a gas range, gas for cooking and icebox. Since the erection of these housing units, the condition of adjacent property has been much improved and real estate tax assessments thereon have been increased.
The housing projects produce insufficient income...
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