Cent. Realty Co v. Martin

• Decision Date: 16 June 1944
• Docket Number: No. 9561.,9561.
• Citation: 30 S.E.2d 720
• Parties: CENTRAL REALTY CO. et al. v. MARTIN, Assessor, et al.
• Court: West Virginia Supreme Court

30 S.E.2d 720

CENTRAL REALTY CO. et al.
v.
MARTIN, Assessor, et al.

No. 9561.

Supreme Court of Appeals of West Virginia.

June 16, 1944.

Rehearing Denied July 29, 1944.

[30 S.E.2d 721]Syllabus by the Court.

1. Real estate owned by a fraternal association, used for purely commercial enterprises, is not exempt from taxation under Article X, Section 1, Constitution, and Code, 11-3-9, as amended by Chapter 40, Acts of the Legislature, 1933.

2. The cases of Prichard v. Countv Court, 109 W.Va. 479, 155 S.E. 542, and Patterson Memorial Fund et al. v. James, 120 W.Va. 155, 197 S.E. 302, are disapproved to the extent herein indicated.

3. The case of Prichard v. County Court, 109 W.Va. 479, 155 S.E. 542, is overruled in so far as held therein that the second proviso of Code, 11-3-9, as

[30 S.E.2d 722]

amended by Chapter 40, Acts of the Legislature, 1933, is constitutional.

4. The second proviso of Code, 11-3-9, as amended, contravenes Article X, Section 1 of the Constitution of West Virginia, and is therefore unconstitutional.

Error from Circuit Court, Cabell County.

Proceeding in mandamus by Central Realty Company and others against W. M. Martin, Assessor, etc., and others to compel the assessment of certain realty for taxation. To review a judgment holding the property exempt from taxation and denying the peremptory writ of mandamus, the petitioners bring error.

Reversed and remanded.

Hogsett & St. Clair and Vinson, Thompson, Meek & Scherr, all of Huntington, for plaintiffs in error.

Homer A. Holt, of Charleston, S. P. Bell, of Spencer, and Marcum & Gibson, of Huntington, for defendants in error.

LOVINS, Judge.

Petitioners by a proceeding in mandamus sought to compel the assessment of certain real estate for taxation. The Circuit Court of Cabell County held the property exempt from taxation, denied the peremptory writ of mandamus, and this writ of error was granted to review that judgment. The parties to this proceeding will be referred to herein as they stood in the trial court.

Petitioners are hotel owners and taxpayers of Cabell County. Respondents are the Assessor of Cabell County, A. J. Wilkinson, S. P. Bell, and R. M. West, trustees for the use and benefit of Odd Fellows Home. The Board of Trustees of Odd Fellows Home, a corporation, and Odd Fellows Home, a corporation.

Massachusetts Mutual Life Insurance Company, by deed dated May 27, 1941, conveyed to Odd Fellows Home Endowment Board, a corporation, Lot 11 and the northerly 63 x 90 feet of Lots 12, 13 and 14, Block 95, in the City of Huntington. The consideration for the conveyance was $250,000, of which $60,000 was paid and $190,000 was deferred, the unpaid portion being evidenced by one negotiable promissory note payable in one hundred and eighty monthly installments, one hundred seventy-nine thereof being for $1,250 each and the final installment for the balance then unpaid, secured by deed of trust. By deed dated June 3, 1941, Odd Fellows Home Endowment Board, a corporation, conveyed said real estate to A. J. Wilkinson, S. P. Bell, and R. A. West, trustees for the use and benefit of Odd Fellows Home, a statutory corporation under Code, 35-2-6, the transfer being approved by the State Tax Commissioner. The grantees assumed payment of the $190,000 note given for the unpaid purchase money. The terms of the trust created by the deed to the Board of Trustees in so far as they are here pertinent are:

" * * * that so long as they hold said title to said real estate, they will account for and pay over the net income derived from the renting and leasing of said property, at such times and intervals as may be convenient or practical, but not less frequently than once in each calendar year, to the Board of Directors of Odd Fellows Home now located at Elkins, West Virginia, to be used by said Board of Directors solely and exclusively for religious, charitable and educational purposes, in the care, education, training and maintenance of the wards, inmates and residents of said Odd Fellows Home, and that no part of said net income so derived shall ever be used for private purposes or profit."

The improvements on the real estate in question consist of the Governor Cabell Hotel and three store-rooms. The hotel is under a ten-year lease to a chain hotel corporation, which operates the property as a hotel in competition with the establishments of petitioners. Rent therefor is $1,250 a month, plus thirty per cent of gross monthly receipts in excess of $5,000 derived from room rentals only. The three store-rooms bring an aggregate monthly rental of $625, making a total monthly income from the property of $1,-875 and an overplus in varying amounts realized from room rentals. Although the trial court found as a fact that this income was devoted in part to payments on the deferred purchase money note, the testimony of a member of the Board of Trustees is to the effect that this income is turned over by the trustees to the Board of Directors of Odd Fellows Home, which applies the funds solely to the maintenance of the Odd Fellows Home, an eleemosynary institution situate at Elkins, West Virginia, its inmates, and to other charitable endeavors espoused by the Grand Lodge. There is also testimony to the effect that the initial

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cash payment, subsequent monthly installments, and some anticipated payments to the insurance company were paid from monies realized from foreclosures of liens, and from gifts, bequests and devises...