Central Realty Co. v. Martin

• Decision Date: 16 June 1944
• Docket Number: 9561.
• Citation: 30 S.E.2d 720,126 W.Va. 915
• Parties: CENTRAL REALTY CO. et al. v. MARTIN, Assessor, et al.
• Court: West Virginia Supreme Court

30 S.E.2d 720

126 W.Va. 915

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.

Syllabus by the Court. [Copyrighted Material Omitted]

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 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. There is conflicting evidence which tends to show that the monthly payments of the deferred purchase price were made out of the income derived from rentals.

The case was heard on petition, amended petition, demurrer thereto, which was overruled, answer of the Assessor of Cabell County, answer of A. J. Wilkinson, S. P. Bell, and R. M. West, as trustees, the answer of Odd Fellows Home, a corporation, and evidence taken in open court. Thereafter the Circuit Court of Cabell County refused the writ as hereinabove stated.

Assessments of property by an assessor of a county involves the performance of discretionary, as well as ministerial duties. The determination of the value of property by an assessor requires the exercise of discretion, but the classification of property for tax purposes and the maximum rate at which such property shall be taxed are prescribed by law. Although the assessment of property is discretionary in part, the exercise of that discretion may be enforced by mandamus, but the manner in which such discretion is exercised is not subject to control by such writ. State ex rel. v. Buchanan, 24 W.Va. 362. See also State v. Martin, 105 W.Va. 600, 143 S.E. 356.

Respondents by cross-assignment of error challenge the finding of the trial court that $1,250 was paid monthly on the lien indebtedness for deferred purchase money out of the gross income derived from rentals of the property; and that the residue of the income was being used by the trustees for the "care, education, training and maintenance of the wards, inmates, and residents of the Odd Fellows Home at Elkins." We have evaluated the evidence with respect to the above finding of fact made by the trial court, and cannot say that the finding is contrary to the preponderance thereof or that the trial court was clearly wrong. An appellate court should not substitute its appraisal of evidence for that of a trial court made in an action at law and make a different finding of fact where there is conflicting evidence and the finding in the first instance is not clearly wrong. Williamson v. Levine, 75 W.Va. 143, 83 S.E. 281. See also Vol. 1, Digest of Virginia and West Virginia Cases, Michie, Title, Appeal and Error, Section 329, and Vol. 1, Perm.Supp. to the same work. This Court has applied a similar rule in a mandamus proceeding where there was a finding of fact by a jury on conflicting testimony and the entry of judgment by the court on that finding. Point Pleasant Register Pub. Co. v. Mason County Court, 115 W.Va. 708, 177 S.E. 873. There is no dissimilarity in a finding of fact by a trial judge in a mandamus proceeding and a factual determination in an ordinary action. The same rule with reference to setting aside a finding applies in each instance. We conclude that the finding made by the trial court is without error, and that the same should not be modified or set aside.

Is the real estate exempt from taxation? That is the controlling question.

Determination of the foregoing question rests on the application and interpretation of the appropriate provisions of our State Constitution and pertinent statutes. Decisions by courts of last resort in the various jurisdictions are not uniform, doubtless because of the diverse provisions of their organic and statute law, and hence do not furnish a guide for decision.

The power to tax property and the citizens of a state is an attribute of sovereignty derived from necessity, and is one of the inherent powers of government. The Constitution of this State limits that power by the following provision "Subject to the exceptions in this section contained, taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law." Section 1, Article X, Constitution of West Virginia. The general rule of equality and uniformity established by the above provision is modified by the following: "*** but property used for educational, literary, scientific, religious or charitable purposes *** may by law be exempted from taxation; ***." (Emphasis ours). Section 1, Article X, Constitution of West Virginia. The latter provision creates an exception to the general rule. Chesapeake & O. R. Co. v. Miller, Auditor, 19 W.Va. 408, 436, et seq. The text of the provision which permits the exception is plain and unambiguous, and we may not search for and apply some meaning ascertained from sources outside the Constitution. Chesapeake & O. R. Co. v. Miller, Auditor, supra. The constitutional and statutory provisions exempting property from taxation are strictly construed. State v. Kittle et al., 87 W.Va. 526, 105 S.E. 775. The opinion of this Court in the Kittle case states that construction of a constitutional and statutory provision should be rational. It is to be supposed that judicial action in all its aspects is agreeable to reason, that sagacity and discretion control and direct the judicial process in resolving any question, and hence for practical purposes the rule of strict construction remains unmodified. Consideration of the foregoing principles lead to the conclusion that the word "used" in the constitutional provision above quoted means...