Christgau v. Woodlawn Cemetery Ass'n, Winona

• Decision Date: 26 July 1940
• Docket Number: No. 32544, 32545.,32544, 32545.
• Citation: 208 Minn. 263,293 N.W. 619
• Parties: CHRISTGAU, Director of Division of Employment and Security of Department of Social Security, v. WOODLAWN CEMETERY ASS'N, WINONA.
• Court: Minnesota Supreme Court

293 N.W. 619

208 Minn. 263

CHRISTGAU, Director of Division of Employment and Security of Department of Social Security, v. WOODLAWN CEMETERY ASS'N, WINONA.

No. 32544, 32545.

Supreme Court of Minnesota.

July 26, 1940.

Appeal from District Court, Winona County; Karl Finkelnburg, Judge.

Action by Victor Christgau, as Director of the Division of Employment and Security of the Department of Social Security of Minnesota, against the Woodlawn Cemetery Association, Winona, Minn., to recover unemployment compensation contributions from the defendant as an employer of labor. From an order sustaining a demurrer to certain portions of the answer and overruling it as to the remainder, both the parties appeal, and certain questions are certified to be important and doubtful.

Order reversed on plaintiff's appeal, and affirmed on defendant's appeal.

A. H. Jacobson and George W. Olson, both of St. Paul, for plaintiff Victor Christgau.

Sawyer & Sawyer and Tawney, Smith, Tawney & Libera, all of Winona, for Woodlawn Cemetery Ass'n.

PETERSON, Justice.

This action is brought under the Minnesota unemployment compensation law, Mason Minn.St.1940 Supp. §§ 4337-21 to 4337-42, to recover unemployment compensation contributions from defendant as an employer of labor. There are 12 causes of action set forth covering the period from January 1, 1936 to September 30, 1939.

Defendant makes two claims of exemption from liability. One is of total exemption upon the ground that it is a corporation organized and operated exclusively for charitable purposes. The other claim of exemption is partial and relates to the services of a part of defendant's employees who are employed in its greenhouse, which it claims are exempt as agricultural labor.

Defendant was organized as a public cemetery in 1862 under Rev. Statutes, 1851, c. 37. It is governed now by Mason Minn. St.1927, §§ 7557-7624. The answer alleges that defendant was organized for the sole purpose of operating and maintaining a public cemetery; that it was authorized by law to engage in no other business, except such as is incident thereto; that it has no stock; that its members are the owners of the lots; that its members are not liable to assessment by it; that its trustees serve without compensation; and that no part of its earnings or any profit inure to the benefit of any individual or member.

Defendant has a permanent improvement fund for the perpetual care of burial lots, which was established pursuant to statute. This and the income therefrom it is alleged may not be used for any purpose other than that for which the fund was established. Certain trust funds are held by defendant upon trusts specified by the donors. Defendant has other funds, received and to be used exclusively for upkeep and maintenance of the cemetery.

The answer further alleges that defendant owns 216 acres of land. Of this, 94 acres are stated to be suitable and used for burial purposes. The other 122 acres are incapable of and unsuited for being platted or used for burial purposes and form a background and setting of beauty and grandeur for the 94 acre portion. Defendant has the usual maintenance equipment consisting of trucks, tools, etc.

Plaintiff demurred to the answer. The demurrer was sustained as to those parts in which defendant claimed a partial exemption on the ground of agricultural labor and was overruled as to the defense of exemption upon the ground that defendant was organized and operated exclusively for charitable purposes. The questions are certified to be important and doubtful. Both parties appeal.

Plaintiff's Appeal.

The claim of exemption as a charitable corporation is based on Mason Minn.St. 1940 Supp. § 4337-22, subd. H, which so far as here material defines employment as follows:

"(6) The term `employment' shall not include:

* * * * *

"(i) Services performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual."

This provision is exactly the same as the corresponding provision of the federal social security act, 42 U.S.C.A. § 409(b) (8). The argument in support of the claim that defendant is a charitable corporation is that it is operated without profit and financial benefit to any member or individual in discharging the public function of providing burial for the dead. It is claimed that constitutional and statutory provisions exempting the burial grounds of cemeteries from taxation and execution give support to that view; but exemption from the tax in question is not claimed in virtue of such provisions.

1. Defendant contends that it is a corporation organized and operated exclusively for charitable purposes for the reason that it is engaged in the public function of providing a suitable place for the burial of the dead without profit. Its contention is that, since its function is public and it is operated without profit, it is a public charity.

It is true that providing a burial place for the dead is a function of a public nature, which might be imposed as a duty on governmental subdivisions. Brown v. Maplewood Cemetery Ass'n, 85 Minn. 498, 89 N.W. 872; Wolford v. Crystal Lake Cemetery Ass'n, 54 Minn. 440, 56 N.W. 56. A corporation organized and operated without profit to discharge a function of a public nature is not a charitable corporation. Defendant relies on the rules obtaining in equity for defining a charitable use within the purview of 43 Eliz. c. 4. under which a charitable purpose embraces the improvement and promotion of the general welfare. But that rule has no application where, as here, there are constitutional and statutory provisions indicating that the word "charitable" is used in a restricted sense not comprehending other enumerated subjects. The enumeration in our constitution and statutes of public charities, cemeteries, institutions of learning, and other subjects, indicates that each of the subjects enumerated is distinct from the others. Distinction rests on difference. The meaning of the word "charitable" will be so restricted as to exclude subjects that might otherwise be included in the word in order to observe the differences between the subjects enumerated. These principles are settled in accordance with the weight of reason and authority by our decision in State v. Bishop Seabury Mission, 90 Minn. 92, 95 N.W. 882, 883, where an institution of learning claimed that its endowments were exempt from taxation on the grounds that it was both a charitable institution and a college or seminary of learning. We held that, while the purposes of the institution were charitable under 43 Eliz. c. 4, and the rules governing charitable gifts and uses in equity, those rules were not applicable and that the question was one of constitutional construction. The constitution (Art. 9, § 1) enumerates as subjects of exemption from taxation public burying grounds, public school houses, public hospitals, academies, colleges, universities, seminaries of learning, churches, church property, houses of worship institutions of purely public charity, public property used exclusively for public purposes and certain personal property in limited amount. Several of the subjects enumerated partake of a public nature such as public burying grounds, schools, hospitals, institutions of learning and public property used for public purposes. None of them are owned or operated for profit. Our reasoning was to the effect that each subject enumerated was to be differentiated from the others to give meaning and effect to the words used; that enumeration involves classification based on differences between the subjects enumerated; that the process places each subject in its own class and gives it a meaning of its own; that by the same token it excludes each subject from the classes to which others are assigned; and that, where the law, constitutional or statutory, indicates that there is a difference in subjects enumerated, the distinction should be observed. We pointed out that the institution involved was of a public character, saying, "The work of such institutions is done primarily for the individual educated, but results ultimately in the public good. Their function is largely public, and property possessed by them is devoted, not to private gain to individuals, but to a beneficent use—the education and enlightenment of the citizen." But notwithstanding its public character and that it was operated without profit, the institution was held not to be a public charity. We held that the term "purely charitable institution" was to be restricted in meaning so as to differentiate such institutions from the others enumerated and said, "So that a `purely charitable institution,' within the meaning of this constitutional provision, may be said to be an institution organized for the purpose of rendering aid, comfort, and assistance to the indigent and defective, open to the public generally conducted without a view to profit, and supported and maintained by benevolent contributions." By this process of reasoning and under this definition defendant is not an institution of purely public charity. A cemetery can no more be said to be a public charity than it can be said to be an institution of learning or one of the other enumerated subjects.

While the reasoning in the Bishop Seabury Mission case explodes the argument that defendant is both a public charity and a public cemetery, some other thoughts might be added. Education has from the earliest times been regarded as a matter of vital concern, in consequence of which provision has been made in our constitution (art. 8) and by statute to insure an adequate system of education. See State ex rel. Klimek v. School District, 204 Minn. 279, 283 N.W. 397....