City of Ashland v. Calvary Protestant Episcopal Church of Ashland
Decision Date | 04 March 1955 |
Citation | 278 S.W.2d 708 |
Parties | CITY OF ASHLAND, a Municipal Corporation of the Second Class, Appellant, v. CALVARY PROTESTANT EPISCOPAL CHURCH OF ASHLAND, Kentucky, et al., Appellee. |
Court | United States State Supreme Court — District of Kentucky |
A. W. Mann, Arthur T. Bryson, Jr., Ashland, for appellant.
John L. Smith, Catlettsburg, J. G. M. Robinson, Ashland, for appellee.
This is an appeal from a judgment in a declaratory judgment suit upholding the contention of appellee, Calvary Protestant Episcopal Church of Ashland, Kentucky, that certain property owned by it is exempt from taxation under Section 170 of the Constitution.
The church has, for many years, owned a corner lot in Ashland upon which stands its church building. It purchased an adjoining lot upon which is a two-story building. The lower floor was rented by appellee to a merchant for a term of 26 months. The acquired building and church proper were joined, after purchase, by means of a stairway leading from the church to the upper floor of the other building which is being used in connection with a Sunday school and other religious activities. The petition alleges that the sole purpose for the purchase of the adjoining property was efficiently to carry on its religious activities, the old property having become inadequate. It is also alleged that all the rental proceeds, save only such as were to be used for maintenance, were set aside for the purpose of retiring a lien on the lot for the balance of the purchase money. It is alleged that the purchased lot is attached and appurtenant to its house of worship and the two items do not exceed one half acre in area.
The trial court held appellee's recently acquired property to be exempt from taxation even though the first floor of the building was leased to a mercantile firm, and placed emphasis on the fact that the rents derived from the lease were applied to the retirement of the lien debt on the building and once the debt was retired, the whole building was to be devoted to religious purposes. The appellant, City of Ashland, sought to tax only that portion of the builiding under lease--the first floor. We think a different result must be reached in light of the judicial history construing Section 170 of our Constitution, which exempts certain types of property and certain institutions from taxation.
Our constitutional exemption found in Section 170 reads in part:
'There shall be exempt from taxation * * * places actually used for religious worship, with the grounds attached thereto and used and appurtenant to the house of worship, not exceeding one-half acre in cities or towns, and not exceeding two acres in the country; * * * all parsonages or residences owned by any religious society, and occupied as a home, and for no other purpose, by the minister of any religion, with not exceeding one-half acre of gound in towns and cities and two acres of ground in the country appurtenant thereto * * *.'
In the determination of the application of this section we have made 'use,' rather than the bare fact of ownership, the controlling factor. Ham Evangelistic Ass'n v. Matthews, 300 Ky. 402, 189 S.W.2d 524, 168 A.L.R. 1216. Thus, if appellee's property is to come within the exemption, it must come within the test of being used for religious worship without regard to the fact that it is owned by a church.
In reaching a decision we find it necessary to review some of the many cases construing Section 170 which concerns not only property used for religious worship, but also charitable and educational institutions, and attempt to glean the underlying policies favoring exemption for some and nonexemption for others.
Insofar as charitable or educational institutions are involved, it was held as early as 1896, in the case of Trustees of Kentucky Female Orphan School v. City of Louisville, 100 Ky. 470, 36 S.W. 921, 40 L.R.A. 119, that all of the property of a public charity or an educational institution should be exempt because the Constitution exempts the 'institution' as such and all its property in whatever form. There the Midway School owned property in Louisville, the rentals from which were used and devoted to its school in Midway.
In the recent case of City of Louisville v. Presbyterian Orphans Home Society, 299 Ky. 566, 186 S.W.2d 194, this court was faced with the question (now before it as applicable to a church and religious use) of the exemption of property owned by educational and charitable institutions which was rented or leased, the income from which was applied to educational purposes. Judge Rees, in an elaborate opinion, traced the judicial histroy of the exemption accorded charities and educational institutions under Section 170 from the date of the Female Orphan School case cited above and in so doing summarized and catalogued several cases to which we need not refer because they are set out in that opinion. After stating that the charitable and educational institutions relieved the state and municipalities of burdens which they would otherwise have to assume, it was said in 186 S.W.2d at page 199:
(Emphasis added.)
This statement is indicative of the limited area of application for the exemption of property 'actually used for religious worship' and clearly points out that the policy underlying the religious exemption is not the same as that underlying the charitable and educational institutions' exemption. Although current policy may differ from that of another time, the intent of the framers of the Constitution and of the people adopting it must be given effect. Rouse v. Johnson, 234 Ky. 473, 28 S.W.2d 745, 70 A.L.R. 1077.
From the foregoing, it necessarily follows that if property actually used for religious worship is to be exempt, it must come under the specific exemption granted such property and is in nowise supported by the policy underlying the more liberal exemption accorded charitable and educational institutions.
In addition to the limited exemption found in Section 170, we find comment, which borders on precaution, elsewhere in our Constitution that serves to guide us when dealing with the taxation of property owned...
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