City of Newport v. Masonic Temple Ass'n

• Decision Date: 20 April 1900
• Citation: 108 Ky. 333,56 S.W. 405
• Parties: CITY OF NEWPORT v. MASONIC TEMPLE ASS'N. [1]
• Court: Kentucky Court of Appeals

56 S.W. 405

108 Ky. 333

CITY OF NEWPORT v. MASONIC TEMPLE ASS'N. ^[1]

Court of Appeals of Kentucky.

April 20, 1900

Appeal from circuit court, Campbell county.

"To be officially reported."

Action by the city of Newport against the Masonic Temple Association to recover taxes. Judgment for defendant, and plaintiff appeals. Reversed.

Root &amp Root, for appellant.

C.J Helm and W. W. Helm, for appellee.

HOBSON J.

The only question involved in this action is whether the appellee's property is exempt from taxation. This is the second appeal of the case. The opinion on the former appeal is reported in 45 S.W. 881. By the charter of the association enacted in the year 1886, it was provided that its property and income should be exempt from all taxation so long as it was entirely devoted to Masonic and charitable purposes. On the former appeal it was held that this provision of the charter was repealed by the present constitution of the state, which took effect September 28, 1891. But whether the property of the association was subject to taxation or exempt under the provisions of the constitution was not determined as the case was not so prepared as to present this question. Section 170 of the constitution is as follows: "There shall be exempt from taxation public property used for public purposes; 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; places of burial not held for private or corporate profit, institutions of purely public charity, and institutions of education not used or employed for gain by any person or corporation, and the income of which is devoted solely to the cause of education; public libraries, their endowments, and the income of such property as is used exclusively for their maintenance; 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 ground in towns and cities and two acres of ground in the country appurtenant thereto; household goods and other personal property of a person with a family, not exceeding two hundred and fifty dollars in value; crops grown in the year in which the assessment is made, and in the hands of the producer; and all laws exempting or commuting property from taxation other than the property above mentioned shall be void. The general assembly may authorize any incorporated city or town to exempt manufacturing establishments from municipal taxation, for a period not exceeding five years, as an inducement to their location." On the return of the case to the court below, appellee filed an amended answer, setting up the defense that it is an institution of purely public charity. To this answer appellant filed a reply, to which the court below sustained a demurrer, and dismissed the action.

It appears from the record that appellee is the owner of a four-story brick building and the ground on which it stands; that the lower floor is rented by the United States postmaster, and used as a post office at an annual rent of about $1,000; that the second floor is rented out for offices and living rooms at an annual rent of about $700; and that the third and fourth floors are used by the association for the purposes of its organization. It also appears that only the first and second stories which were rented out were assessed for taxation. It is admitted in the reply that all of appellee's income and revenue is devoted--First, to the payment of the balance of debt for erecting the building sought to be taxed; second, to relieve distressed and indigent members of the Masonic order and their families. But it is alleged that the association, so far as it dispenses charity at all, confines itself exclusively to its members and their families, or, if the members are dead, to their widows and children, or to those who are directly or indirectly connected with the association; that it does not extend charity to all alike, or to those not in any way connected with the association; and that its charity is governed by the following by-law: "The master and wardens of this lodge shall constitute a charitable committee, whose duty it shall be, on application, carefully to inquire into the situation and circumstances of indigent brethren, their widows and orphans, and afford them the necessary relief; for which purpose they shall have power to draw on the treasurer in the recess of the lodge for any sum, not to exceed ten dollars for any one person, and they shall at the next meeting after such relief has been granted report the same to the lodge, which shall be entered on the minutes."

The question in the case is therefore whether, under these facts appellee is an institution of purely public charity, and as such exempt from taxation, under the section of the constitution above quoted. By the statutes in force previous to the adoption of our present constitution, all property "devoted to charitable purposes" was exempt from taxation. Gen. St. p. 1036. If this rule was still in force, appellee's property would, under some authorities, be exempt, as it is, in one view, devoted to charitable purposes. But the constitution was intended to modify the exemptions theretofore allowed, and now only institutions of purely public charity are exempt. While this is a new provision in this state, it has long been in force in a number of other states. The purpose of its adoption in this state was to exclude from exemption all charities not purely public. The words "purely public" need no definition. They do not include any restricted or private charities. These may be very valuable, and the spirit prompting them is much to be commended; but the exemption of property from taxation had assumed such proportions at the time of the adoption of our present constitution that it was seen fit not to exempt property from taxation unless de voted to a purely public charity. A Masonic lodge, which provides for its members and their families, or the widows and orphans of those who are dead, is a commendable private charity; but it is in no sense purely public. This question has often been presented to the courts, and, so far as we have seen, under provisions like ours the decisions are uniform. The constitution of Ohio is the same as ours. In Lodge v. Hayslip, 23 Ohio St. 144, the facts were substantially the same as here. The court said: "A charitable or benevolent association, which extends relief only to its own sick and needy members, and to the widows and orphans of its deceased members, is not 'an institution of purely public charity,' and its moneys held and invested for the aforesaid purposes are not exempt from taxation." The constitution of Pennsylvania is also the same as ours. In Philadelphia v. Masonic Home of Pennsylvania, 160 Pa. St. 572, 28 A. 954, 23 L. R. A. 545, the question was whether the property of the Masonic Home, open only to...