Clark v. Marian Park, Inc.

• Decision Date: 30 January 1980
• Docket Number: No. 79-20,79-20
• Citation: 80 Ill.App.3d 1010,36 Ill.Dec. 241,400 N.E.2d 661
• Parties: , 36 Ill.Dec. 241 In the Matter of Application for Judgment of Taxes for the Year 1975 by James H. CLARK, County Treasurer, DuPage County, Illinois, Applicant-Appellee Cross- Appellant, v. MARIAN PARK, INC., Objector-Appellant Cross-Appellee, v. CITY OF WHEATON, Petitioner-Appellee Cross-Appellant.
• Court: United States Appellate Court of Illinois

Page 661

400 N.E.2d 661

80 Ill.App.3d 1010, 36 Ill.Dec. 241

In the Matter of Application for Judgment of Taxes for the

Year 1975 by James H. CLARK, County Treasurer,DuPage County, Illinois,Applicant-Appellee Cross- Appellant, v.MARIAN PARK, INC., Objector-AppellantCross-Appellee, v.CITY OF WHEATON, Petitioner-AppelleeCross-Appellant.

No. 79-20.

Appellate Court of Illinois, Second District.

Jan. 30, 1980.

Wylie & Mulherin, Bonnie M. Wheaton, Wheaton, and Francis X. Riley, Glen Ellyn, for objector-appellantcross-appellee.

J. Michael Fitzsimmons, State's Atty., George J. Sotos, Asst. State's Atty., Edward J. Walsh Jr., Wheaton, for applicant-appelleecross-appellant.

WOODWARD, Justice:

On March 9, 1970, the City of Wheaton entered into an annexation agreement with the owner of certain real estate.At the time the agreement was entered into, the real estate was exempt from taxation because the owner was a religious organization.Paragraph 13 of the annexation agreement stated that when the owner obtains a firm commitment of financing for construction of an improvement on the first parcel, it will cause that parcel to be placed on the county tax rolls.The same terms and procedure was to be followed for each additional parcel.Paragraph 13 also stated that it was "the intention of the Owner that all of the Subject Realty, and all improvements thereon, shall become as fully taxable as privately owned real estate within the State of Illinois."Further, the annexation agreement provided that it was binding upon successors in title to the real estate and to any successor municipal corporation to the City of Wheaton.

The tax objector herein, Marian Park, Inc., was formed by the prior owner as a general not-for-profit corporation to own and operate on the various parcels of real estate here involved federally subsidized low and moderate income rental housing units for the poor, elderly and handicapped.Subsequent to the signing of the annexation agreement, title was transferred to Marian Park and the land was annexed to Wheaton.

On November 24, 1976, Marian Park filed an objection to an order for judgment and sale of part of the land.The judgment had been obtained on application of the County Collector for delinquent real estate taxes for the year 1975.A hearing was held on the objection and the trial court found that Marian Park was exempt from real estate taxation as a charitable organization.Wheaton thereafter filed a petition to vacate the order, alleging that it was a necessary party and that it had not received notice of the original hearing.The trial court thereupon vacated the previous order and set the matter for a new hearing.Marian Park petitioned for a rehearing of the Wheaton petition and the court denied Marian Park's petition for rehearing.

At the conclusion of the new hearing, the trial court found that Marian Park was exempt from real estate taxation because it was a charitable organization but that Marian Park waived its exemption from real estate taxation under the provisions of paragraph 13 of the annexation agreement.The court vacated its original order and entered judgment against the land for the amount of taxes, interest, penalties and costs due and ordered that such of the land as is necessary be sold to pay the judgment.Marian Park's notice of appeal is taken solely from that portion of the order that reversed the original order; Wheaton and the County Collector cross-appeal as to the finding that Marian Park qualifies as an exempt organization for real estate tax purposes.

The central question is whether Marian Park is a charitable organization and is therefore exempt from real estate taxation under Ill.Rev.Stat., 1977, ch. 120, par. 500.7.Regardless of exemptions declared by the legislature, it is within the power of the courts of this state to determine whether an organization is a charitable organization.(Illinois Hospital and Health Service, Inc. v. Aurand(1978), 58 Ill.App.3d 79, 15 Ill.Dec. 549, 373 N.E.2d 1021.)Exemption from federal income tax and from state sales and use tax is not determinative of whether the subject property is used for charitable purposes.(People ex rel. County Collector v. Hopedale Medical Foundation(1970), 46 Ill.2d 450, 264 N.E.2d 4.)Also, the burden of proving the exemption is on the party seeking it; all facts are to be construed and all debatable questions are to be resolved in favor of taxation.Methodist Old Peoples Home v. Korzen(1968), 39 Ill.2d 149, 233 N.E.2d 537.

In the latter case, the supreme court set forth certain guidelines for determining whether an organization qualifies for an exemption as a charitable organization.For an organization to be considered charitable for purposes of obtaining the exemption the following six factors must be present:

(1) the benefits derived are for an indefinite number of persons;

(2) the organization has no capital, capital stock or shareholders, and does not profit from the enterprise;

(3) funds are derived mainly from private and public charity, and the funds are held in trust for the objects and purposes expressed in the charter;

(4) the charity is dispensed to all who need and apply for it;

(5) no obstacles appear to be placed in the way of those seeking the benefits; and

(6) the exclusive (primary) use of the property is for charitable purposes.

Examining the record of the present cause in light of the guidelines set out above, we view the following as being the determinative facts in deciding whether Marian Park is qualified for exemption as a charitable organization.First, the operating funds do not come primarily from public or private charity but rather from rent payments by residents and the federal subsidy (the latter pays all but one percent of the mortgage interest).Second, not everyone who needs the help can obtain it since certain financial and medical requirements must be met by applicants before they are admitted as residents; these requirements additionally serve as obstacles which are placed in the way of those seeking the benefits.Third, there have been several judicial evictions of tenants who...