Commonwealth v. Lynchburg Y. M. C. A

• Decision Date: 04 December 1913
• Parties: COMMONWEALTH v. LYNCHBURG Y. M. C. A.
• Court: Virginia Supreme Court

80 S.E. 589

115 Va. 745

COMMONWEALTH

v.LYNCHBURG Y. M. C. A.

Supreme Court of Appeals of Virginia.

Dec. 4, 1913.

1. Taxation (§ 204*)—Exemptions.

As the exemptions from taxation accorded by Const. 1902, § 183.^† are in accord with the policy of the state from an early day, the Constitution must not be construed as changing that policy; the purpose merely being to limit the power of the Legislature to grant exemptions.

[Ed. Note.—For other cases, see Taxation, Cent. Dig. §§ 321-323, 325, 332, 333; Dec. Dig. § 204.*]

2. Taxation (§ 204*) — Exemptions — Construction op Exemptions.

While provisions exempting property of individuals or private corporations from taxation should be strictly construed, Const. 1902, § 183, subsec. "e, " exempting from taxation the prop erty of religious associations, orphan asylums, Young Men's Christian Associations, hospitals and nunneries not conducted for profit, should receive a liberal construction; it being the policy of the law to exempt such property from the burdens of taxation.

[Ed. Note.—For other cases, see Taxation, Cent. Dig. §§ 321-323, 325, 332. 333; Dec. Dig. § 204.*]

3. Taxation (§ 241*)—Leases—What Constitutes.

Where a Young Men's Christian Association let rooms on the third and fourth floors to its members for sleeping or lodging purposes, such letting was not a renting or leasing of the property which deprived the association of control over it, but the occupants were lodgers, and, the association having control over the rooms, it cannot be held that they were not property belonging to and actually and exclusively used and occupied by the association, within Const. 1902, § 183, subsec. "e, " exempting such property from taxation.

[Ed. Note.—For other cases, see Taxation, Cent. Dig. §§ 389-393; Dec. Dig. § 241.*]

4. Taxation (§ 241*)—Exemptions.

Where a Young Men's Christian Association let rooms to its members who desired to lodge in the building, the fact that the association received an income from such rooms will not deprive it of the exemption from taxation, extended by Const. 1902, § 183, subsec. "e, " to all property exclusively occupied by Young Men's Christian Associations not for profit but as charity, where it appeared that the association offered many educational and religious features of which the lodgers were necessarily the chief beneficiaries; it appearing that the income from the rooms was incidental to the main purpose of the association.

[Ed. Note.—For other cases, see Taxation, Cent. Dig. §§ 389-393; Dee. Dig. § 241.*]

Error to Corporation Court of City of Lynchburg.

Proceedings by the Lynchburg Young Men's Christian Association to correct an erroneous assessment of taxes. From a judgment for petitioner, the Commonwealth brings error. Affirmed.

R. D. Yancey, Atty. Gen., for the Commonwealth.

S. A. Anderson, of Richmond, and Harrison & Long and Caskie & Caskie, all of Lynchburg, for defendant in error.

BUCHANAN, J. In a proceeding to correct an alleged erroneous assessment of the real estate of the Lynchburg Young Men's Christian Association, it was held that the property assessed was exempt from taxation under the Constitution, and an order was entered by the corporation court of that city exonerating the association from the payment of the tax assessed. To that order this writ of error was awarded upon the petition of the commonwealth.

It is not controverted here that the property upon which the tax in question was assessed is exempt from taxation if it is actually and exclusively occupied and used by the association for the purposes for which the association was incorporated, viz., "the improvement of the spiritual, mental, social and physical condition of young men and boys."

The contention of the commonwealth is that the whole of the property "is not so occupied and used, but that the third and fourth stories of the building in question are entirely occupied as dormitories or bedrooms, which are leased or rented out to occupants for a monthly rental amounting in the aggregate to about $5,000 a year, and that the prcoeeds of the same are applied to the general purposes of the association."

By section 183 of the Constitution it is declared that, except as otherwise provided therein, no other property than that which is enumerated in that section shall be exempt from taxation. Among the kinds of property enumerated (subsec. "e") is "real estate belonging to, and actually and exclusively occupied, and used by, and personal property, including endowment funds, belonging to Young Men's Christian Associations, and other similar religious associations, orphan or other asylums, reformatories, hospitals and nunneries, which are not conducted for profit, but purely and completely as charities."

By said section 183 it is further declared that "whenever any building or land, or any part thereof, mentioned in this section and not belonging to the state, shall be leased or shall be a source of revenue or profit, all such buildings and land shall be liable to taxation as other land and buildings in the same county, city, or town."

The exemptions from taxation provided for by section 183 of the Constitution are in accord with the policy of the state from an early day. The Constitutional Convention, in taking away the power of exemption from the Legislature, did not intend to change the old policy of the state on the subject, but placed limitations upon the use of property exempted so as to prevent the perversion or abuse of the liberality of the state.

It is insisted by the commonwealth that the provision of section 183 of the Constitution must receive a strict construction. The general rule is that provisions exempting property of individuals or private corporations from taxation must be strictly construed; taxation of such property being the rule, and exemption from taxation the exception. One of the reasons for this is that all such persons should bear their fair share of the burdens of taxation, and that lessening the burden of one increases the burdens of others. But as the policy of the state has always been to exempt property of the character mentioned and described in section 183 of the Constitution, it should not be construed with the same degree of strictness that applies to provisions making exemptions contrary to the policy of the state, since as to such property exemption is the rule and taxation the exception.

The real estate of the association consisted of a lot on Church street, in the city of Lynchburg, 80 feet by 132 feet, upon which was erected a five-story building, in cluding the basement, and the whole was valued at $48,000. The use made of the building by the association, as stated by the court in its finding of the facts (the correctness of which is not controverted), are as follows: "Fourth. That in the basement of this building is a billiard room, tenpin alley, swimming pool, and numerous shower and other baths. On the first floor is an office and lobby, a library and reading room and a gymnasium. On the second floor is an auditorium, a boys' department, consisting of a library, reading room, and game room, a parlor, and several educational classrooms. The third and fourth floors contain dormitories or bedrooms, of which there are 45 in number.

"Fifth. That the billiard room, tenpin alley, swimming pool, and baths are used only by members of the association, and their out of town guests; for the use of the billiard tables they pay five cents per one-half hour; for the tenpin alley five cents per game, and for the baths and swimming pool no charge is made. The office is occupied by the secretary and his assistants in and about the work of the association. The lobby is open to the public, and no fee of any sort is charged for its use. The gymnasium is used for the various classes in physical culture, taught by a director employed by the association. None but members are allowed these privileges, and no extra charge is made therefor. The auditorium is used for all public meetings, the object and purpose of which is approved by the directors; no rental is charged for its use. None but members of the association are allowed to use the boys' department, and no charge is made or money ever received for the use of this department or any of its privileges. The educational classrooms are used for the conduct of the night school. No fees are charged for instruction in this school. Some of the pupils do pay very small sums, because they prefer to do so; but these fees do not pay over one-half the cost of conducting the school, and are not compulsory. The dormitories or bedrooms are used by members of the association only. They pay for these...