Cox v. Dillingham

• Decision Date: 23 September 1947
• Docket Number: 32036.
• Citation: 184 P.2d 976,199 Okla. 161,1947 OK 250
• Parties: COX et al. v. DILLINGHAM, County Treasurer.
• Court: Oklahoma Supreme Court

184 P.2d 976

199 Okla. 161, 1947 OK 250

COX et al. v. DILLINGHAM, County Treasurer.

No. 32036.

Supreme Court of Oklahoma

September 23, 1947

Appeal from District Court, Washington County; James T. Shipman Judge.

Action by Gerald J. Cox and another against Marvin H. Dillingham Treasurer of Washington County, to recover the amount of taxes paid by plaintiffs on property claimed to be exempt from taxation. From a judgment of dismissal, plaintiffs appeal.

Reversed with directions.

Syllabus by the Court.

1. By the plain provisions of Art. 10, section 6 of the Constitution, the exemption of the classes of property therein specified is determined by the use to which the property is devoted. It is not essential that the property be owned by the person using it for a purpose which brings it within the constitutional exemption.

2. The constitutional provision exempting from taxation 'property used exclusively for schools' is self-executing. No legislation is necessary to effect its purpose, nor may the exemption therein granted be impaired limited, or destroyed by legislation.

3. If, by reason of the constitutional exemption, property is not taxable county officials have no jurisdiction or power to levy a tax against the same, and any levy so made is void. If the levy is void the statutory proceeding by appeal from the Board of Equalization is not exclusive.

A. O. Harrison, of Bartlesville, for plaintiffs in error.

J. D. Plunkett, County Atty., of Bartlesville, for defendant in error.

LUTTRELL Justice.

This action was brought by plaintiffs, Gerald J. Cox and Paul F. Dahlgren, against Marvin H. Dillingham, County Treasurer of Washington County, for the recovery of taxes paid on property claimed to be exempt. The case was tried to the court without the intervention of a jury and upon an agreed statement of facts, and the trial court sustained the motion of the county attorney to dismiss the action, the motion being based upon the grounds that the plaintiffs failed to make out a case, and that the court had no jurisdiction to determine the matter. Plaintiffs appeal.

The petition filed by plaintiffs and the agreed statement upon which the case was tried disclose without dispute that the plaintiff Paul F. Dahlgren is the owner of 16.42 acres of land in Washington County; that on May 15, 1942, Dahlgren and his wife leased said property to Gerald J. Dox for a term of three years from June 1, 1942, at an annual rental of $10 per year, plus all taxes assessed and legally payable against the property during said term and plus premiums on insurance to be carried on the property. Said lease provided that the land, which had theretofore been the home of lessors, should be used exclusively for the operation of a school for boys or girls; it provided further that at the end of the three year term if lessee should conduct a meritorious school during such period, lessee could renew the lease for an additional term of five years, and that same might thereafter be extended for successive five-year periods not to exceed twenty-three years from June 21, 1942. After the first three years, the rental to be paid by lessee, in addition to that fixed in the lease for the first three years, was to be either five percent of the gross operating receipts received by lessee, less any amounts paid as taxes or insurance, or ten percent of the net earnings received by lessee from the operation of the school, less any amount paid for taxes or insurance, whichever should be the greater. The lease further provided that lessors could terminate it at any time upon the breach of any conditions by lessee, and that the contract should never be construed as constituting a partnership between lessors and lessee. It also granted an option to lessee to purchase the property.

On February 5, 1943, Dahlgren filed with the County Assessor of Washington County, a statement of property for taxation, containing the description of the above described property with this notation: 'Exempt by reason of being used exclusively for school purposes and under lease therefor'. The Board of Equalization of Washington County disregarded the claimed exemption and placed a taxable valuation upon the property. Plaintiffs did not appeal from the action of the Board, but paid the taxes under protest and thereafter brought this action to recover the taxes so paid. At the trial it was stipulated that the property in question 'is occupied now by a school and used exclusively for school purposes and has been since December 31, 1942.' The cause was tried on May 31, 1944.

Plaintiffs contended in the this court, and here contend, that the property is exempt from taxation under the express provisions of Act. 10, section 6 of the Constitution. That section, in so far as applicable, provides as follows: '* * * all property used * * * exclusively for schools * * * shall be exempt from taxation * * *.' Plaintiffs contend that the property is being used exclusively for school purposes and therefore comes squarely within the exemption above quoted. They assert that it is the use to which the property is devoted, and not the ownership or the pecuniary profit to the owners, which determines whether or not the property is exempt from taxation.

This court has repeatedly held that in ascertaining whether or not property is exempt from taxation under the provisions of our Constitution, the purpose for which such property is used is the determinative factor.

In Board of Commissioners of Tulsa County v. Tulsa Business College, 150 Okla. 197, 1 P.2d 351, we said: 'It is the use to which the property is devoted and not the presence or absence of pecuniary profit to the owners wich determines whether or not the property is exempt from taxation.'

In Board of Commission of Tulsa County v. Sisters of the Sorrowful Mother, 141 Okl. 32, 283 P. 984, we said: 'The purpose for which property is used in the test to be applied in determining whether such property is exempt from taxation, and that use is a question of fact to be determined from the evidence.'

In Beta Theta Pi Corporation v. Board of Commissioners, 108 Okla. 78, 234 P. 354, 356 we specifically held that ownership of property used for such purposes was immaterial. Therein we said: 'It will be observed from a reading of said section 6, art. 10 of the Constitution, that the constitutional test as to whether certain property comes within the classes exempted by the Constitution, is the 'use' to which it is put. It is immaterial what name the institution, organization, or society may bear, or who may own the property in question. But it is the use to which the property is dedicated and devoted which constitutes the test as to whether it is exempt. While it is clear that the 'use,' to which property is dedicated and devoted constitutes the test under the Constitution and needs no support from other decisions or authorities, yet such view is well supported by decisions of other states wherein the same subject, under similar constitutional provisions, has been under consideration and passed upon.' (Citing authorities.) In Oklahoma County v. Queen City Lodge No. 197, I.O.O.F., 195 Okl. 131, 156 P.2d 340, we approved and followed the rule announced in the above cases, and overruled cases holding that the exemption extended to income.

While in the above cases the parties using the property upon which the exemption was upheld were also the owners, the rule announced in those cases, in our judgment, applies also to cases where the property, as here, is owned by one person and is used by another.

In Scott v. Society of Russian Israelites, 59 Neb. 571, 81 N.W. 624, the owner of property leased it to a religious organization, which agreed to pay all taxes against the property in addition to a monthly rental. The property was used by the lessee solely for religious purposes. The statute of the State of Nebraska exempted property 'used exclusively for * * * school, religious, cemetery, and charitable purposes'. Comp.St.1899, c. 77, art. 1, § 2. In holding that use was the decisive test in determining whether the property was exempt or not, the court said 'It is the exclusive use for the purpose named which determines whether the property is subject to the burden of taxation or not. [Omaha] Medical College v. Rush, 22 Neb. 449...