Daughters of St. Paul, Inc. v. City of San Antonio

• Decision Date: 10 February 1965
• Docket Number: No. 14342,14342
• Citation: 387 S.W.2d 709
• Parties: DAUGHTERS OF ST. PAUL, INC., Appellant, v. CITY OF SAN ANTONIO et al., Appellees.
• Court: Texas Court of Appeals

Page 709

387 S.W.2d 709

DAUGHTERS OF ST. PAUL, INC., Appellant, v. CITY OF SAN ANTONIO et al., Appellees.

No. 14342.

Court of Civil Appeals of Texas, San Antonio.

Feb. 10, 1965.

Rehearing Denied March 11, 1965.

Pat Maloney, San Antonio, for appellant.

Sam S. Wolfe, City Atty., William R. Ward, Asst. City Atty., Arley V. Knight, San Antonio, for appellees.

MURRAY, Chief Justice.

This suit was instituted by appellant, Daughters of St. Paul, Inc., duly incorporated as a non-profit corporation, doing business as St. Paul Catholic Book and Film Center, against appellees, City of San Antonio and San Antonio Independent School District, seeking a declaratory judgment exempting its property at 114 East Main Plaza, located within the corporate limits of both of appellees, from any ad valorem tax. Appellees answered denying that appellant was entitled to an ad valorem tax exemption on its property at 114 East Main Plaza, and by way of cross-action sought to collect past due taxes on such property, together with interest and penalties for the years 1958 to 1962, both inclusive, amounting to the total sum of $4,245.59. Appellees' cross-action was not seriously contested.

The cause was submitted to the court, a jury being waived, upon an agreed statement of facts, plus the deposition of Sisters Mary Rosalba, with exhibits attached thereto. The trial court denied any tax exemption on the property and rendered judgment for the past due taxes, from which judgment the Daughters of St. Paul, Inc., has prosecuted this appeal.

Appellant's first point is that the court erred in holding that it is not entitled to ad valorem tax exemption within the meaning of Article VIII, Sec. 2, of the Texas Constitution, Vernon's Ann.St.

Art. VIII, Sec. 2, reads in part as follows:

'All occupation taxes shall be equal and uniform upon the same class of subjects within the limits of the authority levying the tax; but the legislature may, by general laws, exempt from taxation * * * institutions of purely public charity; * * *.'

Appellant bases its claim for a tax exemption upon the provision relating to 'institutions of purely public charity.'

The authority given to the Legislature in the above constitutional provision has been exercised and its action, insofar as it relates to institutions of purely public charity, is found in Sec. 7 of Art 7150, Vernon's Ann.Civ.Stats., reading as follows:

'Public charities.--All buildings belonging to institutions of purely public charity, together with the lands belonging to and occupied by such institutions not leased or otherwise used with a view to profit, unless such rents and profits and all moneys and credits are appropriated by such institutions solely to sustain such institutions and for the benefit of the sick and disabled members and their families and the burial of the same, or for the maintenance of person when unable to provide for themselves, whether such persons are members of such institutions or not. An institution of purely public charity under this article is one which dispenses its aid to its members and others in sickness or distress, or at death, without regard to poverty or riches of the recipient, also when the funds, property and assets of such institutions are placed and bound by its laws to relieve, aid and administer in any way to the relief of its members when in want, sickness and distress, and provide homes for its helpless and dependent members and to educate and maintain the orphans of its deceased members or other person.'

Appellant contends that a liberal construction should be given to the above provisions of the constitution and statutes, so as to include it within the exemption provided. The Supreme Court of Texas in River Oaks Garden Club v. City of Houston, 370 S.W.2d 851, has decided this question against appellant's contention in the following language:

'The courts of some states construe constitutional and statutory tax exemptions accorded institutions of purely public charity liberally, some strictly. See Zollman's American Law of Charities, pp. 460-468. The courts of Texas have been committed to a strict construction since an early date. See Morris v. Lone Star Chapter No. 6, Royal Arch Masons, 68 Tex. 698, 5 S.W. 519. Moreover, a strict construction seems more in harmony with the intent of the people when they adopted the Constitution in 1876, and conforms to our announcement in Cox v. Robison, 105 Tex. 426, 150 S.W. 1149, 1151, that 'The fundamental rule for the government of courts in the interpretation or construction of a Constitution is to give effect to the intent of the people who adopted it.' The action of the delegates in the Constitutional Convention of 1875 on various tax exemption proposals, as reflected in the Journal of the Convention, indicates that they intended that exemptions from taxes be narrow and limited.

'In Morris v. Lone Star Chapter No. 6, Royal Arch Masons, 68 Tex. 698, 5 S.W. 519, 520-521, we stated the underlying reason for a strict construction of the 'used exclusively' provision of the constitutional tax exemption, as follows:

"The reason of these rules would seem to be that it is but just and equitable that the property of all persons and associations of persons should bear the burdens of government in equal proportion; and hence it is to be presumed that the law-makers did not intend to make an exception in favor of any class unless that intention be clearly expressed.'

'In Massachusetts General Hospital v. Inhabitants of Belmont, 233 Mass. 190, 124 N.E. 21, 25, the Supreme Judicial Court of Massachusetts stated the rationale for exemption from taxes of property of charitable instiutions as well as a sound reason for strict construction in these words:

"One ground upon which exemptions from taxation of charitable institutions like the complainant can be justified in a constitutional sense is that they minister to human and social needs which the state itself might and does to a greater or less extent undertake to satisfy. The ultimate obligation of the state thus is discharged by the private charity. To that extent the state is relieved of its burden. (In re) Opinion of (the) Justices, 195 Mass. 607, 609, 84 N.E. 499. An exemption from taxation is in the nature of an appropriation of public funds, because, to the extent of the exemption, it becomes necessary to increase the rate of taxation upon other properties in order to raise money for the support of government."

With the above holdings of the Supreme Court in mind, let us examine the facts of this case. The facts are largely stipulated and are undisputed. Appellant was incorporated on September 12, 1963, under the Texas Non-Profit Corporation Act with domicile...