Douglas County v. OEA Senior Citizens, Inc.

• Decision Date: 17 November 1961
• Docket Number: Nos. 34956,35055,s. 34956
• Citation: 172 Neb. 696,111 N.W.2d 719
• Parties: COUNTY OF DOUGLAS, State of Nebraska and Joseph Stolinski, County Assessor of Douglas County, Nebraska, Appellees, v. OEA SENIOR CITIZENS, INC., Appellant, Methodist Memorial Homes, Inc., Presbyterian Welfare Foundation, Inc., dba Clark Jeary Memorial Manor, and Sarah Ann Hester Memorial Home, Amici curiae. OEA SENIOR CITIZENS, INC., a Corporation, Appellant, v. COUNTY OF DOUGLAS, State of Nebraska and Joseph Stolinski, County Assessor of Douglas County, Nebraska, Appellees.
• Court: Nebraska Supreme Court

Page 719

111 N.W.2d 719

172 Neb. 696

COUNTY OF DOUGLAS, State of Nebraska and Joseph Stolinski, County Assessor of Douglas County, Nebraska, Appellees, v. OEA SENIOR CITIZENS, INC., Appellant, Methodist Memorial Homes, Inc., Presbyterian Welfare Foundation, Inc., dba Clark Jeary Memorial Manor, and Sarah Ann Hester Memorial Home, Amici curiae.

OEA SENIOR CITIZENS, INC., a Corporation, Appellant, v. COUNTY OF DOUGLAS, State of Nebraska and Joseph Stolinski, County Assessor of Douglas County, Nebraska, Appellees.

Nos. 34956, 35055.

Supreme Court of Nebraska.

Nov. 17, 1961.

Syllabus by the Court.

1. By the terms of Article VIII, section 2, of the Constitution of Nebraska, the Legislature is empowered to exempt from taxation by general law property which is owned and used exclusively for educational, religious, or charitable purposes, when such property is not owned or used for financial gain or profit to the owner or user.

2. By section 77-202, R.R.S.1943, the Legislature implemented Article VIII, section 2, of the Constitution of Nebraska, so as to exempt from taxation property owned and used exclusively for educational, religious, or charitable purposes, when such property is not owned or used for financial gain or profit to either the owner or user.

3. The question of taxability of property being a subject of inquiry yearly and in the first instance each year by the county assessor, an adjudication that it is exempt from taxation in any one year is not res judicata of the question of whether or not it is exempt in any succeeding year.

4. An independent action is proper in which to determine whether or not property which has been placed upon the assessment rolls is exempt from taxation, and this is true notwithstanding the availability of a statutory remedy.

5. The Summary Judgments Act authorizes summary judgment where the moving party is entitled to judgment as a matter of law, where it is clear what the truth is, and where no genuine issue remains for trial.

6. Property which is owned and used primarily for the purpose of furnishing low-rent housing is not property owned and used exclusively for charitable purposes within the meaning of the Constitution and statutes of the State of Nebraska.

No. 34956:

Frank C. Heinisch, Eisenstatt & Lay, Omaha, for appellant.

John J. Hanley, County Atty., John C. Burke, Deputy County Atty., Arthur D. O'Leary, Tax Atty., William F. Ryan, Omaha, for appellees.

Kenneth H. Dryden, Kearney, Joseph Emmert, Omaha, Wade Stevens, McCook, for amici curiae.

No. 35055:

Eisenstatt & Lay, Omaha, for appellant.

John J. Hanley, County Atty., Arthur D. O'Leary, Tax Atty., Omaha, for appellees.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH and BROWER, JJ.

YEAGER, Justice.

Here are two actions both of which are so related to the same subject and the same parties as to permit them to be regarded as a single action calling for adjudication upon but one basic theory of relief. The first one, numerically speaking, contains the basic theory and the second may well be said to be secondary and incidental to the first.

In the first action the County of Douglas, State of Nebraska, and Joseph Stolinski, County Assessor of Douglas County, Nebraska, are plaintiffs and appellees. OEA Senior Citizens, Inc., a corporation, is defendant and appellant.

By their petition the plaintiffs declared their own capacities as plaintiffs and the legal status of the defendant, which was that of a nonprofit and nonstock corporation, organized under the laws of the State of Nebraska. The petition was filed on October 23, 1959. Therein it was alleged that the defendant was the owner of certain real estate in Douglas County, Nebraska, on which was located housing facilities, where services were provided for elderly persons, and where an educational program in the field of geriatrics designed to contribute to health, happiness, and usefulness in longer living was to be carried out.

It was further alleged that previous to March 1, 1959, the board of equalization of Douglas County, Nebraska, determined that this property was exempt from taxation; that on March 1, 1959, Joseph Stolinski in his capacity as county assessor determined that it was not exempt and placed it on the tax rolls for taxation; that on June 22, 1959, on complaint of the defendant the board of equalization found that it was exempt and again removed it from the tax rolls; and that on August 25, 1959, the board of county commissioners of Douglas County, Nebraska, directed the county attorney to commence this action the purpose of which was to have determined in this, a declaratory judgment action, whether or not this property was exempt from taxation under the Constitution and laws of the State of Nebraska. The prayer was for a declaratory judgment under sections 25-21,149 to 25-21,164, R.R.S.1943, declaring that the property involved was not used by the defendant exclusively for educational, religious, or charitable purposes, but that it was owned and used for financial gain or profit.

To the petition the defendant filed a demurrer. The grounds of the demurrer were (1) that the court was without jurisdiction of the person or the subject matter, (2) that there was a defect of parties defendant, and (3) that the petition did not state facts sufficient to constitute a cause of action. This demurrer was overruled.

For the purpose of clarity in the consideration of the substantial issue involved in the case it will be said here that the demurrer was, as will later appear, properly overruled. There is but one substantial issue and, as will be made clear later herein, it is that of whether or not the property in question was exempt from taxation under the Constitution and statutes of the State of Nebraska. Only one ground of the demurrer is mentioned in the assignments of error. That one is that the district court did not have jurisdiction of the subject matter. This is based on the theory that the matter involved was not properly one upon which an adjudication could be made in a declaratory judgment action.

Declaratory judgments and to what they may extend are provided for in sections 25-21,149 and 25-21,150, R.R.S.1943. It is not deemed necessary to quote their provisions herein in their entirety since there is no question in this case as to the contents and meaning of these provisions. For clarity, however, it appears advisable to quote section 25-21,149, R.R.S.1943, which is the definitive provision, as follows: 'Courts of record within their respective jurisdictions shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declarations shall have the force and effect of a final judgment or decree.' The true question is whether or not there is a present right to resort to the declaratory judgment process to determine the question under consideration.

On the face of the record it appears that this should be determined adversely to the defendant by reason of the declaration and prayer of an answer which the defendant filed in the case by which it is bound. However the matter will be considered at length later herein. Therein the defendant points out that this is the subject of a declaratory judgment and prays that the court 'render a declaratory judgment.' This was a part of the answer on which the case as tried. See, In re Estate of McCleneghan, 145 Neb. 707, 17 N.W.2d 923; Barry v. Barry, 147 Neb. 1067, 26 N.W.2d 1.

By the answer which has been mentioned the capacities of the plaintiffs alleged in the petition and the allegations therein contained as to the organization and existence of the defendant, the ownership of the property in question, and as to what had been done by the plaintiffs, the board of equalization, and the defendant starting with the designated incident prior to March 1, 1959, and the specifically dated incidents occurring thereafter to and including August 25, 1959, were admitted.

Further answering the defendant described the property, its present and prospective uses, its plan of management, and its maintenance.

It pleaded that the building on the land was 12 stories in height and in it were 132 identical one-room efficiency units above the first floor and on the first floor were a dining room, lounge, office, and an apartment for a custodian; that a custodian, cook, and nurse were provided; that senior citizens living in the building served on a voluntary basis in the kitchen, dining room, and office and in the performance of other duties in the building; that regular programs were arranged for the senior citizens for community services, are and craft work, and for entertainment and social activities; that a charge of $70 a month for each unit was made to the occupants toward cost of maintenance and amortization of a mortgage on the property; that it was contemplated that any excess required for cost of maintenance and amortization would be paid by the Omaha Education Association; that no part of the income was for financial gain or profit to the defendant or the occupants of the building; and that the meals were served on a cost basis.

It further pleaded that it was a nonprofit and nonstock corporation organized and existing under sections 21-1501 to 21-1508, R.R.S.1943; that it owned and used this property in trust for the Omaha Education Association; that as owner it did not own or use it for financial gain or profit to either the owner or user; and that thus it was exempt from taxation.

It appears that although this is not a complete summary of the answer it is sufficient upon which to present the question on which determination is required.

A portion of the answer not summarized sets forth what a...