Engineers & Scientists of Milwaukee, Inc. v. City of Milwaukee

• Decision Date: 09 April 1968
• Parties: ENGINEERS AND SCIENTISTS OF MILWAUKEE, INC., a Wis. corporation, Appellant, v. CITY OF MILWAUKEE, a municipal corporation, Respondent.
• Court: Wisconsin Supreme Court

Page 572

157 N.W.2d 572

38 Wis.2d 550

ENGINEERS AND SCIENTISTS OF MILWAUKEE, INC., a Wis corporation, Appellant, v. CITY OF MILWAUKEE, a municipal corporation, Respondent.

Supreme Court of Wisconsin.

April 9, 1968.

Kaumheimer, Reinhart, Boerner, Van Deuren & Norris, Milwaukee, Paul V. Lucke, Milwaukee, of counsel, for appellant.

John J. Fleming, City Atty., Maurice L. Markey, Asst. City Atty., Milwaukee, for respondent.

HEFFERNAN, Justice.

One who seeks to have his property exempt from taxation is required to bring himself within the terms of the exemption statute. This court has frequently stated that taxation is the rule and that exemption from taxation is the exception. In Bethel Convalescent Home, Inc. v. Town of Richfield (1961), 15 Wis.2d 1, 4, 111 N.W.2d 913, we quoted with approval the rule stated in Madison Aerie No. 623 F.O.E. v. City of Madison (1957), 275 Wis. 472, 476, 82 N.W.2d 207, 210:

"Statutes exempting property from taxation are to be strictly construed and all doubts are resolved in favor of its taxability. To be entitled to tax exemption the taxpayer must bring himself within the exact terms of the exemption statute."

In the recent case of Columbia Hospital Asso. v. City of Milwaukee (1967), 35 Wis.2d 660, 668, 669, 151 N.W.2d 750, 754, we pointed out that:

'* * * a strict construction is nonetheless a construction, and an exemption statute need not be given an unreasonable construction or the narrowest possible construction. A 'strict but reasonable' construction seems to be the pithy and popular statement of the rule. (Citing cases) The difference between a liberal and a strict construction is best illustrated in those cases where the meaning of the language expressing the objective intent of the legislature is doubtful; in such cases, any doubt under the strict construction rule must be resolved against the exemption. Thus an exemption should be expressed in such clear language as to leave no doubt.'

In the instant case, the findings of fact of the trial judge, other than the ultimate finding that ESM is a scientific and not an educational association, are substantially undisputed. In view of the fact that the evidentiary findings of fact made by the trial judge are conceded to be correct, this appeal does not pose the question of whether those facts are contrary to the great weight and clear preponderance of the evidence. Nor do we deem that such test is applicable to what the trial judge denominated as the ultimate conclusions of fact, for that conclusion is dependent upon the trial judge's construction of the term, 'educational association,' and as we stated in Sprague-Dawley, Inc. v. Moore (1968), 37 Wis.2d 689, ---, 155 N.W.2d 579, 'The problem presented is one of statutory construction and, therefore, is a matter of law to be decided by this court without giving any special weight to the conclusions * * *' of the trial court.

Thus, we must look to the facts ab initio to determine whether the primary use to which the building is put comes within the compass of what the legislature has denominated as an educational association. The facts are these:

ESM was organized in 1904 ¹ and presently owns a three-story building in the city of Milwaukee. The building has been remodeled for class and meeting rooms and, in addition, contains a kitchen and dining rooms, offices, and a public library housing 2,000 to 3,000 volumes of engineering texts and materials. No meals are prepared at ESM, and there are no recreational facilities, although catering services are sporadically used. ESM has seven persons in its employ: an executive secretary, an editor for its publication, Milwaukee Engineering, three secretaries, one custodian, and a part-time cleaning lady.

Membership in ESM totals approximately 1,700 and is open to graduate or registered engineers, technicians, or anyone working in the general field of engineering and science. Anual dues are $25 for members over 30 and $17.50 for those not having attained that age. In addition, members living in excess of 50 miles from Milwaukee pay an annual fee of $7.50, and student membership costs $5.00.

The activities conducted at the ESM facilities are of a diverse nature. Of prime importance are meetings held by national engineering and technical groups not having in the Milwaukee area. Approximately 20 of these groups use the ESM facilities for meetings, the purpose of which is to educate engineers and technicians on current developments, trends, and practices in their respective fields. In 1964, of the 441 meetings held at ESM, 257 were conducted by non-ESM groups. These groups generally pay a $12 room-rental fee for each meeting, the fee based entirely on maintenance costs.

Structurally, ESM is presently divided in 10 divisions, ² although during 1964, there were only six or seven. Each division is required to schedule five annual meetings with a guest speaker and one annual seminar.

The meetings of the ESM divisions are normally dinner affairs, followed by lectures or classes. Attendance is not restricted to ESM members, although non-members normally pay a slightly higher dinner fee. Approximately 3,000 fliers are mailed prior to each meeting; 1,700 are sent to ESM members and the remainder to companies, plants, newspapers, TV and radio stations, various engineering and technical schools throughout the state, and to the 700--800 members of the Wisconsin chapter of the Society of Civil Engineers.

Other activities at ESM include a speech class taught by a professor from Marquette University, a toastmaster's club, which meets bimonthly at ESM and is open to the public, and explorer scout post meetings for sons of both members and nonmembers.

In addition, ESM, in cooperation with the University of Wisconsin, sponsored four two-day institutes taught by U.W. faculty for the purpose of refreshing individuals for professional engineering examinations; 6,500 fliers were sent to Milwaukee area engineers.

ESM's vocational-guidance standing committee provided speakers for Career Days at various Milwaukee high schools and also sponsored a meeting for high school vocational-guidance counselors. The ESM building is also used by college representatives to present their curriculum to interested high school students. During 1964, seven separate panels were conducted.

ESM's scholarship committee held a benefit concert to aid 17 students taking engineering and science courses at various colleges. Each student was provided $300 per year for four years.

During 1964, ESM held three dinner dances. These affairs were restricted to members and were entirely social in nature.

Milwaukee Engineering, the ESM magazine, was published 11 times during 1964. Subscriptions are $2.00 per year, and the circulation is about 3,000. The primary purpose of the magazine is to inform interested persons of meetings of technical organizations in the Milwaukee area. It is supported by advertisements by local industrial concerns.

ESM also publishes an annual directory containing listings of engineers and scientists in the Milwaukee area and articles on recent developments in the fields of engineering and science. The directory is circulated to ESM members, other subscribers, presidents and engineers of industrial firms, and various schools throughout Wisconsin.

ESM also operates an addressograph service for other technical organizations and educational institutions. For a nominal fee, ESM informs approximately 11,500 engineers and scientists of various meetings in the Milwaukee area. During 1964, ESM addressed more than 300,000 pieces of mail, of which 100,000 were sent to engineering schools in Wisconsin.

During 1964, the civic affairs committee of ESM met with various governmental agencies and published reports in the Milwaukee Engineering relating to various urban problems such as pollution, flood control, and transportation.

ESM also conducts a monthly educational film series with emphasis on films of a scientific nature. These, in addition to various travel and adventure films, are open to the public without any admission fee.

The dean of engineering at Milwaukee School of Engineering and the former dean of engineering at Marquette testified on behalf of ESM. Both these educators, in essence, viewed ESM's program as one of continuing education for Milwaukee engineers and scientists. They acknowledged that engineering is a rapidly changing field requiring continuous refresher courses. It was their opinion that the educational institutions in Wisconsin were not fully capable of providing this service and that ESM played a vital role in the field of continuing education.

ESM operated at a loss during fiscal years 1963 and 1964. Expenses exceeded income by about $15,000 from July 1, 1963 to June 30, 1965. Even had ESM operated at a profit, its articles of incorporation prohibited the issuance of any dividends or profits to the organizers or members. The executive secretary of ESM testified that the purposes of the organization were set forth on the membership-application blank. As set forth therein, the purposes were:

A. Keeping engineers and scientists abreast of latest developments in their fields by means of meetings, seminars, discussion groups, classes, institutes, conferences, inspection trips, and related activities.

B. Promoting engineering and scientific opportunities in eastern Wisconsin through cooperation with other professional societies, civic and educational institutions, and industry.

C. Providing engineers and scientists from all branches of the professions and from different industries with opportunities to meet and exchange ideas in informal gatherings.

This review of the facts indicates that a substantial portion of the activities...