Evangelical Lutheran Church v. Shawano County

• Decision Date: 30 December 1949
• Citation: 256 Wis. 196,40 N.W.2d 590
• Parties: EVANGELICAL LUTHERAN CHURCH, v. SHAWANO COUNTY et al.
• Court: Wisconsin Supreme Court

Page 590

40 N.W.2d 590

256 Wis. 196

EVANGELICAL LUTHERAN CHURCH, v. SHAWANO COUNTY et al.

Supreme Court of Wisconsin.

Dec. 30, 1949.

O. Strossenreuther, Dist. Atty., Shawano, for appellant Shawano County.

L. J. Brunner, Shawano, for impleaded defendant and appellant Town of Wittenberg.

Lehner & Lehner, Oconto Falls, Adolph P. Lehner, Oconto Falls, Howard N. Lehner, Oconto Falls, for respondent.

BROWN, Justice.

In brief, the court found the ultimate fact to be that the Home was an orphan asylum or orphan home. This must stand unless contrary to the great weight and clear preponderance of the evidence.

Omitting as unessential here such matters as descriptions of real estate, incorporation, and facts relative to the care given the inmates of the Home, it was stipulated that 'The purpose of the plaintiff is to teach religious principles to orphans, half orphans, and neglected and dependent children * * *', and that plaintiff actually did, in the facilities of the Home, shelter, clothe, and care for such children whose number and status, year by year, was as follows:

                      No Living  One living  Two living
                       parent      parent     parents
                1938      4          19          48
                1939      4          24          35
                1940      1          18          32
                1941      1          19          36
                1942      3          36          47
                1943      2          36          37
                1944      2          34          33
                1945      4          31          35
                

The parties further stipulated that from 1908 to 1938 the township had treated the plaintiff's property as entirely exempt from taxation; from 1938 to 1945 all of it except the buildings and ten acres was assessed and the plaintiff refused and neglected to pay the taxes, claiming it to be entirely exempt. During such years plaintiff was licensed as a child welfare agency under secs. 48.35 to 48.42, Stats., to provide for neglected and dependent children, whose number at any one time was limited to fifty-five. The Home was open at all times to receive any orphan tendered to it provided there was room within such limits.

Upon these stipulations the trial court made findings of fact setting forth the assessments, failure to pay taxes under claim of exemption, the issue of tax certificates and tax deed, and the charitable nature of the institution, none of which facts or findings are in dispute. Concerning the status of the inmates, it made findings which corresponded to the stipulation, except that in 1938 the finding was that there were thirty-seven children with both parents living, whereas it had been stipulated that there were forty-eight; in 1939 that there were thirty-two, while the stipulation was thirty-five, and in 1945 that there were fifteen, though thirty-five were stipulation. There is no evidence on which the court could make such alterations and the stipulated numbers must govern if the variance is material. The court further found that when, from 1908 to 1938, the property was not taxed, it was a practical construction of the statute by the proper town and county officials. Of course it was not stipulated that the Home was or was not an orphan home or asylum and the trial court's finding that it was is a conclusion of ultimate fact drawn from the several evidenciary facts. The appeal tests such conclusion.

There was no support in the stipulation for the finding that it was common knowledge in the vicinity that the establishment was an orphans' home but we do not regard either this or the so-called practical construction of the statute as material. If this Home was an orphanage, it was entitled to complete exemption from property taxes; if it was not, contrary local opinion or practice could not prevent the public, through its town and county governments, from correcting the assessment. Neither tax liability nor exemption is established by prescription.

The fundamental principles of the tax exemption cases are that taxation is the rule and exemption the exception; exemption statutes are to be construed most strongly against the exemption; and to be exempt the taxpayer must bring himself clearly within the exact terms of the exemption statute. These are so well established and are so often stated that citations are unnecessary.

It is clear, as respondent's counsel state in their brief, that the Home is a benevolent institution which '* * * cares for children without parents, children with but one parent alive, and dependent children, all without discrimination, * * *.' But the legislature did discriminate. It granted a larger exemption in favor of orphans than it granted in favor of other dependent children unless they might be in the Home of the Friendless or the Wisconsin Home and Farm School. The stipulated figures on the Home's population unmistakably show that the use made by plaintiff of its property for the care of children who were not orphans cannot be claimed as incidental, negligible or inconsequential. In fact, that was the greater part of its activity. Ten percent of non-exempt use was sufficient to take away a claimed exemption in Cardinal Publishing Co. v. Madison, 1932, 208 Wis. 517, 243 N.W. 325, 326. In that action this court, by Rosenberry, C. J., said:

'* * * It is evident that the use made by the plaintiff of its property for nonexempt purposes cannot be claimed as incidental, negligible, or inconsequential. It is clearly substantial.

'It is sought here to justify the plaintiff's position upon the theory that the property used for the nonexempt purposes was property which was necessarily employed by the plaintiff for purposes which are exempt and that the use of the property when not employed for purposes which are exempt should not destroy the exemption. This construction would create an entirely new exemption statute. * * *'

Here the proportion of non-orphans is greater than fifty percent of the whole. Such use of its property qualifies the Home for the limited rather than the total exemption.

Both parties have called our attention to three opinions of the attorney general and to the amendment of the exemption statute in 1945. Respondent deduces therefrom a conclusion that the legislature has intended all along that this establishment was to be entirely exempt from property taxation. We have examined these matters and find they support a contrary conclusion. The first such opinion is dated August 25, 1931, and is found in 20 Op.Atty.Gen. 685. It was given in answer to a question which stated that this institution was an orphan home and asked whether its property would be considered 'a lot' under the provisions of sec. 70.11(15), Stats. The answer was that the 'lot' mentioned by the statute referred only to the Home of the Friendless and all the property of an orphan home was exempt. The second opinion is dated March 7, 1939, and is reported in 28 Op.Atty.Gen. 154. The Home had purchased additional property. The inquiry again assumed that it was an orphanage and asked whether the fact that the Home was owned by a non-resident corporation made a difference in the exemption. The attorney general replied that there was some doubt, citing authority, but concluded that the residence of the owner made no difference. Neither opinion has any persuasive effect upon the question before us because in its statement of fact that the place was an orphans' home the inquiry assumed the point here to be proved. The third opinion is dated December 4, 1944, and appears in 33 Op.Atty.Gen. 254. For the first time facts concerning the method of operation and the number and character of the children were submitted. The query was whether or not the Home was an orphanage. That is exactly the question before us. The facts stated do not differ in any essential from those stipulated here. The attorney general, by H. H. Persons, assistant attorney general, answered (p, 257):

'The character of an institution is judged upon the basis of its actual operation and its predominant activity is controlling as determinative thereof.' (Authorities cited.)

'A viewing of the facts as above set forth in accordance with these principles results in the conclusion that this institution is a home for children generally. While some of the children cared for are orphans they do not predominate. Actually the orphans are in the minority and the predominance is of children who are not orphans. * * * Thus, laudible as is the conducting of a home for needy children, that does not constitute the institution in question an 'orphan asylum' or 'orphan home' * * *.'

He advised that the Homme Children's Home did not meet the qualifications necessary for it to be accorded exemption under sec. 70.11(15), Stats. We consider his opinion a sound statement of the law upon the facts before us now. We note, also, that in the first two requests for opinions the name of the institution is Homme Orphan Home, while in the last it is Homme Children's Home, as at present. Since the change of name was not referred to by counsel and is not one of the facts stipulated, we do not care to give weight to it but we may suspect that with the times the nature of the place had changed and was reflected both in the adoption of a new and more nearly descriptive name and in the more limited exemption allowed by the Town. The former name also explains the trial court's finding, without support in the stipulation, that in common knowledge this was an orphan home and was held out to be one.

Respondent, in brief and in oral argument, urged that the amendment of the statute by the 1945 legislature promptly after the attorney general's third opinion indicates the legislature's belief that the Home was exempt under the old law and the amendment is its attempt to say so. We cannot agree, especially as the legislature had remained calm over the actual taxation of the property in all the years since 1938. If 'practical construction' has any value in this case, here is the place to apply it.

The statute as amended in 1945...