Frank Lloyd Wright Foundation v. Town of Wyoming

• Decision Date: 09 November 1954
• Parties: The FRANK LLOYD WRIGHT FOUNDATION, a corporation, Appellant, v. TOWN OF WYOMING, a municipal corporation, et al., Respondents.
• Court: Wisconsin Supreme Court

Page 642

66 N.W.2d 642

267 Wis. 599

The FRANK LLOYD WRIGHT FOUNDATION, a corporation, Appellant, v. TOWN OF WYOMING, a municipal corporation, et al., Respondents.

Supreme Court of Wisconsin.

Nov. 9, 1954.

Action by plaintiff to compel the defendants to grant plaintiff an exemption from general property taxes on all or a portion of its real estate and all of its personal property, and to restrain the defendants from taking or issuing tax deeds.

Plaintiff claims exemption from taxes for the years 1944 through 1948 on all of its personal property and all of its approximately 800 acres of land under sec. 70.11(4), Stats.1947 et ante, which provides that the following property is exempt from taxation:

'* * * real and personal estate of any corporation formed solely to encourage the fine arts, organized under the laws of this state, without capital stock, and paying no dividends or pecuniary profits to its members.'

That section was amended in 1949, the provision for exemption of fine arts corporations was deleted, and other provisions were restated as sec. 70.11(3) and (4) of the 1949 statutes. Because of said amendment, the plaintiff has shifted its position and now claims exemption for the years 1944 through 1948 as an educational institution and college, as well as a corporation formed solely to encourage the promotion of the fine arts. For the years 1949 and subsequently plaintiff claims exemption for only 80 acres of real estate but for all of its personal property as an educational institution and college under sec. 70.11(3) and (4), Stats.1949.

The case was tried to the court, and findings of fact were made on which the conclusions of law were based. As set forth in appellant's appendix, the conclusions of law, in substance, determine:

'1. That the plaintiff from the time of its creation until 1949 was not a non-profit, non-stock corporation, formed solely to encourage the fine arts, under Section 70.11(4), Stats., 1947 et ante.

'2. That the plaintiff, during its existence, was not and is not now an educational institution under Section 70.11(4), Stats.

'3. That the plaintiff, during its existence, was not and is not now an incorporated (chartered) college or university under Section 70.11(3), Stats.

'4. That none of the plaintiff's personal property or real estate was exempt from taxation during the years in question.'

The circuit court entered judgment dismissing plaintiff's complaint and for costs in favor of the defendant against the plaintiff. Plaintiff appeals. Other matters will be referred to in the opinion.

Frederic Sammond, Milwaukee, Randolph R. Conners, Frederick F. Hillyer, Madison (Robert L. Wright, Washington, D. C., Fairchild, Foley & Sammond, Milwaukee, of counsel), for appellant.

Harry A. Speich, Mineral Point, Wilson H. Brue, Dodgeville, for respondents.

FAIRCHILD, Chief Justice.

The evidence shows that the Frank Lloyd Wright Foundation was incorporated as a non-profit corporation in 1940 by Frank Lloyd Wright, Ogilvanna Lloyd Wright, his wife, and William Wesley Peters, their son-in-law, as an outgrowth of an earlier association formed in 1932 known as 'Taliesin Fellowship.' Among other things, the articles of incorporation of the Foundation state that the business and purpose of the corporation shall be:

'to encourage the fine arts by the education and teaching of the art of architecture and collateral crafts.'

When Frank Lloyd Wright moved his architectural office from Chicago to the vicinity of Spring Green, he built the establishment known as Taliesin, and made it the headquarters from which he has ever since carried on his profession. Shortly after the establishment of Taliesin, Mr. Wright gathered about him cartain associates and also certain young people who were interested in his work as an architect. These associates and young people carried on the work of Mr. Wright as an architect and also operated the establishment and the large farm connected therewith. Excepting for an increased volume of business, a larger farm, and an increased number of apprentices, the plaintiff corporation has been operated in the same manner since its incorporation in 1940 as in previous years. All income of Frank Lloyd Wright is turned in to the treasury, such income consisting of his fees as an architect for the 'various projects he is supervising from year to year all over the world,' fees from his lectures, royalties from books, all amounting to from $80,000 to $150,000 a year. After payment of 'expenses' there has been a usual annual profit of from $12,000 to $40,000, for the years for which plaintiff has records, that is, for the years 1946 through 1950,--except during the year 1947, when disbursements exceeded receipts in the amount of $5,400. This action was begun August 28, 1951, so that the record of receipts and disbursements for that year is not complete. The cash income from the farm, in addition to what produce is used by the institution, is from $4,000 to $12,000 a year. Tuition from apprentices (who are arbitrarily selected by Mr. Wright) amounts to from $18,000 to $30,000 a year. If an apprentice is not able to pay all of the tuition and is considered worthy, he is admitted upon payment of such amount as he may be able to pay. The apprentices 'learn by doing.' All live from the funds of the Foundation, and all work of the Foundation is carried on cooperatively. Incidentally, it might be observed that on-the-job training is not a new concept. It has had long recognition in the indentured apprentice system administered by the state industrial commission under Ch. 106 of the Wisconsin Statutes, without suspicion that the taxation status of the industries in which the trainees are placed is altered by their presence.

The trial court found:

'That all the work of plaintiff and Frank Lloyd Wright's work as an architect is conducted at and from the establishment at Taliesin, the apprentices and associates aiding in every way, engineering, drafting, and ultimately by becoming overseers on the various projects where structures are being created by the plaintiff and assisting in the work (menial and otherwise) of operating and maintaining the establishment at Taliesin, including the large dairy and stock farm of 800 acres connected therewith. That at the time of hearing Frank Lloyd Wright or the plaintiff was engaged in supervising the construction of about ninety buildings in twenty-six states.'

It was further found that:

'Mr. Wright's projects as an architect are handled as follows: When a given contract has been awarded to him or to the Foundation as a project, Mr. Wright first designs the same and then it is turned over to the various associates and they and the apprentices do the actual work of preparing the plans and specifications and later supervising the construction in the various cities where buildings are being erected throughout the country. It is done just exactly as though done by a private office conducted by Frank Lloyd Wright * * *;'

that

'The general business manager of the Frank Lloyd Wright Foundation is Frank Lloyd Wright's son-in-law who conducts most of the general business under Frank Lloyd Wright's direction;'

that

'No one can sign a check except Frank Lloyd Wright and he may spend the funds in such manner as he sees fit. So far as the records are concerned, there is no limit to his authority in this respect;'

and that

'No one testified as to what Frank Lloyd Wright, Ogilvanna Lloyd Wright, his wife, or William Wesley Peters, their son-in-law, the three directors, receive as salary, except that all expenses of every kind and description were paid. This included cars, furniture, traveling expenses, maintenance, medical and dental fees * * *.'

The claim of exemption by the taxpayer here as an educational institution or college is based on its alleged character as a benevolent, educational institution similar to hospitals and other institutions of that nature with which they are associated in the terminology of the statute, and on the fact that its claim is governed, therefore, by the general rule providing for exemption from taxation....