Horton v. Colorado Springs Masonic Bldg. Soc.

• Decision Date: 06 May 1918
• Docket Number: 8850.
• Citation: 64 Colo. 529,173 P. 61
• Parties: HORTON, County Treasurer, v. COLORADO SPRINGS MASONIC BLDG. SOC.
• Court: Colorado Supreme Court

173 P. 61

64 Colo. 529

HORTON, County Treasurer, v. COLORADO SPRINGS MASONIC BLDG. SOC.

No. 8850.

Supreme Court of Colorado, En Banc.

May 6, 1918

Error to District Court, El Paso County; J. W. Sheafor, Judge.

Injunction by the Colorado Springs Masonic Building Society against Albert H. Horton, as County Treasurer of El Paso county. Decree for complainant, and defendant brings error. Affirmed.

White and Teller, JJ., dissenting.

Wills L. Strachan, Co. Atty., of Colorado Springs and Fred Farrar, Atty. Gen., and W. B. Morgan, Asst. Atty Gen., for plaintiff in error.

G. W Musser, of Denver, and C. H. Dudley and E. P. Hufferd, both of Colorado Springs, for defendant in error.

John M Maxwell, of Denver, amicus curiae.

HILL C.J.

The defendant in error obtained an injunction restraining the plaintiff in error, as treasurer of El Paso county, from collecting any taxes for the year 1914 levied upon a building and its grounds owned by the defendant in error, the Colorado Springs Masonic Building Society. The complaint alleges that said building and lots whereon it is situate are used exclusively for strictly charitable purposes. The answer denies this, and, in addition, alleges that said building has been rented to certain fraternal organizations as a place for their meetings and entertainments. The replication admits that plaintiff rents the property to certain fraternal organizations, but alleges that said organizations are such as are commonly known as Masonic organizations, and that together the said organizations are the sole stockholders of plaintiff, save and except 10 qualifying shares held by the directors thereof, and that said rental charge is made to said several organizations solely as a method of equalizing among them the burden of the maintenance and operation of said property, agreed upon as fair and equitable, and for no other purpose.

Trial was to the court. The findings were in favor of the plaintiff, and the property held to be exempt from taxation. According to the issues, this had to include a finding that the lots and building thereon were used exclusively for strictly charitable purposes. The contention is that the evidence is insufficient to sustain this finding. The testimony is uncontradicted. It shows that the defendant in error is a society organized not for profit; that the principal purpose of its organization was to construct and own a temple or lodge building to be used as a home for the several Masonic organizations of Colorado Springs, including a collateral order known as the Eastern Star; that it was organized by these several Masonic bodies who own all of its stock with the exception of the 10 shares held by its 10 directors. Its by-laws provide that none of its stock shall be sold or transferred to any one, except these various Masonic bodies, etc., or their trustees for the use of said bodies. It is also shown that no other bodies, societies, persons, or corporations have used said building since it was erected. The testimony also discloses that these Masonic societies derive their income from annual dues paid by their members, fees for initiation and donations; that out of this are paid the operating expenses of this building and the maintenance of these several lodges, and that the balance is used in relief and charitable work; that they contribute from their fund to the relief of their members, wives, widows, and orphans, and other Masons who come there for their health and require assistance; that they are not limited in these respects to this class of persons, but frequently aid other charitable organizations and needy persons not connected with Masonic societies; that they maintain a plot in a cemetery, furnishing graves and headstones for individuals, and frequently pay the entire expense of burial; that some of them contribute to the furnishing of a room in a hospital for the general use of the hospital; that each of said respective bodies has a relief committee, and there is a general Masonic relief board to which all contribute; that they visit the sick and extend advice and assistance to the families of sick persons; that they inculcate and teach to their members respect and support of government and legal authority, right living, service to their fellowmen, morality, temperance, and other virtues; that they not only aid in a material way by furnishing food, clothing, and other necessities, but that they aid and comfort mental distress and alleviate pain and suffering, all of which is done without compensation, gain, or profit; that no one has a right to demand or receive anything from them; that they accept and give upon the call of humanity, and minister to man, woman, and child as far as their ability as societies will permit; that frequently deficiencies occur in their treasury, which are made up by donations or other legitimate means.

Per the great weight of authority, this testimony is sufficient to justify a conclusion that these societies are charitable institutions, and that their purposes are charitable purposes. Burdine v. Grand Lodge, 37 Ala. 478; Mayor, etc., of Savannah v. Solomon's Lodge, 53 Ga. 93; Massenburg et al. v. Grand Lodge, 81 Ga. 212, 7 S.E. 636; City of Indianapolis v. Grand Lodge, etc., 25 Ind. 518; Morrow, Treasurer, v. Smith, Ex'r, 145 Iowa 514, 124 N.W. 316, 26 L.R.A. (N. S.) 696, Ann.Cas. 1912A, 1183; Mason et al. v. Zimmerman et al., 81 Kan. 799, 106 P. 1005; Masonic Home v. Sedgwick Co., 81 Kan. 859, 106 P. 1082, 26 L.R.A. (N. S.) 702; State v. Board of Assessors, 34 La. Ann. 574; Fitterer v. Crawford, 157 Mo. 51, 57 S.W. 532, 50 L.R.A. 191; Plattsmouth Lodge v. Cass County, 79 Neb. 463, 113 N.W. 167; State v. Addison, 2 S.C. 499; Lodge v. Nashville, 127 Tenn. 248, 154 S.W. 1141.

Section 5 of article 10 of our Constitution provides that:

'Lots, with the buildings thereon, if said buildings are used solely and exclusively for religious worship, for schools, or strictly charitable purposes, * * * shall be exempt from taxation, unless otherwise provided by general law.'

The only law that we have on the subject is section 5545, Revised Statutes 1908. It provides that----

'The following classes of property shall be exempt from taxation, to wit: * * *

'Second. Buildings used exclusively for religious worship, for schools or for strictly charitable purposes, with the grounds whereon the same are situated.'

The question for determination is whether this building (Masonic Temple, so called) is used for strictly charitable purposes within the meaning of our Constitution and statutes. The plaintiff in error appears to concede, were the entire building used as lodge rooms and for lodge room purposes, there would be more reason for the contention that it would come within these provisions; but calls attention to testimony disclosing that while the second floor of the building contains three lodge rooms, with the usual smaller rooms (all of which are used for strictly lodge purposes), the first floor contains a reading room for the use of the members of these different lodges, a smoking and reception room, and another large room which is sometimes used in connection with these other rooms for dinners and dances given by members of these different bodies; that sometimes these entertainments are restricted to members and sometimes they include nonmembers. He concedes that said societies use the surplus or income from all sources, after paying running expenses, for strictly charitable purposes. He also concedes that the defendant in error pays no dividends; that none of its officers receive any remuneration for their work; that the rental charge to the different lodges is made solely to cover the actual and necessary operating expenses of the building, and that it never has thus far exceeded or equaled such expenses; that while an admission fee us usually charged for dances, the receipts above actual expenses are, like other funds, devoted to the maintenance of the building. The defendant in error maintains in the building a stand for the sale of cigars, tobacco, playing cards, and gum to those privileged to be there, but no profit is derived therefrom, and thus far it has been conducted at a loss.

In considering this question we agree with counsel for plaintiff in error that in one sense it is immaterial what kind of an organization owns this property; that the test is the use made of the property; but, in deciding this question, it is proper to consider the surrounding circumstances. When thus considered, we are of opinion that, for the purposes of taxation, the same rule applies to it as would were it owned and directly controlled by these sundry Masonic societies. Vol. 37 Cyc. 927; Glengary Co. v. Boehmer, 28 Colo. 1, 62 P. 839; Kappa Kappa Gamma v. Pearcy, as Treasurer, etc., 92 Kan. 1020, 142 P. 294, 52 L.R.A. (N. S.) 995.

There are two lines of authorities concerning the rule of construction applied to exemption from taxation of properties like that under consideration--one has adopted the strict rule of construction; the other, the liberal or broader rule, as it is termed. This court has heretofore adopted the liberal or broader rule.

In Cathedral of St. John v. County Treasurer, 29 Colo. 143, at page 145, 68 P. at page 272, the court says:

'The general rule is that exemptions from taxation are strictly construed, but this rule is not applied with full vigor to the character of exemptions under consideration. In other words, provisions exempting property used for educational purposes are less strictly construed than those exempting property used for ordinary gain or profit. * * * The words 'solely' and 'exclusively,' employed in the provisions of the law under consideration, are words of limitation, which, in their ordinary sense,

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