Incorporated Trustees of Gospel Worker Soc. v. Evatt

• Decision Date: 01 July 1942
• Docket Number: 28922.
• Citation: 42 N.E.2d 900,140 Ohio St. 185
• Parties: INCORPORATED TRUSTEES OF GOSPEL WORKER SOC. v. EVATT et al.
• Court: Ohio Supreme Court

42 N.E.2d 900

140 Ohio St. 185

INCORPORATED TRUSTEES OF GOSPEL WORKER SOC. v. EVATT et al.

No. 28922.

Supreme Court of Ohio

July 1, 1942

Appeal from Board of Tax Appeals.

Syllabus by the Court.

1. Property belonging to a charitable institution may not be exempted from taxation unless it is used exclusively for charitable purposes.

2. Under Section 2 of Article XII, Constitution of Ohio, and Section 5353, General Code, property which is used to produce income to be used exclusively for charitable purposes may not be exempted from taxation. The test is the present use of the property rather than the ultimate use of proceeds received from the property sought to be exempted.

Appellant a corporation not for profit, filed two complaints with the Board of Tax Appeals asking its consent to the exemption of certain real and personal property from taxation upon the ground that it constituted property belonging to an institution used exclusively for charitable purposes within the meaning of Section 5353, General Code.

The evidence shows that the entire group of buildings contains approximately 1,819,660 cubic feet, not including the new storage and office building constructed in 1940. This cubage is subdivided for various uses as follows:

Dormitories dining rooms and kitchen, 472,640 cubic feet, or 26 per cent of the total.

The chapel, used for public worship and located on the second floor above the warehouse, 41,820 cubic feet, or 2.3 per cent of the total.

The remaining 1,305,200 cubic feet, representing 71.7 per cent of the total cubage, is used for the housing of printing machinery and equipment, offices and warehouses--all used in connection with the publication of a number of religious papers, tracts, pamphlets, etc.

The evidence before the Board of Tax Appeals showed a subdivision of the 1940 assessment in the following approximate amounts:

Dormitories, dining rooms, and

kitchen .......................... $ 64,180

Chapel .............................. 18,310

Printing shops, warehouses, etc..... 177,000

Two old dwellings destroyed in

1940 ................................ 1,090

--------

Total 1940 building assessment .... $260,580

The personal property, including office furniture and fixtures, printing machine and equipment, was valued for 1940 in the sum of $132,323. The personal property in question consisted of printing equipment, manufacturing and manufactured stock and the equipment in lodging quarters and offices.

The Gospel Herald, published by appellant, had a circulation of about fifteen thousand per week, with three different subscription prices. There were a number of other publications, also sold at different subscription prices.

In answer to the question of whether the publications were sold and paid for, appellant's managing officer testified: 'Yes, they are paid for by them, but occasionally they are too poor to pay and if they are too poor to pay we do not stop the literature. We send it anyway. We contribute that.'

However, other evidence shows that a considerable amount of literature is sent without charge to various institutions.

The net proceeds for the foregoing activities were used to help finance appellant's religious and charitable activities.

The Board of Tax Appeals denied consent to the exemption by reason of its finding that the property in question was not used exclusively for charitable purposes.

The cause comes to this court pursuant to an appeal under Section 5611-2, General Code.

Hollington & Macdonald, of Cleveland, for appellant.

Thomas J. Herbert, Atty. Gen., and Perry L. Graham, Asst. Atty. Gen., for appellee William S. Evatt.

TURNER Judge.

Cases decided by this court involving the exemption from taxation of charitable institutions must be read in the light of the then applicable constitutional and statutory provisions.

As said by Chief Justice Nichols in the case of Rose Institute v. Myers, Treas., 92 Ohio St. 252, 254, 110 N.E. 924, 925, L.R.A.1916D, 1170: 'The Supreme Court has been frequently called upon to interpret the statutes exempting properties from taxation, and quite an array of reported cases on this subject are available.'

In the more than a quarter of a century which has elapsed since that was written, another substantial array of cases on the same subject has been accumulated.

Under the wording of Section 2 of Article XII of the Constitution of Ohio now in force, such exemptions are now limited to those 'institutions used exclusively for charitable purposes.' (Italics ours.)

Section 5353, General Code, provides: '* * * property belonging to institutions used exclusively for charitable purposes, shall be exempt from taxation.' (Italics ours.)

We have repeatedly held that statutes granting tax exemptions are to be strictly construed and that we indulge no presumption favorable to such exemptions.

In the recent case of In re Estate of Taylor, 139 Ohio St 417, 40 N.E.2d 936, we held: 'A right to exemption from taxation must appear with reasonable certainty in the language...