Indianapolis Elks Bldg. Corp. v. State Bd. of Tax Com'rs, 1168

• Decision Date: 28 October 1969
• Docket Number: No. 2,No. 1168,1168,2
• Parties: , 39 A.L.R.3d 624 INDIANAPOLIS ELKS BUILDING CORPORATION, Appellant, v. STATE BOARD OF TAX COMMISSIONERS, Larry R. Mohr, Durwood Strang and Herbert C. Holmes as the Members of the State Board of Tax Commissioners, Appellees. A 183
• Court: Indiana Appellate Court

Page 673

251 N.E.2d 673

145 Ind.App. 522, 39 A.L.R.3d 624

INDIANAPOLIS ELKS BUILDING CORPORATION, Appellant, v. STATE BOARD OF TAX COMMISSIONERS, Larry R. Mohr, Durwood

Strang and Herbert C. Holmes as the Members of the

State Board of Tax Commissioners, Appellees.

No. 1168 A 183.

Appellate Court of Indiana, Division No. 2.

Oct. 28, 1969.

Rehearing Denied Nov. 24, 1969.

Kurt F. Pantzer, Jr., Royse, Travis, Hendrickson & Pantzer, Indianapolis, Ging, Free & Brand, Greenfield, of counsel, for appellant.

Theodore L. Sendak, Atty. Gen. of Indiana, Indianapolis, Lloyd C. Hutchinson, James B. Droege, Deputy Attys. Gen., Indianapolis, for appellees.

PFAFF, Chief Justice.

Appellant instituted this action in the Marion Superior Court No. 1 seeking a judgment to vacate, set aside and adjudge null and void a prior order of appellee State Board of Tax Commissioners which disallowed an asserted property tax exemption on real property owned by appellant. Thereafter, venue was changed to the Hancock Circuit Court.

Trial to the court resulted in the affirmance of appellees' order and judgment denying the property tax exemption. After hearing evidence, the trial court requested that the parties submit proposed findings of fact and conclusions of law thereon. The court accepted those submitted by and for the appellees and adopted them as the court's findings of fact and conclusions of law. They are as follows:

'FINDINGS OF FACT

'1. The plaintiff, Indianapolis Elks Building Corporation, was incorporated on November 5, 1954, pursuant to the Acts of 1953, ch. 279, as amended, and as found in Burns IND.STAT.ANN. (1960) § 25--1540--25--1545, for the purposes and objects as follows:

"ARTICLE IV

"The purposes or objects for which this Corporation is formed are, to acquire, own, hold, lease, mortgage, pledge, sell convey and otherwise dispose of property, real and personal, for the sole and exclusive (benefit) of said Lodge No. 13, 'M' Benevolent and Protective Order of Elks of United States of America, a fraternal organization within the meaning of that term as used in Chapter 279, Acts of 1953 of the Laws of the State of Indiana.'

'2. Indianapolis Lodge No. 13, 'M' Benevolent and Protective Order of Elks, filed Articles of Association and Incorporation with the Secretary of State of Indiana on November 4, 1881, for the purposes and objects as follows:

"The objects of this Lodge shall be Charity, Justice, Brotherly Love and Fidelity to the members and brothers of the Order and to contribute to the relief of the widows and orphans of deceased brothers of the Order--and to further the interests of the order, pursuant and subordinate to the laws, rules and regulations of the Grand Lodge of the Benevolent and Protective Order of Elks.'

'3. On March 1, 1965, the plaintiff was the owner of the following described property: * * *, commonly known as 8603 North Township Line Road, along with certain improvements and personal property located thereon, which property is also identified for taxation purposes as Parcel No. 8--00--45462 Sec. 16 Twp. 17N Range 3E 16 Ac. & 498 C. THS., and personal property located thereon.

'4. The above described property was and is owned by the plaintiff and leased to Indianapolis Elks Lodge No. 13 and occupied and used entirely by Indianapolis Elks Lodge No. 13, its members, and their families and guests. The business of Indianapolis Elks Lodge No. 13 is conducted at regular weekly meetings and at other times through various committees, in accordance with the ritual and rules and regulations of the Grand Lodge, Benevolent and Protective Order of Elks of the United States of America.

'5. On April 19, 1965, the plaintiff filed with the Marion County Auditor its application for property tax exemption for the year 1965 upon the above-described property.

'6. On July 21, 1965, the Marion County Board of Review granted exemption to 100% of the assessed valuation of the plaintiff's real property, improvements and personal property.

'7. Thereafter, on April 15, 1966, the State Board of Tax Commissioners gave notice to the plaintiff that said Board would review the action of the Marion County Board of Review in granting said exemption on April 27, 1966, at the City-County Building, Indianapolis, Indiana. On that date, the plaintiff appeared by its officers and counsel and presented evidence to a hearing officer of the State Board of Tax Commissioners. Upon the recommendation of the hearing officer and the evidence presented in support of said plaintiff's application for exemption, the State Board of Tax Commissioners, on July 18, 1966, denied entirely any exemption upon the real property, improvements, and personal property of the plaintiff for the year 1965. Thereafter, on August 17, 1966, the plaintiff brought this action for judicial review of said order of the State Board of Tax Commissioners denying exemption to the plaintiff.

'8. The improvements on the plaintiff's above-described real property were a swimming pool and bathhouse, and a large one-story building which contained facilities for Lodge meetings, dining and social events, a kitchen, a bar, game room, and offices.

'9. The primary purposes for which the plaintiff's property was used during the taxable year 1965 were for recreational and social activities and for ritual and regular meetings of the Indianapolis Elks Lodge No. 13 and for the entertainment and promotion of good will, fellowship, and fraternalism among the members of said Lodge. In 1965, activities conducted on the Lodge property included a Fourth of July Fireworks Display, Halloween Party, and Christmas Party for needy children, and the priests at Brebeuf School were allowed to swim in the pool free of charge, all of which activities were also participated in by the members of the Lodge and their families.

'10. The nature and extent of activities on the property claimed to be exempt were also indicated by the financial statements of the Lodge which showed a gross income in 1965 of $159,088.52, which was derived from the following major sources:

Members Dues and Initiations--$58,634.48;

Liquor--$39,195.84;

Beer--$7,772.93;

Food--$42,103.30;

Bingo and Card Games--$2,005.88;

Swimming Pool--$7,820.27;

Miscellaneous--$1,555.82.

These sources of income were derived from recreational, entertainment, and social activities, such as drinking, eating, dancing, playing cards and Bingo, swimming, and enjoying the fellowship of other members, all of which were activities actually conducted on the plaintiff's property.

'11. The financial statement of the Indianapolis Elks Lodge No. 13 showed donations to charities of $1,218.71, and other evidence indicated a total of charitable contributions in the amount of $4,580.75. The total of contributions claimed by the Indianapolis Elks Lodge No. 13 to be charitable was less than three percent (3%) of its gross income in the amount of $159,088.52. Except for the Christmas Party, Halloween Party, and Fourth of July Fireworks Display, and swimming pool privileges for the priests from Brebeuf School, none of these contributions represent a charitable activity conducted on the property claimed to be exempt.

'12. The Indianapolis Elks Lodge No. 13 was not incorporated, organized, or licensed under the laws of the State of Indiana, as a 'fraternal beneficiary association or fraternal benefit society', nor did said Lodge make any contract or provision for the payment of benefits in accordance with the Indiana Insurance Law, Acts of 1935, ch. 162, §§ 181--208, as found in Burns IND.STAT.ANN. (1965) §§ 39--4401--39--4428.

'CONCLUSIONS OF LAW

'1. The real property, improvements and personal property owned by the plaintiff, Indianapolis Elks Building Corporation, for the taxable year 1965, were not used exclusively for charitable purposes within the meaning of the Acts of 1919, ch. 59, § 5, as amended, and as found in Burns IND.STAT.ANN. (1967 Supp.) § 64--201, Part Fifth, and the Acts of 1953, ch. 279, § 5, as amended, and as found in Burns IND.STAT.ANN. (1967 Supp.) § 25--1544, and Article 10, Section 1 of the Constitution of the State of Indiana.

'2. The real property, improvements, and personal property of the plaintiff, Indianapolis Elks Building Corporation, during the taxable year 1965, were not used exclusively for any fraternal purposes within the meaning of any provision of the Acts of 1919, ch. 59, § 5, as amended, and as found in Burns IND.STAT.ANN. (1967 Supp.) § 64--201.

'3. The real property, improvements, and personal property of the plaintiff, Indianapolis Elks Building Corporation, during the taxable year 1965, were not used exclusively by and for the purposes of any fraternal beneficiary association, incorporated, organized, or licensed under the laws of the State of Indiana, within the meaning of the Acts of 1919, ch. 59, § 5, as amended, and as found in Burns IND.STAT.ANN. (1967 Supp.) § 64--201, Part Eleventh.

'4. The action of the defendants, State Board of Tax Commissioners, and the constitutent members of said Board, in denying exemption from taxation to all of the real property, improvements and personal property of the plaintiff, Indianapolis Elks Building Corporation, for the year 1965, was not arbitrary, capricious, or illegal, but was a reasonable exercise of the authority granted by law to said State Board of Tax Commissioners, and therefore, the denial of exemption by said Board is upheld and the relief sought by the plaintiff is denied.'

Appellant, Indianapolis Elks Building Corporation, submitted its motion for new trial, and the court's refusal to grant said motion is the error assigned. The motion for new trial and the memorandum in support thereof control the issues on appeal, and for this reason we recite them herein:

'MOTION FOR NEW TRIAL

'The plaintiff in the above-entitled cause moves the Court for a new trial herein on each of the following grounds:

'1. The decision of the court is contrary to law.

'2...