Most Worshipful Grand Lodge of Free and Accepted Masons of State of Ala. v. Norred

• Court: Alabama Supreme Court
• Writing for the Court: MADDOX; HORNSBY
• Citation: Most Worshipful Grand Lodge of Free and Accepted Masons of State of Ala. v. Norred, 603 So.2d 996 (Ala. 1992)
• Decision Date: 14 August 1992
• Parties: MOST WORSHIPFUL GRAND LODGE OF the FREE AND ACCEPTED MASONS OF the State of ALABAMA, v. Sarah NORRED, as tax collector of Montgomery County, et al. 1910629.

Page 996

603 So.2d 996

MOST WORSHIPFUL GRAND LODGE OF the FREE AND ACCEPTED MASONS OF the State of ALABAMA, v. Sarah NORRED, as tax collector of Montgomery County, et al.

1910629.

Supreme Court of Alabama.

Aug. 14, 1992.

T. Dudley Perry, Jr. of Perry & Perry, Montgomery, for appellant.

Thomas T. Gallion III of Haskell Slaughter Young Johnston & Gallion, Montgomery, for appellees Marvin Driver and Sarah Norred.

Jimmy Evans, Atty. Gen., and Ron Bowden, Counsel, and Gwendolyn B. Garner, Asst. Counsel, Dept. of Revenue, for appellee James M. Sizemore, Jr.

MADDOX, Justice.

The issue presented in this case is whether the Most Worshipful Grand Lodge of the Free and Accepted Masons ("the Grand Lodge") is exempt from the payment of taxes on property it owns and leases to commercial enterprises because the rental income was "dedicated to charitable purposes." The property at issue is located near the intersection of Zelda and Vaughn Roads in Montgomery, Alabama, and is known as the Hillwood Shopping Center. To decide the issue presented, we must construe the provisions of two legislative Acts--Act No. 317 of the 1859 Alabama Legislature, and Act No. 2 of the 1950 Alabama Legislature (amending Act No. 317). We shall collectively refer to Act No. 317 as amended by Act No. 2 as "the Act." The trial court, after examining the case law and the Act, concluded that "the Hillwood Shopping Center property is not 'dedicated to charitable purposes' as required by the Act." From our review of the Act, and the applicable case law, we conclude that the trial court was correct in its holding. We, therefore, affirm.

The facts are undisputed. In 1821, the Alabama Legislature incorporated the Grand Lodge under the name "Most Worshipful Grand Lodge of Ancient Free Masons of Alabama and its Masonic Jurisdiction." 1821 Ala. Acts 22-23. The 1821 Act gave the Grand Lodge the right to create subordinate lodges, to own and sell land not exceeding $20,000 in value, to sue and be sued in its corporate name, and to receive donations of real property, not exceeding $10,000 in value, and personal property, of any value, from individuals.

In 1859, the Alabama Legislature again incorporated the Grand Lodge, this time under the name "Most Worshipful Grand Lodge of Free and Accepted Masons of the State of Alabama." Act No. 317, 1859-60 Ala. Acts 458. The 1859 Act gave the Grand Lodge power to create subordinate lodges, to own real property (not exceeding 10 acres in area), to sue and be sued in its corporate name, to erect lodge offices and store rooms, to rent out the lower floors of the lodge offices, to collect the rental proceeds from these lower floors and accumulate this money (not to exceed $50,000), and then to either lend this money or use it for charitable purposes. Id. The rental proceeds from these lower floors were declared tax exempt if they were used for charitable purposes. Id. Also, the 1859 Act incorporated the subordinate lodges and gave them the power to own real and personal property not exceeding $25,000. Id. at 459. Further, the 1859 Act exempted from taxation all real and personal property of the Grand Lodge and its subordinate lodges, not exceeding $25,000, if the property was "dedicated to charitable purposes only." Id. at 460.

In 1874, the Alabama Legislature amended the 1859 Act. Act No. 52, 1874-75 Ala.Acts 158. The only major change brought about by this amendment was to allow the Grand Lodge and its subordinate lodges to own and/or sell real and personal property not exceeding 10 acres in area or $200,000 in value. Id. at 160.

In 1950, the Alabama Legislature again amended the 1859 Act. Act No. 2, 1950 Ala.Acts 41. Here again, the only major change brought about by the amendment was to change the dollar amount and area limitations on land and personalty that the Grand Lodge and its subordinate lodges could own. Both the land area and the dollar value limitations were removed completely.

In the fall of 1990, W.V. Lyerly, the Montgomery County tax collector, sent escape tax notices to the Grand Lodge for the 1985 through 1989 tax years. The escape notices were sent for ad valorem taxes on a small, 10-store shopping center called the Hillwood Shopping Center. The Hillwood Shopping Center property is located across the road from the Grand Lodge's lodge building and the Alabama Masonic Home. It is undisputed that the Grand Lodge leases out the spaces in the Hillwood Shopping Center to commercial enterprises and uses the proceeds for charitable purposes in regard to the Alabama Masonic Home.

The Grand Lodge sued Lyerly; Marvin Driver, the Montgomery County tax assessor; and James Sizemore, the Alabama commissioner of revenue, seeking a declaration that the Hillwood Shopping Center was tax exempt property and seeking a permanent injunction against the collection of any taxes on the property. Lyerly, Driver, and Sizemore answered the complaint, denying that the Hillwood property was tax exempt. The Grand Lodge amended its complaint to request a stay of any levy, execution, or tax sale on the Hillwood property pending a determination of the lawsuit. The trial court granted the requested stay.

The case was submitted to the trial court on a stipulation of facts, trial briefs from counsel, and oral arguments. The court ruled that the Act did not exempt the Hillwood property from taxation. However, the court also held that the Act did exempt the Grand Lodge's lodge building and the Alabama Masonic Home from taxation. The Grand Lodge appeals. ¹

Initially, we note that because this case involves a strictly legal challenge, no presumption of correctness, or favorable initial view of the trial court's evidentiary findings, applies. H.C. Schmieding Produce Co. v. Cagle, 529 So.2d 243, 247 (Ala.1988). Rather, "we [must] review any rulings purely on matters of law without any presumption of correctness on the part of the trial court." Id., and see, Ricwil, Inc. v. S.L. Pappas & Co., 599 So.2d 1126 (Ala.1992).

Also, we note that neither party disputes the trial court's ruling as to the tax exempt status of the Grand Lodge's lodge building and the Alabama Masonic Home. Thus, the only issue before us is the propriety of the ruling on the tax status of the Hillwood Shopping Center property.

The 1950 Amendment to the Act reads:

"Be It Enacted by the Legislature of Alabama:

"Section 1. Sections 1, 2 and 5 of Act No. 317, approved December 9, 1859, entitled 'An Act To Incorporate the Grand Lodge of Free and Accepted Masons of the State of Alabama and the subordinate Lodges under its jurisdiction,' as amended, are amended to read:

"Section 1. R.H. Ervin, S.F. Hales, H.S. Shelton and J.A. Whitaker, and their successors in office, are hereby incorporated by the name of the Most Worshipful Grand Lodge of Free and Accepted Masons of the State of Alabama, and by that name shall have capacity to sue and be sued, plead and be impleaded, in any and all of the courts of this State, to contract and be contracted with, to have a common seal, and to alter the same at pleasure, and the said Grand Lodge, through its four principal officers, shall have perpetual succession, and may grant dispensations and charters to subordinate Lodges, to be subject to and under its masonic jurisdiction, and make, ordain and establish its constitution, by-laws, rules and regulations, not inconsistent with the constitution or laws of this State or of the United States, and may acquire, purchase, hold and enjoy so much real estate as may be necessary for the erection of proper buildings and offices for carrying on and conducting its business, may rent out any store rooms or offices in the lower stories of the buildings which may have been erected on such real estate, or which the said Grand Lodge may erect thereon, and collect the rent, and for the purpose of purchasing such real estate and buildings, the said Grand Lodge shall have power to borrow money, issue its bond therefor and execute a mortgage on any property it may own to secure the same, and may hold or loan out any money derived from the renting of its store rooms and offices or otherwise as the said Grand Lodge may desire, subject to the regulations hereinafter prescribed.

"Section 2. That said Grand Lodge shall have the power to collect its revenue, and to apply the same according to the ancient customs of the Order, or may loan out the same for the purpose of aiding in benevolent enterprises, or for the purpose of accumulation; provided the funds in money or choses in action shall not be loaned upon usurious interest, nor shall the funds or accretions thereof be used otherwise than for the payment of the expenses of said Grand Lodge and for charitable purposes and being thus set apart, the same shall not be liable to taxation.

"Section 5. The said Grand Lodge and each subordinate Lodge under its jurisdiction, shall have, respectively, power to receive by gift, grant, contract, devise or donation by will, or otherwise, any personal or real estate and shall have power to sell, alienate or dispose of the same, and no such gift, grant, contract or devise, or donation by will, subscription, or otherwise shall fail by reason of any misconception in the name of such corporation, and all contracts or agreements which may have been lawfully entered into by said subordinate Lodges under their organization heretofore shall be binding upon them respectively, and the property and effects owned by them, when dedicated to charitable purposes, shall be exempt from taxation."

Act No. 2, 1950 Ala.Acts 41-42 (Emphasis supplied).

In Ware Lodge No. 435, Ancient Free & Accepted Masons v. Harper, 236 Ala. 334, 182 So. 59 (1938), this Court held that the 1859 Act and the 1874 Amendment created a contract between the State of Alabama and the Grand Lodge and its subordinate lodges that could not be altered or revoked, absent consent, without violation of Article I, § 10, of the United States Constitution. Article...