Multnomah School of the Bible v. Multnomah County

Decision Date09 September 1959
Citation343 P.2d 893,218 Or. 19
PartiesMULTNOMAH SCHOOL OF THE BIBLE, an Oregon corporation, Appellant, v. MULTNOMAH COUNTY, a municipal corporation, Wiley Smith, County Assessor of Multnomah County, Oregon, Francis Lambert, Sheriff of Multnomah County, Oregon, and James Gleason, Al. Brown and Jack Bain, Commissioners of Multnomah County, State of Oregon, Respondents.
CourtOregon Supreme Court

Wendell E. Cameron, Portland, for appellant.

Robert M. Christ, Deputy Dist. Atty., Portland, for respondents. On the brief were F. Leo Smith, Dist. Atty., and Willis A. West, Deputy Dist. Atty., Portland.

Before McALLISTER, C. J., and LUSK, WARNER and MILLARD, JJ.

WARNER, Justice.

This is a proceeding in mandamus. The plaintiff, Multnomah School of the Bible, hereinafter called the 'Bible School,' is a nonprofit institution, engaged in literary, benevolent and educational activities in the city of Portland, incorporated under ORS 61.010 to 61.130 of the code relating to nonprofit corporations. In addition to the defendant Multnomah county, plaintiff has made the County Assessor, County Sheriff and its three County Commissioners parties defendant. We will later refer to all these defendants as 'the County.' From an order dismissing the alternative writ, plaintiff appeals.

The Bible School is the owner of a certain parcel of real property in east Portland to which we will later make more particular reference. It also operates a book store some distance from the school in west Portland, called the Christian Supply Center.

It claims that the real property known as Tax Lot 440, which is part of the school campus, and the personal property in its store, are entitled to exemption from ad valorem taxes assessed by the officials of Multnomah county for the tax year 1956-1957 because of its educational and charitable activities, as was declared by the circuit court in a suit instituted by the Bible School in 1954 which resulted in a decree in May, 1955, enjoining the defendants from thereafter assessing or collecting taxes on said properties. The Bible School now seeks to compel obedience by defendants to that decree.

The real property owned by the Bible School consists of approximately 10 acres, including Tax Lot 440, at 8435 Northeast Glisan Street, in the city of Portland. It constitutes in its entirety the school campus. This parcel, together with the six buildings located thereon, was originally owned by the state of Oregon and operated as a state school for the blind.

The Bible School is a nondenominational institution and makes no tuition charges and affords opportunities for a general education, meeting all requirements of an accredited liberal arts college but emphasizing the study of the Bible, with preparation qualifying its graduates for missionary work and other forms of religious activity. It holds both day and evening classes, serving approximately 150 students who live on the campus. Of these, 100 girls have residences in the dormitories reserved for women and 50 boys reside in the dormitory established for their accommodation. During the school periods as many as 200 students daily take their meals on the campus in the school dining hall.

There is situated on Tax Lot 440 a residential structure. The lower part is occupied by the school's superintendent of buildings and his wife, and the upper story by the school's dining hall supervisor.

In addition to these uses, the living room of this building is used for student activities and small group meetings, the Student Missionary Union and certain prayer groups. This room is also provided with a practice piano which the students use daily.

The plaintiff represents that the presence of its buildings superintendent is required on the campus 24 hours a day, 12 months of the year, to give immediate attention, when needed, to the various utilities serving all the school buildings. Tunnels constructed by the state during its ownership not only carry elements of the central heating system, but also of the plumbing and electrical wiring systems. All these are under the care and direction of the building superintendent. The buildings and conduits of the various utilities are old and give rise to emergency situations requiring immediate attention.

The Bible School further asserts that the duties of the dining hall supervisor require her presence on the campus the greater part of each day, which, for her, begins at 4:30 a. m.; and that organizational and administrative efficiency demand that the building superintendent and dining hall supervisor live on the school grounds at all times. It is on the residence of these employees on Tax Lot 440 that the County rests its claim of tax liability.

The stock of merchandise in the Christian Supply Center consists in the main of Sunday School supplies, Bibles of various styles, missionary film strips, moving pictures, picture projection machines, religious records, greeting cards and miscellaneous novelties with a religious flavor. While the store caters to missionaries and Sunday School teachers, without regard to denomination, its merchandise is sold to whomsoever of the public may be interested in buying.

The foregoing statement of facts and those that follow are supplied by plaintiff's witnesses and are not controverted by defendants.

Tax Lot 440 and the personal property of the store were placed on the tax rolls and assessed for the tax year 1954-1955. This gave rise to the suit filed in December, 1954, to which we have already made reference.

In that earlier suit against the same defendants, the Bible School claimed that the same property, real and personal, which is the subject of this proceeding, was tax exempt, giving the same reasons urged here. That suit, as we have noticed, resulted in the decree of May, 1955, declaring those properties to be tax free and enjoining the defendants from thereafter levying or collecting any ad valorem taxes.

The relief sought and granted by the circuit court in 1955 was made pursuant to ORS 307.130, which then read as follows:

'Upon compliance with ORS 307.170, the personal property of all literary, benevolent, charitable and scientific institutions incorporated within this state, and such real estate belonging to such institutions as is actually occupied for the purposes for which they were incorporated or for the sole convenience of its members shall be exempt from taxation. The liability of any such institution for payment of principal or interest on any obligation of the institution, whether direct or assumed, shall not deprive it of the exemption otherwise allowable.' (Emphasis ours.)

ORS 307.130 has had a long history. It was first passed by the territorial legislature in 1854 and continued in force by Oregon Constitution, art. XVIII, § 7 (Hibernian Benevolent Society v. Kelly, 28 Or. 173, 189, 42 P. 3, 30 L.R.A. 167), until 1945, when it was amended for the first time by adding thereto 'or for the sole convenience of its members' (Oregon Laws 1945, ch. 296, p. 441).

Thereafter, the legislature of 1955 by § 1, ch. 576, Oregon Laws 1955, p. 692, again amended ORS 307.130, and it now reads:

'(1) Upon compliance with ORS 307.170, the following property owned by incorporated literary, benevolent, charitable and scientific institutions shall be exempt from taxation:

'(a) Except as provided in ORS 740.080, only such real or personal property, or proportion thereof, as is actually and exclusively occupied or used in the literary, benevolent, charitable or scientific work carried on by such institutions.

'(b) Parking lots maintained solely for the use, without charge, of persons going to and from the property exempted under paragraph (a) of this subsection, but not if such lots are used for parking or other purposes not connected with the use and maintenance of such property.' (Emphasis ours.)

The amendment also abolished the prior provision which limited the right of exemption to domestic corporations and by § 3 of the Act of 1955, established its effective date as of January 1, 1956.

Notwithstanding the strictures of the 1955 decree in the first suit, the taxing authorities of Multnomah county, relying on the legislative amendment of 1955, proceeded to assess and levy upon the same two items of property for taxes for the tax year 1956-1957. This they did on the theory that these items of real and personal property 'were not actually and exclusively occupied or used in the literary, benevolent, charitable or scientific work' carried on by the Bible School as owner of said property. This action on the part of the County precipitated the instant mandamus proceedings, filed January 30, 1957.

At the outset of the trial, the parties stipulated that the court could have recourse to and rely upon all the testimony and exhibits and entire record made in the suit of 1954 and take and consider the same in all respects as the evidence governing the instant matter.

Since there was no other evidence offered in the present proceeding, consideration is limited to the earlier record to determine whether or not there was substantial evidence in that case to support the finding of the trial court that neither the real nor personal property was exclusively occupied or used by the Bible School in the work it was carrying on. We must also assume, as apparently did the trial court, that the factual situation of the Bible School as to the uses of its property remained status quo between 1954 and 1957.

Referring to ORS 307.130, supra, as it was before the amendment of 1955, we find the right to exemption was dependent upon a showing that the property was 'actually occupied for the purposes for which [the institution was] incorporated * * *.' It was this language that determined the favorable decree of 1955.

The fundamental change made in ORS 307.130 by the act of 1955 as that section existed at the time of the...

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