Nashville Labor Temple v. City of Nashville

• Decision Date: 15 July 1922
• Citation: 243 S.W. 78,146 Tenn. 429
• Parties: NASHVILLE LABOR TEMPLE v. CITY OF NASHVILLE.
• Court: Tennessee Supreme Court

243 S.W. 78

146 Tenn. 429

NASHVILLE LABOR TEMPLE v. CITY OF NASHVILLE.

Supreme Court of Tennessee.

July 15, 1922

Appeal from Chancery Court, Davidson County; John R. Aust Chancellor.

Action by the Nashville Labor Temple against the City of Nashville. From a decree for complainant, defendant appeals. Affirmed.

Morton B. Adams and J. Washington Moore, both of Nashville, for appellant.

A. J Griffith and W. C. Cherry, both of Nashville, for appellee.

HALL J.

This is an appeal prosecuted by the defendant, city of Nashville from a decree of the chancery court of Davidson county adjudging complainant exempt from taxation by the city of Nashville.

The cause was heard upon the bill, answer, and a stipulation of facts entered into by counsel. Only two questions are involved:

First. Is the real estate of complainant, located on Eighth Avenue North, in the city of Nashville, exempt from taxation under article 2, § 28, of our Constitution and subsection 2 of section 2, c. 602, Acts of 1907?

Second. As to the taxes assessed against complainant by the city of Nashville for the year 1920, and which have not been paid, is complainant estopped because it did not protest said assessment to the city tax assessor nor appeal to the city board of equalizers?

Article 2, § 28, of our Constitution provides as follows:

"All property real, personal or mixed, shall be taxed, but the Legislature may except such as may be held by the state, by counties, cities or towns, and used exclusively for public or corporation purposes, and such as may be held and used for purposes purely religious, charitable, scientific, literary or educational, and shall except one thousand dollars' worth of personal property in the hands of each taxpayer, and the direct product of the soil in the hands of the producer, and his immediate vendee."

The statute based on this provision of the Constitution, in so far as the same bears upon the question under consideration, exempts the following property from taxation:

"All property belonging to any religious, charitable, scientific, or educational institutions, when used exclusively for the purpose for which said institution was created, or is unimproved and yields no income. All property belonging to such institution used in secular business and competing with a like business that pays taxes to the state shall be taxed on its whole or partial value in proportion as the same may be used in competition with secular business." Subsection 2 of section 2, c. 602, Acts of 1907.

The complainant, Nashville Labor Temple, is a nonprofit or general welfare corporation, chartered and organized under the general incorporation laws of the state embodied in Shannon's Annotated Code at section 2513, and subsections 2, 5, and 6 are copied into its charter. The particular purposes of said corporation are thus stated in its charter:

"That the members of organized labor in the city of Nashville, Tennessee, or adjacent thereto, may buy or erect and maintain a building in which all members of organized labor may hold meetings for educational and social purposes; to maintain a gymnasium club and other clubs for the promotion of athletic sports; to encourage and support the mechanical arts and to promote the social, physical and intellectual improvement of its members."

It is stipulated that complainant owns a building situated within the corporate limits of the city of Nashville, on Eighth Avenue North, which was purchased by complainant in November 1919, for the consideration of $50,000, a portion of which remains unpaid.

That, while the legal title to said property is vested in complainant, the real beneficial ownership is held by a number of local labor unions, which are unincorporated and voluntary associations, who have contributed all the money which has been paid on the purchase price.

The government of the corporation and control of its property is vested in a board known as the general welfare committee, each participating union electing one member of this committee.

Each contributing union holds what is known as "ownership certificates," one certificate being issued for each $50 contributed by it toward the purchase or improvement of the building. These certificates are nonnegotiable and nonassignable, except, with the consent of the general welfare committee, they may be assigned from one participating local union to another local union. These certificates neither bear interest nor participate in profits or dividends.

The expense of operating and maintaining the temple is derived from rentals paid by the various unions for rooms or halls set apart for their use, but, if any union becomes financially unable to pay rental, it is allowed the use of its room or hall without rent.

There are nine ladies' auxiliary organizations, and they are given the use of their rooms without charge or rent.

There is also an auditorium in the building known as McAdoo Hall, which is occasionally furnished without charge to bodies, organizations, or meetings outside of labor unions, and for some months the use of this hall has been gratuitiously furnished to the Nashville Symphony Orchestra for the purpose of rehearsals, etc.

No room, hall, or space in the building is rented to any person, firm, or corporation except as herein stated, and the rental charged is only for the purpose of securing a sum sufficient to maintain the temple, and is, in fact, only an apportionment among the participating unions of the expense according to the space occupied, number of meetings, and ability to contribute.

The ordinary meetings of these unions are executive or secret, and no person other than a member of such union is permitted to be present, unless upon special invitation. At these meetings a number of the unions have one of their members, by lectures and instructions given voluntarily and without remuneration, teach the various phases or principles of their art or craft; such instructions being designed to prepare those so taught to pass the required examinations by the unions and become a journeyman of that art or craft.

Blackboards are installed in the several rooms or halls of the temple by the local unions of sheet metal workers, machinists, boiler makers, steam fitters, carpenters, plumbers, and perhaps others. In each of these unions voluntary and unpaid instructors from their membership, who are specially fitted and competent to do so, deliver lectures and instructions designed to promote the skill of such members in their art or craft.

Subsequent to the filing of the bill in this cause, but prior to the hearing in the court below, a school of mechanical drawing has been opened and taught, and the hall where said school is taught has been equipped with tools, desks, chairs, and other paraphernalia necessary for the conduct of this school, which is open and free to all applicants, whether members of the union or not, and is in session four nights in each week. In this school there is one instructor, whose salary is paid by commissioners of Watkin's Institute and the federal government jointly.

The stipulation of facts contains this further agreement:

"Because of lack of financial ability and because the Labor Temple is in a formative period, the complainant through its general welfare committee and board of directors has not accomplished as yet all that was in the mind of the original corporators. It was and is in the mind and purpose of the general welfare committee and the board, as rapidly as possible, to promote, establish, and maintain schools for instruction in the mechanical arts, and in the general principles of law, either free or at the lowest possible cost, and for the general public without regard to membership in labor unions."

The several local unions are members of or affiliated with larger...