North Shore Post No. 21 of Am. Legion v. Korzen

• Decision Date: 29 September 1967
• Docket Number: No. 40282,40282
• Citation: 38 Ill.2d 231,230 N.E.2d 833
• Parties: NORTH SHORE POST NO. 21 OF the AMERICAN LEGION, Appellant, v. Bernard J. KORZEN et al., Appellees.
• Court: Illinois Supreme Court

Page 833

230 N.E.2d 833

38 Ill.2d 231

NORTH SHORE POST NO. 21 OF the AMERICAN LEGION, Appellant, v. Bernard J. KORZEN et al., Appellees.

No. 40282.

Supreme Court of Illinois.

Sept. 29, 1967.

Rehearing Denied Nov. 27, 1967.

Spray, Price, Hough & Cushman, Chicago (Robert S. Cushman, Minard E. Hulse, Jr., and Albert C. Linenthal, Judge Advocate, Dept. of Illinois, American Legion, Chicago, of counsel), for appellant.

John J. Stamos, State's Atty., Chicago (Edward J. Hladis, Chief, Civ. Div., and Ronald J. Veverka and Ronald Butler, Asst. State's Attys., of counsel), for appellees.

HOUSE, Justice.

North Shore Post No. 21 of the American Legion, an Illinois not-fot-profit corporation, filed a complaint in the circuit court of Cook County seeking a declaratory judgment that its headquarters building is exempt from taxation and an injunction against the collection of 1964 real-estate taxes on the property. The trial court held section 19.18 of the Revenue Act of 1939, as amended, (Ill.Rev.Stat.1963, chap. 120, par. 500.18) pertaining to veterans' organizations, which plaintiff relies on for exemption, unconstitutional, and entered a decree declaring the property not to be tax emempt. Plaintiff appeals directly to this court, the revenue and the constitutionality of the statute being involved.

Section 19.18 adopted in 1959, adds the following to the list of tax-exempt property: 'All property of veterans' organizations used exclusively for charitable, patriotic and civic purposes.' The trial court held that a 'patriotic' or 'civic' use was not a charitable use within the meaning of section 3 of article IX of the Illinois constitution, S.H.A., which in part provides that such '* * * property as may be used exclusively for agricultural and horticultural societies, for school, religious, cemetery and charitable purposes, may be exempted from taxation * * *.'

The first issue is whether section 19.18 of the Revenue Act is constitutional. Plaintiff contends that the legislature can constitutionally declare a patriotic use to be a charitable use while defendants argue that a patriotic or civic use is outside the realm of a charitable use as contemplated in the constitution.

The Illinois constitution is not regarded as a grant of powers to the legislature, but rather as a restriction on the legislature's power to act. (Droste v. Kerner, 34 Ill.2d 495, 217 N.E.2d 73; Locust Grove Cemetery Ass'n v. Rose, 16 Ill.2d 132, 156 N.E.2d 577; People v. Dale, 406 Ill. 238, 92 N.E.2d 761.) In general terms article IX of the constitution subjects all property to taxation. Section 3 of that article permits the legislature to exempt certain property, but this provision is not self-executing and exemptions exist only when created by a general law enacted by the legislature. (Association of American Medical Colleges v. Lorenz, 17 Ill.2d 125, 160 N.E.2d 763; International College of Surgeons v. Brenza, 8 Ill.2d 141, 133 N.E.2d 269; Turnverein 'Lincoln' v. Board of Appeals of Cook County, 358 Ill. 135, 192 N.E. 780.) It is permissible, not mandatory, for the legislature to exempt certain property from taxation. It follows, therefore, that in exempting property the legislature may place restrictions, limitations, and conditions on such exemptions as may be proper by general law.

Section 19.18 exempts from taxation property of veterans' organizations which is used exclusively for 'charitable, patriotic And civic purposes'. (Emphasis added.) There is a presumption of constitutionality of legislation once it becomes the law of the State, and all reasonable doubts must be resolved in its favor. (Locust Grove Cemetery Ass'n v. Rose, 16 Ill.2d 132, 156 N.E.2d 577; People v. Illinois State Toll Highway Com., 3 Ill.2d 218, 120 N.E.2d 35.) It is our view that the legislature, in enumerating the purposes for which property must be used to render it exempt, meant to use the conjunction 'and' in its ordinary sense rather than as a disjunctive conjunction which would permit any one of the three stated uses as being sufficient to exempt the property from tax. Therefore, in order for property of veterans' organizations to be exempted from taxation it must be shown not only that the property was used exclusively for charitable purposes, but also that such use was patriotic and civic. This is not a broader exemption than is permitted by the constitution, rather it is more restrictive, therefore, section 19.18 pertaining to veterans' organizations is not unconstitutional.

After determining that section 19.18 was unconstitutional, the trial court found that plaintiff did not use its property exclusively for charitable purposes, but expressly refused to consider whether the property was used within the contemplation of that section. The next question before us is whether plaintiffs' property was used for purposes which make it exempt from taxation under section 19.18.

Defendants contend that plaintiff must first prove that it is a charitable organization and then show that its property is used exclusively for charitable purposes and not leased or otherwise used with a view to profit. Although these requirements are set forth in Milward v. Kaschen, 16 Ill.2d 302, 157 N.E.2d 1, that case is decided under section 19.7 of the Revenue Act, (Ill.Rev.Stat.1965, chap. 120, par. 500.7,) which deals with exemptions of property of charitable organizations. However the rationale of Milward is applicable here. In order to qualify its property for exemption the party seeking it must prove that it is the kind of organization or institution described in the applicable exempting statute and that its property is used exclusively for purposes set forth in the act. (See also, American College of Surgeons v. Korzen, 36 Ill.2d 340, 224 N.E.2d 7; Rotary International v. Paschen, 14 Ill.2d 480, 153 N.E.2d 4.) Specifically, plaintiff need not here prove that it is a charitable institution but rather that it is a veterans' organization and that its property is used exclusively for charitable, patriotic and civic purposes.

Statutes granting tax exemptions are to be strictly construed and are not to be extended by judicial interpretation beyond the authority given in the constitution. (Kiwanis International v. Lorenz, 23 Ill.2d 141, 177 N.E.2d 220; Rogers Park Post No. 108 v. Brenza, 8 Ill.2d 286, 134 N.E.2d 292.) The burden of proving the right of exemption is upon the party seeking it, and in determining whether property is included within the scope of an exemption all facts are to be construed and all debatable...