Okla. Cnty. v. Queen City Lodge No. 197, I. O. O. F.

Citation156 P.2d 340,1945 OK 55,195 Okla. 131
Decision Date13 February 1945
Docket NumberCase Number: 31076
PartiesOKLAHOMA COUNTY v. QUEEN CITY LODGE NO. 197, I. O. O. F.
CourtSupreme Court of Oklahoma
Syllabus

¶0 1. COUNTIES - Presumption that county attorney prosecuting appeal in name of tax officers was duly authorized by board of county commissioners.

Where the county attorney prosecutes an appeal from a judgment adverse to the county in a tax case in the name of the tax officers rather than in the name of the board of county commissioners, in passing upon a motion by the appellee to dismiss the appeal because it was not prosecuted in the name of the proper party, this court will indulge the legal presumption that the county attorney has regularly and legally prosecuted the appeal with the consent, and on behalf, of the board of county commissioners, in the absence of a showing to the contrary.

2. TAXATION - Complaint of taxpayer held sufficient to confer upon board of county commissioners jurisdiction to consider application for certificate of error relieving property from taxation.

Record examined, and held that the complaint stated facts sufficient to confer upon the board of county commissioners jurisdiction to consider the application for a certificate of error relieving the property from taxation under 68 O.S.1941 § 184d.

3. COURTS - Stare decisis - Power and duty of courts in proper cases to refuse to follow prior decisions.

Notwithstanding the force of many considerations prompting a court to follow its prior decisions, the courts have the power to, and in proper cases should, in the full performance of duty, refuse to do so.

4. SAME - Correction of harmful construction of organic law in prior decisions.

When the court is convinced that its prior decisions in the construction of a provision of the Constitution are manifestly erroneous, and work pernicious and widespread injury, it will, in proper cases, correct its own error by overruling the prior decisions, especially where much less injurious results will follow by the changed construction. Courts are under greater duty to thus correct their own errors in that respect because of legislative inability to correct a harmful construction of the organic law.

5. SAME - TAXATION - Prior decisions on exemption of property of educational and charitable institutions overruled subject to saving provision of prospective application only as to assessments for taxation.

Our prior decisions in Board of Com'rs of Garfield County v. Phillips University, 144 Okl. 57, 289 P. 720; Sand Springs Home v. State, 168 Okl. 323, 32 P.2d 928, and Board of County Com'rs of Tulsa County v. Sand Springs Home, 185 Okl. 305, 92 P.2d 376, are expressly overruled in so far as they announce the rule that property owned by the institution or corporation which is in no manner occupied or used by the owner for the objects and purposes thereof, but, on the contrary, is separately and definitely maintained for income and revenue only, is nevertheless exempt from ad valorem taxation because the net income is used to further the general purpose of the institution or corporation. The overruling of such decision is subject to the saving provision of prospective application only as to assessments for taxation.

6. SAME - Certain prior decisions overruled insofar as they indicate existence of total constitutional tax exemption of property involved.

The conclusion in State v. Bartlesville Lodge, 168 Okl. 416, 33 P.2d 507, and in University Scholarship Corporation v. Parduhn, 180 Okl. 445, 70 P.2d 84, is disapproved and overruled in so far as it indicates the existence of any total constitutional tax exemption of the property there involved. The overruling of such decisions is subject to the saving provision of prospective application only as to assessments for taxation.

7. SAME - Constitutional provision does not exempt property of educational and charitable institutions merely because income therefrom is used for their appropriate purposes.

Section 6, article 10 of the State Constitution of Oklahoma, exempts from taxation only such property of the institutions therein named as is used for the appropriate purposes of such institutions and does not exempt property merely because the income therefrom or the net income therefrom is used for such purposes.

8. SAME - Constitutional inhibition against Legislature extending tax exemptions.

Section 50, article 5 of the Constitution of Oklahoma, inhibits the Legislature from extending tax exemptions to property not otherwise exempt by the Constitution.

9. SAME - Partial exemption of revenue-producing property owned by non-profit benevolent institution or corporation occupying and using portion of property.

By virtue of the Constitution a building and the grounds thereof owned by a non-profit benevolent institution or corporation and used by such owner for the appropriate purposes and objects thereof, is exempt from ad valorem taxation. But real estate though so owned is not so exempt if it is not used by the owner as above stated, but instead is separately maintained for revenue only by rental to the general public, and this is true even if the net income from such rental property is used by the owner as above stated. When a building is so owned and one substantial part thereof is actually occupied and used by the owner for the appropriate purpose and objects of the institution and another substantial portion thereof is separately and definitely maintained for revenue only by rental to the general public, such building with the grounds thereof is pro-rata exempt from taxation and pro-rata taxable according to its separate uses, and it should be assessed and taxed at that portion of its proper assessable value allocated to the taxable use, after deducting from its overall assessable value, the portion thereof properly allocated to the proportionate tax exempt use.

10. COURTS - Prior decisions may be overruled preserving all rights accrued thereunder.

A court of final decision, in overruling a prior adopted principle established by its own earlier decisions, may ordinarily in its discretion, preserve in the overruling opinion all rights accrued under the prior declaration, the same as if they had been created or arose out of a former existing statute later repealed by the Legislature.

11. SAME - TAXATION - Prospective operation of decision on tax exemption of property of nonprofit benevolent institutions.

This opinion shall operate prospectively only as to assessment and taxation of property affected hereby in the manner stated in the body of the opinion and for the reasons therein stated.

Appeal from District Court, Oklahoma County; Lucius Babcock, Judge.

Proceedings on complaint of Queen City Lodge No. 197, I. O. O. F., against Oklahoma County to cancel assessment of real property for ad valorem taxation on contention that constitutional tax exemption was applicable. From judgment in favor of Queen City Lodge, the County appeals. Affirmed because of withholding of retroactive effect, for certain purposes as stated, of the present opinion overruling prior opinions. But corrected rule announced as to pro-rata assessment and taxation of a single item of real property which is owned by a charitable and benevolent association maintaining a portion thereof in a tax exempt use, and maintaining another portion thereof separately in a different use for income or revenue only.

Lewis R. Morris, Co. Atty., B. C. Logsdon, Asst. Co. Atty., George Miskovsky, Co. Atty., and Norman J. Futor, Asst. Co. Atty., all of Oklahoma City, for appellants, Tax Officials of Oklahoma County.

Rainey, Flynn, Green & Anderson, of Oklahoma City, for appellee.

Everest, McKenzie & Gibbens, of Oklahoma City, for Phillips University, V. P. Crowe and F. C. Love, both of Oklahoma City, for Oklahoma City University, Billups & Billups, of Oklahoma City, for Oklahoma Baptist University, and Baptist General Convention of State of Oklahoma, Martin, Logan, Williams & Boesche and Richard P. Ryan, all of Tulsa, for University of Tulsa, John F. Eberle, of Oklahoma City, for Most Reverend Francis C. Kelly, Bishop of Diocese of Oklahoma City and Tulsa, for and on behalf of Educational, Charitable and Religious Institutions of Catholic Church in Oklahoma, amici curiae.

R. O. Wilson and Chas. B. Duffy, both of Ponca City, for Grand Lodge of Oklahoma, of the Independent Order of Odd Fellows, amici curiae.

John E. Luttrell, of Norman, for McFarlan Memorial Methodist Church of Norman, amicus curiae.

Charles P. Gotwals, Wm. A. Killey, and James D. Gibson, all of Muskogee, amici curiae.

WELCH, J.

¶1 Queen City Lodge No. 197, I. O. O. F., hereinafter referred to as the Lodge, commenced this proceedings by filing with the Board of County Commissioners its verified complaint, seeking to strike from the tax rolls certain real estate on the contention that same was exempt from ad valorem taxation by the State Constitution. Showing was therein made to excuse failure to theretofore appear before the equalization board.

¶2 To this complaint appellants, the County Assessor, the County Treasurer, and the County Board of Equalization, herein called the Tax Officers, by the County Attorney, filed a special demurrer which was sustained by the Board of County Commissioners, and the Lodge appealed to the district court. At the commencement of the trial in the district court it was agreed that all of the evidence should be introduced, that at the close of the evidence the court should rule on the special demurrer to the complaint, and that if the demurrer was overruled the court should then pass on the merits.

¶3 At the conclusion of the evidence the court overruled the special demurrer and rendered judgment for the Lodge on the merits, and this appeal followed.

¶4 At the outset we are faced with two procedural questions, which we must first determine.

¶5 The Lodge has filed a motion to dismiss the appeal for the reason that the said...

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