Portland Hibernian Benev. Soc. v. Kelly

• Citation: 28 Or. 173,42 P. 3
• Parties: PORTLAND HIBERNIAN BEN. SOC. v. KELLY, Sheriff.
• Decision Date: 21 October 1895
• Court: Supreme Court of Oregon

42 P. 3

28 Or. 173

PORTLAND HIBERNIAN BEN. SOC. v. KELLY, Sheriff.

Supreme Court of Oregon

October 21, 1895

Appeal from circuit court, Multnomah county; E.D. Shattuck, Judge.

Action by the Portland Hibernian Benevolent Society to restrain Penumbra Kelly, sheriff, from enforcing the collection of taxes levied upon plaintiff's property. Judgment for plaintiff. Defendant appeals. Reversed.

John H. Hall, for appellant.

John M. Gearin, for respondent.

BEAN, C.J.

The plaintiff, a corporation organized under the statute providing for the incorporation of churches, religious benevolent, literary, and charitable institutions, brought this suit to restrain the sheriff of Multnomah county from enforcing the collection of taxes levied upon its property for state and county purposes for the year 1892, claiming that such property is exempt from taxation under the constitution and laws of the state. From the agreed statement of facts it appears that plaintiff was incorporated in 1873. Its constitution declares that "the objects of this society shall be charity and benevolence, for the purpose of contributing a weekly allowance for sickness, and the means of defraying the expenses consequent upon the death of a member, and to contribute for the above-named purposes such sums as a majority of the members may be pleased to contribute." It is further provided by its constitution and by-laws that "every Irishman, or the son of an Irishman, or a son of a member of the society," between the ages of 18 and 45 years, "of good moral character possessed of reputable means of support, and free from all infirmities that might render him burdensome to the society," and a resident of the city of Portland for 60 days preceding his application, may, upon first being duly elected, "become a member thereof by signing the constitution and paying an initiation fee of five dollars." Every person who has been a member of the society for six months, and whose name is on the "list of active members," is entitled, in case of sickness "to receive such sum as the society may direct, not to exceed seven dollars per week, for three months in succession," provided he furnishes a doctor's certificate that through sickness he is confined to his bed and that he has not been instrumental in causing his sickness. In addition to this allowance, the society may extend benevolence to sick members as it may deem necessary, to be decided by a two-thirds vote of the members present at any regular meeting. On the death of a member in good standing, a sum of money not less than $25, nor more than $75, is to be paid for funeral expenses; and his widow or orphans are entitled to receive $25, and, if need be, in three months thereafter, a like sum. Upon the death of his wife, a member is entitled to receive the sum of $40 for funeral expenses. If there is no money in the treasury for sick or funeral expenses, when required, the board of directors is authorized to levy a special tax on the members for that purpose, and no other. It is provided that no money shall be drawn from the treasury for any but benevolent purposes, and none of the income or revenue of the society is to be used for any purpose other than as set out in the constitution, except for the payment of principal and interest on its indebtedness, and the purchase and improvement of real estate. Provision is also made for the appointment of a committee of three members, whose duty it shall be, when notified of the illness of a member, to visit him as often as convenient, and report from time to time to the board of managers the condition of the member, lest sick dues might be drawn from the treasury contrary to the constitution. The property assessed consists of lot 1, block 177, in the city of Portland, upon which is erected a three-story brick building, the lower story of which is rented for stores, the second story for offices (except one room, which is occupied by the plaintiff), and the third story for a public hall; the revenue derived from such rental being exclusively devoted to the objects and purposes of the society. Upon these facts the court below found that plaintiff was a charitable institution, within the meaning of the exemption law, and that the property in question was actually occupied by the plaintiff for the purposes for which it was incorporated, although the greater part of the building was leased to sundry persons, to be used for purposes wholly unconnected with the society, and entered a decree enjoining the collection of the tax. From this decree the defendant appeals.

Section 1, art. 9, of the constitution directs that "the legislative assembly shall provide by law for uniform and equal rate of assessment and taxation; and shall prescribe such regulations as shall secure a just valuation for taxation of all property, both real and personal, excepting such only for municipal, educational, literary, scientific, religious, or charitable purposes as may be specially exempted by law." Under this provision no property can be relieved from taxation except such as may be in use for some of the purposes enumerated therein, and then only to the extent specially permitted by legislative enactment. The constitution itself does not exempt any property from taxation, and it authorizes the legislature to do so only for municipal, educational, literary, scientific, religious, or charitable purposes. It follows, then, that, before property can be exempted from taxation, it must not only be used for some of the purposes specified in the constitution, but must be specially authorized by law. Now, the statute which undertakes to exempt property from taxation, and by which the questions presented in this case must be solved, was passed by the territorial legislature in 1854, and, so far as not inconsistent with the constitution, continued in force by section 7 of article 18 of that instrument, and is now section 2732 of Hill's Annotated Laws. By subdivision 3 of this section, it is provided that "the personal property of all literary, benevolent, charitable, and scientific institutions, incorporated within this state, and such real estate belonging to such institutions as shall be actually occupied for the purposes for which they were incorporated," shall be exempt from taxation. Under these constitutional and statutory provisions, it is manifest that real property, to be exempt from taxation, must belong to some incorporated literary, benevolent, charitable, or scientific institution, and must be actually occupied for literary, benevolent, charitable, or scientific purposes.

The contention for the defendant is that the real property upon which the tax in question was laid is not exempt from taxation, for the reason (1) that plaintiff is not a charitable institution, within the meaning of the law, because its benefits are confined to its own members and their families; and (2) that the property assessed is not actually occupied for the purposes for which it was incorporated.

Upon the first point the argument of his counsel is that a charitable institution, within the meaning of the exemption law, is one whose benefits are extended to the public generally, or some indefinite portion thereof, without regard to the relation the recipient may bear to the members of the particular organization or society, or to the fees or dues paid. But the principal authorities relied upon by him in support of this position were determinations of controversies arising under constitutional or legislative enactments exempting from taxation property belonging to institutions devoted to "purely public charity," which it is held does not include charitable institutions whose benevolence is confined to their own members, or persons having some particular relationship to such members. Philadelphia v. Masonic Home of Pennsylvania, 160 Pa.St. 572, 28 A. 954; Swift's Ex'rs v. Beneficial Soc., 73 Pa.St. 362; Delaware Co. Institute of Science v. Delaware Co., 94 Pa.St. 163; Donohugh's Appeal, 86 Pa.St. 306; Mitchell v Treasurer of Franklin Co., 25 Ohio St. 144; Babb v. Reed, 5 Rawle, 150; Burd Orphan Asylum v. School Dist. of Upper Darby, 90 Pa.St. 21; Hennepin Co. v. Brotherhood of Gethsemane (Minn.) 8 N.W. 595. But under constitutional or legislative provisions which, like ours, provide for the exemption of certain property belonging to "charitable institutions," and used for charitable purposes, it is believed that such an institution is entitled to the benefit of the exemption, although its benefactions are confined to its own members or their families. Thus, in City of Indianapolis v. Grand Master, etc., 25 Ind. 518, it is held that an institution which extends charity to its own members only is a charitable institution, within the meaning of the law exempting such institutions from taxation, the court saying: "The third paragraph of the answer presents the question whether that is a charitable institution, in the sense of the statute, which confines its benefactions to those who have become members of the order, having paid the fees commonly required for that purpose. We think that this question must be answered in the affirmative. It is not essential to charity that it shall be universal. That an institution limits the dispensation of its blessings to one sex, or to the inhabitants of a particular city or district, or to the membership of a particular religious or secular organization, does not, we think, deprive it, either in legal or popular apprehension, of the character of a charitable institution. If that only be charity which relieves human want, without discriminating amongst those who need relief, then, indeed, it is a rarer virtue than has been supposed. And, if one organization may confine itself to a sex or...