Salt Lake Lodge No. 85, Benevolent and Protective Order of Elks v. Groesbeck

• Decision Date: 02 December 1911
• Docket Number: 2156
• Citation: 120 P. 192,40 Utah 1
• Court: Utah Supreme Court
• Parties: SALT LAKE LODGE NO. 85, BENEVOLENT AND PROTECTIVE ORDER OF ELKS v. J. A. GROESBECK, County Treasurer

120 P. 192

40 Utah 1

SALT LAKE LODGE NO. 85, BENEVOLENT AND PROTECTIVE ORDER OF ELKS v. J. A. GROESBECK, County Treasurer

No. 2156

Supreme Court of Utah

December 2, 1911

APPEAL from District Court, Third District; Hon. M. L. Ritchie Judge.

Action by Salt Lake Lodge No. 85, Benevolent and Protective Order of Elks against J. A. Groesbeck, as County Treasurer.

Judgment for defendant. Plaintiff appeals.

REVERSED AND REMANDED WITH DIRECTIONS.

Powers & Marioneaux and M. M. Warner for appellant.

APPELLANT'S POINTS.

Constitution of Utah, article 13, section 3: "That the property of the United States, of the state, counties, cities, towns school districts, municipal corporations and public libraries, lots with the buildings thereon used exclusively for either religious worship or charitable purposes, and places of burial not held or used for private or corporate benefit shall be exempt from taxation."

Compiled Laws of Utah, 1907, section 2503: "That the property of the United States, of the state, counties, cities, towns school districts, and public libraries, lots with the buildings thereon used exclusively for either religious worship or charitable purposes, and places of burial not held or used for private or corporate benefit shall be exempt from taxation."

Any organization or institution which discharges in whole or in part a duty which the commonwealth owes to its indigent and helpless citizens by caring for the orphans and the poor who are sick and afflicted, thereby, and to just such an extent, relieves the state of its burdens in that respect, and is a charitable organization or institution, and its property actually used by it, is exempt from taxation. (City of Indianapolis v. Grand Master, etc., of Grand Lodge of Ind., 25 Ind. 518; Hibernian Benevolent Society v. Kelly, 28 Ore. 173, 43 P. 3, 30 L. R. A. 167; Commonwealth v. Thomas, 119 Ky. 208, 83 S.W. 572, 6 L. R. A. [N. S.] 32; Widows and Orphans' Home v. Commonwealth, 103 S.W. 354 (Ky.); Adelphia Lodge v. Crawford, 57 S.W. 1020 (Mo.); City of Petersburg v. Petersburg Benevolent Association, 78 Va. 431; Fitterer v. Crawford, 157 Mo. 51, 57 S.W. 532; Mayor et al. of Savannah v. Solomon's Lodge, etc., 53 Ga. 93; Massenburg et al. v. Grand Lodge F. & A. M., 81 Ga. 212; Appeal Tax Court of Baltimore v. Grand Lodge, A. F. & A. M., 50 Md. 421; Burdine v. Grand Lodge of Alabama, 37 Ala. 498; Philadelphia v. Masonic Home of Penn., 160 Penn. St. 572, 28 A. 954, 23 L. R. A. 545.)

Even the fact that an institution confines the dispensation of its charity to its own members and their families does not deprive it of its character as a charitable institution. (Portland Hibernian Benevolent Society v. Kelly, 28 Ore. 173, 43 P. 3, 30 L. R. A. 167; City of Indianapolis v. Grand Master, etc., of Grand Lodge of Ind., 25 Ind. 518; City of Petersburg v. Petersburg Benevolent Association, 78 Va. 431; Fitterer v. Crawford, 157 Mo. 51, 50 L. R. A. 191; Commonwealth v. Thomas, 119 Ky. 208, 83 S.W. 572, 6 L. R. A. [N. S.] 32; Appeal Tax Court of Baltimore v. Grand Lodge A. F. & A. M., 50 Md. 429; Massenburg v. Grand Lodge, etc., 81 Ga. 212; Mayor et al. of Savannah v. Solomon's Lodge, etc., 53 Ga. 93; Curtiss v. Odd Fellows, 99 Me. 356; State v. Board of Assessors, 54 La. Ann. 574; Mayor, etc., of Baltimore v. Grand Lodge, 60 Md. 280; Plattsmouth Lodge v. Cass County, 113 N.W. 167 [Neb.].

Property which is owned and occupied and used exclusively by a charitable organization; which is not used for general business purposes, and out of which no revenue is derived from third persons; and which is used by the organization for carrying on its charitable work, such use being either direct or indirect, is used exclusively for charitable purposes and is exempt from taxation under section 2503 of the Compiled Laws of Utah 1907. (Parker v. Quinn, 23 Utah 332; Hibernian Benevolent Society v. Kelly, 28 Ore. 173, 43 P. 3, 30 L. R. A. 518; Plattsmouth Lodge v. Cass County, 113 N.W. 167; Fitterer v. Crawford, 157 Mo. 51, 50 L. R. A. 191; First Unitarian Society v. Hartford, 66 Conn. 368.)

A use of property exclusively for charitable purposes does not preclude its being used for other than strictly charitable purposes, so long as such other use does not exclude nor materially interfere with its use for charitable purposes. (First Unitarian Society v. Hartford, 66 Conn. 368; People v. Feitner, 168 N.Y. 494; Curtiss v. Odd Fellows, 99 Me. 356; Fitterer v. Crawford, 157 Mo. 51; Book Agents of Methodist Episcopal Church South v. Hinton, 92 Tenn. 188, 19 L. R. A. 289; Bishop, etc. v. Treasurer of Arapahoe County, 29 Colo. 143, 68 P. 272; St. Mary's Church v. Tripp, 14 R. I. 307; Harvard College v. Assessors of Cambridge, 55 N.E. 844; Phillips Academy v. Inhabitants of Andover, 175 Mass. 118, 55 N.E. 841; Plattsmouth Lodge v. Cass County, 113 N.W. 167.)

Job P. Lyon and John J. Jensen for respondent.

RESPONDENT'S POINTS.

It is the use of the property itself and not the use to which the income or profit from the property is put that determines whether or not it shall be exempt from taxation. (Parker v. Quinn, 23 Utah 332; Cincinnati College v. State, 19 Ohio 110; American Sunday School Union v. Taylor, 161 Pa. 307; First Methodist Episcopal Church v. Chicago, 26 Ill. 482; Orr v. Baker, 4 Ind. 86; Philadelphia Appellant v. Barber, 160 Pa. 123; Morris v. Lone Star Chapter No. 6 R. A. Masons, 68 Tex. 698; Cleveland Library Assn. v. Pelton, 3 Ohio St. 259.)

The fact that the business of the Elks is restricted to their own membership, does not entitle the property in question to exemption from taxation. The decisions of the courts are universal in holding that if religious or charitable property is devoted in any manner distinctly to trade, business or secular purposes, the exemption no longer continues. (Benjamin Pierce v. Inhabitants of Cambridge, 2 Cushing [Mass.], 611; Frederick County Commissioners v. Sisters of St. Joseph, 48 Md. 39; Hendricks v. Farquhar, 8 Ohio 197; Massenburg et al. v. Grand Lodge, 81 Ga. 220.)

When an exemption is found to exist, it shall not be enlarged by construction. On the contrary it ought to receive a strict construction. (1 Cooley on Taxation [3d Ed.], p. 357. See, also, Judge v. Spencer, 15 Utah 242; St. v. Armstrong, 17 Utah 171; Fitterer v. Crawford, 157 Mo. 51, 50 L. R. A. 191; Boston Society, etc v. Boston, 129 Mass. 180; Hennepin County v. Grace, 27 Minn. 503; St. Peters Church v. Scott Co. Commissioners, 12 Minn. 395.)

McCARTY, J. STRAUP, J., concurring. FRICK, C. J., dissenting.

OPINION

McCARTY, J.

Plaintiff brought this action under Comp. Laws Utah 1907, section 2684, to recover from defendant, the treasurer of Salt Lake County, the sum of $ 621.89, taxes paid by plaintiff under protest on property which it claims was and is exempt from taxation. The cause was submitted to the trial court for decision upon an agreed statement of facts. From the facts stipulated in the record the court found, so far as material here, as follows:

"(1) That the plaintiff was and is a corporation, organized and existing under and by virtue of the laws of the State of Utah, and during all the times herein mentioned was and is the owner of the following described real and personal property: N. 50 ft. of S. 175 1/2 ft. of W. 112 ft. of lot 4 block 74, plat A, Salt Lake City, Salt Lake County, Utah, together with personal property therein, all of the total value of $ 16,280.

"(2) That the plaintiff is organized as a corporation for the purpose of furthering and carrying on the objects and purposes fully set forth in the constitution and by-laws of the incorporated society of Benevolent and Protective Order of Elks, and the Grand Lodge thereof, to promote good fellowship among its members and for charitable purposes, and in addition thereto, inaugurate and conduct a social club for the benefit of the members of said corporation, with all the rights and privileges incident and necessary to the furtherance of said objects, including the right to buy, acquire, exchange, sell, hold, and in any manner dispose of, real property, and to contract indebtedness of every nature whatsoever; that in accordance with its said purposes, plaintiff, during all of the year 1909, up to the date of this stipulation, has maintained and is now conducting for the benefit of the members of said lodge, social club rooms, and maintains on the first floor of the building situated on the land described in the first paragraph of plaintiff's complaint, a buffet where spirituous, vinous, and malt liquors, and cigars are sold to its members only, for profit, at about the same prices paid at the bars and saloons in Salt Lake City, and that said plaintiff on the second floor of said building sells for profit to its members only, luncheon and refreshments, and that upon the second floor of said building, said plaintiff also maintains a reading room, a room where billiards are played, and a room where cards are played; that said plaintiff also occasionally uses its lodge meeting room on the top floor of said building for dancing and other social purposes, from which use of its said lodge meeting room it derives no revenue whatever; that out of the receipts derived from the sale of liquors, cigars, luncheon and refreshments to its members, the plaintiff pays the expenses of maintaining the said buffet and restaurant, including the expense of bartender, waiters, porters, and the expense of everything sold and served in the buffet and restaurant, and all the net receipts thereof go to the plaintiff's general fund for charitable purposes; that said plaintiff also manages and conducts, every calendar year, an excursion over the San Pedro, Los Angeles, and Salt Lake Railway to Los Angeles, California, the...