Salvation Army v. Hoehn

• Decision Date: 04 June 1945
• Docket Number: 39098
• Citation: 188 S.W.2d 826,354 Mo. 107
• Parties: The Salvation Army, Appellant, v. Arthur C. Hoehn et al
• Court: Missouri Supreme Court

188 S.W.2d 826

354 Mo. 107

The Salvation Army, Appellant, v. Arthur C. Hoehn et al

No. 39098

Supreme Court of Missouri

June 4, 1945

Rehearing Denied July 2, 1945.

Appeal from Circuit Court of City of St. Louis; Hon. Charles B Williams, Judge.

Reversed and remanded (with directions).

Buder & Buder and Neuhoff & Millar for appellant.

(1) The legal concept of charity is not confined to the relief of poverty and destitution, but includes such humanitarian activities as tend to improve the physical, mental, or moral condition of people, and thereby benefit the community by improving its condition or lessening the burdens of government. Missouri Historical Society v. Academy of Science, 94 Mo. 459; Parsons v. Childs, 345 Mo 689, 136 S.W.2d 327; Buchanan v. Kennard, 234 Mo. 117; In re Rahn's Estate, 316 Mo. 492, 291 S.W. 120; Robinson v. Crutcher, 288 Mo. l.c. 8, 209 S.W. 105; Catron v. Scarritt Collegiate Institute, 264 Mo. l.c. 725, 175 S.W. 573. (2) Homes operated for employed girls and women where they can obtain board and lodging at or below cost, and where all revenue is used in the maintenance and operation of the home, with no profit resulting to anyone, have consistently been recognized as "purely charitable" and have without exception been accorded tax exemption. Webster Apartments v. New York, 193 N.Y.S. 650, affirmed 206 A.D. 749, 200 N.Y.S. 956; Women's Christian Assn. of Philadelphia v. Lippincott, 9 N.J. Misc. 133, 153 A. 261; Young Women's Christian Assn. of Harvey Cedars v. Pelham, 9 N.J. Misc. 196, 153 A. 397, affirmed 158 A. 544; Franklin Square House v. Boston, 188 Mass. 409, 74 N.E. 675. (3) The receipt of revenue by an institution from the recipients of its bounty, which is purely incidental to or constitutes part of its religious, educational, or charitable program, where such revenue is devoted to the furtherance of such program, and there are no commercial aspects about its operation, will not prevent such institution from claiming and obtaining tax exemption. Such institution is entitled thereto under the provisions of Article X, Sec. 6 of the Constitution of Missouri and Section 10937, R.S. 1939. Young Women's Christian Assn. v. Baumann, 344 Mo. 898, 130 S.W.2d 499; State ex rel. Alexian Brothers' Hospital v. Powers, 10 Mo.App. 263; State ex rel. Spillers v. Johnston, 214 Mo. 656, 113 S.W. 1083.

George L. Stemmler and Joseph F. Holland, City Counselors, Henry A. Hamilton and Charles J. Dolan, Associate City Counselors, for respondents Arthur C. Hoehn and Louis Nolte, Eugene M. Guise for respondent Richard E. Gruner.

(1) The building in question was not used exclusively as of June 1, 1942, for religious worship, for schools, or for purposes purely charitable. State ex rel. Y.M.C.A. v. Gehner, 320 Mo. 1172, 11 S.W.2d 30; St. Louis Y.M.C.A. v. Gehner, 329 Mo. 1007, 47 S.W.2d 776; Young Men's Christian Assn. of Germantown v. Philadelphia, 323 Pa. 401, 187 A. 204. (2) Under laws exempting from taxation property used for religious worship, for schools, or for purposes purely charitable, it is the use of the property and not the character of the owner or the motive for which it is used, which determines the right to exemption. St. Louis Lodge No. 9, B.P.O.E., v. Koeln, 262 Mo. 444, 171 S.W. 329; State ex rel. Y.M.C.A. v. Gehner, 320 Mo. 1172, 11 S.W.2d 30; St. Louis Y.M.C.A. v. Gehner 329 Mo. 1007, 47 S.W.2d 776; Young Men's Christian Assn. of Germantown v. Philadelphia, 323 Pa. 401, 187 A. 204. (3) It is the well-settled law of this State that grants of exemption from taxation will be strictly construed against the person claiming exemption, taxation being the rule and exemption the exception. Fitterer v. Crawford, 157 Mo. 51, 57 S.W. 532; St. Louis Lodge No. 9, B.P.O.E., v. Koeln, 262 Mo. 444, 171 S.W. 329; State ex rel. Y.M.C.A. v. Gehner, 320 Mo. 1172, 11 S.W.2d 30; St. Louis Y.M.C.A. v. Gehner, 329 Mo. 1007, 47 S.W.2d 776. (4) All laws exempting from taxation property used exclusively for schools or for purposes purely charitable, are based upon the theory that the persons using such property are rendering a service to the community which would otherwise have to be assumed by the community itself. Lloyd Library and Museum v. Chipman, 232 Ky. 191, 22 S.W.2d 597; School of Domestic Arts and Science v. Carr, 322 Ill. 562, 153 N.E. 669; Y.M.C.A. of Germantown v. Philadelphia, 323 Pa. 401, 187 A. l.c. 210. (5) The principles of law announced and applied in the cases of State ex rel. Y.M.C.A. v. Gehner, 320 Mo. 1172, and St. Louis Y.M.C.A. v. Gehner, 329 Mo. 1007, should be respected and followed as a public policy in accordance with the maxim, stare decisis, et non quieta movere. 1 Kent's Commentaries (14 Ed.), pp. 475, 476; 7 R.C.L., p. 1000. (6) It is an established rule of construction that, where a constitutional provision has received a settled judicial construction, and is afterwards incorporated into a new Constitution, it will be presumed to have been retained with a knowledge of the previous construction and courts feel bound to adhere to it. 12 C.J., p. 717; Sanders v. St. Louis, etc., Line, 97 Mo. 20. (7) The Constitution of Missouri authorizes tax exemption of real estate "used exclusively . . . for purposes purely charitable." A use of property is not charitable unless the owner employs the property in doing acts which possess all the elements of charity. A commercial enterprise is not a charity even though those dealing therewith receive substantial benefit therefrom.

Wilbur B. Jones, Arthur J. Freund and Sam Elson for St. Louis Y.M.C.A., amicus curiae; Salkey & Jones of counsel.

OPINION

Bradley, C.

Action against the St. Louis Assessor, Comptroller, and Collector for a declaratory judgment to the effect that plaintiff's (appellant's) described property in St. Louis is exempt from taxation and to enjoin the collection of taxes against said property. The trial court denied relief and plaintiff appealed. Jurisdiction of the appeal is in the supreme court because the construction of the Constitution and the revenue laws of the state is involved. Sec. 12, Art. 6, Constitution.

Plaintiff owns the lot (100 feet by 109 feet, 1 inch) and the building thereon at 1803 Pine Street, St. Louis. The building (basement and 13 stories) was erected in 1928 and was first known as the Robert E. Lee Hotel, but when plaintiff became the owner it was known as the Auditorium Hotel. Plaintiff became the owner by purchase at a second mortgage foreclosure sale in 1939. The bid, plus a first mortgage assumed, was $ 108,000. In plaintiff's hands, the building became the St. Louis Evangeline Residence of the Salvation Army. June 1, 1942, the property was assessed at $ 281,500. In April, 1943, the Board of Equalization reduced the assessment to $ 272,500. The reduced assessment and the taxes due thereon in 1943 are the assessment and taxes involved here.

Plaintiff contends that the property is exempt from taxation under Sec. 6, Art. 10, Constitution, and Sec. 10937, R.S. 1939, Mo. R.S.A., Sec. 10937. The Constitution provides that "lots in incorporated cities . . . with the buildings thereon, may be exempted from taxation, when the same are used exclusively for religious worship, for schools, or for purposes purely charitable" (italics ours). The statute provides that property so used shall be exempt. Plaintiff's property is less than one acre and there is no claim that it is used exclusively for religious worship or exclusively for schools, hence the sole question: Is the property used exclusively for purposes purely charitable?

Plaintiff was incorporated in Illinois May 29, 1913. The object and purpose of plaintiff, as given in its charter is "to further the work of the Christian Church known as The Salvation Army, and to engage in charitable, educational, missionary, philanthropic and religious work of the character that has been and is being conducted by the branch of the Christian Church known as The Salvation Army, and to do everything, and to act and carry on every kind of operation necessary and incidental to the maintenance of such beneficial, educational, charitable, missionary, philanthropic and religious work, but that all of such work shall be conducted not for pecuniary profit . . ."

As stated, the building has a basement and 13 stories. In the basement are the boiler room, food storage room, laundry room, recreation room, baggage room, office and shop of the building engineer, and dressing room for the building employees. On the first floor are the lounge or lobby, a social room large enough to accommodate 35 people and furnished with dishes, electric stove, cooking utensils, dining room and kitchen, library, chapel, secretary's office, rest room for employees. On the second floor are linen room, housekeeper's room, manager's office, two guest rooms, auditor's office and room, manager's apartment, storage room. Each of the 11 floors above the second contains 17 bedrooms and each has bath and telephone.

Women and girls desiring to live at the Evangeline Residence are required to file a written application and give age nationality, nearest relative and address, church, occupation, employer's name and address (if employed), how long employed, salary, two references, type of room desired, single or double. Religion and nationality are not considered in passing on application. The rooms are $ 11.50 per week for single, and $ 9.50 or $ 10.00 per person for double. Included in these charges are 15 meals per week, 3 on Sunday and 2 on week days. Of the amount paid by each per week, $ 5.35 was allocated to food, the remainder to lodging. Outside telephone calls from the rooms are 10 cents each, but on the first floor are two toll telephones from which an outside call may be made for 5 cents. No...