Samarkand of Santa Barbara, Inc. v. Santa Barbara County

Citation216 Cal.App.2d 341,31 Cal.Rptr. 151
PartiesThe SAMARKAND OF SANTA BARBARA, INC., a non-profit corporation, Plaintiff and Appellant, v. COUNTY OF SANTA BARBARA, a body corporate and politic, Defendant and Respondent. Civ. 26740.
Decision Date20 May 1963
CourtCalifornia Court of Appeals

Page 151

31 Cal.Rptr. 151
216 Cal.App.2d 341
The SAMARKAND OF SANTA BARBARA, INC., a non-profit corporation, Plaintiff and Appellant,
COUNTY OF SANTA BARBARA, a body corporate and politic, Defendant and Respondent.
Civ. 26740.
District Court of Appeal, Second District, Division 2, California.
May 20, 1963.
As Modified on Denial of Rehearing June 14, 1963.
Hearing Denied July 17, 1963.

Page 152

[216 Cal.App.2d 344] Price, Postel & Parma, Santa Barbara, for appellant.

Robert K. Cutler, County Counsel, Stanley C. Hatch, Deputy County Counsel, for respondent.

[216 Cal.App.2d 345] ASHBURN, Justice.

In eight causes of action plaintiff, invoking the welfare exemption of the Constitution, 1 and the Revenue and Taxation Code, 2

Page 153

sought return of real property taxes paid to defendant county for the tax years 1955-56 to 1961-62, inclusive. Demurrer to its amended complaint was sustained with leave to amend but plaintiff declined to [216 Cal.App.2d 346] amend, judgment was entered accordingly and it has appealed from that judgment which dismisses the action.

Two major problems are canvassed by counsel, (1) whether inclusion of the words 'educational, scientific or literary purposes' in Article II of plaintiff's charter (the article stating corporate purposes) disqualifies it for the welfare exemption, and (2) whether the healing balm of the curative provisions of § 268, Revenue and Taxation Code, has cured or can cure the failure of plaintiff to file claims for exemption or petitions for refund as required by other sections of the code.

Concerning the first problem it appears that 'at all times herein mentioned all of the property hereinbefore described was irrevocably dedicated to, and was used exclusively for, religious, charitable or hospital purposes, to wit: as a home for the care, maintenance and support of aged persons, and upon liquidation, dissolution or abandonment of the owner will not inure to the benefit of any private person, except a fund, foundation or corporation organized and operated for religious, hospital or charitable purposes'; also, that plaintiff qualifies in all respects for exemption under the Constitution and statute unless the use of the words 'educational, scientific, or literary purposes' in the Articles of Incorporation dictates a denial of the exemption. In other words, the past and present uses of plaintiff's property have been fully charitable and the problem grows out of the declaration of purposes found in the articles. Articles II and IV are the pertinent ones; they are set forth in footnote 3. 3

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[216 Cal.App.2d 347] The constitutional provision is not self-executing but confers upon the legislature the power to grant exemptions to nonprofit organizations with respect to property 'used exclusively for religious, hospital or charitable purposes,' which language requires the legislature in the first instance to determine and declare what uses fall within this category. There is a presumption in favor of the legislative interpretation which will not be set aside unless clearly wrong. 'The presumption is in favor of constitutionality, and the invalidity of an act of the Legislature must be clear and unquestionable before the statute can be declared unconstitutional. We cannot adopt our own interpretation of a provision of the Constitution without regard to the legislative construction, and, where more than one reasonable meaning exists, it is our duty to accept that chosen by the Legislature. [Citations.] This fundamental principle is particularly applicable where, as here, the statute was enacted pursuant to an enabling provision of the Constitution and there is not only a reasonable legislative construction of that provision but also approval of that construction by the people on referendum.' (Lundberg v. County of Alameda, 46 Cal.2d 644, 652, 298 P.2d 1, 6.) Accordingly, the use in § 214 of the statute of 'scientific' purposes [216 Cal.App.2d 348] or school purposes ('educational'), raises a presumption that those are or may be charitable purposes within the meaning of the Constitution. Moreover, when the legislature recognizes as charitable any purposes 'clearly incidental to a primary religious, hospital, * * * or charitable purpose,' it is on solid constitutional ground, as the cases have pointed out.

Estate of Henderson, 17 Cal.2d 853 at page 857, 112 P.2d 605 at page 607, which deals with a will and gifts which are intrinsically charitable, defines the scope of a charity as follows: 'Since the enactment of the Statute of Charitable Uses during the reign of Elizabeth, aid to the aged and infirm has been recognized as charitable. See cases cited in 5 Cal.Jur. 24. Relief of poverty is not a condition of charitable assistance. If the benefit conferred has a sufficiently widespread social value, a charitable purpose exists. Restat., Trusts, secs. 368, 374; People [ex rel. Ellert] v. Cogswell, [supra] 113 Cal. 129, 45 P. 270, 35 L.R.A. 269; Collier v. Lindley, 203 Cal. 641, 266 P. 526; 16 Cal.L.Rev. 478. Thus, gifts or trusts for educational institutions (Restat., Trusts, sec. 370; People [ex rel. Ellert] v. Cogswell, supra), the promotion of woman's suffrage (Garrison v. Little, 75 Ill.App. 402), the publishing of religious writings (Restat., Trusts, sec. 371; In re Estate of Graham, 63 Cal.App. 41, 218 P. 84; see 16 Cal.L.Rev. 478 at 482), and even for the relief of dumb animals (In re Estate of Coleman, 167 Cal. 212, 138 P. 992, Ann.Cas.1915C, 682; Restat., Trusts, sec. 374(c)), have been held charitable. It is a matter of common knowledge that aged people require care and attention apart from financial assistance, and the supply of this care and attention is as much a charitable and benevolent purpose as the relief of their financial wants. Every civilized community must provide facilities, either public or private, for the care of old people, regardless of financial condition, and a bequest to such an institution to further its purposes is of enough social value to be designated

Page 155

as charitable.' At page 858, of 17 Cal.2d, at page 608 of 112 P.2d, it is said: 'Thus students at a private school may be required to pay tuition fees to cover the cost of their instruction; yet a gift to such a school for the purpose of assisting in the education of its students is clearly charitable. [In re] Estate of Bailey, 19 Cal.App.2d 135, 65 P.2d 102; People ex rel. Ellert v. Cogswell, supra; In re Estate of Bartlett, 122 Cal.App. 375, 10 P.2d 126; Restat., Trusts, sec. 370.' This broad concept of a charity runs through the later cases dealing with the welfare exemption from property taxation.

[216 Cal.App.2d 349] Fifield Manor v. County of Los Angeles, 188 Cal.App.2d 1, 7, 10 Cal.Rptr. 242, 246: 'It is a generally recognized fact that modern miracle drugs and intensive study of geriatrics have lengthened the lives of our people, especially those past 60, to a remarkable extent in recent years. The Congress in an act passed September 2, 1958, entitled 'White House Conference on Aging Act' (1 U.S.Code Congressional and Administrative News, p. 2101) declares that: '(1) The number of persons forty-five years of age and older in our population has increased from approximately thirteen and one-half million in 1900 to forty-nine and one-half million in 1957, and the number sixty-five years of age and over from approximately three million in 1900 to almost fifteen million at the present time, and is expected to reach twenty-one million by 1975.' Page 2102: '(5) [T]he lack of suitable facilities and opportunities in which middle-aged persons can learn how to prepare for the later years of life, learn new vocational skills, and develop and pursue avocational and recreational interests is driving many of our older persons into retirement shock, premature physical and mental deterioration, and loneliness and isolation and is filling up our mental institutions and general hospitals and causing an unnecessary drain on our health manpower; * * *

"(7) [W]e may expect average length of life and the number of older people to increase still further, we must proceed with all possible speed to correct these conditions and to create a social, economic, and health climate which will permit our middle-aged and older people to continue to lead proud and independent lives which will restore and rehabilitate many of them to useful and dignified positions among their neighbors; which will enhance the vigor and vitality of the communities and of our total economy; and which will prevent further aggravation of their problems with resulting increased social, financial, and medical burdens."

Lundberg v. County of Alameda, supra, 46 Cal.2d 644, 649, 298 P.2d 1, 4: 'The term charity has been defined in a number of California cases as "a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings [216 Cal.App.2d 350] or works or otherwise lessening the burdens of government."' At page 650 of 46 Cal.2d, at page 4 of 298 P.2d: 'The argument made by plaintiff that the word charitable should be narrowly construed in favor of taxability has been rejected by this court in two recent cases involving section 1c of article XIII.'

When the words 'educational, scientific or literary purposes' are considered separately, sound basis appears for treating them as charitable within the meaning of the Constitution.

Educational gifts are said, in Estate of Henderson, supra, 17 Cal.2d 853, at 858, 112 P.2d 605, at 608, to be 'clearly charitable.' The authorities cited in the last quotation from that case clearly support the text.

Section 370 of Restatement of Trusts 2d, says (p. 251): 'A trust for the...

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