Southside Church of Christ of Des Moines v. Des Moines Bd. of Review, 57074

• Decision Date: 30 June 1976
• Docket Number: No. 57074,57074
• Citation: 243 N.W.2d 650
• Parties: SOUTHSIDE CHURCH OF CHRIST OF DES MOINES, Iowa, Appellant, v. DES MOINES BOARD OF REVIEW et al., Appellees.
• Court: Iowa Supreme Court

Page 650

243 N.W.2d 650

SOUTHSIDE CHURCH OF CHRIST OF DES MOINES, Iowa, Appellant, v. DES MOINES BOARD OF REVIEW et al., Appellees.

No. 57074.

Supreme Court of Iowa.

June 30, 1976.

James F. Fowler, Indianola, for appellant.

Allean A. Herrick and Jeffrey E. Lamson, Des Moines, for appellees.

Heard before MOORE, C.J., and MASON, RAWLINGS, UHLENHOPP and HARRIS, JJ.

MASON, Justice.

This is an appeal by Southside Church of Christ of Des Moines from the decree of the Polk district court sustaining the decision of the Board of Review of the City of Des Moines denying the Church an exemption for a residence property owned by it described as Lot 18, Magnolia Park Plat 3, Des Moines, Iowa, for the reason the property was not solely used for charitable or religious purposes within the meaning of section 427.1(9), The Code, 1973. This statute under which the Church, as plaintiff, claims the exemption provides in part:

'The following classes of property shall not be taxed:

'* * *

'9. Property of religious, literary, and charitable societies. All grounds and buildings used or under construction by literary, scientific, charitable, benevolent, agricultural, and religious institutions and societies solely for their appropriate objects, not exceeding three hundred twenty acres in extent and not leased or otherwise used or under construction with a view to pecuniary profit.' This statute appears without change in the 1975 Code.

The burden is upon one claiming tax exemption to show the property falls within the exemption statute. Wisconsin Evangelical Lutheran Synod v. Regis, 197 N.W.2d 355, 356 (Iowa 1972); Evangelical Lutch. G.S. Soc. v. Board of Rev., Des Moines, 200 N.W.2d 509, 511 (Iowa 1972); and authorities cited in these opinions.

The trial court concluded plaintiff had failed to establish that the property involved was used solely for charitable and benevolent purposes.

In tax exemption cases 'our review is De novo. * * * (citing authority).' Aerie 1287, Frat. Order of Eagles v. Holland, 226 N.W.2d 22, 24 (Iowa 1975).

Thus, '* * * it is this court's responsibility to review the facts as well as the law and adjudicate rights anew on those propositions properly presented, provided issues have been raised and error, if any, preserved in the course of the trial court's proceedings. While weight will be given to the findings of the trial court this court will not abdicate its function as triers de novo on appeal. * * * (citing authority).' Mulford v. City of Iowa Falls, 221 N.W.2d 261, 267 (Iowa 1974).

The Church was incorporated in the fall of 1967. The articles of incorporation provided the Church corporation was being organized for the 'objects and purposes' of establishing '* * * a church to provide for people of good faith a program of concentrated religious education and training, together with facilities for and programs of benevolent work for orphaned and foster children and widows, * * *.'

Around the time of incorporation, arrangements were also made for the purchase of property. Lloyd A. Deal, a Church elder, testified payments on the property commenced in July 1968. To effect the objects and purposes of the corporation, the Church purchased several lots, including Lot 18, Scandia Magnolia Park, plat 3, in Des Moines (111 Southeast Emma Avenue) upon which was built a five bedroom home. Deal stated the house was constructed as a 'benevolent child's care home' with the possibility it would also be the Church parsonage.

Construction of this house was part of a larger plan by the Church to provide several homes with family type living for small numbers of foster children. To this end inquiry was made to the Iowa Department of Social Services regarding building standards for foster child placement. A local agency was also checked as to family requirements. In short, the Church contemplated family type living conditions for foster children. The Church itself provided special training in 'christian parenthood' in this connection for married couples.

The need for family type foster care is beyond question. Byron Bissell, Assistant Director of Social Services for the Polk County Department of Social Services testified the family type home is a more desirable form of care than the 'group home' and institution type. In was further adduced the family type situation, in addition to being the best, is also the least expensive. In this connection, 'foster care specialist' Darlene Clark wrote the Des Moines legal aid office that the average cost to government in the family type situation is $119.37 per child per month as opposed to, for example, $546.32 in the public institution setting.

Mr. Bissell also testified there is a shortage of foster homes in Polk County, especially those which will accept older children. When a child is over ten years old, 'we very quickly run out of available foster homes.' It is apparent homes not placing restrictions on the type of children accepted are few and far between.

With these needs in mind, the home in controversy was built. In addition to having five bedrooms, there were three bathrooms, a large kitchen and family room. It was the policy of the Church only couples who were Church members would be eligible to act as foster parents. When a couple was selected, trained and licensed, they would move into the home rent-free. The Church provided major maintenance and paid the mortgage and all utilities except personal long distance calls. Operating funds consist of 'free-will contributions of the congregation,' and are part of the Church's regular budget.

The first couple selected was Mr. and Mrs. Douglas Clark. Due to a health problem, the Clarks were replaced by Mr. and Mrs. James G. Holder in the summer of 1971. Holder testified the couple's own home did not meet state qualifications for foster care. Thus, they and their three children moved to the Church home for the purpose of providing foster care.

Records indicate the Holders had two foster children in the home from February 23, 1972 through August 18, 1972. Holder testified the two girls were eight and ten years old. Then, from October 23, 1972 through April 1973, there were two foster children seven and eight years old. The Holders were paid $100.00 monthly for each child. It was testified this money is derived mostly from the county juvenile court fund, although some state and federal funds are also involved. At the time of the hearing, the Holders had a 15-year-old mentally and physically handicapped child living with them for whom they are paid $107.50 monthly. It was noted the Holders are paid on the same basis as other private family foster homes. Byron Bissell stated there was nothing unusual about the amount of time foster children were in the Holder home during 1972.

Upon cross-examination of James Holder, it was adduced that while no rent is charged by the Church, the Holders donate an average of $200 monthly to the Church. Holder contended this did not constitute payment for living in the house and that since moving into the house, their donations have 'not necessarily' increased, although they might have due to a salary increase and obligation decrease. (Mr. Holder is a full-time purchasing agent for Wilson and Company).

The record reveals the Church applied several times for property tax exemptions on the property. In 1969, the Board of Review granted an exemption on the lot when it was utilized as a church parking lot. Again in 1970, the exemption was granted when the house was being constructed for benevolent child care And use as a parsonage. The 1971 and 1972 applications based on the reason the property was being utilized for benevolent child care only were denied. It is the 1972 exemption denial which generated this appeal.

April 4, 1972, plaintiff filed the claim for tax exemption with the Des Moines City Assessor. The Board of Review denied the application May 22, whereupon plaintiff filed a written protest. June 13 the Board of Review denied the protest. The Church then appealed from the action of the Board of Review to the Polk district court.

I. One of the questions presented for review by the appeal stems from the Church's attack directed to certain findings of fact by the trial court which the Church contends are neither supported by substantial evidence nor 'fair and reasonable inferences from the evidence.'

In the particular paragraphs of the findings assailed by the Church the trial court stated:

'3. The Holders say they pay no rent but they do pay $200.00 a month to the Church which they and the Church call a donation.

'* * *

'6. Plaintiff offered in evidence as Exhibit '6' its claim for exemption for 1970 which alleged said Lot 18 was to be used as a parsonage, and the exemption was granted.

'7. In its claim for exemption of said Lot 18 for 1971, plaintiff...