State v. Bridges

• Decision Date: 08 March 1945
• Docket Number: 6 Div. 306.
• Parties: STATE v. BRIDGES et al.
• Court: Alabama Supreme Court

21 So.2d 316

246 Ala. 486

STATE v. BRIDGES et al.

6 Div. 306.

Supreme Court of Alabama

March 8, 1945

Wm. N. McQueen, Acting Atty. Gen., and John W. Rish and H. Grady Tiller, Asst. Attys. Gen., for appellant.

Spain Davies, Gillon, Grooms & Young, of Birmingham, for appellees.

GARDNER Chief Justice.

Appellees jointly own a three-story brick building situated on Lot 18 and the west half of Lot 20 in Block 74 in the City of Birmingham, Alabama, the lot being 50 feet in width and 140 feet in depth. The ground floor of the building is rented to two separate tenants for commercial purposes, each paying $275 per month. The second and third floors of said building together with the connecting stairway, are leased to the Massey Business College, a partnership, for a rental of $187.50 per month, making a total rental for the building of $737.50. The gross rent, therefore, produced by the lease from the Massey Business College is slightly in excess of 25% of the total. This property was assessed by the Board of Equalization for Jefferson County as a whole at a valuation of $54,000.

Pursuant to the provisions of Sec. 110, Title 51, Code 1940, the appellees appealed from the order entered by the Board of Equalization to the Circuit Court of Jefferson County. There the cause was heard upon an agreed statement of facts, the salient features of which, so far as the result here is concerned, have been stated. And upon consideration of the cause in the circuit court a judgment was entered to the effect that the second and third floors of this building, and the stairway leading thereto, be held exempt from ad valorem taxes by reason of the fact these parts of the building were being used exclusively for schools, within the meaning of Sec. 2, Title 51, Code 1940; and that, excluding these parts of the building, the assessed valuation of the remainder be fixed at $40,500. The matter of valuation was as stipulated in the agreed statement of facts. This conclusion resulted in an order of refund to the property owners from the State, the County of Jefferson, and the City of Birmingham. From the judgment thus rendered the State has prosecuted this appeal.

The sole question here for consideration is whether the second and third floors of this building are exempt from taxation, either under Sec. 91 of the Constitution of 1901 or under the provisions of subd. (a), Sec. 2, Title 51, Code 1940.

The constitutional exemption, Sec. 91, supra, is of 'lots in incorporated cities or towns, or within one mile of any city or town to the extent of one acre, [and] lots one mile or more distant from such cities or towns to the extent of five acres, with the buildings thereon, when same are used exclusively for religious worship, for schools, or for purposes purely charitable.' It will be noted that this constitutional provision is applicable only to real estate, and places no limitation on the Legislature concerning the taxation of personal property.

In Anniston City Land Co. v. State, 160 Ala. 253, 48 So. 659, it was held that it was the use of the property and not its ownership that laid the foundation for the exemption. And in State v. Church of the Advent, 208 Ala. 632, 95 So. 3, following the holding of the above-cited authority, the conclusion was reached that the test by which it is to be determined whether or not the property is exempt is the use to which it is put and not the purpose for which the proceeds are devoted, if the property is actually rented to others.

In State v. Alabama Educational Foundation, 231 Ala. 11, 163 So. 527, this constitutional provision was interpreted as not prohibiting the Legislature from granting other exemptions to religious, educational, and charitable institutions.

The minute entry in the instant case has the recital that the matter of exemption was rested upon Sec. 2, Title 51, Code 1940. But so far as the purposes of this appeal are concerned, we are unable to discover any material difference in the statutory exemption and that found in the above-cited Sec. 91 of our Constitution. True, the statute extends the exemption to personal property, as to which the constitutional provision is silent. But we are not here concerned with personal property, and that distinction is therefore immaterial. The statute exempts 'all property, real and personal, used exclusively for religious worship, for schools or for purposes purely charitable.'

There is a proviso in regard to the property, real or personal, owned by any such institutions which is let for rent or hire. But that proviso is inapplicable here, and may, therefore, be disregarded. True, the statute makes no reference to any matter of limitation as to the acreage, but that, too, is a difference without any significance here. It would, therefore, appear that a consideration of the merits of this case from the standpoint of Sec. 91 of the Constitution or of Sec. 2, Title 51, Code 1940, would lead to the same result. And that result must be determined upon whether or not the property, within the meaning of these constitutional and statutory provisions, is used exclusively for school purposes.

At the outset, it may be observed that, in keeping with the principle expressed by some of the authorities that 'equality is equity,' a constitutional or statutory grant of exemption from taxation is to be strictly construed. 61 C.J. p. 392. And this rule of construction was given application to Sec. 91 of our Constitution in Anniston City Land Co. v. State, 160 Ala. 253, 48 So. 659, 660, where it was observed: 'The 'universal rule of construction is that exemptions from taxation, whether statutory or constitutional, are to be strictly construed, against the exemption and in favor of the right to tax, and that no person or property is to be exempted unless the intention to exempt such person or property clearly appears in some statute or constitutional provision.''

The right to tax is never presumed abandoned or surrendered unless it clearly appears that such was the intention. In this same authority the Court quoted approvingly from Washburn College v. Shawnee County, 8 Kan. 344, involving a constitutional provision which bears striking analogy to our own, i. e., for the exemption to be claimed, the property must be used exclusively for educational purposes. In speaking of this decision our Court, in the Anniston City Land Co. case, supra, said: 'The court of last resort in that state, construing the provision and speaking through Brewer, J., said: 'To bring this property within the terms of the section quoted, it must be used exclusively for literary and educational purposes. This involves three things: First, that the property is used; second, that it is used for educational purposes; and, third, that it is used for no other purpose.''

The State insists, in the first instance, that a business college is not included in the term 'school' as used in the Constitution and statutes of this State exempting property used exclusively for schools from taxation. Among the authorities cited in support of this insistence are: Lawrence Business College v. Bussing, 117 Kan. 436, 231 P. 1039, from the Supreme Court of Kansas; Parsons Business College v. Kalamazoo, 166 Mich. 305, 131 N.W. 553, 33 L.R.A.,N.S., 921; Lichentag v. Tax Collector, 46 La.Ann. 572, 15 So. 176. In answer thereto, counsel for appellees cite, as holding to a contrary view: Board of Commissioners v. Tulsa Business College, 150 Okl. 197, 1 P.2d 351; Watson v. Cowles, 61 Neb. 216, 85 N.W. 35; Rohrbough v. Douglas County, 76 Neb. 679, 107 N.W. 1000; Wilson's Modern Business College v. King County, 4 Wash.2d 636, 104 P.2d 580; In re Mountain State College, Inc., Assessment, 117 W.Va. 819, 188 S.E. 480; Pitcher v. Miss Wolcott School Ass'n, 63 Colo. 294, 165 P. 608, L.R.A.1917E, 1095: Detroit Home & Day School v. City of Detroit, 76 Mich. 521, 43 N.W. 593, 6 L.R.A. 97, among others. Additional authorities treating this question may be found noted in 51 Am.Jur. pp. 595, 596; 95 A.L.R. p. 75.

A cursory examination of the cases is persuasive that the question is a debatable one and worthy of serious consideration. But in view of the fact that we are clearly convinced that the property here in question does not come within the influence of the language of either the Constitution or the statute as to exclusive use for schools, whatever conclusion may be reached concerning the status of a business college, we have left that question to one side and undetermined. We have commented upon this insistence in order to make clear our position that the determination of this question is left to one side.

Some of the authorities cited by appellees appear to sustain the view that different floors of one building may be used for different purposes and thus be separate parcels for taxation purposes, and that the exemption thus turn upon the exclusive use of the property claimed to be exempt. Among the authorities cited are: Parker v. Quinn, 23 Utah 332, 64 P. 961; State v. Board of Assessors, 52 La.Ann. 223, 26 So. 872; Y. M. C. A. v. Douglas County, 60 Neb. 642, 83 N.W. 924, 52 L.R.A. 123; First Methodist Episcopal Church v. City of Chicago, 26 Ill. 482; Massenburg v. Grand Lodge F. & A. M., 81 Ga. 212, 7 S.E. 636; Appeal Tax Court of Baltimore City v. Grand Lodge, etc., 50 Md. 421; Cleveland Library Ass'n v. Pelton, 36 Ohio St. 253; Board of Home Missions, etc., v. City of Philadelphia, 266 Pa. 405, 109 A. 664; City of Philadelphia v. Barber, 160 Pa. 123, 28 A. 644. Some of these authorities are found cited to the notes in 61 C.J. p. 485.

But we have made no critical examination of the constitutional or statutory provisions of these several states, or a close analysis of the decisions rendered. To justify a holding that a...