Sunday School Bd. of Southern Baptist Convention v. McCue

• Citation: 293 P.2d 234,179 Kan. 1
• Decision Date: 28 January 1956
• Docket Number: No. 39575,39575
• Parties: The SUNDAY SCHOOL BOARD OF the SOUTHERN BAPTIST CONVENTION, Plaintiff, v. Roy N. McCUE, Dale A. Fisher, O. W. Schwalm, Constituting and Members of the State Commission of Revenue and Taxation, Defendants.
• Court: United States State Supreme Court of Kansas

Page 234

293 P.2d 234

179 Kan. 1

The SUNDAY SCHOOL BOARD OF the SOUTHERN BAPTIST CONVENTION, Plaintiff, v. Roy N. McCUE, Dale A. Fisher, O. W. Schwalm, Constituting and Members of the State Commission of Revenue and Taxation, Defendants.

No. 39575.

Supreme Court of Kansas.

Jan. 28, 1956.

Syllabus by the Court.

1. The settled rule in this state is that taxation of property is the rule, exemption is the exception and one claiming an exemption must clearly disclose his right thereto.

2. The record examined in an original action in mandamus to compel the State Commission of Revenue and Taxation to issue an order declaring certain personal property exempt from taxation, and held, that the plaintiff is not entitled to the relief sought.

Lester C. Arvin, Wichita, argued the cause, and Kay K. Arvin, Wichita, was with him on the briefs for plaintiff.

Ervin G. Johnston, Kansas City, argued the cause and Paul Hurd, Topeka, was with him on the briefs for defendants.

THIELE, Justice.

This is an original proceeding in mandamus in which the plaintiff seeks to compel the State Commission of Revenue and Taxation to issue an order declaring certain personal property exempt from ad valorem taxation for the year 1953. An alternative writ was issued and the Commission filed its answer raising issues of fact and upon application made, this court appointed a commissioner to hear the testimony and to report his findings of fact and conclusions of law to this court.

The commissioner heard the testimony and later reported to this court, his report including findings of fact and conclusions of law and, in summary, that the property involved was not exempt from taxation and that the plaintiff should be denied the relief for which it prayed. The commission filed its motion that this court approve the report of the commissioner and confirm and adopt his findings of fact and conclusions of law and allow it its costs, and shortly thereafter the plaintiff filed its motion that this court set aside the conclusions of law in the above report and find that the property involved was exempt. The case is submitted to us on the two motions.

Inasmuch as the findings of fact are in no manner attacked and as they sufficiently cover the pleadings and the facts at issue, it is not necessary that any review be made of the pleadings.

The substance of the findings of fact in the report is that the particular property plaintiff seeks to have declared exempt from ad valorem tax consists of a merchandise inventory assessed at $16,000, a furnace assessed at $130, and moneys and credits assessed at $4,281.36, all located at its place of business in Wichita operated as the Baptist Book Store; that plaintiff is a nonprofit corporation under the laws of Tennessee for the purpose of establishment, support and maintenance of any Sunday-school undertaking on the part of the Southern Baptist Convention, a voluntary association of more than 28,000 Baptist churches, 109 of which are in Kansas; that plaintiff is authorized to print, purchase and distribute by gift or sale religious literature for the propagation of the gospel and the advancement of the religious faith of Baptist churches associated with the above Convention; to buy and sell Sunday-school supplies and '* * * to deal in books, stationery and general office supplies and to perform all necessary functions incident to the conduct of its business.' The plaintiff's principal place of business is in Nashville, Tennessee, from which point it directs sale and distribution to Baptist churches of Sunday-school literature, church periodicals, supplies and records and some 11,000 various items of merchandise such as office supplies, pictures, books, cameras, audiovisual aids, toys, novelties and gifts, both by by catalogs and by ownership and operation of some forty-seven establishments known as Baptist Book Stores, one being in Wichita; that the literature, periodicals and other printed matter are selected and sold as being religious in character and as in keeping with a religious organization, and most of such articles bear some moral axiom or religious phrase; that plaintiff deals in certain types of cameras and audiovisual aids for religious purposes '* * * although such articles are offered and made available for sale by it to the general public; that many of the items sold and distributed by petitioner are available for purchase at purely secular stores and places of business and are capable of being used by a purchaser for purely secular purposes.' Findings are made as to plaintiff's gross receipts and its net income for 1953 and that the net income was used by the plaintiff for religious purposes and that members of Baptist churches in Kansas affiliated with the Convention received benefits; that plaintiff organized its store in Wichita for the purpose of supplying church materials to Kansas Baptist and its activities are 'largely confined' to the sale of church supplies and articles of merchandise such as toys, gifts and novelties, both of a religious and secular nature; that the sales in Wichita materially assist plaintiff in its missionary and religious functions in Kansas and sales at a profit provide more funds available to it in its missionary and religious programs and that its book store in Wichita is not used as a place of public worship or as a place of religious instruction; that plaintiff conducts its book store in Wichita in a manner similar to the operation of other retail establishments; that its manager and employees are hired in Nashville, Tennessee, and that reports are made to that office; that the Wichita store manager purchases some similar articles for sale from numerous salesmen who call on him, the purchases being billed to and paid by the Nashville office and in turn charged to the Wichita operation; that in 1953 the costs of operation in Wichita exceeded the receipts, but if there had been a gain it would have been remitted to the Nashville office and there appropriated and distributed for religious purposes. The last finding of fact reads:

'15. That the merchandise inventory owned by petitioner and located in its book store at 231 North Main Street on March 1, 1953, which was assessed for ad volorem tax purposes at $16,000.00 (see finding No. 4 above) had been purchased or acquired by the manager of said store in the manner described above and on that date was being held for purposes of resale at a profit to Baptist Churches and other religious or secular organizations and to members of the general public; that petitioner's moneys and credits located in Wichita on March 1, 1953 and assessed at $4,281.36 (see finding No. 4) resulted from sales of merchandise made at said Wichita book store; that said merchandise inventory, moneys and credits were not being used exclusively for religious purposes at the time said property was assessed for taxation, nor were they used exclusively for religious purposes at any time during the year 1953; that said merchandise inventory on March 1, 1953, was being held and used at its location for purpose of retail sale at a profit; that said moneys and credits on March 1, 1953, were being held and used at its location to pay the cost of operating said Wichita book store; that said moneys and credits on March 1, 1953, were not appropriated solely to sustain a religious institution; that the furnace owned by petitioner and located in its Wichita book store on March 1, 1953, assessed at $130.00 (see finding No. 4) was not being used exclusively for religious purposes.'

The commissioner's conclusions of law are:

'Conclusions of law.

'1. That the property here involved and assessed for ad valorem taxation for the year 1953 was not used exclusively for religious purposes within the meaning of Section 1, Article XI of the Kansas Constitution and the decisions of the Supreme Court of the State of Kansas. Washburn College v. Commissioners of Shawnee County, 8 Kan. 344; Vail v. Beach, 10 Kan. 214; St. Mary's College v. Crowl, 10 Kan. 442; Stahl v. [Kansas] Educational Association, 54 Kan. 542, 38 P. 796; Wheeler v. Weightman, 96 Kan. 50, 149 P. 977 [L.R.A.1916A, 846]; Clements v. Ljungdahl, 161 Kan. 274, 167 P.2d 603.

'2. That the...