The Kappa Kappa Gamma House Association v. Pearcy

• Decision Date: 07 July 1914
• Docket Number: 19,449
• Citation: 92 Kan. 1020,142 P. 294
• Parties: THE KAPPA KAPPA GAMMA HOUSE ASSOCIATION, Appellee, v. C. E. PEARCY, as Treasurer of Douglas County, etc., et al., Appellants
• Court: Kansas Supreme Court

142 P. 294

92 Kan. 1020

THE KAPPA KAPPA GAMMA HOUSE ASSOCIATION, Appellee, v. C. E. PEARCY, as Treasurer of Douglas County, etc., et al., Appellants

No. 19,449

Supreme Court of Kansas

July 7, 1914

Decided July, 1914.

Appeal from Douglas district court; CHARLES A. SMART, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. TAXATION--Building Used by Students of State University as Literary Hall and Dormitory--Exempt from Taxation. A building was erected upon grounds less than one-half acre in extent by the Kappa Kappa Gamma society, which was composed of young women who were students of the state university, from funds obtained by a mortgage on the property and in part from subscriptions by the members of the society and the donations of their friends. To accomplish it a corporation was organized which acted as trustee for the society, in which the legal title of the property was placed and by which the mortgage securing the loan was executed. After the completion of the building it was exclusively used by the members of the society as a literary hall and dormitory and was never leased or otherwise used with a view of profit. Held, that as long as the property is so used it is exempt from taxation under the provisions of section 9218 of the General Statutes of 1909.

2. SAME--Use Not Ownership--Test of Exemption. As use, not ownership, is the test of the exemption it is not material that the legal title to the property was placed in the corporation and not in the society, nor can the society be deprived of the benefit of the exemption because some of the students may be unable to gain admission to the society.

J. S. Amick, county attorney, for the appellants.

W. B. Brownell, of Lawrence, and Edwin C. Meservey, of Kansas City, Mo., for the appellee.

OPINION

JOHNSTON, C. J.

Whether the building occupied and used by the Omega chapter of the Kappa Kappa Gamma sorority, a society composed of young women who are students of the University of Kansas, is subject to taxation is the question presented for determination. The title to the real estate stands in the name of the Kappa Kappa Gamma House Association, a corporation "organized not for profit, and . . . the purposes for which it is formed are: to acquire and manage property, both real and personal, for the furtherance of educational, social, benevolent and charitable purposes among such women of the University of Kansas as are now or may hereafter become members of the Omega Chapter of Kappa Kappa Gamma."

The ground on which the building was erected was purchased for $ 1650 and paid for from voluntary subscriptions made by the young women who were members of the society and students of the university and by their friends and relatives. From the same source they raised the sum of $ 2000 which was used in the construction of the chapter house. The house cost approximately $ 17,500 and to complete it the society borrowed the sum of $ 15,500. Upon the completion of the building the young women of the society, students in the university, took possession of it and have occupied it ever since. The furniture placed in the building was purchased by voluntary subscription of the members and through donations from friends of the society and of the university. The building has been used exclusively as a literary hall and dormitory. It has been principally used as a dormitory, but from time to time the members of the society have held literary exercises in a large room set apart for that purpose. No lease was ever executed by the House Association nor has any rent ever been paid by the society for the use of the building as the corporation was only organized to act as trustee for the members of the society, that is, to hold the title to the real estate and to execute a mortgage thereon that would be accepted as security for the money advanced to complete the house. The mortgage debt was placed in notes of small amounts under the agreement and plan that the young women would obtain subscriptions and that these, together with initiation fees for admission into the society, should be devoted, as they were obtained, to the payment of the mortgage debt. The officers of the county listed the real estate for taxation and were proceeding to enforce the payment of the taxes assessed against it when this action of injunction was begun. Under the facts, which were agreed upon, the trial court held that the property was exempt from taxation and granted a permanent injunction against the assessment and taxation of the property.

These facts fairly bring the case within the statutory exemption. The statute provides that:

"All real estate not exceeding...