Vogt v. City of Louisville

• Decision Date: 10 January 1917
• Citation: 173 Ky. 119,190 S.W. 695
• Parties: VOGT ET AL. v. CITY OF LOUISVILLE ET AL.
• Court: Kentucky Court of Appeals

190 S.W. 695

173 Ky. 119

VOGT ET AL. v. CITY OF LOUISVILLE ET AL.

Court of Appeals of Kentucky.

January 10, 1917

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

Suit by Henry Vogt and others, as trustees of De Molay Commandery No 12, Knights Templar, against the City of Louisville and others. Judgment dismissing the petition, and complainants appeal. Affirmed.

J. S Luscher, Robt. C. Kinkead, and Eugene R. Attkisson, all of Louisville, for appellants.

Pendleton Beckley, and Geo. Cary Tabb, both of Louisville, for appellees.

SETTLE C.J.

The question involved in this case is whether the real estate in the city of Louisville owned by the De Molay Commandery No 12, Knights Templar, the title to which is held by appellants as its trustees, is subject to taxation. The action was brought by appellants to obtain a decision by the court of that question, and an injunction therein sought to prevent appellees from assessing the property for taxation, and also to prevent their collecting any taxes thereon. After the filing of appellees' answer proof was taken on the issues made by the pleadings. On the hearing the court below refused the relief asked by appellants and dismissed their petition. From the judgment entered in conformity to that ruling, the latter have appealed.

The property consists of a lot and threestory stone front building, the lot front 62 1/2 feet on the south side of Broadway, between Second and Third streets, and running back 260 feet to an alley. The entrance hall on the first floor of the building divides the front part of it into two large parlors, a library and committee rooms. The rear is occupied by the drill hall and kitchen. The drill hall is at times rented out, and since the institution of this action a lease was made of it to a Christian Science congregation as a place of worship on Sundays, for one year, at a rental of $75 per month. The second floor of the building is used more particularly for the purposes of the commandery, such as the conferring of degrees, conducting the work of the commandery etc. The third floor contains lockers owned by the members of the commandery, in which they keep their uniforms and any other personal property they may wish to put there. The estimated value of this property is $47,000.

The sole ground upon which the exemption from taxation is asked by appellants is that De Molay Commandery is an institution of "purely public charity," and by reason thereof, under section 170 of the Constitution of the state, not subject to taxation. The petition does not ask the exemption of a fund, the principal or interest of which is devoted to charitable uses, but only its real estate, already described, which was purchased and is maintained for the use and benefit of the members of De Molay Commandery, or rather, as alleged in the petition, "for a home for the said De Molay Commandery." The provision of the Constitution under which the exemption is here claimed is found in section 170 thereof:

"There shall be exempt from taxation * * * institutions of purely public charity. * * *"

It is well to bear in mind at the outset that exemptions from taxation must be strictly construed, and one claiming an exemption must show it to be clearly within the spirit and intent of the exception. City of Middlesboro v. New South Brewing Co., 108 Ky. 351, 56 S.W. 427, 21 Ky. Law Rep. 1782; City of Newport v. Masonic Temple Ass'n, 108 Ky. 333, 56 S.W. 405, 21 Ky. Law Rep. 1785, 47 L. R. A. 252.

One of the best statements of the rule referred to is thus given in Frederick Elect. Lt. & Power Co. v. Frederick City, 84 Md. 599, 36 A. 362, 36 L. R. A. 130:

"The right of taxation is never presumed to be relinquished, and before any party can rightly claim an exemption from the common burden, it is incumbent upon that party to show affirmatively that the exemption claimed is authorized by law. If there be a * * * doubt upon the subject, that doubt must be resolved in favor of the state, and it is only where the exemption is shown to be granted in terms clear and unequivocal that the right of exemption can be maintained."

Is De Molay Commandery an institution of "purely public charity"? Its property is used and enjoyed only by its own members. No part of its building is given over to the free use of widows or orphans as a home, nor is it even an asylum for the indigent of its own order. The only occupancy of its building by persons outside of the order is confined to the occasional occupancy of its drillroom for such use as it receives compensation. The use made of the building by its members is for the benefit of the association and their individual comfort and social profit. The total income of the De Molay Commandery for the past year appears to have been $4,900, $300 of which it spent in charity, that is, distributed for the relief of the sick or indigent among its own members. It is true the commandery has occasionally made charitable contributions outside of the state, for its books show that in 1889 it donated $88 to yellow fever sufferers in Florida; in 1901, $100 to Galveston, Tex., flood sufferers; and in 1907, $107 to sufferers from the earthquake and fires of San Francisco, Cal. But all of the contributions to charity mentioned, though highly commendable, are not sufficient to demonstrate that the commandery is an institution of purely public charity. It also expends considerable sums each year in furtherance of the fraternal spirit and aims of the order, because such expenditures are found necessary to enlist the interest and obtain the co-operation of the members in its work.

In brief, it appears from the record before us that De Molay Commandery is essentially a fraternal and social organization, and that the charity it dispenses is only an incident to the work it performs. Its charter, made a part of the record, shows it to be a corporation created by an act of the Legislature of Kentucky, with power to acquire and own property, real and personal, to borrow and loan money; but it is nowhere recited therein that it is a charitable organization. We do not mean to be understood as saying that De Molay Commandery is a business corporation, created or maintained for gain or profit. On the contrary, its mission is to benefit mankind, and to that end its work is in large measure charitable. But what we do mean to say is aptly expressed in Bangor v. Lodge, 73 Me. 428, 40 Am. Rep. 369, as follows:

"It is apparent that the defendant corporation cannot be regarded as a purely public charitable institution, because it wants the essential elements of a public charity. It has other objects than charity. Whatever its ultimate purposes, they are other than charitable. Its funds are derived, not from devises and gifts as in case of a public charity, but from fees and the assessment of its members. The funds so obtained are to be distributed among the poor and needy members, from whom they were collected, and among their wives and children. It is an association for the mutual benefit of its members, and not a charitable institution within the meaning of the statute."

In City of Newport v. Masonic Temple Assoc., 108 Ky. 333 56 S.W. 405, 21 Ky. Law Rep. 1785, 47 L. R. A. 252, it was held that property held exclusively by a Masonic Lodge is not a "purely public charity," the opinion quoting with approval the excerpt from Bangor v. Lodge, supra...