Young Men's Christian Ass'n of Los Angeles v. Los Angeles County

• Decision Date: 18 August 1950
• Court: California Supreme Court
• Parties: YOUNG MEN'S CHRISTIAN ASS'N OF LOS ANGELES v. LOS ANGELES COUNTY et al. L. A. 21208.

Page 47

221 P.2d 47

35 Cal.2d 760

YOUNG MEN'S CHRISTIAN ASS'N OF LOS ANGELES v. LOS ANGELES COUNTY et al.

L. A. 21208.

Supreme Court of California, in Bank.

Aug. 18, 1950.

Brady & Nossaman and Walter L. Nossaman, all of Los Angeles, for plaintiff-appellant.

Henry C. Clausen, San Francisco, as amici curiae on behalf of plaintiff-appellant.

Harold W. Kennedy, County Counsel, Andrew O. Porter, Deputy County Counsel, Ray L. Chesebro, City Attorney, and Louis A. Babior, Deputy City Attorney, all of Los Angeles, for defendants-appellants.

SPENCE, Justice.

Plaintiff, the Young Men's Christian Association of Los Angeles, brought this action to recover certain taxes and assessments paid under protest for the taxable year 1946-1947. The controversy involves the application of the recently enacted welfare exemption law, Cal.Const. art. XIII, § 1c; Rev. & Tax. Code, § 214, to five buildings owned by plaintiff and used in carrying on its work. The county assessor refused to exempt from taxation such portions of plaintiff's buildings as were used for dormitories, restaurant and dining-room accommodations, barber shops, valet shops, a particular type of merchandise store, and office space rented to a Government agency; and, in addition, he deemed each of plaintiff's pieces of property liable for a Los Angeles County Flood Control District assessment.

The cause was tried upon an agreed statement of facts, and by the judgment thereupon entered plaintiff's exemption claims were sustained as to the tax payments made on the disputed portions of its buildings but denied as to the flood control district assessments made against its property. The judgment is assailed by both parties, defendants having appealed from that portion allowing plaintiff a refund of the tax payments, and plaintiff having appealed from that portion disallowing recovery of the flood control district assessments.

Various aspects of the scope of the welfare exemption law in relation to particular claimants seeking the benefits thereof have been discussed in the case of Cedars of Lebanon Hospital v. County of Los Angeles, Cal.Sup., 221 P.2d 31, and reference is made to such opinion for such bearing as it may have on the considertion of the general problem. The parties have resolved their controversy here to turn principally on these points: (1) whether the portions of the buildings in question, as property belonging to plaintiff, concededly a nonprofit corporation, were 'used exclusively for religious * * * or charitable purposes' as a basic prerequisite, Const. art. XIII, § 1c; Rev. & Tax. Code, § 214, and (2) the effect of the further proviso that the 'property (be) not used or operated by the owner * * * for profit regardless of the purposes to whith the profit is devoted.' Rev. & Tax. Code, § 214, subd. (3). Upon an analysis of the agreed factual basis of plaintiff's several exemption claims, it appears that plaintiff (1) properly invoked the 'welfare exemption' with respect to the tax levy made on the dormitory facilities it furnished in its respective buildings but (2) was not entitled to such exemption with respect to (a) tax levies made on the restaurant and diningroom accommodations, barber shops, valet shops, the particular mechandise store involved, and the office space rented to the Government agency; or (b) flood control district assessments made against its property.

The record identifies the five buildings owned by plaintiff as the Downtown Branch, San Pedro Branch, Hollywood Branch, 28th Street Branch, and East Los Angeles Brach. In each instance exemption was accorded generally to the portions of these buildings devoted to locker rooms, swimming pools, gymnasiums, club rooms, social rooms, classrooms, storage and maintenance rooms; and the parties are in dispute only as to the tax status of the following physical facilities in their respective locations:

(1) Downtown Branch, an eleven-stroy structure, with basement and sub-basement, and situated in the certral business section of Los Angeles: dormitory rooms provided on the sixth to tenth floors; a small barber shop; and a valet shop. These two shops are located in a small adjoining structure, each having entrances from the steet and through a court from the lobby of the main building. The valet shop maintains a small room on the basement level in the main building for the performance of its cleaning and pressing services. Both shops serve the public, as well as dormitory residents and Y. M. C. A. members generally. The barber shop is operated by Y. M. C. A. employees, who are paid by plaintiff on the basis of an agreed percentage of the gross receipts. The valet shop is operated by an independent contractor, who pays plaintiff a monthly rental of $100. The charges made by both shops for their services are equivalent to standard commercial prices in the community.

(2) San Pedro Branch, a five-story structure, with a basement, and situated close to the business center and harbor channel of San Pedro: dormitory rooms provided on the third to fifth floors, and also a portion of the second floor; a restaurant on the first floor, a room approximately 1600 square feet in area, with counters and seats accommodating 38 persons and 7 tables serving 28 persons 66 persons in all; Cluverius Hall, a special meeting room on the second floor containing an area of 1800 square feet and used by non-Y.M.C.A. groups, where meals are served to a maximum of 100 people in conjunction with scheduled meetings; a barber shop and a valet shop, each located at the rear of a small court in the interior of the building and reached only through the main lobby; and a small store located in the rear of the first floor, and without a direct street entrance.

The restaurant is operated by Y.M.C.A. employees, and meals are served to the general public, as well as to resident and nonresident Y.M.C.A. members, with a price range of 45cents to 95cents for breakfast, and 70cents to $1.05 for lunch and dinner. In Cluverius Hall meals are served to various civic groups at a charge varying from $1.00 to $1.50 per person, according to the choice of menu. Both the barber shop and the valet shop are open to the public, as well as to dormitory residents and Y.M.C.A. members generally. The barber shop is operated by an independent contractor, who pays plaintiff a weekly rental of $10. The valet shop is operated by a Y.M.C.A. employee, a tailor, whose compensation consists in a fixed percentage of the gross receipts. In both shops standard prices prevail. The small store was started as a 'gym store' for the sale of athletic equipment and clothing pursuant to plaintiff's uniform policy to provide such merchandise for use in athletics at all branches having gymnasium, swimming or similar physical training facilities. This particular store was so operated since the opening of the present building in 1926, but during World War II as a convenience to the large number of servicemen visiting the San Pedro Branch, ths store began to stock various other items of merchandise, principally toilet articles, and various kinds of trinkets and curious. This augmented line of purchasable articles was still being offered in the store during 1946, the tax year in question, but apparently was allowed to dwindle in 1947 and 1948, at which time the stock of the store returned to its prewar status as a true 'gym store.'

(3) Hollywood Branch, a four-story structure and situated in the center of Hollywood: dormitory rooms provided mainly on the third and fourth floors, with a few accommodations on the second floor.

(4) 28th Street Branch, a four-story structure, with a basement, and situated near Central Avenue in a district in Los Angeles populated largely by Negroes: dormitory rooms provided mainly on the third and fourth floors, with some rooms also on the second floor.

(5) East Los Angeles Branch, a two-story structure, with a separate gymnasium buildings in the rear, and situated in the eastern part of Los Angeles: dormitory rooms provided on the second floor; three office rooms on the first floor, having a total area of 1122 square feet and rented to the Selective Service Board, originally at a rental beginning in 1943 of $25 per month but increased in December, 1945, to $100 per month and so continued until the occupancy of the board was terminated in December, 1946.

Plaintiff follows a general pattern in the operation of the dormitory facilities in its respective branches: In each instance the dormitory area is under the supervision and management of a trained Y. M. C. A. secretary, who also has the additional responsibility of acting as a counsellor and advisor to the branch's residents. Applicants for living quarters are required to fill out a written form of questionnaire giving information as to background, experience, and character of the individual and declaring his agreement with the fundamental purposes of the Y. M. C. A. Each applicant is interviewed by the supervising secretary at the branch and told about the organizational policy of the Y. M. C. A., its general objectives in making available various facilities and activities as part of its regular program, and the prevailing standard of good conduct and moral behavior that must be followed. All accepted applicants for residence are required to become members of the Y. M. C. A. An effort is made to confine dormitory residence to men under forty years of age, but exceptions are made on occasions. Loans are made to those who are without funds, coincident with arrangements for their stay at the branch for a reasonable period of time on credit and until they can get established. The rooms are rented at moderately low rates, consistent with their modest furnishings and limited size, ranging according to the branch from $4.50 to.$7.00 per week for singles; $4.50 to $6.50 per week, two in a room; and $3.50 to $5.50 per week, three in a room.

Plaintiff's financial records...