Young Men's Christian Ass'n of Omaha v. Douglas Cnty.

• Decision Date: 18 October 1900
• Citation: 60 Neb. 642,83 N.W. 924
• Parties: YOUNG MEN'S CHRISTIAN ASS'N OF OMAHA v. DOUGLAS COUNTY ET AL.
• Court: Nebraska Supreme Court

60 Neb. 642

83 N.W. 924

YOUNG MEN'S CHRISTIAN ASS'N OF OMAHA

v.DOUGLAS COUNTY ET AL.

Supreme Court of Nebraska.

Oct. 18, 1900.

Syllabus by the Court.

1. An intention to use property occupied for business purposes at some uncertain time in the future, for purposes which will render it exempt from taxation under the laws of the state, will not preclude its being taxed under the general revenue laws, so long as occupied for such business purposes.

2. Statutes providing for exemption of property from taxation when used for purposes therein mentioned, being an exception to the general rule of taxation, and in derogation of the equal rights of all, are to be strictly construed.

3. The Young Men's Christian Association of Omaha, being organized and incorporated for educational, charitable, and religious work, owned certain real estate, upon which was erected a building used by it for the purpose of carrying forward the object of its organization, except the first floor thereof, which was rented for business purposes, the rents being applied to the work of the association. Held, that the portion of the property occupied for business purposes was not used exclusively for educational, charitable, and religious work, and therefore not exempt from taxation, under the general revenue laws of the state.

Appeal from district court, Douglas county; Keysor, Judge.

Action by the Young Men's Christian Association of Omaha to restrain the county of Douglas and another from collecting certain taxes alleged to be illegally assessed. There was judgment for defendants, and plaintiff appeals. Affirmed.Acheson & Adams, for appellant.

H. L. Day, for appellees.

HOLCOMB, J.

A petition was filed for the purpose of obtaining an order of injunction to restrain the appellees, the county of Douglas and the county treasurer thereof, from collecting certain taxes alleged to have been illegally assessed against the appellant's property situated in Omaha, Douglas county, and consisting of a city lot and a building erected thereon. In the petition it is alleged that the appellant is a duly-organized corporation, under and by virtue of the laws of the state, maintained and existing for school, religious, and charitable purposes, and that the property which is attempted to be assessed is exempt under the constitution and laws of the state. It is to be conceded at the outset, as it is admitted by the demurrer to the petition which was filed, and under which the question was decided, that the object and purposes of the appellant corporation are such as to exempt the property used exclusively by it for the purposes of its organization from taxation under the laws of the state. The controversy as to its property being taxable, notwithstanding the exemption referred to, arises, and becomes apparent, from the following allegations in the second paragraph of the petition. After describing the lot of land owned by it, it is said “that on this lot this plaintiff constructed, about the year 1887, and has ever since been maintaining, a large four-story stone building, which building has always been used for said purposes of said Young Men's Christian Association. The first floor of said building the plaintiff is now leasing temporarily for business purposes; the rents thereof, as well as all the income from all sources, being used exclusively in maintaining the educational, religious, and charitable work of the plaintiff. It is the purpose and intention of the plaintiff to use the first floor for offices, gymnasium, baths, etc.; but, owing to its restricted income, it is compelled, for the present, to rent the same, and apply the rents to the running expenses of the institution, until its income from other sources and voluntary donations will pay the expenses of maintenance for the purposes aforesaid.” Whether the assessment of taxes sought to be restrained is against the entire property, or only the portion thereof rented for business purposes, is not disclosed by the petition. It is alleged that there was levied and assessed against the plaintiff, and against the said lot of ground, the taxes for the years 1892, 1893, 1895, and 1896.

The demurrer to the petition raises but one question, and that is whether or not, under the constitution and laws of the state, the plaintiff's property, or the portion thereof rented for business purposes, is wholly and altogether exempt from taxation. It is provided by section 2, art. 9, of the constitution, that “the property of the state * * * shall be exempt from taxation, and such other property as may be used exclusively * * * for school, religious, * * * and charitable purposes, may be exempted from taxation, but such exemption shall be only by general law.” By section 2, c. 77, of the revenue laws it is provided: “The following property shall be exempt from taxation in this state: * * * Such other property as may be used exclusively * * * for school, religious, cemetery and charitable purposes.” While there is an allegation that the plaintiff intends to use the rooms now rented for business purposes, for offices, gymnasium, and other purposes proper and necessary for carrying out the objects of its organization, we do not think such allegation can materially affect the decision of the case as to the present situation and uses to which the property is put as disclosed by the petition. An intention to use it for such purposes in the future, which would doubtless, when so used, exempt it from taxation, is not a present exclusive use, as contemplated by the constitutional and statutory provisions quoted. In the case of Academy v. Irey, 51 Neb. 755, 71 N. W. 752, it is held that, in order to be exempt from taxation, the property must be used directly, immediately, and exclusively for the purposes mentioned in the provisions referred to. It cannot, we think, under the allegations of the petition, be successfully contended that, because of an intention to use the property at some time in the future directly by the association for offices, etc., such intention is a direct and immediate use for such property. As has been aptly said by Mr. Justice Brewer, in Washburn College v. Commissioners of Shawnee Co., 8 Kan. 344: “An intention to occupy is not equivalent to occupation,--does not tend to prove it. The pleadings recognize the difference, for they admit the failure while they allege the intention to occupy. An occupation which is to be--though here it is only which may be--is no present use. Nor is ownership evidence of use. Full possession and perfect title are consistent with total failure to use. This is too plain to need either argument or illustration. If the framers of the constitution had intended to exempt all property belonging to literary and charitable institutions from taxation, the language employed would have been very different. They would have used the simple, ordinary language for expressing such intention. The fact that they ignored ‘ownership,’ and made ‘use’ the test of exemption, shows clearly that they recognized the essential distinction between the two, and established the latter, rather than the former, as the basis of exemption.” In First Christian Church of Beatrice v. City of Beatrice, 39 Neb. 432, 58 N. W. 166, it is held that the possession and ownership of a lot which is rented, the rent derived therefrom being set apart to constitute a building fund for the purpose of erecting a church edifice thereon, which the society had resolved to build, was not a use of the property such as would exempt it from taxation under the provisions of the law...