Court Opinion

ID: 3270840
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:39:17.176254+00
Date Added: 2024-06-11T13:34:55.126821
License: Public Domain

I cannot agree with the view of the majority in this case.
Article XVI, 5 of the Constitution of the State of Arkansas provides: "All property subject to taxation shall be taxed according to its value . . . provided that the following property shall be exempt from taxation: Public property used exclusively for public purposes; churches used as such; cemeteries used exclusively as such; school buildings and apparatus; libraries and grounds used exclusively for school purposes; and buildings and grounds and materials used exclusively for public charity." Section 6 reads: "All laws exempting property from taxation other than as provided in this Constitution shall be void." *Page 18 
Obviously 5 was not self executing and an enabling act of the Legislature was necessary to make it effective and to define or classify the different species of property which the Constitution exempted from taxation. To this end, the Legislature of 1883 passed an act (now 13603 of Pope's Digest), exempting the following property from taxation: "First. All public schoolhouses, etc. Second. All public colleges, academies, etc. Third. All lands used exclusively as graveyards, etc. Fourth. All property, whether real or personal, belonging exclusively to this State or the United States. Fifth. All buildings, belonging to counties used for holding courts, for jails or for county offices, etc. Sixth. All lands, houses and other buildings belonging to any county, city or town used exclusively for the accommodation of the poor. Seventh. All buildings belonging to institutions of purely public charity, etc. Eighth. All fire engines and other implements  used for the extinguishment of fires, with the buildings, etc. Ninth. All market-houses, public squares, other public grounds, town and city houses or halls, etc." There was no attempt by the Legislature, by this act, to exhaust all of its powers under Art. XVI of the Constitution, supra.
By Act No. 40, the Legislature of 1931 further exercised its powers under Art. XVI. The title of that act was "An Act to Declare Certain Institutions Used for Hospital purposes to be Purely Public Charity." Section 1 of the Act provides: "All corporations or institutions heretofore or hereafter organized, created and operated as a hospital for the purpose of treating the members of said organization and others, not leased or otherwise used with a view of profit, are hereby declared to be institutions of public charity and shall be free from taxation." Section 2 repealed all laws and parts of laws in conflict.
This act has been in effect for more than fifteen years and recognized and followed by all tax assessing agencies, resulting in appellant's property not being taxed during this period. *Page 19 
It will be observed that the exempting provision of the Constitution, supra, did not attempt to define "public property," "public purposes," "churches," "cemeteries," "school buildings and apparatus," "libraries and grounds," or "public charity," so as I view it, the present case presents this question: "Can the Legislature within reasonable limitations find and declare as the public policy of this State what constitutes public charity and what type of institutions shall be declared institutions of public charity?" I think it has that power.
Certainly, the Legislature of this State has the power to, and does, declare the State's public policy and "when, as here, it has by legislation declared the State's policy to be that all corporations or institutions coming within the provisions of Act No. 40, supra, "are hereby declared to be institutions of public charity and shall be free from taxation," it was, it seems to me, acting within its powers and this court would not be warranted in striking down this legislation as being in contravention of the Constitution.
There is no contention that appellant does not come within the provisions of Act No. 40, but it is insisted that the act is unconstitutional.
In considering this question, there are certain well established rules of construction to guide us. This court in Bush v. Martineau, 174 Ark. 214, 295 S.W. 9, said: "First, that the Constitution of this State is not a grant of enumerated powers to the Legislature, not an enabling, but a restraining act (Straub v. Gordon, 27 Ark. 625), and that the Legislature may rightfully exercise its powers subject only to the limitations and restrictions of the Constitution  of the United States and of the State of Arkansas. (Citing cases.) In other words, as was said in McClure v. Topf  Wright, 112 Ark. 342, 166 S.W. 174: `It is not to be doubted that the Legislature has the power to make the written laws of the State, unless it is expressly, or by necessary implication, prohibited from so doing by the Constitution, and the act assailed must be plainly at variance with the Constitution before the *Page 20 
court will so declare it.' Second, that an act of the Legislature is presumed to be constitutional, and will not be held by the courts to be unconstitutional unless there is a clear incompatibility between the act and the Constitution; and further, that all doubt on the question must be resolved in favor of the act. (Citing cases.) In Standard Oil Co. of La. v. Brodie, 153 Ark. 114,239 S.W. 753, this court quoted the language of the Supreme Court of the U.S. in Hooper v. California, 155 U.S. 48,15 S. Ct. 207, 39 L. Ed. 297, that `the elementary rule is that every reasonable construction must be resorted to in order to save the statute from unconstitutionality.'"
In McEachin v. Martin, 193 Ark. 787, 102 S.W.2d 864, it was said: ". . . the well established rule of construction should be kept in mind that legislation will not be declared unconstitutional unless obviously so, and that all reasonable doubt upon the subject must be resolved in favor of the constitutionality of the legislation."
In Alaska Steamship Co. v. United States, 290 U.S. 256,54 S. Ct. 159, 78 L. Ed. 203, the Supreme Court said: "Courts are slow to disturb the settled administrative construction of a statute long and consistently adhered to."
In Moore v. Alexander, 85 Ark. 171, 107 S.W. 695, this court said: "The general rule is that the acts of the General Assembly are valid unless in conflict with some express provision of the State or Federal Constitution, and it will not do to say that the act is contrary to the spirit of the Constitution, but the clause must be indicated and the repugnancy between it and the act apparent before the courts are justified in pronouncing the act null. 1 Lewis's Sutherland, Stat. Con. (2d Ed.), 85."
A case which appears to be directly in point is that of State ex rel. v. Packard et al., 35 N.D. 298,160 N.W. 150, L.R.A. 1917B 710. There, four Masonic institutions sought to prevent the Tax Assessor and State Tax Commission from listing and assessing their properties for taxation, claiming exemption under the laws of North Dakota. The Constitution of that State provided: *Page 21 
"Laws shall be passed taxing by uniform rule all property according to its true value in money, but the property of the United States and the State, County and municipal corporations, both real and personal, shall be exempt from taxation, and the legislative assembly shall by general law exempt from taxation property used exclusively for school, religious, cemetery or charitable purposes.
Pursuant to this mandate, the North Dakota Legislature passed a law exempting "all buildings belonging to institutions of public charity" from taxation. In 1901, the exemption statute was amended to exempt from taxation "the personal and real property owned by charitable associations known as posts, lodges, chapters, councils, commanderies, consistories, and like organizations and associations not organized for profit, grand or subordinate, and used by them as places of meeting and to conduct their business and ceremonies; provided, however, that such property is used exclusively for such charitable purposes."
In upholding these statutes and sustaining the contention of certain Masonic bodies that their property was exempt from taxation the court, among other things, said: "But if the meaning of the statute be deemed doubtful, we are reminded that the foregoing provisions have remained a part of the statute law of this State since 1901 (decision 1916) although subsequent Legislatures have made certain changes in the law designating the property declared to be exempt from taxation. . . . The provision therefore has remained a part of the statute law of this State for fifteen years. During this time it has not only been treated as valid by the various administrative officers and boards but has received the approval of three different legislative assemblies and three different Governors. . . .  The contemporaneous construction placed thereon by the various administrative officers and boards is entitled to great weight, and the acquiescence in and approval of such construction by subsequent legislative assemblies and chief executives ought to dispel all possible doubt as to the legislative intent. The State Tax Commission, however, *Page 22 
contends that the Masonic bodies are not charitable associations and that property used for their places of meeting and to conduct their business and ceremonies is not used for charitable purposes; that it was beyond the constitutional power of the Legislature to so declare, and that consequently the provision under consideration is unconstitutional. . . . It is unnecessary for us, however,  in this case to determine whether a Masonic lodge is a charitable organization. The Legislature has determined this question and in positive and unequivocal terms declared that the several Masonic bodies are charitable organizations and that their property when used for the purposes specified in the statute is used for charitable purposes and as such exempt from taxation. We are not called upon, nor is it our function, to review the correctness of this legislative determination. For it must be presumed that the Legislature had before it when the statute was passed any evidence that was required to enable it to act; and the passage of the statute must be deemed a finding by the Legislature of the existence of the facts justifying the enactment thereof. We have no power to supervise the acts of the Legislature or substitute our judgment for its judgment upon any matter within the scope of its constitutional powers. Our authority is limited to an inquiry into and a determination of whether the Legislature has exceeded its constitutional powers and has arbitrarily classified property as entitled to exemption from taxation on the ground that it was used for charitable purposes, when clearly and unquestionably the property sought to be exempted is not within the class which the Legislature has declared it to be.
"Every reasonable presumption is in favor of the constitutionality of a legislative enactment, as it is presumed that the Legislature acted within its constitutional powers and enacted a valid law. This presumption is conclusive unless it is clearly shown that the enactment is prohibited by the State or Federal Constitution. The primary duty of the courts is to construe statutes with, reference *Page 23 
to the Constitution and it is only when a statute clearly violates the provisions of the Constitution that the courts may declare the statute to be unconstitutional. . . .
"No attempt was made to define charitable purposes in the State Constitution, or to determine what organizations or institutions would be entitled to the benefit of the exemption which the Constitution directed the Legislature to put into effect. Nothing was said to indicate any intent to exclude secret or fraternal societies from the benefit of such exemption or (as in some States) to restrict such exemption to property devoted purely and exclusively to the purposes of public charity. The legislative construction and determination as we have already stated was in harmony with the weight of judicial authority in this country, and in our opinion we have no right to say that the Legislature exceeded its constitutional authority in enacting the statute under consideration."
I have quoted somewhat at length from this North Dakota case for the reasoning appears to me most logical and sound. See Gay et al. v. State et al., 228 Ala. 253,153 So. 767.
In the present case, not only has appellant's property been declared exempt by all taxing agencies in this state for more than fifteen years, but at least seven Legislatures have met and adjourned without further action, and certainly it appears to me that some action on the part of the Legislature would have been taken had there been any doubt about the meaning and validity of Act No. 40, supra. The presumption of the act's validity as pointed out in the above authorities is fortified by acquiescence continued through the years, until it has become a rule of property.
In Union Pacific Ry. Co. v. Artist, 60 F. 365, (C.C.A. 8 Circuit — opinion by Judge SANBORNE [SANBORN]), 23 L.R.A. 581, it was held: "A hospital maintained by a railroad for free treatment of its employees, supported partly by monthly contribution of all its employees and partly by the company, and *Page 24 
not maintained for profit, is a charitable institution."
I think that the definition of "public charity" being promulgated in the majority opinion is a narrow and impracticable one. The majority is, in effect, saying that unless a charitable institution is open alike to all members of the public it is not such a public charity as to be exempt from taxation. Merely to give examples of what would flow from such a rule is to show its utter unsoundness. A home built and operated under an endowment that provided that it should be a haven for white orphan children of Pulaski county would not, under the majority's rule, be exempt from taxation, because it was not open to children of the Negro race or children from outside Pulaski county. Instances of the absurdities to which the narrow construction being given the word "public" by the majority could be multiplied, but I think the one given is sufficient to show that the majority's pronouncement that a charity must be available to all members of the public, in order to come within they constitutional exemption, is an unreasonable one.
The case of S. L. S.W. Ry. Co. v. Yates,23 F.2d 283, relied upon by the majority is, as I view it, not controlling here for the reason that that case was decided approximately four years before Act No. 40, supra, was enacted.
For the above reasons, I think the judgment should be reversed and the cause remanded with directions. Mr. Justice McHANEY and Mr. Justice ROBINS concur.