Court Opinion

ID: 8033553
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:18:10.376684+00
Date Added: 2024-06-11T16:36:54.531630
License: Public Domain

Redick, District Judge,
dissenting.
I am unable to agree in the majority opinion in this case. Only “property owned and used exclusively for educational, religious, charitable or cemetery purposes, when súch property is not owned or used for financial gain or profit to either the owner or user” (Comp. St. 1922, sec. 5821) is exempt from taxation. The appellee is carrying on a commercial business in competition with other persons and corporations subject to tax; the only relation of the laundry business to the admirable philanthropic and charitable purposes of the organization is that it furnishes a useful occupation for the inmates of the home. But the indisputable purpose of carrying on the commercial enterprise in question is to make a profit and thus secure the necessary funds to carry on the philanthropic work and purpose of the institution. It seems to me that the underlying principle of exemptions such as'tlie one in question is the encouragement of benevolence and the sentiment of brotherly love toward the unfortunate, misguided and needy, and the major benefit derived from the cultivation of these senti*495ments is lost when philanthropic institutions are placed upon a purely commercial basis. No doubt the aims and purposes of the appellee are of the highest and noblest character and the results of their work of incalculable social and humanitarian value, but to exempt from taxation a competitive commercial business for the sole reason that the ■ entire profits therefrom are devoted to charitable and benevolent purposes, it seems to me, is most unjust and not within the intention of the makers of the Constitution or the laws enacted in pursuance thereof. As was well said by Dean, J. in Sunday School Union v. City of Philadelphia, 161 Pa. St. 307, 314:
“Every dollar the society expends is some charitable contributor’s gains or profits from some business not charitable; if such contributor devoted the whole of his profits from the sale of drygoods, groceries or books to promote this particular charity, that fact would not make the source of such profit a purely public charity. And if, as the master has found, the society was compelled to put a part of its. operations on a basis that was self-supporting, by starting a. book-store to sell books only of a high moral character, and standard publications, that is trade. That the entire profits, of this branch of the business are devoted to the purpose of the charity, no more changes its business nature than if,, instead of a book-store, the society had established and carried on a shoe-store. It might have operated a farm or rolling mill with the same end in view, to put the society, as the master aptly says, on a basis that was self-supporting ; but the end would not have exempted the business from taxation.”
So here, appellee might have established a knitting mill or a cotton factory. What chance of exemption from taxation would it stand in Massachusetts or Alabama ? To permit appellee to carry on the laundry business free of taxes in competition with others who pay their full share of the cost of government, in effect, levies a forced contribution for the support of the institution and indirectly commits the administration of a part of the public revenues to non-*496officials; it would seem that appellee’s competitors have made their full contribution to the public weal as regards this charity, when they are required to meet the competition which pays no wages other than bed and board.
The only cases in point cited in the briefs are in their reasoning against the position of appellee: Young Men’s Christian Ass’n v. Keene, 70 N. H. 223; Young Men’s Christion Ass’n v. Douglas County, 60 Neb. 642; Young Men’s Christian Ass’n v. Lancaster County, 106 Neb. 105; Sisters of Peace v. Westervelt, 64 N. J. Law, 510. See, also, Sunday School Union v. City of Philadelphia, supra.
The case of St. Elizabeth Hospital v. Lancaster County, 109 Neb. 104, is not in point for the reason that the profits there arise out of the carrying on of the particular work for which the charity was organized; if the hospital should Install in one of its buildings a general drug-store for the purpose of making a profit on the sale of drugs to its patients and the public, to secure funds for the maintenance of the institution, then we would have a case analogous to the one at bar. In Lutheran Hospital Ass’n v. Baker, 40 S. Dak. 226, the statute exempted all property belonging to any charitable society or used exclusively for charitable purposes, and the case announces the same principle as in the St. Elizabeth case. In Central Union Conference Ass’n v. Lancaster County, 109 Neb. 106, the maintenance of a farm and dairy by an agricultural college were held proper activities and the fact that a profit was made by the dairy department and used exclusively for the purposes of the college did not subject that department to taxation. The principle there announced has no application here; while one of the purposes of the institution is said to be the inculcation of habits of industry, it is in no sense an institute of technology—the purpose is not to fit the girls to enter the service of laundries; if so, a course of a few weeks would suffice. No, the purpose is to carry on a profitable business for the support of the institution—this is trade, and it should bear its share of the burden of taxation. In Dakota Wesleyan University v. Betts, 47 S. Dak. 618, the nature of *497the property or its use does not appear hut the exemption was sustained upon the authority of a number of cases cited holding the rectory of a church, or houses occupied by professors of colleges, exempt. The case of Trinidad v. Sagrada Orden, 263 U. S. 578, is not in point as it involved only the taxability of the income of an educational institution, not the property from which the income was derived; and the court remarked that the exception in the law “says nothing about the source of the income, but makes the destination the ultimate test of exemption.” If appellee owned a business. block the rentals from which were used exclusively for charity, such rentals would be exempt, but would the real estate be exempt?
The exemption of our statute extends only to property exclusively used fon the purposes mentioned, and from which no financial profit inures to the owner. Under all •our decisions the part of the premises used for conducting a competitive business is not exclusively used for charitable, etc., purposes. Young Men’s Christian Ass’n v. Douglas County, 60 Neb. 642; Young Men’s Christian Ass’n v. Lancaster County, 106 Neb. 105. But even if that point is conceded, how fares it with the second requirement ? How can it be said that no “financial profit inures to the owner” from the conduct of the laundry business? The fact that such profits are used by appellee for a charitable purpose does not change their character as financial profits, any more than in the case of a private individual—they are still profits to the owner.
The judgment should be reversed.