Court Opinion

ID: 6566829
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:20:40.311699+00
Date Added: 2024-06-11T15:56:46.259956
License: Public Domain

Mr. Justice Teller
dissenting:
The exemption of a single piece of property from taxation is not in itself of great moment; but the announcement of a rule under which much property becomes exempt calls for serious consideration. I cannot, therefore, permit the majority opinion to go with a simple dissent.
It assumes, on grounds which to me appear wholly insufficient, that we are bound by former decisions of this court to give to the statutory and constitutional provisions concerning exemption from taxation so liberal a construction as thereby to hold the property here involved not liable to taxation.
The assumption is wrong for two reasons. First, the decisions cited'as committing us to the rule of liberal construction do not determine that such rule should be generally applied in this jurisdiction, but only that the rigor of the rule should be modified as to schools; and, second, if it be conceded that the liberal rule has been adopted here, and that it ought, under the doctrine of sta/re decisis, to be followed, it is not applicable in this case.
The majority opinion relies upon Cathedral of St. John v. County Treasurer, 29 Colo. 143, 68 Pac. 272, as authority for a liberal construction of the provisions under consideration. In that case the court said:
“The general rule is, that exemptions from taxation are strictly construed, but this rule is not applied with full vigor to the character of exemptions under consideration.” *539The case involved the question of whether or not a portion of the school property occupied by one who was an instructor in the school was exempt.
The court held' that the object of the exemption ofj schools was “to foster educational institutions by relieving their property within prescribed limits from the burden of taxation.” It held further that:
“To carry out this design, the uses peimissible must necessarily embrace all which are proper and appropriate to effect the object of the institution claiming the benefits of the exemption.”
It was therefore determined that the occupation of a part of the premises by the instructor of the school was a use incidental to the main purposes for which the property was held.
This affords no possible ground for holding that the first floor of the so-called Masonic Temple is exempt. The construction there applied was, as the opinion states, necessary to prevent a limitation of the exemption to the things which are absolutely indispensable to a school, and thus interfere with its work. If it be supposed that a clubhouse or social-hall is indispensable to the main purpose for which the Masonic Lodges are instituted and property acquired, it is pertinent to inquire why the great majority of lodges have not and never have had club rooms annexed to them? It is also asserted that the liberal rule was followed in Colorado Seminary v. Arapahoe County, 30 Colo. 507, 71 Pac. 410. This also involves a school. The liberality of the rule there followed is indicated by the language of the court concerning it, and announcing that a former decision apparently laying down the rule of strict construction in such cases was open to modification so as to determine the fair meaning of the school’s charter. The court said:
“The construction should be reasonably strict, but not so strict as to defeat the obvious intention of the General Assembly.”
The court was there considering the language of the *540charter, and no reference was made to the constitutional and statutory provisions here involved. It held that it was proper to assume that the legislature intended to encourage the founding and maintenance of a school of higher learning, and that, therefore, it must be supposed that the exemption extended to the school’s property generally., There was no occasion to consider the terms “exclusive,” “solely” or “strictly.”
Another case cited is Bishop and Chapter v. Treasurer, 37 Colo. 378. This case contains no discussion of the rule and the holding is simply that on the evidence, under the authorities, the property in question was used for charitable purposes.
If, however, it be considered that the cases cited commit us, in any degree, to a rule which is in conflict with sound legal principles, we should not be deterred from announcing the following the correct rule. In Colo. Sem. v. Arapahoe Co., supra, in speaking of changing the rule of construction, it is said:
“No general rule of property has been established, no private rights have been acquired by third persons upon the faith of its protection, and none will be impaired if a review of the judgment results in a change of doctrine.”
To apply to enactments providing for exemptions a liberal rule of construction is unreasonable, and in conflict with the weight of authority and with established legal principles. As is pointed out in one of the foregoing quotations, taxation is the rule, exemption the exception; and he who claims the benefit of the exception must establish clearly and fully his right thereto. Exemption is in the nature of a privilege conferred by the sovereign;, — the public, — and, when the right-to it is questioned, it is the duty of the courts, according to the most elementary principles of construction, to resolve all doubts in favor of the state. To apply a liberal rule of construction, is to violate this principle. The rule is applied often, if not generally, to remedial laws, to advance the remedy and suppress the mischief; and in other cases to avoid the effect of out*541grown technical rules. It should never be applied to defeat the plain language of the statute or to give it effect beyond its evident purpose. We have heretofore condemned the practice of
“setting up what the court or judges may conceive to be the ‘spirit of the law’ against the plain letter and principles of the law.” In re Garvey, 1 Colo. 502, 4 Pac. 758.
The rule is generally applied in determining whether or not an individual or an organization is within a favored class; but is not applied to relieve one in such class from strict compliance with a prescribed procedure.
It is only by a liberal interpretation of the word “charitable” that the lodge itself can be held to be a charitable organization.
The basis of the exemption of charitable institutions is that the State does not lose thereby, since they assume a burden which the State must otherwise bear. Bishop and Chapter v. Treasurer, supra.
Conceding, now, that by the weight of authority Masonic lodges are charitable institutions, and that the property used for strictly lodge purposes should be exempt from taxation, it by no means follows that all of the property here involved is entitled to such exemption. How can it be said that the use of so much of this property as is in effect a club-room for the use of lodge members — with no necessary connection with the general work of the order,— relieves the State of any burden? No construction oi the law is required to determine that the use of at least one-half of the property does not meet this basic requirement of a use for charitable purposes such as justify an exemption from taxation.
The majority opinion in one place recognizes that the question turns upon the use of the property, though apparently not making it determinative of the case. It fails to apply the rule that in interpreting statutes and constitutional provisions every word must be given a meaning, so far as possible, in that the words “solely,” “strictly,” and “exclusively” are ignored. True, an attempt is made to *542show that the club-house part of the property is used for charitable purposes by reference to entertainments in Churches, which, it is said, do not prevent church property being exempt. This overlooks the patent fact that entertainments in church buildings are of occasional occurrence only, and are open to everyone; while the first story of this property is devoted all the time to social purposes, for the benefit of lodge members and their friends. The one is an incident to a charitable use; the other is an independent and continuous use, with no necessary or natural connection with the use of the rest of the property.
If the court’s reasoning be sound, a golf course connected with the building, the receipts of which are devoted in part to lodge purposes, should likewise be exempt. It should be noted, too, that there is nothing in the record which assures any receipts from the use of the first floor to charitable uses. It may be so conducted as to yield no profits, and, if there are profits, they may or may not be devoted to charity. The result of this consideration is that we have exempted a property from taxation on the mere possibility that it may be a source of income to an institution which has, without much reason, been termed a charitable institution.
In this connection we should consider the words “strictly,”' “solely” and “exclusively.” What force or meaning does the majority opinion give to them, if a building used in part for purposes which are not “strictly” charitable, is held to be within the terms of the law? Clearly, the court has in practical effect stricken those words from the constitution and the statute.
The difficulty in drawing the line in applying the law of exemption if partial use for the specified purposes gives the right, or if the purposes are not clearly apparent, is evident; and doubtless the law-makers had that fact in mind, and ex-industria provided that the use should be solely and exclusively for charity, and that the purposes should be strictly charitable. The terms used prohibit the construction now given to the law.
*543The majority opinion states that the existence of these lodges “requires a place like the building under consideration within which to exist, in order that their charitable work may be continued.” .
Manifestly, this is a mistaken statement. Of the thousands of Masonic lodges throughout the country, it is safe to say that but a small proportion own buildings, and still less of them have club-rooms in addition to lodgerooms. The maintenance of the' club-rooms, it is said, tends to increase the membership and so enlarge their charities. By parity of reasoning, they should be allowed to conduct, free from taxation, a picture show, or any other amusement device, which would tend to attract new members. This well illustrates the difficulties which confront us when we abandon the limitations imposed by the law, and attempt to create a “twilight zone” between the exempt and the non-exempt.
A strict construction of the statute and the constitutional provision is demanded by a consideration of the history of taxation.
Under a simple social organization, with a rapid increase of wealth and tax-paying power, the question of exemptions was not of very great importance; but, with increased complexity of social and political relations, and consequent increase of public expenditures, it becomes more and more necessary to widen the fíéld of taxation so as to equalize the burdens of government.
The changed conditions have produced a new view of the law as to exemptions, and the tendency is to limit rather than to expand them. In Massenburg v. Grand Lodge, 81 Ga. 212, 7 S. E. 6361, the court said:
“The more one investigates the constitutions, statutes and reports of the several states, the more will he be impressed with the tendency to narrow the range of exemptions from taxation, and to lay stress on the open, visible and direct use of property as a test of its exemption in the interest of charity.”
This tendency is shown in a number of modern cases.
*544In Green Bay Lodge v. Green Bay, 122 Wis. 452, 100 N. W. 837, 106 Am, St. 984, it appeared that the second floor of the building in question, which was owned by the lodge, was used for lodge rooms, while the basement and first floor were used as a club-house for the entertainment and amusement of the lodge members. The court, holding that the property was not used exclusively for benevolent purposes, said:
“While some of the aims of the order are the promotion of benevolence and charity, it is the avowed and obvious purpose of the order to maintain this club-house as a suitable place for the members and their families to congregate for entertainment, amusement, and to provide refreshments. The bestowal of these privileges and benefits is not of a benevolent or charitable character.”
It is true that the court there found that the use made of the property resulted in a pecuniary profit, which fact defeated the claim to exemption, but, on the point that the maintaining of a part of the building as a club-house is not an exclusive use for charity, the case is authority. The entire property was held taxable.
In Boston Lodge Order of Elks v. Boston, 217 Mass. 176, 104 N. E. 453, a building containing lodge-rooms, and club-rooms, kitchen, etc., was held taxable on the ground that the property was used principally for social, and not charitable purposes.
In St. Louis Lodge No. 9, B. P. O. E. v. Koeln, 262 Mo. 446, 171 S. W. 329, L. R. A. 1915C 694, Ann. Cas. 1916E, 784, a like ruling was made upon a similar state of facts.
In Y. M. C. A. v. Patterson, 61 N. J. L. 420, 39 Atl. 655, it is said:
“In all statutes exempting property from taxation words descriptive of the property must receive the narrowest interpretation of which they are reasonably capable. So interpreted charitable purposes are eleemosynary purposes, connected with the distribution of charity, i. e., of aid to the needy. It is impossible to hold that these buildings are, in this sense, used exclusively for charitable purposes. With *545slight exceptions those who use them are not the recipients of charity, but such as purchase the right to use them at a price deemed adequate.”
It was therefore held that since the building was not used exclusively for charitable purposes it was not exempt.
In Fitterer v. Crawford, 157 Mo. 51, 57 S. W. 532, 50 L. R. A. 191, it was held that none of the property was exempt unless it was all used for charitable purposes; that it was not enough that the income from a part not used by the lodge was applied to charitable use.
It is clear that the use of part of the building for non-charitable purposes puts that much of the property in competition with all persons who have property to rent for similar purposes. Were the first floor of the building not used for social purposes, the parties not thus using it must, if they would have a club-room, either buy or lease other property which, pays taxes. No one would claim that property, used as is the first floor of the building in question, and separate from the building containing the lodge rooms, would be exempt. That being so, it is evident that the only ground of exemption is its physical connection with the lodge rooms. It cannot be said that the people, who frequent the rooms on the first floor and enjoy its privileges, are objects of charity. Doubtless, they would resent such an imputation. Yet, if as to them the first floor is not devoted to charitable uses, it is not so used at all.
According to the majority opinion the fact that the income from the use of the first floor, if any, is devoted to charity makes the use of that floor charitable. But that is contrary to the authorities and to the plain meaning of the law.
In Trustees v. Bohler, 80 Ga. 159, 7 S. E. 633, it was held that property whose rentals were applied to the construction of an alms-house was only indirectly used for charity, and hence was taxable.
In Mason v. Zimmerman, 81 Kans. 799, 106 Pac. 1005, *546it was held that a building occupied by the Grand Lodge of Masons was not exempt because not “used directly, immediately and exclusively in dispensing charity.”
Decided June 4, A. D. 1917.
Affirmed on rehearing May 6, A. D. 1918.
Clearly, this building is not used solely and exclusively for strictly charitable purposes, and ought not, therefore, to be exempt.
Rehearing granted.