Court Opinion

ID: 9648578
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:28:07.718363+00
Date Added: 2024-06-11T18:12:03.348726
License: Public Domain

CALVERT, Chief Justice.
River Oaks Garden Club sought a judgment in the trial court, pursuant to the Declaratory Judgment Act, Art. 2524 — 1 1, declaring certain property owned by it to be exempt from ad valorem taxes assessed by the City of Houston and Houston Independent School District for the years 1959 and 1960, and from those to be assessed in future years. The trial court rendered judgment so declaring.
The Court of Civil Appeals reversed the judgment of the trial court and rendered judgment declaring that the property was not exempt from such taxes. 360 S.W.2d 855. We affirm the judgment of the Court of Civil Appeals.
Petitioner’s claim to exemption is asserted under the provisions of Secs. 14 and 20 of Art. 7150. They read in pertinent part as follows:
“14. Art Galleries, etc. — All property belonging to Art Leagues and Societies of Fine Arts, whether incorporated or not, which are devoted wholly and without charge to the promotion of education and learning, including Art Galleries and exhibits therein contained, the land upon which the same are situated, which is devoted exclusively to such purposes, and also all land, money, pictures and other works of art and all other personal property which may be necessary and in actual use for the purpose of carrying out' said educational feature.
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“20. American Legion and other Veterans’ Organizations. — Hereafter all buildings, together with the lands belonging to and occupied by * * * any non-profit organization chartered or incorporated under the Texas Statutes for the purpose of preserving historical buildings, sites and landmarks, not leased or otherwise used with a view to profit, shall be exempt from taxation in this State. * * * ”
Petitioner is incorporated as a non-profit corporation. Its purposes as set forth in an amendment to its Articles of Incorporation adopted in November, 1959 are as follows:
“The purpose of the River Oaks Garden Club shall be the creation of a Society of Fine Arts, devoted wholly and without charge to the promotion of education and learning in the field of the fine art of gardening and related fine arts.
“Further, the River Oaks Garden Club shall maintain the historical building on the premises known as the Old Smith County School and is incorporated for the purpose of preserving the building which is not to be leased or otherwise used with a view to profit.”
By the purposes thus expressed in the amended Articles of Incorporation, peti*853tioner has sought, in clear language, to bring its property within the exemptions of Secs. 14 and 20, quoted above. For purposes of this opinion we may assume it has done so. However, if its exemption is not authorized by the Constitution, it has done so to no avail.
Legislative authority to exempt property from taxation is found in Sec. 2, Art. VIII of the Constitution. Vernon’s Texas Constitution. The section is quite lengthy and no good purpose would be served by quoting it in full. Petitioner contends that its right to exemption under the quoted provisions of Sections 14 and 20 of Article 7150 is authorized by the language of Sec. 2, Art. VIII which empowers the Legislature to exempt “institutions of purely public charity.”
Because of the wording of Sec. 2, Art. VIII, as it was written originally, we held in Morris v. Lone Star Chapter No. 6, Royal Arch Masons, 68 Tex. 698, 5 S.W. 519, that it did not authorize exemption of institutions of purely public charity as such but only that property which was owned by such institutions and was used exclusively by them for purely public charity. We have adhered to that construction through the years in spite of frequent changes in internal language and punctuation in the section, and have denied exemption of property, not used exclusively by the owner for purposes of purely public charity. See City of Houston v. Scottish Rite Benev. Ass’n, 111 Tex. 191, 230 S.W. 978; State v. Settegast, Tex.Com.App., 254 S.W. 925; Benevolent & Protective Order of Elks v. City of Houston, Tex.Civ.App., 44 S.W.2d 488, writ refused; City of Longview v. Markham-McRee Memorial Hospital, 137 Tex. 178, 152 S.W.2d 1112.
The record in this case discloses that the property in question is not being used exclusively by River Oaks Garden Club; that other non-profit organizations are permitted the use of the property without charge. The Court of Civil Appeals denied tax exemption for that reason. We do not reach the question decided by the Court of Civil Appeals because there are far more basic reasons for holding that exemption of petitioner’s property is unauthorized by the Constitution.
The last clause in Sec. 2, Art. VIII provides that “all laws exempting property from taxation other than the property above mentioned shall be null and void.” Respondents question the constitutionality of the purported exemption in Section 20 but do not question the constitutionality of that in Section 14.
Our Constitution containing the provision for exemption of institutions of purely public charity was ratified on February 15, 1876. In August of the same year the Legislature passed “An Act defining what money and property is subject to taxation or exemption, and the mode of listing the same.” 8 Laws of Texas 1111. Among the exemptions provided in Sec. 5 of the Act was, “All buildings belonging to institutions of purely public charity, together with the lands belonging to and occupied by such institutions, not leased or otherwise used with a view to profit * * That exemption still exists. Sec. 7, Art. 7150. Neither the Constitution nor the early statutes defined an “institution of purely public charity.” Nor, so far as we have been able to discover, had the courts of this state defined the term before 1905.
In 1905 the Legislature amended the Statute relating to the exemption of property from taxation, 12 Laws of Texas 314, and for the first time defined an institution of purely public charity, as follows:
“An institution of purely public charity under this act is one which dispenses aid to its members and others in sickness or distress, or at death, without regard to poverty or riches of the recipient, also when the funds, property and assets of such institutions are pledges [sic] and bound by its laws to relieve, aid, and administer in any way to the relief of its members when in want, sickness and distress and pro*854vides homes for its helpless and dependent members and to educate and maintain the orphans of its deceased members or other persons.”
Except for changing the word “pledges” to “placed,” the definition has been preserved through the years and now appears as a part of Sec. 7, Art. 7150. While the primary purpose of the legislative definition was probably to insure that exemption was accorded property of organizations dispensing charity only to a small segment of society, included also is the concept that an institution of purely public charity is one which dispenses aid to the sick, the distressed and the needy, by providing for their basic needs. The necessary converse of the legislative definition is that an organization cannot be an institution of purely public charity unless its funds, property and assets are pledged and used to provide for the basic needs of the sick, distressed and needy, whether the benefits be extended only to a small segment of society or to the public generally.
This Court suggested a definition of an institution of purely public charity, without reference to the statutory definition but largely in the same terms, in City of Houston v. Scottish Rite Benev. Ass’n, 111 Tex. 191, 230 S.W. 978, 981, where we said:
“In our opinion, the Legislature might reasonably conclude that an institution was one of ‘purely public charity’ where: First, it made no gain o.r profit; second, it accomplished ends wholly benevolent; and, third, it benefited persons, indefinite in numbers and in personalities, by preventing them, through absolute gratuity, from becoming burdens to society and to the state.”
Here, again, the primary purpose of the definition suggested was to meet the contention that an institution which dispensed aid only to its own members was not an institution of purely public charity; but here again, also, is the concept that an institution of purely public charity is one whose charity benefits persons “by preventing them, through absolute gratuity, from becoming burdens to society and to the state.” We did not leave our meaning in that respect in doubt. We continued:
“Charity need not be universal to be public. It is public when it affects all the people of a community or state, by assuming, to a material extent, that which otherwise might become the obli-ation or duty of the community or the state.”
The necessary converse of that statement is that an organization is not an institution of purely public charity within the-meaning of the constitutional exemptioni unless it assumes, to a material extent, that' which otherwise might become the obligation or duty of the community or the state..
The courts of some states construe constitutional and statutory tax exemptions, accorded institutions of purely public charity liberally, some strictly. See Zollman’s-American Law of Charities, pp. 460-468. The courts of Texas have been committed’ to a strict construction since an early date.. See Morris v. Lone Star Chapter No. 6,. Royal Arch Masons, 68 Tex. 698, 5 S.W. 519. Moreover, a strict construction seems-more in harmony with the intent of the people when they adopted the Constitution in 1876, and conforms to our announcement in Cox v. Robison, 105 Tex. 426, 150 S.W. 1149, 1151, that “The fundamental rule for the government of courts in the interpretation or construction of a Constitution is to-give effect to the intent of the people who-adopted it.” The action of the delegates-in the Constitutional Convention of 1875-on various tax exemption proposals, as reflected in the Journal of the Convention, indicates that they intended that exemptions-from taxes be narrow and limited.
In Morris v. Lone Star Chapter No. 6,. Royal Arch Masons, 68 Tex. 698, 5 S.W. 519, 520-521, we stated the underlying rea*855son for a strict construction of the “used exclusively” provision of the constitutional tax exemption, as follows:
“The reason of these rules would seem to he that it is hut just and equitable that the property of all persons and associations of persons should hear the burdens of government in equal proportion; and hence it is to he presumed that the law-makers did not intend to make an exception in favor of any class unless that intention be clearly expressed.”
In Massachusetts General Hospital v. Inhabitants of Belmont, 233 Mass. 190, 124 N. E. 21, 25, the Supreme Judicial Court of 'Massachusetts stated the rationale for exemption from taxes of property of charitable institutions as well as a sound reason for strict construction in these words:
“One ground upon which exemptions from taxation of charitable institutions like the complainant can be justified in .a constitutional sense is that they minister to human and social needs which the state itself might and does to a greater or less extent undertake to satisfy. The ultimate obligation of the ■state thus is discharged by the private •charity. To that extent the state is relieved of its burden. [In re] Opinion of [the] Justices, 195 Mass. 607, 609, 84 N.E. 499. An exemption from taxation is in the nature of an appropriation of public funds, because, to the extent of the exemption, it becomes necessary to increase the rate of taxation upon other properties in order to raise money for the support of government.”
With the foregoing discussion of the law in mind, we now examine the facts in the record before us to determine whether petitioner is an “institution of purely public charity” within the meaning of the constitutional provision.
The property for which exemption is sought is in the City of Houston and is owned by petitioner. Situated on the property is the Old Smith County Schoolhouse, a landmark in Harris County of historical value. Petitioner has, at considerable expense, renovated the building and beautified the grounds. One area is devoted to experimental gardening. The building and grounds are open six days a week to any members of the public generally as care to visit, without charge. There is a library in the building and a few ornamental works of art about the premises. Petitioner holds its regular meetings in the building, and, on occasions, invites speakers on gardening, horticulture, flower-arrangement, etc. Such members of the public generally as care to do so may attend the lectures, without charge. The building is not used by petitioner for social functions. Other non-profit organizations with similar purposes are permitted to use the building for their meetings, without charge. Some of the organizations which have been using the building are The Houston Symphony Society Women’s Council, The Amarylis Society, The African Violet Society and The Gulf Coast Botanical Research Society. In additional to beautifying its own grounds, petitioner has spent some $4,000 on beautification of a section of Memorial Drive. It publishes a book on gardening which is available in Houston and Southeast Texas.
We hold on the facts here stated that petitioner is not an institution of purely public charity. Admittedly, its main activity is to educate and enlighten its members, and such other persons as care to attend its meetings or read its book, in the art of growing and arranging flowers. That activity may be one which the state or local government could finance from taxes, a question we need not decide, but it is certainly not an activity which either the state or local government is under a duty or an obligation to finance in providing educational opportunities and benefits to its society.
If petitioner may claim tax exemption as a constitutional “institution of purely public charity,” there can be no end of exemptions accorded clubhouses and meeting places owned by small groups of persons of com*856mon aesthetic interests who associate themselves to promote and enjoy their particular interests. All they would need do would he to declare theirs to be a society of fine arts, devoted exclusively to education and learning in the field of their particular interests, and admit the public, without charge, to their clubhouse and meetings. It is but a half stride from the art of gardening to the art of interior decorating, and less than a half stride to the art of dramatics. Many others are but a stride away.
The Constitution provides separate exemptions of properties owned and used for educational purposes and of properties owned and used for charitable purposes. The exemption in the field of education is of “all buildings used exclusively and owned by persons or associations of persons for school purposes.” Sec. 2, Art. VIII, Constitution. If an organization uses its property exclusively for school purposes, the property is exempt whether the operation be purely charitable or for profit. The exemption is justified because by the operation of schools the state or community is relieved of its obligation to provide through taxes for the formal education of its youth. Cassiano v. Ursuline Academy, 64 Tex. 673. Respondent does not claim exemption under this provision, and could not do so successfully. And yet, it seeks the same result by claiming exemption as a purely public charity because of its educational contributions in gardening and flower arrangement, principally to its own members, which neither the state nor the community is obligated to provide. We cannot believe that such an exemption was ever intended by either the framers of the Constitution or the people who adopted it.
We are not to be understood as holding that property of an institution of purely public charity, devoted to the promotion of education, cannot be exempt from taxes unless it be used exclusively for school purposes. We would have an entirely different question if exemption were sought for property owned and used exclusively by an institution or foundation whose purpose was to grant scholarships or otherwise to aid in providing formal education to deserving-persons.
Apposite here is Dickison v. Woodmen of the World Life Ins. Soc., Tex.Civ. App., 280 S.W.2d 315, writ refused. In that case Woodmen of the World claimed tax exemption for its property under Art. 10.39' which expressly declares that every fraternal benefit society is a charitable and benevolent institution and directs that their property shall be exempt from taxation. The court denied exemption on the ground that Woodmen was not in fact an institution of purely public charity and that it could not be made one by mere legislative declaration. No more may a charter declaration of a worthwhile purpose make an institution one of purely public charity if it is not one in fact.
Having concluded that petitioner is not an institution of purely public charity, we need not decide the constitutionality of the exemption quoted above from Sec. 20‘, Art. 7150; nor need we decide whether petitioner would be an institution of purely public charity if its sole purpose and activity were the preservation of the Old Smith County Schoolhouse. The fact that an organization performs some charitable acts or engages in some charitable activity is not enough to qualify it for the tax exemption provided in Sec. 2, Art. VIII of the Constitution. Masonic Temple Ass’n v. Amarillo Independent School Dist., Tex.Civ.App., 14 S.W.2d 128, writ refused; B.P.O.E., Lodge No. 151 v. City of Houston, Tex.Civ.App., 44 S.W.2d 488, writ refused; Dickison v. Woodmen of the World Life Ins. Soc., Tex.Civ.App., 280 S.W.2d 315, writ refused.
In sustaining the validity of a charitable trust created in a will, the Waco Court of Civil Appeals, relying on the Restatement of Trusts and certain legal texts and encyclopedias, stated the “Charitable purposes include (a) the relief of poverty; *857'(h) the advancement of education; (c) the advancement of religion; (d) the promotion of health; (e) governmental or municipal purposes; and (f) other purposes the accomplishment of which is beneficial to the community.” Powers v. First National Bank of Corsicana, Tex.Civ.App., 137 S.W.2d 839, 842, affirmed, 138 Tex. 604, 161 .S.W.2d 273. See also Boyd v. Frost Nat. Bank, 145 Tex. 206, 196 S.W.2d 497, 502, 168 A.L.R. 1326. But we are not here con■cerned with the purposes for which charit.able trusts may be created; rather, we are here concerned with the intent of those who framed and adopted the Constitution in ■extending tax exemptions to properties own-id by institutions of purely public charity. Valid charitable trusts may be institutions of purely public charity within the meaning of Sec. 2, Art. VIII of the Constitution, '.but they are not necessarily so.
It may well be that all property of all nonprofit organizations or institutions whose ■activities are in any way beneficial to any segment of society should be exempt from -taxes. For like reason, it may be that all property used exclusively for purposes beneficial to society should be exempt from taxes ■even though owned by persons or organizations otherwise bent on earning profits. But those are not the exemption provisions of ■our present Constitution. The way to provide them is by amendment of the Constitution.
The judgment of the Court of Civil Appeals is affirmed.

. All references to statutes are to Vernon’s Texas Civil Statutes unless otherwise indicated.