Court Opinion

ID: 9548009
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:56:18.491793+00
Date Added: 2024-06-11T15:18:22.158647
License: Public Domain

McQUADE, Justice
(dissenting).
The holding of the majority that the respondent is not entitled to a tax exemption for the property in question compels me to dissent.
The majority is caught up in the litany of the law pertaining to the scope of tax exemptions. That such exemptions are to be strictly construed, and that there is no presumption or implied exemption from taxation in favor of religious or charitable organizations is not disputed.1 But the majority in this case, in the name of strict construction, squeezes the policy from the law, applying only the narrow words of the statutory exemptions.
The clear policy supporting the exemptions here involved is that the activities of non-profit religious and charitable organizations work for the public betterment and therefore should be encouraged by tax exemptions. So that these exemptions will not be available to those who would use them to protect endeavors of a commercial nature, the legislature attempted to more precisely define the types of activities and organizations to which the exemptions were applicable. One category is set out by I.C. § 63-105B:
“The following property is exempt from taxation: Property belonging to any religious corporation or society of this state, used exclusively for and in connection with public worship, and any parsonage belonging to such corporation or society and occupied as such, and any recreational hall belonging to and used in connection with the activities of such corporation or society.”
The majority seizes upon the fact that the “property * * * [is not] used exclusively for and in connection with public worship.” (Emphasis theirs). They also note that § 63-105B does not specify church camps as such will be exempted, as it does recreational halls. The conclusion is that the exemption provided by § 63-105B is not available to respondents.
This is an elevation of form over substance. Section 63-105B is an attempt by the legislature to exempt church property used in worship, or other religious *885oriented activities, and to avoid exempting commercial enterprises owned or operated by churches. Recreational halls serve precisely the same function as the church camp. Neither is specifically a part of the worship service. Each attempts to foster the tenet of the church by provision of recreational activities in conjunction with other church activities. Surely the majority would not conclude that an outdoor basketball court on the church grounds provided for the recreational use of the church’s youth would not be exempt because there were no walls or roof, and thus, it was not a “recreational hall.” Nor do I think they intend, as their opinion seems to imply, that the recreational hall exemption is only available if such hall is used “exclusively for and in connection with public worship.” Indeed then it would not be a “recreational” hall at all.
The church camp was used as a recreational center in conjunction with religious instruction which was mandatory for all children attending the camp, according to the stipulated facts. Further, the camp was used by ministers and church teachers for educational classes, these individuals taking advantage of the recreational facilities during non-class hours, when the camp was not being used by children. The camp had never been run at a profit. It is precisely this kind of non-profit activity by a religious society aimed at regenerating the spirit of the individual, which qualifies property under § 63-105B as tax exempt. Therefore, I must conclude that the camp was within the exemption of § 63-105B.
Because of the inherently overlapping nature of the exemptions involved here, this property also qualifies under §§ 63-105L and 63-105C. Section 63-105L provides :
“The following property is exempt from taxation: All property used exclusively by the owner for (for) school or educational purposes, from which no profit is derived, and- all property from which no profit or rental is derived and which is held or used exclusively for endowment, building or maintenance purposes of schools or educational institutions.”
The majority finds this exemption is not available since the property was used for recreational purposes, rather than exclusively for educational purposes. Again, in the guise of strict construction, the majority narrows the scope of the exemption beyond the legislative intent.
The main use of the camp was for religious instruction and provision of formal classes in handicraft, water skiing, boating and water safety. These latter subjects differ little from those taught in physical education classes in Idaho’s schools. Such classes have long been accepted as a necessary part of the full development of the child.
The fact that the camp facilities are used for recreational purposes when not in use for classes should not be determinative of the property’s qualification for tax exemption. Use of school facilities like gymnasiums, swimming pools and playing fields after school hours is common. Such uses do not denigrate the school as a school, whether it be public or private. After class availability should be encouraged to maximize the benefit derivable from these facilities. Denying tax exemption because the property is used for recreational purposes during non-class hours must have the opposite effect. The legislature could not have intended this result. Rather, as with the exemption provided by § 63-105B, the intent was to avoid granting tax exemptions to commercial institutions who sought the cover of this section for their profit oriented activities. Use of the facilities, after classes, for recreational purposes, is not the kind of use by which the legislature intended to bar property from exemption when § 63-105L was made to turn on “exclusive” use for school or educational purposes. Such recreational uses are consistent with exclusive use for *886school, 'or educational purposes, as required by ■ § 63-105L.
As for § 63-105C, it provides:
“The following property is exempt from taxation: Property belonging to any fraternal, benevolent, or charitable corporation or society, the World War veteran organization buildings and memorials of this state, used exclusively •for the purposes for which such corporation or society is organized; provided, that if any building or property belonging to any such corporation or society is leased by such owner or if such corporation or society uses such property for business purposes from which a revenue is derived, then the same shall be assessed and taxed as any other property, and if any such property is leased -in part or used in part by such corporation or society for commercial purposes the assessor shall determine the value of the entire building and assess such proportionate part of such building including the value of the real estate ,as is so leased or used for commercial purposes, and shall assess all merchandise kept for sale, and the trade fixtures used in connection with the sale of such, merchandise.”
The majority concludes there is nothing in the record to indicate that respondent corporation is a fraternal, benevolent or charitable corporation, nor is there evidence in the record that the property is exclusively used for purposes for which the corporation is organized. This conclusion leads the majority to deny respondent an exemption under § 63-105C. This conclusion, however, is not supported by the facts before this Court. This Court must determine whether respondent corporation comes within the terms of § 63-10SC from the charter instrument of respondent before this Court as a part of the record.
Churches have been held to be charitable corporations, the distinctive features of a charitable corporation being that it' has> no capital stock and no provision for-making profits, but derives its funds main-' ly from public and private charity, holding them' in trust to be expended for charitable and benevolent purposes.2 It is clear from; the respondent’s Articles of Incorporation’ that respondent qualifies as a charitable corporation under this test. Having qualified, the question remains as to whether the record shows the property involved is used exclusively for the purposes for which the corporation was organized, as. § 63-105C requires.
The Articles of Incorporation state in part:
“The object of said corporation shall be the organization, establishment and' maintenance of mission and church societies to teach, spread and promulgate the Christian [sic] religion and morality in accordance with the teachings of the Seventh Day Adventists; and to erect and assist in erecting church edifices for such societies when established; and to build and assist in building structures for educational charitable and benevolent purposes throughout eastern Oregon, Washington, Idaho and British Columbia and to said end to own, hold,, mortgage, sell and convey property of every kind and description and to do all other things incidental to the accomplishment of the aforesaid purposes.”
The “objects” clause of the corporation thus states the purposes generally to establish mission and church societies to-spread the teachings of the Seventh Day Adventists, to build structures for education, charitable and benevolent purposes, and to do other things incidental to the accomplishment of these purposes. .This camp clearly involved spreading the teachings of the Seventh Day Adventists, since all children attending camp were required to attend religious instruction classes. The other classes were very similar to those one might encounter in a Y.M.C.A. Such *887•classes, whose object is to promote growth in Christian character and service through physical, social and spiritual training, have been held to have charitable or benevolent objects.3 When such activities as were conducted at this camp are interwoven with instruction in religion, and are conducted for no profit, it is clear that benevolent and charitable purposes are being served, as is the object of respondent as set out in its charter. It is settled law that while a corporation cannot engage in a business the charter does not authorize, -it may.engage in any business or transaction which is fairly and reasonably incidental to the carrying on of its principal business.4 Under this rule of construction of the limits of an “objects” clause, the activities of respondent at the camp are within the objects set out by the Articles. The respondent is thus entitled to an exemption under § 63-105C.
The qualification of this property for a tax exemption is clearest when §§ 63-105B, C, and L are read together. The key to the scope of these sections is an understanding of the purpose of the legislature in enacting them. The legislature, as previously noted, intended that the socially beneficial works carried on by religious organizations, by charitable or benevolent organizations, and by those promoting education be encouraged by exempting the properties employed in these endeavors from taxation. On the other hand, these categories are not to be available as tax shields, for profit oriented activities. This intent is emphasized by use of the word “exclusive” in these sections — use partially for religious, educational or charitable purposes as outlined in the statutory sections, and partially for other (commercial) purposes disqualifies the property from these exemptions. A building used for worship services on the day of worship set aside by a particular denomination, and as a classroom for five other days during the week, would not be used exclusively for worship or for educational purposes. By the reasoning of the majority, then, no tax exemption would be available. This result is certainly not in keeping with the legislative intent of §§ 63-105B and 63-105L. The legislature found sufficient' public benefit in either use to exempt the property from taxation. Use for both cannot be said to negate the public benefit derived; on the contrary, the public benefit in this situation is increased. The legislature intended that property in such a situation be tax exempt. That is precisely and unavoidably the case at hand. The property was used for religious instruction and worship, for recreation in connection with the activities of this religious corporation, and for nonreligious educational purposes. Thus, even if the property did not qualify-'as being used exclusively for ■ activities ■enumerated in §§ 63-105B or 63-105L, there can be no doubt that these ; uses together qualify the property for ■ a statutory tax exemption.
For these reasons, the judgment of the district court should be affirmed.
DONALDSON, J., concurs in the dissent.

. I.C. § 63-101; Sunset Memorial Gardens v. Idaho State Tax Com’n, 80 Idaho 206, 327 P.2d 766 (1958) ; Malad Second Ward of the Church v. State Tax Com’n, 75 Idaho 162, 269 P.2d 1077 (1954) ; 84 C.J.S. Taxation § 227 (1954).

. In re Coleman’s Estate, 66 Idaho 567, 571-572,163 P.2d 847 (1945).

. Leeds v. Harrison, 7 N.J.Super. 558, 72 A.2d 371 (1950) ; Carpenter v. Young Men’s Christian Ass’n, 324 Mass. 365, 86 N.E.2d 634 (1949).

. 19 O.J.S. Corporations § 949 (1940).