Court Opinion

ID: 9740576
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:37:51.558581+00
Date Added: 2024-06-11T07:24:19.004556
License: Public Domain

HANSON, Judge
(dissenting).
The trial court determined the South Dakota State Medical Association to be a benevolent society within the meaning of our tax exemption statute and entitled to a proportionate exemption from taxes on its headquarters building situated in Sioux Falls. The judgment should be affirmed, in my opinion.
According to SDC 57.0311 all property belonging to a benevolent society and used exclusively for benevolent purposes shall be exempt from taxation. The statute goes on to describe the term "benevolent society" as including "all lodges, patriotic organizations, memorial associations, educational associations, cemetery associations, and similar institutions, operating without profit and devoting their resources to the promotion of virtue by charitable, educational, ritualistic, ceremonial, literary or other similar methods, or by any or all of such methods". In Dakota Lodge No. 1, I.O.O.F. v. Yankton County, 56 S.D. 234, 228 N.W. 238, this court construed the meaning of the word "benevolent" appearing in our tax exemption statute. The court said "we *383must presume that the word was used in the same sense as it is used by the Legislature in other kindred statutes; not merely in statutes on the same subject, but in statutes on cognate subjects". Reference was then made to our statutes relating to "Religious, Educational, and Benevolent Corporations" from which the court concluded that the word "benevolent" was used in its broadest sense and was not synonymous with "charitable". The court concluded that "The meaning thus attached by the Legislature, through a long period of years, to the word 'benevolent,' as used in designating the character of societies for the purpose of incorporation, cannot be ignored in endeavoring to ascertain the meaning attached to the use of the same word in designating the societies whose property shall be exempt from taxation, and we think that, in providing for the exemption of all property belonging to any such charitable, benevolent, or religious 'society, the Legislature must have contemplated the inclusion of such societies as were deemed benevolent societies for the purpose of incorporation as such".
Turning then to our Benevolent Corporation Act, under which the South Dakota Medical Association is incorporated, it appears from SDC 11.1401 that "Associations for benevolent and charitable purposes to establish and maintain hospitals and infirmaries for the cure of the sick and support of the aged and indigent, asylums for orphans, and lodges, chapters, posts, encampments, councils, commanderies, and other organizations, grand or subordinate, of the fraternities or associations commonly known as the Free and Accepted Masons, Independent Orders of Odd Fellows, Grand Army of the Republic, American Legion, Knights of Pythias, Ancient Order of United Workmen, Knights of Columbus, and other fraternal, benevolent, or charitable fraternities or associations, may become incorporated" under this chapter. SDC 11.1402 prescribes the contents of articles of incorporation for "Any such benevolent association, lodge, chapter, post, encampment, council, commandery, or other similar organization".
Many different kinds of fraternal, benevolent, and charitable organizations are entitled to be chartered under our Benevolent Corporation Act. All are not specifically named therein. *384Various service organizations, for example, are similar in character, purpose, and practices to the American Legion. Labor unions are similar to the Ancient Order of United Workmen. Likewise, an association of medical doctors is similarly related. At least the public good and benevolent practices of a medical association can be equated with a labor union. The South Dakota Medical Association was, therefore, properly chartered as a benevolent corporation. The trial court found it was not organized for profit and is sustained by membership dues, fees and charges required to meet the cost of services rendered to its members and allied organizations promoting health work. The court further found its practices were of a benevolent nature and consistent with its objectives and purposes and "such practices are designed to afford protection, relief, or beneficence to its members or are of direct benefit to the public. Such latter programs include providing medical scholarships, assistance to students of the South Dakota Medical School, providing and distributing public health literature and health information, assistance to the South Dakota State Board of Medical Examiners, a community doctor placement service, distribution of information relative to medical services, maintenance of medical grievances committee, and assistance in the establishment and operation of clinics free to the public." There are ample substantial and credible facts 'sustaining these findings of the trial court.
It is indicated by this court in the case of South Dakota Sigma Chapter House Ass'n. v. Clay County, 65 S.D. 559, 276 N.W. 258, that if an organization or association has been properly chartered under our Benevolent Corporation Act, it cannot be denied an exemption from taxation if its practices are in conformity with its tenets. According, the South Dakota Medical Association is a benevolent corporation and entitled to exemption from taxation of its headquarters building in proportion to the beneficent use made of the building by the association. The nonbenevolent use of the building made by the South Dakota Medical Services Corporation was properly assessed and taxed in accordance with SDC 57.0311, subsection (3) (b), which allows an apportionment to be made between benevolent and nonbenevolent use of property.