London Square Village v. OKLAHOMA CTY. EQUALIZATION AND EXCISE BD.
559 P.2d 1224
Okla.
1976
Check Treatment

*1 SQUARE VILLAGE, LONDON

INC., Appellant, EQUALIZATION COUNTY OKLAHOMA BOARD, Appellee. EXCISE AND No. 48596. of Oklahoma. Supreme Court 2, 1976. Nov. 14, Rehearing Denied Feb. Freeman, City,

Freeman & Oklahoma appellant. Harris, P. Atty. by

Curtis Dist. James P. Laurence, Asst. Atty., City, Dist. appellee. BERRY, Justice: judgment appeal This is of district from affirming court decision of Oklahoma Coun- Equalization ty Board that de- [Board] plaintiff’s request to declare nied certain of property exempt county ad valo- rem taxes.

Plaintiff, Square Village London [Vil- non-profit corporation organized lage] February chartered in 1970 under 18 seq. Village incorpo- 851 et O.S.1971 was rated Board of Directors of National America, Association of the Volunteers of religious non-denominational Christian or- ganization. Volunteers of America tax status as a church granted Revenue as are its Internal Service subordi- the country nate around such Square Village. as London *2 Village of state Incorporation of of income over expenses,

Articles but in profit event be: organization of to purpose might be shown at year, end of under terms “* * * charitable, Village those benevo- of contract between any for and HUD nonprofit purposes hereinabove lent and must surplus be returned to HUD as credit capital. and has no stated This against supplements. described rent capital be without shall stock corporation Village has been county on the tax rolls shall be nor no dividends declared and inception. from its It now submits that issued.” of its purpose operation, because and are: purposes The described property comes directly purview within of basis, “(a) provide, nonprofit To on 2405(h) (i), 68 O.S.1971 as being § “used and moderate income housing for low exclusively directly and for pur- displaced from urban areas or as families State,” poses within this and as such should action, where governmental of a result exempt be from taxation. adequate housing groups, exists for such Village protest filed its with the County 221(d)(3)and pursuant to Section Section of Equalization. Board The acting Board Act, Housing the National 236 of on advice of district attorney, pro- denied amended, U.S.C.A. and §§ [now Village and test initiated action in 1715z-l] pursuant court district to 68 O.S.1971 irrevocably “(b) Corporation 2461. The matter was decided § trial to, operated exclusively and dedicated plaintiff’s stipulation court on of facts and for, purposes; part and no of nonprofit trial briefs. The court Village’s pe- denied (sic) Corpora- income or assests tition, holding subject property exempt to, nor inure to tion shall be distributed from ad valorem taxation. Village appeals of, any individual.” the benefit this Court. to purpose, of its stated Vil- In furtherance lage apartment complex constructed an to Art. X 6 Under of the Constitution public housing with assist- cost provide low Oklahoma, property exclusively of used Department of United States of Hous- ance religious purposes for and charitable is ex ing Development and Urban and [HUD] empt from taxation. Housing Administration Federal [F.H.A.] 2405(h)(i) provides: 68 O.S.1971 § through Federally guaranteed loans and following “The property shall be ex- Apartments are rented supplements. empt from taxation: public appli- of who make to members through cation for financial assistance Housing National supplements.” “rent See (h) property any All of charitable insti-

Act, seq. specifically 1701 et U.S.C.A. organized or tution chartered under the Prospective apply renters to HUD 1715z-l. nonprofit this as a laws of State or chari- granted which are on basis supplements institution, provided table net income are ability pay. Those who applicant’s of is used property from such supplements to receive rent are this for charitable within State 215.20 and in- C.F.R. § enumerated of such income part and no inures to the among others those with limited in- clude stockholder, any private benefit elderly, handi- physically who are come further its facilities are provided displaced from their homes ur- capped, any person regardless of his available to disaster, military per- renewal or ban pay. duty. ability on active sonnel (i) All rents from each tenant Village collects within directly received from supplement amount of less State, provided, charity using this pays operating ex- HUD and from pay any does not rent or be- said mortgage payments. Since penses thereof, to the owner operation there has been no excess remuneration ginning any person proval re- open Quinn, its facilities are Parker v. County Treas., 23 ” * * * ability pay. gardless of his Utah P. wherein it was said: “ * * * Among the exempt several property is from ad va- classes Whether are depends on ‘lots with taxation build- lorem question ings thereon used exclusively which it is used and such for either County Hospital, religious Tulsa v. St. John’s worship purposes.’ fact. *3 983; 176, 191 Okl. P.2d Coun In the case at society 200 bar the relief which Queen Lodge 197, I.O.O.F., ty City v. No. manages owns and the over 340; 131, 156 P.2d Phi Delta Theta 195 Okl. controversy which this arose was organ- State, 608, 1129; v. 175 Okl. 53 P.2d Cox v. ized and acts 161, Dillingham, 199 Okl. 184 P.2d 976. purposes. sick, It ministers poor, to the and community. destitute of the pur- Its County Hospital, In Tulsa v. St. John’s excellent, poses are and the means adopt- we supra, quoted from Farmer’s Union commendable; and, ed doubt, no the Hospital City, 661, 126 Ass’n 190 of Elk Okl. measurably state is by having benefited 244, as P.2d follows: poor subjects helpless and under the cases, “There is a wealth these and a benign protection and care of such socie- variety of schemes and therefore, If, ty. in the fundamental and operation, many methods of are held law, to specifying in addition lots and exempt not. In and others all of them buildings thereon used exclusively for presence the there is one factor or ab- purposes, charitable rentals derived from sence of which means almost more than buildings such and used for such purposes anything determining else in the issue. enumerated, were also we would have no That doors of hospital is this: Are the difficulty in this case in declaring the all, open poor patients pay patients property, including whole the portion yes, alike? If the is it answer is a chari- rent, rented and held for exempted from hospital table and its is entitled taxation; but the lawmakers did not see exemption provided; to the from taxation exempt fit such rentals in no, express it if the answer is is not a charitable terms, can and we furnish by hospital and is not aid exemp- entitled to the Only construction. such of the society’s tion.” therefore, property, as occupied is persons In case are re purposes, quired rent, to pay poor rich and alike. from taxation. It follows that However, persons qualify those who may exemption does extend to that supplements rent receive from HUD. portion not appropriated by society who are to receive sup Those use, its own but held as a source of reve- are plements enumerated 24 C.F.R. ” * * * nue. among 215.20 and include others § those elderly, with limited income who are physi jurisdictions Other have held that hous- cally handicapped, displaced from their ing projects are not v. charitable. Beerman by disaster, homes urban renewal Appeals, Board of Tax 179, Ohio St. military personnel active duty. on We [1949]; N.E.2d 474 Methodist River Oaks agree housing per low-rent for such Apartments, City Waco, Inc. v. sons worthwhile cause of beneficial [Tex.Civ.App.1966]. S.W.2d However, to society. interest we are of exempting Statutes opinion that such is not used exclu strictly taxation are to be against construed sively for purposes required exemptions. of Equalization Board v. Bon (i) 2405(h), 68 O.S.1971 when each and ner, 431, 1077; 185 Okl. 93 P.2d Dairy every occupant is required pay for ac Queen of v. Oklahoma Oklahoma Tax Com commodations. mission, 205 Okl. 238 P.2d 800. Queen

In Oklahoma County City Lodge 197, I.O.O.F., supra, ap- Judgment No. we cited with of trial court affirmed. HODGES, J., DAVISON, C. IR- V. tions from taxation. Oklahoma Tax Com- SIMMS, JJ., WIN, con- LAVENDER mission v. Sisters of Mother, Sorrowful cur. (1940). Okl. P.2d 888 “Charitable,” WILLIAMS, J., defined C. and BARNES and in its broader sense JJ., court, DOOLIN, by this comprehends dissent. all kindly incli nations which men ought to bear toward Justice, DOOLIN, dissenting: one another. In re Farmers’ Union Hospi I dissent. tal Association of Elk City, 661, 126 190Okl. opinion principle This court’s enunciates a P.2d 244 Charitable means person helps a low income himself in that if those which benefit an indefinite manner, given assistance to him any small persons number of either influence byor purpose. is not for a charitable Because a relieving their bodies from suffering and person’s paid of a income is as rent portion also, may, constraint. It mean erecting or not mean he is not in need of or maintaining buildings any other method *4 recipient “charity.” a of As for not be lessening of the burden on the state to care example lodge sponsored various church or for and advance the interests of its citizens. hospitals receive non-tax- organizations Source of the funds for operation is not the though status even many charitable of able sole factor. American College of Surgeons in such persons served institutions are the Korzen, 340, v. 36 Ill.2d (1967). N.E.2d 7 patients part paying guests. full is majority carefully silent as jur- to Society of the National Volunteers of holding isdictions that housing projects do religious organ- is a charitable and America a have charitable purpose, and that it is to such similar as the ization immaterial that might tenants pay some constitution, Army. Under its Salvation portion fractional of the City rent. of Har- corporations throughout the non-profit risburg Presbyterian v. Apartments, 18 Pa. have been formed “to aid and assist country 428, Cmwlth. 337 A.2d 297 (1975); Delmo society carrying religious, in on its be- the Housing Corporation v. Finnegan, 85 philanthropic work.” London nevolent F.Supp. (E.D.Mo.1949). Providing low Village corporations. is one of these Square housing people cost for with limited in- purpose Incorpora- clause of Articles of See may public comes constitute a charity even majority opinion. cited in tion though charged, rent is if the charged rents Anyone may Village. live in the How- are less than rents charged by commercial only those with an annual ever income be- apartments organization and if the has nev- low an established maximum are profit private er taken a for purposes. supplements from receive rent HUD. Pref- Freedoms House of Philadelphia, Four Inc. given applicants is with erence the low- Philadelphia, City 443 Pa. practicable est income limits. (Penn.1971). A.2d There the court rec- Constitu-; ognized the possibility, as could be no doubt the Oklahoma There is case, Village’s in if a charitable tax exemption mandates an from taxes for tion allowed, exemption is not organi- the owner property used for charitable may have to zation either close its doors or Admittedly all purposes. non-profit corpo- increase the rent. Either alternative exemption, claim would rations cannot but if it frustrate the charitable intention of property shown the use of the is for the can be organization. exemption then the charitable be allowed. should There can be no fixed rule to determine if organization purpose an or its consequence in “a use is charitable. “Charity” and it is academic that charity But purposes” contemplates a wide not con- almsgiving or relief of exemption poverty of activities. Tax stat- fined spectrum construed, strictly signification, must be but the distress but has a broader utes em- bracing improvement state has in ex- the policy happiness of this been liberal use, empting property organiza- of charitable man. “A charitable where neither law forbids, may applied solely be for the benefits of the residents policy public nor promote Village. tends to the Citizens of anything that Oklahoma are almost well-being project of social man.” the beneficiaries of the and the well-doing and use Authority, 370 Ill. the Housing property and benefit of is limited to v. Peoria Krause (1939); Realty Bader & The fact the “within State.” direct 356, N.E.2d Housing possible Louis Au of an occasional surplus v. St. result Co. Investment be more 217 S.W.2d 489 could funds other Mo. involved thority, 358 reasoning destroy of these the benefit states citizens persuaded I am though practice here we do not deal receive from such of Oklahoma even courts housing authority. housing. Further, Al of low cost ownership by a the form if in with here, profit only well as the future a is realized from the in those cases as though receive direct or use of income becomes non- of low families charitable, per tax housing project, all status will be benefit removed. community indirectly. promptly Supp. benefit See 18 O.S.1975 in the sons a tends to be of most type of this Charity juris The above cited character. practical Square Village, operat- I believe London held hold dictions by a charitable organization ed and for the low accom authority provide used to aiding citizens of is used modations by providing housing, low cost notwithstanding that some rent is constitutional and statutory meets Housing see Williamson v. charged. Also for ad valorem guidelines exemption tax 673, 199 Augusta, 186 Ga. Authority of S.E. I would reverse the district court. *5 I am authorized state that Chief Jus- Apartments, Inc. v. River Oaks Methodist join WILLIAMS and Justice tice BARNES Waco, (Tex.Civ.App. 409 S.W.2d 485 City of in this dissent. holding a 1966) majority cited to be charitable is readi-

housing project not from the case. distinguishable ly corporation formed court held There provide Church to accom- Negro Methodist displaced ur- for families from modations “purely public areas was not a renewal ban DAVIDSON, d/b/a Professional Cecil paid by the rents the ten- charity” because Company, Appellee, Marble equivalent were not lower than hous- ants taking thus no burden from the state. ing, COMPANY, BANK AND TRUST FIRST organiza- the case The This is not here. YALE, Hugh Oklahoma and implement created to the charita- tion was Jones, Appellants. act. It purposes of the federal ble No. per- for the services it charge the tenants assisting obtaining in in them forms Supreme Court of Oklahoma. housing. pay tenants is demon- type What 2, 1976. Nov. substantially lower than fair strably and Modified, Rehearing Opinion Denied supple- rental value because market 7, 1977. Feb. anticipated. yet As ments received operating profit shown has been there it should exist in the future

and if one by Village. not be retained would supplement pro- of the rent obtaining qualified persons is to aid gram meet its enabling plaintiff while necessary expenses. The rent received