*1 business the chances that the lessees’ would succeed were good; poor risks, not the lessees were credit and that monthly proportion rent to the was out value $500 parcel and to the amount of business the lessees could carry foregoing expected circumstances, on. Under the testimony concerning Harrington’s lease, the exclusion of requirement prejudicial. just error, if was not even contemplate an enhanced compensation does award brought by unconscionable tactics. about In June 19026. Bank. F. No. 1956.]
[S. LUNDBERG, Respondent, v. COUNTY OF ALFRED J. Appellants; THE al., et Defendants ALAMEDA CORPORATION OF WELFARE ROMAN CATHOLIC (a Corpоration), Intervener SAN FRANCISCO Appellant.* filing Lundberg Respondent * Reporter’s died of this after Note: Hersey Special Administrator was substituted and Paul W. decision place.
in his *3 Coakley, Attorney, F. R. Hunter, J. District Robert Chief Attorney, Assistant District Richard Maury J. Moore and Engel, Deputy Attorneys, Collier, City District John W. Attorney E. (Oakland), Nisbet, Deputy City Robert Attorney, Brown, Attorney Edmund General, G. and Linn, Clarence A. Attorney Chief Assistant for General, Appel- Defendants and lants.
Andrew F. Burke for Intervener and Appellant. Burrill,
Hill, Jackson, Farrer & Anson B. Jr., Musick, & Peeler Garrett and James E. Ludlam Amici Curiae on Appellants of Defendants and and behalf Intervener and Appellant.
Henry Respondent. for C. Clausen Respondent. on behalf of as Amicus
Culbert L. Olson
Curiae
of defendant
Plaintiff,
citizen resident
GIBSON, C. J.
a
challenge
county
taxpayer
brought
this suit to
therein,
and a
are au
actions
legality
exemption.
of a
Such
tax
Procedure,1
Civil
thorized
section 526a of the Code
674]) and,
P.2d
(cf. Delaney
Lowery,
v.
In property California all must be taxed unless an by granted is authorized the state Constitution or by the laws of the le article XIII United States. Section “In declares, exemp of the Constitution addition to such provided Constitution, in this tions as are now any may exempt portion property from taxation all or exclusively hospital religious, pur for or used charitable community chests, funds, or poses foundations and owned for operated religious, hospital оrganized or corporations and profit part no conducted purposes, not charitable contributor, operator, member, employee, or bondholder of the owner or profits, payment through any person, the distribution of other or excessive of their advantageous pursuit compensations charges or the more or profession; business or “ (5) property is used the owner or members The thereof for purposes lodge purposes, except or for social club where fraternal clearly primary religious, hospital, scientific, such use is or charitable incidental to a purpose; “ irrevocably (6) religious, property charitable, dedicated to scientific, purposes upon liquidation, hospital dissolution or any private the owner not inure to the abandonment of will benefit organized person except fund, corporation operated foundation or religious, hospital, scientific, purposes; or charitable “ (7) exclusively property, purposes, if used for scientific is used by the in which, complying a foundation or institution foregoing requirements addition to with organizations general, Congress has been chartered of the United States requirеment (except apply purposes that this shall not when the scientific research), objects encouragement are medical conduct of scientific of the and whose are the investigation, discovery research and for the benefit community large. at exemption provided “The shall herein be known as the ‘welfare ’ exemption. exemp- This shall inbe addition to provided by enlarge This tion now law. section shall not be construed to college exemption. Property for school collegiate grade operated by religious, of less than and owned and funds, corporаtions, or charitable foundations or funds, corporations requirements foundations or meet all of the section, exemption provided of this shall be deemed to be within the for California and Section le of Article XIII of the Constitution of the State of section. ’ ’
649 any private the benefit of inures earnings of which net individual.”3 or shareholder first, depends, statutory exemption validity of the may regarded as purpose be upon educational whether an lc of meaning of section purpose a within the charitable in a number charity defined term has article XIII. The been consistently gift applied of to be cases as “a California number existing of an indefinite laws, for the benefit with in under the bringing hearts persons—either by of their bodies by relieving their religion, or education, of fluence assisting them to constraint, disease, suffering, from or maintaining erecting or life, in establish themselves lessening the burdens public buildings works, or otherwise 778, Halm, 196 Cal. 781-782 (Estate government.” of of 214 212, Cal. Coleman, 167 ; Estate [138 P. [239 307] of 727, Sutro, 155 Cal. ; Estate 1915C 992, P. Ann.Cas. 682] of Lennon, 329-330 327, 152 Cal. ; Estate 736 P. 920] [102 of 1024]; 14 Ann.Cas. Estate Am.St.Rep. 58, 870, P. 125 [92 of 475].) This definition P. 537, 543-544 Merchant, 143 Cal. [77 Hospital quoted approval Scripps in etc. v. was with California 109, 155 A.L.R. Emp. 669, 24 675 P.2d Com., Cal.2d [151 was exempt from un held a 360], where organization. a charitable employment insurance taxes as held to be purpose An educational has been bequest in was the status of a trust character where public controversy gift for the benefit and the 641, Lindley, (Collier v. 203 Cal. private gain. 778, 781-782 Halm, 196 Cal. ; 648-650 P. Estate 526] [266 Cal.App.2d 652, 654 ; Yule, 57 P. Estate [135 [239 307] 135, 139 Bailey, Cal.App.2d 19 P.2d Estate ; [65 386] 375, Cal.App. 122 377 Bartlett, ; P.2d Estate [10 102] 444.) And in 370; 14 C.J.S. ; Rest., Trusts, see § 126] nonprofit educational held that jurisdictions it has been qualify of the maintained for benefit institutions exemption. purpose of tax organizations for the as charitable (S Carr, 322 Ill. v. Domestic Arts & Science chool Academy, Peter’s v. Appeal Tax Court St. ; 562 N.E. 669] [153 following quoted lc, adoptеd above. The read 3 Section as amendment section, ‘property in this “As used in 1954: was added used ’ religious, hospital shall exclusively or charitable building equipment on of construction in the course and its include Monday March, 1954, together land with the on or after the first occupation may required the use it building, is located as be religious, hospital or charitable to be used purposes.’’ 650 321; 50 Md. Board Assessors v. Garland Home School 296
Making,
;
378
Johnston,
Mass.
N.E.2d
State v.
[6
374]
;
169
Purcell,
65 N.J.L.
A.
229;
Gerke
25 Ohio St.
776]
[46
Cooper’s
In Hill
School,
259];
re
370 Pa.
A.2d
In re
see
[87
Estate,
Presby
; Morgan
Iowa 921
N.W.
[295
448]
Ky.L.R.
terian Church
the United
America,
States
;
761].)
In re
Grace,
S.W.
27 Minn.
N.W.
338]
argument
by plaintiff
made
that the word charitable
taxability
narrowly
should
construed
favor of
has
rejected by
involving
been
in two recent
court
eases
*6
(Young
lc of
Assn. v.
section
article XIII.
Men’s Christian
County
Angeles,
47];
Los
Cal.2d 760
Frede
P.2d
[221
Aged County
Diego,
ricka Home
San
The broad Home case Fredericka applied was Y.M.C.A. case on a aged, operated a home for the it was held that where charity exemption as a entitled to tax nonprofit basis, was charged. Both these decisions although fees were entrance Henderson, 853, 17 Cal.2d upon Estate relied bequest charitable if: stated, it “A is 605], where was P.2d aims and ac- purpose; a its charitable (1) It made gen- political religious, educational, complishments are (2) The ultimate re- mankind. ... eral social interest community a whole an as either the cipients constitute char- . . The portion thereof. . and indefinite unascertainable itable of an is determined on the same nature institution basis.” only of three fact that the term charitable is one
descriptive require words used in lc section does not narrowly it be exemption. To against construed Emp. contrary, Scripps Hospital Com., etc. California 360], Cal.2d 669 A.L.R. where an unemployment exempted organizations insurance tax statute charitable, scientific, formed “religious, such as literary educational,” hospital nonprofit it held that a was exempt charity was although a the word as stated, used in the “The wide and varied statute. court clearly nature of provided thus rather indi purpose give cates a intention to the words here in question meaning. (24 rather than a strict ...” broad 676.) p. Cal.2d at appears
It thus word charitable has been given a broad construction in as tax cases well as others, and it would seem clear schools owned by nonprofit organizations operated for the benefit of come within the term charitable as defined our Moreover, people decisions. both have construed the term lc of article authorizing XIII of such schools. *7 enabling provision empowers
Section lc is an which Legislature grant the to general exemptions within certain categories. Legislature In acting under section the necessarily must of provision construe the terms the in order to authority upon the determine extent conferred it. the Legislature The consistently has treated the term charitable enough schools, in section lc as nonprofit broad to include by first, specifically excluding exemption and, them from second, by specifically granting exemption. them an The first Legislature originally construction was made in 1945 the when еnacted 214 Code, section of the Revenue and Taxation provided exemption property for the Legislature purposes.
charitable must have then believed the word as used in lc that charitable section author ized exemption nonprofit schools, unquali the and that the fied use of term in 214 exempting that section would result it at schools, because added the end of 214 section proviso not the section to that should construed include
652 enough to include If word was not broad them.4 the necessity for nonprofit schools, have no the there would been Legislature intended proviso, аnd we assume that the cannot thing. lc interpretation to do a The next section useless 214 Legislature 1951 when the amended section occurred in provide schools as charitable to lc organizations. placed The construction thus on section by by Legislature adopted people in 1952 when they approved 214 on section referendum.5 constitutionality, is in favor of presumption Legislature be clear invalidity an must act be declared unconstitutional. unquestionable before the statute can interpretation own adopt cannot our
We regard legis provision of a of the Constitution without to than reasonable construction, and, where more one lative by meaning duty accept that chosen exists, it is our Com., Legislature. (Pacific Co. Industrial Acc. Indem. v. 1, ; 82 Kaiser v. 461, 215 464 P.2d A.L.R. [11 1170] Cal. P,2d 1278]; 537, 540 San Francisco 6 Cal.2d Hopkins, [58 seq. 26]; P. 273, 183 279 et Com., v. Industrial Acc. Cal. [191 Co., 578, 593-594 People Cal. P. v. Southern Pac. [290 146, Dick, 36 ; see Woodcock v. Cal.2d P.2d also [222 25] 29 Cal.2d Reynolds Equalization, Board 667]; State 4]; Delaney Lowery, 551, P.2d P.2d 137, 674].) This fundamental 561, 568-569 25 Cal.2d where, as statute applicable here, the principle particularly is enabling provision of pursuant an the Con was enacted legislative only is a reasonable construc there stitution and approval of that provision also construction but tion referendum. people on history strongly upon legislative Plaintiff relies support claim section 214 uncon- lc in of his section Legislature originally to the sec- stitutional. As submitted may exempt from lc “The taxation all read, tion any property owned and used portion community chests, purposes hereinafter mentioned in 1945 4 As section of the Bevenue Taxation Code enacted enlarge provided, part, “This shall not be construed to college property an held extend collegiate grade.” (Stats. less used as an institution of than educаtional 706.) 1945, 241, p. ch. people, specified 5 Section as submitted to the *8 exemption provided “shall to be therein described be deemed within the in lc of article XIII of the Constitution. ...” Section operated organized corporations and funds, foundations or no purposes, educational, or charitable religious, to benefit part earnings the net which inures the was The measure any private or shareholder individual.” educational entirely word in its final form the recast, and why show nothing in record to there is the omitted, but nonprofit schools seen, provision the we have was revised. As for the benefit by nonprofit organizations operated owned and charitable, Legis the and the term come within the theory on the lature educational have omitted the word may it was un elsewhere, and that, under the authorities here to necessary specific in order authorize the to use that word pamphlet In official voters’ of such schools. argument lc contained the adoption section favor legal authority schools Competent advises that statement, exempted under this amendment colleges other than will not be ‘ term educa Legislature expressly because the eliminated ’ ” however, made, arguments tional. were Numerous say against which adoption, and and we cannot by various on voters. It would statements was relied amend purely who voted for the speculative hold that those by ment non intended exclude schools owned public. profit organizations operated for benefit of in history lc inconclusive as what was section certainly justify not a construction of tended, it would by the deci the term charitable to that contrary established adopted by Legislature in the 1945 above, sions discussed sessions, approved people on referendum and 1951 lc that sectiоn authorizes the 1952. We are satisfied question. argued exemption, applied to It is next as religious organizations, or is con operated schools owned trary to 30 of article IV the California Constitution section anything provides “grant not which shall any religious church, sect, creed, to or in or sectarian aid help support school, college, sustain purpose, by any hospital, or other institution controlled university, religious church, denomination creed, sectarian what expressly mention tax ever. This section does ...” prohibited them, but, if assume it exemptions, even we subsequent adoption of section superseded it was 1% XIII, exempts of article lc, which, seen, have worship, we religious *9 654 exemption nonprofit
authorizes of specifically schools and to property operated refers owned and religious organi- zations. validity exemption of challenged the is also on the
theory that it portion contravenes that of First Amend- of ment the federal Constitution which forbids the enactment respecting of laws the establishment religion. argu- of This pertinent ment of is, course, only exemption insofar as the would be available to operated by religious schools groups. There are two answers to thе contention.
In
place,
the first
apparent
it is
that the
promote
general
was enacted to
through
welfare
encour
aging the
of
young
education
religion,
to favor
since it is not
by religious groups
limited to schools maintained
applies
operated by
but
also to
organi
those
other charitable
Under the circumstances,
zations.
benefit received
religious
merely
denominations is
incidental
the achieve
of
purpose.
analogous
ment
An
pre
situation was
in
sented
Everson v. Board
1
Education, 330 U.S.
[67
504,
711,
91 L.Ed.
taken which have been rendered and they are therefore dismissed. J.,
Traynor, Spence, J., McComb, J., and concurred. SCHAUER, J., Dissenting.—Since provisions 1914 the of XIII section la article of the California have Constitution exempted from property taxation of a “educa- . . collegiate grade, exclusively tional institution . used for purposes аdded.) quoted (Italics of education.” lan- guage specific; speculation or “con- is it leaves no room for language in majority opinion struction.” The holds that the Constitution, adopted section lc of the same article exempt in 1944, to from authorizes the property exclusively religious, taxation for “used by” added) purposes (italics charitable cer- owned and institutions, tain of all likewise authorizes the property is used for educational such institutions which purposes grade—more specifically, prop- character or erty collegiate grade. used for than This hold- schоols less ing despite is reached the word “educational” the fact that notably is absent from the 1944 amendment. encompass lc of XIII
To so construe section article as to purposes, “religious, hospital in addition educational to designated expressly in purposes” which are plain language section, meaning violence to the does section, used, adopted intent the voters who statutory principles and settled construction. specific property
First, the Constitution itself its tax provisions. Thus, desig- 1 of XIII article property from . “exempt . . used for free nates as taxation museums, growing crops, property public libraries free la of exclusively schools.” Section article used “Any collegiate educational institution XIII declares profit, exempt hold from grade . . . conducted shall buildings equipment, grounds its . ., its . its taxation purposes for the and income securities used specific exemptions are listed article education.” Other property 10 of article declares “All IX. Section founding, now or held trust maintenance hereafter University Leland Junior . . . or benefit Stanford . may exempted special from act State taxation . . be university real held and property аll so may exclusively, similarly ex- be educational municipal empted county taxation. ...” from Section belonging or hereafter property “All now provides that Arts,’ . . of Mechanical . shall be California School ‘The provision 12 makes the same exempt from Section taxation.” belonging or hereafter to the ‘Cali- property “All now as to ‘ ’ ’’ 13 declares that ‘All of Sciences. Section Academy fornia Cogswell Poly- belonging now or hereafter exempt from . . taxation.” Sec- College technical . shall *11 July 1, 1929, “All as of held specifies property tion that founding, maintenance or benefit оf for the trust the Library Gallery and in- Huntington and Art the Henry E. property received in ex- personal and crements thereof all exempt from taxation.” In view therefor change shall be designations express specific in the unusually and of these people willing are to which the property the Constitution of me too clear grant appears to serious exemption, to it tax following pro- if the among the law that jurists debate grant XIII was intended to it of section lc article visions purposes, to educational then property to devoted exemption precisely. so, clearly said language have the used would Legis- originally submitted to the Second, fact that as the “religious, property used referred to lc lature section added), (italics purposes” educational, the for a vote being people the but that before submitted to measure, from deleted the classification “educational” was property devoted intent that is a further indication of the authorization purposes not be to such included presenta- out exemption. This likewise borne view is pamphlet, official voters’ tion of the measure made lc refers adopting argument wherein the in favor оf Play de- to the amendment as “Fair Charities” property among exempted, “To clares, things, other that purposes stated. exclusively for the must be and used owned of investment The amendment does not authorize colleges al- large landholdings. property or Churches authority advises ready exempt. legal Competent are this exempted under colleges not be other than will schools Legislature expressly eliminated amendment because ” added.) point At no in the term (Italics ‘educational.’ pro con, are concerning measure, arguments either appears It clear disputed. thus the above declarations property approved the in the belief the voters measure in the author- used for was not included educational exemptions. ized of the attempted amendments
Moreover, the fate exemption of specifically Constitution so to authorize as collegiate grade property private used for schools of less than pointedly mere words the affirmative expresses more than can property of the of this continue intent voters state that la proposed amendment to section on the tax rolls. In 1926 a XIII, proposition Numbеr on the article submitted as for educa- ballot, property to extend the secondary purposes by “any tional educational institution grade” people. Within seven was defeated the vote years again presented, proposition the issue Number again people to amend on the 1933 refused ballot, property section la so as extend “Any private collegiate educational institution of less than grade.” not, my firm that this court should It conviction construction, guise statutory effect an amendment in the voting which the citizens of California of the Constitution repeatedly rejeсted. have people state, purpose securing for the
Finally, subjecting from “equality of taxation which results all (Watchtower Tract Bible & same burden” *12 658 County Angeles
Soc. Los (1947), 426, v. 30 429 Cal.2d of 178]), provided P.2d have in section 1 of XIII article [182 of the property except Constitution that “All in the State as otherwise provided, exempt in this Constitution under of the laws proportion the United be States, shall taxed in value, provided its by law, be ascertained as or as provided.” hereinafter carry objective To of equality out the ‘‘ taxation, provisions granting Constitutional and statutes strictly from are taxation construed to the end that such concession will enlarged nor neither extended beyond plain meaning language employed. of the [Cita (Cedars Hospital County Lebanon v. Los tions.]” Angeles 35 729, 31, Cal.2d 15 (1950), 734 P.2d A.L.R. [221 1045]; County 2d Angeles see also Los Home v. Pacific 41 (1953), 844, ; Hospital Cal.2d P.2d Sutter 539] City (1952), 33, Sacramento Cal.2d 390]; Watchtower County Bible & Tract Los An Soc. geles (1947), supra, 428.) provisions Cal.2d “The of . . . mandatory pro Constitution are [California’s] hibitory, by express they unless words are declared to be 22.) justices otherwise.” (Const., I, court, of this art. § regardless of personal social, views on economic or political, religious subjects, support are bound to the Con duty pоwers govern stitution and laws of this state. “The of the of . . . separate ment California shall be divided into three departments—the legislative, executive, judicial; person no charged powers properly with the exercise be longing departments to one of shall these exercise func appertaining others, tions either of as in except expressly permitted.” (Const., Constitution directed or art. 1.) Ill, my judicial duty concept Obedient to I must § firmly apply the principles established construction above delineated, give plain language to the specific effect intent and of the framers оf lc of XIII article of the Constitu tion, respect principle powers govern of division of quoted, purported ment above and hold unauthorized the property, laudatory objectives, however sought which is to be sustained on the sole basis that for school of less than “used collegiate grade”-—a specified use which is not a character constitutional therefore authorization, which is beyond power of either the or this court to into the write Constitution. following law, judgment superior court, *13 be affirmed.
should Carter, J., concurred. J.,
Shenk, July rehearing was denied for a Respondent's petition J., were J., Schauer, Shenk, Carter J., 1956. granted. petition
opinion that should 6, 1956.] In Bank. June F. No. 19116. [S. Appellant, v. (a Corporation), ELECTRIC
LEMOGE Respondent. MATEO, OF SAN COUNTY