232 Mo. 693 | Mo. | 1911
Plaintiff sues in equity to remove the cloud on the title to certain of its real estate arising from a taxbill and a tax assessment for State, school and city taxes for the year 1906, and to cancel the tax-bill and enjoin the collector from enforcing the same.
. The bill runs on the theory, first, that under its charter its real estate is exempt from taxation; second, that the question is no longer open but is res judicata.
Prom a decree in plaintiff’s favor, defendant comes up by appeal.
The pleadings are not challenged and we pass them by with the remark that they join issue on the questions of exemption and former adjudication, and are broad enough to make pertinent an agreed statement of facts on which the cause was submitted below. The substance of which is:
Plaintiff was incorporated under the name and style of “Nord St. Louis Turnschule und Kinder Garten” (followed by the legislative translation of “North St. Louis Gymnastic School and Infant Garden,)” by a special act of the General Assembly in 1864 — at a time when special legislation was not unconstitutional. Its charter purpose was “educating children in gymnastics and the elementary branches of education.” It had warrant of authority to hold and enjoy so much property, real, personal and mixed, as may be necessary to conduct its affairs. Section 3 of its charter authorizes its board of directors to employ; engage and discharge necessary professors, teachers, nurses, servants and agents, and to issue $50,000' in stock, each share for $25, but subscribers might take a fraction of a share. By section 4, the board was authorized to receive voluntary contributions from subscribers and
In 1874 its name was changed by an act of the General Assembly and made to read as it does now. In 1881, an attempt was made to tax its property, then amounting to $7610 in real estate and $500- in chattels. It then owned lots 7 and 8 and the west 8 feet of lot 9 in city block 1174 on Salisbury Street. The then collector of revenue, Hudson, having a tax-bill in hand and being about to enforce it, plaintiff sued in equity — the life of its bill being to enjoin collection on the ground its property was exempt by force of its charter terms. Answer was filed in that case and it was submitted (like this one) on an agreed statement of facts, which (omitting caption) reads:
“The facts in this case, for the purposes of a judicial determination, are agreed to be (in addition to the documentary evidence, viz., taxbill and charters of plaintiff, herewith also submitted):
“That plaintiff is the owner of the real and personal property described in said taxbill; that it carries on a gymnastic school as averred in the petition; that the personal property by it owned is devoted wholly to the conduct and purposes of such school; that upon the real estate described in the petition, plaintiff erected a two-story brick building, paying for about one-lialf thereof out of sums 'realized on shares of stock issued pursuant to its charter, as also some other means, and the other half then remaining as a debt of said society; that the entire second floor, and a large part of the first floor of said building are used and occupied in the conduct of said school, and that two corner rooms on said first floor are let by plaintiff at a monthly rental paid to it; one of said rooms for a saloon and the-other for a store; which*698 said monthly rental so received is used by plaintiff in defraying the legitimate expenses of conducting said school, paying salary of teachers (so far as the same are not met by voluntary contributions of members) ; in keeping said building in repair; and in discharging the remaining indebtedness of plaintiff, incurred in building as aforesaid.
“That plaintiff has not devoted any money received by it to any purpose other than above designated. That the taxbill in question has been demanded as in the petition alleged.
“The above facts are to be considered by the court subject to defendant’s objection that under the allegations of the petition, plaintiff is not entitled to any relief in the premises; in other words, that the.petition does not state a cause of action and no testimony can be received to support it.”
In that case a decree went for plaintiff in the circuit court. Defendant appealed to the St. Louis Court of Appeals, where the decree was affirmed (12 Mo. App. 342). Under the then practice, an appeal was taken to this court, and the decree was finally affirmed (85 Mo. 32). Such was the end of the first suit. (Nota bene: While the agreed statement of facts in the case at bar does not directly say so, yet the briefs proceed on the theory, and read between the lines the statement means, we think, that plaintiff acquired property and organized its school at once on its corporate birth in 1864; that no attempt to tax its property was made before 1881, and that after the first suit was determined in its favor no further attempt was made until in 1905-6. The case may also proceed on the theory that only a part of the capital stock was taken and that the original buildings and the new gymnasium were largely constructed by interest-bearing loans.) In 1905, plaintiff still owned the Salisbury lots, but at some time during the quarter of a century between the first attempt to tax and the
“On June 1,1905, and for a long time prior thereto, the buildings on lots 7 and 8 and the western eight feet of lot 9, in city block 1174, consisted of a group of buildings, partly two-story and basement, and partly three stories in height. The saloon on the ground floor at the corner., with the living rooms adjoining it, were rented to a man, for the sum of fifty dollars per month, whose duty it was, as part of the consideration for his occupancy of the premises, to keep all parts of the plaintiff association’s premises in proper order and to hire all help necessary for this purpose; the other room on the first floor of the principal building at the corner was occupied by the plaintiff association as a club or assembly room, and the second floor of the principal corner building consisted of a large entertainment hall, with stage, dressing rooms, bar and retiring rooms adjoining, used by the society for the purpose of lectures to its members, in*700 accordance with the objects for which it was formed, for giving gymnastic exhibitions, for public contests in declamation and for musical, dramatic and other entertainments by its members. This hall, with the rooms adjacent, was on occasions rented out to clubs or other social organizations for dances, fairs, banquets and other entertainments for hire, and a considerable income received therefrom; the basement of the main building contained a bowling alley, and the first floor of the three-story part of the original group of buildings on lots 7 and 8 and the western eight feet of lot 9' billiard and pool tables, used by the members of the society and by auxiliary clubs and societies closely allied with the society, who paid a regular rental for their use; the third floor of this three-story part of the main building was occupied by a dining hall and kitchen, used in connection with entertainments given by the members of plaintiff association and also, like the large hall, rented to others for hire; the second floor of the three-story part of the main building was occupied by the retiring rooms and bar adjacent to the large entertainment hall hereinbefore referred to. ’ ’
It was further agreed that the rent from “Entertainment hall, including the saloon and living rooms” in the year .preceding March 31, 1905, was $4,915.36; from the “banquet hall” on the third floor, $201.88; from the bowling alley in the basement, $147.90; and that an income at that rate was coming in on June 1, 1905. . Outside of the saloon and adjoining living rooms in the Salisbury property, no part of the buildings thereon was arranged for mercantile purposes. To the contrary, it was arranged and used only for purposes incident to the objects of a club or social organization. In fact, the rooms occupied by stores in 1881 were no longer so used on June 1, 1905, and no part of the premises were rented out other than for “dances, entertainments, fairs, public lectures, banquets, and
On the foregoing record, learned counsel for plaintiff plants himself on two propositions: First. The property is exempt by virtue of tbe charter. Second. The question of exemption is not an open one, but by virtue of the former suit and judgment it passed into a matter adjudicated. Contra, learned counsel for defendant plant themselves on, first, the proposition that the doctrine of transit in rem 'judicatam on principle does not apply to tax judgments, and, second, if it be held to apply, then in strict fact there has been a material change in conditions which takes this case out of the rule; and third, that under its charter plaintiff’s Salisbury store lots are not exempt.
Such are the propositions of fact and law held in judgment.
Our conclusion is the judgment must be affirmed. This, because:
(a). As pointed out, in the evolution of their argument counsel present the question whether under its charter and tbe facts of this record plaintiff’s property is exempt from taxation. Plaintiff’s affirm, defendant’s deny. But that question merges itself into the larger one of res judicata. If the first adjudication rises to the mark of res judicata, and the doctrine of res judicata applies to the judgment, we need not consider whether the decision was right or wrong; for right or wrong, it abides and must be given force and effect in any case between the same parties where the very thing adjudged is again in issue. Assuming res judicata applicable in full vigor, its potency is remarkable. It, in effect, makes of white, black; of black, white; of the crooked, straight; of the straight, crooked.
The doctrine of North St. Louis Gymnastic Society v. Hudson, 85 Mo. 32 (the case affirming the first judgment), may have been modified by our later decisions. It was ruled in that case that renting a part of the premises to produce an income, so long as the income was used for the purpose of education, left the property of this plaintiff still exempt from taxation under its charter provision, exempting its property “so long as it is used only for the purposes of education.” In the light of our recent decisions, we might not rule that question the same way at this day. Witness: Fitterer v. Crawford, 157 Mo. 51; Adelphia Lodge v. Crawford, 157 Mo. 356; State ex rel. v. Macgurn, 187 Mo. 238; State ex rel. v. Johnston, 214 Mo. l. c. 668, and cases cited. Doubtless, the question as shown by the reasoning in those later cases may be somewhat controlled by whether there has been such bouleversement that the principal thing and incidental thing have swapped places — whether the incidental use has swollen into the principal use and the charter purpose has in turn dwindled to a mere incident. But for the purposes of this case we need pursue the matter no further.
It is settled law that a provision in a charter of a benevolent, charitable or educational corporation
(b). Of res judicata.
The question, as presented here, divides itself into two. First. Does the doctrine of the thing adjudged apply to tax judgments ? Second. If so, was the thing adjudged in the first suit the same thing to be adjudged in the second suit?
1. Defendant’s counsel cite us to a line of cases elsewhere, holding that res judicata does not apply to tax judgments. The supporting reason for those cases is that the exercise of the light to tax belongs to sovereignty, and that estoppel doefe not lie against a sovereign. If the question were new, it would be an inviting field' of exploration. It would be profitable to consider it right well before adopting it or the contrary theory, but it is in no way new in this jurisdiction.
In Kansas City Exposition Driving Park v. Kansas City, 174 Mo. 425, the question in all its bearings was elaborately considered on both precedent and principle and our learned brother Gantt reviewed nearly all the cases now relied on by defendant. In that case
2. There remains the other division of the question, viz., whether the facts, the parties and the issue in the present suit are the same as they were in the 1881 case. In contemplation of law the parties are the same. In New Orleans v. Citizens’ Bank, supra, the contention was made that res judicata did not apply because the officers about to enforce the tax were not the same officers charged with that duty in the former case. But the court brushed that contention aside. It held that the tax collectors and board of assessors, who stood in judgment in the suit when the first decisions were rendered, were duly qualified and empowered to that end and the successors to those officers, defendants now, also were duly empowered. “The mere fact that there has been a change in the person holding the office does not destroy the effect of the thing adjudged.” [Pp. 388-9.] It is familiar doctrine that privies are bound. The identical claim of exemption, on the same property, under the same charter provision is here now that was here when plaintiff sued Hudson, collector (85 Mo. 32). In that case parts of the property were rented out for mercantile and saloon purposes. The collector claimed then, and the collector claims now, that such use of the property took it out of the exemption. The circuit court, the court of appeals and this court adjudged such use of the property did not defeat the exemption so long as the income of such use went alone to the principal corporate purpose. In this case, it is true, parts of the building are no longer rented for stores. It is also true that a more profitable use is made of a certain hall in the old building than was made at the time of the first suit, and that there is 'a bowling alley in the basement from which a small income is derived. But there is no dif
The mere fact that in the course of its existence the corporate plaintiff paid to some of its shareholders, by way of redeeming their stock, the amount they had paid for it, so long as no interest or profits inured to the stockholders paid off, was merely in the nature of. allowing them to retire from the corporation; and, considering the form of the stock certificates issued, such transaction was somewhat in the nature of paying an indebtedness in the time and way set forth in the certificates, viz., at the will of the directors. Whether what was done was legally done in that behalf, is a question not for decision. We see no facts in the present case destroying. the indentity of the thing adjudged in the former case. In that case the tax exemption was sustained and whether the case was well or poorly decided, it became a proposition settled so long as plaintiff’s property does not exceed $50,000 and so long as its entire income is devoted to keeping up its establishment, maintaining its gymnasium school with its incidental purposes without financial profit and gain by way of dividends to its shareholders. [New Orleans v. Citizens’ Bank, supra; Baldwin v. Maryland, 179 U. S. 220; Kansas City Exposition Driving Park v. Kansas City, supra.]
The judgment is affirmed.