91 N.E.2d 497 | Ohio | 1950
Lead Opinion
Was the decision of the Board of Tax Appeals unreasonable or unlawful?
Section
"Land and improvements thereon shall be taxed by uniform rule according to value * * * and without limiting the general power, subject to the provisions of Article I of this Constitution, to determine the subjects and methods of taxation or exemptions therefrom, general laws may be passed to exempt * * * public school houses, * * * institutions used exclusively for charitable purposes * * *."
In considering the applicability of this section of the *135
Constitution to the above-mentioned Sections 5349 and 5353, General Code, the following language in the case of UrsulineAcademy of Cleveland v. Board of Tax Appeals,
"Under Section 5349 or Section 5353, General Code, property belonging to a public college, academy or ininstitution of learning not publicly owned may be exempted from taxation only if used exclusively for a charitable purpose at the time the exemption is sought."
The same rule has been restated in the case of AmericanCommittee of Rabbincal College of Telshe, Inc., v. Board of TaxAppeals,
"Property to be exempt from taxation as a public college or academy or as land connected with a public institution of learning must be, at the time exemption is sought, owned and operated for such purpose, without any view to profit, by the state or a political subdivision thereof, or, if privately owned, must be used exclusively for the benefit of the public as a public charity, without any view to profit."
The facts upon which the order denying exemption was based are not set forth in the entry. However the board considered as established by the evidence that the applicant is a charitable institution within the meaning of Section 5353, General Code, and found that by reason of the educational policy of the academy it was convenient and necessary that these properties "be let tothese instructors as residence for them and their families" and also that the instructors are required to accommodate academy guests and to entertain student groups for instruction and entertainment when needed and to tutor, brief or otherwise deal with individual students therein.
Although it is urged by counsel for appellant, with *136 some apparent acquiescence by the Board of Tax Appeals in its entry, that no rent is indirectly paid in that the occupancy of a residence by a member of the faculty is not regarded as a portion of his compensation, it seems rather obvious that their salaries would quite logically be greater if such members of the faculty were required to provide residences for themselves and their families.
Applying the case of Watterson v. Halliday, Aud.,
There was evidence on which the Board of Tax Appeals could properly arrive at this conclusion. Residence in a dwelling with a family must necessarily be a private use of the premises. Where the exercise of such private rights constitutes the primary use of property owned by a charitable institution such property is no longer used exclusively for a charitable purpose. See Presidentand Trustees of The Miami University v. Evatt, Tax Commr.,
Decision of the Board of Tax Appeals is affirmed.
Decision affirmed.
WEYGANDT, C.J., MATTHIAS, HART, ZIMMERMAN and TURNER, JJ., concur.
STEWART and TAFT, JJ., dissent.
Dissenting Opinion
Dissents upon the reasoning of the Circuit Court in Kenyon College v.Schnebly, Treas., 12 C.C. (N.S.), 1, 21 C.D., 150, affirmed by this court in Schnebly, Treas., v. Kenyon College,
Dissenting Opinion
The last sentence of Section 5353, General Code, as enacted effective September 27, 1945, reads:
"Real and tangible personal property belonging to institutions used exclusively for charitable purposes, shall be exempt from taxation."
Both the Board of Tax Appeals and the majority opinion recognize that The Western Reserve Academy is a charitable institution, within the meaning of Section 5353, General Code. Admittedly, therefore, the property for which tax exemption is sought belongs to an institution (Gerke, Treas., v. Purcell,
Prior to the 1929 amendment of Section 2 of Article XII of the Constitution, it had been held that the words of that section required such a strained and extraordinary construction of the similar language of Section 5353, General Code, as then in force, so as to require the use of the particular property to be exclusively for charitable purposes. Jones, Treas., v. Conn etal., Trustees,
This construction, in 1927, of Section 2 of Article XII of the Constitution, as adopted in 1912, was somewhat different from that which had been previously anticipated (see Cleveland BibleCollege v. Board of Tax Appeals,
In my opinion, as a result of that amendment, the General Assembly now has general power, subject to the provisions of Article I of the Constitution, to determine exemptions from taxation. My reasons for this conclusion are stated in the dissenting opinion in City of Cleveland v. Board of Tax Appeals,supra. If the General Assembly has such power, it follows that there is no longer any necessity for a strained and extraordinary construction of the words of Section 5353, General Code. If the words of that section are given their ordinary meaning, the tax exemptions here sought should be granted. *139
However, even if such a strained and extraordinary construction is given to the words of Section 5353, General Code, the exemptions here sought should still be granted, unless previous decisions of this court are to be disregarded.
In Aultman Hospital Assn. v. Evatt, Tax Commr.,
140 Ohio St. 114 ,42 N.E.2d 646 , the syllabus reads:
"Property used exclusively as a home for student nurses, which is owned and maintained by a nonprofit hospital association as a necessary part of a hospital used exclusively for charitable purposes, is exempt from taxation."
The record in the instant case clearly discloses that the use of the property, for which tax exemption is sought, was just as essential to the conduct of this boarding school for boys of high school age away from their homes as the use of the home for student nurses in the Aultman case was to the operation of the hospital.
The rule governing exemption from taxation of property of the kind involved in the instant case was established by this court over 40 years ago in the decision in Schnebly, Treas., v. KenyonCollege,
The unanimous opinion of the Circuit Court in that case was concurred in by Donahue, J., later a member of this court. The facts in that case did not even indicate the strong necessity, present in the instant case, for use of the premises there involved as a part of the charitable institution. This clearly appears from the court's opinion, where it is stated on page 2: *140
"It appears that the college has a number of residences which are occupied by the members of the faculty of the college. It has been the policy of the college to permit such of its professors as are married, and also its president, to use these residences, rent free. It further appears that they are primarily residences, and no literary exercises or instruction are conducted therein."
The statutory language relied upon in that case was substantially similar to the language of Section 5349, General Code, which is one of the sections relied upon by Western Reserve Academy in the instant case.
In the court's opinion, it is said on page 5:
"It is urged upon our attention by the defendant, that these houses, or residences are not used, `exclusively,' for literary purposes, and that unless used exclusively for literary purposes, or for the purpose of instruction, that they are not exempt.
"But there are many buildings connected with colleges and academies which are necessary for the proper conduct of the business of the college, in which literary exercises do not take place, and which are not employed for the purpose of giving instruction. Many buildings are employed for the purpose of storing the necessary equipment and apparatus of the college, or for the purpose of carrying on the experiments, or for the purpose of storing the archives and records of the college, and conducting its financial affairs; yet because these, or any of these, are carried on in the buildings, or a portion thereof, it can not be said, that they are not devoted to the uses and purposes of the college.
"* * * And we think it was the purpose to exempt all buildings that were with reasonable certainty used in furthering or carrying out the necessary objects and purposes of the college. * * *"
Reasoning similar to that of the Circuit Court in the KenyonCollege case was used in reaching the decision *141
of this court allowing exemption in In re Bond Hill-RoselawnHebrew School,
In the court's opinion in the Kenyon College case on page 7, the case of Watterson v. Halliday, Aud.,
In Ursuline Academy of Cleveland v. Board of Tax Appeals,
The majority opinion cites President and Trustees of MiamiUniversity v. Evatt, Tax Commr.,
None of the other cases cited in the majority opinion is in point. The decisions in American Committee of *142 Rabbinical College of Telshe, Inc., v. Board of Tax Appeals,
In my opinion, the decision of the Board of Tax Appeals, denying the exemption sought, is clearly unreasonable and unlawful.