EVANSTON Y.M.C.A. CAMP
v.
STATE TAX COMMISSION.
Docket No. 63, Calendar No. 49,686.
Supreme Court of Michigan.
Decided December 31, 1962. Rehearing denied February 6, 1963. Motion to dismiss granted October 14, 1963.Reber & Reber (Harry D. Reber, of counsel), for plaintiff.
Frank J. Kelley, Attorney General, Eugene Krasicky, Solicitor General, T. Carl Holbrook and William D. Dexter, Assistant Attorneys General, for defendant.
Motion to dismiss granted by the supreme court of United States October 14, 1963.
KELLY, J.
The Sherman township, Newaygo county, supervisor assessed appellant's property at a $20,000 valuation. Appellant protested, claiming the property was legally exempt. The board of review denied the petition for exemption. The State tax commission affirmed the board of review, and, on leave granted, this appeal is taken in the nature of certiorari.
Appellant was duly incorporated (November 22, 1923) as a Michigan nonprofit, nonstock, membership corporation, and its purposes were described in article 3 as follows:
"To provide benevolent and charitable means whereby young men and boys may obtain physical, *5 social, moral, and religious culture, and the development of Christian character through life in the out-of-doors; to hold, own, and purchase or otherwise acquire, and to sell, convey, mortgage, handle, manage, or otherwise dispose of, any real or personal property, that may, in the judgment of the trustees or directors of this corporation, be necessary or proper to carry out and effectuate the purposes aforesaid."
In 1923 appellant acquired less than 400 acres of land in Newaygo county and has improved same by constructing thereon a dining hall, social lodge, infirmary, 14 cabins, craft shop, warehouse, pump house, and directors' cabin.
Appellant contends the property is exempt from taxation for the year 1961 under paragraph "Fourth," of section 7 of the general property tax act as amended by PA 1960, No 155 (CL 1948, § 211.7, as amended [Stat Ann 1960 Rev § 7.7, as amended]).
In construing said paragraph we follow the cardinal rule that effect must be given to all statutory language employed by the legislature and that the history of legislation should be considered in determining the purpose of the legislature.
In Remus v. City of Grand Rapids, 274 Mich. 577, 581, we stated:
"`"In the construction of a particular statute, or in the interpretation of any of its provisions, all acts relating to the same subject, or having the same general purpose, should be read in connection with it, as together constituting one law. The endeavor should be made, by tracing the history of legislation on the subject, to ascertain the uniform and consistent purpose of the legislature, or to discover how the policy of the legislature with reference to the subject-matter has been changed or modified from time to time." 36 Cyc pp 1147-1149.' (Quoted in Miles, ex rel. Kamferbeek, v. Fortney, 223 Mich. 552, 558.)"
*6 The history of the act in question discloses that the pertinent portion of paragraph "Fourth" has been amended 4 times since 1938. Prior to its amendment by PA 1939, No 232, this paragraph contained only 2 sentences, and read as follows:
"Fourth, Such real estate as shall be owned and occupied by library, benevolent, charitable, educational or scientific institutions and memorial homes of world war veterans incorporated under the laws of this State with the buildings and other property thereon while occupied by them solely for the purposes for which they were incorporated. Also charitable homes of fraternal or secret societies."
PA 1939, No 232, added 1 additional sentence:
"Also real estate owned by any boy or girl scout organization, while occupied by them solely for the purpose for which they were incorporated or established."
This sentence, however, was amended by PA 1941, No 125, to read:
"Also real estate not to exceed 160 acres of land owned by any boy or girl scout organization, while occupied by them solely for the purpose for which they were incorporated or established."
PA 1960, No 155, again amended this sentence so that it read:
"Also real estate not to exceed 400 acres of land in this State owned by any boy or girl scout organization, or by young men's Christian associations or young women's Christian associations, if at least 50% of the membership of the associations or organizations are residents of this State, while occupied by them solely for the purpose for which they were incorporated or established."
This same sentence was last amended by PA 1961, No 238, by inserting between the words "State" and "while," the following language: "but upon petition *7 of any association or organization the board of supervisors may waive the residence requirement."
It is appellant's position that 4 categories of exempt property are provided by said paragraph "Fourth" and that each of the 4 sentences thereof contains a description of at least 1 such category that is separate and distinct from the others; that appellant's real estate falls within the scope of the category of the first sentence which exempts real estate owned and occupied by "benevolent, charitable, educational * * * institutions" and, also, by the third sentence exempting real estate of "young men's Christian associations or young women's Christian associations."
Appellant, citing Ready-Power Company v. City of Dearborn, 336 Mich. 519, states that it is a "fundamental principle that tax laws are to be construed liberally in favor of the taxpayer."
Appellant raises the following question:
"Is there any evidence in the certified original record to support the order of the tax commission determining that such real estate of appellant is correctly assessed and that the assessment has been made in compliance with law?"
Appellant evidently proceeds on the fallacious theory that it is entitled to exemption unless the commission established that it was not entitled to an exemption.
While it is true that the imposition provisions of a taxing statute should be construed in favor of the taxpayer, this rule of construction does not supplant or eliminate the important rule to be applied in the question here presented: That exemption provisions must be strictly construed in favor of the taxing agency.
We made this clear in City of Detroit v. Detroit Commercial College, 322 Mich. 142, when we quoted *8 2 Cooley on Taxation (4th ed), § 672, pp 1404-1408, as follows (p 149):
"`Exemptions are never presumed, the burden is on a claimant to establish clearly his right to exemption, and an alleged grant of exemption will be strictly construed and cannot be made out by inference or implication but must be beyond reasonable doubt. In other words, since taxation is the rule, and exemption the exception, the intention to make an exemption ought to be expressed in clear and unambiguous terms; it cannot be taken to have been intended when the language of the statute on which it depends is doubtful or uncertain; and the burden of establishing it is upon him who claims it. Moreover, if an exemption is found to exist, it must not be enlarged by construction, since the reasonable presumption is that the State has granted in express terms all it intended to grant at all, and that unless the privilege is limited to the very terms of the statute the favor would be extended beyond what was meant.'"
When we construe statutory language containing both specific and general provisions, we adopt the rule set forth in 50 Am Jur, Statutes, § 367, p 371:
"Where there is in the same statute a specific provision, and also a general one which in its most comprehensive sense would include matters embraced in the former, the particular provision must control, and the general provision must be taken to affect only such cases within its general language as are not within the provisions of the particular provision."
See, also, Dossin's Food Products, Inc., v. State Tax Commission, 360 Mich. 312; Mayor of Port Huron v. City Treasurer of Port Huron, 328 Mich. 99.
Is appellant's property exempt under the category provided by the first sentence of paragraph "Fourth" exempting the following:
*9 "Such real estate as shall be owned and occupied by library, benevolent, charitable, educational or scientific institutions and memorial homes of world war veterans incorporated under the laws of this State with the buildings and other property thereon while occupied by them solely for the purposes for which they were incorporated"?
Appellant did not claim the right of exemption under the provisions referring to charitable, benevolent, or educational institutions at the hearing before the board of review or the State tax commission.
Appellant matched the legislature's 1960 amendment granting young men's Christian associations exemption on 400 acres of land if 50% of the membership are residents of the State, by executing (November 30, 1960) an amendment to its articles of incorporation and filing a certificate of same with the Michigan corporation and securities commission disclosing:
"The qualifications required of officers and members are as follows: That they be members in good standing of the Y.M.C.A. of Evanston, Illinois, provided, at least 50% of such members shall be residents of the State of Michigan."
We quote with approval the following from appellee's brief:
"The argument of appellant that the general benevolent, charitable and educational exemption is applicable to it is untenable. Such an argument gives no effect whatsoever to the restrictive language added to paragraph Fourth by PA 1960, No 155, which amendatory language specifically provides that only those Y.M.C.A. organizations that meet the resident membership requirement therein set forth are entitled to the property tax exemption therein granted. Such an argument gives no effect to the specific statutory language applicable to *10 Y.M.C.A. organizations and thereby violates a cardinal rule of construction that effect must be given to all statutory language employed by the legislature. * * *
"In arguing that it is entitled to this general exemption as well as to the specific exemption granted Y.M.C.A. organizations, appellant overlooks another cardinal rule of construction which requires the special provisions of an enactment to be read as exceptions to general provisions."
We hold that appellant was not entitled to an exemption under the first sentence of paragraph "Fourth."
Is the real estate of appellant exempt from taxation as falling within the category of the third sentence of the controlling statute, exempting real estate of young men's or young women's Christian associations?
Appellant defines the word "membership" as used in the statute as follows:
"Clearly, the `ordinary meaning' of the term `membership' in this statute, as claimed by appellee, does not extend to the campers occupying the camp maintained by the corporation, who need no affiliation whatever with the corporate organization of appellant.
"It is more reasonable to conclude that the legislature imposed the residential requirement to apply to those members who were so charged with the responsibility of the management of the corporate affairs, as to facilitate the enforcement of sanitary and other State laws and regulations, with respect to its operations. This would be an `ordinary meaning' of the term `membership,' and not mere formalism."
Appellee answers such contention by stating:
"It is a strange and constrained construction of the statutory language in question to presume that *11 the legislature, in granting real-estate exemptions to young men's and young women's Christian organizations, was concerned with the place of residence of 5 members of the Evanston, Illinois, Y.M.C.A. rather than the utilization of the properties by the youth of this State. It thus seems reasonable to conclude that the legislature used the term `membership' in the ordinary context when it referred to membership in a young men's Christian organization.
"Undoubtedly, the exemption in question pertains to the concern of the Michigan legislature to make provision for camp and recreation facilities for its youth. To hold otherwise would place empty formalism over substance."
The construction of appellant that the legislature was concerned with "those members who were so charged with the responsibility of the management of the corporate affairs," plus appellant's contention that the legislature used the word "membership" as it used that word in the corporation law, does not meet the fact that the exemption was not confined to corporation but also included unincorporated organizations and associations.
The legislature emphasized the importance it placed upon the 1960 amendment to paragraph "Fourth" providing that "at least 50% of the membership of the associations or organizations are residents of this State," by the 1961 amendment to the same sentence providing that "upon petition of any association or organization the board of supervisors may waive the residence requirement."
The order from which this appeal is taken determined that appellant's land was correctly assessed for 1961 taxes, and there is merit to appellant's contention that the 1961 amendment to paragraph "Fourth" does not apply to the 1961 assessment because *12 of section 2 of the general property tax act, which reads in part as follows:
"The taxable status of persons and real property after January 1, 1958, shall be determined as of December 31, 1958, and each December 31 thereafter, which shall be deemed the tax day." CL 1948, § 211.2, as amended by PA 1958, No 209 (Stat Ann 1960 Rev § 7.2).
It is our opinion that the legislature in adopting the 1960 amendment was motivated by a desire to assist the youth of this State rather than by a concern "to facilitate the enforcement of sanitary and other State laws and regulations, with respect to its (the association's) operation," and we hold that the commission did not err in finding that appellant's property was not exempt from taxation by the third sentence of paragraph "Fourth" exempting real estate of "young men's Christian associations or young women's Christian associations."
Is the clause "if at least 50% of the membership of the associations or organizations are residents of this State" unconstitutional and invalid as a discrimination based on residence prohibited by section 1 of the Fourteenth Amendment to the Federal Constitution guaranteeing equal protection of the laws?
"One who assails the constitutionality of a statute must stand on his own right to relief." Duckworth v. Arkansas, 314 U.S. 390, 397 (62 S. Ct. 311, 86 L ed 294, 138 A.L.R. 1144).
"It is a well-established rule of constitutional law that one who would strike down a statute as unconstitutional `must bring himself, by proper averments and showing, within the class as to whom the act thus attacked is unconstitutional.'" General Motors Corp. v. Attorney General, 294 Mich. 558, 566 (130 A.L.R. 429).
*13 This is not a case where the legislature singled out a particular class denoted "nonresidents" for the purpose of imposing a tax. No discrimination between "residents" and "nonresident" is involved, since appellant is a Michigan corporation.
The only constitutional question refers to the power of the legislature to classify property for ad valorem property tax exemptions by determining it would exempt from taxation certain associations and organizations when 50% of their membership resided in Michigan. We dealt with the power of classification in Banner Laundering Co. v. State Board of Tax Administration, 297 Mich. 419, and in deciding that case we quoted from Citizens' Telephone Co. v. Fuller, 229 U.S. 322, 328, 329, 331 (33 S. Ct. 833, 57 L ed 1206), as follows (pp 432, 433):
"`It is manifest, therefore, that there are marked differences between the taxed and nontaxed companies, and the differences might be pronounced arbitrary if the rule urged by appellant should be applied, that is, that is the taxation of property no circumstance should be considered but its value, or, to use appellant's words, "each dollar's worth should be treated alike." But such rigid equality has not been enforced. In Michigan the legislature has the power of prescribing the subjects of taxation and exemption, notwithstanding the Constitution of the State requires the legislature to provide a uniform rule of taxation, except on property paying specific taxes. People v. Auditor General, 7 Mich. 84; Board of Supervisors v. Auditor General, 65 Mich. 408; National Loan & Investment Co. v. City of Detroit, 136 Mich. 451. The power of exemption would seem to imply the power of discrimination, and in taxation, as in other matters of legislation, classification is within the competency of the legislature. We said in American Sugar Refining Co. v. Louisiana, 179 U.S. 89, 92 (21 S. Ct. 43, 45 L ed 102), that from time out of mind it has been the policy *14 of this Government to classify for the purpose of taxation. * * *
"`Granting the power of classification, we must grant government the right to select the differences upon which the classification shall be based, and they need not be great or conspicuous. Keeney v. Comptroller of New York, 222 U.S. 525, 536 (32 S. Ct. 105, 56 L ed 299, 38 LRA NS 1139). The State is not bound by any rigid equality. This is the rule; its limitation is that it must not be exercised in "clear and hostile discriminations between particular persons and classes." See Quong Wing v. Kirkendall, 223 U.S. 59, 62, 63 (32 S. Ct. 192, 56 L ed 350). Thus defined and thus limited, it is a vital principle, giving to the government freedom to meet its exigencies, not binding its action by rigid formulas but apportioning its burdens and permitting it to make those "discriminations which the best interests of society require."'"
The clause "if at least 50% of the membership of the associations or organizations are residents of this State" is not unconstitutional and invalid as a discrimination based on residence prohibited by section 1 of the Fourteenth Amendment to the Federal Constitution guaranteeing equal protection of the laws.
The order of the State tax commission is affirmed. No costs, a public question being involved.
CARR, C.J., and DETHMERS, KAVANAGH, SOURIS, and OTIS M. SMITH, JJ., concurred with KELLY, J.
BLACK, J., concurred in result.
ADAMS, J., did not sit.