Horton v. Colorado Springs Masonic Building Society

Chief Justice Hill

delivered the opinion of the court.

The defendant in eror obtained an injunction restraining the plaintiff in error, as treasurer of El Paso County, from collecting any taxes for the year 1914, levied upon a building and its grounds owned by the defendant in error, The Colorado Springs Masonic Building Society. The complaint alleges that said building and lots whereon it is situate are used exclusively for strictly charitable purposes. The answer denies this, and, in addition, alleges that said building has been rented to certain fraternal organizations, as a place for their meetings and entertainments. The replication admits that plaintiff rents the property to certain fraternal organizations, but alleges that said organizations are such as are commonly known as Masonic organizations, and that, together, the said organizations are the sole stockholders of plaintiff, save and except ten qualifying shares held by the directors thereof, and that said rental charge is made to said several organizations, solely as a method of equalizing among them the burden of the *531maintenance, and operation of said property, agreed upon as fair and equitable and for no other purpose.

Trial was to the court. The findings were in favor of the plaintiff, and the property held to be exempt from taxation. According to the issues, this had to include a finding that the lots and buildings thereon were used exclusively for strictly charitable purposes. The contention is that the evidence is insufficient to sustain this finding. The testimony is uncontradicted. It shows that the defendant in error is a society organized not for profit; that the principal purpose of its organization was to construct and own a temple or lodge building to be used as a home for the several Masonic organizations of Colorado Springs, including a collateral order known as the Eastern Star; that it was organized by these several Masonic bodies who own all of its stock, with the exception of the ten shares held by its ten directors. Its by-laws provide that none of its stock shall be sold or transferred to any one, except these various Masonic bodies, etc., or their trustees, for the use of said bodies. It is also shown that no other bodies, societies, persons or corporations have used said building since it was erected. The testimony also discloses that these Masonic societies derive their income from annual dues paid by their members, fees for initiation, and donations; that out of this are paid the operating expenses of this building, and the maintenance of these several lodges, and that the balance is used in relief and charitable work; that they contribute from their fund to the relief of their members, wives, widows and orphans, and other Masons who come there for their health, and require assistance; that they are not limited in these respects to this class of persons, but frequently aid other charitable organizations, and needy persons not connected with Masonic societies ; that they maintain a plot in a cemetery furnishing graves and headstones for individuals, and frequently pay the entire expense of burial; that some of them contribute to the furnishing of a room in a hospital, for the general use of the hospital; that each of said respective bodies has a re*532lief committee, and there is a general Masonic relief board, to which all contribute; that they visit the sick, and extend advice and assistance to the families of sick persons; that they inculcate and teach to their members respect and support of government and legal authority, right living, service to their fellowmen, morality, temperance and other virtues ; that they not only aid in a material way, by furnishing food, clothing and other necessities, but that they aid and comfort mental distress, and alleviate pain and suffering, all of which is done without compensation, gain or profit; that no one has a right to demand or receive anything from them; that they accept and give upon the call of humanity, and minister to man, woman and child as far as their ability as societies will permit; that frequently deficiencies occur in their treasury which are made up by donations of other legitimate means. Per the great weight of authority, this testimony is sufficient to justify a conclusion that these societies are charitable institutions, and that their purposes are charitable purposes.

Burdine v. Grand Lodge, 37 Ala. 478; Mayor, etc., of Savannah v. Solomon’s Lodge, 53 Ga. 93; Massenburg et al. v. Grand Lodge, 81 Ga. 212, 7 S. E. 636; City of Indianapolis v. Grand Lodge, etc., 25 Ind. 518; Morrow, Treasurer, v. Smith, Ex’r, 145 Iowa. 514, 124 N. W. 316, 26 L. R. A. (N. S.) 696, Ann. Cas. 1912A, 1183; Mason et al. v. Zimmerman et al., 81 Kan. 709, 106 Pac. 1005; Masonic Rome v. Sedgwick Co., 81 Kan. 859, 106 Pac. 1082, 26 L. R. A. (N. S.) 702; State v. Board of Assessors, 34 La. Ann. 574; Fitterer v. Crawford, 157 Mo. 51, 57 S. W. 532, 50 L. R. A. 191; Plattsmouth Lodge v. Cass County, 79 Neb. 463, 113 N. W. 167 ; State v. Addison, 2 S. C. 499; Lodge v. Nashville, 127 Tenn. 248, 154 S. W. 1141.

Section 5 of article X of our Constitution provides that

“Lots, with the buildings thereon, if said buildings are used solely and exclusively for religious worship, for schools, or strictly charitable purposes * * * shall be exempt from taxation unless otherwise provided by general law.”

*533The only law that we have on the subject is section 5545 Revised Statutes, 1908, it provides that

“The following classes of property shall be exempt from taxation, to-wit: * * *
Second — Buildings used exclusively for religious worship, for schools or for strictly charitable purposes, with the grounds whereon the same are situated.”

The question for determination is, whether this building (Masonic Temple so-called) is used for strictly charitable purposes within the meaning of our constitution and statutes. The plaintiff in error appears to concede, were the entire building used as lodge rooms, and for lodge room purposes, there would be more reason for the contention that it would come within these provisions, but calls attention to testimony disclosing that while the second floor of the building contains three lodge rooms, with the usual smaller rooms (all of which are used for strictly lodge purposes), the first floor contains a reading room for the use of the members of these different lodges, a smoking' and reception room, and another large room which is sometimes used in connection with these other rooms for dinners and dances given by members of these different bodies; that sometimes these entertainments are restricted to members, and sometimes they include non-members. He concedes that said societies use the surplus or income from all sources, after paying running expenses, for strictly charitable purposes. He also concedes that the defendant in error pays no dividends ; that none of its officers receive any remuneration for their work; that the rental charge to the different lodges is made solely to cover the actual and necessary operating expenses of the building, and that it never has thus far exceeded or equaled such expenses; that while an admission fee is usually charged for dances, the receipts above actual expenses are, like other funds, devoted to the maintenance of the building. The defendant in error maintains in the building a stand for the sale of cigars, tobacco, playing cards and gum, to those privileged *534to be there, but no profit is derived therefrom, and thus far it has been conducted at a loss.

In considering this question, we agree with counsel for plaintiff in error that in one sense it is immaterial what kind of an organization owns this property; that the test is the use made of the property, but in deciding this question it is proper to consider the surrounding circumstances. When thus considered, we are of opinion that for the purposes of taxation the same rule applies to it as would were it owned and directly controlled by these sundry Masonic societies.

Vol. 37 Cyc. 927; Glengary Co. v. Boehmer, 28 Colo. 1, 62 Pac. 839; Kappa Kappa Gamma v. Pearcy as Treasurer, etc., 92 Kans. 1020, 142 Pac. 294, 52 L. R. A. (N. S.) 995.

There are two lines of authorities concerning the rule of construction applied to exemption from taxation of properties like that under consideration; one has adopted the strict rule of construction, the other, the liberal or broader rule, as it is termed. This court has heretofore adopted the liberal or broader rule.

In Cathedral St. John v. County Treasurer, 29 Colo. 143, at page 145, 68 Pac. 272, the court says:

“The general rule is, that exemptions from taxation are strictly construed, but this rule is not applied with full vigor to the character of exemptions under consideration. In other words, provisions exempting property used for educational purposes are less strictly construed than those exempting property used for ordinary gain or profit. * * *
The words ‘solely’ and ‘exclusively’ empiloyed in the provisions of the law under consideration are words of limitation which in their ordinary sense strictly limit the subjects to which they refer, but their purport and meaning in this instance must be ascertained from the intent of the people and the legislature in exempting from taxation property used for educational purposes. In providing for these exemptions, the object was to foster educational institutions by relieving their property, within prescribed limits, from the burden of taxation. This being the end *535to be attained, the meaning of the law must be ascertained by a construction within its spirit, purpose and policy not opposed to its letter. * * * The fundamental object of the law was to exempt property used for school purposes from taxation. To carry out this design, the uses permissible must necessarily embrace all which are proper and appropriate to effect the objects of the institution claiming the benefits of the. exemption. * * *
So that a use incident to the main purpose for which the property is held is not one which falls within the prohibitions contemplated by the law.”

While this case involved the exemption of propérty used for educational purposes, the rule pertaining to property used for charitable purposes is the same, and was thus recognized in Bishop and Chapter v. Treasurer, 37 Colo. 378, 86 Pac. 1021, (known as the Oakes Home case) wherein it is said that a charity as regards the character of the work to be performed, includes whatever will pjromotei in a legitimate way the comfort, happiness and improvement of an indefinite number of persons. While the conclusion reached in this latter case has been seriously criticised, which it may be subject to upon account of the facts pertaining to the services rendered, and the amount of the charges paid therefor, as disclosed by the record, yet were its declarations applied to the facts of this case where nothing is received or expected for the charitable acts continuously performed, it would not be subject to the criticism lodged against it. This liberal rule was also followed in Colorado Seminary v. Arapahoe County, 30 Colo. 507, 71 Pac. 410.

In Vol. 12 Am. & Eng. Encyc. of Law (2nd Ed.) at page 306, it is said:

“There are several classes of exemptions in reference to which it has been suggested that the rule of strict construction should be relaxed.
This has been suggested in relations to exemptions of religious, charitable and educational institutions, on account of their meritorious nature and the fact that they *536relieve the government of burdens which it would otherwise have to bear.”

This rule, or suggestion as the author terms it, was followed in:

Elks v. Groesbeck, County Treas., 40 Utah 1, 120 Pac. 192, Ann. Cas. 1914 C, 940; State v. Fisk University, 87 Tenn. 233, 10 S. W. 284; M. E. Church South v. Hinton, 92 Tenn. 188, 21 S. W. 321; Lodge v. Nashville, 127 Tenn. 248, 154 S. W. 1141; City of Indianapolis v. Grand Master, etc., 25 Ind. 518; Commonwealth v. Lynchburg Y. M. C. A., 115 Va. 745, 80 S. E. 589, 50 L. R. A. (N. S.) 1197; Sisters of Charity, etc., v. Collector, etc., 52 N. J. Law, 373, 20 Atl. 292, 9 L. R. A. 198; Association, etc., v. Mayor, etc., 104 N. Y. (59 Sickle) 581, 12 N. E. 279; People, etc., v. Commissioners of Taxes, 36 Hun (43 N. Y.) 311; People ex rel. v. Commissioners of Taxes, 11 Hun (18 N. Y.) 505; Black-man v. Houston Tax Collector, et al., 39 La. Ann. 592, 2 South. 193.

The fact that these societies or their members sometimes give a dinner or a dance in the reception and other rooms upon the lower floor, in our opinion, does not change the nature of the use of the building. Many things depend upon who is doing them, and the purposes for which they are being done. For instance, the proprietor of a hotel serves a meal in his dining room at a certain price, for his gain and profit, — in such case no one would contend that it was being used for charitable purposes, yet when a religious organization serves a meal or lap supper in the base.ment of its church, and charges for it, even for the purposes of raising money to meet a deficiency in connection with its church matters, or to be used in religious work, no authority has ever held that for that reason the church building was not used solely and exclusively for religious worship: The aims and objects of these societies are charitable. The moneys received from their members and otherwise, except sufficient to perpetuate their existence, are devoted to charitable purposes; their existence requires a place like the building under consideration within which to *537exist, in order that their charitable work may be continued. The reading rooms, etc., in connection with the lodge rooms, make them all the more attractive and tend to increase the membership, which in turn gives greater opportunity to enlarge the charities performed. The dances and dinners referred to are but an incident in the social life of these societies; they are not for gain or profit, although they may, in some instances, add to the revenue and in the end help to provide more funds to be used by the societies in their charity work. Lodge v. Nashville, 127 Tenn., 248, 154 S. W. 1141. It is conceded that the news stand affords no profit to any one, but is simply a matter of convenience. While we appreciate that there is a conflict of authority úpon questions of this kind and that it is not always easy to fix the dividing line, yet when tested by what is termed the liberal or broader rule of construction given to the language of our constitution and statutes by former decisions of this court, we cannot agree that the evidence in. this ease, to which this opinion is limited, is insufficient to justify the findings that this building was being used solely and exclusively for charitable purposes.

Cases holding that property used principally for the benefit only of persons in some way related to the members of a society (an artificial class as it is called) are not exempt have done so generally for the reason that the constitution or statute governing the case provided that the charity shall be a purely public charity. This is true of Pennsylvania, Ohio, Minnesota, Maine and perhaps other states. These cases are not applicable to the question under consideration. Our constitution does not contain the word “public” in connection with “strictly charitable purposes.” In addition to the cases heretofore cited, the following, in principle, sustain our conclusion: St. Paul’s Church v. Concord, 75 N. H. 420, 75 Atl. 531, 27 L. R. A. (N. S.), 910, Ann. Cas. 1912A, 350; St. Mary’s Church v. Tripp, City Treas., etc., 14 R. I. 307; Yale University v. New Haven, 71 Conn. 316, 42 Atl. 87, 43 L. R. A. 490; Emerson v. Trustees of Milton Academy, 185 Mass. 414, 70 N. E. 442; First *538Unitarian Society v. Hartford, 66 Conn. 368, 34 Atl. 89; Curtis, Collector, v. Odd Fellows, 99 Me. 356, 59 Atl. 518; Masonic Home v. Sedgwick Co., 81 Kan. 859, 106 Pac. 1082, 26 L. R. A. (N. S.) 702; Fitterer v. Crawford, 157 Mo. 51, 57 S. W. 532, 50 L. R. A. 191.

The former opinion will be withdrawn and the judgment affirmed.

Affirmed.

Decision en banc.

Mr. Justice White and Mr. Justice Teller dissent.