Barnes Hospital v. Leggett

RENDLEN, Judge,

dissenting.

I respectfully dissent. This case turns on the Missouri Constitution art. X, § 6, which provides that,

*245[A] I1 property, real and personal, not held for private or corporate profit and used exclusively . . . for purposes purely charitable may be exempted from taxation by general law . . . (Emphasis added.)

and its implementing statute, § 137.100, subsection 5, RSMo 1978, which exempts

All property, real and personal, actually and regularly used exclusively . for purposes purely charitable and not held for private or corporate profit, . (Emphasis added.)

For many years this court has interpreted these clauses and their predecessors as requiring that the taxpayer bear the burden of showing his property is not liable to taxation, because exemption is the exception and it behooves one so claiming, to show it in clear terms. Spillers v. Johnston, 214 Mo. 656, 113 S.W. 1083, 1084 (1908). It was expressed this way in Wyman v. City of St Louis, 17 Mo. 335, 337 (Mo.1852):

[W]hen one claims an exemption from a burden to which all others are subject, and whose freedom will increase their load, he must clearly show himself in the situation which entitles him to the exemption claimed.

This principle has been reaffirmed as recently as 1976 in The City of St. Louis v. State Tax Commission, 524 S.W.2d 839, 844 (Mo. banc 1976), and again in St. John’s Mercy Hospital v. Leachman, 552 S.W.2d 723, 725 (Mo. banc 1977).

While the principal opinion does not disturb the burden of claiming an exemption from taxation, on other aspects of these constitutional and statutory sections it stands squarely against more than a century of legal precedent. The majority concede that this court historically “has held that the word ‘property’ [as used in these sections] means a building or tract in its entirety, . . . ” and further that when considering such tracts or buildings they have always been held to be “indivisible for tax purposes.” The readily apparent rationale for these consistent holdings that the exemption exists only when all of a building or tract is used for charitable purposes, is the unambiguous language of § 137.100, subsection 5, which, tracking that of the constitution, provides, “All property . actually and regularly used exclusively . . . for purposes purely charitable . . . .” (Emphasis added.) This and similar language of earlier constitutional and statutory sections have been so interpreted from 1852 in Wyman v. City of St. Louis, supra until today. Some of the cases in the unbroken chain are referenced in the majority opinion and are discussed in detail in St. John’s Mercy Hospital v. Leachman, supra.

The majority however overrules this unbroken line of authority by announcing a rule that the language of the constitution and the statute “authorizes a partial exemption of a building or tract where the building or tract is used in part for charitable purposes and in part for non-charitable purposes.” (Emphasis added.) In so doing they effectively engraft new language on the constitutional and statutory sections; hence art. X, § 6, would now read: “all [OR PART OF ANY] property, real or personal, not held for private . profit and [ANY PART OF WHICH IS] used exclusively for purposes purely charitable . . ” with similar engraftment on § 137.100(5).

Strong practical considerations demonstrate why such engraftment or construction seems ill-advised and why the framers of our constitution and the legislature when enacting the implementing statute avoided this concept. With the establishment of this new exemption, monumental if not insoluble problems of tax collection (to say nothing of the assessment headaches) loom ahead. For example, if property taxes become delinquent on a six story building, the two mid-floors of which are leased to physicians for their private practice and personal gain, and the remaining floors are devoted to charitable purposes, we must ask: Which part will be sold for nonpayment of the tax? Will the purchaser at a tax sale acquire a title to all or just the mid two floors of the building? How will he segregate or subsequently sell his interest in a portion of the building? How will he borrow money on *246the part purchased? Do we engraft a condominium or similar concept on what he buys in relation to the rest of the building and the use of the common areas? Who pays for repairs to the roof or the elevator? Does the court or the legislature draw and impose the terms of the “condominium” agreement? This not only requires that we reshape our notions of taxation but that we create legal interests for real estate and improvements thereon in which the fee may be rearranged or divided perpendicularly as well as horizontally. Such problems will not disappear or evaporate. Adoption of the attitude that “we will cross that bridge when we reach it” skirts round the fact that the legislature and the framers of the constitution apparently chose not to take this route at all. For these reasons, among others, I would reverse the judgment of the trial court and remand with directions that the property be returned to the assessment rolls of the City.