People Ex Rel. Nelson v. Rockford Masonic Temple Building Ass'n , 348 Ill. 567 ( 1932 )

A judgment was rendered in the county court of Winnebago county sustaining objections to an application for judgment and sale of certain real estate owned by the Rockford Masonic Temple Building Association, a corporation, for taxes, penalties and costs for the year 1930, amounting to $1933.78. The title to the property is held by the corporation for the sole use and benefit of three Masonic orders of Rockford which have equal rights therein and equal representation on all matters of the corporation. The county court held that the property is used by the organizations and by two affiliated orders actually and exclusively for charitable purposes and that it is not leased or otherwise used with a view to profit and therefore is exempt from taxation.

Witnesses for the objector testified to the objects and purposes of the different organizations using the building, and the testimony indisputably disclosed that the object of those organizations is to promulgate the ideals of Masonry, inculcate a moral standard of living, administer to the religious and spiritual life of the members and practice benevolence and charity. The constitution of this State does not exempt any property whatsoever from taxation, but section 3 of article 9 provides that the property of the State, counties and other municipal corporations, both real and personal, and such other property as may be used exclusively for charitable purposes, may be exempted from taxation by general law. Pursuant to the power thus granted to it, the General Assembly by section 2 of the Revenue act (chapter 120) exempted all property of organizations when actually and exclusively used for beneficent and charitable purposes and not leased or otherwise used with a view to profit.

While the evidence discloses that the various organizations which use the objector's property engage in a number of charitable activities, it does not show that the property is used exclusively for charitable purposes. The building located on the real estate sought to be taxed is known as the Rockford Masonic Temple Building. It is of the size, type and character necessary and convenient for the use of the several branches of the Masonic order. As a general rule, the purpose for which a corporation is formed is shown by its charter. (People v.Wyanet Electric Light Co. 306 Ill. 377; People v. WesternSeaman's Friend Society, 87 id. 246; Catholic Knights v. Boardof Review, 198 id. 441; Congregational Publishing Society v.Board of Review, 290 id. 108; People v. Walters Chapter D. A.R. 311 id. 304; People v. Phi Kappa Sigma, 326 id. 573.) The charter of the objector specifies that the object for which it is formed "is mutual benefit and social intercourse of its members." From the evidence it is apparent that the primary purpose and object of the various organizations which use the building is to promulgate the ideals of Masonry, which include the maintenance of a high moral standard of living and administration to the religious and spiritual life of its members. In carrying out these ideals charity is but an incidental feature. It is not the principal or the exclusive object of the organization, and under the constitution of the State no exemption from taxation can be enjoyed by any organization which does not have charity as its primary object.School of Domestic Arts v. Carr, 322 Ill. 562; CongregationalChurch v. Board of Review, 254 id. 220; Grand Lodge v.Board of Review, 281 id. 480.

It is the primary use to which property is put which determines the question of tax exemption. Thus, in Grand Lodge v. Board of Review, supra, a 200-acre farm, with buildings thereon, used exclusively for the care and support of dependent Master Masons, their widows and orphans, was held to constitute a public charity and exempt from taxation; and a home for working girls, with officers serving without compensation, with free medical attention, was likewise held to be a public charity and exempt from taxation. (Franklin SquareHouse v. Boston, 188 Mass. 409.) But it is not enough, to exempt property from taxation, that one of several purposes or results is charity. It must be the chief, if not the sole, object. (Attorney General v. Detroit, 113 Mich. 388.) InScottish Rite Building Co. v. Lancaster County, 106 Neb. 95, it was urged that the word "charitable" was intended to include a subjective meaning, such as the encouraging of fraternal principles, but the court said: "Persons or institutions of wealth or means, however generous, who, even though they systematically allot a fixed part of their income to charity, are yet engrossed in pursuits and interests in which charity, while not entirely excluded, does not play a leading part, are not entitled to claim that they devote themselves chiefly to charity. Neither is a fraternal order entitled to claim exemption of its property from taxation because it encourages charity among its members and itself makes substantial donations to charity, when the evidence shows that its principal activities were not in that direction."

An organization with charitable objectives may own property which is exempt from taxation and also property which is not exempt. For example, if it has a home used exclusively for the care and support of dependent aged people the property is exempt, but if it owns a building which is primarily used for a club, or for social or fraternal purposes, or for lodge meetings for the conduct of ritualistic work, such property is not exempt from taxation. Under the evidence the property of the objector is not entitled to exemption from taxation. Therefore the objections to the entry of judgment for sale should have been overruled.

The order of the county court with respect to said property is accordingly reversed and the cause remanded to that court, with directions to overrule the objections and to enter judgment for sale unless the tax, penalties and costs are previously paid.

Reversed and remanded, with directions.