York Rite Bodies of Freemasonry of Savannah v. Board of Equalization

Cooper, Judge.

This is a consolidated appeal of two cases involving two Masonic lodges, Thunderbolt Lodge No. 693 and York Rite Bodies of Savannah, Georgia (“appellants”). Appellants had been afforded an ad valorem tax exemption on their properties until 1985, when this exemption was revoked by the local taxing authorities. In December 1985 and January 1986, appellants filed appeals to the superior court from the adverse decisions of the taxing authorities. The next pleading was filed by appellants in April 1988, and in November 1988, the Thunderbolt case was dismissed for lack of prosecution as no request for trial had been made by the appellant in that case. In May 1989, appellants filed a motion for declaratory judgment and therein asserted that the properties of appellants were exempt from taxation because appellants are “purely public charities” under OCGA § 48-5-41 (a) (4). Also in May 1989, despite the earlier dismissal of the Thunderbolt case, the two cases were consolidated. By order entered in October 1989, the superior court ruled that the Thunderbolt case was properly dismissed and that the dismissal constituted an adjudication on the merits which prevented the issues from being raised again. As to the York Rite Bodies case, the court, after a lengthy discussion of the controlling authority, determined that the property at issue was not used in such a manner as to qualify it for tax exemption and denied the declaratory judgment. This appeal followed.

1. Upon a review of the record, we determine that the trial court erred by allowing the dismissal of the Thunderbolt case to act as an adjudication of the merits. Contrary to the trial court’s ruling, OCGA § 9-11-41 (b) states “[a] dismissal for failure of the plaintiff to prosecute does not operate as an adjudication upon the merits. ...” Consequently, appellants were not barred by the doctrine of res judicata from reasserting the claims in the Thunderbolt case. Idowu v. Lester, 176 Ga. App. 713 (la) (337 SE2d 386) (1985). See Leach v. Aetna Cas. &c. Co., 172 Ga. App. 785 (324 SE2d 494) (1984). The trial court should have considered the merits of the Thunderbolt case. Since the issues presented by both cases are identical, we will consider herein appellants’ enumeration of errors as to both cases.

2. In their first and fifth enumerations of error, appellants assert that the trial court erred in its interpretation of the “purely public charity” doctrine. The two properties at issue are Masonic lodges, used exclusively as meeting places for Masonic and Masonic-related activities, and no part of either is used for commercial purposes. Unquestionably, the Masonic organization devotes a substantial amount of time and money for charitable purposes. At issue here, however, is whether the use of the properties meets the tests established by Georgia law to qualify them for a property tax exemption. “The test is whether the property itself is ‘dedicated to charity and used exclusively’ as an institution of purely public charity, not whether the [appellant] is an organization of purely public charity.” Tharpe v. Central Ga. Council &c. of America, 185 Ga. 810, 813 (196 SE 762) (1938). “If exempt, it is only because it is property used exclusively as an institution of purely public charity.” Mu Beta Chapter &c. Corp. v. Davison, 192 Ga. 124, 126 (14 SE2d 744) (1941). “Property owned by a charitable institution is not exempt from taxation unless it is used for the purposes for which that institution was established. Mere latent ownership of property by an institution of public charity will not entitle it to an exemption in the absence of the required application of the property to the charitable goals of the owner.” Thomas v. Northeast Ga. Council, 241 Ga. 291, 293 (244 SE2d 842) (1978). That an organization is non-profit, non-commercial, that it serves a benevolent purpose, and that its charter declares it to be a charitable and benevolent institution, do not automatically qualify it for a tax exemption as a charitable institution. Historic House Museum Corp. v. Camp, 223 Ga. 510, 511 (156 SE2d 361) (1967). Further, the use of the property sought to be exempted must not only be purely charitable, but must also be devoted to a public charity. Georgia Congress of Parents &c. v. Boynton, 239 Ga. 472, 473 (238 SE2d 113) (1977).

Based upon the exemption tests above enunciated by the Georgia courts, we hold that the properties at issue do not qualify for an ad valorem tax exemption pursuant to OCGA § 48-5-41 (a) (4). The properties are used as meeting places, and are not used for the actual charitable purposes for which the Masons were established. Also, the properties are used only by members of the respective lodges and are therefore not open to the “public.” We agree with the trial court that the case of Massenburg v. Grand Lodge F & AM &c., 81 Ga. 212 (7 SE 636) (1888) is not controlling because the issue decided in that case was the taxability of productive property when the income was used for charitable purposes. Any implication in that case that Masonic lodges, used exclusively for Masonic fraternal activities, are tax exempt is not binding as the controlling usage tests were not applied to those factual circumstances. Appellants’ first and fifth enumerations are without merit.

3. Appellants’ second and third enumerations of error, asserting that the trial court erred in failing to require appellee to file responsive pleadings and in failing to place the burden of proof on appellee, are both without merit. An appeal to the superior court from a county tax assessment is not a complaint as contemplated by the Civil Practice Act. Rogers v. DeKalb County Bd. of Tax Assessors, 247 Ga. 726 (1) (279 SE2d 223) (1981). Therefore, an answer is not required in response to such appeal, and a default judgment will not lie for failure to answer. Id. The court did not err in failing to require a responsive pleading, and such failure did not deprive appellants of any of their constitutional rights. “The burden of proof in the superior court was on the taxpayers, as the parties who initiated the appeal to that court. [Cit.]” Hawkins v. Grady County Bd. of Tax Assessors, 180 Ga. App. 834 (3) (350 SE2d 790) (1986). The court was not authorized to shift that burden, and no error occurred.

4. Appellants finally assert that the court erred in not considering the act of the Georgia legislature that incorporated the Grand Lodge of Georgia in 1796, and in not considering a cited Alabama case. Although the act referenced states that the principles of the Masons are “charity and universal benevolence,” as stated in Division 2, the wording of a corporate charter is not determinative; the property usage tests must nevertheless be satisfied. Boynton, supra at 473. Further, it was not error for the trial court to fail to consider an Alabama case cited by appellants in the face of controlling Georgia authority.

Judgment affirmed.

Beasley, Daniel M. Coursey, Jr., Dawson Jackson, Robert G. Walther, and Thomas D. Wilcox, Jr., JJ., concur. Birdsong, Arnold Shulman, and William J. Smith, JJ., dissent. Carley, C. J., Deen, P. J., McMurray, P. J., Banke, P. J., Sognier and Pope, JJ., disqualified.