Opinion
Nos. 32774, 32775, 32776, 32777, 32778, 32779 and 32780
Decided July 16, 1952.
Taxation — Exemptions — Section 5353, General Code — Real property used exclusively for charitable purposes, when — Owned and operated without profit by charitable institution — Overall program of social, religious and educational service.
Real property is used exclusively for charitable purposes and is exempt from taxation under Section 5353, General Code, where it is owned and operated without profit by a charitable institution and by it devoted, as its main objective, to an overall program of social, religious and educational service to persons in peculiar need thereof, without distinction as to race, color or creed, even though, as incidental to such objective, dormitory, dining room and other like services are furnished and a charge made therefor, the income therefrom being devoted to such program.
APPEALS from the Board of Tax Appeals.
These cases are separate appeals from the Board of Tax Appeals. The question involved in each is whether the respective real property owned by the appellants is exempt from taxation on the ground that it is used exclusively for charitable purposes. The cases have similar facts and similar legal questions for determination. They were heard together in this court.
In case No. 32774, Jerome Goldman, pursuant to Section 5616, General Code, filed with the Board of Tax Appeals a complaint that certain real estate located on the corner of Ohio and McMillan streets in the city of Cincinnati, title to which was in the name of John T. McNicholas, archbishop, trustee, and which is popularly known as The Friars Club, be placed on the tax duplicate, the property for many years having been exempted from taxation.
The Friars Club, Inc., is an Ohio corporation not for profit organized for the purpose of "advancing the moral and physical welfare of its members," and, under its constitution attached to the articles of incorporation, its objective is "the spiritual and physical welfare of the men and women of greater Cincinnati." The club operates a four-story brick building. With the exception of a small chapel on the third floor, the top two floors are occupied as a place of residence by young men, approximately 50 per cent of whom are students employed by business firms and industries of Cincinnati. They pay low rentals, the rates varying according to their ability to pay and to the type of room occupied. Some occupants are admitted without payment if they are without funds and worthy of such consideration. The club, by concession, operates a public restaurant and a snack bar in a portion of the building and operates bowling alleys which are open to the public for a fee.
The club has both resident and nonresident members, all young people, without discrimination as to sex, race or religion. Athletic programs, both in and outside the buildings, are organized and carried on under trained supervisors. The institution generally is devoted to guidance and character building of young people. All revenues are devoted to the charitable objectives of the institution. It is supported by personal contributions and is one of the institutions partially supported by the community fund.
The Board of Tax Appeals held that the dormitories, restaurant and snack bar were not used exclusively for charitable purposes but that the remainder of the building was so used and attempted to set off those portions of the building used for charitable purposes as exempt from taxation under the provisions of Section 5560, General Code, the pertinent part of which is as follows:
"But where a separate parcel of real property, improved or unimproved, having a single ownership, is so used, that part thereof, if a separate entity, would be exempt from taxation, and the balance thereof would not be exempt from taxation, the listing thereof shall be split and the part thereof used exclusively for an exempt purpose or purposes shall be regarded as a separate entity and be listed as exempt, and the balance thereof used for a purpose or purposes not exempt, shall, with the approaches thereto, be listed at its value in money and taxed accordingly."
The Board of Tax Appeals found that it was impossible to divide by metes and bounds the portion of the property used for charitable purposes from that not so used and made a division of the building as to exempt and nonexempt purposes by determining the percentage of the cubical content of the various occupancies of the building. Accordingly, the board found that the cubical content of the entire building was 914,152 cubic feet; that the cubical content of the restaurant, kitchen, refreshment bar, bowling alleys and dormitories was 231,230 cubic feet; and that an undivided 74 per cent of the building was used for a charitable and tax exempt purpose whereas an undivided 26 per cent of the building was used for taxable purposes and was subject to taxes, which, however, should be a lien upon the entire building.
In case No. 32775 Goldman filed with the Board of Tax Appeals a complaint demanding that certain real estate located on Commercial square on the north side of Fifth street between Broadway and Pike streets in the city of Cincinnati, title to which was in the name of John T. McNicholas, archbishop, trustee, and which is popularly known as the Fenwick Club, be placed on the tax duplicate, although the property had been for many years exempted from taxation.
The Fenwick Club is likewise a corporation not for profit. It is housed in a building consisting of a basement and nine stories, a part of the fifth and all of the sixth, seventh, eighth and ninth floors, consisting of 125 rooms, being devoted to a residence program. These rooms are occupied as places of residence by persons who pay from $5 to $9 per week for these accommodations. The original purpose of the club was to house homeless boys, but it has been expanded into a community center for the underprivileged persons of that section of the city and serves as a home for men who, although working, need and receive counsel and guidance. The club houses persons who have been referred to it by social societies as needing such social assistance as the club can give. It also serves women and girls with reference to social and domestic problems. The club is open to all without distinction as to race or religious affiliation. A cafeteria is operated for the use of the occupants of the building and occasionally for persons outside the building.
The Board of Tax Appeals concluded that the building was not used as a whole exclusively for charitable purposes but that it was subject to apportionment as to exempt and nonexempt uses. It found that the cubical content of the building was 695,259 cubic feet; that the cubical content of the cafeteria and kitchen on the fourth floor was 68,433 cubic feet; that the cubical content of the kitchen and space used for dormitories on the fifth floor was 19,075 cubic feet; that the cubical content of the dormitory space on the sixth, seventh, eighth and ninth floors was 147,793 cubic feet; that an undivided 66 percent of the cubical content of the building was used for tax exempt purposes whereas 34 per cent of the cubical content was used for nonexempt purposes; and that 34 per cent of the building was subject to taxation under the provisions of the statute hereinbefore referred to.
In case No. 32776 Goldman filed with the Board of Tax Appeals a complaint demanding that certain real estate located on the south side of Fifth street between McAllister and Lawrence streets in Cincinnati, owned by the Congregation of Sisters of St. Joseph of New Orleans and popularly known as "The Fontbonne," be placed on the tax duplicate although this property for many years had been exempted from taxation. The Fontbonne is a corporation not for profit organized under the laws of the state of Louisiana. It occupies and operates a six-story building which is used to carry out various programs and to further its basic charitable purposes. The programs consist of residential service, religious service, restaurant service, library service, settlement work, lecture and educational service, social activity service, and community service, etc. It is admitted by the complainant that the corporation is a charitable institution but he claims the property is not "used exclusively for charitable purposes." The building contains on the second to sixth floors, inclusive, about 190 rooms, a majority of which are occupied as places of residence by young women and girls, both Catholic and non-Catholic and who are employed. Some of the rooms are free to those who are unable to pay rent, and about 30 of the rooms are reserved for this purpose, but the remainder of the rooms are rented at rates of from $5.50 to $8 per week.
Programs are carried on for recreation, religious and cultural development and consist of lectures and classes, counselling by nuns, nurses and lay personnel, a library, a chapel and a snack bar and cafeteria. There are 14 sisters engaged in managing these programs, none of whom receives any compensation or salary, but each having a room on the second floor. The chapel is open to the public generally. The income from the rental of rooms for the period from January 1, 1950, to September 30, 1950, was $52,597.23, all of which was devoted to the charity program.
The Board of Tax Appeals concluded that the building as a whole was not used exclusively for charitable purposes, and that certain portions of it were so used but could not be set off by metes and bounds. It found that the total cubical content of the building was 1,440,543.86 cubic feet; that the cubical content of income-producing rooms devoted to dormitory purposes was 288,327.60 cubic feet; that the cubical content of the dining rooms, snack bar, kitchen, storeroom, etc., was 31,446.02 cubic feet; and that an undivided 74 per cent of the building was used for tax exempt purposes whereas 26 per cent was used for nonexempt purposes, and ordered taxes assessed accordingly.
In case No. 32777 a complaint was filed with the Board of Tax Appeals by Goldman demanding that certain real estate located at the southeast corner of Ninth and Walnut streets in Cincinnati and owned by the Young Women's Christian Association of Cincinnati be placed upon the tax duplicate, notwithstanding the building had been on the exempt list for many years.
The Young Women's Christian Association of Cincinnati is a corporation not for profit organized under the general corporation laws of Ohio on June 12, 1868. The purposes of the corporation as stated in its amended articles of incorporation are "the temporal, moral and religious welfare of women, especially young women who are dependent upon their own exertions for support." The corporation owns and operates a 13-story building in carrying out its various programs, including a program for teenagers, a program for women between the ages of 18 and 35, a health educational program, a residence program, and food service program. The building contains about 284 rooms which are occupied by young women and girls as places of residence for which they generally pay from $4.25 to $9.50 per week as rental. The rental of these rooms for the period from January 1, 1950, to October 31, 1950, was $92,759.74, all of which was devoted to charitable programs of the organization. The corporation operates a public restaurant in a portion of the building and the programs carried on by the organization are those traditionally carried on by the Young Men's Christian Association and the Young Women's Christian Association generally.
The Board of Tax Appeals found that the building was not used exclusively for charitable purposes and as in the other cases here considered found that the portions entitled to exemption from taxation could not be set off by metes and bounds. On a cubical content basis it found that 55 per cent of the cubical content was used for tax exempt purposes whereas 45 per cent of the cubical content was not so used, and entered a tax assessment accordingly.
In case No. 32778 a similar complaint was made by the same complainant to the Board of Tax Appeals, demanding that certain real property located at the northwest corner of Eighth and Cutter streets in Cincinnati and owned by the Young Women's Christian Association of Cincinnati be placed upon the tax duplicate. This property had theretofore been exempted from taxes for many years. The property in question consists of two three-story residences which are operated substantially as is the property involved in case No. 32777.
The Board of Tax Appeals made a finding similar to that in case No. 32777 and found that 80 per cent of the cubical content of the buildings was used for tax exempt purposes and that 20 per cent of the cubical content thereof was not so used, and assessed taxes accordingly. The cause in this case was tried together with that in case No. 32777 by the Board of Tax Appeals.
In case No. 32779 a complaint was filed with the Board of Tax Appeals by Goldman demanding that certain real estate located at the northwest corner of Elm and Central Parkway in Cincinnati and owned by the Young Men's Christian Association be placed on the tax duplicate notwithstanding it had enjoyed exemption from real estate taxes for many years.
The Young Men's Christian Association of Cincinnati was organized not for profit under the general corporation laws of Ohio on December 16, 1870, and its stated purpose is "to bring into harmony with the spirit of Christ the physical, mental, spiritual, social, and moral condition of young men and boys." It operates a nine-story building and carries on programs similar to those carried on by the Young Men's Christian Association generally. It operates a dormitory containing 250 single and 77 double rooms which are rented for from $4.50 to $9 per week. The income from the rental of these rooms and from the cafeteria, game room and laundry for the period from January 1, 1950, to October 31, 1950, was $204,539.68, all of which was devoted to the charitable operations of the association. The association operates a public restaurant in a portion of the building.
The Board of Tax Appeals found that 56 per cent of the cubical content of the building was used exclusively for charitable purposes whereas 44 per cent of the cubical content was not so used, and ordered tax assessments accordingly.
In case No. 32780 a complaint was filed with the Board of Tax Appeals by Goldman demanding that certain real estate located on Ninth street near Cutter street in the city of Cincinnati, owned by the Young Men's Christian Association of that city and known as the "Ninth Street Branch," be placed on the tax duplicate. It too had enjoyed tax exemption for a number of years.
The activities of this organization are the same or similar to those carried on in the property described in case No. 32779. The association here operates a four-story building consisting of a ground floor, four stories and an attic. The dormitory has 46 rooms which produced an income in rental of $13,541.04 for the period from January 1, 1950, to October 31, 1950.
The Board of Tax Appeals found that 65 per cent of the cubical content of the building was used for charitable and religious purposes whereas 35 per cent of such cubical content was not so used, and ordered tax assessments accordingly.
Mr. Robert A. Goldman, for plaintiff appellee.
Messrs. Dargusch, Caren, Greek King and Mr. Joseph O'Meara, Jr., for The Friars Club, The Fenwick Club, The Fontbonne and The Young Women's Christian Association, appellants.
Mr. Henry W. Merland, for appellant The Friars Club.
Messrs. Dempsey Dempsey, for appellant The Fenwick Club.
Mr. William J. Dammarell, for appellant The Fontbonne.
Messrs. Dinsmore, Shohl, Sawyer Dinsmore and Mr. Richard W. Todd, for appellant the Young Women's Christian Association.
Messrs. Wright, Harlor, Purpus, Morris Arnold, Mr. C. Emory Glander, Messrs. Nippert Nippert, Messrs. Thompson, Hine Flory and Mr. Frank E. Bubna, for appellant the Young Men's Christian Association.
Mr. C. Watson Hover, prosecuting attorney, for appellee George Guckenberger, auditor.
Tax exemption of real property is permitted but limited by the Constitution of Ohio in Section 2, Article XII thereof, the pertinent part of which is as follows:
"* * * general laws may be passed to exempt burying grounds, public school houses, houses used exclusively for public worship, institutions used exclusively for charitable purposes, and public property used exclusively for any public purpose * * *."
Pursuant to this constitutional provision, the General Assembly provided in Section 5353, General Code, for the exemption of certain property from taxation, the pertinent part of which section is as follows:
"* * * Real and tangible personal property belonging to institutions used exclusively for charitable purposes, shall be exempt from taxation."
In these cases it has been stipulated by the complainant that appellants are charitable organizations, and the question of the exemption from taxation of their respective properties is narrowed to the use of the properties. In this connection the complainant claims that the properties are not "used exclusively for charitable purposes," and that as a consequence they are wholly subject to taxation.
It must be conceded that the criterion of the exemptibility of these properties is their use for charitable purposes. The application of this limitation on the exemption of real property from taxes was before this court in the case of Wilson, Aud., v. Licking Aerie No. 387, F.O.E., 104 Ohio St. 137, 135 N.E. 545, wherein it was held that to be exempt the property need not be owned by an institution of purely public charity, so long as the property itself is exclusively devoted to and used for charitable purposes.
The complainant herein, therefore, insists that, even though the properties are owned and operated by charitable institutions, the facts are that large sections of the properties are used for dormitories, for operation of public cafeterias, and in some instances for the operation of public bowling alleys and that, therefore, the properties cannot be considered as being exclusively used for charitable purposes.
This court has held on numerous occasions that the use of lands for private homes for individuals and the use of land for low-rent housing for persons of limited income do not entitle the owner of the property to exemption from the payment of real estate taxes. Incorporated Trustees of Gospel Worker Society v. Evatt, Tax Commr., 140 Ohio St. 185, 42 N.E.2d 900; Columbus Metropolitan Housing Authority v. Thatcher, Aud., 140 Ohio St. 38, 42 N.E.2d 437; Dayton Metropolitan Housing Authority v. Evatt, Tax Commr., 143 Ohio St. 10, 53 N.E.2d 896, 152 A.L.R., 223; Youngstown Metropolitan Housing Authority v. Evatt, Tax Commr., 143 Ohio St. 268, 55 N.E.2d 122; Mussio v. Glander, Tax Commr., 149 Ohio St. 423, 79 N.E.2d 233; Cleveland Branch of Guild of St. Barnabas for Nurses v. Board of Tax Appeals, 150 Ohio St. 484, 83 N.E.2d 229; Beerman Foundation, Inc., v. Board of Tax Appeals, 152 Ohio St. 179, 87 N.E.2d 474; Western Reserve Academy v. Board of Tax Appeals, 153 Ohio St. 133, 91 N.E.2d 497; In re Application for Exemption from Taxation, 155 Ohio St. 590, 99 N.E.2d 761.
This court has also held that where income from rentals of real estate for private housing or from a commercial business is devoted to objects of charity or used in connection with charity the property so rented is nevertheless not exempt from taxation. See Incorporated Trustees of Gospel Worker Society v. Evatt, Tax Commr., supra (special business, income from which devoted to charity, and housing for employees of business); Society of the Precious Blood v. Board of Tax Appeals, 149 Ohio St. 62, 77 N.E.2d 459; Mussio v. Glander, Tax Commr., supra (private homes of priests, student priests and social workers, no school or social work open to public); Cleveland Branch of Guild of St. Barnabas for Nurses v. Board of Tax Appeals, supra (low rent accommodations for nurses); Beerman Foundation, Inc., v. Board of Tax Appeals, supra (homes for disabled veterans at low rental); Western Reserve Academy v. Board of Tax Appeals, supra; and President and Trustees of Miami University v. Evatt, Tax Commr., 144 Ohio St. 434, 59 N.E.2d 366 (private homes of professors of a school).
The question here is whether the properties in the instant cases fall within the categories of the properties under consideration in the foregoing cited cases, or, as substantially stated by appellants, whether real estate owned and operated by a charitable institution, organized not for profit, is used exclusively for a charitable purpose, where the property is wholly devoted to an overall program of social, religious and educational service to the community by providing a place in which to live (a) under wholesome influences and surroundings designed to develop Christian character, with facilities for recreation and for mental, moral and physical improvement, (b) for young working people, students, the physically handicapped and persons under other disabilities, some of low or moderate means but others entirely destitute, who have no homes of their own, (c) without cost to those unable to pay and at prices based upon ability to pay in the case of those having the means to do so, all such payments being used to help defray the cost of conducting the institution, and (d) open to all without regard to race, color or creed.
In addition to the statement of facts hereinbefore made as to the use of the properties, the basic facts are further stated by counsel for appellants in their brief as follows:
"Each institution devotes itself, exclusively, to conducting an integrated welfare program for the moral, intellectual, physical and social improvement of a broad segment of the general public of Cincinnati, Ohio. The Young Women's Christian Association, for example, devotes itself primarily to 'the temporal, moral and religious welfare of women, especially young women who are dependent on their own exertions for support,' while the principal concern of The Friars Club is with the welfare of men and boys, particularly young men. Within broad limits such as these, the services of the institutions are available to all.
"Each organization has 'members' who take part in its program, but membership is open at nominal or no cost to all of those whom the program is designed to serve. No one is excluded because of race, color or creed, or because of inability to pay dues or to make any other payments.
"The work of the institutions is carried on without any view to profits (there are none) and is financed by gifts of persons interested in the advancement of their respective purposes, contributions of the local community fund in the case of the Young Women's Christian Association [The Young Men's Christian Association] and the Fenwick Club and of the religious orders conducting the institutions in the case of the Friars Club and the Fontbonne, and by the dues and other voluntary payments of members and other participants in the institutional programs. Much of the work, of course, is done without cost to the beneficiaries and where charges are made they are based upon ability to pay. No one has ever been refused a service because he was unable to pay for it.
"A fully equipped building or buildings has been dedicated by each institution to the accomplishment of its purposes. Each occupies its own property and uses it exclusively for the conduct of its program."
The Board of Tax Appeals in its decisions recognized the charitable character of the activities carried on in the greater areas of these properties but held that the lesser areas, used as dormitories and cafeterias, and in one case a bowling alley, were used for noncharitable purposes. The board apparently did not give consideration to the character of these uses as connected with and incidental to the overall programs carried on within the properties and the charitable nature of each institution as a whole. These overall programs carried on by these institutions devoted to charity without any commercial aspect or commercial profit, in the opinion of the court, differentiate the instant cases, as to the specific facts, from the cases hereinbefore cited. See College Preparatory School for Girls v. Evatt, Tax Commr., 144 Ohio St. 408, 413, 59 N.E.2d 142; Aultman Hospital Assn. v. Evatt, Tax Commr., 140 Ohio St. 114, 42 N.E.2d 646; O'Brien, Treas., v. Physicians Hospital Assn., 96 Ohio St. 1, 8, 9, 116 N.E. 975, L.R.A. 1917F, 741.
A somewhat similar question was before this court in the case of Waddell, a Minor, v. Young Women's Christian Assn., 133 Ohio St. 601, 15 N.E.2d 140, which involved the liability of the Dayton Young Women's Christian Association for the alleged negligence of its swimming instructor. Liability turned upon the question whether the association was a public charitable institution. The court held that it was such an institution even though it charged fees for services and provided rooms for young women at reasonable cost.
Judge Gorman in the opinion in that case said:
"In order to determine whether the Young Women's Christian Association is a charitable institution we may look to the charter, constitution, bylaws and such oral evidence as is not inconsistent therewith. * * *
"* * *
"In the amended articles of incorporation in effect at the time of the injury to the plaintiff, it is set forth: 'The purposes for which said corporation is formed, shall be to promote the spiritual, moral, mental, social and physical welfare of the women and girls of the city * * *.'
"The evidence offered showed that in actual practice the association attempted to achieve these purposes. No evidence was offered to controvert the purposes of the association and the uses to which its property was put. While fees are charged for services, the institution is sustained largely by private donations and gifts from community funds.
"Charity is not aid to the needy alone, but it embraces and includes all which aids man and seeks to improve his condition. * * *
"* * *
"Efforts are being expended in attempting to train the youth of today to meet the problems of tomorrow. * * * The purpose, therefore, is of an unquestioned public character.
"The jury was not called upon, in the special verdict submitted, to determine whether the defendant association was a charitable institution. On the undisputed evidence, the court could reach no other conclusion than that the Young Women's Christian Association was a public charitable institution.
"This conclusion is in accord with the great weight of authority where courts have been called upon to determine the nature of institutions with similar purposes and activities."
In the case of Salvation Army v. Hoehn, 354 Mo., 107, 188 S.W.2d 826, the court held that a building used by the Salvation Army to provide room and board for girls and women of low-earning capacity was "used exclusively for charitable purposes," notwithstanding the institution made moderate charges for the services. More recently, the same court in Young Men's Christian Assn. of St. Louis v. Sestric (Mo.), 242 S.W.2d 497, held that the building of the St. Louis Young Men's Christian Association was exempt from taxation as being used exclusively for charitable purposes, notwithstanding the fact that the association received payment for the use of its dormitories, cafeterias, barber shop, candy and tobacco counter, cleaning and pressing shop, and athletic facilities.
The Constitution of Illinois provides that "the property of the state and the counties both real and personal and such other property as the General Assembly may deem necessary for school, religious and charitable purposes may be exempt from taxation." The General Assembly granted the Young Men's Christian Association of Chicago a charter exempting its property from taxation for the above purposes. In the case of People v. Chicago Young Men's Christian Assn. of Chicago, 365 Ill. 118, 6 N.E.2d 166, the court held that the property of the institution was tax-exempt including its dormitories, restaurants, cafeterias, laundry and haberdashery because the latter were incidental to its general program. The court held further that in determining whether an institution is exempt from taxation, the test is whether the primary purpose of the institution is charitable or making a profit and devoting those profits to charitable purposes. See, also, Salvation Army v. Allegheny County, 367 Pa. 373, 80 A.2d 758; Asbury Park v. Salvation Army, 26 N.J. Misc., 170, 58 A.2d 216; Young Men's Christian Assn. v. Los Angeles, 35 Cal.2d 760, 221 P.2d 47; Fredericka Home v. San Diego, 35 Cal.2d 789, 221 P.2d 68; Springfield Young Men's Christian Assn. v. Assessors, 284 Mass. 1, 187 N.E. 104; Young Women's Christian Assn. v. Pelham, 9 N.J. Misc., 196, 153 A. 397; People, ex rel. Young Men's Christian Assn. of New York City, v. Miller, 278 N.Y. 651, 16 N.E.2d 302.
Persuasive also in this respect is the fact that the properties of the numerous private colleges of Ohio, open to the public without racial or religious distinction, are exempted from taxation under Section 5353, General Code, as property of charitable institutions, devoted exclusively to charitable purposes notwithstanding the fact that most, if not all, of such colleges operate dormitories and dining rooms as incidental to their main purpose of educational and religious training. See College Preparatory School for Girls v. Evatt, Tax Commr., supra; Library Assn. v. Pelton, 36 Ohio St. 253; Cleveland Bible College v. Board of Tax Appeals, 151 Ohio St. 258, 85 N.E.2d 284; Rabbinical College of Telshe, Inc., v. Board of Tax Appeals, 156 Ohio St. 376, 102 N.E.2d 589.
The decisions of the Board of Tax Appeals are modified and the causes are remanded to that board with direction to so modify its entries as to order the whole of the properties in these cases exempt from taxation on the ground that they are at present used exclusively for charitable purposes.
Decisions modified.
STEWART, MIDDLETON and TAFT, JJ., concur.
The reasons for my dissent may be very briefly stated.
The phrase, "institutions used exclusively for charitable purposes," in Section 2 of Article XII of the Constitution of this state, has for over a period of 40 years been consistently held by this court to be the prescribed standard with which an applicant for tax exemption must conform to secure such exemption. The cases cited in the majority opinion are only a few of the cases establishing that precedent.
Pursuant to that limited authority, the General Assembly, in Section 5353, General Code, has provided for such exemption, and such exemption "must be clearly and expressly stated in the statute and must be such only as * * * the Constitution authorizes to be exempted." Wilson, Aud., v. Licking Aerie, 104 Ohio St. 137, 135 N.E. 545; Cullitan, Pros. Atty., v. Cunningham Sanitarium, 134 Ohio St. 99, 16 N.E.2d 205.
The decision in these cases ignores the long established precedent and adopts a new standard which is in itself vague, varying and uncertain. Under the proposed new standard, renting rooms to transients or permanent occupants in competition with taxpaying owners of real property and operating restaurants, bowling alleys and like facilities, which are patronized by the general public and for the use of which a charge is made, also in competition with similar businesses are held to be "only incidental" to social, religious and educational purposes, even though from 20 to 45 per cent of the cubic content of the buildings, exemption of which is sought, is devoted to such nonexempt purposes. In one of the instant cases the income for a ten-month period from such so-called incidental uses was in the year 1950 $204,539.68. Such were the findings of the Board of Tax Appeals. The majority of this court now holds that the property involved herein was used "exclusively for charitable purposes."
The wisdom of the people of this state in adopting Section 2 of Article XII of the Constitution is demonstrated by the results which will naturally flow from the majority decision of the cases now under consideration. Each year the county auditor will be required to investigate each institution in his county claiming exemption; he will necessarily determine whether it has an "overall program of social, religious and educational" service; he will necessarily determine whether the extent and nature of its commercial enterprises are such as to make them only "incidental"; he must determine whether the proceeds thereof are in fact devoted to its adopted program; and in accordance with his findings grant or reject such application for tax exemption. Those claiming exemption need no longer show that the property is "used exclusively for charitable purposes," but only that such is its main objective.
The Board of Tax Appeals may review such action of the county auditor with the same lack of any fixed standard and, upon hearing, affirm, reverse or modify the action of the county auditor.
In that situation, an appeal may be had to this court for its determination of the question whether the decision of the Board of Tax Appeals is unlawful or unreasonable.
Courts are not authorized to adopt or amend constitutions or enact statutes. If a new and different standard for tax exemption is to be established and the word, "exclusively," is to be eliminated from the Constitution, that should be accomplished by the process of amendment of the Constitution, which is beyond the province of this court.