Moody Institute of Science v. County of Los Angeles

California Court of Appeal Jun 25, 1951 No. Civ. 17249Published

Before: Drapeau, Hanson, White

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Holding. A corporation is not entitled to a tax exemption if its articles of incorporation authorize the use or diversion of its property for non-exempt educational purposes, as such articles fail to meet the requirement of irrevocable dedication to religious or charitable purposes.

Issues

Whether a corporation's property is entitled to a tax exemption when its articles of incorporation authorize the use of property for non-exempt educational purposes.
Whether the statutory requirement of irrevocable dedication is determined by the powers disclosed in a corporation's articles of incorporation.

Disposition. reversed

Quotations verified verbatim against the opinion

“If the articles of incorporation permit not only a present use for but also the ultimate and permanent diversion of its assets to nonexempt purposes no exemption may be allowed.”

“The statutory requirement of irrevocable dedication is determined by the powers of the corporation, as disclosed in its articles of incorporation.”

Opinion

105 Cal.App.2d 107 (1951) MOODY INSTITUTE OF SCIENCE (a Corporation), Respondent,

COUNTY OF LOS ANGELES et al., Appellants.

Civ. No. 17249. California Court of Appeals. Second Dist., Div. One.

June 25, 1951. Harold W. Kennedy, County Counsel, Andrew O. Porter, Deputy County Counsel, Ray L. Chesebro, City Attorney, and Louis A. Babior, Deputy City Attorney, for Appellants.

Mackay, McGregor, Reynolds & Bennion, A. Calder Mackay and F. Edward Little for Respondent.

DRAPEAU, J.

Plaintiff filed its complaint, alleging that it was a religious nonprofit corporation, and, as such, its property was exempt from taxation, under the provisions of section 1c, article XIII of the Constitution of California, and section 214 of the California Revenue and Taxation Code, and that the county tax collector had denied plaintiff's claim of exemption, requiring plaintiff to pay under protest $1,475.79 taxes for the year 1947.

The case was tried without a jury, resulting in findings of fact and judgment for plaintiff for the recovery of the taxes thus paid.

From this judgment the county of Los Angeles and the city of Los Angeles appeal.

Appellants state that the sole question involved is: "Was plaintiff's property properly taxed where it was not irrevocably dedicated to religious, hospital, or charitable purposes as required, but instead its Articles of Incorporation authorized diversion of its property to non-exempt educational purposes?"

Plaintiff's articles of incorporation empower it to study the relationship between science and the Bible, and to encourage a faith in and acceptance of that sacred volume; to spread and teach the results of its study and research by classroom instruction, books and pamphlets, by radio, television, and moving and still pictures; to receive and hold money and property for these purposes; "and for other religious, scientific and educational purposes."

Do the words quoted take this corporation out of the class defined by statute for exemption?

[1] Constitutional provisions and statutes granting exemption from taxation are strictly construed to the end that such concession will be neither enlarged nor extended beyond the plain meaning of the language of the law. This rule does not require that the narrowest possible meaning be given to words descriptive of the exemption. A fair and

Moody Institute of Science v. County of Los Angeles

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Opinion

DRAPEAU, J.

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WHITE, P. J.

Opinion — Drapeau

Concurrence — Hanson

Dissent — White

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