Pasadena Playhouse Ass'n v. County of Los Angeles

WOOD (W. J.), J. The plaintiff Pasadena Playhouse Association, which is an educational institution organized under division I, part IV", title 17 of the Civil Code, in which provision is made for the incorporation of colleges and seminaries of learning, commenced this action to obtain a refund of taxes paid for the tax year 1941-42. Plaintiff bank as trustee commenced a similar action and the two actions were consolidated for trial. A single judgment was rendered in favor of the two plaintiffs. The trial court found that plaintiff association is an educational institution of collegiate grade, not conducted for profit, whose profits were being used exclusively for the purposes of education. On this appeal from the judgment in favor of plaintiffs defendant contends that these findings are not supported by the evidence.

Plaintiff association is the record owner of approximately one-half of the property involved, consisting of the Fannie E. Morrison Building, a structure seven stories in height used primarily for class work and instruction. It is the beneficial owner of the balance of the taxed property, the legal title being held by respondent bank as trustee, consisting of the playhouse building, containing administration offices of the school, a recital hall, library and an auditorium used primarily as a laboratory in developing the histrionic talents of the students.

As the basis for its claim of exemption from the payment of taxes plaintiffs rely upon article XIII, section la, of the Constitution of California, which provides “Any educational institution of collegiate grade, within the State of California, not considered for profit, shall hold exempt from taxation its buildings and equipment, its grounds within which its buildings are located, not exceeding one hundred acres in area, its securities and income used exclusively for the purposes of education.”

The Legislature in 1939 enacted section 203 of the Revenue and Taxation Code, which is as follows: “An educational institution of collegiate grade is an institution incorporated as a college or seminary of learning under the laws of this State, which requires for regular admission the completion of a four-[614]year high school course or its equivalent, and confers upon its graduates at least one academic or professional degree, based on a course of at least four years in liberal arts and sciences, or on a course of at least three years in professional studies, such as law, theology, education, medicine, dentistry, engineering, veterinary medicine, pharmacy, architecture, fine arts, commerce, or journalism. An educational institution of collegiate grade is not conducted for profit when it is conducted exclusively for scientific or educational purposes and no part of its net income inures to the benefit of any private person. ’ ’