The petition stated a cause of action for equitable relief.
The Church of God of the Union Assembly, Inc., filed an equitable petition against the City of Dalton, and named persons as the mayor, council, and chief of police of the city. In so far as material, the petition as amended alleged:
The plaintiff is a non-profit corporation organized and incorporated as a church for religious society, its sole object and purpose being to promote the interest of religion in the cause of Christ on earth. It has authority under its corporate charter as amended, and the laws of Georgia, to hold real estate for the purpose of the church. There is no capital stock in the corporation and no dividends are declared; and no dividends or income have ever been distributable to any officer or agent of the corporation for the purpose of personal profit or gain. All income and property, both real and personal, held by the corporation, are used exclusively for religious purposes. A certified copy of the charter of the corporation is attached as an exhibit. On October 6, 1956, the chief of police of the city levied a certain execution, issued by the city council, against C. T. Pratt and the Church of God of the Union Assembly, Inc., on described property. Attached as an exhibit is a written notice of the levy. C. T. Pratt, as an individual, has no equity or title in the real estate, which is owned entirely in fee by the corporation. The city contends that the corporation is indebted to it in an amount stated in the execution for city taxes. The corporation is not indebted to the city in any amount for taxes, and the execution is null and void. "The real property upon which said tax execution was levied as aforesaid is used for the purpose of religious worship and is used in maintaining and operating said church, and . . . the income derived therefrom is used exclusively for religious purposes according to the exact text and tenor of the charter of said corporation . . . , and the primary purpose of such real estate is not that of securing an income thereon or therefrom, but the primary purpose of said real estate and the improvements thereon is for the purpose of providing a meeting place and quarters for members of the various other branches and affiliates of the Church of God of the Union Assembly," whose members meet periodically several times each year in Dalton, Georgia. The corporation is exempt from taxation in any form by virtue of art. VII, sec. I, par. IV of the Constitution of 1945, and by virtue of Code 92-201, as amended (Ga. L. 1946, p. 12; Ga. L. 1947, p. 1183). Unless the defendants are restrained and enjoined from collecting, or attempting to collect, the tax execution, the property of the corporation will be subjected to sale contrary to law. The execution has been recorded on the general execution docket, and is a lien upon all of the property of the corporation, and is a cloud upon its title. Its property which is located in Dalton, Georgia, and upon which the taxes were assessed, is used exclusively for religious purposes, and the primary purpose of this real estate is to provide a place of meeting and assembly for the members of the church.
The prayers were for process; that the defendants be temporarily and permanently enjoined from doing any act to collect the tax execution, and from selling or otherwise disposing of its property; that the execution be declared null and void, and of no effect, and be canceled of record; and for other relief.
The defendants' general demurrers to the amended petition were sustained. The exception is to that judgment.
Equity will enjoin a sale of property for the collection of an unauthorized tax at the instance of any taxpayer who is not estopped. Code 92-6807; Burkhart v. City of Fitzgerald, 137 Ga. 366 (73 S. E. 583); Fulton Trading Co. v. Baggett, 161 Ga. 669 (131 S. E. 358); Carreker v. Green & Milam Inc., 183 Ga. 864 (189 S. E. 836).
It is the rule that all grants of exemption from taxation must be strictly construed in favor of the State, and that nothing passes by implication, but this rule must not be pushed to unreasonableness. Rayle Electric Membership Corp. v. Cook, 195 Ga. 734
(25 S. E. 2d 574). An exemption from taxation will not be held to be conferred unless the terms under which it is granted clearly and distinctly show that such was the intention of the legislature. Cherokee Brick & Tile Co. v. Redwine, 209 Ga. 691
, 693 (75 S. E. 2d 550). In determining whether or not the exemption claimed has in fact been granted, the words in the constitutional exemption are to be given their ordinary meaning. Epping v. City of Columbus, 117 Ga. 263 (3)
(43 S. E. 803).
Under the provisions of Art. VII, Sec. II, Par. II of the Constitution of 1877 (Code 2-5002), the only tax exemption to churches authorized was "places of religious worship or burial." In 1946 the General Assembly, by an act approved January 31, 1946, exempted the property described in Art. VII, Sec. I, Par. IV (Code, Ann., 2-5404) of the Constitution of 1945, in the exact language of the constitutional authority to exempt from taxation. Under this 1946 act (Ga. L. 1946, p. 12), "places of religious worship or burial" and "all intangible personal property owned by or irrevocably held in trust for the exclusive benefit of, religious, educational and charitable institutions" were exempted, provided that none of the property exempted should be distributed to shareholders, and that the income should be used "exclusively for religious, educational and charitable purposes," and provided the exemption should not apply to real estate "used for the primary purpose of securing an income thereon."
The Minutes of the Constitutional Commission of 1945 reveal that the commission declined at that time to include an exemption on property owned by religious groups used only for single-family residences. See Records of Constitutional Commission, vol. 1, pp. 395, 396. In 1953 the General Assembly by resolution proposed an amendment to the Constitution of 1945 (Art. VII, Sec. I, Par. IV; Code, Ann., 2-5404), by inserting in subparagraph one, after the words, "The General Assembly may, by law, exempt from taxation all public property; places of religious worship or burial," the words, "and all property owned by religious groups used only for residential purposes and from which no income is derived." (Ga. L. 1953, Nov.-Dec. Sess., p. 70). The proposed amendment was submitted to the voters and approved in the General Election of 1954. In 1955 the General Assembly passed an act (Ga. L. 1955, p. 262) consistent with the amendment, and otherwise re-enacting the exemption provisions contained in the act of 1946. The language added by the 1955 act, "all property owned by religious groups used only for single family residences and from which no income is derived," exempted the residences of a religious denomination or society occupied by a pastor, preacher, or other person occupying such relation to the religious group, from ad valorem taxation. The constitutional amendment of 1953, and the statute of 1955, do not limit or restrict the exemptions previously enacted pursuant to Art. VII, Sec. I, Par. IV of the Constitution of 1945.
In the present case it is contended by the city that the language, "places of religious worship or burial, and all property owned by religious groups used only for single-family residences and from which no income is derived," is exhaustive in description of property belonging to churches exempt from taxation; and, "if the property against which taxes have been assessed is productive of income, whether that be the primary or secondary purpose of the ownership of the property, that it is not entitled to be exempted from taxation."
Counsel for the parties have not cited any decision by this court in point on its facts with the present case. In principle, however, the decision here is controlled by the ruling in Elder v. Henrietta Egleston Hospital, 205 Ga. 489 (53 S. E. 2d 751). In the Elder case it was said that, prior to the adoption of the Constitution of 1945, the decisions of this court based on the constitutional exemptions of 1877 were controlling, and the property of an institution, though one of public charity, when used for corporate profit or income, was taxable. It was held in the Elder case that the income of the hospital from all sources was used exclusively for the maintenance, operation, and furtherance of the charitable purposes of the hospital, and that the petition, under the Constitution of 1945, and the act of 1946, stated a cause of action for relief from ad valorem taxation.
The exemptions applying to a charitable institution under Art. VII, Sec. I, Par. IV of the Constitution of 1945, and the acts of 1946 (Ga. L. 1946, p. 12) and 1955 (Ga. L. 1955, p. 262), placed religious, educational, and charitable institutions on the same basis with reference to income, in that any income from such property must be "used exclusively for religious, educational and charitable purposes, or for either one or more of such purposes and for the purpose of maintaining and operating such institution."
In the present case, it is alleged that no dividends, income, or profits have been, or will be, distributable for the purpose of profit or personal gain, that the property upon which the execution has been levied is a place of religious worship, is used in maintaining and operating a church, that the income derived therefrom is used exclusively for religious purposes, and that the primary purpose of such real estate is not that of securing an income thereon, but the primary purpose is that of providing a meeting place and quarters for members of affiliates of the Church of God of the Union Assembly. The allegations of the petition as amended placed the plaintiff squarely within the constitutional and statutory exemptions. The petition alleged a cause of action for the relief prayed, and it was error to dismiss it on general demurrer.