Plaintiff Town of Auburn brought this petition on May 15, 1981 to foreclose a tax lien for non-payment of taxes on property with buildings thereon at 40 Highland Street in Auburn alleging title thereto in the name of J. Waylon Lee and Paul Hagerstrom, Trustees of the Church of God. [Note 1]
Defendants answered that the Church of God is an incorporated charitable religious organization under the provisions of Chapter 180 of the Massachusetts General Laws and therefore exempt from paying a real estate property tax and in addition is entitled to a reduction in its tax title accounts for Fiscal 1977-1982.
A trial was held on June 28, 1982. A stenographer was sworn to record and transcribe the testimony given in the case. Five witnesses testified and one exhibit was introduced and is incorporated herein for the purpose of any appeal.
Based on all the evidence the Court finds the following facts:
1. The Church of God with its office at Keith at 25th N.W., Cleveland, Tennessee, has been recognized by the Internal Revenue Service as a tax exempt organization since 1972 (Exhibit 1). The Church has approximately 1,200,000 members in 5,000 churches nationwide. The Church of God of Worcester, of which the Defendant Reverend J. Waylon Lee has been Pastor since 1968, has approximately 55 members and has been included as a subordinate entitled to a group exemption by the Internal Revenue Service. (Exhibit 1). The Church of God of Worcester is reputedly a Chapter 180 corporation with a building located at 23 Stanton Street, Worcester from 1960 to October of 1978.
2. This Worcester Church building was located atop a steep hill with no off-street parking available, making access to it extremely difficult during the winter. This caused the Church to seek another site to provide easier access for its parishoners. From 1968 - 1975 the Church looked for a suitable property.
3. By deed dated August 13, 1975 and recorded in Book 5777, Page 8 in the Worcester County Registry of Deeds, Defendants acquired the land with buildings thereon here in question, located at 40 Highland Street, Auburn, Massachusetts. The building on the lot had been used as a nursery school for approximately 20 years prior to the Defendants' acquisition.
4. The defendant Church repaired the Auburn property, putting on a new roof, fencing the yard and filling in an old swimming pool. The Church then proceeded to open the "Humpty Dumpty" day-care center in the building. This day-care center accepts children of all faiths but emphasizes its own religious philosophy. Presently, there are between 25 to 30 children enrolled in the center, of which 20 to 25 are children of parishoners. Church members who work in the day-care center testified that this is accomplished through telling Bible stories, reciting prayers and through setting a good example by exhibiting religious qualities such as sharing, loving, etc. Some of the teachers "witness" with parents who come in to pick up their children.
5. The basement and first floor of the building are used primarily for the day-care center. The first floor also has a desk which is used by the Church secretary, a small office work area and a large living room. The top floor, which is not used by the day-care center, has an office, a storage room and a guest room where guests who lead revival meetings can stay.
6. In addition to being a day-care center, the building is put to a variety of other Church uses. Church suppers are regularly held there, as well as Bible quizzes in the evenings for teenage Church members, and Bible study for adults. A midweek religious service is held there weekly. From 1975 through 1978 all Sunday services conducted from January through April were held at the Auburn property as the inclement weather made the Worcester Church building at 23 Stanton Street inaccessible. This Worcester Church building was sold in October of 1978 so that thereafter all religious services were conducted in the Auburn property until in 1980 the Defendants purchased a new Church building located at 370 Pleasant Street, Worcester. For the last two years this new Pleasant Street building has been used for the majority of religious services although the Auburn property is still used for the day-care facility, Bible study, Bible quizzing, and some mid-week services.
7. The Church receives approximately $5,000.00 a year from its members and through fund raising. The day-care center provides the rest of the income necessary to run the Church. The average income for the Church from both of these sources is approximately $13,000.00 per annum.
8. On September 15, 1980 and recorded in Book 7058, Page 310, Worcester County Registry of Deeds, the Town of Auburn took the defendant Church's property at 40 Highland Street, Auburn, this being all the property owned by the Defendants in Auburn, for non-payment of taxes and now seeks to foreclose taxpayer's right of redemption.
By way of defense the defendant Church asserts that it is tax exempt pursuant to General Laws chapter 59, Sec. 5, eleventh as a "house of religious worship owned by or held in Trust for the use of a religious organization." For this proposition Defendants cite the case of Town of Norwood v. Norwood Civic Association, 340 Mass. 518 (1960). In Norwood the Court stated:
"Where a taxpayer owns in the town no real estate subject to taxation, the tax is wholly void if assessed only upon exempt property. The remedy by abatement is available. (Citation) Such a void tax, however, may also be recovered by an action under G. L. c. 60, §98, provided, of course, that the strict requirements of that section are satisfied. Citation.... We think that essentially that remedy may be asserted as a defence (sic) ... in foreclosure proceedings under c.60, §65, in order to avoid circuity of action."
In light of Norwood and the judgment in the case of The City of Boston v. Church of God, Land Court Case No. 58261, the Court rules that this is a valid defense in a foreclosure proceeding. Therefore, the only real question before the Court is whether the use of the Church property in Auburn qualifies as a "house of religious worship owned by or held in Trusf for the use of a religious organization."
The Court answers this in the affirmative.
G. L. c. 59, §5, paragraph 11 exempts from taxation:
"Houses of religious worship owned by, or held in trust for the use of, any religious organization, but such exemption shall not, exempt as herein provided, extend to any portion of any such house of religious worship appropriated for purposes other than religious worship or instruction. The occasional or incidental use of such property by an organization exempt from taxation ... shall not be deemed to be an appropriation for purposes other than religious worship or instruction."
The use of the property as a day-care facility is incidental to the Church's primary use, religious worship and instruction. Although the term "incidental" is not defined by statute there are cases which illuminate this principle. In the cases of Mount Hermon Boys' School v. Inhabitants of Gill, 145 Mass. 139 (1887) and South Lancaster Academy v. Inhabitants of Lancaster, 242 Mass. 553 (1922) the Court held that where a school produced and sold vegetables and milk from a farm it maintained this activity did not prevent its tax exempt status as these sales were merely incidental to a use for purposes of a school and thus did not prevent exemption. In the case of Children's Hospital Medical Center v. Board of Assessors of Boston, 353 Mass. 35 (1967) the Court held that a laundry owned by a hospital was exempt from taxation where it served a charitable hospital organization.
In light of these cases and the facts the Court has found it is clear that the dominant purpose of the Auburn property owned by the Church is religious worship and that the running of the day-care center is merely incidental thereto. The fact that the Church charges for its service does not destroy the exemption. Thornton v. Franklin Square House, 200 Mass. 465 , (1909), M.I.T. Student House, Inc. v. Board of Assessors of Boston, 350 Mass. 539 (1966).
There was ample testimony that the Church property was used for a variety of religious activity: worship services, Bible quizzes, Bible study, etc. The day-care center itself also provides some religious instruction in the form of prayer and Bible stories.
The Court finds and rules that the use of the property as a day-care center does not destroy the exemption, it being an incidental although an important use.
Therefore, real estate taxes assessed on the said property at 40 Highland Street to the Defendants from 1977 through 1982 and the tax taking made pursuant thereto, recorded in Worcester County Registry of Deeds in Book 7058, Page 310, are void as the property is used in accordance with M.G.L.c. 59, §5, Paragraph 11.
The Court orders that the petition be dismissed.
[Note 1] The Land Court citation, court papers and title report state that title is also in the name of Charles A. Thompson, a third trustee of the Church of God.