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lish rule, most of the courts have taken a different view, and have held that the mere knowledge of the seller of goods or services, or of the vendor or lessor of property that the buyer intends an illegal use of them is no defense to an action for the price or for rent.' ** * Here the contract of lease was complete when the parties agreed upon the price to be paid, the time the premises were to be occupied, and when possession thereof was taken under the contract. Although the lessor may have had knowledge that the premises would be used for an immoral purpose, unless, coupled with that knowledge, there was an intention on his part when he executed the lease that the premises should be used for such immoral purpose, the lease contract would not be void. *** The lessor is not the keeper of the conscience of the lessee, and has no police control over him in such matters, and mere knowledge on the lessor's part that the lessee is going to use the premises for an unlawful purpose does not make the lessor a participant in that purpose; for mere knowledge that the lessee may or will use the premises for an unlawful purpose is not, of itself, sufficient to show that the lessor intended that they must or shall be

so used."

It is argued earnestly that the defendants in error fully intended that plaintiff in error should violate the law by keeping his saloon open on Sunday, and that therefore the contract was void. In a somewhat recent decision this court said:

"It is urged that this contract is void chiefly for the reason that it furnished an incentive to appellant to shorten the life of Mrs. McVicker by neglect or improper treatment or by the commission of the crime of murder. Each argument made by appellees in support of this contention involves a breach of the contract and is not founded on the performance of it." Zeigler v. Illinois Trust & Savings Bank, 245 Ill. 180, 91 N. E. 1041, 28 L. R. A. (N. S.) 1112, 19 Ann. Cas. 127.

The reasoning found in this quotation fully answers the argument of counsel for plaintiff in error here as to defendants in error encouraging plaintiff in error to violate the contract. So far as this record shows, the only trace of illegality is furnished, not in the making of his lease plaintiff in error contracted to do nothing illegal-but in his conduct in carrying on the business engaged

In Almy v. Greene, 13 R. I. 350, the court in by him in the demised premises in violasaid (page 352):

"The decision of the court is that knowledge on the part of the lessor, before and at the time of the execution of the lease, that the lessee intended to use the demised premises in violation of [the statute], was not sufficient to render the lease void in the absence of any other participation in, or furtherance of, the illegal purpose by

the lessor."

tion of said Sunday closing law. In his affidavit filed in the lower court in support of his position he does not state that he informed defendants in error that he would necessarily operate on Sunday, but that he would do so "if permitted by the police auIllinois Trust & Savings Bank, supra, on thorities." This court said in Zeigler v. page 193 of 245 Ill., on page 1046 of 91 N. F., 28 L. R. A. (N. S.) 1112, 19 Ann. Cas. 127:

"The laws and the public policy of the state permit and require the utmost freedom of contracting between competent parties, and it is only when a contract expressly contravenes the law or the known public policy of the state that courts will hold it void."

"Mere knowledge on the part of A., in the case supposed, that B. is purchasing the liquors for the purpose of selling them in territory where the sale of such liquors is prohibited by law, coupled with the sale of them by B. in such territory, will not suffice to render the transaction between A. and B. illegal. In addition, there must be some participation by A. in the illegal purpose and act of B.; and while knowledge of such purpose, coupled with its execution on the In considering a somewhat similar quespart of B., may afford a basis for inference of tion, the Court of Appeals of New York held: participation on A.'s part-i. e., would be evi"A lease, valid, as this was, upon its face, dence tending to show such participation-such is not to be condemned as unlawful, and thereknowledge of the proposed illegal act is not, of fore an unenforceable instrument, because the itself, that participation in it which will avoid B.'s liability to pay A. for the liquors." Bluth- to be used might, under certain circumstances, B.'s liability to pay A. for the liquors." Bluth- purpose for which the demised premises were enthal v. McWhorter, supra. be within the prohibition of a statute. When the operation of the prohibition depends upon subject, then the obligation of the parties rethe proof, and that is inconclusive upon the mains unaffected. The presumption of a lawful intention must always prevail, and the burden of overthrowing it is not met by him who asserts it by proof, which is quite consistent with a perfectly lawful purpose, however demonstrating that if effectuated in a certain way it would contravene the law." Shedlinsky v. Budweiser Brewing Co., 163 N. Y. 437, 57 N. E. G20.

In Lurton v. Gilliam, 1 Scam. 577, 579, 33 Am. Dec. 430, there was an action to recover for cloth sold based on an election bet. The court said:

"It does not appear that the defendants in error were in any way parties to the bet, or encouraged it; and we do not perceive that their contract for the sale and delivery of the cloth was tainted with a participation in the original agreement between the parties. Their mere knowledge of it could not certainly connect them with it; and, having parted with their property under the arrangement, common honesty surely requires that the party at whose instance it was delivered, conformably to his agreement, should be held answerable for the value of the merchandise delivered."

here. This lease, in our judgment, was not This reasoning applies to the situation shown to have been entered into with the intention of using the premises for an unlawful purpose.

(125 N.E.)

In Kearney v. Webb, 278 Ill. 17, 23, 115 a proper way, the authority of defendants N. E. 844, this court held that a plaintiff's in error's agent to make the changes or enaction could not be defeated by a claim of ter into any agreement not contained in the illegality injected into the case by a defend- written lease. Furthermore, the offered tesant. In that case money had been delivered timony tended to vary or add to the plain to three persons in pursuance of an illegal terms of the lease between the parties. contract, under directions to use it for gaming purposes, and it was held that the owner might recover in an action for money had and received if he repudiated the contract before the money was paid over according to the illegal agreement; the court saying:

"They proved their title to the money without relying on the illegal contract in question; i. e., they made out completely under their declaration, without even a reference to the illegal contract, their prima facie case. They used two of their said employés as their witnesses, and there is no claim to the money in question by any one except the plaintiffs in error. It was the defendant in error himself who introduced the proof of the illegal contract and relied thereon for his defense. He cannot be permitted to rely on the illegal contract for a defense."

Under the authorities cited, we cannot infer from the clause in the lease here in dis

"If the language [of an instrument] is plain and unambiguous, proof aliunde cannot be heard to contradict or vary its meaning or give it a meaning inconsistent with the language used in the instrument." Chicago Auditorium Ass'n v. Fine Arts Building, 244 Ill. 532, 91 N. E. 665, 18 Ann. Cas. 253.

The instrument itself constitutes the contract of the parties. Gaston v. Gordon, 208 Mass. 265, 94 N. E. 307.

While it is undoubtedly true that a contract made for the purpose of violating a State statute must be held void and unenforceable, there is no provision in this lease which showed that a state statute was intended to be violated. On the contrary, the lease specifically provides that the demised premises shall be conducted in compliance with the state and local laws.

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.

(290 Ill. 108) CONGREGATIONAL SUNDAY SCHOOL & PUBLISHING SOC. v. BOARD OF REVIEW. (No. 12584.)

pute that defendants in error licensed plaintiff in error to violate the Sunday closing law. No decision cited by counsel for plaintiff in error, in our judgment, goes to the length of holding that a covenant of this nature is susceptible of being inferred as a license to violate the law. We do not so construe this clause. It is not a provision for the violation of the law, but states a condition which gave plaintiff in error the option of terminating the lease. If plaintiff in error desired to avail himself of this option, he could have done so by giving notice as pro- 1. TAXATION 61-ALL PROPERTY TAXABLE vided by the lease. Having failed to do so, he cannot now take advantage of this defense. The public good, and not the defendant's advantage, is the controlling consideration. Hill v. Spear, 50 N. H. 253, 9 Am. Rep. 205. As was said by Lord Mansfield in Holman v. Johnson, Cowper, 341:

(Supreme Court of Illinois. Oct. 27, 1919. Rehearing Denied Dec. 4, 1919.)

UNLESS EXEMPTED.

All property in the state of Illinois is subject to taxation unless it is exempted.

2. TAXATION 196-CHARITABLE ORGANIZA

TIONS NOT EXEMPTED IN CONSTITUTION.

defend-sembly

Const. art. 9, § 3, does not exempt from taxation such property as may be used exclusively for school, religious, or charitable pur"The objection that a contract is immoral or illegal as between the plaintiff and defend-poses, but merely provides that the General Asant sounds at all times very ill in the mouth of sembly may do so by general law. the defendant. It is not for his sake, however, 3. TAXATION 241(1) - WHAT CONSTITUTES that the objection is ever allowed, but it is founded on general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff."

--

"CHARITY" WITHIN EXEMPTION STATUTE.

"Charity" as used in Revenue Act, § 2, in relation to exemptions from taxation of property used for religious purposes, public charity, etc., is not confined to mere almsgiving or the relief of poverty and distress, but has a wider significance, which embraces the improvement and promotion of the happiness of man, a gift to the general public, extending to the rich as well as to the poor, being a charity.

[2] It is further insisted by counsel for plaintiff in error that the trial court erred in refusing to permit evidence offered that at and prior to the execution of the lease conversations were had between the plaintiff [Ed. Notc.-For other definitions, see Words in error and the agent of defendants in er- and Phrases, First and Second Series, Charity.] ror with reference to the lease being made 4. TAXATION 241(1) - DISTINCTIVE FEAwith the understanding that the Sunday TURES OF "CHARITABLE ORGANIZATION." closing law was to be violated. We do not The distinctive features of a charitable orthink that plaintiff in error established, in ganization, the property of which is exempted

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

from taxation, are that it has no capital stock Appeal by the Congregational Sunday and no provision for making dividends and School & Publishing Society from a decision profits, but derives its funds mainly from public of the Board of Review of Cook County, denyand private charity, and holds them in trusting its personal property exemption from taxfor the objects and purposes expressed in its

charter, the test being whether it exists to ation. Certified by the auditor of public accarry out a purpose recognized in law as char-counts for review. Decision set aside. itable or whether it is maintained for gain, profit, or private advantage.

5. TAXATION

Jones, Addington, Ames & Seibold, of Chicago (Walter Hamilton, of Chicago, of coun

241(1)-CHARITABLE ORGANI- sel), for appellant.

ZATIONS NOT LOSING RIGHT TO EXEMPTIONS.

An institution does not lose its charitable character and consequent exemption from taxation by reason of the fact that those recipients of its benefit who are able to pay are required to do so, where no profit is made by the institution and the amounts so received are applied in furthering its charitable purposes, and those benefits are refused to none on account of inability to pay therefor.

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A fundamental ground upon which all exemptions from taxation in favor of charitable institutions are based is the benefit conferred upon the public by them and the consequent relief to some extent of the burden upon the state to care for and advance the interests of its citizens.

7. TAXATION 241(1) — NATURE OF WORK DONE BY CHARITABLE ORGANIZATION DETER

Edward J. Brundage, Atty. Gen., and Clarence N. Boord, of Springfield, for appellee.

THOMPSON, J. This is an appeal by the Congregational Sunday School & Publishing Society from a decision of the board of review of Cook county denying its personal property exemption from taxation. This property consisted of religious and moral books and Sunday school supplies kept in its store at 19 West Jackson boulevard, Chicago. Its property was assessed at $20,000. The auditor of public accounts has certified the record to this court for review.

Appellant was formed by the consolidation of two private corporations, and is organized under certain special acts of the state of Massachusetts. Its main office is located in Boston, and the Chicago office is a branch established for handling its business in that territory west of the state of Ohio. The corporate purposes of appellant, as authorized It is not the use to be made of the profits, by the statutes of the state of Massachusetts, but the nature of the business done, that is to are to establish and aid Sunday schools, supbe considered in deciding the question of lia-ply Sunday school libraries, and otherwise bility of property of charitable institutions to taxation.

MINES RIGHT TO EXEMPTIONS.

promote Sunday school education; to produce, publish, sell, and circulate moral and religious

8. TAXATION 244-PROPERTY OF FOREIGN tracts and books; and to publish, purchase, RELIGIOUS INSTITUTIONS EXEMPT. sell, circulate, and distribute, in such manner Property of a Massachusetts organization in as it deems advisable, any and all publications, a branch office or store in Chicago, consisting of books, tracts, papers, or periodicals calculated religious and moral books and Sunday school to promote good morals, pure Christianity, the supplies, is exempt from taxation, under Revenue Act, § 2, where the purpose of the organi-spread and extension of the gospel of Jesus zation is to establish and aid Sunday schools, Christ, and to take, hold, and disburse any supply Sunday school libraries, and otherwise and all charitable funds contributed to it for promote Sunday school education, etc.; and where the publications sold are written by writers employed by the organization itself and any profits made are applied solely to the establishing and aiding of Sunday schools, etc., and persons obtaining publications are not required to pay for the same unless able, the the corporation to traffic in books for the purprime object of the organization being the dis-pose of profit. tribution of the publications.

9. TAXATION 204(2)-STATUTES GRANTING

EXEMPTIONS STRICTLY CONSTRUEd.

Statutes for the exemption of property from taxation are to be strictly construed against the exemption and in favor of the state and taxation, but charities have always been favored in the law because they relieve the burdens of government; and the property of an organization which comes fairly within the terms of the exemptions provided by Revenue Act, § 2, will be exempted from taxation.

Dunn, C. J., dissenting.

the purposes aforesaid. The charter of the Congregational Sabbath School & Publishing Society, one of the corporations merged in appellant, provided that nothing in the act creating it was to be construed to authorize

Section 46 of our Corporation Act (Hurd's Stat. 1917, p. 707) authorizes religious corporations to publish, print, circulate, sell, or give away such religious, Sabbath school, and missionary tracts, periodicals, or books as they may deem necessary to the promotion of religion and morality. We have held that a foreign corporation legally doing business in this state has all the rights and privileges that a similar domestic corporation has. Eaton v. Home Missionary Society, 264 Ill. 88, 105 N. E. 746.

It is conceded that the business of appellant

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(125 N.E.)

per cent. of the price, in accordance with its ability to pay. Such profits as do come from the business of selling books and periodicals are devoted to the maintenance of the missionary department.

[1, 2] In determining whether appellant is entitled to have its claim for exemption granted it will be necessary to consider the revenue laws of this state. All property in this state is subject to taxation unless it is exempted. Section 3 of article 9 of the Constitution does not exempt from taxation such property as may be used exclusively for school, religious, or charitable purposes, but merely provides that the General Assembly may by general law exempt from taxation the property of such institutions. Section 2 of the Revenue Act (Hurd's Rev. St. 1917, c. 120) provides that

"All property used exclusively for religious purposes, or used exclusively for school and religious purposes * * and not leased or otherwise used with a view to profit," and "all property of institutions of public charity, all property of beneficent and charitable organizations, whether incorporated in this or in any other State of the United States *** when such property is actually and exclusively used for such charitable or beneficent purposes, and not leased or otherwise used with a view to profit," shall be exempt from taxation.

is fourfold: It maintains a Sunday school with these supplies at a cost of 75, 50 or 25 missionary department, which organizes Sunday schools and maintains missionaries, who visit and assist in the work of these schools; it publishes and circulates a religious paper known as The Congregationalist and Advance, and four other smaller religious periodicals; it publishes and sells religious and moral books; and it composes and publishes Sunday school periodicals, quarterlies, and lessonhelps, and sells these supplies to Sunday schools of all denominations. Appellant employs authors of note to write its books, and, so far as the record shows, it sells at its Chicago office only such books as it writes and publishes. The aim of the corporation is to publish and distribute these books for the purpose of disseminating the views of its writers on religion and morality. A sufficient charge is made to cover the expenses of this work. All the printing and publishing is done in Boston. The Chicago branch is used as western headquarters for the work of the society, and it maintains a store, where its religious and moral books and Sunday school supplies are sold to whomsoever desires to buy. The funds of appellant are raised by donations from Congregational churches, Sunday schools, Christian Endeavor societies, women's home missionary organizations, and individuals, and by incomes from certain legacies, trust funds and investments. All of these funds are handled in Boston, and none of the property of appellant, except the books and Sunday school supplies, is kept in Chicago. All of the income of appellant is devoted to the corporate purposes heretofore outlined. No stock is issued, no dividends are declared, and no profit accrues to any individual. Appellant contends that these corporate purposes and acts are clearly religious, beneficent, and charitable, and that its property is therefore exempt from taxation. The only tabulated statement of receipts and disbursements and of assets and liabilities that appears in the record is one for the year 1908-1909. That year its business showed a profit to the Chicago office of $8,440.28. It appears that some years the business is operated at a profit and some years it is operated at a loss. Appellant's business at, Chicago for the year 1917 amounted to approximately $200,000, of which $140,000 was from This definition was approved in Hoeffer v. the sale of Sunday school supplies and $60,000 Clogan, 171 Ill. 462, 49 N. E. 527, 40 L. R. A. from the sale of religious and moral books. 730, 63 Am. St. Rep. 241; In re Estate of It is, of course, impossible to determine just Graves, 242 Ill. 23, 89 N. E. 672, 24 L. R. A. what the expenses will be each year, but it (N. S.) 283, 134 Am. St. Rep. 302, 17 Ann. Cas. appears that the prices charged are such that 137; and Skinner v. Northern Trust Co., 288 in carrying the business over a period of years Ill. 229, 123 N. E. 289. The editors of the there will be practically no profits, When a When a American & English Encyclopedia of Law (5 Sunday school is in such financial condition Am. & Eng. Ency. of Law [2d Ed.] 894), and that it is unable to purchase its supplies the of Corpus Juris (11 Corpus Juris, 299) have society will furnish the supplies gratis. accepted this definition as comprehensive and the missionaries find a Sunday school in need satisfactory. of these supplies which is able to pay only a portion of the list price, then it is furnished

If

This society claims exemption under both of these clauses, and, so far as this particular case is concerned, they are so closely associated that we will discuss them together.

Before proceeding further it is well to determine what is meant by the term "beneficent and charitable organizations." The definition of a charity which we adopted in Crerar v. Williams, 145 Ill. 625, 34 N. E. 467, 21 L. R. A. 454, first laid down by Mr. Justice Gray in Jackson v. Phillips, 14 Allen (Mass.) 539, is:

"A charity, in the legal sense, may be more fully defined as a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds and hearts under the influence of educaestablish themselves in life, tion or religion, * * * by assisting them to * * or otherwise lessening the burdens of government."

[3-6] Charity, in the legal sense, is not confined to mere almsgiving or the relief of pover

Nor does the fact that

profits from some business not charitable. If such contributor devoted the whole of his profits from the sale of dry goods, groceries, or books to promote this particular charity, that fact would not make the source of such profit a purely public charity. And if, as the master has found, the society was compelled to put a part of its operations on a basis that was self-supporting by starting a book store to sell books only of a high moral character, and standard publications, that is trade. That the entire profits of this branch of the business are devoted to the purposes of the charity no more changes its business nature than if, instead of a book store, the society had established and car

ty and distress, but has a wider signification,, the enterprise. which embraces the improvement and promo- the profits gathered on the counter of the book tion of the happiness of man. A charity is a store are devoted to the primary object of the gift to the general public use which extends to charity, which is purely public, in any degree affect the character of the trading or commerthe rich as well as to the poor. The test of a cial enterprise. Every dollar the society excharity and the test of a charitable organiza-pends is some charitable contributor's gains or tion are in law the same. The principal and distinctive features of a charitable organization are that it has no capital stock and no provision for making dividends or profits, but derives its funds mainly from public and private charity, and holds them in trust for the objects and purposes expressed in its charter. In other words, the test whether an enterprise is charitable is whether it exists to carry out a purpose recognized in law as charitable, or whether it is maintained for gain, profit, or private advantage. An institution does not lose its charitable character, and consequent exemption from taxation, by reason of the fact that those recipients of its benefits who are able to pay are required to do so, where In Alton Bay Camp-Meeting Ass'n v. Town no profit is made by the institution and the of Alton, 69 N. H. 311, 45 Atl. 95, the charter amounts so received are applied in furthering of the association provided that its real and its charitable purposes, and those benefits are personal property, within certain limits, used refused to none on account of inability to pay for religious, moral, charitable, and benevotherefor. The fundamental ground upon lent purposes should be exempt from taxawhich all exemptions in favor of charitable tion. Among its affairs it conducted a grocery institutions are based is the benefit conferred store, with a stock valued at about $500, upon the public by them, and a consequent relief, to some extent, of the burden upon the state to care for and advance the interests of its citizens.

The main case relied upon by appellee as tending to hold that appellant is not a charity, and therefore not entitled to exemption from taxation, is American Sunday School Union v. City of Philadelphia, 161 Pa. 307, 29 Atl. 26, 23 L. R. A. 695. The purpose of the union was the erection and maintenance of Sunday schools and the publication and circulation of moral and religious periodicals and books. It had no capital stock and paid no dividends. It owned and occupied a building where books, published not only by itself but also by other concerns, were sold. Standard works, such as Webster's Dictionary, were included in the books sold by the union. The court held that while the union was a benevolent and charitable institution, still the building occupied by it was liable to taxation. The court said:

"Conceding the fact that the society is an 'institution of purely public charity,' and as such exempt from taxation, it seems to us, such an institution may, as an aid to the accomplishment of its primary object, carry on a business, or use part of its property for a business purpose which renders such business or such part of its property taxable. The first floor of the society's Chestnut street building was used for purely business purposes, and its business was conducted in that location for the avowed purpose of profit. *** While they confine their trade to 'publications of a high

ried on a shoe store."

which it claimed to be exempt from taxation, but the court there held that the purposes of a religious institution were not advanced directly by operating the grocery store, and therefore it was subject to taxation.

In Sisters of Peace v. Westervelt, 64 N. J. Law, 510, 45 Atl. 788, exemption from taxation was claimed on a tract of land upon which a chapel and a three-story frame building used for a summer boarding house had been erected. The annual income from the boarding house amounted to over $5.000, which money was. afterwards used for charitable purposes. The court there held that the chapel and ground upon which it stood were exempt, but that the operation of the boarding house did not directly further the purposes for which the society was organized, and therefore the building and tract were not exempt. The court said:

"The fact that the profits of a commercial enterprise are either in whole or in part devoted to charity certainly does not operate to render the business itself a charity, nor is the property in which it is carried on, by reason of such appropriations of profits, used for charitable purposes."

In Fitterer v. Crawford, 157 Mo. 51, 57 S. W. 532, 50 L. R. A. 191, a Masonic lodge which owned a building of which the first and second floors were rented and the third floor was used as a lodge room, asked that the building be exempt from taxation on the ground that the rents so received were used moral character and such standard works as for the benevolent purposes of the lodge, and Webster's Dictionary and like works,' this in that these floors were not rented for profit. no way negatives the business character of The court there held that the use of the

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