Opinion
Nos. 29504 and 29505
Decided April 5, 1944.
Taxation — Application for exemption raises question for only one year — Section 5616, General Code — Municipal airport a public utility — Sections 3677 and 3989, General Code — Section 4, Article XVIII, Constitution — Public property exempt from taxation, when — Section 5351, General Code — Section 2, Article Xll, Constitution — Real property constituting part of municipal airport, public property, when — Real estate in municipal airport devoted to public use, when — Public character of use not altered by receipt of incidental revenue — Portion of municipal airport realty may be taxed and remainder exempt — Privately owned building located on municipal airport and leased to municipality — Taxable in name of owner although municipality agreed to pay taxes — Application for exemption a pending proceeding — Section 26, General Code — Requirement for certificate that taxes and assessments paid, inapplicable, when — section 5570-1, General Code.
1. By virtue of Section 5616, General Code, an application for exemption of property from taxation raises the question only for the year in which the application is filed. ( Pfeiffer v. Jenkins, 141 Ohio St. 66, approved and followed.)
2. Under the power conferred by Section 4, Article XVIII of the Constitution, and Sections 3677 and 3939, General Code, a municipal corporation may purchase or lease and operate a landing field and place improvements thereon so as to make a fully equipped aircraft and transportation terminal; and, as such, it is a public utility.
3. Section 5351, General Code, construed in the light of Section 2, Article XII of the Constitution, exempts from taxation public property used exclusively for a public purpose.
4. In general the real property of a municipal corporation, constituting part of its wholly owned and operated public airport, is public property within the meaning of the Constitution and statute. 5. All the real estate necessary and incidental to the operation of such an airport and used therein is devoted to a public use.
6. The fact that revenue is incidentally derived from public property does not in and of itself alter the public character of the use.
7. Some of the real property in a municipally owned and operated public airport unit may be taxable and the remainder exempt from taxation. The term "exclusively," as used in Section 2, Article XII of the Constitution, and read into Section 5351, General Code, by interpretation, applies to the use of particular parts of the property and not to the unit as a whole.
8. Where a person owns a building, located on land belonging to a municipal corporation and constituting part of a municipally owned and operated airport, and leases such building merely for a term of years to the municipal corporation to be used exclusively as a part of such airport at a substantial fixed rental, the building is taxable and listable on the tax duplicate in the name of such person as owner and the legal status is not changed by a clause in the agreement of lease that the municipal corporation shall pay the taxes on such building.
9. The filing of an application for the exemption of property from taxation institutes a pending proceeding within the meaning of Section 26, General Code; and Section 5570-1, which provides that the Board of Tax Appeals shall not consider such an application, unless a certificate or affidavit executed by the county treasurer is attached certifying that taxes, assessments, penalties and interest levied and assessed against the property sought to be exempted have been paid, does not affect an application for exemption filed prior to the time the latter section became effective.
APPEALS from the Board of Tax Appeals.
These two appeals came to this court from the Board of Tax Appeals and relate to the taxation of the Toledo Municipal Airport located in Wood county, Ohio, about 10 miles from the limits of the city of Toledo which is in the adjoining county of Lucas. The purpose of the proceedings below was to determine whether all the airport property was exempt from taxation, and, if not, the part that was exempt.
The land and buildings which constitute this airport were acquired by the city of Toledo from the Transcontinental Airport of Toledo, Inc., a private corporation, and its receiver on November 26, 1936.
In cause No. 29504 the city of Toledo on or about June 2, 1938, filed an application seeking to have the real estate constituting the airport declared exempt from taxation. The application did not specify the years for which exemption was sought but did set forth that the property was purchased November 26, 1936. This application is known as No. 186 in the files of the Board of Tax Appeals. The cause was heard and submitted on an agreed statement of facts and an "additional stipulation," both in writing.
The agreed statement is as follows:
"1. The Toledo airport is located in Lake township, Wood county, Ohio, and consists of approximately 506.10 acres of land, all of which is outside of and approximately 10 miles distant from the limits of the city of Toledo. A plat of the Toledo airport property is attached hereto, marked 'Exhibit A.'
"2. All of the land comprehended in the lands of the airport was acquired by the city of Toledo from Transcontinental Airport of Toledo, Inc., an Ohio corporation, and its receiver, on November 26th, of 1936. Taxes upon all of the land and buildings were paid by Transcontinental Airport of Toledo, Inc., or its receiver to the year 1937, and no taxes on either land or buildings have been paid since that date. A schedule of the taxes and assessments for the years 1937 to 1940, inclusive, with penalties, is attached hereto, marked 'Exhibit B,' which taxes and penalties are shown by parcels lettered 'A' to 'H' inclusive, as they appear upon the tax duplicate.
"3. Parcels 'B' and 'H' are occupied by buildings, a description of which, with the occupany and use of the same, is as follows:
"Parcel 'B':
"(a) A one-story tile and steel frame hangar (known as the east or Transcontinental hangar) 83.4 x 120 feet; also a one-story office addition size 18 x 120 feet. This building was erected in 1928 by Transcontinental Airport, Inc., and is used and occupied for airplane storage, two offices, repair shop, boiler room and toilets. The storage space is rented by the city to private individuals for storage of airplanes on established daily, weekly or monthly rates. The offices were vacant until 1940 and during 1941 were rented to Metcalf Flying Service and Transcontinental Aviation Company on a monthly cash basis. These companies conduct a training program sponsored by the federal government and the Toledo University. The repair shop is used by all tenants without extra charge. The boiler is for heating the building, and toilets are for the convenience of the public.
"(b) A one-story brick substation, with frame and glass tower erected in the Spring of 1938. The building is used to house transformers, distribution system, electric equipment for the airport and field operations, and has an office at which gasoline sales are recorded, and incoming and outgoing ships registered. Above the office is a flood light for field illumination, with controls for traffic and all other lighting facilities.
"(c) A one-story brick and concrete block hangar, (known as the Curtiss-Wright or west hangar), size 100 x 120 feet; a two-story and part basement office and waiting room addition 22 x 120 feet; a one-story brick and concrete ticket office, size 10 x 41 feet. This building was erected by Curtiss-Wright Flying Service, Inc., pursuant to a lease agreement between Transcontinental Airport of Toledo, Inc., and Curtiss-Wright Flying Service, Inc., dated April 1, 1929, copy of which lease agreement is attached hereto, marked 'Exhibit C.' Said lease was modified by an agreement dated January 1, 1936 between the receiver of Transcontinental Airport, Inc., and Mevon Corporation, the successor in interest of Curtiss-Wright Flying Service, Inc., a copy of which agreement is attached hereto, marked 'Exhibit D'.
"The city acquired the interest of Transcontinental Airport of Toledo, Inc., and of its receiver under said lease agreement as modified at the time of, and as a part of, the acquisition of the airport property, and entered into an agreement with Mevon Corporation, extending the 1936 modification of the 1929 lease to December 31, 1940, copy of which agreement is attached hereto, marked 'Exhibit E'. The title to the land upon which the hangar is located is, and continuously since its acquisition in 1936, has been, in the city of Toledo. The ownership of the west hangar and administration building above described has during the period covered by the taxes in question been in accordance with the provisions of Exhibit C'. Under the provisions of the April 1, 1929 lease (Exhibit C) full title to the west hangar and building would pass to the city in 1949, unless otherwise agreed, and the city, in fact, acquired full title by subsequent agreement, in December of 1941. The building is occupied and used in part for the administration offices of the airport, and waiting room open to the general public; office space leased at a nominal rental to the United States Department of Agriculture and the United States Department of Commerce. Office space is also leased to United Air Lines, Inc., Transcontinental Western Line, Inc., and a class room to Metcalf Flying Service on a monthly or yearly basis. Hangar space is rented to private owners at fixed rates, except space used by local C. A. A. inspectors and director of aeronautics, without charge.
"(d) A two-story frame house occupied by the manager of the airport, having eight rooms and bath, with two-car garage. The manager receives free rent as a part of his compensation. The land used in connection with this residence is approximately one acre.
"Parcels A, C, D, E, F and G have runways and landing fields upon the same, as shown on 'Exhibit A'.
"Parcel 'H':
"A story and a half five-room frame house, with barn and garage. House occupied by service man employed at airport, who receives free rent of the house as a part of compensation. The barn is used to store farm tools used on airport, and miscellaneous equipment. The land used in connection with above mentioned house is approximately one acre.
"4. Parcels D, E, F, G and H, and the westerly parts of A, B and C, except the portions thereof occupied by concrete runways or structures have been sowed down to alfalfa, which has been harvested and sold, and the amounts received from the sale of alfalfa are included in the total receipts for the years 1937, 1938, 1939 and 1940, shown on 'Exhibit F.'
"5. The income from the airport, and expenditures of the city on account of the airport, by years, are attached hereto, marked 'Exhibit F.' A statement reflecting the city's original cost and improvement expenditures at the airport is attached hereto, marked 'Exhibit G.' The bonds and note shown on 'Exhibit G' are general obligations of the city.
"6. The airport is operated by the city of Toledo under civil air rules of the United States Department of Commerce, the statutes of the state of Ohio and the charter and ordinances of the city of Toledo. The airport is open and operated twenty-four hours per day, and private and military aircraft may land and take off without charge therefor, and may be stored in available hangar space and serviced at a reasonable charge. United Air Lines and T. W. A., in accordance with their respective leases, pay a fixed rental for office space and also a charge based on scheduled aircraft landings, but no charge is made for other than scheduled landings. All runways are available for general use. No aircraft is owned and operated by the city of Toledo.
"7. During the years 1938, 1939 and 1940, the commercial use of the airport was greatly restricted, due to the lack of suitable runways, and the airport was availed of principally by owners of private planes and non-scheduled aircraft, during which period extensive improvements and additions to runways were in the process of construction as W. P. A.
"8. The commissioners of Wood county and the county engineer would testify that repair and construction expenditures were made and estimated by the county on county roads No. 111 and No. 11, which are adjacent to the east and west of the airport, as follows: [Total for 1939 and 1940 on both $21,728.68] * * *
"Said public officials would further testify that substantially all of said repair and construction expense was made necessary by reason of the increased travel over said roads to and from the airport. * * *"
The material part of the "additional stipulation" is:
"Toledo University, mentioned in the 'agreed statement of facts', is a tax supported municipal university, operated by the city of Toledo under the statute, pertaining to municipal universities."
The plat, exhibit A, when construed with the agreed facts shows the following:
The parcels, which as to acreage are in accord with the way they appear on the books of the county auditor, are contiguous and form one compact tract of land. Parcel C is composed of two separate parts, one of 80 acres which borders on Krueger road and one of 14.53 acres which borders on Cummings road. Between them is parcel A.
Parcels A, B (except 5.51 acres on which buildings are located), C (except the 14.53 acres on Cummings road), D and E are the parcels on which runways are located. The agreed statement of facts shows that "parcels A, C, D, E, F and G have runways and landing fields upon the same, as shown on 'Exhibit A.' "
Parcels F and G and the 14.53 acres of parcel C abutting on Cummings road have no runway on them. Parcel H, which is in the northwest corner and likewise has no runway, is in the main an open field and has on it a five-room house, barn and garage. Exhibit B shows, inter alia, the listing of the west hangar separately and as being on leased land. The exact manner of such listing will be shown in the opinion.
The parts of exhibits C, D and E which bear materially on the question of exemption from taxation are referred to and considered in the opinion.
On February 26, 1943, the Board of Tax Appeals filed a decision in which it held the part of the area, on which were the runways, exempt and the remaining area and buildings thereon not exempt. The effect of this decision upon the different parcels as they appeared on the tax duplicate together with their area and the acreage exempted and not exempted is shown in the following table:
Areas Areas Not Parcel Area Exempted Use Exempted Use A 40.99 40.99 Runways .. B 132.93 127.42 " 5.51 Buildings C 94.53 80. " 14.53 Had landing field D 22.91 22.91 " .. E 81.46 81.46 " .. F 24.19 .. 24.19 " " " G 78.19 .. 78.19 " " " H 30.90 .. 30.90 None except residence, barn ------ ------ ------ and garag Totals 506.10 352.78 153.32
Both parties felt aggrieved by the decision. The city of Toledo filed an appeal to this court seeking to have all the real estate exempted and the appellee, Harry Williamson, auditor of Wood county filed a cross-appeal and now seeks a reversal of the decision below insofar as the part used as runways was held exempt.
In cause No. 29505 the city of Toledo on or about August 13, 1941, filed an application for exemption of the same property. It was recited in this application that the applicant sought exemption "for the years subsequent to those covered by application No. 186 now pending before the Tax Commission to and including 1941."
This cause was decided adversely to the city of Toledo on February 26, 1943, the Board of Tax Appeals holding that the application should be denied for want of jurisdiction, in that no statement or certificate was submitted in accordance with the requirements of Section 5570-1, General Code, that no application for remission of delinquent taxes had been filed as provided for in that section, and that the court had no jurisdiction to consider applications for exemption for any year other than the one in which such application was filed.
From the decision of the Board of Tax Appeals the city of Toledo took an appeal to this court.
Mr. Martin S. Dodd, director of law, and Mr. Jas. Slater Gibson, for appellant.
Mr. Floyd A. Coller, prosecuting attorney, and Messrs. Harrington Avery, for appellees.
In cause No. 29504 the sole question is the extent to which the real estate of Toledo Municipal Airport is exempt from taxation. Under the provisions of Section 5616, General Code, the application, having been filed in 1938, raised the question of exemption for that year only. Pfeiffer et al., Trustees, v. Jenkins et al., Board of Tax Appeals, 141 Ohio St. 66, 46 N.E.2d 767.
The first inquiry naturally relates to the nature of the property and the law which governs.
Section 4 of Article XVIII of the Constitution gives municipalities power to "acquire, construct, own, lease and operate within or without its corporate limits, any public utility the product or service of which is or is to be supplied to the municipality or its inhabitants."
Section 3677, General Code, provides, inter alia:
"Municipal corporations shall have special power to appropriate, enter upon and hold real estate within their corporate limits. * * *
"15. For establishing landing fields either within or without the limits of a municipality for aircraft and transportation terminals, with power to impose restrictions on all or any part thereof and leasing such part thereof as may be desired for purposes associated with or incident to such aircraft landing and transportation terminals, * * * all of which are hereby declared to be public purposes."
Section 3939, General Code, provides, inter alia:
"Each municipal corporation in addition to other powers conferred by law shall have power: * * *
"(22) To purchase, lease or condemn land and/or air rights necessary for landing fields, either within or without the limits of a municipality, for aircraft and transportation terminals and uses associated therewith or incident thereto, * * * and to improve and equip the same with structures necessary or appropriate for such purposes."
The statutory provisions confer upon the municipal corporation power to own or lease and operate landing fields and improve them with runways, buildings or other structures, so as to make them fully equipped aircraft and transportation terminals. As an airport of that character is a public utility ( State, ex rel. Chandler, v. Jackson, 121 Ohio St. 186, 167 N.E. 396), the Toledo Municipal Airport was and is a complete public utility unit.
Under and by virtue of Section 2, Article XII of the Constitution, general laws may be passed to exempt from taxation "public property used exclusively for any public purpose."
Section 5351, General Code (110 Ohio Laws, 78), provided, inter alia, that "public property used for a public purpose shall be exempt from taxation."
Section 5351 controls but its language must be read in the light of the language of the Constitution. The test, then, is whether the realty was public property used during the year involved exclusively for a public purpose.
Underlying that test are three essential prerequisites. (1) The realty must be public property; (2) the use must be for a public purpose; and (3) the use must be exclusively for that purpose.
The first prerequisite is not difficult of application. It is fundamental that property lawfully owned and controlled by a municipal corporation is public property Thus the realty of a municipally owned and operated public utility is public property and exempt from taxation when the elements of use are such as to work exemption; but the realty of a privately owned and controlled public utility is not exempt though the use may properly be said be in compliance with the second and third prerequisites.
During the period for which exemption is sought the title to all the land and structures thereon except the building known as the west hangar was in the municipality and was public property.
The second prerequisite involves the element of public use. In the case of State, ex rel., v. City of Toledo, 48 Ohio St. 112, 26 N.E. 1061, 11 L.R.A., 729, it was stated that "it is now the well-settled doctrine throughout the several states, that the business of public highways, turnpikes, bridges, canals, and other public means for travel and for the transportation of goods, are a public use within the Constitution."
That the use of essential public utility property in the operation of the utility is a public use cannot be gainsaid. See City of Toledo v. Hosler, Treas., 54 Ohio St. 418, 43 N.E. 583. A ticket office, waiting rooms, baggage rooms, storage space, administrative offices, light control, dining rooms, facilities for repairs and the furnishing of gasoline are necessary to a complete public utility airport unit. Then, too, aviation in a particular area must find its center in some airport. Public utilities are created to render service to the public and for the service a charge is made. Any incidental use allied to the main public purpose is likewise public. Renting space in buildings to others to promote aviation by extending service at the airport to all the public using its facilities would be a use incidental to the main public purpose. Moreover, the mere fact that revenue is received for the space so rented does not change the public aspect, so long as the purpose of the utility is subserved and the objective is not primarily to obtain revenue. It is the "primary and principal" use that controls and the fact that incidental revenue is derived from the property does not in and of itself alter the public character of the use to which the property is put. For authorities see annotation 101 A. L. R., 790. So all the real estate necessary and incidental to the operation of a municipally owned and controlled airport unit would in its operation be concerned with a public use.
The third essential prerequisite involves the concept of exclusive use for a public purpose. What is the meaning of the word "exclusively?" It is not essential to exemption that all the property that is part of the utility unit be used for public purposes. A building might be antiquated for airport purposes and rented for manufacturing or other private business Thereupon the building and land appertaining to it would cease to be used "in the exercise of municipal functions" and would become taxable. City of Cincinnati v. Lewis, Aud., 66 Ohio St. 49, 63 N.E. 588.
The next step in orderly procedure is to analyze the various parcels, the structures thereon and their uses in order to make a concrete application of the principles pronounced.
When the agreed statement of facts is read in conjunction with the plat, exhibit A, it is definitely disclosed that parcels A, B, C, D, E, F and G have runways and landing fields upon them, the runways being on parcels A, B, D and E and the 80 acres of parcel C abutting on Krueger road. Exclusive of land with buildings thereon (which land and buildings will be considered later) all of these parcels are so clearly public property devoted exclusively to a public use that we have no hesitation in saying that they were exempt. Even though the 14.53 acres of parcel C abutting on Cummings road and parcels F and G in the year in question had not had landing fields upon them, they, being in such close proximity to the runways, were necessary in the operation of the airport, as large airplanes in the ascending and descending incidental to landing and taking off require considerable open space for safety. The acreage would not have been excessive whether landing fields were on them or not. Parcel H (excluding from consideration for the time being the part on which the residence, barn and garage were located) does not have runways or landing fields and so far as appears from the record was not used for any purpose connected with the airport and was not exempt. It appears that these parcels, except where the runways and the buildings are located, are in large part sowed with alfalfa and that the alfalfa is cut and sold on the market. It could hardly be expected that the fields would be allowed to grow up with weeds and the mere fact that a profit is made from the sale of the alfalfa does not change the character of the use of the land, on which it is grown, from a public to a public one.
The parts of parcel B on which buildings were located and the buildings themselves were held taxable. Among the buildings were the house and garage occupied by the manager as a residence, together with 1.06 acres of land on which the house and garage were located. On parcel H are a residence, occupied by the service man, a garage and a barn. These residences and garages stand on the same footing as to taxability. Workmen who by reason of their duties are required to sleep on the premises may be provided with sleeping quarters and the purpose would be public. An instance of this use is where such quarters are provided for firemen at a municipal engine house. Providing a residence with garage for a manager, service man, or other officials or employees is beyond the scope of utility service. Buildings so used, whether a rental charge is made or not, would be subject to taxation. However, the barn, which is used to store airport tools and equipment, together with the necessary land on which it is located, is exempt.
The other buildings on parcel B will be considered in order.
The east hangar is used for offices, airplane storage, repair shop, boiler room and toilets.
Prior to 1940 the offices were vacant. So no question arises about renting them since the application for exemption covers only the year 1938. It is well known that in constructing buildings of this character it is necessary to make them somewhat larger than present needs require to allow for growth in the future. Transportation by airplane is still in its infancy. Airplanes are becoming larger and more commodious with each advancing year. The Douglas B-19 constructed in 1942 carries a bomb load alone of 12 tons and has a wing spread of 212 feet. Future requirements for transportation of passengers and property will create need for larger buildings and more office space, so the fact that offices existed which temporarily could not be used or rented cannot be considered a factor which destroys the public character of a building's use.
A question is made as to the storage of the airplanes of individuals, at established rates. In this matter there is precedent to guide us. In City of Cleveland v. Ruple, 130 Ohio St. 465, 200 N.E. 507, 103 A. L. R., 853, the facts disclosed that the city of Cleveland had erected a public underground exhibition hall for holding public exhibitions and to provide space for garage and other purposes. The language used in the fourth paragraph of the syllabus is apposite here:
"Such a public underground exhibition hall may be used by the municipality for all public purposes and all purposes incidental thereto, including the right to afford to patrons of adjacent municipal buildings, to wit, a public stadium and a public hall, parking and storing privileges, and a reasonable charge therefor may be made."
The analogy is close. The individual airplanes are stored so the public in using them may avail themselves of all the facilities of the airport, which are maintained for public use. Such storage is therefore a use incidental to the main purpose and is not altered because a proper and fair charge is made therefor. The service accorded to owners of private airplanes is as much a public use as is the service accorded to the companies that operate commercial airplanes in carrying passengers, express or freight.
The "tenants" used the repair shop without extra charge. A service was thus provided which was essential and without which airplanes could not be operated. Likewise the boiler room and toilet facilities were necessary for the health and comfort of those engaged in operating the airport and for the public visiting it. The whole east hangar was used exclusively for public purposes and should be exempted.
The one-story brick substation with frame and glass tower was erected in the spring of 1938 and was used to house transformers, distribution system and electric equipment. It had an office at which gasoline sales were recorded and outgoing ships registered. Above the office was a floodlight for field illumination with controls for traffic and all other lighting facilities. All of these uses are essential in the operation of an airport. A question arises about office space in which records were kept with respect to the sales of gasoline but this use was a necessary incident to the main purpose. A municipality may not enter business which has not the element of public utility or public function, as has been pointed out, but the sale of gasoline and the maintaining of offices and buildings to aid in accomplishing that end would be necessary in the operation of the public utility which is maintained under the name of Toledo Municipal Airport. This building should be exempted.
The west hangar is used in part for the administrative office and waiting room for the general public. Some of this office space is leased at a nominal rental to the United States Department of Agriculture (presumably for a weather bureau) and to the United States Department of Commerce (presumably for aeronautic purposes). United Air Lines, Inc., and Transcontinental Western Line, Inc., rent office space and the Metcalf Flying Service a classroom, on a monthly or yearly basis. Hangar space is rented to private owners at fixed rates.
Much that has been said about the east hangar would be applicable here and need not be repeated. There is no reason why air-line transportation companies may not rent space for airport purposes without changing the public aspect of the utility unit. The Metcalf Flying Service conducted a training program which, of course, required aeronautic facilities. No charge or only a nominal charge is made for the other space rented. These uses are all, indeed, incidental. The renting to individual owners of airplanes has been previously considered, and, as carried on, is deemed a public use.
The land on which the west hangar is and was located does not stand on the same footing as the hangar itself with respect to exemption. In 1929 under and by virtue of an indenture (exhibit C) land was leased by Transcontinental Airport of Toledo, Inc., to Curtiss Flying Service of Ohio, Inc., at an agreed rental for a term of 20 years with a stipulation that the building erected thereon should at the end of the term belong to the lessor. There was a clause in the indenture of lease which gave the lessor upon termination of the leasehold for any cause an option to buy such building at cost less 5% depreciation for each year the lease "shall have run." In 1936 an agreement, exhibit D, was executed between Mevon Corporation (which had acquired all rights formerly belonging to Curtiss Flying Service of Ohio, Inc.) and the receiver of Transcontinental Airport of Toledo, Inc., by which the payment of rental for the land was forgiven and the receiver was to pay a substantial fixed rental to Mevon Corporation for the building which is known as the west hangar and in addition all taxes on the building. This agreement expired December 31, 1938.
Later in 1936 the city of Toledo acquired the rights and interest of Transcontinental Airport of Toledo, Inc., and of its receiver, and in 1939 an agreement (exhibit E) was entered into between the city of Toledo and Mevon Corporation by which the terms of the contract (exhibit D) became binding as between them and were extended for two years. By virtue of these agreements the city of Toledo became obligated to pay the taxes on the building and the rental therefor until the expiration of the extended agreement on December 31, 1940. So in the years 1937 to 1940 inclusive the city of Toledo was the owner of the land on which the west hangar stood without receiving rental therefor and Mevon Corporation was the owner of the building which was under lease to the city of Toledo at a substantial rental. During that period of four years all the airport property, including the west hangar, was listed on the tax duplicate. Specifically the west hangar was listed thus:
"City of Toledo Airport * * * Hangar on leased land * * *."
This hangar was a one-story building of brick and concrete block, 100 x 120 feet in size. To it there was a two-story office and waiting room addition, 22 x 120 feet in size, with part basement. In addition there was a one-story brick and concrete ticket office 10 x 41 feet in size.
This building, annexed to the real estate in the way it was, was essentially real estate. The county auditor therefore correctly placed the building on the tax duplicate as real property separately from the land; but should have listed the structure in the name of the Mevon Corporation.
Under such circumstances the city would not be relieved of its contractual obligations even though the building was used exclusively for a public purpose. The contract bound the city to pay the taxes as between it and the Mevon Corporation, although the building was listable in the name of the latter. The fact that the building would become the property of the city at the end of the twenty-year term under the original lease of the land upon which this hangar was constructed or sooner if the option should be exercised does not alter the legal situation; nor does the fact that the city acquired the building in 1941. The west hangar was, therefore, taxable and should have been placed on the tax duplicate in the name of the lessor-owner, the Mevon Corporation, although the city leased it for airport purposes. Humphries, Aud., v. Little Sisters of the Poor, 29 Ohio St. 201. The land on which the building stood, however, is exempt due to the use to which the building was put.
The agreed statement shows that during the year involved here as well as the two succeeding years the commercial use of the airport was greatly restricted due to lack of suitable runways and that during that time extensive improvements and additions to runways were made. The agreed statement, however, when read as a whole discloses that the uses were the same and the questions presented are not changed because the commercial use was restricted.
As to cause No. 29505, merely a question of jurisdiction is presented. On August 13, 1941, the appellant filed with the Board of Tax Appeals application No. 6202 for the exemption of the same property involved in cause No. 29504; but filed no application for the remission of taxes for prior years.
By amendment (effective August 21, 1941) provisions were inserted in Section 5570-1, General Code, which read thus:
"The Board of Tax Appeals shall not consider an application for exemption of property under any of the sections enumerated herein unless the application has attached thereto a certificate or affidavit executed by the county treasurer certifying that taxes, assessments, penalties and interest levied and assessed against the property sought to be exempted have been paid in full to the date upon which the application for exemption is filed.
"Provided, however, that taxes, penalties and interest which have accrued after the property began its use for the exempt purpose but in no case prior to the date of acquisition of the title to said property by applicant, may be remitted by the county auditor, with the consent of the board of tax appeals."
Previous to the amendment the attachment of such a certificate or affidavit to the application was not required. It is contended by appellant that the general saving statute of Section 26, General Code, makes the quoted provision of Section 5570-1 inapplicable. We accede to this contention. The filing of an application for exemption (which, as heretofore indicated, could apply only to the year in which it was filed) instituted a pending proceeding within the meaning of Section 26. State, ex rel. Cleveland Ry. Co., v. Atkinson, Admr., 138 Ohio St. 157, 160, 34 N.E.2d 233. As it was not expressly provided in the amending act that it should apply to pending proceedings, the application, having been filed before the amendment became effective, was sufficient without having attached thereto such a certificate or affidavit. The Board of Tax Appeals committed prejudicial error in dismissing application No. 6202 for want of jurisdiction in that the statutory provisions had not been followed.
In cause No. 29504, the decision, holding exempt the 352 acres on which the runways are located, and holding taxable the dwelling houses, garages, west hangar and parcel H, is affirmed, but as to the barn on parcel H, and a reasonable amount of land surrounding it, and in all other respects, the decision is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
In cause No. 29505 the decision is reversed and cause remanded for further proceedings.
Judgments accordingly.
WEYGANDT, C.J., MATTHIAS, HART and ZIMMERMAN, JJ., concur.
BELL, J., concurs in paragraphs 1, 2, 3, 4, 5, 7, 8 and 9 of the syllabus and in the judgment.
The record in these cases shows that the publicly owned property in question is not used exclusively for a public purpose. There is no difference in principle between an airport and a railroad depot or a bus station. While there is an element of public convenience involved, the airport, the railroad depot and the bus station are essential transportation facilities the use of which is paid for by the passenger when purchasing a ticket from a privately owned public utility. There is no reason why any of the cost involved in such transportation should be shifted from the passenger to the general public.
No authority is to be found in Article XVIII of the Constitution which authorizes a municipality to establish a public utility within the limits of another taxing authority without contributing to the expense of government of that other authority. The record shows that Wood county is being put to additional expense on account of this airport and in its opinion is entitled to have this property entered on its tax duplicate as taxable.
The calling of an airport a public utility does not ipso facto result in a tax exemption. I need not stop to examine whether an airport may be classed as a public utility for the reason that Section 4, Article XVIII of the Constitution (which authorizes municipalities to acquire and operate public utilities within or without their corporate limits), does not modify the provisions of Section 2 of Article XII of the Constitution which authorizes the exemption from taxation of public property only when it is used exclusively for a public purpose.
Furthermore, I question the right of a municipality to establish an airport. Section 6 of Article VIII of the Constitution forbids a municipality to raise money for, or to loan its credit to, or in aid of, any joint stock company, corporation or association whatever.
As said by Judge Johnson in State, ex rel. Campbell, Pros. Atty., v. Cincinnati Street Ry. Co., 97 Ohio St. 283, 304, 119 N.E. 735: "However, these sections of Article XVIII must be construed with Section 6 of Article VIII, which, as already stated, was readopted at the same time. They are entirely consistent and full effect must be given to all of them."
I think the following language of Mr. Justice Peckham in Bank of Commerce v. Tennessee, 161 U.S. 134, 146, 40 L.Ed., 645, 649, 16 S.Ct., 456, is appropriate here: "Taxes being the sole means by which sovereignties can maintain their existence, any claim on the part of any one to be exempt from the full payment of his share of taxes on any portion of his property must on that account be clearly defined and founded upon plain language. There must be no doubt or ambiguity in the language used upon which the claim to the exemption is found. It has been said that a well founded doubt is fatal to the claim; no implication will be indulged in for the purpose of construing the language used as giving the claim for exemption, where such claim is not founded upon the plain and clearly expressed intention of the taxing power."