# Appellants Brief Opposing Appellees Motion — Wabaningo Boy Scout Camp v. Michigan Tax Commission > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385001_0382%3A4 ## Record - **Collection:** Supreme Court brief - **Document type:** Appellants Brief Opposing Appellees Motion - **Published:** January 1, 1963 - **Citation:** 375 U.S. 19 ## Text IN THE SUPREME COURT OF THE UNITED STATES OcTOBER TERM, 1963 No. 231 WABANINGO BOY SCOUT CAMP, A Michigan Nonprofit Corporation, Appellant, vs. MICHIGAN STATE TAX COMMISSION, Appellee. No. 232 EVANSTON Y.M.C.A. CAMP, A Michigan Nonprofit Corporation, Appellant, vs. MICHIGAN STATE TAX COMMISSION, Appellee. Appeals from the Supreme Court of Michigan APPELLANTS’ BRIEF OPPOSING APPELLEE'S MOTION TO DISMISS OR AFFIRM Of Counsel: HARRY D. REBER Fremont, Michigan STEPHEN R. SMITH RICHARD A. BEYER AMOS M. MATHEWS JAMES G. STAPLES 28 Union Station Building ALBAN WEBER _ Chicago 6, Illinois Attorneys for Appellants Lo Salle Street Press—Chicago 10 INDEX SUBJECT MATTER RI TORII 6c ies oso cenn ens cd ao hae cha hanees Although appellee asserts a contrary conclusion, appellee’s admissions reveal that appellants have presénted a substantial Federal Question. coe Oe SA hb id ks sxe 54a ahh eae ea ecey «o Except by making two erroneous assertions, ap- pellee does not attempt to contradict or question any statement in appellants’ statement of the case. ARGUMENT 1. Appellants are proper parfies in interest to present nf PUP TETCTAT eee Teer eee ere to by The inheritance tax cases cited by appellee (pp. 11-21) rest upon a special principle of state sover- eignty not applicable here .................... 3. The judgments of the Supreme Court of Michigan DEO DER WUD Faw esac ce asdacabeceas bs aaes IUD <5 x saree cavnnuceseciescessackaaceser AUTHORITIES CITED Cases Cincinnati, N. O. & T. P. Railway Co. v. Rankin, 241 a Se I ee ae ees Dearborn Clinic and Diagnostic Hospital, In re, 342 Mich. Gi3, 71 N..W. Dd ZEB (ARGS) x. doc ec cscs nss Edwards v. Leaver, 102 F. Supp. 698 (DCRI 1952) .... International Harvester Co. v. Wisconsin Department of Taxation, 322 U.S. 435 (1944) ................. 11 11 3 10 ii PAGE Maxwell v. Bugbee, 250 U.S. 525 (1919) 2... .0.0.0... 9 Muilaney v. Anderson, 342 U.S. 415 (1952) .......... 10 Phillips Chemical Co. v. Dumas Independent School District, 361 U. S. 376 (1960) ................ 9,10, 11 Pierce v. Society of Sisters, 268 U.S. 510 (1925) ...... 6 Raley v. Ohio, 360 U. S. 423 (1959) »............... 4 Toomer v. Witsell, 384 U.S. 385 (1948) .....0...02... 10, 11 Travis v. Yale & Towne Manufacturing Co., 252 U.S. I OS a hat Be ae CAN Sc a chs 7 United States v. Burnison, 389 U.S. 87 (1950) ...... 9 CONSTITUTION AND STATUTES Fourteenth Amendment ................0-05- 2, 4,5, 8, 10 Par. Fourth of $7.7 as amended, Michigan Stat. Ann. DE cis ii cas ed kex tac vhesarekaeedesens 2, 6,8, 11 IN THE SUPREME COURT OF THE UNITED STATES OcTOBER TERY, 1963 No. 231 WABANINGO BOY SCOUT CAMP, A Michigan Nonprofit Corporation, Appellant, vs. MICHIGAN STATE TAX COMMISSION, Appellee. No. 232 EVANSTON Y.M.C.A. CAMP, A Michigan Nonprofit Corporation, Appellant, vs. MICHIGAN STATE TAX COMMISSION, Appellee. Appeals from the Supreme Court of Michigan APPELLANTS’ BRIEF OPPOSING APPELLEE'S MOTION TO DISMISS OR AFFIRM QUESTION PRESENTED Although appellee asserts a contrary conclusion, appel- lee’s admissions reveal that appellants have presented a substantial Federal question. 2 “Appellee asserts (p. 4) that “appellants’ jurisdictional statement does not properly state any federal questien.’’ But soon thereafter appellee’s own admissions (pp. 4, 6) reveal that this conclusion is erroneous. For appellee states ip. 4): **We believe the only possible federal question to be: ‘**Can the State of Michigan distinguish, for ad valorem property tax exemption purposes, between camp facilities available to the use of its residents, as compared to camp facilities available to the use of nonresidents ?”” Then appellee states (p. 6): “If the appellants ** * had established that their camp facilities were used by Michigan residents in sub- stantial part (50 per cent at least), presumably they would have been granted the ad valorem property tax exemption here in question.”’ Thus appellee concedes that appellants are, by para- graph Fourth, as construed by the Michigan Court, denied the tax exemption granted other Boy Scout and Y.M.C.A. organizations soiely because appellants’ Boy Scouts and Y.M.C.A. youth are nonresidents. This is the same ‘*ques- tion presented*’ set forth in our jurisdictional statement (p. 4), and it presents a question of equal protection of the laws under the authorities there cited (pp. 7-10). STATEMENT OF THE CASE Except by making two erroneous assertions, appellee does not attempt to contradict or question any statement in ap- pellants’ statement of the case. Although appellee asserts (p. 5) that it ‘‘cannot accept appellants’ statement of the case,** appellee actually does 3 not attempt to contradict or question any statement therein except by the making of two erroneous assertions. First, appellee states (p.5):‘*There is not a scintilla of evidence presented to substantiate the allegation that these corporations in fact operated and conducted themselves as nonprofit corporations.’* Appellee’s statement is not cor- rect. In the proceedings before appellee, the Tax Commis- sion, appellants filed sworn statements that they have al- ways operated, and used their camp properties, within the limitations of their articles as nonstock, nonprofit, member- ship corporations. *(Wabaningo App. 4a, 6a, 14a, 19a; YMCA App. 4a, Ga, Iza, Ia, 18a). These sworn state- ments have never been denied. They are part of the reeord on which appellee Tax Commission acted and which was before the Supreme Court of Michigan. (Wabaningo App. la-2a, 27a-28a; YMCA App. la-2a, 33a-34a). These sworn statements are the type of evidence which is receivable be- fore the\ Tax Commission in proceedings to determine whether property is exempt from taxation under the exemp- tion statutes. Ze re Dearborn Clinic and Diagnostic Hos- pital, 342 Mich. 678, 71 N. W. 2d 212 (1955). Actually, appellants made no direct ‘‘allegation”’ in their statement of the case that they ‘tin fact conducted them- selves as nonprofit corporations.’ The presumption exists until the contrary is proved that a corporation of limited powers acts within those powers and does not act u/tra vires. Cincinnali, N. O. & T. P. Railway Co. v. Rankin, 241 U.S. 319, 327 (1916). Appellee’s only other disagreement with our statement of the case is the assertion (p. 5): **Neither is there merit * The parenthetic references (Wabaningo App.) and (YMCA App.) refer to the printed appendices of the record certified here from the Supreme Court of Michigan. + to the statement that these corparations would have been exempted from real property taxation, if it were not for the amendment setting forth the membership requirement. ”’ That is not correct. For many years before the amendment of paragraph Fourth in 1960 appellants had been exempted by the statute from real property taxation to the same extent that all other Boy Scout and Y. M. C. A. organiza- tions were exempted, Y. M. C. A. property being wholly exempt and Boy Scout property up to 160 aeres. (Juris. St. 4a). The 1960 amendment changed that (id.), and appellee admits (p. 6), by the quotation we have set out above, that except for the amendment_(or if 50 per cent of appellants’ members were Michigay residents) appellants would still be enjoying such exemptions. Appellee observes (p. 5) that the question of equal pro- tection under the 14th Amendment was first presented in appellants’ applications for leave to appeal from the decei- sion of appellee Tax Commission to the Supreme Court of Michigan. The Court granted the application and con- sidered and ruled on the question. (Juris. St. 10a, 12a). That adequately brings the Constitutional issue here. Raley v. Ohio, 360 U.S. 423, 486 (1959). Moreover, that issue first emerged from the Tax Commission's decision. 5 ARGUMENT 1. ~ :, Appellants are proper parties in interest to present the Constitutional issue. Under its Part 1, page 8, appellee argues (pp. 8-11) that appellants’ lack standing to sue. Appellee’s first point in support of that contention is (p.&) that since appellants are Michigan Corporations ‘‘a question of discrimination be- tween residents and nonresidents is not involved in this proceeding,’* and therefore appellants cannot invoke the Constitutional issue on their own behalf. This point has no merit. Since appellants are denied tax exemption solely because the Boy Scouts and Y.M.C.A. youth who use their camps are nonresidents, appellants are the victims of discriminatory taxation, and they have stand- ing to invoke on their own behalf the equal protection clause of Ahe 14th Amendment, under the principles of the cases cited on page 9 of our Jurisdictional Statement. Appellee then contends (p. 9) that appellants are not ‘tin a position to espouse the cause of nonresident Boy Scouts or Y.M.C.A. youth** who use their eamps. Appellants do not rest their standing on that basis. Our position is that due to our close relationship with the nonresident vouth we have standing to attack paragraph Fourth on our own behalf because of the discrimination it works upon us by reason of that relationship. Our position is squareiy supported by the cases cited in our Jurisdictional Statement (pp. 9-10), and it was originally set forth immediately preceding those citations (foot p. 8, top p. 9). Appellee’s three numbered points (p. 9) only emphasize the solid foundation for appellants’ standing to sue. The 6 first two points can be considered, together. They are that there is no ‘‘direct relationship’? between appellants and the Ilinois youth who use the camps, and that the require- ment that appellants pay taxes *‘bears no direct or legal relationship’’ to such youth. On their face these contentions lack any merit. Appel- lants’ liahility for taxes is created solely by the fact that Illinois youth attend the camps. This demonstrates that- there is both a direct and a legal:¥elationship between ap- pellants and these youth, and between these youth and ap- pellants’ liability for taxes, that gives appellants standing to sue. See, for example, Pierce v. Society of Sisters, 268 U.S. 510, 530, 534-536 (1925), cited and brietly explained in our Jurisdictional Statement (p. 9). Appellants, for many years exempt from taxation to the same extent as all other Boy Scout and Y. M. C. .A. organiza- tions, were denied that exemption by the 1960 amendment (Juris. St. 3) solely because their membership, as the word was construed by the Michigan Court, are nonresident Boy Scouts and Y. M. C. A. youth (Juris. St. 5-6). Thus there is a clear financial impact upon appellants solely because their members are nonresidents. joing now to the record, it there appears that there is a direct and legal corporate relationship between appellants ° and their Illinois youth who use their camps. .\ppetlants’ respective articles of association show that appellants ate expressly designed and authorized to provide and operate eamp facilities for, and to train and discipline, the Boy Scouts and Y.M.C.A. youth who use them. Thus Wa- baningo’s articles, adopted and filed in 1924, provide in part *)*) (Wabaningo App. 23a) that the corporate purpose is: ‘*To promote through organization, the ability of boys to do things for themselves, and others, to train them 7 to scout craft, and to feach them patriotism, courage self reliance, Aud Kindred virtues, using the strictly educational program and methods which are now in common use by Boy Scouts; * °° to provide benevolent and charitable means whereby boys may obtain phys- ical, social, moral, and religious eultere, and the de- velopment of good character and citizenship through life in the out of doors * ” The Y.M.CLA. Camp articles, adopted and filed in 1928, employ similar phraseology. (YMCA App. 20a). Appellee’s third point (p. 9) is that there is no showing that the youth whe use the camps are adversely affected by the denial of the tax exemption. ‘Whatever may be the materiality of this point, appellee’s statement is not cor- rect. The articles of each appellant provide : ‘A charge, based upon the actual cost of operation and maintenanee, may be levied upon such persons as may attend the camp and be able to pay. therefor.” (Waz- baningo App. 24a-2oa; YMCA App. 21a.) Any charge, suchas taxes, increases the costs that must be paid by the campers. Appellants, the taxpayers, have a corporate duty and legal standing to contest the validity of these taxes. Jnternational Harvester Co. v. Wisconsin De- partmen¥ of Taxation, 322 U.S. 485, 440 (1944); Travis v. Yale & Towne Manufacturing Co,, 252 U.S. 60, 75 (1920), both cited in our Jurisdictional Statement (p. 9). Appellee’s footnote observation (p. $), that ‘technically neither appellant is a Y.M.C.A. or Boy Seout organiza- tion,’’ is shown to’ he without foundation by the undisputed facts set forth in our Jurisdictional Statement (pp. 4, 5.%0)-; in brief, Wabaningo Boy Seout Camp is a corporation wholly owneed and cantrolled by Evanston Council of the Boy Scouts of America, and Evanston Y.M.CLA. Camp_is a Fs lee 8 corporation wholly owned and controlled by Evanston Y.M.C.A. Wabaningo was incorporated in 1924 and its de- clared purpose in its articles, brief excerpts from which are set out above, mark it as nothing else but a ‘*Boy Scout organization.”* (Wabaningo App. 22a-27a). Evanston Y.M. C.A. Camp was incorporated in 1925 and its articles sim- ilarly show it to be a** Young Men’‘s Christian Association. (YMCA App. 20a-24a). Appellee says (p. 10) that ‘tit is not [appellants*| mem- bers who are adversely affected by the denial of the tax exemption in question but rather the members of the Illinois Boy Scout and Y. M. C. A. organizations.’* The Michigan Court held tat **membership’* in paragraph fourth means the youth attending the camps. (Juris. St. 5-6). These youth are Boy Scouts or Y. M. C. A. youth of the Illinois organizations; the youth members of the related Michigan and Illinois organizations are identical. Appellee states (p. 10) that appellants ‘tare instruments of Llinois corporate entities.”" This is true, but appellatts have a vey close and active relationship with their Boy *Scout and Y. M. C. A. youth members; they are ‘live and active instruments. They turnish training, inspiration, and discipline for their members and they finance the camps by charges upon their members, as shown by the above ex- tracts and other provisions of their articles. (Wabaningo App. 22a-27a; YMCA App. 20a-24a). Thus it is idle for appellee to say (p. 11) in’ closing its argument on standing to sue, that the relationship between appellants and their members who use the camps ‘tis too remote and too inconsequential and unsubstantial for ap- pellants to be in a position to raise the equal protection argument here posed."* when (1) in faet that relationship is very close and intimate, and (2) as a matter of law that 9 relationship brings into play the statutory discrimination against appellants and deprives them of the exemption, 2. The inheritance tax cases cited by appellee (pp. 11-21) rest upon a special principle of state sovereignty not ap- plicable here. Appellee’s argument captioned “*. Appellants do not pre- sent a substantial federal question’? (pp. 11-21) is based upon inberitance tax cases, which are not applicable here. The principle of these cases is that since arstate has the power to determine who shall take property by devise or descent, it May discriminate against nonresidents and others in respect both of the right to inherit and the level of inheritance taxes. See Marweell vo Baghee, 250 U.S. 525, 040-542 (1919) cited by appellee (p. 15). The principle of the inheritance tax cases Is sw juris, It has never been extended to any other form of taxation. No discrimination in other forms of taxation based on non- residence has ever been sustained, so far as we can discover, ‘and appellee cites no authority therefor, The absolute inapplicability of the inheritance tax prin- ciple to ad valorem property taxes is demonstrated by com- paring Uuited States v. Burnison, 339 Us. 87 (1950), with Phillips. Chemical Co. vo. Dumas Independent School Dis- trict, 861 U.S. 376 (1960), both cited by appellee (pp. 14, 78). Burnison sustained a California statute which made de- vises to the United States invalid even theugh California permitted devises to the state and its subdivisionsy The Court held that this discriminatory treatmerft: was Wie the state's power. citing Waswell v. Bagher. supra. £ 10 But in Phillips Chemical Co. v. Dumas Independent School District, supra, 361 U.S. 376, the Court held invalid a Texas statute that exempted from ad valorem taxation state property leased to a private concern, while denying exemption to Federal property leased to a private concern, as an unconstitutional discrimination against the United States. Thus the Court held in effect that the inheritance tax principle did not apply to ad valorem property taxes. The only tax cases cited by appellee rest on the inherit- ance tax princip.c. Appellee’s non-tax cases deal with gen- eral principles of classification and are not relevant. Appellee argues (p. 21) that the statute ‘tinvolves .no mere unconstitutional classification than the requirement that a nonresident pay a higher fishing or hunting fee in the State of Michigan than does a resident.’ That argu- ment has no validity in respect to operations on the scale of summer camps. In Toomer v. Witsedl, 354 U.S. 380, 395- $03 (1958), and Mullaney ve Anderson, 342 US. 415 (1952), commercial fishing licenses higher for nonresidents than for resideuts were held unconstitutionally disceierfinatory. Following the Toomer decision Edivards v. Leaver, 102 F. Supp. 698 (D.C. Ro 1.1952), held invalid under the equal protection clause of the 14th Amendment a Rhode Island statute because it had characteristics similar to the one here in issue. It forbade taking fish from the waters of the state by foreign corporations, and by domestic corporations 00 per cent or more of whose stock Was owned by nonresidents, and it required that 51 per cent of the crew of a licensed boat must be residents of the state. 11 3. The judgments of the Supreme Court of Michigan are not conclusive. Appellee argues under its point 3 (p. 21) that ‘*The judgments of the Supreme Court of Michigan are conclu- sive.’’ Appellee says that the Michigan Court found that the purpose of the exemption was ‘‘for the health end wel- fare of the youth of the State’’- [of Michigan]. But this purpose cannot justify a discrimination against appellants solely because the youth using their cgmps are nonresidents. Toomer ¥. Witsell, supra, 384 U.S. 285, 397-899: Phillips Chemical Co. v. Dumas Independent School District, supra, 361 U.S. 376, 385-385. Appellee further says: ‘*The Court found that the statute wes not «esigned to discriminate against nonresident Y. M. C. A. or Boy Scout members.”’ We submit’ that no such finding can be spelled out, but even if it could it would not be binding on this Court. See cases. cited in our Jurisdictional Statement, page &. These cases dispose of all of the other contentions in appellee’s point 3. There is no merit in them. CONCLUSION It should be noted that appellee does not question our argument in our Jurisdictional Statement (pp. 11-12) that the 1961 amendment doe: not in any respect relieve para- graph Fourth from unconstitutionality. We have fully dealt with the arguments that are repeated and summarized in appellee’s cenclusion and there is no need to repeat our arguments here. We are constrained to suggest, however, that appellee’s summary presents startling vistas. Assume a discrimina- 12 tory statute directed at corporations having Negro stock- holders. Under appellee’s theory (pp. 22-23) the corpora- tion could not object since it is not a Negro, and the stock- holders could not object since the statute discriminates only against the corporation. ; The question here presented is so substantial as to require plenary consideration ty the Court. Appellee’s motion should be denied. Respectfully submitted, Harry D. Reser Fremont, Michigan Amos M. MatHews Z 280 Union Station Building A, Chicago 6, Illinois Attorneys for Appellants Of Counsel: STEPHEN R. SmitH 39 South La Salle Street Chicago 3, Illinois Ricuarp A. Beyer 220 Prudential Plaza Chicago 1, Illinois James G. STAPLES 8 South Michigan Boulevard Chicago 3, Illinois ALBAN WEBER g 619 Clark Street Evanston, Illinois --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385001_0382%3A4. Public record. Not legal advice.