Summary
allowing exemption to charitable hospital open to all patients, where 45 percent were not charged due to poverty, 24 percent were partly charged in light of their limited finances, and 31 percent of its patients were charged for all their medical care because they were financially able to pay
Summary of this case from First Congregational Church v. Fulton Cnty. Bd. of Tax AssessorsOpinion
16618.
MAY 12, 1949. REHEARING DENIED JUNE 16, 1949.
Cancellation, etc. Before Judge Hendrix. Fulton Superior Court. February 2, 1949.
J. C. Savage, J. C. Murphy, J. M. B. Bloodworth, and John E. Feagin, for plaintiffs in error.
John H. Boman Jr., and Crenshaw, Hansell, Ware Brandon, contra.
Pursuant to article 7, section 1, paragraph 4 of the Constitution of 1945, the General Assembly in 1946 exempted from taxation "all institutions of purely public charity; . . provided the property so exempted be not used for the purpose of private or corporate profit and income, distributable to shareholders in corporations owning such property or to other owners of such property, and any income from such property is used exclusively for religious, educational and charitable purposes, or for either one or more of such purposes and for the purpose of maintaining and operating such institution." The petition in the present case, when measured by that statute, was sufficient to state a cause of action for the relief prayed, and accordingly the court did not err in overruling a general demurrer thereto.
No. 16618. MAY 12, 1949. REHEARING DENIED JUNE 16, 1949.
On September 18, 1943, corporate existence was granted to Henrietta Egleston Hospital For Children as a non-profit corporation without capital stock. Thomas Egleston, a resident of Fulton County at the time of his death, had left $100,000 for the purpose of building and equipping such a hospital as a memorial to his mother. The petition for charter alleged that the object of the corporation was to render free medical service to poor, unfortunate children, and in the brief for the plaintiffs in error it is conceded that the declared purposes of the corporation make it a charitable agency within the terms of Title 35 of the Code of Georgia. The City of Atlanta, for 1948 city-tax purposes, assessed that property of the corporation, including lands, buildings, and hospital equipment, which it uses exclusively for the purpose of operating and maintaining its institution, and based upon that assessment executions were issued and levied upon a portion of the hospital property. The corporation, claiming that its hospital property is exempt from taxation, sought to cancel the executions and to enjoin the sale of its property. Briefly, the petition for that relief alleged that the corporation was neither organized nor operated for pecuniary gain, but exclusively for charitable, scientific, educational, and humanitarian purposes, with no part of its earnings ever inuring to the benefit of any private corporation, stockholder, or individual. Three classes of patients are cared for by the corporation's hospital: first, free patients, that is those who on account of poverty are unable to pay any part of the cost for treatment; second, part-pay patients, that is, those who because of limited finances can pay only a part of the cost for treatment; and third, full-pay patients, that is, those who are financially able to pay the hospital's regular charges for treatment. In 1947, an average operation for previous years, the hospital admitted for treatment 1180 sick and disabled children. They received 11,700 days treatment, 31% being for full pay, 24% for part pay, and 45% for no pay. All of the income received from such pay patients, as well as $78,716.32 donated by friends of the hospital for its charitable objects, was expended for the operation and maintenance of the hospital, caring for patients unable to pay, increasing its facilities for treating patients not able to pay, and instructing young women in the duties of nursing, peculiar to pediatrics. Exemption of its hospital property from taxation was claimed under article 7, section 1, paragraph 4 of the Constitution of 1945, the enabling act of 1946 (Ga. L. 1946, p. 12), and an act of 1947 amending the enabling act of 1946 (Ga. L. 1947, p. 1183). The exception here is to a judgment overruling a general demurrer to the petition.
In the present case we are dealing with the right of a municipality to tax the property of a charitable institution in which there is no private ownership, no capital stock, no profit or income to any individual, stockholder, or private corporation, and where its entire income from all sources is devoted exclusively to the maintenance and operation of its hospital, caring for sick and disabled children who are financially unable to pay for treatment, and increasing its charitable facilities for the relief of human suffering.
Had this case reached us before the adoption of the Constitution of 1945, the rulings made in the cases of Trustees of the Academy of Richmond County v. Bohler, 80 Ga. 159 ( 7 S.E. 633), Massenburg v. Grand Lodge, 81 Ga. 212 ( 7 S.E. 636), Mundy v. Van Hoose, 104 Ga. 292 ( 30 S.E. 783), and Richardson v. Executive Committee of the Baptist Convention, 176 Ga. 705 ( 169 S.E. 18), would have been binding upon us and we would have been required to hold, as we did in those cases, that the property of an institution, even though it be one of purely public charity, when used for private or corporate profit or income is taxable. When this court decided those cases, the General Assembly, pursuant to article 7, section 2, paragraph 2 of the Constitution of 1877, had exempted from taxation "all institutions of purely public charity . . provided the property so exempted be not used for purposes of private profit or income." But since then the people of this State adopted the Constitution of 1945, and article 7, section 1, paragraph 4 of that instrument provides that the General Assembly may, by law, exempt from taxation "all institutions of purely public charity; . . provided the property so exempted be not used for the purpose of private or corporate profit and income, distributable to shareholders in corporations owning such property or to other owners of such property, and any income from such property is used exclusively for religious, educational and charitable purposes, or for either one or more of such purposes and for the purpose of maintaining and operating such institution." In 1946 the General Assembly passed an act exemption from taxation all of the property enumerated in the above-stated clause of the Constitution, using the identical language there employed, Ga. L. 1946, p. 12. By that act the General Assembly fully exhausted its constitutional power to make exemptions, and the amending act of 1947 (Ga. L. 1947, p. 1183), which expressly exempted from taxation all hospitals of purely public charity added nothing to what the General Assembly had previously done by the act of 1946. But in the present case no contention is made, nor could the same be successfully made, that the General Assembly has not exempted from taxation all of the property which it had constitutional authority to exempt, and the question actually made by the record is whether or not the property presently involved comes within the enumerated properties which the Constitution of 1945 empowered the General Assembly to exempt. The plaintiffs in error contend that it does not, but we cannot agree with them. They concede that the hospital here involved was organized for charitable purposes, and there is no merit in the contention that it is not an institution of purely public charity. According to the record, its facilities are available alike to poor, unfortunate children, and the fact that patients who are able to pay are charged for services rendered, according to their ability, does not alter its character as such. Trustees of the Academy of Richmond County v. Bohler, supra. And, as shown by our statement of facts, all of its income from all sources is used exclusively for maintenance, operation, enlarging its charitable facilities, and for furtherance of its charitable purposes, with no part of the same distributable to any one having an interest therein. This interpretation of article 7, section 1, paragraph 4 of the Constitution of 1945 accords with the intention of the framers of that document as shown in the Records of the Constitutional Commission 1943-1944, Volume I, pages 138-141, 388-395, 397, 528-531; Volume II, pages 58-59.
For the reasons stated, the allegations of the petition clearly show that the property sought to be taxed has been exempted by statute passed pursuant to the Constitution of 1945, and the court properly held that the petition stated a cause of action for the relief prayed.
Judgment affirmed. All the Justices concur, except Atkinson, P. J., and Wyatt, J., who dissent.