Carmelite Sisters, St. Rita's Home v. Board of Review, Bureau of Unemployment Compensation, 68-161

• Decision Date: 30 April 1969
• Docket Number: No. 68-161,68-161
• Citation: 47 O.O.2d 159,18 Ohio St.2d 41,247 N.E.2d 477
• Parties: , 47 O.O.2d 159 CARMELITE SISTERS, ST. RITA'S HOME, Appellant, v. BOARD OF REVIEW, BUREAU OF UNEMPLOYMENT COMPENSATION, Appellee.
• Court: Ohio Supreme Court

Page 41

18 Ohio St.2d 41

247 N.E.2d 477, 47 O.O.2d 159

CARMELITE SISTERS, ST. RITA'S HOME, Appellant, v. BOARD OF REVIEW, BUREAU OF UNEMPLOYMENT COMPENSATION, Appellee.

No. 68-161.

Supreme Court of Ohio.

April 30, 1969.

Syllabus by the Court

1. The care of the age and infirm by a home operated by a corporation not for profit constitutes '* * * activities * * * confined exclusively to the rendition of service * * * for its * * * charitable * * * purposes' under Section 4141.01(B)(2)(h), Revised Code. (Philada Home Fund v. Board of Tax Appeals, 5 Ohio St.2d 135, 214 N.E.2d 431, distinguished; paragraph two of the syllabus in Vick v. Cleveland Memorial Medical Foundation, 2 Ohio St.2d 30, 206 N.E.2d 2, approved and followed; In re Exemption of Real Property From Taxation by Lutheran Senior City, 9 Ohio St.2d 151, 224 N.E.2d 352, overruled; Crestview, Inc., v. Donahue, 14 Ohio St.2d 121, 236 N.E.2d 668, overruled except as to the undeveloped meadow, the small golf course and the residence of the director.)

2. A corporation not for profit which operates a home caring for the aged and infirm is not an 'employer,' under Section 4141.01(A), Revised Code, liable to contribute to the Unemployment Compensation Fund.

The Administrator of the Bureau of Unemployment Compensation determined that appellant, Carmelite Sisters, St. Rita's Home, was an employer under Section 4141.01(A), Revised Code, liable to contribute to the Unemployment Compensation Fund.

The home for the aged and infirm, now known as St. Rita's Home for the Aged, was originally built by a real estate development corporation and operated as a proprietary rest home by a subsidiary of the development corporation. In 1964, the Roman Catholic Diocese of Columbus purchased the home and furnishings and placed it under the direction of members of the Carmelite Sisters of the Aged and Infirm until September 1965.

On September 16, 1965, St. Rita's Home for the Aged, Inc., a corporation not for profit, was incorporated, and the real property, furniture, fixtures and equipment transferred by the diocese to the corporation. Under its articles of incorporation, St. Rita's Home for the Aged, Inc., is organized to establish, maintain and operate a home for indigent and aged men and women and to provide for their welfare and comfort. The sole criteria for admission to the home is that the applicant must be 65 years of age or older and have need for the services rendered by the Home.

St. Rita's Home operates on a breakeven budget. Any surplus of revenue over operating costs would be used to improve the home. A majority of the residents pay a monthly charge which not only defrays the cost of their own upkeep but helps to pay the cost of those residents who are unable to pay the full rate.

After the transfer of the property from the diocese of St. Rita's Home for the Aged, Inc., application was made to relieve the home from liability for contributions to the Unemployment Compensation Fund.

The real property owned by the home and bequests to the home have been determined by the Board of Tax Appeals to be used exclusively for charitable purposes, and therefore exempt from taxation.

The Administrator of the Bureau of Unemployment Compensation determined that the services rendered by the home were not exclusively for charitable purposes because the residents paid all or a large part of the cost of their own upkeep and that, therefore, the Home was an 'employer,' under Section 4141.01(A), Revised Code, liable to contribute to the Unemployment Compensation Fund. That determination was affirmed by the Bureau of Unemployment Compensation Board of Review, the Court of Common Pleas and the Court of Appeals for Franklin County.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Connor, Connor & Bennett and John D. Connor, Columbus, for appellant.

Paul W. Brown, Atty. Gen., and C. Richard Gregg, Columbus, for appellee.

DUNCAN, Judge.

The question before the court is whether St. Rita's Home, appellant herein, is an 'employer,' as defined in Section 4141.01(A), Revised Code, required to make contributions to the Unemployment Compensation Fund. The Home contends that it is not an 'employer' because it is '* * * organized and operated exclusively for * * * charitable * * * purposes * * * the activities of which are confined exclusively to the rendition of service * * * for its * * * charitable * * * purposes * * *.' Section 4141.01(B)(2)(h), Revised Code. The Board of Review, appellee herein, contends that the Home's activities are not '* * * confined exclusively to the rendition of service * * * for its * * * charitable * * * purposes,' since all the residents pay something toward their upkeep and a majority of them pay a rate which more than defrays the cost of their own upkeep.

To sustain the Home's contention we must find that the care of the aged and infirm by a home operated by a corporation not for profit constitutes '* * * activities * * * confined exclusively to the rendition of service * * * for its * * * charitable * * * purposes.' Section 4141.01(B)(2)(h), Revised Code. The board contends that Philada Home Fund v. Board of Tax Appeals, 5 Ohio St.2d 135, 214 N.E.2d 431, is controlling here and compels us to reject the Home's contention. That case held that the real property of a nonprofit corporation which was used for apartments for aged and needy persons was not used exclusively for charitable purposes and was not exempt from real property taxation. The Philada Home Fund case may be distinguished on its facts from the instant case, and we hold that a corporation not for profit which operates a home caring for the aged and infirm is not an employer, under Section 4141.01(A), Revised Code, liable to contribute to the Unemployment Compensation Fund.

In Philada Home Fund v. Board of Tax Appeals, supra, apartments built and operated by a nonprofit corporation were offered for rent to 'aged and needy self-respecting persons of good character,' with preference given to couples over individuals. No services were provided for the residents of the Philada Home,...