Corporation of Sisters of Mercy v. Lane County

CourtSupreme Court of Oregon
Citation261 P. 694,123 Or. 144
Decision Date29 November 1927

Department 2.

Appeal from Circuit Court, Lane County; G. F. Skipworth, Judge.

Suit by the Corporation of the Sisters of Mercy against Lane County and others. From the judgment, defendant Ben F. Keeney County Assessor, appeals. Affirmed.

This suit was instituted to restrain the officers of Lane county from assessing, levying, and collecting taxes upon the plaintiff's property known as Mercy Hospital, and alleged to have been devoted to charitable uses.

The plaintiff corporation was organized by representatives of a religious society known as the Sisters of Mercy, under the name of "Corporation of the Sisters of Mercy," its purpose being, according to its articles, "entirely religious, educational, and charitable." The articles further state:

"That the principal objects are the opening and establishment of schools; * * * the establishing and maintaining homes for the aged, and of homes for girls without employment and without homes; the maintaining and establishing of hospitals wherever the officers of the corporation shall deem hospitals necessary within the state of Oregon. * * *

"That the estimated value of the properties and moneys possessed by this corporation at the time of making and signing these articles of incorporation is about the sum of $2,000; and the only sources of income which this corporation has or will have is the moneys which may be derived by them from schools and hospitals, together with the donations which may be made to it from time to time by the charitable."

The property in question, consisting of a hospital and grounds situate in Eugene, Lane county, Or., involves two adjoining tracts; one containing 3.178 acres, acquired by the society in 1912, being designated in the record as tract No. 1; the other a tract of 2.6 acres, purchased in September, 1921, and referred to as tract No. 2. The hospital is located on tract No. 1.

The court decreed that tract No. 1 was exempt from taxation, but denied the exemption of tract No. 2. The defendant appeals from that part of the decree exempting tract No. 1 from taxation, and the plaintiff undertook to appeal from that part of the decree holding tract No. 2 to be taxable, but neglected to perfect the appeal.

H. E. Slattery, of Eugene, for appellant.

Donald Young and L. L. Ray, both of Eugene, for respondents.

J. P Kavanaugh and Hall S. Lusk, both of Portland, amici curiæ.

BROWN J. (after stating the facts as above).

Section 4235, Oregon Laws, provides:

"The following property shall be exempt from taxation:
"(3) The personal property of all literary, benevolent charitable and scientific institutions incorporated within this state, and such real estate belonging to such institutions as shall be actually occupied for the purposes for which they were incorporated."

The defendants aver that Mercy Hospital is not exempt from taxation as a charitable corporation under the provisions of the statute hereinabove set out; and, further, that, if the hospital is exempt under that statute, such statute is unconstitutional and void.

Is Mercy Hospital a charitable institution as defined by law? In this connection, the uncontradicted testimony of the president of the society that founded the hospital is enlightening. She testified, in part, as follows:

"Q. You know the objects and purposes of that society? A. Yes.
"Q. Will you state what they are? A. We take care of the poor and sick, and have schools and orphan asylums, * * * and homes for the aged, and hospitals.
"Q. I will ask you if there is any stock issued by the corporation of the Sisters of Mercy. A. Nothing. "Q. Do any of the officers receive any profit? A. Nothing.
"Q. Any of the sisters receive anything? A. No, certainly.
"Q. Will you state whether any money or income of the Mercy Hospital here is turned over to the Catholic Church, in any way? A. Not one cent.
"Q. Does any of it go to any other institution? A. No.
"Q. In case of a surplus from the operation of the Mercy Hospital, what would be done? A. We would use it to improve and do what we can for the place where we are."

She testified that it was not the intention or purpose of the corporation to sell any part of the property, and that it was not held for speculation.

Sister Mary Lourdes, one of the organizers of the corporation, and who had been superintendent of the hospital for a number of years, testified that there were buildings on the lands constituting a graduate nurses' home, a student nurses' home, a hospital, and a pump house; that a small portion of the land was used for garden and orchard purposes for the benefit of the hospital; that the hospital was equipped with 50 to 60 beds; and that one floor of the nurses' home was likewise equipped with hospital beds that the general equipment of the hospital consisted of an X-ray laboratory, therapeutic light, and modern tables, modern sterilizers, a dishwasher, a mangle, and washer; that the hospital was not operated for profit; and that, if any surplus was accumulated, it went to pay off the indebtedness, or "is put into the building, put into the hospital, to the upkeep of the patients and taking care of patients." She testified that none of the money derived from the operation of the hospital was invested anywhere other than in the local hospital. In answer to the following questions by the court, she testified:

"The Court: Now, do the sisters who operate the hospital get any salary at all? A. No, Judge.
"Q. From the proceeds of the hospital? A. No, Judge; absolutely nothing. The sisters never get any salary.
"Q. Are there any dividends declared in any way? A. No, Judge.
"Q. Well, now, I would ask you further, would it be possible under your system or articles of incorporation for any dividends to be declared to the members? A. No, sir; we make a vow of property (poverty), and we cannot possess one penny.
"Q. Do any of the sisters have any property? A. No, sir.
"Q. Or can they have any property? A. No, sir.
"Q. What is the purpose of operating the hospital? A. For the purpose of taking care of the sick and those who need care, and taking care of people who need spiritual help as well as temporal help.
"Q. How many nurses are there now, can you state? A. I think there are about ten now, I am not sure.
"Q. Are those nurses sisters, or not? A. Some of them are sisters. There is one sister nurse there now. One-half are graduate and one-half are pupil nurses."

She testified that the nurses who were paid were not Sisters of Mercy; that the sisters who were at the hospital had no outside employment, but that they devoted all of their time to the work of the hospital; that their duties consisted of "all the duties you could possibly think of," because they supervised every department, i. e., a sister supervised the entire bookkeeping department, another the housekeeping department, and yet another the buying department; that a sister in the laboratory supervised the laboratory, another was head of the tray room, and another supervised the nurses' home. She testified that the society made no discrimination on account of the religious faith of patients, nor in regard to "race, creed, or color." She further testified:

"Q. Do you discriminate whether they are able to pay or not? A. No, sir; they get just as good care and treatment whether they pay or not. We give them just as good care.
"The Court: Suppose a patient comes to the hospital and they are unable to pay; that is, they haven't the money. Do you take care of them just the same? A. Yes, Judge.
"The Court: Give them the same care? A. We have never refused any one.
"The Court: The same care? A. Yes, Judge. * * *
"Q. Do you make a practice of giving bills to all outgoing patients? A. Yes; as a matter of not being imposed on. We take care of people who need the care. But, if you did not do that, you would have people coming and staying, and they would not want to leave. If people have it, we ask for it. If not, we don't.
"Q. Do you ever have patients come who you know in advance cannot pay? A. Yes.
"Q. What is done about taking them? A. Absolutely nothing. Take them in and take care of them. The doctors always tell us when the patients are unable to pay, and ask us if we will take care of them, and we say 'Yes.' We never refuse any cases.
"Q. Is any difference made in the care of these patients than in the care of other patients? A. Certainly not. A patient needs the best care, whether they have the money or not. * * *
"Q. Now, just what attention and care do you give to the patient, that is, what service? A. They have 24 hours' service of the nurse; they have certain medicine given them free; and they have the best of tray service. * * *
"Q. How about services of the doctor? Do you control that in any way? A. No; we never know what the doctors charge. That is their own business. They charge their own prices.
"Q. Do you control in any way what doctor a patient has? A. No.
"Q. State whether you maintain a free dispensary out there? A. No; we don't maintain a free dispensary, but, should any one come who needed medicine, and hadn't the money to pay for it, we would give it to them.
"Q. Supposing you have a charity patient up there who needs the attention of a doctor and cannot pay for a doctor. What practice do you follow in regard to getting a doctor for him? A. We ask one of the doctors if they will kindly look after the patient, and the doctor is under obligations to the hospital, he feels he is, and he usually does it; he never refuses. * *
"Q. What doctors are allowed to practice in the hospital? A. All doctors of good repute."

She then testified concerning the maintenance of a training...

To continue reading

Request your trial
27 cases
  • City of Tulsa v. Southwestern Bell Telephone Co., 1113
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • January 26, 1935
    ...Rocke, 91 W. Va. 423, 113 S. E. 647, 650; Kelley v. Meyers, 124 Or. 322, 263 P. 903, 905, 56 A. L. R. 661; Corporation of Sisters of Mercy v. Lane County, 123 Or. 144, 261 P. 694, 700; City of Astoria v. Cornelius, 119 Or. 264, 240 P. 233, 236; Willard v. Glenn-Colusa Irr. Dist., 201 Cal. 7......
  • Friendsview Manor v. State Tax Commission
    • United States
    • Supreme Court of Oregon
    • November 16, 1966
    ...the charitable exemption from property tax although patients paid for the hospital services rendered. Corporation of Sisters of Mercy v. Lane County, 123 Or. 144, 155, 261 P. 694 (1927), The Manor has failed to observe that what was being paid for in our hospital decisions is completely dif......
  • Utah County, By and Through County Bd. of Equalization of Utah County v. Intermountain Health Care, Inc., 17699
    • United States
    • Supreme Court of Utah
    • June 26, 1985
    ...fact that these hospitals do not advertise that they render free service is inconsequential. The court in Corporation of Sisters of Mercy v. Lane County, 123 Or. 144, 261 P. 694 (1927), did not disqualify a charitable hospital for giving a bill to each patient so as not to be imposed upon b......
  • Delta Air Lines, Inc. v. Dep't of Revenue
    • United States
    • Oregon Tax Court
    • August 23, 2023
    ...were incorporated." Oregon Laws, title XXIX, ch II, § 4235 (1920) (emphasis added); see Corporation of Sisters of Mercy v. Lane Co., 17 123 Or. 144, 261 P 694 (1927). The court reasoned that the "adoption of a legislative policy exempting hospitals from taxation is predicated upon the theor......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT