Georgia Osteopathic Hospital, Inc. v. Strickland

• Decision Date: 04 December 1970
• Docket Number: Nos. 1,3,No. 45520,2,45520,s. 1
• Citation: 123 Ga.App. 86,179 S.E.2d 560
• Parties: GEORGIA OSTEOPATHIC HOSPITAL, INC. v. Onie STRICKLAND
• Court: Georgia Court of Appeals

Page 560

179 S.E.2d 560

123 Ga.App. 86

GEORGIA OSTEOPATHIC HOSPITAL, INC. v. Onie STRICKLAND.

No. 45520.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Dec. 4, 1970.

Zachary, Hunter, Zachary & Bowden, W. E. Zachary, Sr., Decatur, for appellant.

Essley B. Burdine, Atlanta, for appellee.

Syllabus Opinion by the Court

HALL, Presiding Judge.

The hospital appeals from a judgment of the DeKalb Superior Court affirming an award of the State Board of Workmen's Compensation to one of its employees.

The sole issue is whether the Georgia Osteopathic Hospital is an 'employer' as contemplated by Georgia Code Ann. § 114-101, and thus subject to the Workmen's Compensation Act. The section defines an employer as '* * * any individual, firm, association or corporation engaged in any business operated for gain or profit, except as hereinafter provided, * * *' This court has held that 'Non-profit organizations do not come under the definition of employer as defined in the Workmen's Compensation Law.' Flint Electric Membership Corp. v. Posey, 78 Ga.App. 597, 599, 51 S.E.2d 869, 871.

The board found 'as a matter of fact' that the hospital was operated for gain '* * * in that each year its net worth has increased and a profit has been shown above its operating expenses.' It further found that the same issue was decided by the Supreme Court of Georgia, (citing Georgia Osteopathic Hospital, Inc. v. Alford, 217 Ga. 663, 124 S.E.2d 402) and that, as a matter of law, the hospital is operated for a gain or profit.

The hospital contends the board misinterpreted and misapplied the law of the Alford case. We must agree. The sole issue and the holding in Alford was that the hospital was not a 'purely charitable institution' within the meaning of the Constitution and statutes of the state and therefore not exempt from ad valorem taxes. It did not hold that the hospital was a profit-making organization.

'Charitable' and 'non-profit' are not synonymous. Non-profit organizations also include those devoted to religious, scientific, educational, literary and other purposes. Further, the test for determining whether an organization is non-profit is not whether it has an excess of income over expenses for several years. If this were the case, no such organization could ever expand beyond its initial stage.

The Georgia Corporation Code defines a non-profit corporation as one 'no part of the income or profit of which is distributable to its members, directors or officers.' Code Ann. § 22-2102(c). Both the charter and the actual operations of the hospital conform to this test as shown by the evidence adduced at the hearing, including the fact it is recognized as a non-profit organization by the United States Internal Revenue Service and the Georgia Sales Tax Unit.

Finally, the fact that the member-doctors clearly benefit in their private practice from the hospital's operation does not make this a business run for gain. The same thing could be said for the members of the Georgia Milk Producers Confederation or the Flint Electric Membership Corp.; yet this court has held both organizations to be non-profit for the purposes of workmen's compensation. Hall v. Georgia Milk Producers Confederation, 61 Ga.App. 676, 7 S.E.2d 330; Flint Electric Membership Corp. v. Posey, supra.

Judgment reversed.

BELL, C.J., JORDAN, P.J., and EBERHARDT, PANNELL, DEEN, QUILLIAN and WHITMAN, JJ., concur.

EVANS, J., dissents.

VEANS, Judge (dissenting).

The Workmen's Compensation Board made a finding from the evidence submitted that this hospital is an 'employer' as contemplated by Code Ann. § 114-101, and that 'as a matter of fact' the hospital was operated for gain. This finding was affirmed by the Superior Court of DeKalb County, Georgia, and if there was any evidence before the State Board of Workmen's Compensation to support its finding, we are bound thereby.

Among the findings by the Board was that 'any individual, firm, association or corporation engaged in any business for gain or profit, except as hereinafter provided' is subject to workmen's compensation law, if meeting the other requirements, under Code § 114-101, as amended (Ga.L.1943, pp. 401, 402; 1950, pp. 324, 404, 405; 1952, pp. 167, 168; 1953, pp. 526, 527; 1958, p. 183; 1964, p. 675; 1967, p. 633; 1968, pp. 1163, 1164). The board also found that under Code § 114-107 as amended (Ga.L.1937, pp. 528, 529) that even though workmen's compensation does not apply 'to employees of institutions maintained and operated as public charities; nor employers of such employees,' that as a matter of fact, from a consideration of all the records before the board, including the financial report of the defendant, 'that the Georgia Osteopathis Hospital is clearly operated for gain in that each year its net worth has increased and a profit has been shown above its operating expenses.' From the above findings the board further stated: 'The institution is not operated as a public charity but merely for the purpose of providing facilities for members of the staff of said hospital and the purpose of training persons engaged in the practice of osteopathic medicine.'

It also considered that the Supreme Court of Georgia, in the case of Georgia Osteopathic Hospital, Inc. v. Alford, 217 Ga. 663, 124 S.E.2d 402 had...