Hospital Authority of Albany v. Stewart

• Decision Date: 08 June 1970
• Docket Number: No. 25779,25779
• Citation: Hospital Authority of Albany v. Stewart, 175 S.E.2d 857, 226 Ga. 530 (Ga. 1970)
• Parties: HOSPITAL AUTHORITY OF ALBANY et al. v. D. Lamar STEWART, Sheriff et al.
• Court: Georgia Supreme Court

Page 857

175 S.E.2d 857

226 Ga. 530

HOSPITAL AUTHORITY OF ALBANY et al. v. D. Lamar STEWART, Sheriff et al.

No. 25779.

Supreme Court of Georgia.

June 8, 1970.

Rehearing Denied July 9, 1970.

Syllabus by the Court

Property owned by a hospital authority created under the authority of Code Ann. Ch. 88-18 is public property so as to be exempt from ad valorem taxation.

Divine, Busbee & Wilkin, George D. Busbee, E. B. Wilkin, Jr., Albany, for appellants.

Burt & Burt, W. H. Burt, Donald D. Rentz, Albany, for appellees.

NICHOLS, Justice.

The Court of Appeals has certified the following question to the Supreme Court: 'Is real property held and owned by a public hospital authority, created under and by virtue of the Hospital Authorities Law (Ga.L.1941, p. 241, as amended, and as superseded by Ga.L.1964, pp. 499, 598, as amended (Code Ann. § 88-1801 et seq.)), 'public property' within the meaning of the Constitution of 1945, Art. VII, Sec. I, Par. IV (Code Ann. § 2-5404) and Ga.L.1946, p. 12, as amended (Code Ann. § 92-201) so as to be exempt from ad valorem taxation, where the property itself is not a part of the hospital but its income is properly devoted to public purposes (hospital operations) in the furtherance of the legitimate functions of the hospital authority?

'See Code Ann. § 88-1802(a), 1803, 1805; Code Ann. § 87-802(b)(d); Undercofler v. Hospital Authority of Forsyth County, 221 Ga. 501 (145 S.E.2d 487); compare Culbreth v. Southwest Georgia Regional Housing Authority, 199 Ga. 183 (33 S.E.2d 684) (and Ga.L.1937, p. 210, as amended; §§ 4, 8, 21), and Sigman v. Brunswick Port Authority, 214 Ga. 332 (104 S.E.2d 467) (and Ga.L.1945, p. 1023, as amended by Ga.L.1958, p. 82, §§ 2, 15) with Sheffield v. State School Bldg. Authority, 208 Ga. 575, 582(4) (68 S.E.2d 590) (and Ga.L.1951, p. 241, §§ 2, 21), and McLucas v. State Bridge Building Authority, 210 Ga. 1, 8(3) (77 S.E.2d 531) (and Ga.L.1953, p. 626, §§ 2, 30). See also Stegall v. Southwest Georgia Regional Housing Authority, 197 Ga. 571, 588(4) (30 S.E.2d 196); Richmond County Hospital Authority v. McLain, 112 Ga.App. 209 (144 S.E.2d 565); 3 E.G.L., Authority Financing §§ 4, 13.'

This question does not involve the tax exemption of property used for charitable purposes nor does it involve the tax liability of any person in possession of any such property under any rental or lease agreement; but the sole question is whether or not property owned by such hospital authority is 'public property' and therefore not subject to ad valorem taxation.

A review of the decisions cited by the Court of Appeals, as well as review of other decisions, shows that there is a conflict in the decisions of this court; although, in some instances an apparent conflict disappears upon closer scrutiny. In the case of Trustees of the Academy of Richmond County v. Bohler, 80 Ga. 159, 7 S.E. 633 it is held: 'Therefore, lands held in trust to appropriate the annual product to the erection of a poor-house and the support of its inmates forever, are not exempt (from ad valorem taxation). The poor-house, when erected, will be exempt, but not detached property from which its support is to be derived.' An examination of the report of an earlier appeal involving the 'trust' discloses that the property held in 'trust' was privately donated in a trust provision of a will and the 'trustees' of the Richmond Academy were the trustees under the will which created the trust. The property was not a part of the corpus of the Richmond Academy property. See City Council of Augusta v. Walton, 77 Ga. 517, 1 S.E. 214.

As early as Dart v. Houston, 22 Ga. 506, it was recognized that a corporation created by the legislature and funded with State funds is a creature of the legislature and subject to the control of the legislature while a corporation created by the legislature to be funded by private funds is not so subject to future legislative control. Citing Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, 4 L.Ed 629.

In several cases, including Trustees of Academy of Richmond County v. City Council of Augusta, 90 Ga. 634, 17 S.E. 61, 20 L.R.A. 151, it was held: 'Lands held in trust under the Act of July, 31, 1783, and subsequent acts, vesting in trustees funds arising from the sale and lease of certain lands of the state for the erection and maintenance of a public academy in the county of Richmond, are exempt from municipal taxation, though separate from the tract on which the academy is situated and used only as a means of income for the institution, the same being public property of the state.' In the body of the opinion it was held: 'It is claimed on the part of the city that the property is not public but private; that the academy is conducted by the trustees as a private school, and is not a part of the public school system of the state or county; and that as the lands taxed are separate from the tract on which the academy is situated, and are used only as a means of income, they are not within the exemptions allowed by the constitution and granted by the statute of exemptions. * * * In view of the legislation to which we have referred, there can be no question as to the public character of the institution originally. The property vested in the trustees was public property and was committed to them for a public purpose. No private interest of any kind was acquired. The beneficial interest was in the public, and the trustees were merely agents of the state for the administration of the fund and the management of the institution. Since that time there has been no legislation changing the public character of the trust, or parting with the control of the state over the institution or the fund connected with it. Mere noninterference with the control exercised by the trustees could not affect the rights of the state, or divest the institution or the property of its public character. Nor is the institution conducted now, any more than it was at first, for any private purpose. It still subserves the public end for which it was created,-the education of the people; and its purpose is none the less public because of it being conducted independently of the general public school system of the state or county. The right of the state as to property held in this manner was under consideration by this court in the case of Dart v. Houston, 22 Ga. 506. It was there complained by the plaintiffs in error that the court erred in deciding that the Glynn County Academy-an institution endowed in the same manner as the Richmond County Academy-was a public corporation, and that the trustees had no beneficial interest in the fund, but only a nacked power which the state could resume at pleasure. The court affirmed the judgment, and held that the funds of the academy were public property, and that the control of the institution was in the state. As to the same institution, it was said, in the case of Board of Education of Mayor, etc., of Brunswick, 72 Ga. 353: 'It is not, and never was, a private or corporate, but a public, eleemosynary establishment.' * * * These lands, therefore, are clearly exempt under the statute * * * which declares that 'all public property' shall be exempt from taxation. It is immaterial whether the property is used merely for income or not. The proviso at the end of the statute and of the constitutionl provision on this subject * * * which excludes property 'used for purposes of private or corporate profit or income' does not apply to public property.' Compare Neal-Millard Co. v. Trustees of Chatham Academy, 121 Ga. 208, 48 S.E. 978 and citations.

A different result was reached in Sheffield v. State School Building Authority, 208 Ga. 575, 582, 68 S.E.2d 590; State of Georgia v. Regents of University System of Georgia, 179 Ga. 210, 175 S.E. 567; and Stegall v. Soughwest Georgia Regional Housing Authority, 197 Ga. 571, 30 S.E.2d 196, but those cases primarily dealt with the bonds to be issued by such authorities being a 'debt' in violation of stated provisions of the Constitution. In the Stegall case it was held: 'While it has been held by some courts that housing authorities created under similar statutes are municipal corporations in the broad sense that their property might be treated as public property for the purpose of tax exemption, the regional authority here could not be correctly classified as a municipal corporation within the meaning of the foregoing debt clause of our constitution.' The author of that opinion wrote for the court in Culbreth v. Southwest Georgia Regional Housing Authority, 199 Ga. 183, 188, 33 S.E.2d 684, 688, with one Justice dissenting: 'The constitution provides that, 'The General Assembly may, by law, exempt from taxation all public property,' and it has been declared by statute that all such property shall be exempt. Code, §§ 2-5002, Const. art. 782, par. 2; 92-201. Property may be public property so as to come within the exemption, although the legal title is not in the State, nor in a county or municipality, provided it is 'not used for purposes of private or corporate profit and income.' Code, § 2-5002; Trustees of Academy of Richmond County v. City Council of Augusta, 90 Ga. 634, 17 S.E. 61, 20 ,L.R.A. 151; Walden v. Whigham, 120 Ga. 646, 48 S.E. 159. 'Public property, within the meaning of that clause of the constitution which authorized the General Assembly to exempt from taxation all public property, embraces only such property as is owned by the State, or some political division thereof, and title to which is vested directly in the State, or one of its subordinate political divisions, or in some person holding exclusively for the benefit of the State, or a subordinate public corporation. Board of Trustees of Gate City Guard v. City of Atlanta, 113 Ga. 883, 39 S.E. 394, 54 L.R.A. 806.' Williamson v. Housing Authority of Augusta, 186 Ga. 673(8), 691, 199 S.E. 43, 54 (supra).

'As we have seen above, the applicable statutes purport to...