Peachtree on Peachtree Inn, Inc. v. Camp

• Decision Date: 04 September 1969
• Docket Number: Nos. 1,3,2,No. 44368,44368,s. 1
• Citation: 120 Ga.App. 403,170 S.E.2d 709
• Parties: PEACHTREE ON PEACHTREE INN, INC. v. J. L. CAMP, Tax Commissioner, et al
• Court: Georgia Court of Appeals

Page 709

170 S.E.2d 709

120 Ga.App. 403

PEACHTREE ON PEACHTREE INN, INC. v. J. L. CAMP, Tax Commissioner, et al.

No. 44368.

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

Sept. 4, 1969.

Rehearing Denied Sept. 30, 1969.

Certiorari Denied Nov. 12, 1969.

Syllabus by the Court

1. Since the appellant is a purely public charity and meets the requirements of Code Ann. § 92-201, that portion of its property which is being used as a home for the aged is tax exempt.

2. Where there is no certificate by the trial judge, the refusal to grant a motion for summary judgment is not subject to review by direct appeal or otherwise.

The facts as stated by the appellant in its brief are as follows: 'The Georgia Baptist Convention was commissioned by the Beazley Foundation, Incorporated, a tax-exempt charitable corporation to charter a Georgia corporation through which one of the foundation's charitable purposes, to-wit, providing, or assisting in providing, for the needs of elderly retired people of limited income, might be carried out in Georgia.

'The understanding between the foundation and the Georgia Baptist Convention was that when such corporation had been chartered and organized, the foundation would convey to it by deed of gift a 17-story building in downtown Atlanta and all real and personal property in and pertaining to the building, in order that a home for elderly persons of limited income might be operated in such building in furtherance of the foundation's charitable purpose. In pursuance of said understanding, the Georgia Baptist Convention caused the appellant, Peachtree on Peachtree, Incorporated, to be chartered on November 22, 1966, as a charitable non-profit corporation having no capital stock. The principal charitable purpose of appellant is to acquire, own maintain and operate an institution to receive, house, feed and care for aged men and women who otherwise could not afford adequate facilities and to provide for their physical, mental and spiritual welfare.

'On December 31, 1966, the foundation, as anticipated, deeded the 17 story building (formerly known as the Peachtree on Peachtree Hotel) and all associated property to appellant.

'In 1967, appellant borrowed $250,000 to renovate and improve the building so as to place it in proper condition for use by elderly residents. This loan had the prior approval of the executive committee of the Georgia Baptist Convention. The foundation made an additional charitable gift of $50,000 to Appellant to furnish funds with which operations could begin.

'The building was renamed the Peachtree on Peachtree Inn (the 'Inn') and its renovation commenced on a floor by floor basis from the first floor upwards. By November 1967 ten floors had been completely renovated and the remaining floors were scheduled for renovation as funds and occupancy dictated. The inn consists of a lower lobby which houses cooking, dining, and other service facilities; a lobby level which houses the lobby, a chapellibrary and office and administrative areas; a street level that houses two retail stores together with the entrance and service areas that serve the residents of the inn; and fourteen floors each containing twelve private or semiprivate rooms and living areas for the inn's residents.

'As reflected in its admission policy, the inn is used to house and care for aged men and women who, though not entirely without income from social security, relatives or friends, or other retirement funds, do not have an income which is sufficient to support them in anything more than conditions detrimental to the well-being of the aged. Requirements for admission are that a person be not less than 60 years of age, be of good moral character, and be ambulatory. No preference is given to members of any church or denomination, nor is there any requirement that an applicant have any religious affiliation. The only other requirement is that the applicant be of such character that his associations with the other residents will not be offensive or create unpleasant surroundings.

'Each resident of the inn is assigned a private or semi-private room, is furnished clean linen and towels and periodic cleaning service with respect to his room, can use the common areas and is entitled to eat all of his meals in the inn dining room. For these facilities, including three nourishing meals per day, a resident or his sponsor was initially called upon to make a $100 deposit upon admission and to pay a monthly sum ranging from $140 to $175. Beginning with July 1968, to the extent that the resident or his sponsor was financially able to do so, a deposit of $200 has been made and each resident is charged only to the extent that he or his sponsor is able to defray the maximum charge of $140 to $175 a month.

'When the Inn was conveyed to appellant, tenants occupied two retail stores on the ground floor under ten-year leases and such tenants continue to operate their stores. The area devoted to these two stores is approximately 4% of the total usable area in the building. Aggregate annual rentals received by appellant for these stores, in the amount of $22,000 are applied exclusively against the direct cost of operating the Inn, which cost was budgeted at $276,156 for 1968.

'The aggregate monthly payments made by residents plus rentals from the two stores have fallen far short of covering the direct cost of operating the inn. The main items of operating expense have been incurred for meals, cleaning the inn including the residents' rooms and furnishing linens and towels. In 1967, appellant incurred an operating deficit of $65,950. In addition to the aforementioned $50,000 gift received from the Foundation, appellant received charitable contributions from the Georgia Baptist Convention in the amount of $6,000 and from other persons in the amount of $1,525 which were applied against such deficit. These contributions totaling $57,525 fell $8,425 short of covering the 1967 deficit. Appellant's trustees realized that the inn would probably suffer a similar loss in 1968 and discussed this concern with the foundation which agreed to give $25,000 if the Trustees would raise $25,000 in the Atlanta community. The trustees raised $26,014 from 23 persons and the foundation contributed $25,000 as promised. Anticipating a loss in 1968 approximately equal to that in 1967, the foundation further agreed to match local donations up to $33,000. For the first three months of 1968 the operating deficit was $10,008.

'Not only have the payments made by the residents plus the store rentals been insufficient to cover direct operating expenses of the inn, but no part of such payments have been applied towards mortgage amortization on the building, it having been unencumbered when received from the foundation. Likewise, no part of such payments is applied towards the amortization of the $250,000 loan obtained to renovate and improve the building. Each year appellant requests the Georgia Baptist Convention to pay the accrued interest and principal due on the loan. The 1968 budget of the convention included $35,000 for that purpose. In effect, all residents of the inn have the use and enjoyment of the building, furnishings and improvements without cost or obligation-that is, rent free.

'As of November 30, 1967, the inn was home to approximately one-half of the 169 residents which it plans ultimately to accommodate. Of all the residents of the inn, 85% had incomes below the poverty level for persons of their age. Poverty levels are measured by the objective standards promulgated by the Atlanta Housing Authority. Two-thirds of the residents had a net worth that is below the level considered necessary by the Atlanta Housing Authority to raise a person of limited income above the poverty level.

'The policy statement of the inn provides that consideration would be given to the financial needs of individual residents with respect to whether monthly payments might be reduced in given situations. When the inn opened in 1967, all available funds were utilized to renovate and prepare the building for occupancy including the addition of eating facilities. At that time there were no additional funds available to defray the direct costs of operating the inn. In July, 1968, through the continuing generosity of the foundation, it became possible for appellant to fully effectuate this policy by accepting otherwise qualified residents who were unable even to make the minimum monthly payments established by the inn, even though, as indicated, these minimum payments fell far short of defraying a resident's pro-rata cost of operating the inn. In keeping with this new capability two persons had already been accepted on a substantially reduced payment basis by July 26, 1968.

'In 1967, the joint City-County Board of Tax Assessors of the City of Atlanta and Fulton County, Georgia, assessed the inn and all personal property in an pertaining thereto for ad valorem tax purposes notwithstanding appellant's request to the board that its property be exempted from taxation as an institution of purely public charity. Subsequently, appellant received notices of ad valorem taxes due to Fulton County, and a fi. fa. notice in favor of the City of Atlanta, all pertaining to ad valorem taxes alleged to be due for the year 1967. Thereafter, appellant brought a declaratory judgment action in the Fulton Superior Court principally seeking to have itself declared an institution of purely public charity with respect to the property in question and therefore exempt under Georgia law from the ad valorem taxes sought to be collected.

'The superior court granted appellees' motion to strike allegations and exhibits showing that appellant is exempt from Federal income taxes and has been granted a free business license by the City of Atlanta.'

The appellees agree that the statement of facts contained in the appellant's brief is correct but state that there are additional...