Prairie Du Chien Sanitarium Co. v. City of Prairie Du Chien

• Decision Date: 09 February 1943
• Citation: 7 N.W.2d 832,242 Wis. 262
• Parties: PRAIRIE DU CHIEN SANITARIUM CO., Inc., v. CITY OF PRAIRIE DU CHIEN.
• Court: Wisconsin Supreme Court

242 Wis. 262

7 N.W.2d 832

PRAIRIE DU CHIEN SANITARIUM CO., Inc.,

v.CITY OF PRAIRIE DU CHIEN.

Supreme Court of Wisconsin.

Feb. 9, 1943.

Appeal from a judgment of the Circuit Court for Crawford County; S. E. Smalley, Circuit Judge.

Action begun September 18, 1941, by the Prairie du Chien Sanitarium Company, Inc., against the city of Prairie du Chien to recover taxes paid under protest. From a judgment dismissing the plaintiff's complaint, the plaintiff appeals.

The plaintiff, successor to a private corporation, was re-organized and incorporated in 1940 under chapter 180, Stats., to maintain a hospital and sanitarium. The property was acquired from its predecessor by purchase. The members of the corporation are Dr. and Mrs. Satter, Dr. Dessloch, Mr. Dunne, and three relatives of Dr. and Mrs. Satter, the latter three paying nothing for their membership. Mr. Dunne is the business manager of the hospital, and Dr. Satter and Dr. Dessloch have, by agreement with plaintiff, the exclusive right to surgical cases in the hospital. The doctors receive no salaries from the hospital but they are provided with heated, unfurnished offices in the hospital rent free and one meal a day. They use all the facilities of the hospital without paying. In return they supervise the hospital and its personnel without compensation. The hospital cares for county and municipal patients for a contract price which is less than cost. These patients comprise about thirty per cent of the total and are treated by Dr. Satter and Dr. Dessloch without charge. The other patients in the hospital are the private patients of these two doctors and other doctors. They are charged at regular rates, though about ten per cent of the total number of all accounts are not collected. The patients of Dr. Satter and Dr. Dessloch pay the hospital a fee for the use of the operating room, and they are billed by the doctors for their services. The hospital allegedly takes all patients applying for admittance except mental cases and people suffering from contagious diseases. Except for the two medical directors, all of the employees of the hospital are paid regular wages.

Appellant paid the personal property and real estate taxes under protest and sues to recover them, alleging that it is exempt under sec. 70.11(4), Stats., as a “benevolent association.” The trial court found that the association was not within the statutory exemption and dismissed the complaint.

Graves & Earll, of Prairie du Chien, for appellant.

F. J. Antoine, City Atty., of Prairie du Chien, MacArthur McKichan, of Platteville, (A. W. Kopp, of Platteville, of counsel), for respondent.

FAIRCHILD, Justice.

Appellant contends that under the provisions of sec. 70.11(4), Stats., its real and personal property is exempt from taxation. This statute provides exemption for “Personal property owned by any * * * benevolent association * * * which is used exclusively for the purposes of such association, and the real property necessary for the location and convenience of the buildings of such * * * association and embracing the same, not exceeding ten acres; provided, such real or personal property is not leased or otherwise used for pecuniary profit; * * *.” In order for appellant's contention to be sustained it must appear that (1) appellant is a benevolent association; (2) the personal property is used exclusively for the purposes of such association; (3) the real and personal property is not used for pecuniary profit.

What constitutes a hospital a benevolent association within the meaning of this statute has been considered in several cases and the tests to be applied have been discussed. Order of Sisters of St. Joseph v. Plover, 239 Wis. 278, 1 N.W.2d 173;Rogers Memorial Sanitarium v. Summit, 228 Wis. 507, 279 N.W. 623;St. Joseph's Hospital Ass'n v. Ashland County, 96 Wis. 636, 72 N.W. 43. It is clear that the fact that the articles of incorporation say that the institution is a benevolent and charitable one is not controlling. The actual financial set-up of the hospital is important. If the books of the corporation show a substantial profit, as they did in the Rogers case, this is a circumstance tending to negative the idea of a benevolent institution. The fact the hospital receives and is dependent on donations indicates a benevolent character, as does the fact that it takes all patients who apply, regardless of their ability to...