Rabun Gap-Nacoochee School v. Thomas
| Citation | 228 Ga. 231,184 S.E.2d 824 |
| Decision Date | 21 October 1971 |
| Docket Number | Nos. 26716,GAP-NACOOCHEE,26717,s. 26716 |
| Parties | RABUNSCHOOL v. Hugh W. THOMAS et al. Hugh W. THOMAS et al. v. BABUNSCHOOL. |
| Court | Supreme Court of Georgia |
Syllabus by the Court
1. Ad valorem taxes may be assessed on certain property of Rabun Gap-Nacoochee School from which the school derives income, to wit:
(a) land and buildings used in the operation of a dairy which sells approximately 80 percent of the milk it produces to a private corporation;
(b) land and the building used in the operation of a craft shop which sells various handicraft items to the general public;
(c) land which is in the Federal Soil Bank Program;
(d) land on which peppers are raised for sale to a commercial soup company;
(e) two rental dwellings and the land on which they are located.
2. (a) The fact that the school serves a benevolent purpose does not make it a 'purely public charity.' However, the trial court properly found that it is 'a seminary of learning' within the meaning of the Constitution.
(b) Under our ruling in Division 1 of this opinion, certain of the school's personal property, such as farm machinery used in the operation of the dairy, is subject to taxation. It is for a jury to determine, on a trial of the case, which specific items of property are to be taxed.
(c) Dwellings provided at no expense to members of the school's faculty as a part of their compensation are exempt from taxation. However, dwellings similarly provided to employees who maintain and operate the physical properties of the school and to employees who work in the dairy are not exempt.
Knox Bynum, Clayton, King & Spalding, Charles L. Gowen, A. Felton Jenkins, Jr., Atlanta, for appellant.
V. D. Stockton, Clayton, McClure, Ramsay & Struble, George B. Ramsay, Jr., Robert B. Struble, Toccoa, for appellees.
These appeals are from orders on motions for summary judgments by the appellant and the appellees.
This case involves a question as to whether the real and personal property of Rabun Gap-Nacoochee School, a private educational institution, is subject to ad valorem taxation by Rabun County.
In August, 1970, Rabun Gap-Nacoochee School, hereinafter referred to as 'the school,' received notice from Hugh W. Thomas, Tax Commissioner of Rabun County, that the tax assessors of Rabun County were assessing a taxation on 1100 acres and 16 dwelling houses belonging to the school upon a taxable valuation of $71,000. Shortly thereafter, the school received notice that it owed the county for 1970 state, county, and school taxes, the sum of $3,634.43, based upon property having a total value of $87,000. Thereupon, the school filed its equitable complaint against the defendants in which it prayed that all of the school's properties, real and personal, located in Rabun County be decreed to be exempt under the Constitution and laws of this state from ad valorem taxation, in that all of said properties are used by the school as a purely public charitable institution and as an educational institution, and that the defendants be temporarily and permanently enjoined from levying or attempting to levy and collect any tax on any of its properties.
On presentation of the complaint the court granted a temporary injunction.
In their answer, the defendants alleged that the 1100 acres of land, the 16 dwellings, a dairy barn, and equipment on which the taxes were sought to be levied and collected, were used for the purpose of deriving income, and thereby were not exempt by reason of the school being an educational institution.
The school and the defendants filed their motions for a summary judgment based upon the pleadings, depositions and affidavits of several persons.
On May 29, 1971, the court entered orders in which it made findings and denied the school's motion for a summary judgment and granted in part and denied in part the defendants' motion for a summary judgment and certified both orders for immediate review. Notice of appeal was filed by the school and by the defendants.
The record discloses the following facts. Rabun Gap-Nacoochee School is a nonprofit educational institution, incorporated under the laws of Georgia, located in Rabun County. The purpose of the corporation as stated in its charter is: 'to educate and train men and women, boys and girls, living in mountain regions and other needy sections; and for such purposes it may build, operate, equip and maintain farm schools for instructing minors or adults in agriculture, economy and good citizenship; vocational schools, graded and high schools; normal and junior colleges for training teachers for mountain schools and conducting community activities; and said corporation proposes generally to educate, instruct and train mountain people under Christian auspices, provided that no person shall be excluded from the institution operated by it on account of belief in or adherence to any particular sect or religion; and for the purposes aforesaid said corporation may build, maintain, operate and equip schools, orphanages, academies, colleges, workshops, dormitories, and any other plants or buildings or institutions whatever reasonably necessary to promote the purposes of its organization * * * That said corporation desires the power, right and privilege, to charge, exact and collect such fees from those residing in its dormitories and orphanages and attending its schools and other institutions as it may see fit, provided always that the proceeds of such charges and collections shall be used solely for the charitable, educational and eleemosynary objects of said corporation; to enforce good order in its schools, orphanages and other institutions; to issue degrees and diplomas; and generally to do and perform all things in the opinion of said corporation reasonably necessary or proper to be done or performed to carry out the purposes of said corporation.' The basic aims and purposes of the school are: (1) to provide deserving boys and girls with secondary education in basic academic subjects such as language, social studies, sciences and literature, and (2) through its student work program to teach boys and girls responsible work habits with academic and Christian interests so that they may develop into productive and responsible citizens. The student work program is designed to teach the student to solve his own problems, to teach him responsible work habits and to teach him to do the job right the first time. Each student is required to spend a minimum of approximately 10 hours a week in the work program in addition to the normal classroom work. At present the school has approximately 86 students, boys and girls in equal number. These students reside in dormitories owned by the school. There was testimony that it costs the school approximately $2,200 per student per year. A student's parents or guardians who are able to pay, pay a tuition of $990 and each student must work and earn between $270 and $790 each year to be applied on his tuition. There was evidence that the average deficit per student is approximately $1,400 and that this deficit is made up from charitable contributions. Charitable contributions represented 42 percent of the total operating expenses for the year 1969-70. The school owns approximately 1,600 acres of land on which it has its college buildings and dormitories, comprising around 160 acres which is conceded by the defendants to be exempt from taxation, the balance of the property being land on which the school operates a dairy, land for pasture and farming purposes, and woodland.
The school also participates in the operation of a high school which is a part of the Rabun County school system. It rents the building in which classes are conducted by the county board of education for a nominal yearly rental.
(a) Error is assigned on the court's finding that the lands and buildings used by the school in the operation of the dairy were not exempt from taxation.
The evidence shows that the school operates a dairy barn and has 100 or more cows and that 80 to 85 percent of the milk produced from these cows is sold to a private corporation; that more than 800 acres of its land is used for pasture, growing hay, corn, and silage; that from the sale of milk in one year it received more than $73,000; that it also receives income from the sale of calves; that during the school year 1969-70, approximately 6 percent of the male student body during their stay in school worked in the dairy and an average of six students worked daily in the dairy; and, that for this work, part of their school cost was paid.
The court found that the portion of this property used for dairy purposes was being used to secure income and not for the primary purpose of operating the school and was subject to taxation.
(b) Error is assigned on the court's finding that a craft shop and the land on which the shop is located, were being used for the purpose of receiving income and were subject to taxation.
The evidence discloses that the school operates a craft shop located on its property abutting U.S. Highway 23, in which it sells gifts of handcraft, weaving, and similar items to the public. These articles are produced by persons having no connection with the school. The gross receipts from this operation in 1970 were $18,851.
(c) Error is assigned on the court's finding that land of the school in the Federal Soil Bank Program, from which it received income, was taxable.
The evidence discloses that approximately 200 acres of the school's land is committed to the Federal Soil Bank Program from which it receives annually approximately $3,000.
(d) Error is assigned on the court's finding that a small tract of land on which the school raises peppers was subject to taxation.
The evidence discloses that from this small tract of land the school raises peppers and...
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