Readlyn Hospital v. Hoth
| Decision Date | 09 March 1937 |
| Docket Number | 43707. |
| Citation | 272 N.W. 90,223 Iowa 341 |
| Parties | READLYN HOSPITAL v. HOTH, County Treasurer, et al. et al. |
| Court | Iowa Supreme Court |
Appeal from District Court, Bremer County; M. H. Kepler, Judge.
This is an injunction proceeding to restrain the defendants from the collection of taxes against plaintiff's property. From a decree in favor of defendants, plaintiff appeals.
Affirmed.
Arben L. Young, of Waverly, for appellant.
Oliver J. Reeve, of Waverly, for appellees.
This is an appeal from the district court of Bremer county from a decree refusing an injunction, and in holding that the plaintiff's property was not exempt from taxes assessed against said property for the last half of 1934, under section 6944, par. 9, of the Code of 1935.
Section 6944, par. 9, of the Code of 1935, provides that the following classes of property shall not be taxed: " All grounds and buildings used by * * * charitable, benevolent, * * * institutions and societies solely for their appropriate objects, not exceeding three hundred twenty acres in extent and not leased or otherwise used with a view to pecuniary profit."
Appellant contends that its property, part of which is used as a hospital, is exempt from taxation under said statute, because it is used solely for charitable and benevolent purposes.
For about 15 years prior to March 11, 1933, Dr. E. N. Osnes owned two houses situated upon lots 16, 17, and 18, in block 12, in the town of Readlyn, Iowa. He lived in one of the houses and used the other as a private hospital. At or about the same time Dr. E. N. Osnes, his wife, Emilie Osnes, and Emma Hesse a nurse in the hospital, formed a corporation known as the Readlyn Hospital for benevolent, charitable, and scientific purposes, and not for pecuniary profit. The persons named as officers of the corporation were E. N. Osnes, president, and Emilie Osnes, his wife, secretary and treasurer. E. N. Osnes Emilie Osnes and Emma Hesse, were named as trustees. The articles of incorporation made no provision for any capital stock or dividends.
On March 11, 1933, Dr. E. N. Osnes and his wife, Emilie Osnes, conveyed said property to the Readlyn Hospital, a corporation, with a provision in the deed that, if the property ceased to be used for any purpose other than a hospital, the title would revert to the grantors, E. N. Osnes and Emilie Osnes, their heirs or their estate.
The two houses are about 12 feet apart, one of which had always been used by Dr. Osnes as a residence, and the other as a hospital. After the conveyance to the corporation, the doctor continued to use part of one of the houses as his residence, and part of the other as his office. He also continued to practice his profession in practically the same manner as before. He used the one house as his residence, and two rooms in the hospital building for his offices. While the evidence fails to show the amount of money realized by Dr. Osnes in his practice, it does show that he made charges for his services and collected his fees therefor in the same manner as before.
The evidence fails to show the size of the hospital building, but, as it is situated on a part of three ordinary town lots having a value of about $5200, including the buildings, they are evidently not very large.
The taxes on this property were originally assessed to E. N. Osnes and were all paid by him, except the last half of 1934. Thereafter the defendants advertised the property for sale for the nonpayment of delinquent taxes, and this action was commenced to enjoin the sale thereof, upon the ground that it was exempt from taxes, because it was used solely for charitable and benevolent purposes, as provided in section 6944, par. 9, of the Code of 1935. The defendants denied the right of exemption because the property was not used solely for charitable or benevolent purposes. The lower court found in favor of the defendants, and plaintiff appeals.
Appellant contends that because the articles of incorporation show that the Readlyn Hospital was organized for charitable and benevolent purposes, that the objects and purposes as expressed in its articles of incorporation should be controlling in determining its objects and purposes. The objects and purposes of the corporation as expressed in its articles of incorporation may be considered in determining this question, but the recital thereof in its articles is not controlling in determining the question of exemption. This question must be determined from the use made of the property rather than the declaration made in its articles of incorporation. Theta XI Bldg. Ass'n v. Board of Review, 217 Iowa, 1181, 251 N.W. 76.
The sole question for determination in this case is whether or not the uses made of the property are solely for charitable and benevolent purposes within the contemplation of section 6944, par. 9, of the Code of 1935, providing an exemption of property used solely for their appropriate objects.
In Theta XI Bldg. Ass'n v. Board of Review, 217 Iowa, 1181, 251 N.W. 76, we said: " It is the use of the property, rather than the declaration made in the charter of the appellant, which determines the question as to its exemption from taxation."
Statutes passed for the purpose of exempting property from taxation must be strictly construed, and, if there is any doubt upon the question, it must be resolved against the exemption and in favor of taxation. The exemption is not to be made by judicial construction, but any one claiming exemption from taxation under a statute must show clearly that the property is exempt within the terms of the Constitution and the statute. Theta Xi Bldg. Ass'n v. Board of Review, 217 Iowa, 1181, 251 N.W. 76; Trustees of Griswold College v. State, 46 Iowa, 275, 26 Am.Rep. 138; City of Sioux City v. Ind. School Dist., 55 Iowa, 150, 7 N.W. 488; Farwell v. Des Moines Brick Mfg. Co., 97 Iowa, 286, 66 N.W. 176, 35 L.R.A. 63; Lacy v. Davis, 112 Iowa, 106, 83 N.W. 784; In re Assessment of Boyd, 138 Iowa, 583, 116 N.W. 700, 17...
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