Salisbury Hosp. Inc v. Rowan County

• Decision Date: 28 June 1933
• Docket Number: No. 522.,522.
• Parties: SALISBURY HOSPITAL, Inc. v. ROWAN COUNTY.
• Court: North Carolina Supreme Court

205 N.C. 8

169 S.E. 805

SALISBURY HOSPITAL, Inc.

v.ROWAN COUNTY.

No. 522.

Supreme Court of North Carolina.

June 28, 1933.

Appeal from Superior Court, Rowan County; Barnhill, Judge.

Action by the Salisbury Hospital, Inc., against Rowan County. Judgment for defendant, and plaintiff appeals.

No error.

The plaintiff is a corporation organized under the laws of this state, with its principal office and place of business in the city of Salisbury, Rowan county, N. C. It has an authorized capital stock of $250,000, divided into 2, 500 shares, each of the par value of $100. It was authorized to begin business when $60,000 of its capital stock had been subscribed for. Stock for this amount was subscribed for by residents of the city of Salisbury, and the plaintiff began business as authorized by its certificate of incorporation in 1921. Since said date, the plaintiff has been and is now engaged in the business of operating a general hospital and conducting a training school for nurses in connection with said hospital in the city of Salisbury, N. C.

During the years 1929, 1930, and 1931, the plaintiff owned a lot of land, with the buildings located thereon, situate in the city of Salisbury; it also owned certain personal property, consisting of furniture and equipment in said buildings. This property, both real and personal, was used by the plaintiff in the operation of its hospital and in the conduct of its training school for nurses.

The defendant, Rowan county, caused the property owned by the plaintiff, both real and personal, to be assessed and listed for taxation during the years 1929, 1930, and 1931. The plaintiff has not paid the taxes levied on its property by the defendant for said years, and the defendant has advertised, or threatens to advertise, said property for sale for the collection of said taxes.

This action was begun on April 12, 1932, for the purpose of obtaining a judgment declaring that the property, both real and personal, owned by the plaintiff, and used by it as a hospital and training school for nurses, during the years 1929, 1930, and 1931, was exempt from taxation by the defendant, for the reason that said property was used by the defendant, not for profit, but purely and completely for charitable purposes.

All the evidence at the trial tended to show that the plaintiff was organized as a business corporation, and not as a charitable association, and that plaintiff charged all patients admitted to its hospital according to a fixed schedule, and collected from such patients as were able to pay such charges, but that it did not attempt to collect such charges from patients who were found upon investigation to be unable to pay. Patients were classified by plaintiff as pay patients and as charity patients. The latter were relieved of all charg-es made against them. No profit was made by plaintiff from its business during the years 1930 and 1931. A profit was realized by plaintiff from its business during the year 1929. This profit was applied as a payment on plaintiff's indebtedness. No dividend was paid by plaintiff during the years 1929, 1930, or 1931 to its stockholders. There was evidence tending to show that stockholders of the plaintiff, at the time they subscribed and paid for their stock, did not expect to receive dividends, but there was no evidence tending to show that stockholders had waived their right to dividends, or that plaintiff by corporate action had dedicated its property, real or personal, exclusively to charitable purposes.

The issue raised by the answer of the defendant to the complaint in this action was submitted to the jury and answered as follows: "Was the plaintiff during the years 1929, 1930 and 1931 a hospital conducted entirely and completely as a charitable institution, as alleged in the complaint? Answer, No."

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