Sanitarium v. Town of Summit

• Decision Date: 17 May 1938
• Citation: 228 Wis. 507,279 N.W. 623
• Parties: ROGERS MEMORIAL SANITARIUM v. TOWN OF SUMMIT.
• Court: Wisconsin Supreme Court

228 Wis. 507

279 N.W. 623

ROGERS MEMORIAL SANITARIUM

v.TOWN OF SUMMIT.^*

Supreme Court of Wisconsin.

May 17, 1938.

Appeal from a judgment of the Circuit Court for Waukesha County; C. M. Davison, Judge.

Reversed.

Action by Rogers Memorial Sanitarium against the Town of Summit to recover a tax on real estate paid under protest, commenced June 4, 1937. From a judgment for plaintiff entered December 30, 1937, the defendant appeals. The facts are stated in the opinion.

Dougherty, Arnold & Kivett, of Milwaukee, for appellant.

Quarles, Spence & Quarles, of Milwaukee (T. H. Spence and Arthur Enright, both of Milwaukee, of counsel), for respondent.

FOWLER, Justice.

The action is by Rogers Memorial Sanitarium, a nonstock, nonprofit corporation, against the Town of Summit, to recover $897.02 of a tax of $997.02 imposed by the town upon the plaintiff as real estate and personal property taxes during the year 1936. The taxes were paid under protest. The claim for recovery is based upon the contention that the buildings, personal property and ten acres of the land on which a sanitarium of the plaintiff is located is exempt as belonging to an institution covered by section 70.11(4), Stats. The statute exempts:

“Personal property owned by any educational institution having a regular curriculum and offering courses for at least six months in the year, or by any *** scientific, literary, or 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 institution or association and embracing the same, not exceeding ten acres; provided, such real or personal property is not leased or otherwise used for pecuniary profit.”

It will be observed that educational institutions covered by the statute are those having a regular curriculum and offering courses for six months of each year. The plaintiff has no curriculum and offers no courses. Obviously it is not exempt as an educational institution under the language of the statute. The statute also covers “literary” institutions, but manifestly a sanitarium is not such.

The statute also covers scientific associations and it is suggested that the plaintiff qualifies under this head. The suggestion is based upon the facts that its physicians are engaged in the treatment of its inmates, who are limited to persons afflicted with mental and nervous diseases, and in the study of their individual cases; that the knowledge thus acquired is promulgated to the medical profession; and that the plaintiff is thus engaged in furthering the science of the care and treatment of mental and nervous diseases. Plainly it is no more a scientific institution than any hospital or clinic whose physicians disclose their medical discoveries and practices to the profession generally, as physicians as a class take pride in doing. We cannot sustain this claim.

The plaintiff must therefore be a “benevolent” institution or its case falls. The claim that it is such is based upon the fact that no person makes any profit out of its operation and a large part of its inmates receive treatment and hospitalization at less than cost and it thereby becomes a charitable institution.

It is suggested that the articles of incorporation of the plaintiff bring it within the exemption of the statute, because it is there declared that the “purpose” of the organization of the corporation is “exclusively for benevolent, charitable and educational purposes,” and the property taxed is used “exclusively for the purposes” of the corporation and “not for pecuniary profit.” If this declaration were taken as controlling the plaintiff would fall under the exemption statute but manifestly it must be judged by what it actually does rather than by its declared purposes. Besides, paragraph (a) of article I recites that the “business and purpose” of the corporation are “to own, operate and manage a sanitarium for the care and treatment of nervous, mental and other diseases, ailments and disorders,” and it would seem that this specifically declared “business and purpose” would be entitled to more weight in determining the purpose than the general declaration first quoted.

The income of the institution in 1935 was over $85,000; the excess of its receipts over operating expenses was over $20,000 excluding as an expense $12,000 paid for insurance on the life of Dr. Rogers, payable to the institution. All of the income was received from its patients except $2,209.22, all but $230 of which was made up from interest from and profits made on the sale of bonds. Of the days' service to its patients 10,215 were rendered at above cost while 4,080...