### No. 12599 IN

### THE SUPREME COURT OF THE 

### STATE OF MONTANA 1974

MONTANA DEACONESS HOSPITAL, A NON-PROFIT CORPORATION, and PICKER CORPORATION, a 

### New York Corporation, Plaintiffs and Respondents,

CASCADE COUNTY, 

### a body politic of the Stateof Montana etal., Defendants and Appellants.

Appeal from: 

### District Court of the Eighth Judicial District, Honorable R. J. 

### Nelson, Judge presiding. Counsel of Record: ForAppellants: J. 

### Fred Bourdeau, County Attorney, Great Falls, Montana Michael 

### T. Greely, Deputy CountyAttorney, argued,

Great Falls, Montana For Respondents: Church, Harris, Johnson and Williams, Great Falls,

Montana Earl 

### J. Hanson argued, and Robert P. 

### Goff argued,

Great Falls, Montana For Amicus Curiae: Cure and Borer, Great Falls, Montana

Submitted: March 20, 

### 1974 Decided: 

## APR171974 Filed

### : 

# APR1719%Mr. Justice Frank I. Haswell delivered the Opinion of the Court. This is an action torecover taxes paid tothe defendant Cascade County on certain personal property used exclusively for hospital purposes under a lease agreement between the plaintiffs. The Hon. R. J. Nelson, districtjudge, granted plaintiffs' motion for summary judgment. From thisjudgment, the County appeals. Plaintiff, Montana Deaconess Hospital, is a nonprofit hospital inGreat Falls, Montana. The hospital leased certain X-ray equipment from the coplaintiff, Picker Corporation, under

an agreement for a stipulatedmonthly rental. In addition the hospital was required toreimburse the Picker Corporation for any taxes assessed on the equipment. This X-ray equipment was used exclusively for hospital purposes. On March 29, 1972, the Cascade County treasurer issued

a personal property tax statement for the year 1972 toPicker Corporation in the amount of $10,839.96. Included in the statement was an amount of $8,004.62 assessed upon said equipment leased by Picker Corporation tothe hospital. Picker Corporation, believing said taxes tobe due, paid the full amount toCascade County. Subsequently they requested reimbursement from the hospitalpursuant tothe 

### terms of the lease. On July 12, 1972, both the hospital and Picker Corporation petitioned the Cascade County commissioners for a refund of the tax on the grounds that the hospital was a nonprofit corporation and the property was exempt from taxation under section 84-202, R.C.M. 1947. The petition was filed in accord with section 84- 4176, R.C.M. 1947. The Board of County Commissioners denied the petition, and subsequently plaintiffs filed thiscomplaint forrefund in districtcourt on October 4, 1972. Plaintiffs' motion for summary judgment was granted on August 2, 1973. From thisjudgment theCounty has filedthisappeal. In addition tothe parties tothis appeal, the Sisters of Charity of Providence of Montana, owners and operators of the Columbus Hospital inGreat Falls, appeared asamicus curiaeby way of brief and oral argument. The sole issuepresented for review iswhether personal property leased by a nonprofit hospital and used exclusively for hospitalpurposes isexempt from taxation even though the lessor,

a private profit corporation, received a profit from said lease. The pertinent statute involved inthis action is section 84-202, R.C.M. 1947, which was enacted by the legislaturepursuant toauthority of Article XII, section 2 of the 1889 Montana Constitution, now Art. VIII, section 5 of the 1972 Constitution. Section 84-202 grants tax exemptions for certain classes of property. That section statesinpart: "The property of the United States, the state, counties, cities, towns, school districts, municipal corporations, public libraries, 

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## * * such other property asisused exclusively for agricultural and horticultural societies, for educational purposes, places of actualreligious worship, hospitals and places of burial not used or held forprivate orcorporate profit

## * * * are exempt from taxation

## * * *." (Emphasis added.) The hopsital and Picker Corporation's argument is that the statuteexempts, among others, two classes of property from taxation: property owned by certain specified entities and propertyused for certain specific purposes. In the firstclassof exemptions allproperty owned by governmental entities is exempt from taxation, regardless of themanner of itsuse. The second classof property exempted by the statute isproperty used exclusively for specificpurposes, including use forhospital purposes by nonprofit hospitals. They argue that the statutory exemption isnot dependent upon ownership but exempts allproperty used exclusively forhospital purposes by a nonprofit hospital.

### It is the County's contention that every claim for' exemption from taxation should be denied unless the exemption is granted so clearly as to leave no room for any fair doubt. Cruse v. Fischl, 55 Mont. 258, 175 P. 878. The County argues that the language of section 84-202,R.C.M. 1947 is not clear and could be subject to several interpretations. The County contends that while the nonprofit hospitals themselves are clearly exempt from taxation,nothing contained in section 84- 202 exempts all property used exclusively for hospital purposes regardless of the commercial profit thatmay be derived from such property. The County argues that in the instant case Picker Corporation owns the property in question and derives a significant profit from the property. The County further contends that section 84-202 contains a strong legislative intent to prohibit exemptions where corporate or private profit is realized; thus, said X-ray equipment under lease to the hospital is a taxable interest in personal property. Allen v. Multnomah County, 179 Or. 548, 173 P.2d 475; Ross v. City of Long Beach, 24 Cal.2d 258, 148 P.2d 649. This same question was under consideration in N.W. Imp. Co. v. Rosebud Co., 129 Mont. 412, 288 P.2d 657. There this Court discussed the various views on the subject matter and demonstrated the split of authority throughout the country. That case, however,may be distinguished. In

### N.W. Imp. Co., unlike the instant case, the Court found that the private company that was leasing property to the exempt school districtwas not deriving any economic advantage from the lease of the building. The rental on the lease agreement was so adjusted that at the end of its estimated life the private company would have returned to it only the actual cost of construction without any interest. Although N.W. Imp. Co. is thus distinguishable, thereasoningused inthat casemay be extended toexempt from taxation the property inquestion here. This we believe tobe inaccord with the legislativeintent of section 84-202, R.C.M. 1947. It is a 

### wellaccepted principle of statutory construction that the function of the Court is tointerpret the intention of the legislature, if atallpossible, from theplain meaning of the words used, and if the meaning of the statute can be determined from the language used, the Court isnot atliberty toadd

ordetract language from the statute inquestion. Sections 93-401-15, 93-401-16, R.C.M. 1947; Nice v. StateBoard of Equalization, 161Mont. 448, 507 P.2d 527, 30 St.Rep. 284. The fact that the statute creates several classes of exemptions, based in one case on "ownership" and in the other case upon "use", reveals a clear legislative intent toexclude "ownership" of property asa criterion indetermining the applicability of the exemption toproperty "used exclusively for hospitals". To require thathospitals own the property, in addition tothe requirement that they use the property only for hospital purposes, would necessitate inserting the words "owned by" orwords of similar import, so that the relevant clausewould read "property owned by and used exclusively for

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## * * hospital purposes." To insert these suggested words into this statutewould give to it an added meaningnot tobe found inthe plain and unambiguous language of the statute. See Ross v. City of Long Beach, 24 Cal.2d 258, 148 P.2d 649; Scottv. Society of Russian Israelites, 59 Neb. 571, 81N.W. 624. The legislative purpose increating the tax exemption appears tobe lower costs of hospital care, which in turn means 

### lesser expenses forpatients. To deny the exemption here would add an additional expense tothe rentalprice already paid for

### the equipment. If the equipment here is taxable to Picker Corporation it is reimbursable to them by the hospital whose patients would bear the taxes in the form of increased hospital charges. This would be directly contrary to the purpose of the exemption. For these reasons the judgment of the district court is affirmed.

Justice We concur;.)