Court Opinion

ID: 5145003
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:24:56.754492+00
Date Added: 2024-06-11T13:42:55.742332
License: Public Domain

As I am opposed to rule unrestricted by law, based on force, I must, in reason, state the basis of opinion to govern taxation or exemption from taxation of hospitals, privately owned.
Board of Com'rs, Tulsa County, v. Sisters of the Sorrowful Mother, 141 Okla. 32, 283 P. 984, determined this hospital to be tax exempt. The matter of taxation ought to be by some agency of state government finally settled. This is a matter publici juris. If a property is classified and taxed, it shall not thereafter have a legislative tax exemption. Sec. 50, art. 5, Const.
All property should equitably bear the burden of government.88 Okla. 156, 212 P. 424. Yet the power to tax is legislative and there must be a distinct exercise of legislative authority for each levy. State v. Shamblin, 185 Okla. 126, 90 P.2d 1053. But see section 7302, R.L. 1910; 68 O.S. 1941 § 15.1[68-15.1]; Assessment of Price, 88 Okla. 156, 212 P. 424. The reason is that government defends and protects property, if need be, with the lives of the citizenship. Robert E. Lee, after divesting himself of ownership in human chattels, elected to cast his lot with the Old Dominion for the purpose of resisting the taking of private property for public use without just compensation.
By the constitutional exemption from taxation, it is contemplated that some institutions are of such value to the state that when, exclusively, use is made of property, as for example, for the "religious" or "charitable" purpose, such property will be totally exempt. (Sec. 6, art. 10, Const. of Okla.). Whether founding fathers or a majority of the citizenship who adopted the Constitution wrought well, or otherwise, is of no concern to the courts. The personnel of courts is sworn to uphold and defend the Constitutions, State and Federal.
According to prior judgments of this court, by which facts presented in the case at bar are to be measured, St. John's Hospital is not exclusively used as a charitable institution, but it does not follow that its property located within this state is taxable.
While the Benedictine Order of Nuns own exclusively the non-profit stock representative of title to St. John's Hospital, and while the Order is a religious and charitable corporation, the use of the profits (derived from patients who pay for services) and the property determine whether the property *Page 180 
is devoted to a charitable purpose. Within a restrictive sense and according to precedent in tax matters, this property is not used for a charitable purpose. The nuns or sisters receive no pay, as such, but the profits are used for an extension of the hospital facilities. However, the extensions are not shown to be confined within the borders of this state.
In state tax matters, we do not recognize "foreign missions". Therefore, since the extension of the hospital facilities may extend beyond the boundaries of the state, the property is not, to that extent, exclusively devoted to a charitable purpose. Hence, the hospital property is not exempt from taxation as property exclusively used for the charitable purpose.
This is so according to public policy expressed by the Legislature. 68 O.S. 1941 § 15.2[68-15.2], subsec. 8. By the terms of the statute an exemption is provided for charitable institutions "organized or chartered" under the laws of this state. The charitable institution in the case at bar is not organized or chartered under the laws of this state, but is organized and chartered under the laws of the State of Wisconsin. It is a foreign corporation doing business in this state.
The requirement for the exemption extended to domestic charitable corporations is limited. The statute reads: "providing the net income from such property is usedexclusively within this State for charitable purposes and no part of such income inures to the benefit of any private stockholder". By the provisions of subsec. 10, supra, "All property of any hospital organized and chartered as a non-profitable or charitable institution under the laws of thisState", shall have tax exemption, "provided, however, that the net income from such property is used exclusively within thisState for charitable purposes and no part of such income inures to the benefit of any private stockholder".
The above statute does not apply in the case at bar for two reasons: (1) This corporation is not organized or chartered under the laws of this state; (2) the net income from such property is not used exclusively within this state for charitable purposes.
There is compliance with the third condition of the exemption by which "no part of such income inures to the benefit of any private stockholder". The consequence is that neither the institution nor its property has exemption as a charitable institution.
There is, however, proviso contained in the text of article 10, sec. 6, Constitution. It reads:
"All property not herein specified, now exempt from taxation under the laws of the Territory of Oklahoma, shall be exempt . . until otherwise provided by law."
As measured by the statute of the Territory of Oklahoma, limited to the area of land upon which a hospital is situated, St. John's Hospital is exempt from ad valorem taxation. It has not otherwise been provided by law except as to an exemption relating to hospital corporations "organized and chartered" as nonprofitable or charitable institutions under the laws of this state. As to all property of hospitals organized and chartered under the laws of other states of foreign jurisdictions, and licensed to do business within this state, 68 O.S. 1941 § 15.2[68-15.2] does not apply. Therefore the provisions of the laws of the Territory of Oklahoma exempting hospitals apply, and under those provisions the property of St. John's Hospital located within this state is exempt from ad valorem taxation.
The extended provisions of section 15.1, 68 O.S. 1941, that "All property in this State, whether real or personal (shall be subject to ad valorem taxation) except that which is specifically exempt by law, and except that which is relievedof ad valorem taxation *Page 181 by reason of the payment of an in lieu tax," is not inclusive of the extent that without the specific mention of foreign charitable institutions extending their charity within the boundaries of Oklahoma, St. John's Hospital is to be taxed.
By the terms of section 15.1, supra, there is no specific legislative authority to tax, on an ad valorem basis or otherwise, the property of St. John's Hospital or any hospital similarly situated.
For example, property in and around a producing oil well and used in the production of oil and gas is not subject to ad valorem taxation. This is so because of the "in lieu" provision of statute by which a severance tax is paid on petroleum or gas produced. Hence, the exemption from ad valorem taxation. So the oil derrick, machinery, and casing actually used in the production of nature's products is exempt by the "in lieu" provision of the statute. Query: What of the property, real, personal or mixed, as is exempt, supplies not used but intended for use, or a royalty interest in land, or an oil and gas lease upon which there is no present production? Are these included within the all-embracing terms of section 15.1, supra. "All property in this State, whether real or personal, except that which is specifically exempt by law, and except that which is relieved of ad valorem taxation by reason of the payment of an in lieu tax, shall be subject to ad valorem taxation" rendered taxable? It is well known that such properties do not bear the burdens of the cost of government. They are neither taxed nor yet have they a specific exemption from the tax. But, according to law, or according to usage and custom, having the effect of law, these things are not taxed.
Yet the landowner's land is taxed. His nonproductive royalty interest is taxed as a part of the land and unless severed from the fee exempt estate and vested by conveyance in another, or unless an oil and gas lease is granted and held by another, taxation is the rule. But the advantage of an exemption is obtained when such interests in land are conveyed.
Although, if such conveyances and grant constitute real estate by virtue of constitutional provision, they may not within the State of Oklahoma be corporately owned unless proper and necessary to the corporate enterprise.
Yet chattels, such as hogs and chickens and personal property of the farmer, are taxed. Moreover, when bread is bought there is a tax on bread. In the opinion of C.J. Hurst, "nor property intended to be used in the future . . . . . but not presently so used" was exempt. Oklahoma County v. Queen City Lodge,195 Okla. 131, 156 P.2d 340.
But within specific authority of law to govern the assessor's action, by the same omen and for additional reasons, hospitals within limited areas of land located in Oklahoma, as a result of which from foreign jurisdictions the rich or poor, without regard to race or color, have succor, the hospital property is not taxable.
The authority to assess that property as yet falls within a glittering generality of the law. Scripps Memorial Hospital v. California Employment Comm. (Cal.) 151 P.2d 109; In re St. Elizabeth's Hospital, 109 Neb. 104, 189 N.W. 981.
The record shows there are 51 Sisters of the Sorrowful Mother, a Catholic organization organized and existing for charitable purposes. These are consecrated to the task of devoting their labors to the public and private service rendered or to be rendered by St. John's Hospital.
Without such services being rendered and devoted in Tulsa county, State of Oklahoma, and if the county of Tulsa, a municipal corporation, or the state were to afford a same or similar hospital *Page 182 
labor facility, the cost in salaries would be $108,000 per annum.
This St. John's Hospital was assessed at $725,770. The court should take judicial notice that property generally in Tulsa county and the State of Oklahoma is assessed for taxes at from 1/3 to 1/2 of its actual cash value estimated at the amount it would bring at voluntary sale. If the 50% ratio is applied, the hospital has a real cash value of $1,451,540. That amount would be required to be accumulated from the citizenship of the municipal subdivision, or the state, by an issuance of bonds bearing interest, or otherwise, and invested in such a hospital facility. If the rate of interest on such bonds or the current value of money were 2 1/2% per annum, interest per annum on such an investment in such hospital facility would amount to $36,288.50, which, when added to the sum required per annum for services of hospital employees, would be the sum of $144,288.50.
The total sum, in the absence of tax exemption that is sought to be derived per annum from taxes sought to be assessed against St. John's Hospital amounts to only $33,411.55.
Therefore, the county of Tulsa and the citizenship of it may be said to be financially benefited each year, despite the tax exemption and by reason of the existence and operation of St. John's Hospital, in the sum of $110,877.95.
Wigmore, an authority on the law of evidence, taught that he who makes or applies the rule should know the reason for the rule.
The people, by adopting the constitutional tax exemptive provision as to charitable institutions and extending the exemption by reference to the territorial laws wherein hospitals were particularly mentioned, but reserving permissive authority for a legislative act by which such hospitals might be taxed, made the rule to be applied by this court in this case. The constitutional provision contains words, phrases and clauses by the terms of which the Legislature or the people, by the medium of an initiative petition, may, by a mere statute, transform the constitutional tax exemption provision into a statute levying a tax against all such hospitals when they are not exclusively used for religious and charitable purposes. Whether the people or the Legislature will do so rests within the exercise of their respective discretions. It is the policy of this state to let the people rule. The duty of state officers is to govern.