Court Opinion

ID: 9778300
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:59:43.411366+00
Date Added: 2024-06-11T07:33:07.461995
License: Public Domain

POPE, Justice
(dissenting).
I agree with the holding of the majority that homes for the indigent aged, when in fact they are operated as a public charity, are tax exempt, because they relieve the government of burdens it would otherwise be charged with solving. Sec. 11, art. 2351, Vern.Tex.Civ.Stat.; art. 1528a, Vern.Tex. Civ.Stat.; art. 1269k, Vern.Tex.Civ.Stat.; art. 695c, Vern.Tex.Civ.Stat. See, Housing Authority of City of Dallas v. Higginbotham, 135 Tex. 158, 143 S.W.2d 79, 130 A.L.R. 1053 (1940); Pacific Home v. Los Angeles County, 41 Cal.2d 844, 264 P.2d 539 (1953); Fifield Manor v. County of Los Angeles, 188 Cal.App.2d 1, 10 Cal.Rptr. 242 (1961); Estate of Henderson, 17 Cal.2d 853, 112 P.2d 605 (1941); Topeka Presbyterian Manor, Inc. v. Board of County Commissioners of Shawnee County, 195 Kan. 90, 402 P.2d 802 (1965); Assembly Homes, Inc. v. Yellow Medicine County, 237 Minn. 197, 140 N.W.2d 336 (Minn. 1966); In re Tax Appeals of the United Presbyterian Homes of Presbytery of Huntingdon, etc., 236 A.2d 776 (Pa.1968).
I cannot agree, however, with the conclusion of the majority that Hilltop is not, in fact, operated as a public charity. Hilltop’s charter is for a charitable home; its receipt of gifts, grants and bequests is for that purpose; it must hold, invest and spend its funds for that purpose; the corporate property and that hereafter acquired must be “exclusively for the purpose for which said corporation is formed”; and when the corporation is finally dissolved, all of the corporate assets must be distributed to the use of similar purposes. The charter, it would seem, dedicates all of the property and funds of the home to charitable purposes from inception until final distribution upon the dissolution of the corporation.
The by-laws, in the opinion of the majority, are so lacking in such a dedication to charitable purposes as to defeat Hilltop’s exemption. If its basic documents do not already so require, as I believe they do, this may be corrected by amendments to the charter and by-laws to provide that the institution’s properties and assets are “pledged in perpetuity to the relief of per*950sons in financial need and to their assistance in obtaining the care they must have to prevent their becoming a burden on society.”
I cannot agree that Hilltop is not, in fact, operating as a purely public charity. The parties specifically stipulated to the contrary in these words :
“Further it is the policy of the Home that no one is denied admission because of financial inability to pay.”
In my opinion the agreed facts upon which this case was tried fully qualify the home for exemption, and those facts need to be more fully stated:
“Further it is the policy of the Home that no one is denied admission because of financial inability to pay. This policy is established in Sec. 3 of Article IX of the current By-Laws (Exhibit ‘JO and this provision has been in the By-Laws since the corporation was chartered. At the present time there are 86 residents, of whom 67 are able to pay the full cost of their care, and 19 are part pay. Thus 22% of the residents receive some charity. The amount of charity required by an - individual will vary. The largest amount received by a resident each month is $165.00 of charity, but the average amount received by the 19 charity residents is $54.42 per month.”
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“With 86 residents, at present Hilltop Village is 65% occupied and the average age of said residents is approximately 80 years of age. The basic cost to a resident depends upon the type of room accommodation furnished and ranges from $150 per person per month to $215 per person per month. . . . The services provided by the corporation other than the rooming units and meals in the cafeteria generally are bed linen, towels, wash cloths and laundry of same, maid service for regular cleaning of rooms, constant nursing supervision and, the free use of the library, game, social and recreation area where various games are played, programs and meetings held and television is viewed, laundry room facilities where washers and dryers are located and chapel.”
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“The corporation has no source of income other than the rental from the housing units; nominal income from the services and vending machine agreement herein mentioned and possible contributions and donations. Since organization Hilltop Village has operated at a substantial loss.”
It appears to me that Hilltop measures up commendably well when tested by the best gauge this court has yet provided. In Santa Rosa Infirmary v. City of San Antonio, 259 S.W. 926 (Tex.Com.App.1924, judg. adopted), it was held that a charity existed though 2,590 of 2,919 patients were full pay patients, 123 were part pay and 206 were full charity. In Santa Rosa about 14 per cent of the patients were charity patients; in Hilltop 22 per cent were charity residents. Santa Rosa made a profit, but used the profits for further services; Hilltop makes no profit but overcomes the deficit by outside gifts. Santa Rosa expresses the law of Texas and should here be followed. The Supreme Court of Kansas is one of a number of cases which approved Santa Rosa. It said in Nuns Third Order of St. Dominic v. Younkin, 118 Kan. 554, 235 P. 869 (1925):
“ ‘The fact that it charges and receives pay for patients able to pay, does not detract from the charitable nature of the service rendered. In [Lutheran] Hospital Association v. Baker, [40 S.D. 226, 167 N.W. 148] * * * 95 per cent of the patients were pay patients. In City of San Antonio v. Santa Rosa Infirmary, [sic] [259 S.W. 926] * * * 87½ per cent were pay patients. In St. Elizabeth Hospital v. Lancaster County, [109 Neb. 104, 189 N.W. 981] * * * only a small per cent did not pay.
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“ ‘If these incomes from pay patients and donations are used for the purpose of caring for or relieving the sick or disabled and increasing the facility of the institution for that purpose, and are not used for the purpose of declaring dividends or the financial profit (other than the paying of necessary operating expenses) of those connected with or having charge of the institution, such use is simply an extended use for charitable purposes.’ ” (pp. 559, 560, 235 P. 872).
The majority relies upon several cases in support of its denial of the exemption, but the controlling facts in each of them demonstrate the total absence of any charity at all. I rather suppose that the facts presented by those cases would defeat any charitable pretensions in any state. Nebraska denied an exemption in County of Douglas v. OEA Senior Citizens, Inc., 172 Neb. 696, 111 N.W.2d 719 (1961). All residents of the home which claimed tax exemption were required to pay the full charges. Only one class was permitted to remain in residence save at the will of the institution, and that class consisted of those who made a “donation” of $1,-500. Those residents remained under a continuing obligation to pay their proportionate share of the expenses, maintenance, and even of the amortization of the loan on the institution.
Oregon denied an exemption in Oregon Methodist Home, Inc. v. Horn, 226 Or. 298, 360 P.2d 293 (1961). The home received no gifts or donations. Residents were admitted upon payment of a “founder’s fee” which ranged from $7,000 to $20,000. In addition the residents were required to pay a monthly life care charge. Residents who could not pay were evicted or excluded. Everyone paid his full cost and upon subsequent failure to do so, he forfeited his founder’s fee. Haines v. St. Petersburg Methodist Home, Inc., 173 So.2d 176 (Fla.App.1965) had an arrangement similar to that in the Oregon case. The founder’s fee ranged from $5,000 to $7,000 plus a monthly charge. I respectfully suggest that these cases present arrangements by self-supporting elderly persons and of institutions designed to provide residences for pay and for persons who needed no charity. In them, the public was not served; the occupants were served. None of those cases relied upon by the majority present facts of charity as in Hilltop’s case.
I would hold that Hilltop is entitled to the claimed exemption.
NORVELL, J., joins in this dissent.