Untitled Texas Attorney General Opinion

OFFICE OF THE A’ITORNEY GENERAL OF TEXAS
AUSTIN
monble ilarid J. Uorrie
Ooanty Attorney
Brown county
Browmood, Texas
Dew Elrz
ounwoodM66iorial
pXWQ6rt37 i6 WMIQt,
axes elraady paid
W6 have r idered )roW r6c;U66t iOr
ther aartaiu propsrQ
OSPit&., InO., 16 OS8Bipt
15, 1943, there am 6et
of the oorporatioa slhawlng ft
not orgenlzed lor profit, end
for odditionel in-
law--r dated 2:'ay15, 1943, a portion
The proparty inquired about is ueed 6xolu6~ve~y by
The Rwwnwooa Mentorial Ho6pltal.
"The Institution O-8 not rent orrio to dootore
or to any other organl6etior, antI has no inoome of any
type rr0ik e-3 propeFt7, other then yatlents who are abl6
to pay.
mnorable David J. Morris, page 2
The property inquir6d about i6 the property upon
whioh thaw ho6pitaL building Is looated. and no ot&r
property is in gu~stlon. The hospital plant ant gmundr
is th6 prOpWty ill qU66tiOn.
*No one recsivse aay profit from the operation
of the i3rownwood 3emorial &6pltaA. The doctor's oon-
neoted therewith draw nothing from the hospital, and
have never reoelved any oompeneatlon thererrom, and
there has never been any dividend or any kind deolarsd;
and no-one expeots to draw Or reoeivn anything from the
operation of the bo6pitaI.w
You have etated that the property Inquired about ia
666d eroIu6lre~y by the oorporatloQ. 'u6 thsrerore essum6 that
th6 doOtOr6 oonneoted with the in6titUtiOn 814 not assigned
Off1066 in the building, where they oonduot their private prao-
tlo6 rbnt rree, in return ror 6erviose rendered. The requir6-
mnt of exolualve uaa is not 6nti.9flnd in suah A case, even
though those sharing the U66 pay Qo rent. Redp Johnson, 53 Tax.
288; City or Longview Y. marlchzun-XaReeZdemorlal Rospltal, 137
Tax. 198, 152 8. W. (Sd) 1112. We also further 888111114that
th6 aotual operation of the institution la in accordance with
it6 OharteX’ pSOViSiOn6.
lWo questions ray be raieed as to the charitable
nature of the lnstltution oonoerned hrr6: First, can an
inrtitutlon be one of chtrrlty when its lnoorporators are
dootore, who apparently a6 a group may minister to the slok to
the exolu6lon ol’ other r^ootore? 3eoond, oan the institution ba
drolared aharitable if upon dl66olutlon the 4ootor6 oonoorned are
to reoeivo its aesota?
The charters of the &enta:Rnaa Inrlrmarg and of the
inrtltution oonosrned here are almoat ldcntloal, and these very
qU66tfon6 ware raised by the Court of Civil Appeals in City Or
San &ton10 v. ;liantaRosa Infirmary, S4S 6. W. 498, at Dss,s 336.
The latermedl~te court ~(29 reversed upon appeal, ;janta %oea
Infirmary v. City of tian ialtcnlo, SS9 S. Vi. Q&I, In a decision by
the Commission of J~pj~3d.S abated by tha Supreme Court. It wan
apparent from t.rie charter of the Santa Rosa InflrsWy that oluy
the Sister6 Of Ch&UTity Of th3 Incarnate bard could administer to
the Bick, etc., and we we unable to distin&ah such e situation
anopable Dar id J. :Zorriu, Fage 3
from the one presented here. tie therefore believe that the Jupremae
Court has by its deoiaion overruled I& firat objeotion.
Relative to the seoond objeation noted above, we find the
following: language used by the Commission of Appeals at pwge 935~
“The oorporetians here were not organized for profit..
They have no capital stocir--no private or oorporbte gain
can aoorue. By their Very inoorporation for purely oharithbie
and benevolent purposes they hava made a oontmot with tfie
state and with t.e beneficiaries named in the charters
effeotually constituting those in ohergo of ;t.heenterprise
trustees of an exprees trust, nnd their charters in thoir
last analysis and in their legal effeat become dsolaratione
of truet. It would serve no useful purgeee to quote from
the numerousauthorities sustaining this view, but the
follueing are aited: mer. .& Sng. haoy. of Law (28 Ed.) 898;
Linton v. Brown’s kdm'ra (C.C .) 2C Fed 456; 2 Uoravetz on
Corporations ilO46; 1 Perry on Truete (6th Ed.)1 82.
“By ertiole 1136 of the hevised Litcrtutes any renewal
of their corporate existenoe must ccatlnue the purposes
originally stated.
viny benericiary of the t&u& areated by the ohartera
oould prevent, and BD might well the representatives of the
state government enjoin, a use or appropriation of the trust
e#tstem of tiW corporations for purposes of private gafn or
those inconsistent with their oharter provlsioniv. Cook on
Corporations, vol. 2j 492~ Dazrtmuth College v. i?oodward,
$zheat. 518, 4 L. id. 629 ; 2 Perry on Trusts (6th Ed.) j1 732-
; “ttyiaaI ii Garrison et al., 101 ;dtrss.233; Parker,
eta.; v. ., 5 Gush. (Mass.) 336.’
In view of the above language, 1 t would seem that the
public and the &ate of Texas are well proteoted from a dissolution
Of a obaritable aoryoration which might redound to the banef it of
its incorporators and members.
Upon the fact6 presented, we hold the real estate belons-
ing to The arowmvood Memorial hospital, Inc., tax exempt. It
should be understood, however, that the presenoe of new facto or
wditi3ni3 arising i;i the future, might chzzge Its exempt status.
However, ti differtint aituation exists iifth respect to
Personal 2roperty beloqing to the institution. krtlele VIII,
Yaatlon i, of our Constitution only permits the Leglelatare to
honorable David J. xorria, Pww 4
exe t "inatitutioaa of gu1.1~ publio oharity*. This portion of
tu T onmtitutlon is not aelf-enacting, and siaae &ticlo 7150(T)
V. j., only exempts the bulldiaga and @rounda ooaupied by
a,",itL 156tltat2onB, it is our opinion the personal pmperty
ia liable for faxen. See Davis v. Santa hors Ufirmary, (Clv.App)
gg 6. iI. 185.
be next consider tb refund oi real e&ate taxea by
the rerloub taxing cruthor~tiae. In thla conueetion, you mike t&
following ltaremnt:
"The oorpor.atlon Aid not reader ita real lrtatr
for tha [year 1042, but had been paying the taxes Oy
the month to (L lonn company atwryiag a previous loan,
and this loan company beiore February 1, 1914%. paid
to thm varlour taxing unite of Brownwood and 3rown County
taxeu aaseaoed againot property of The Brownwood &aorlal
hospital Inc. on the untendrred rolls."
ihether the lam oompany be regarded as baring geld
the taxes ?a ageat of the in8tltution, or under the powexr
&ren it by oontract, the result ir that the taxe8 were pvid
v01nataP11y. The sitatake mede wa8 e8 to taf liability, which
1s a mletakce of law. Turma gaid voiuatarfly through mistake
of law are not recoverable. Nntloaal tiisoult Co. v. State,
134 Tex. 2c13133 S. A. (2A) SSI; kuetln Nation&l &alr 0.
Sheppard, 123 Tmx. 272, 71 &. L. (8d) 24:; Gttf ol Houston v.
yei?.er,76 TexL. 963, 13 2. %. 255; Frost v. Fowierton Conmolidated
School tiiet. go. 1, (Civ. :;pp) 111 J. P. (2di 754.
Although the Cuestim of tax liability ia one Of law,
if there has hen ELml&eke OS fact in couneotloa with the pey-
aunt or theme taxeo, we belteve the institution etill not en-
titled to a refund. In this State, the burden 18 upon one
clainiw exeqtlon from taxation to show himself clearly within
the statutory or constitutional exexegtion. ?b~Gallum V. keao-
Cl&ted tietail Credit *ien of iiuetinl (CO&U. ngp.) 41 5-i.. (26)
45; ii. P. 0. C. &Age v, i:lt.yof llcuston, 44 3. +. (8A) 4593,
nit of error refueed; Trinity Methodlet lipfsoopal Churoh v.
city of San AntonlO, 201 S.W. 669, writ of error refdaed.
~0 offioere of the aorporalion knew ~$11 the facts establishing
itr rights to-the tax eremptlon. ID our opinion, their negli-
Genoa In not Drlnging these raote to the attention of the taxing
authorities, and in not olal,ing the exemption, bars tba insti-
tution froa recovering the taxes ?aid even though they IWAY have
wen paid under mistake of fact. See City of Nouaton v. Felmr,
supra.
Vie truet the above euffioiently anmwerr you.? request.
WE:ncd