*1
Review
Appeal,
Petitions
Madison, Defendant-Appellant.
Supreme Court Submitted on May No. briefs 76-664. 2,1979.— Decided May 30, 1979. (Also reported 814.) in 278 N.W.2d *3 appellant For the the cause was submitted on the brief Henry Gempeler, A. city Larry attorney, W. and O’Brien, city attorney. assistant respondent
For the the cause was submitted on the Timothy D. Fenner brief of Axley, Brynelson, Her- and rick & Gehl of Madison.
BEILFUSS, complaint alleges C.J. The the collection property taxes on the illegal is unlawful be- property question taxation from cause property by plaintiff exclu- and used both owned sively purposes non-profit hospital under for of a sec. by (1975), and as owned Stats. religious housing plaintiff and used for for members 70.11(4), orders and communities under sec. Stats. statutory portions sec- The relevant of the two by tions relied on read as follows: Property exempted proper- “70.11 from taxation. The ty general exempted described this section is property taxes: “(4) Educational, and benevolent insti- tutions; CLUBS; SOCIETIES; WOMEN’S FRA- HISTORICAL Property owned and used exclu- TERNITIES; libraries. sively olent and used for sistants, and ordained a tions religious, ... churches or educational or benev- associations, including property . . . also housing pastors and their ordained as- communities, members of orders and contiguous teachers, whether or not to and part of other owned and used associa- such or churches. ...1 entirety “(4) Educational, In this section its is as follows: Re ligious CLUBS; INSTITUTIONS; AND BENEVOLENT HISTORICAL WOMEN’S Property used ex owned and societies; fraternities; libraries. clusively by offering regular educational institutions courses 6 year; religious, or months in the or churches educational associations, including nursing benevolent benevolent homes including property aged, and also and retirement homes pastors their owned and used for ordained assistants, communities, members of orders and contiguous teachers, or not to and a ordained whether *4 by churches; property used such other owned and or associations incorporated by clubs; by or domestic historical women’s or by incorporated, public library societies; domestic, free associa or by lodge system tions; operating under the or fraternal societies high university, college (except school fraternities exceeding necessary sororities), acres of land for but not buildings property of not location and convenience while such profit. Property churches or associa used for necessary buildings, of for location and convenience used tions purposes profit, subject and not for he for educational shall not “ Nonprofit hospitals. is used (4m) Property which or any exclusively purposes hospital of 10 beds diagnosis, or treatment primarily
more devoted to the hospital sick, injured, deformed, care of the or which voluntary associa- operated by corporation, owned and a earnings of tion, which inures trust, net part or no foundation member, operated any shareholder, to the benefit officer, hospital not director or and which adjunct principally principally as an for of or the benefit private practice groups of doctors. of a doctor or (1975 Stats.)2 .. .” parties stipulated as
The facts. The relevant facts they may appear stipulation in summarized as fol- be non-stock, non-profit The is a lows : Sisters of St. foreign corporation exempt in- and federal state 501(c) (3) come of the Internal Rev- taxation under sec. corporation as amended. The was or- enue Code ganized religious, pur- educational and benevolent engaged poses religious, in and is educational and benevo- lent activities. The association was formed subject to the 10-acre limitation but he to 30-acre shall limitation. Leasing- property organizations such to for educational or similar purposes, benevolent where income therefrom is all derived maintenance, property used for shall not render taxable.” legislature 1977, Stats., amended sec. chs. 418, 29, 83 and Laws of reads as 1977. section now follows: hospitals. Nonprofit “(4m) property Real owned and used and personal any property purposes primarily diagnosis, of 10 or more beds devoted sick, injured, disabled, care of or treatment or which voluntary operated corporation, association, is owned and trust, earnings or the net foundation no of which inures any shareholder, member, officer, benefit of director or operated principally which is not for the benefit of or principally adjunct private practice as an of a doctor or group apply of doctors. This does not purposes exemp- used for commercial doctor’s office. The tion for residential shall be limited to dormitories 12 or more units which house student nurses enrolled a state nursing hospital.” accredited school of affiliated with the *5 religious and consists of of the Roman Catholic members Mary, order known as of which order the Sisters Saint purpose rendering physical spiritual has the of care sick, injured to the the or deformed. sister-mem- None of religious corporation compensation of bers the for receive their services. stipulated corporation
It was further that the of Mary Marys the operates St. owns and St. Hospital Madison, Medical The Center Wisconsin. hospital, having an beds, pri- institution ten more than marily diagnosis, devoted to the treatment and care of sick, injured engaged deformed; however, the or it is also medical education and net research. No the earnings of corporation or to the inures any member, benefit of sister, or officer of the director two hospital operated entities. Neither for adjunct benefit of or private as an practice aof group doctor of doctors. hospital chaplain Marys Department heads St.
Pastoral Care. He call is on at all for the times two-fold caring purpose spiritual for the needs of patients both and the sisters of who staff hospital. To end regularly this he conducts masses and other routinely Roman Catholic services performed priests for of the Roman members Catho- lic position church. appointment by was filled Bishop Roman Catholic the Diocese of Madison and only occupied by duly can be ordained Roman Catholic priest.
Living quarters hospital chaplain always have provided been Mary. Orig- rent-free the Sisters of St. inally the rooms for prin- were within located cipal building Medical Center it- self. Because space need patient additional care, separate single-family dwelling located in the im- vicinity mediate purchased by was *6 the corporation to be used as residence chaplain. hospital chaplain in that resi- The has resided building purchase dence since the and the used exclu- sively purpose. for that deciding recognized
The trial the court in matter the developing patient concept modern total medical emotional, hospitals necessarily encompassed care in the psychological spiritual aspects The trial of illness. maintaining court further concluded that residence for chaplain vicinity hospital the in the immediate might so that he to be on call administer staff, patients needs of patients’ the was families reasonably necessary purposes hospital for the merely rather than hospital chap- a convenience for the lain. following The trial court made the conclusions Marys Hospital law: That St. qual- Medical Center awas non-profit ified meaning within the of sec. 70.11 (4m), Stats.; by that the residence owned corporation and used to chaplain house the was used ex- clusively purpose for the within the mean- ing of the statute and exempt was therefore from taxa- ; that, tion and consequence, as a the real estate taxes lev- ied on years 1975 and 1976 consti- illegal tuted an tax under (1), sec. 74.73 The court Stats. did not consider nor determine residence, whether the the plaintiff-respondent alleged, was also taxation under sec. 70.11 presented
The by issues parties are as follows: 1. respondent’s Does the ownership and use of a sin- gle-family residence for its chaplain render premises exempt from pursuant taxation sec. 70.11 Stats. ?
2. respondent’s Does ownership and use of the de- premises scribed premises render the exempt from taxa- pursuant tion (4), sec. 70.11 Stats. ? agreed stipulations by
The factual upon parties adopted evidentiary findings were as the of fact trial Mary court. It is conceded that the Sisters St. religious, which, corporation educational and benevolent if eligible, otherwise exemption pro- is entitled to the tax (4), vided under sec. 70.11 It also conceded that Stats.3 Marys Hospital non-profit hospi- Medical Center is a general tal eligibility whch satisfies the tax qualifications prescribed non-profit hospitals under (4m). sec. findings is not correctness these before the court appeal. in this first issue is narrow whether the house as a chaplain residence of St.
Marys Hospital property Medical Center is used exclu- sively for purposes hospital the of the within the mean- ing of 70.11(4). sec. showing burden of property that
taxation is on
seeking
the one
exemption,
i.e.,
Mary
Sisters
St.
in this case.4 To be entitled to tax
exemption
taxpayer
bring
must
himself within the
exact
exemption
terms of statute. While the statute
given
must be
a strict
taxation,
construction
favor of
the modern rule
given
is that the statute must be
a “strict
but reasonable”
Hospital
construction. Columbia
v.
Asso.
Milwaukee,
660,
35
668-69,
Wis.2d
Home v. 1, 4, 15 Wis.2d N.W.2d 913 149, 1957, ch. (4m), Stats., was created in
Sec. 70.11
1957, specifically
apply
hospitals, notwith-
Laws
to
to
70.11(4)
standing
exemption in sec.
of the
existence
gen-
applicable to
institutions
charitable and benevolent
erally. Any
take into
of the
must
construction
statute
legislative
namely,
provide
purpose,
a
account its clear
engaged
nonprofit hospitals
care of the
benefit
in the
be
sick.5 To
entitled to
tax
this sec-
under
tion,
showing
has
that
the burden of
chaplain’s
residence is
purposes
Marys Hospital
statu-
Center.
tory
analyzed by
thoroughly
at
terms
issue here were
Milwaukee,
this court in
su-
Columbia
Asso. v.
pra.
phrase
purposes of
With reference to the
“for the
any hospital”
following
the court made the
declarations:
argued by
city
“It
‘purposes
hospi-
of a
primary
tal’ are
concept
to be determined
diagnosis,
function of
treatment and care of the sick and
management
the decision of the
of what is nec-
essary
purposes
determining
for its
is not conclusive in
what
exempt.
is to be
We think the
management may
purposes
hospital.
determine the
necessary
purposes
What means are
to attain the
is a
question open
secondary
to determination
...
[I]f
purpose
generally
recognized
aas
desir-
purpose
hospital,
able
legitimate
a modern
it is
purposes
tax exemption.”
Id. at 669-70.
*8
plaintiff
important
secondary
contends that an
purpose
Hospital
Medical Center is to care
spiritual
for the
patients.
needs of
court,
its
The trial
citing statements from the Manual of the American Hos-
pital Association, acknowledged
dealing
that
with the
psychological, emotional,
spiritual aspects
and
of illness
Leasing Corp,
First Nat.
Madison, supra,
v.
In Columbia Asso. 668, at Wis.2d we stated: considering problem “In exemption this we re- cannot primary strict our purpose consideration to the of a hos-
pital ities. The offering typical to a hospital small facil- limited language of the section does not so limit the meaning of ‘hospital.’ fact, the word In sec. 70.11 recognizes Stats., primary purpose token exempted an of such a hospital recognizes that may legitimate purposes. have other has The section carefully expressed in terms of a primary purpose whose and functions diagnosis, care treatment and contemplates hospital may this that a have other objects, they directly whether be or indi- rectly language associated with the care the sick. The section refers purposes hospital. any pur- This means and all Hospital Chaplaincy” The “Manual on of the American Hos pital following Association contains the declaration: “A patient care, dedicated to total or care of the whole man, healing. spiritual is dedicated to dimensions patient significant patient’s care are well-being. Total patient surgical care involves more than excellence in medical or achievement, physiologic because man is more than a structure. patient Total care is social, emotional, concerned spiritual, with physical and economical as well and chemical restoration of beings. human accomplish Medical service alone cannot this. caring patients ‘Because needs of is an essential patient care, hospital chaplain of total should function as ” ¡the healing member team/ *9 diagno- care,
poses, just primary purpose not for sis or treatment.”
Using to construction the strict reasonable rule of but Stats., for interpret exemption in sec. 70.11 any purposes of hos- for the “used Hospital Milwau- pital,” Asso. v. this court in Columbia “ supra, ne- kee, 671, adopted ‘reasonable at the test cessity functioning hospital as an efficient ” organization.’ Elaborating rule, noted on the court this though in- doctrine, that —“Under this there is some even properties, occupants cidental benefit to the of residential require benefit not that the be nonex- such does great- empt providing when of such hospital- hospital.” er benefit of Id. at 671. nursing, elec- owned residences used the director building tronic technician and in Co- director services Hospital qualified exemption, lumbia Association for personnel opera- these were so essential to the efficient necessary tion of the that it for was them be emergencies readily close to the for avail- or “on able call.”
Based on the for test tax under sec. 70.11 (4m), Stats., adopted by Hospital this court in Columbia Milwaukee, supra, it is clear that the tax status single-family dwelling corporation and used as a residence chaplain Medical Center de- pends providing on whether chaplain residence for the “reasonably necessary functioning to the efficient organization.” as an The court below de- agree. termined that it was. We recognized trial court gave decision significant weight to what was termed the modern concept medical patient of “total care.” It appropriate court this *10 acknowledge general growing of and awareness non-physiologic aspects concern for the The of illness. suggests Hospital hospital American Association that chaplains, long present hospitals, in func- some should healing tion Psychologists as members of teams. psychiatrists commonly are called to treat the emo- helping patient tional side of illness, effects and his family adjust social, to the realities of his condition. The spiritual emotional and patient dimensions of care are important patient’s well-being. Caring indeed to the non-physical legitimate these patients pur- needs is a pose hospital. of a modern
To fulfill Mary function this have Sisters St. Department created a of Pastoral Care directed hospital chaplain. chaplain helps provide The for the patient “total” needs of the entrusted to his care. He ad- spiritual ministers patients to the staff, needs of ob- taining clergy the services of of various on faiths a full part-time patient or basis as require. and staff needs chaplain Marys employee St. is a super- full-time who vises four Department other members of the of Pastoral He Care. rotates responsibilities “on call” and is called hospital during off-duty perform hours to emer- gency religious patients. services for
Considering advantageous it chaplain to have the read- ily available, corporation of the Sisters Mary has furnished the chaplain with a rent- free residence in vicinity immediate of St. Hospital Medical Center. The trial court considered oc- cupancy of chaplain residence to be for the benefit of fulfilling obligation its to its patients and concluded property was property from taxation as exclusively pur- poses hospital. agree We with this conclusion as being consistent with this court’s construction of sec. (4m), Stats., appears in Columbia as it
70.11 supra.7 Milwaukee, Asso. property in also contends
question exemption under sec. is entitled to a tax general property taxes Stats., exempts (4), which by churches “property ... owned and used including property . . associations . . . . or- pastors and their owned and used for assistants, and com- dained orders members of contigu- munities, teachers, or not and ordained whether to and of other and used ous such associations or . . . while such churches profit.” is not The trial did not determine used for court *11 eligibility chaplain’s nor the residence consider exemp- exemption scope of the under this section. recently by provided tion in this section reviewed was City this in Midtown v. Ra- court Church Christ of of cine, 72, 74-76, Our 83 Wis.2d N.W.2d 281 analysis, part, is as follows: granted statutory exemption par- “The tax sonages by theory program. smooth justified 70.11(4) sec. has on been parsonage integral part that a is an of a church parsonage A has been deemed be vital to running congregation. of the activities of the In Wisconsin, exemption originally parsonage pastor, person was restricted to the home of who years legisla- all church oversaw functions. Over the expanded housing ture has the statute to include the of re- ligious persons significant perform who other official language functions for the church .. . evinces [The a] statutory purpose exempting of taxation housing occupied by group people limited whose employment integral functioning of the church. granted scope exemption by “The limited sec. 70.11(4) similarly can phrases be seen in the and words religious phrase with the associated ‘members of orders opinion express We no as to the effect the amendment of the by legislature. statute communities,’ i.e., ‘pastors,’ and ‘their ordained assist- religious per- ants’ and ‘ordained teachers.’ This list of housing exempt only sons persons whose those includes leadership who have official in the activities roles congregation. . . . “Further, religious phrase ‘members of orders and according communities’ is to be construed to ‘common approved usage,’ 990.01, Third sec. Stats. Webster’s Dictionary many New International lists definitions community, including: body ‘a monastic unified reli- gious group’ group sharing particular and ‘a economic living communally.’ dictionary and social belief and That religious body, typical- states that ‘a ‘order’ can refer to ly aggregate living an separate communities under a rule, discipline, distinctive or constitution: a monastic ”8 society.’ brotherhood or In Missionaries Michalski, La Salette 15 Wis.2d 593, 113 (1962), N.W.2d 427 which concerned taxes prior levied under statute, version of the the court noted occupied that mission house seven members order, while not under the older statute, qualify would an under the 1955 statutory dwelling amendment. The was owned a re- ligious order of the Catholic Church brothers engaged of the order who were in various works, although assigned charitable permanently not any specific church. The residence was determined to be for members of and commu- orders *12 nities. 70.11(4),
Sec. Stats., Evangelical applied was also in Alliance Mission v. Bay, 187, Williams Wis.2d (1972), involving N.W.2d a corpora- case an Illinois engaged religious tion which in and educational work throughout the world. The facts revealed that fulltime 8 On the basis of this the construction court concluded that the occupied by church-owned residence rent-free the widow of the pastor qualify church not did for a tax under the statute. furlough
missionaries home on and staff members in- for short Mission used the church-owned residence by mis- tervals. court held that the transient The use hosping 70.11 constituted use for under sec. sionaries agree parties present The in the case that residence question religious association, not in is owned a housing. profit used for and is used The sole issue encompassed position hospital chaplain whether the in groups specifically within one of the mentioned four assistants; statute, (1) pastors; (2) i.e., ordained (3) religious communities; or members of orders (4) ordained teachers. question is owned the Roman Catho- Marys
lic operates order which owns and St. occupied Medical Center. It is as a residence duly chaplain, ordained Roman Catholic priest appointed capacity by to serve in that the Roman Bishop chaplain Catholic Diocese of Madison. The general responsibility ministering has to the re- ligious needs of the who staff the sisters patients way at pas- in much the same as a congregation specific tor of a to the needs of ministers parishioners. patients individually his He visits in their rooms and also holds services in the chapel. addition, through In performs, the services he he fulfilling assists the mission of its rendering physical spiritual sick, care to the in- jured or deformed. City of Madison chaplain maintains that the is not pastor of a church as regularly that term is used.
However, requirement there is no Stats., in sec. (4), pastor for whom a provides association pastor permanent be congregation at- specific tached to a local Indeed, church. in the 1955 amendment to sec. 70.11(4), legislature abandoned *13 just “parsonage” a restrictive the word which has such general “pastor” which is connotation for the more word chaplain simply “spiritual defined aas overseer.”9 The significant func- performs official Marys, patients tions and at adminis- the sisters tering providing spiritual to their and needs guidance requested. when a but strict Under reasonable single- construction of the statute that we believe family dwelling property by religious owned associa- pastor. tion and used as The residence qualified exemption therefore for a tax in 70.11(4), under sec. Stats. (4m), therefore
We conclude that under sec. Stats., hospital exemption it in statute as existed 1976, exemption 1975 and authorized real es- property question tate taxation the that ex- emption is (4). also authorized under sec. 70.11
By Judgment affirmed. Court. — HEFFERNAN, (concurring). J. I concur re- join opinion sult in that of the which holds that property exempt under sec. 70.11 Stats., hospital. judge as a the trial did Because not de- termine the 70.11(4) under sec. religious institution, unnecessary it is that question.
we consider holding nontaxability 70.11(4) under sec. is not essential result I join case. therefore do portion not in the major- ity opinion that applicability of considers the sec. 70.11 joins
Justice Abrahamson in this concurrence. Dictionary. Webster’s Third New International