White Cross Hospital Ass'n v. Board of Tax Appeals

Per Curiam.

The facts in the case before us are substantially the same as they were when this court decided *200White Cross Hospital Assn v. Warren, Aud. (1966), 6 Ohio St. 2d 29. In a per curiam decision, the court held that:

“The subject building is being’ used commercially. Cincinnati College v. State, 19 Ohio 110. The decision of the Board of Tax Appeals is affirmed on authority of Jeivish Hospital Assn. of Cincinnati v. Board of Tax Appeals, 5 Ohio St. 2d 179.”

The appellant contends that a material change in the law has occurred since that decision which now mandates the opposite result. Its contention is that the enactment of R. C. 5709.121 broadens the charitable use exemption of R. C. 5709.12 to such an extent that its medical office building now qualifies for that exemption.

R. C. 5709.121, in pertinent part, provides:

“Real property * * * belonging to a charitable or educational institution * * * shall be considered as used exclusively for charitable or public purposes * * * if it is either:
it* *
“(B) Otherwise made available under the direction or control of such institution * * * for use in furtherance of or incidental to its charitable, educational, or public purposes and not with the view to profit.” (Emphasis added.)

Appellant argues that its operation of the medical building is “in furtherance of or incidental to” its overall charitable purpose. Appellant also argues that its position is fully supported by this court’s decision in Galvin v. Masonic Toledo Trust (1973), 34 Ohio St. 2d 157.

This court affirmed the decision of the board in that case because it agreed with the board’s finding that the “renting of the facility for private and commercial uses was ‘incidental to the overall purpose’ of the facility.” This court further pointed out that the General Assembly had chosen to define the words “used exclusively for charitable purposes,” as used in R. C. 5709.12, by enacting R. C. 5709.121.

In this case, the Board of Tax Appeals concluded that:

“There is no evidence of any charitable activity being carried on in this building. Admittedly, it is a convenient arrangement aud no doubt is beneficial in some respects to *201the operation of the hospital, but the use of this property is a commercial use and it is not within the purview of R. C. 5709.121.”

In Doctors Hospital v. Bd. of Tax Appeals (1962), 173 Ohio St. 283, 287, Bell, J., in a concurring opinion, said: “* * * Hospitals are charitable institutions because of the services furnished to the public rather than because of those furnished to the members of a profession. * * * ” Although that case is not directly in point, the statement is apropos here.

The Board of Tax Appeals has decided that because of the commercial nature of the use of this property, whatever “benefit” the hospital may derive from that use is too remote to bring that use within the purview of E. C. 5709.-121. It is clear that the board has considered the pertinent language in that statute, but has still denied the exemption.

The rationale justifying a tax exemption is that there is a present benefit to the general public from the operation of the charitable institution sufficient to justify the loss of tax revenue. Philada Home Fund v. Board of Tax Appeals (1966), 5 Ohio St. 2d 135, 139. Exemption is the exception to the rule, and statutes granting exemptions are strictly construed. This court’s duty is limited to determining whether the decision of the Board of Tax Appeals was unreasonable or unlawful.

The board determined that the building was used as a place “in which the tenant-physician conducts and furthers his own private practice, paying competitive rental therefor.” This court, from its examination of the record, cannot say that Galvin, supra, mandates the granting of the exemption in this case.

Nor can this court conclude that the operation of a medical office building by a nonprofit charitable hospital for the convenience of the private practice of its staff members is either “in furtherance of or incidental to its charitable, educational, or public purposes,” even in the absence of a profit.

Prom the record before us, the decision of the Board *202of Tax Appeals was neither unreasonable nor unlawful, and it is, therefore, affirmed.

Decision affirmed.

CoReigaN, Celebrezze and W. Brown, JJ., concur. Stern, J., concurs in the judgment. P. Brown, Acting C. J., Herbert and Stephenson, JJ., dissent. Stephenson, J., of the Fourth Appellate District, sitting for 0 ’Neill, C. J.