German Masonic Temple Ass'n v. City of New York

Majority

p. 452

German Masonic Temple Association of the City of New York, Appellant, v. City of New York et al., Respondents.

p. 453

Argued December 5, 1938;

decided January 10, 1939.

p. 455

Eugene Cohn for appellant.

Exemption of charities from the municipal sales tax and the right of any person aggrieved by the unauthorized imposition of that tax to a declaratory judgment are well established. The complaint, read in the light of the rule that its allegations are to be taken as true, makes out plaintiff’s charitable status. (Y. M. C. A. v. City of New York, 159 Misc. Rep. 539 ; 251 App. Div. 821 ; 276 N. Y. 619 ; Matter of N. Y. U. v. Taylor, 251 App. Div. 444 ; 276 N. Y. 620 ; Socony-Vacuum Oil Co. v. City of New York, 247 App. Div. 163 ; 272 N. Y. 668 ; Dun & Bradstreet, Inc., v. City of New York, 276 N. Y. 198 ; National City Bank v. Waggoner, 243 App. Div. 305 ; 270 N. Y. 592 .) Plaintiff is a charity and, as such, exempt from the sales tax. (Corbett v. St. Vincent’s Industrial School, 79 App. Div. 334 ; 177 N. Y. 16 ; Matter of Huntington, 168 N. Y. 399 ; People ex rel. German Masonic Temple Assn. v. Goldfogle, 136 Misc. Rep. 100 ; 229 App. Div. 863 ; 255 N. Y. 586 ; Matter of Allen, 76 Misc. Rep. 88 .) That plaintiff

p. 456

maintains and operates an institution such as the Temple for the purpose of providing revenue used for the maintenance of its asylum does not affect its charitable status. (County of Noblirig v. Hamlin University, 46 Minn. 316 ; People ex rel. Trustees of Masonic Hall v. Farrell, 130 Misc. Rep. 142 ; Matter of Allen, 76 Misc. Rep. 88 ; National Navy Club v. City, 122 Misc. Rep. 89 ; Butterworth v. Keeler, 219 N. Y. 446 .) Immunity from payment of the sales tax comes to plaintiff by force of a public policy consistently pursued by the State and expressed in actions of its legislative and executive branches and not by grace of the exemption which the local laws extend to what it calls semi-public institutions. (Socony-Vacuum Oil Co. v. City of New York, 247 App. Div. 163 ; 272 N. Y. 668 ; Matter of Huntington, 168 N. Y. 399 ; Matter of Moses, 138 App. Div. 525 ; People ex rel. Trustees of Masonic Hall Assn. v. Miller, 279 N. Y. 137 ; Matter of W. S. A. & P. R. R. Co., 115 N. Y. 442 ; City of New York v. New York City Ry. Co., 193 N. Y. 543 ; Grimmer v. Tenement House Dept., 205 N. Y. 549 ; Behan v. People, 17 N. Y. 516 ; Jewell v. City of Ithaca, 36 Misc. Rep. 499 ; 72 App. Div. 220 .) The complaint sufficiently alleges the existence of a judiciable controversy. (Commonwealth of Australia v. Queensland, 29 Commonwealth Law Rep. 1; Spooner, O., Ltd., v. T. V. C. Bd., [1932] 4 Dominion Law Rep. 750; N. C. & St. L. Ry. Co. v. Wallace, 288 U. S. 249 .)

William C. Chanler, Corporation Counsel (Sol Charles Levine, Arthur A. Segall and Charles H. Birdsall of counsel), for respondents.

The courts below properly dismissed the complaint which failed to allege such special facts or circumstances as would warrant a departure from the administrative procedure prescribed" by the local laws for testing out liability to tax. (Lewis v. City of Lockport, 276 N. Y. 336 ; Matter of New York University v. Taylor, 276 N. Y. 620 ; United States v. West Virginia, 295 U. S. 463 ; Y. M. C. A. v. City of New York, 251

p. 457

App. Div. 821 ; 276 N. Y. 619 ; Kalman v. Shubert, 270 N. Y. 375 ; Socony-Vacuum Oil Co. v. City of New York, 247 App. Div. 163 ; 272 N. Y. 668 ; New York R. T. Corp. v. City of New York, 275 N. Y. 258 ; 303 U. S. 573 ; Dun & Bradstreet, Inc., v. City of New York, 276 N. Y. 198 ; 1024 Third Avenue Corp. v. City of New York, 254 App. Div. 853 ; Ramsey v. City of New York, 254 App. Div. 658 ; Myers v. Bethlehem Shipbuilding Corp., 303 U. S. 41 ; Matter of Western Electric Co. v. Taylor, 276 N. Y. 309 ; Matter of Syracuse Masonic Temple, 270 N. Y. 8 ; Newburger v. Lubell, 257 N. Y. 383 .) Plaintiff is not a semi-public institution within the meaning of the local laws. (Matter of Kennedy, 240 App. Div. 20 ; 264 N. Y. 691 ; People ex rel. Mizpah Lodge v. Burke, 228 N. Y. 245 ; People ex rel. New York Lodge B. P. O. E. v. Purdy, 179 App. Div. 805 ; 224 N. Y. 710 ; B’nai Brith Club, Inc., v. City of New York, 270 N. Y. 12 ; Matter of Syracuse Masonic Temple, 270 N. Y. 8 ; People ex rel. German Masonic Temple Assn. v. Goldfogle, 255 N. Y. 586 ; Brewster v. Gage, 280 U. S. 327 ; Matter of Armitage v. Board of Education, 122 Misc. Rep. 586 ; 210 App. Div. 812 ; 240 N. Y. 548 .) Plaintiff is organized and operated for profit. (People ex rel. German Masonic Temple Assn. v. Goldfogle, 136 Misc. Rep. 100 ; 229 App. Div. 863 ; 255 N. Y. 586 .) Plaintiff is not supported by public subscription or endowment within the meaning of the local laws. (Matter of Kennedy, 240 App. Div. 20 ; 264 N. Y. 691 .)

Since the material allegations of the complaint are constructively admitted, there is no issue of fact and a declaratory judgment may appropriately be directed. (Dun & Bradstreet, Inc., v. City of New York, 276 N. Y. 198 .)

We think that on the facts alleged by the pleading the plaintiff is not within the exemption for “ those charitable and religious institutions which are supported wholly or in part by public subscriptions or endowment

p. 458

and are not organized or operated for profit.” (Local Law No. 29, 1935 [§ 1, If [h], § 2] and Local Law No. 31, 1936 [§ 1, If [h], § 2] of City of New York.) Concededly the plaintiff association is operated for profit. It is not enough that all its profits are devoted to the maintenance of an asylum which is purely charitable in character. The exemption does not extend to such a situation.

The judgments dismissing the complaint should be reversed and judgment directed for the defendants in accordance with this opinion, with costs in all courts.

Crane, Ch. J., Lehman, Loughran, Finch and Rippey, JJ., concur; O’Brien and Htjbbs, JJ., taking no part.

Judgment accordingly.

Cases cited

Young Men's Christian Ass'n v. City of New York 276 N. Y. 619 N.Y. 1938-01-04 p. 455, p. 457
New York University v. Taylor 276 N. Y. 620 N.Y. 1938-01-04 p. 455, p. 456
Socony-Vacuum Oil Co. v. City of New York 272 N. Y. 668 N.Y. 1936-12-04 p. 455, p. 456, p. 457
Dun & Bradstreet, Inc. v. City of New York 276 N. Y. 198 N.Y. 1937-11-23 p. 455, p. 457
National City Bank v. Waggoner 270 N. Y. 592 N.Y. 1936-03-03 p. 455
Corbett v. St. Vincent's Industrial School 177 N. Y. 16 N.Y. 1903-12-08 p. 455
In re the Appraisal, under the Transfer Tax Act, of the Estate of Huntington 168 N. Y. 399 N.Y. 1901-11-12 p. 455, p. 456
In re Allen's Estate 76 Misc. Rep. 88 N.Y. Sur. Ct. p. 455, p. 456
Butterworth v. Keeler 219 N. Y. 446 N.Y. 1916-12-28 p. 456
People ex rel. Trustees of the Masonic Hall & Asylum Fund v. Miller 279 N. Y. 137 N.Y. 1938-11-29 p. 456
In re Proceedings by the Washington Street Asylum & Park Railroad 115 N. Y. 442 N.Y. 1889-10-08 p. 456
City of New York v. New York City Railway Co. 193 N. Y. 543 N.Y. 1908-12-15 p. 456
Grimmer v. Tenement House Department 205 N. Y. 549 N.Y. 1912-04-02 p. 456
Behan v. People 17 N. Y. 516 N.Y. p. 456
Jewell v. City of Ithaca 36 Misc. Rep. 499 N.Y. Sup. Ct. p. 456
Jewell v. City of Ithaca 72 App. Div. 220 N.Y. App. Div. 1902-05-07 p. 456
Nashville, Chattanooga & St. Louis Railway Co. v. Wallace 288 U. S. 249 SCOTUS 1933-02-06 p. 456
Lewis v. City of Lockport 276 N. Y. 336 N.Y. 1938-01-11 p. 456
United States v. West Virginia 295 U. S. 463 SCOTUS 1935-05-20 p. 456
Kalman v. Shubert 270 N. Y. 375 N.Y. 1936-04-14 p. 457
New York Rapid Transit Corp. v. City of New York 275 N. Y. 258 N.Y. 1937-07-13 p. 457
New York Rapid Transit Corp. v. City of New York 303 U. S. 573 SCOTUS 1938-03-28 p. 457
Myers v. Bethlehem Shipbuilding Corp. 303 U. S. 41 SCOTUS 1938-01-31 p. 457
Western Electric Co. v. Taylor 276 N. Y. 309 N.Y. 1938-01-11 p. 457
In re of Syracuse Masonic Temple 270 N. Y. 8 N.Y. 1936-01-21 p. 457
Newburger v. Lubell 257 N. Y. 383 N.Y. 1931-11-17 p. 457
In re the Transfer Tax upon the Estate of Kennedy 264 N. Y. 691 N.Y. 1934-06-08 p. 457
People ex rel. Mizpah Lodge No. 518 of the Independent Order of Odd Fellows v. Burke 228 N. Y. 245 N.Y. 1920-03-09 p. 457
Claim of Liberatore v. Friedman 224 N. Y. 710 N.Y. 1918-11-26 p. 457
B'Nai B'Rith Club, Inc. v. City of New York 270 N. Y. 12 N.Y. 1936-01-21 p. 457
Brewster v. Gage 280 U. S. 327 SCOTUS 1930-01-06 p. 457
Armitage v. Board of Education 240 N. Y. 548 N.Y. 1925-02-25 p. 457