People ex rel. Society of the New York Hospital v. Purdy

Majority

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The People ex rel. The Society of The New York Hospital, App’lt, v. Elijah Purdy et al., Assessors, Resp’ts.

(Supreme Court, General Term, Second Department,

Filed Dec. 8, 1890.)

Headnote

Taxes—Exemption—New Yobk Hospital.

Relator’s farm, which is not self supporting,supplies the hospital with vegetables, but occasionally certain insignificant articles of produce which could not be advantageously used have been sold and the proceeds applied to the support of inmates of the hospital. Held, that the proceeds of such sales were not income within the meaning of chap. 462, Laws 1889, so as to deprive the society of exemption from taxation under that act, nor does the society waive its exemption because it charges some patients who are'able to pay and uses the money for the support of those who are not.

Appeal from order of special term, dismissing writ of certiorari to review assessment for taxes for the year 1889, on the farm of relator at White Plains.

Martin J. Keogh, for app’lt; L. O. & W. P. Platt, for resp’ts.

By chap. 466, Laws of 1875, the real and personal property of the relator in the city and county of Hew York was made exempt from taxation if no income was derived from it, and the same was used exclusively for the purpose for which the relator was chartered.

By chap. 462, Laws of 1889, this exemption was extended to property “ wherever situated,” but under the same term and condition. The hospital has a farm of land in Westchester county exclusively used for the charter purposes of the society. The farm is not self-supporting, and food is sent from Hew York for the use of the patients beyond the products of the farm and the farm supplies the Hew York Hospital with vegetables. There

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areoceasionally sales made of certain insignificant articles of produce, such as cabbage, pigs and male calves, the proceeds from which have been applied to the support of the inmates of the hospital buildings on the farm.

The sole question is whether this is income within the meaning of the statute. The exemption as to money corporations depending on “ profits or income ” was held not to apply where there were receipts, although the receipts were less than the expenses. People v. Supervisors of Niagara County, 4 Hill, 20 .

The words profit or income are said by the court to be frequently used synonymously, but “ net income profits ” and “ clear income” are also used in the statute. The court decided the case, however, on what was deemed a legislative intent in the use of the words “ profit or income.” A later section of the act was deemed to exclude “ net profit ” or “ clear income ” as inapplicable to the case.

The case of The People v. Supervisors of N. Y., 18 Wend., 605 , held that as to moneyed and manufacturing corporations deriving an income on their capital, the exemption classed under the words “profits or incomes” included any incomes though less than the expenses. The present case is very different. The hospital is not a stock company, but a charitable one. The buildings in the city of Hew York are exempted by law from taxation, and by this amendment the exemption is extended to lands elsewhere. The farm is used solely for the purposes df the charity. The cost of raising the produce exceeds the value of the product, and it is almost entirely used in the institution of the hospital.

The case is very analogous to Betts v. Betts, 4 Abb. N. C., 317 , where it was held that the sale of a few simple articles manufactured by the blind inmates of an institution for the blind were not to be deemed a source of income.

The evidence in this case shows that all the proceeds of the farm go to the support of the relator’s patients, and this result de- • termines the character of the income received from the farm as a whole and not from a few sales of property which could not be advantageously used by relator. If the hospital had permitted this property to be wasted, no exemption would be waived or forfeited. Temple Grove Seminary v. Cramer, 98 N. Y., 121 .

The hospital does not waive its exemption because it charges some people who are able to pay. Whether this fact makes the hospital other than a public charity, and thus subjects its buildings in Hew York and the farm as well to taxation, is fully discussed and decided in City of Philadelphia v. Penn Hospital, Leg. Int., February 14, 1889, page 70.

The case shows that all its income from property and donation is used for the purpose of the charity and the money received from pay patients is wholly applied to the support and attendance on those who cannot pay. The hospital is at present quite heavily in debt and has to meet many thousands of applicants every year. . There is a large excess of disbursements over receipts of board for patients in 1888, amounting to $128,994.50.

The order should, therefore, be reversed and judgment given

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that the farm is exempt from taxation, with ten dollars costs and disbursements on appeal.

Barnard, P. J., and Pratt, J., concur.