Case ID: nys_12/html/0307-01.html
Source: Caselaw Access Project
Author: {"author": "Barnard, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

People ex rel. New York Hospital v. Purdy et al.
    
    
      (Supreme Court, General Term, Second Department.
    
    December 10,1890.)
    'Taxation—Exemption—Charities.
    Laws N. Y. 1889, c. 463, provides that the portion of the property of a certain incorporated hospital society, “from which no income is derived, shall be exempt from taxation so long as the same shall be used exclusively for the purposes for which said society was chartered. ” The society had a farm, used exclusively for its charter purposes, and which was not self-supporting. The farm products were almost entirely used in the hospital, but occasionally insignificant articles were sold, and the proceeds were applied to the support of inmates of hospital buildings on the farm. Held, that such proceeds were not “income, ” within the meaning of the statute, and that the exemption was not waived by the society charging patients able to pay, the money received from them being wholly applied to the support of and attendance on patients who could not pay.
    Appeal from special term, Westchester county.
    
      Certiorari on the relation of the Society of the New York Hospital, a corporation, against Elijah Purdy and others, assessors of the town of White .Plains, to review an assessment for taxes for the year 1889 upon a farm of relator in that town. From an order dismissing the writ of certiorari, relator appeals. Laws N. Y. 1889, c. 462, § 1, provides: “The portion of the property, real and personal, of the Society of the New York Hospital, a charitable corporation, now owned, or hereafter acquired, by it, and wherever situated, from which no income is derived, shall be exempt from taxation so long as the same shall be used exclusively for the purposes for which said society was chartered. ”
    Argued before Barnard, P. J., and Dykman and Pratt, JJ.
    
      Martin J. Keogh, for appellant. L. C. & W. P. Platt, for respondents.
   Barnard, P. J.

By chapter 466, Laws 1875, the real and personal property of the relator in the city and county of New 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 chapter" 462, Laws 1889, this exemption was extended to property “ wherever situated, ” but under the same terms and conditions. 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 New York for the use of the patients beyond the products of the farm, and the farm supplies the New York Hospital with vegetables. There are occasionally 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 many 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. Supervisor, 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 People v. Supervisor, 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 New 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 of 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 determines 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. It the hospital had permittéd this property to be wasted, no exemption would be waived or forfeited. 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 New York, and the farm as well, to taxation, is fully discussed and decided in City of Philadelphia v. Hospital, 47 Leg. Int. 70, (Feb. 14, 1889.) 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 that the farm is exempt from taxation, with $10 costs and disbursements on appeal.