#### The People ex rel. The Young Men’s Association for Mutual Improvement in the City of Albany, Relator, *v.*William Sayles et al., Assessors of the City of Albany, Defendants.

(Supreme Court, Albany Special Term,

March, 1898.)

Taxation — Library corporation, using part of its building as a theatre and applying the income to its corporate uses.

A corporation, organized to maintain a public library, reading rooms, lectures and similar moral and intellectual agencies, having no capital stock nor any provision for the making or division of profits, supported by nominal membership fees, which uses a large part of its building for a theatre and public ball and devotes the resulting income solely to the purposes of its creation, is exempt from, taxation under chapter 371 of the Laws of 1897.

Cebtiobabt to review the action of the board of Assessors .of the city of Albany, in assessing the real estate belongling to the Young Men’s Association of Albany, and. known as Harmanus-Bleecker .Hall.

William P. Rudd, for relator.

John A. Delehanty, corporation counsel, opposed.

Clearwater, J.

The relator is a corporation, organized, under the laws of this state, for the purpose of establishing and main- *2. taining in the city of Albany a public library, branch public libraries, reading rooms, literary and scientific lectures, and other means of promoting moral and intellectual improvement, with power to take by gift, purchase, devise or otherwise, and to hold, grant, lease or mortgage its real and personal property, to erect, maintain and furnish proper buildings for its accommodation, and to take, hold and convey such books, cabinets, library furniture and apparatus as may be necessary for attaining these objects.and carrying into effect these purposes.

The management and disposition of its real estate- is vested in a board of trustees, who have power, among other things, to grant the free use and occupation for such term as. they deem proper, of any room, hall or' apartment in. any building which may be erected upon the lands of the association, to any society, organized for the encouragement of science, art or literature, or for such other purpose as to them may seem most advantageous to the interest and prosperity of the association

It was originally formed in 1833 and,' under its rules, the library rooms are open to the public without charge, and the public has the free use,1 within the rooms, of its books, periodicals and newspapers. Membership may be had on the payment of the nominal due of $1 per year, and entitles a member to the use, by withdrawal, of the books in the library, and to a vote in the selection of officers.

It is the owner of lands on Washington avenue in the city of Albany, about 120 feet .in width, and 210 feet 'in depth, upon which is the building known as Harmanus-Bleecker Hall. This property was obtained from moneys derived from gifts coming through the hands of Amasa L Parker, a former justice of this court and the then trustee, under a deed of trust' executed by Harmanus Blee'cker a philanthropic citizen of Albany, consisting of the lot of ground upon -which the building stands and a sum of money and public subscriptions by the citizens of Albany and others, aggregating $56,000. _ . ■ ■

These subscriptions varied in amount from ten cents each, by the school children of the city, to $1,500 contributed by a public spirited.^ citizen.

The building is spacious, substantially constructed, architecturally imposing, and contains, aside from library, recreation and other rooms, a large room furnished and used’ as a theatre, and provided With a stage, scenery, drop curtain, flies, and the ordinary *3apparatus incident to the rendition of dramatic performances. Its auditorium is divided into the usual boxe§, orchestra, dress- circle and gallery, and is furnished with chairs for the accommodation of persons attending the entertainments given upon its stage. This room has been and is rented, not for a term of months or years, but from time to time as opportunity offers, as a theatre and public hall, and is said to be the most spacious and best equipped room for such purposes in the city of Albany. The net rental is all used by the relator in carrying out the objects for which it- was incorporated. The entire property has never produced revenue sufficient to meet the expenses incident to its maintenance, and in consequence of the steadily growing deficit, it has been necessary to mortgage it for the sum of $10,000, in addition to which there is a floating indebtedness of $3,500.

In preparing the assessment-roll for 1897, the assessors of Albany assessed the property at $115,000, subsequently reducing the assessment to $50,000, at which it remains. The relator sued out a writ of *certiorari*to review the assessment, claiming that the property is exempt from taxation under the amendment of the general act in relation to taxation, chapter 371 of the Laws of 1897, which, so far as relevant, is as follows: .

*“*The real property of a corporation or association organized exclusively for the moral or mental improvement of men or women, or for religious, bible, tract, charitable, benevolent, missionary, hospital, infirmary, educational, scientific, literary, library, patriotic, historical or cemetery purposes, or for the enforcement of laws relating to children or animals, or for two or more such purposes, and used exclusively for carrying out thereupon one or more of such purposes; and the personal property of any such corporation shall be exempt from taxation. But no such corporation or association shall be entitled to any such exemption if any officer, member or employe thereof shall receive or may be lawfully entitled to receive any pecuniary profit from the operations thereof except reasonable compensation for services in effecting one or more of such purposes, or as proper beneficiaries of its strictly charitable purposes; or if the organization thereof, for any such avowed purposes be a guise or pretense for directly or indirectly mating any other pecuniary profit for such corporation or association, 'or for any of its members or ^employes, or if it be not in good faith organized or conducted exclusively for one or more of such purposes. The real property of any such corporation or association *4entitled to- such exemption held by it exclusively for one ¡or more of such purposes and frpm which no rents, profits or income are. derived, shall be so exempt, though not in actual use therefor by reason of the absence of suitable buildings or improvements thereon, if the construction of such buildings or improvements' is in progress,, or is in good faith contemplated by such corporation or association. The real property of any such corporation not so used exclusively for carrying out thereupon one or more .of such purposes, but leased or otherwise used for other purposes, shall not’ be exempt, but if a portion only of any lot or building of any such, corporation or association is used exclusively for carrying out thereupon one or more such purposes of any such corporation or association, then such lot or building shall be so exempt only to the extent of the value of the portion so used, and the remaining or other portion to the extent of the value of such remaining or other portion shall be subject to taxation.”

There is no element of gain in the object' or the operations of the relator; no capital stock, nor any provision for the making of profits, or the declaration.' of dividends. It derives its funds from the rent of this theatre, the nominal- fee paid by its members, the contributions of children and the largess of the philanthropic. Whatever it may receive from any source, it holds in trust to be devoted to the objects of its incorporation and to- increasing its benefits. Its affairs are conducted for a great public purpose, and the wisdom of attempting to burthen such an institution with taxation is questionable. Is it permissible under the existing law?

It is contended by the learned corporation counsel, who- represents the assessors, that as the theatre is leased for hire to- persons not members of the association, the entire property is not used exclusively for the purposes for which the relator is incorporated, and. that at least the portion so. rented is taxable 'and should be assessed. That in order to come within the provisions of the exemption, it is necessary that the whole property should be actually and physically exclusively used and occupied by the association, its members or the public, without other charge than, the nominal fee of membership, and he has fortified his contention with an able and ingenious argument, and by an elaborate and admirable brief.

In determining the precise shade of meaning to- be given to- the adverb *“*exclusively,” as used in the act, we should examine the context of the statute for the purpose of ascertaining the legislative *5intent, for when that is found, the act will receive that construction which will give it the effect intended, even if, as suggested, it be lacking in lucidity of expression. It is the duty 'of every commonwealth to promote the education and- moral improvement of the young, to encourage them in acquiring a knowledge of the sciences, of literature, and of the mechanic and fine ?..l; for it is upon the youth of each generation, that the future of the state depends. This can be done in different ways. By the founding and maintenance of universities, and schools, by the grant of lands and moneys, and by exempting from taxation the property of voluntary associations organized for one or more of these purposes The relator is one among many of such organizations. Its expressed object is to improve the moral and intellectual condition of the young men of Albany of all nationalities, parties and sects, and it is not pretended that there has been any diversion of its endowment or income from the purposes for which they were donated, and intended.

It is evident that the legislature had in mind the existence and usefulness of organizations of this character in framing and passing the act of *1897,*and it seems to me that its object was to exempt from taxation property, owned by. them, actually used in carrying out, upon the property itself, the purposes for which the organization was formed, if of the character specified in the act, and to. prevent any corporation or association, no matter how lofty or beneficent its avowed object, from using an averred aim as the pretext for the acquisition and accumulation of property, either real or personal, with the intent of shielding itself behind such an artifice to evade taxation. If the relator never permitted the use of its theatre save to its own members, or to the public without charge, it is admitted that it would then be within -the exemption. The fact that it lets the theatre for hire to others, and that it devotes the rent received, to carrying out in other parts of the same building, the purposes for which it is incorporated, does not to my mind deprive it of the protection of the act.

While it may perhaps be questioned whether the intermittent character of the letting of the theatre is a leasing, within the purview of the statute, it cannot justly be said that it is either leased or used for purposes other than the carrying out upon the property itself of the design for which the relator is organized, for as has before been said, the net rental is all devoted to that end and up to this time the relator’s operations have been confined to' the *6building of which the theatre is a part. The policy of the exemption is the moral and mental improvement of men or women, the formation and maintenance of religious,' benevolent, educational, patriotic, scientific, literary, historical and burial associations, all of which are aids to and accompaniments of a refined and advanced civilization. This policy is not subverted, but on the contrary, is promoted by permitting the relator to devote a portion of its premises to a profitable use when they are not needed and cannot be used by its own members. By renting the theatre, the relator is enabled to increase its income, applicable to the purposes of its creation, and to afford to the people of Albany, a commodious and well-appointed place of amusement. If the exemption from taxation enables it to obtain a larger net income, it is an advantage to which it is fairly entitled and which is entirely consistent with the policy upon which the exemption is based.

Hot only is this the rule recognized here, but also in other states, cultivating a broad and liberal policy towards the young, the indigent and the infirm. Temple Grove Seminary v. Cramer, 98 N. Y. 121-126; Matter of Will of Vassar, 127 id. 1-15; People ex rel. Cairns v. Murray, 148 id. 171-175, 176; People ex rel. Clausen v. Murray, 5 App. Div. 441; Toole v. Board of Supervisors of Oneida, 13 id. 471; People ex rel. Academy of the Sacred Heart v. Commissioners of Taxes of New York, 6 Hun, 109; affirmed, 64 N. Y. 656; Yates Co. National Bank v. Carpenter, 119 N. Y. 550; Philadelphia v. Women’s Christian Association, 125 Penn. St. 572; County of North Hampton v. La Fayette College, 128 id. 132; Gooch v. Association for Relief of Aged, Indigent Females, 109 Mass. 558; McDonald v. Massachusetts General Hospital, 120 id. 432; Town of Hew Haven v. Board of Trustees of Sheffield Scientific School, 59 Conn. 163; Willard v. Pike, 59 Vt. 202.

In reaching this conclusion, I am not unmindful that taxation is the rule, and exemption the exception, and that an intent to exempt property from taxation is not to be presumed; but the! true rule is that statutes such as this, should be construed, not narrowly by the letter, but liberally and broadly, in view of their object and spirit; and the advantages, to be derived from a generous construction, will be more than an equivalent, to the state and to the city of Albany, for the loss that may result from the relinquishment of the right of taxation over the property owned by such organizations as the relator and devoted to kindred purposes. Hor will the state *7or city suffer by such a construction, as it may safely be assumed that assessors and the courts will scrutinize each case as it arises and see that a salutary and benignant law is not perverted to base ends. ’

I am of the opinion that the assessment is illegal and erroneous, and should be stricken from the roll.

An order to that effect may be framed, and if counsel disagree as to its provisions, it will be settled by me on two days’ notice.

Ordered accordingly.