Association of the Bar of City of New York v. Lewisohn

• Decision Date: 08 May 1974
• Citation: 356 N.Y.S.2d 555,34 N.Y.2d 143,313 N.E.2d 30
• Parties: , 313 N.E.2d 30 In the Matter of the ASSOCIATION OF THE BAR OF the CITY OF NEW YORK, Respondent, v. Richard LEWISOHN, as Finance Administrator of the City of New York, et al., Appellants. In the Matter of the EXPLORERS CLUB, Respondent, v. Richard LEWISOHN, as Finance Administrator of the City of New York, et al., Appellants.
• Court: New York Court of Appeals Court of Appeals

Page 555

356 N.Y.S.2d 555

34 N.Y.2d 143, 313 N.E.2d 30

In the Matter of the ASSOCIATION OF THE BAR OF the CITY OF

NEW YORK, Respondent, v. Richard LEWISOHN, as Finance Administrator of the City of

New York, et al., Appellants.

In the Matter of the EXPLORERS CLUB, Respondent, v. Richard LEWISOHN, as Finance Administrator of the City of

New York, et al., Appellants.

Court of Appeals of New York.

May 8, 1974.

Norman Redlich, Corp. Counsel, New York City (Edith I. Spivack, Stanley Buchsbaum and Russell D. Scott, New York City, of counsel), for appellants in the first and second above-entitled proceedings.

M. Bernard Aidinoff, Michael M. Maney, Stephen R. Watson, and Israel Hoffman, New York City, for respondent in the first above-entitled proceeding.

Richard Steel, New York City, for respondent in the second above-entitled proceeding.

Louis J. Lefkowitz, Atty. Gen. (Julius Greenfield, Samuel A. Hirshowitz, Bernard Toomin and Sharon Cuff Slater, New York City, of counsel), pro se, in his statutory capacity under section 71 of the Executive Law, Consol.Laws, c. 18 and CPLR 1012 (subd. b), Consol.Laws, c. 8, intervenor-respondent.

JASEN, Judge.

The common issue on these appeals is whether the properties of petitioners, Association of the Bar of the City of New York and the Explorers Club, qualify for the exemption from real property taxes provided by constitution and statute for property owned by a charitable or educational organization and used exclusively for such purposes. If not, a further issue is whether the legislation purportedly permitting the return of petitioners' properties to the tax rolls of the City of New York violates due process or equal protection of the law. In each case the Appellate Division has sustained petitioners' entitlement to the exemption. We reverse and uphold the constitutionality of the challenged statute. (Real Property Tax Law, § 421.)

The Association of the Bar of the City of New York was incorporated in 1871 by an act of the Legislature. (L.1871, ch. 819, as amd. by L.1924, ch. 134.) Its purposes, as stated in that act as amended and in the Association's constitution, include 'cultivating the science of jurisprudence, promoting reforms in the law, facilitating the administration of justice, elevating the standard of integrity, honor and courtesy in the legal profession and cherishing the spirit of brotherhood among the members thereof.' Membership in the Association is open to any member of the legal profession, subject to recommendation by the Committee on Admissions, and election by a majority of the Executive Committee.

A principal activity of the Association is maintaining a law library. A large measure of the Association's activities is carried on through its various standing and special committees. The Standing Committee on the Judiciary considers the qualifications and makes recommendations with respect to candidates for judicial office. The Standing Committee on Grievances considers and investigates charges of misconduct against any member of the Association, and, in certain circumstances, other attorneys. It also investigates the unauthorized practice of law. Expenses of this committee are reimbursed to a maximum of 50% By the City of New York, subject to the approval of the Appellate Division in the First Judicial Department. Various standing court committees monitor the performance of the courts and investigate the qualifications of judicial candidates and the conduct of judicial officers. Other committees, organized generally according to substantive law areas, review and make recommendations on pending legislation, advise and appear before various public bodies, and in co-operation with the Committee on Post-Admission Legal Education, arrange for lectures and instructional programs. Other committees are concerned with legal assistance for indigents, lawyer referral service and entertainment.

The property of the Association, subject to review, consists of two adjacent parcels on West 44th Street between Fifth Avenue and the Avenue of the Americas in the Borough of Manhattan. Situate on one is a four-story structure, the House of the Association, used in its entirety by the petitioner; and on the other, the Bar Building, occupied in part and commercially leased in part. Since 1927, when legislation was enacted expressly exempting property used for Bar Association purposes from the real property tax (L.1927, ch. 565), petitioner has enjoyed such exemption for the House of the Association parcel. The Bar Building parcel, acquired in 1940, was later granted a similar exemption to the extent that it was used for the Bar Association's purposes. Such exemptions continued until January 1, 1972, when, pursuant to statute and local law, later to be discussed, they were terminated and the properties returned to the real property tax rolls by the Tax Commission of the City of New York.

The Explorers Club was organized in 1905 as a not-for-profit corporation under the former Membership Corporation Law. Its purposes, as set forth in the original certificate of incorporation, amended in 1964, are, generally stated, to further and to spread knowledge of general exploration, and to acquire and to maintain a library of exploration and travel and a map collection relating to explorers and their work. Membership consists of three classes: fellows (explorers), members (those interested in exploration), and student members (persons aged 16--24 enrolled as full-time students in accredited institutions of learning).

Current activities of the Club include maintenance of its extensive library devoted to works of exploration and the field sciences. Operational activities center on geographic exploration and research in the earth sciences. Through its Exploration Fund, the Club furnishes financial support in the form of exploration grants, and sponsors and otherwise encourages scientific expeditions involving field research and exploration. Through its education program, geared primarily to high school age students, the Club provides instruction and counselling in exploration and the field sciences, places students in expedition and field research projects, and, in co-operation with Federal agencies and private sources, provides financial assistance for such activities. Its Environment Committee furnishes financial support and consultive services for a variety of conservation and ecological projects undertaken by the Club.

The property of the petitioner Explorers Club, here under review, is located on 70th Street in the vicinity of Park Avenue, Borough of Manhattan. Located thereon is a six-story building entirely occupied by the Club. Since acquisition in February, 1964, the property has enjoyed an exemption from the real property tax as devoted exclusively to scientific purposes. Like petitioner in the companion case, effective January 1, 1972, this exemption was revoked and the property restored to the real property tax rolls.

By virtue of former section 420 of the Real Property Tax Law, Consol.Laws, c. 50--a, the Association of the Bar and the Explorers Club enjoyed for many years an exemption of right from taxation for their Manhattan properties; the former by virtue of its status and use of the property for Bar Association purposes, and the latter by virtue of its status and use of its property for scientific purposes. ¹ An amendment to section 420 (subsequently renumbered and now section 421), effective January 1, 1972 (L.1971, ch. 414), continued such exemptions for Bar Associations, scientific groups and certain other nonprofit organizations, but permitted the appropriate local government to terminate the exemption by local law. ²

In effect, the continuation of such exemptions became a matter of grace with local governments. Pursuant to this grant of authority, the City of New York adopted Local Law No. 46 of 1971 providing, in pertinent part, that, as of January 1, 1972, real property of a corporation or association organized exclusively for scientific or Bar Association purposes and used exclusively for such purposes shall be taxable. ³ In accordance with this enactment, petitioners were notified that their respective properties were being returned to the tax rolls effective January 1, 1972.

Petitioners argue on this appeal that they are entitled to an exemption from real estate taxes for the reason that their activities are by their very nature charitable or educational. We begin with the proposition that to qualify for exemption under section 421, it is necessary, first, that the corporation or association seeking exemption be organized exclusively for one or a combination of the denominated statutory purposes; and, second, that the property be devoted exclusively to such use. (Gospel Volunteers v. Village of Speculator, 29 N.Y.2d 622, at pp. 624, 625, 324 N.Y.S.2d 412, at pp. 413, 414, 273 N.E.2d 139, at pp. 140, 141 (Scileppi, J., dissenting).) And while exemption statutes should be construed strictly against the taxpayer seeking the benefit of the exemption, an interpretation so literal and narrow that it defeats the exemption's settled purpose is to be avoided. (People ex rel. Watchtower Bible & Tract Soc. v. Haring, 8 N.Y.2d 350, 358, 207 N.Y.S.2d 673, 678, 170 N.E.2d 677, 680.) Accordingly, 'exclusive', as used in the context of these exemption statutes, has been held to connote 'principal' or 'primary'. (People ex rel. Untermyer v. McGregor, 295 N.Y. 237, 243--244, 66 N.E.2d 292, 294--296; People ex rel. Watchtower Bible & Tract Soc. v. Haring, 8 N.Y.2d 350, 354, 358, 207 N.Y.S.2d 673, 674, 678, 170 N.E.2d 677, 678, 680, Supra; Crusade for Christ v. Town of New Lebanon, 36 A.D.2d 247, 250--251, 320 N.Y.S.2d 164, 166--167, affd., 31 N.Y.2d 765, 338 N.Y.S.2d 440, 290 N.E.2d 440.) Hence, purposes and uses merely auxiliary or incidental to the main and exempt purpose and use will not defeat the exemption. (People ex rel. Untermyer v. McGregor, ...