Beth Israel Hospital Housing Co. v. Catherwood
| Decision Date | 29 December 1970 |
| Citation | 316 N.Y.S.2d 462,35 A.D.2d 397 |
| Parties | In the Matter of BETH ISRAEL HOSPITAL HOUSING COMPANY, Inc., Appellant, v. Martin P. CATHERWOOD, as Industrial Commissioner, Respondent. |
| Court | New York Supreme Court — Appellate Division |
Sidney Schutz, New York City (Henry C. Woicik, New York City, of counsel), for appellant.
Louis J. Lefkowitz, Atty. Gen. (Samuel A. Hirshowitz, Samuel Stern and Frederick M. Paola, New York City, of counsel), for respondent.
Before HERLIHY, P.J., and REYNOLDS, GREENBLOTT, COOKE and SWEENEY, JJ.
This is an appeal from a decision of the Unemployment Insurance Appeal Board holding appellant employer not exempt from contributions under the provisions of subdivision 4 of section 560 of the Unemployment Insurance Law (Labor Law, art. 18).
Appellant is a membership corporation organized under the Private Housing Finance Law for the purpose of building and operating auxiliary housing facilities for the personnel and their immediate families of Beth Israel Hospital which is, concededly, a charitable organization and exempt. Appellant's certificate of incorporation provides that its directors shall be officers, directors or trustees of the hospital at which the housing is provided; that no part of its net earnings shall inure to the benefit of any member or any other private individual; and that upon dissolution of the corporation, its property shall vest in the hospital. Occupancy of the housing accommodations is limited exclusively to hospital personnel. Appellant contends that since it is a nonprofit corporation, formed solely to provide auxiliary housing facilities for the necessary employees of the hospital it, too, is operated exclusively for charitable purposes and should not be subject to unemployment contributions.
The board reasoned that the employer is not a hospital, but a separate corporation organized to provide housing facilities for the hospital staff which is, in fact, its primary purpose, and consequently, it is not entitled to exemption from liability under the Unemployment Insurance Law. With this reasoning we do not agree. As this court stated in Matter of Mendelsohn, 262 App.Div. 605, 609, 31 N.Y.S.2d 435, 439--440, affd. 295 N.Y. 691, 65 N.E.2d 333, the requirements of subdivision 4 are twofold: '(1) the institution must be organized and operated exclusively for charitable purposes, (2) no part of the net earnings' can inure 'to the benefit of any private shareholder or individual'. The second requirement has been met.
The Court of Appeals has held that supplying living accommodations for hospital personnel and their immediate families is a hospital purpose (Matter of St. Luke's Hospital v. Boyland, 12 N.Y.2d 135, 141, 237 N.Y.S.2d 308, 310, 187 N.E.2d 769, 771), and it constitutes a use incidental to the principal use of the main hospital building (Matter of DeMott v. Notey, 3...
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