New York Botanical Garden v. Assessors of Town of Washington

• Decision Date: 04 May 1981
• Citation: 438 N.Y.S.2d 580,80 A.D.2d 170
• Parties: In the Matter of the NEW YORK BOTANICAL GARDEN, Appellant, v. The ASSESSORS OF the TOWN OF WASHINGTON et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 580

438 N.Y.S.2d 580

80 A.D.2d 170

In the Matter of the NEW YORK BOTANICAL GARDEN, Appellant, v. The ASSESSORS OF the TOWN OF WASHINGTON et al., Respondents.

Supreme Court, Appellate Division Second Department.

May 4, 1981.

McCabe & Mack, Poughkeepsie (Lord, Day & Lord, New York City, John J. Loflin, J. Joseph McGowan, Henry deF. Baldwin and Gail A. Schneider, New York City, of counsel), for appellant.

Van De Water & Van De Water, Poughkeepsie (John K. Gifford, and James E. Nelson, Poughkeepsie, of counsel), for respondents.

Before LAZER, J. P., and MANGANO, GIBBONS and COHALAN, JJ.

LAZER, Justice Presiding.

These appeals involve both the meaning and breadth of interpretation to be given subdivision 1 of section 421 of the Real Property Tax Law (RPTL) under which real property owned by nonprofit entities organized or conducted primarily for certain specifically enumerated purposes and primarily used for those purposes is absolutely or qualifiedly exempt from local taxation. The instant owner and appellant is New York Botanical Garden (Botanical Garden), a corporation organized by a special act of the Legislature a century ago (see L. 1891, ch. 285). The corporation maintains the famous Bronx Botanical Gardens which is owned by the City of New York and is exempt from taxation. In 1973, the trustees of the Mary Flagler Cary Charitable Trust donated 1,900 acres of property in Dutchess County to Botanical Garden by a deed which specified that the land was to be used as an arboretum and that the trustees would have the right to reacquire the property if the use ceased. The current controversy involves 1,640 acres of the property (now known as the Cary Arboretum) which lie in the Town of Washington. The Town Assessors have withdrawn the tax exemption previously enjoyed by the Arboretum and have restored the property to the tax rolls. The appeals are from Special Term's dismissal of Botanical Garden's article 78 proceeding challenging the Assessors' action. We believe reversal is mandated.

I

Subdivision 1 (par. ¹ of section 421 of the RPTL provides that property owned by a corporation or association organized or conducted "exclusively" for religious, charitable, hospital, educational, mental or moral improvement or cemetery purposes or two or more such purposes and used "exclusively" for such purposes is entitled to exemption from taxation. Prior to its amendment in 1971, subdivision 1 of section 421 included 14 additional categories of purposes and uses which entitled owners to exemption, but in that year the Legislature added a new paragraph (b) to subdivision 1 (see L. 1971, ch. 414, § 2) granting to the governing boards of municipal corporations the power to eliminate the unqualified exemption previously enjoyed by organizations in the 14 categories. Among the categories whose exempt status was thus subjected to the prospect of extinction by local action were entities whose purposes were "scientific". In 1977 the Washington Town Board enacted Local Law No. 3 ² under which the property of organizations whose purposes or uses were listed in subsection (b) was declared taxable. The Washington assessors then proceeded to restore the Cary Arboretum to the tax roll despite the fact that the property had been exempted from taxation since 1973 on the basis of Botanical Garden's educational purposes and the use of the property for those purposes. The assessors' action was premised upon the postulation that the purposes and uses actually were scientific and not educational.

Botanical Garden responded with the current article 78 proceeding in which it seeks to enjoin the town and its assessors from placing the property on the assessment roll and to have the property declared tax exempt. At Special Term, the parties stipulated as to the facts, furnished the court with various exhibits (including depositions), and submitted the proceeding for determination. The court found that Botanical Garden was organized and conducted primarily for scientific purposes, that the primary use of the arboretum property was for those purposes, and it dismissed the petition. These appeals ensued.

II

Although subdivision 1 of section 421 of the RPTL provides that the exempt purposes and uses it lists must be the owning organization's exclusive ones, judicial gloss has translated the word "exclusively" as referring to the "principal" or "primary" corporate purposes and land uses (see Mohonk Trust v. Board of Assessors of Town of Gardiner, 47 N.Y.2d 476, 418 N.Y.S.2d 763, 392 N.E.2d 876; Matter of Association of Bar of City of N.Y. v. Lewisohn, 34 N.Y.2d 143, 153, 356 N.Y.S.2d 555, 313 N.E.2d 30). But before we can consider the competing contentions relative to purpose and use, we must determine which of the litigating parties bore the burden of proof on those issues at Special Term. The town stresses the settled proposition that the party seeking a tax exemption has the burden of demonstrating entitlement to it (Matter of Grace v. New York State Tax Comm., 37 N.Y.2d 193, 196, 197, 371 N.Y.S.2d 715, 332 N.E.2d 886; Matter of Koner v. Procaccino, 39 N.Y.2d 258, 264, 383 N.Y.S.2d 295, 347 N.E.2d 658 Matter of Young v. Bragalini, 3 N.Y.2d 602-606, 170 N.Y.S.2d 805, 148 N.E.2d 143; Matter of Elkind v. State Tax Comm., 63 A.D.2d 789, 404 N.Y.S.2d 1010; Matter of Marshall v. State Tax Comm., 62 A.D.2d 1124, 404 N.Y.S.2d 703; Matter of International Harvester Co. v. State Tax Comm., 58 A.D.2d 125, 126, 396 N.Y.S.2d 82; Matter of Tripp v. State Tax Comm., 53 A.D.2d 763, 764, 384 N.Y.S.2d 256; Matter of F.O.R. Holding Co. v. Bd. of Assessors of Town of Clarkstown, 45 A.D.2d 875, 876, 357 N.Y.S.2d 875, app. dsmd. 35 N.Y.2d 959, 365 N.Y.S.2d 177, 326 N.E.2d 556; Matter of Lakeland Farms Co. v. State Tax Comm., 40 A.D.2d 15, 18, 336 N.Y.S.2d 972); and Special Term adhered to that general principle in dismissing the petition. We are persuaded that the principle was inapplicable under the circumstances.

Under subdivision 1 (par. of section 421 of the RPTL, religious, charitable, hospital, educational, moral or mental improvement and cemetery purposes and uses provide the bases for absolute exemption. But the 14 categories contained in subdivision 1 (par. are entitled to freedom from taxation only in the absence of local governing board action eliminating the exemption. Under either paragraph of subdivision 1, however, an organization seeking exemption must bear the burden of establishing that it is (1) an association or corporation organized or conducted primarily or principally for one or more exempt purposes and (2) that the particular land for which the exemption is sought is used primarily or principally for one or more exempt purposes (Mohonk Trust v. Board of Assessors of Town of Gardiner, 47 N.Y.2d 476, 483, 418 N.Y.S.2d 763, 392 N.E.2d 876, supra; Matter of Association of Bar of City of N.Y. v. Lewisohn, 34 N.Y.2d 143, 153, 356 N.Y.S.2d 555, 313 N.E.2d 30, supra; Matter of Mary Immaculate School of Eagle Park v. Wilson, 73 A.D.2d 969, 424 N.Y.S.2d 251; Matter of Mount Tremper Lutheran Camp v. Board of Assessors of Town of Shandanken, 70 A.D.2d 984, 985, 417 N.Y.S.2d 796). The burden is reversed, however, where local authorities seek to withdraw an already existing exemption, for then it is the "taxing authority must prove not only that the corporate owner is organized exclusively for qualifiedly exempt] purposes, but as well that it is not organized or conducted exclusively for absolutely exempt] purposes" (Matter of Watchtower Bible & Tract Soc. of N.Y. v. Lewisohn, 35 N.Y.2d 92, 97, 358 N.Y.S.2d 757, 315 N.E.2d 801; see, also, Matter of Swedenborg v. Lewisohn, 48 A.D.2d 798, 369 N.Y.S.2d 429, affd. 40 N.Y.2d 87, 386 N.Y.S.2d 54, 351 N.E.2d 702; Matter of Trustees of Columbia Univ. in City of N.Y. v. Town of Orangetown, 93 Misc.2d 261, 264, 402 N.Y.S.2d 899, affd. 60 A.D.2d 582, 399 N.Y.S.2d 708).

Since the current dispute was engendered by the withdrawal of Botanical Garden's education-based exemption, it is the rule enunciated in Watchtower, supra, which applies and, therefore, the town had the burden of establishing that Botanical Garden was organized or conducted and the Cary Arboretum was used primarily for purposes which are only qualifiedly exempt under subdivision 1 (par. of section 421 of the RPTL.

III

The respective positions on the substantive issues of purpose and use can be briefly stated. Botanical Garden argues that it is primarily organized or conducted for charitable, educational and/or moral or mental improvement purposes and that the arboretum use is consistent with those purposes. The town first invokes the oft-stated rule that tax exemption statutes should be strictly construed against the taxpayer seeking the exemption (see Matter of Association of Bar of City of N.Y. v. Lewisohn, 34 N.Y.2d 143, 153, 356 N.Y.S.2d 555, 313 N.E.2d 30, supra; Matter of City of Lackawanna v. State Bd. of Equalization & Assessment of State of N.Y., 16 N.Y.2d 222, 230, 264 N.Y.S.2d 528, 212 N.E.2d 42) and then posits that Botanical Garden's primary corporate purposes and the uses of the arboretum property are scientific in nature. Charitable purposes, urges the town, import almsgiving or benefactions to the poor; educational purposes connote something closely akin to what a college or university does; and moral and mental improvement purposes are confined to organizations such as the YMCA, Girl Scouts, or others of a similar nature (see, e. g., Matter of Association of Bar of City of N.Y. v. Lewisohn, supra, 34 N.Y.2d p. 154, 356 N.Y.S.2d 555, 313 N.E.2d 30; Matter of Swedenborg v. Lewisohn, 40 N.Y.2d 87, 94-95, 386 N.Y.S.2d 54, 351 N.E.2d 702, supra; Matter of Presbyterian Residence Center Corp. v. Wagner, 66 A.D.2d 998, 411 N.Y.S.2d 765, affd. 48 N.Y.2d 885, 424 N.Y.S.2d 896, 400 N.E.2d 1348).

While the town's position has some superficial appeal, we cannot read the statute with such lexicographical precision. Instead, we...