People ex rel. Watchtower Bible & Tract Soc., Inc. v. Haring

• Decision Date: 17 November 1960
• Citation: 8 N.Y.2d 350,207 N.Y.S.2d 673,170 N.E.2d 677
• Parties: , 170 N.E.2d 677 PEOPLE of the State of New York ex rel. WATCHTOWER BIBLE AND TRACT SOCIETY, INC., Appellant, v. Percy H. HARING et al., Constituting the Board of Assessors of Taxes of the Town of Lansing, Respondents (and two other proceedings).
• Court: New York Court of Appeals Court of Appeals

Page 673

207 N.Y.S.2d 673

8 N.Y.2d 350, 170 N.E.2d 677

PEOPLE of the State of New York ex rel. WATCHTOWER BIBLE AND TRACT SOCIETY, INC., Appellant, v. Percy H. HARING et al., Constituting the Board of Assessors of Taxes of the Town of Lansing, Respondents (and two other proceedings).

Court of Appeals of New York.

Nov. 17, 1960.

Hayden C. Covington, Brooklyn, for appellant.

Charles H. Newman, Ithaca, for respondents.

DESMOND, Chief Judge.

These consolidated proceedings were brought to review the denial by the Assessors of Taxes of the Town of Lansing, Tompkins County, of exemption from realty taxes for the years 1954, 1955 and 1956 of relator's 800-acre farm in the township. Relator claims the exemption under subdivision 6 of section 4 of the Tax Law, Consol.Laws, c. 60 (now Real Property Tax Law, Consol.Laws, c. 50-a, § 420), the pertinent part of which makes exempt from tax 'The real property of a corporation or association organized exclusively for * * * religious, bible, tract * * * purposes * * * and used exclusively for carrying out thereupon one or more of such purposes'. The courts below rejected relator's demands for exemption and dismissed the proceedings.

Relator, organized some 50 years ago as a membership corporation for general religious purposes such as the spreading of bible truths, missionary work and instruction of men and women in religion, is the governing body in the United States of the sect or religious group known as Jehovah's Witnesses which has a membership in this country of some 180,000 persons. Its headquarters buildings in Brooklyn contain housing and boarding accommodations for teachers, students and clergymen as well as a printing plant from which millions of pieces of religious literature are sent throughout the world. The Tompkins County farm, the taxation of which is the subject matter of this proceeding, is far across the State from the Brooklyn establishment but it is undisputed that during the years here in question nearly all the farm produce was used for feeding the employees at the Brooklyn buildings and at a bible school conducted by relator in Tompkins County not on but near the lands here directly involved. Exhibits I, J and K show that in these three years the approximate percentages of produce thus used were respectively 92, 96 and 95. Despite this, the Referee held that the sales of these small food surpluses were separate activity and not merely 'incidental' to the farm's primary purpose of feeding the students, teachers, workers and members of the religious body.

The Appellate Division, in affirming the denial of exemption, did not make a direct finding as to whether the farm sales were incidental only but it did find (it is really undisputed) that nearly all the food produced was used as relator claims, and that only a small remainder was sold. We do not see how disposal of surpluses of this comparatively small size could in reason be held to be more than incidental and insubstantial. The finding to the contrary is not only opposed to the facts but it is inconsistent with the results reached in People ex rel. Society of New York Hospital v. Purdy, 58 Hun 386, 12 N.Y.S. 307, affirmed 126 N.Y. 679, 28 N.E. 249 and New York Conference Ass'n of Seventh-Day Adventists v. Schenck, 275 App.Div. 742, 87 N.Y.S.2d 708, affirmed 304 N.Y. 706, 107 N.E.2d 654.

The Referee, as another reason for dismissal, had held tht the farm 'is not operated for educational and religious purposes, and is not a necessary adjunct for the religious functions of the petitioner or for carrying out the purposes of its incorporation.' He thought the real test as to that was 'whether the operation of the farm is a part of the educational and religious program', and he found that it was not such a part. No justification appears for this part of the Referee's holding and the Appellate Division apparently did not concur in it. The Referee seemed to base this particular conclusion on the failure of relator to prove that the members of this sect living and working at the farm and at the Brooklyn buildings are 'ministers of religion' as that term is usually understood. What he apparently had in mind was the proof that these people do their avangelization and colportage after hours or on weekends, that they do not have the kind or extent of training usually provided for clergymen, that they make a small profit from the sale of books and other literature produced by relator, that some of them receive a small monthly allowance as well as board, lodging and clothing, and that relator itself derives from its printing and publishing activities a large profit which goes into its surplus and reserves. But none of those facts deprive the relator of the exemptions and benefits available to religious bodies. In Murdock v. Commonwealth of Pennsylvania, 319 U.S. 105, 111, 63 S.Ct. 870, 874, 87 L.Ed. 1292, the United States Supreme Court held as to this very sect that 'the mere fact that the religious literature is 'sold' by itinerant preachers rather than 'donated' does not transform evangelism into a commercial enterprise.' The Supreme Court reminded us in the Murdock opinion that 'a religious organization needs funds to remain a going concern.' We all know that religious and educational corporations publish and sell all sorts of literature in aid of the causes which the corporations serve. It is a new and inadmissible idea that an organization not organized for profit but for religious or educational purposes loses its status as such because out of the sale of books and pamphlets it makes a first profit which goes into its capital funds or because the distributors of the books make a tiny gain therefrom.

The Appellate Division in its Per Curiam opinion found a new reason for taxing this farm. Relying entirely on the word 'thereupon' in subdivision 6 of section 4, the Appellate Division said that 'Although the printing operation in Brooklyn may be considered an exempt purpose' (198 N.Y.S.2d 138) the land used to produce the food to support the workers in that exempt purpose was not exempt from local real estate tax because of the fact that the land was so far removed from the Brooklyn buildings. The court recognized that there are many New York cases (People ex rel. Blackburn v. Barton, 63 App.Div. 581, 71 N.Y.S. 933; People ex rel. Missionary Sisters of Third Order of St. Francis v. Reilly, 85 App.Div. 71, 83 N.Y.S. 39, affirmed 178 N.Y. 609, 70 N.E. 1107, and People ex rel. Seminary of Our Lady of Angels v. Barber, 42 Hun 27, affirmed 106 N.Y. 669, 13 N.E. 936) 'involving religious and educational organizations in which an exemption was given for land used to grow food for students, teachers, members and employees of the organizations'. It reasoned, however, that it would be too great an extension of this statutory language to include farm lands remote from the building in which the primary educational or religious work was done. We see no ground for this distinction and it does not appear in any of the other New York decisions or in the statute itself. The well-known 'Doctors Hospital' case (People ex rel. Doctors Hospital v. Sexton, 267 App.Div. 736, 48 N.Y.S.2d 201, affirmed 295 N.Y. 553, 64 N.E.2d 273) emphatically denied any right of assessors to add requirements not found in the exemption law itself. Reliance on the word 'thereupon' in subdivision 6 of section 4 is misplaced. The statute directs that exemption be allowed for all lands of a religious corporation used exclusively for carrying out a...