Pratt Inst. v. City of New York

• Decision Date: 21 November 1905
• Citation: 183 N.Y. 151,75 N.E. 1119
• Parties: PRATT INSTITUTE v. CITY OF NEW YORK.
• Court: New York Court of Appeals Court of Appeals

183 N.Y. 151

75 N.E. 1119

PRATT INSTITUTE

v.CITY OF NEW YORK.

Court of Appeals of New York.

Nov. 21, 1905.

Appeal from Supreme Court, Appellate Division, Second Department.

Action by the Pratt Institute against the City of New York. From a judgment of the Appellate Division (91 N. Y. Supp. 136,99 App. Div. 525), affirming a judgment sustaining a demurrer to the complaint, plaintiff appeals. Affirmed.

The object of this action was to set aside an assessment as a cloud upon the title to certain real estate belonging to the plaintiff in the city of Brooklyn, on the ground that such property is exempt from taxation except for state purposes. The case made by the complaint was in substance as follows: The Pratt Institute is an educational institution organized by special act and located in the city of Brooklyn. Laws 1887, p. 497, c 398. Its general object is the instruction of persons of either sex in such branches of useful and practical knowledge as are not generally taught in the public or private schools. Its special object is to afford opportunities for persons ‘to become acquainted with what is best in manufactured materials, fabrics, wares and arts, and so to educate the eye and hand in the practical use of tools and machinery that students may be encouraged to emulate the best models and be enabled to accomplish the best models and be enabled to more branches of art or manufacture, either useful or ornamental.’ It maintains a free circulating library of art and science, and also a reading room for general use accessible at all reasonabler hours. ‘All income from tuition and all revenues of every kind’ are ‘devoted solely to the purposes of the Institute.’ Section 10 of its charter is as follows: ‘For the uses and puposes aforesaid the said corporation is authorized to take by grant, devise, bequest, gift or otherwise, and to hold, lease, sell and convey any real and personal property, and to erect all necessary and suitable buildings, and any property in the city of Brooklyn actually occupied and used for the purposes aforesaid, or the revenues of which are exclusively devoted to the purpose aforesaid, shall not be subject to local taxation. * * *’ After its incorporation the institute was generously endowed by the founder, Mr. Charles Pratt, who conveyed to it a large amount of real estate, and also gave it personal property of substantial value. Other persons have since given it property, both real and personal, and by means of its endowment it has erected suitable and commodious buildings in Brooklyn, wherein the various branches of its work are carried on. It is thus ‘engaged in performing a work of public utility for the benefit of the citizens of the state of New York.’ In 1902 the plaintiff owned five lots of land in the city of Brooklyn, each wity a dwelling house thereon. This property was not used ‘for carrying out thereupon one or more’ of the objects of the corporation, but it was leased and the net rents used exclusively in its educational work. During the year aforesaid a tax was assessed upon the said real estate in due form of law, amounting upon the valuation of $18,400 to the sum of $433.04. Of this amount only $19.88 was for state purposes, which, as the plaintiff alleged, it was ready and willing to pay, but the defendant had refused to receive it. The assessment became an apparent lien upon the property affected and constituted a cloud upon the title of the plaintiff, which it sought to remove move by this action, upon the ground that all its real estate in the city of Brooklyn, whether actually occupied and used for its corporate purposes or not, is exempt from local taxation, both city and county. The facts thus stated were alleged in the complaint, to which the defendant demurred upon the ground that the allegations were not sufficient to constitute a cause of action. The demurrer was sustained at Special Term, and, as the plaintiff did not ask leave to amend, final judgment was entered dismissing the complaint, and from the judgment of affirmance rendered by the Appellate Division this appeal is brought.

Gray and Haight, JJ., dissenting.

John G. Milburn and Edmund L. Baylies, for appellant.

John J. Delany, corp, Counsel (George S. Coleman and E. Crosby Kindleberger, of counsel), for respondent.

VANN, J. (after stating the facts).

The Pratt Institute is a noble charity, carrying on a work of great usefulness, strictly within the lines of its charter and in accordance with the beneficent purpose of its founder. To the average mind such a charity appeals strongly for relief from the usual burdens resting upon property, because, as it may well be dlaimed, it discharges its duty to the public by devoting all that it has to the public welfare.It is, however, for the Legislature to decise what property should be taxed and what should be exempt, and considerations which might control that department of government can have no force with the courts. It is our duty to enforce the command of the law without regard to what we may think of its policy.

The subject of taxation has been a great embarrassment to legislative bodies throughout the history of the world. Special interests clash with general interests, and seek relief, wholly or in part, from the public burden which is essential to the protection of property and the preservation of order. Claims for exemption multiply, and, when the Legislature yields to the pressure of special interests, the precedent breeds a multltude of special statutes and brings confusion into the law. Such was the situation that confronted the Legislature of 1889, which set out to meet the difficulty by an act authrizing the appointment of commissioners to revise and consolidate the statutes relating to different subjects, and among them to ‘the assessment and collection of taxes and exemption of property from taxation throughout the state.’ Laws 1889, p. 357, c. 289. The first bill reported did not become a law, and another effort was made in 1892, through an act providing for the appointment of two counsel to ‘examine the laws of this and other states relating to taxation and to report to the next Legislature’ the result of their investigations, ‘with recommendations as to legislation relating to assessment and taxation in this state.’ Laws 1892, p. 1216, c. 660. Counsel were appointed accordingly, but the bill reported by them was not passed. Finally, the commissioners of statutory revision reported in substance the present tax law, which went into effect on the 15th of June, 1896. Laws 1896, p. 795, c. 908. In their report to the Legislature they stated that they had ‘gone over the entire field of statutory law relating to taxation,’ and, without intending to effect redical changes, they had been compelled to make various alterations in order to ‘eliminate inconsistencies and reduce the subject to a harmonious and systematic whole.’ They further said that there had been no revision of the tax laws since the Revised Statutes of 1828, and that about 100 supplemental acts had since been passed, including many which increased ‘the exemptions of propety from taxation.’ Having thus stated the history and purpose of the tax law, we will next examine the provisions thereof relating to exemption, and compare them with the special exemption in the plaintiff's charter, in order to determine whether the latter was impliedly repealed by the former.

Section 3 (Laws 1896, p. 797, c. 908) provides that ‘all real property within this state and all personal property situated or owned within this state, is taxable unless exempt form taxation by law.’ The next section makes liberal provision for exemption from taxation, but we are now concerned only with the seventh paragraph thereof which provides that ‘the real property of a corporation or association organized exclusively’ for specific charitable, religious, and educational 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.’ Thus the Legislature made all property taxable, except such as is exempt, and in declaring what is exempt it covered the case of educational institutions, such as the plaintiff, exempting all their personal property absolutely, and so much of their real estate as is used exclusively for carrying out thereon one or more of the corporate purposes, but not exempting real estate held as an investment only, even if the income was used for a corporate purpose. A general rule of taxation and exemption was laid down, after the revisers, as they expressly declared, had gone over the entire field of statutory law relating to the subject. It was the apparent purpose of this legislation to define the status with reference to taxation or exemption from taxation of every parcel of real property and every article of personal property in the state. It furnished a plain and simpie rule for all assessors, by which they could at once determine whether property within their district was subject to taxation or not, without searching the statutes for nearly 70 years for special exemptions. It is a codifying act, designed to reduce all statutes relating to taxation into a complete and harmonious system. A codifying act is presumed to exhaust the subject to which it relates, unless a different intention appears on the face of the statute, or is an irresistible inference from special circumstances. The new enactment is substituted in the place of all statutes previously existing and becomes the sole rule of action.

As an author, who is held in high esteem by the courts, has said: ‘Revision of statutes implies a re-examination of theem. The word is applied to a restatement of the law in a corrected or improved form. The restatement may be with or without material change. A revision is intended to take the place of the law as previously formulated. By adopting it the Llgislature say the same...