Princeton Tp., Mercer County v. Tenacre Foundation

• Decision Date: 23 October 1961
• Docket Number: No. A--769,A--769
• Parties: TOWNSHIP OF PRINCETON, a municipal corporation of the State of New Jersey, in the COUNTY OF MERCER, Appellant, v. TENACRE FOUNDATION, a corporation of the State of New Jersey, and Division of Tax Appeals, Department of the Treasury, State of New Jersey, Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 559

69 N.J.Super. 559

174 A.2d 601

TOWNSHIP OF PRINCETON, a municipal corporation of the State of New Jersey, in the COUNTY OF MERCER, Appellant, v. TENACRE FOUNDATION, a corporation of the State of New Jersey, and Division of Tax Appeals, Department of the Treasury, State of New Jersey, Respondents.

No. A--769.

Superior Court of New Jersey Appellate Division.

Argued Oct. 2, 1961.

Decided Oct. 23, 1961.

Henry M. Stratton, II, Princeton, for appellant.

Francis E. P. McCarter, Newark, for respondent Tenacre Foundation (McCarter & English, Newark, attorneys).

David D. Furman, Atty. Gen., filed a statement in lieu of brief on behalf of respondent Division of Tax Appeals, Department of the Treasury, State of New Jersey (Alan B. Handler, Deputy Atty. Gen., of counsel).

Before Judges PRICE, SULLIVAN and LEONARD.

The opinion of the court was delivered by

SULLIVAN, J.A.D.

The Township of Princeton levied an assessment for the year 1960 on a certain building owned by Tenacre Foundation. On appeal by the Foundation, the assessment was affirmed by the Mercer County Board of Taxation. On further appeal by the Foundation to the Division of Tax Appeals, the assessment was cancelled. The Township of Princeton now appeals.

There is no dispute as to the essential facts. Tenacre Foundation is a non-profit corporation of the State of New Jersey organized under the provisions of R.S. 15:1--1 et seq., N.J.S.A. It maintains and operates a sanitorium and nursing home for the care and treatment of the sick in accordance with the tenets, and under the auspices of, The First Church of Christ, Scientist, Boston, Massachusetts (the Christian Science Church). It is licensed by the State of New Jersey as a mental hospital, as a nursing home and as a home for sheltered care.

The institutional buildings are located on several large contiguous tracts of land on the east side of Great Road in Princeton Township. The township concedes, for the purposes of this appeal, that Tenacre Foundation is a corporation 'organized exclusively for religious, charitable or hospital purposes, or for one or more of such purposes,' so that, in appropriate cases, its property or portions thereof are entitled to tax exemption under N.J.S.A. 54:4--3.6.

This appeal involves the question whether a building used as the residence of the director of Tenacre is exempt from taxation under N.J.S.A. 54:4--3.6. The building is located on the Foundation grounds on a separate lot which fronts on Great Road. It is a substantial single-family seven or eight-room house with two and one-half baths built by the Foundation in 1959 and 1960 at an approximate cost of $58,000. It was built as a residence for the director of Tenacre with funds contributed by a donor who specified that his gift be used for that purpose.

The house is used by the director as a permanent year-round residence for himself and his family, consisting of his wife and her mother. It is also used for many Foundation activities and purposes. Property and records of the Foundation are stored in the basement. The regular monthly meetings of the board of trustees, small staff conferences and staff receptions are held there. The house has a guest suite which is used by official guests. Official entertainment frequently takes place at the house, with the director's wife as hostess, she also being employed by the Foundation. There is a study on the second floor of the house where the director attends to a considerable portion of his duties, although he does maintain an office elsewhere on the grounds. The house has an emergency bell which is connected to the central fire alarm system.

The nature and extent of the director's duties are such that he is 'on call' virtually 24 hours a day, and the operational convenience of the Foundation is greatly served by the location of the residence of the director in close proximity to the institution itself. He is a combination business manager and hospital administrator, being responsible for the hiring and transportation of help, supervision of the day and night staffs of 100 persons, and supervision of the maintenance personnel. It is his responsibility to take care of emergency maintenance problems that arise after the maintenance personnel have left for the day. When the director is not available he must provide a relief, and, during his vacation periods someone moves into the director's residence to take over his duties. Although not a formal rule as such, the board of trustees 'requires' the director to live on the Foundation grounds. The director's residence is furnished and maintained by the Foundation.

The pertinent provisions of N.J.S.A. 54:4--3.6, under which the Foundation claims tax exemption for its director's residence, provides as follows:

'The following property shall be exempt from taxation under this chapter: * * *; all buildings Actually and exclusively used in the work of associations and corporations organized exclusively for * * * hospital purposes * * *.' (Emphasis added.)

The position of the township is that while concededly the Foundation is 'organized exclusively for religious, charitable or hospital purposes, or for one or more of such purposes,' and while the director's residence is unquestionably used for many Foundation activities and purposes, the predominant use of the premises is for the permanent personal residence of the director and his family. Therefore, argues the township, the building is not 'actually and exclusively used' in the work of the Foundation and comes directly within the ruling of Teaneck Township v. Lutheran Bible Institute, 20 N.J. 86, 118 A.2d 809 (1955).

The issue is a narrow one. Is the Foundation director's residence 'actually and exclusively used' in the work of the Foundation, within the meaning of N.J.S.A. 54:4--3.6?

It is a fundamental principle of government that ordinarily all property shall bear its just and equal share of taxation. The burden of proving a tax exempt status is upon the claimant, and statutes granting exemption from taxation are strictly construed against anyone claiming an exemption thereunder. Princeton University Press v....