Rutgers Chapter of Delta Upsilon Fraternity v. City of New Brunswick

• Decision Date: 20 November 1942
• Docket Number: No. 233.,233.
• Citation: 28 A.2d 759,129 N.J.L. 238
• Parties: RUTGERS CHAPTER OF DELTA UPSILON FRATERNITY v. CITY OF NEW BRUNSWICK et al.
• Court: New Jersey Supreme Court

28 A.2d 759

129 N.J.L. 238

RUTGERS CHAPTER OF DELTA UPSILON FRATERNITY

v. CITY OF NEW BRUNSWICK et al.

No. 233.

Supreme Court of New Jersey.

Nov. 20, 1942.

Proceeding in certiorari by the Rutgers Chapter of the Delta Upsilon Fraternity, a body corporate, against the City of New Brunswick, a municipal corporation, and others, to test the validity of tax assessments for the years 1937 to 1941, inclusive, laid upon real and personal property of prosecutor and a sale of prosecutor's lands for taxes levied for the year 1939 and the certificate of sale issued pursuant thereto.

Writ of certiorari dismissed.

May term, 1942, before BODINE, HEHER and PERSKIE, JJ.

John B. Molineux, of New Brunswick, for prosecutor.

Paul W. Ewing, of New Brunswick (William D. Danberry, of New Brunswick, of counsel), for defendants City of New Brunswick and John L. Snitzler.

HEHER, Justice.

The question for decision is the validity of assessments for taxes for the years 1937 to 1941, inclusive, laid upon real and personal property of prosecutor, and a sale of its lands for taxes levied for the year 1939 and the certificate of sale issued pursuant thereto. Prosecutor is a "Greek Letter Society" organized on November 22, 1887, under the provisions of ch. 111 of the Laws of 1878, Pamph.L., p. 175; and it claims an exemption from taxation for the years 1937 and 1938 under ch. 46 of the Laws of 1936, Pamph.L., p. 129, and for the years 1939, 1940 and 1941 by virtue of R.S.1937, 54:4-3.26, N.J.S.A. 54:4-3.26.

There was a voluntary payment of the taxes thus laid for the years 1937 and 1938, and considerations of sound public policy direct that the taxpayer shall be thereby precluded from assailing the assessments with a view to recovery of the taxes levied and paid. The municipality was warranted in assuming that the payment of the taxes constituted a recognition of the validity of the assessments, and to proceed on that hypothesis in the preparation of its budget for the ensuing year, and thereafter. To permit the taxpayer now to take the contrary course would run counter to sound principles of municipal economy and disserve the public interest. When the assessments were made, it was incumbent upon prosecutor, if it deemed the assessed property to be within the exempt category as denned in the act of 1936, supra, to invoke the procedure laid down in the law for the obtaining of relief in such circumstances. This it did not do. E contra, by the payment of the tax it. conceded the nonexistence of grounds for exemption, or waived the right if it existed, and it will not now be heard to claim an exemption. Vide Campion v. City of Elizabeth, 41 N.J.L. 355; Davenport v. City of Elizabeth, 41 N.J.L. 362; Fuller v. City of Elizabeth, 42 N.J.L. 427; Norris v. City of Elizabeth, 51 N.J.L. 485, 18 A. 302; Camden v. Green, 54 N.J.L. 591, 25 A. 357, 33 Am.St.Rep. 686. The case of St. Mary's Church v. Gloucester, 123 N.J.L. 6, 7 A.2d 857, is not in point. There, the court was "not asked to do more than judicially declare what the parties" had "in effect stipulated, viz. that the assessments never had any validity because of the exemption." Here, exemption was not claimed until long after the taxes had been paid, and its validity was challenged by the municipality from the outset. This is not the case of a tax utterly void on its face, but rather of a failure to assert within the allotted time, and by the ordained mode, a right of exemption from a general property tax granted in special circumstances.

The existence of grounds for exemption is a mixed question of law and fact. For obvious reasons, exemptions from taxation are not favored, and so are strictly construed. Such renunciation of sovereignty is sustainable only on grounds of public policy, i. e. the service of an interest fundamentally public and not private. Exemptions not so grounded place an unequal and unjustifiable burden upon property taxed for the operation of government in the common interest. Apart from the criteria laid down in the statute, unless the exemption is founded on a "quid pro quo for the performance of a service essentially public, and which the state thereby is relieved pro tanto from the necessity of performing," it constitutes a "gift of public funds, at the expense of the taxpayer," and is "indefensible both under our public policy of equal taxation and our constitutional safeguard against illegal taxation." Carteret Academy v. State Board of Taxes and Assessment, 102 N.J.L. 525, 133 A. 886, 887, affirmed 104 N.J.L. 165, 138 A. 919. Equality is the basic principle of taxation, and a valid exemption therefrom must needs serve the common interest in substantial particulars. Dwight School v. State Board of Tax Appeals, 114 N.J.L. 594, 177 A. 875, affirmed 117 N.J.L. 113, 187 A. 36. To the same effect is City of Camden v. Camden County Board of Taxation, 121 N.J.L. 262, 2 A.2d 40, affirmed 122 N.J.L. 381, 5 A.2d 688. But for another and dispositive reason to be presently stated, there is no occasion to determine whether this particular property falls into the statutory category.

Invoking the case of Alpha Rho Alumni Ass'n v. New Brunswick, 126 N.J.L. 233, 18 A.2d 68, 71, affirmed 127 N.J.L. 232, 21 A.2d 737, prosecutor challenges the constitutionality of the provision of sec. 54:4— 3.26 of the Revision of 1937, N.J.S.A. 54:4-3.26, that nothing therein contained "shall be construed to permit the exemption of property owned directly or indirectly, or for the benefit of, organizations commonly known and designated as college clubs, or college lodges, or college fraternities." The basic statute exempts from taxation all property "used in the work or for the purposes" of "fraternal organizations or lodges, or any association or society organized on the lodge plan, or affiliated associations, whether incorporated or unincorporated," under certain circumstances. The case is not in point. There, the court dealt with an assessment made before the enactment of the Revision of 1937; and it was held that Chapter 170 of the Laws of 1937, Pamph.L, p. 412, N.J.S.A. 54:4-3.26, purporting to incorporate by amendment the like provision into Chapter 46 of the Laws of 1936, supra (the primary statute), was an "attempt * * * to impose a tax by classification of ownership and not of use," and therefore violative of the "constitutional mandate that all laws for the taxation of property shall be general." Here, the remaining assessments were imposed under the cited provision of the Revision of 1937; and the taint of unconstitutionality thus arising invalidates the section in its entirety.

The question is one of construction and of legislative intent. Unless this section be viewed as a unitary whole, its terms interdependent and indivisible in substance, the plainly expressed legislative intention will be frustrated. The provision excluding college fraternities from the exempt class restrains the substantive enacting clause, and is therefore an integral part of the section. It is revelatory of the legislative purpose; and, if it be disregarded, the section will be accorded a meaning at variance with the essence of the intention of the lawmaking body. This qualifying clause is a proviso or exception definitive of the scope of the exemption granted by the section, and the provisions are therefore inseparable. While a departure from its original technical significance, it is now deemed to be the office of a proviso to except something from the enacting clause, or to qualify or restrain its generality, or to exclude some possible ground of misinterpretation of its extent. Minis v. United States, 15 Pet. 423, 445, 10 L.Ed. 791.

The rule is that where the excepting proviso of an enactment is found unconstitutional, the substantive provisions which it qualifies cannot stand. Frost v. Corporation Commission, 278 U.S. 515, 49 S.Ct. 235, 73 L.Ed. 483; Davis v. Wallace, 257 U.S. 478, 42 S.Ct. 164, 66 L.Ed. 325; Connolly v. Union Sewer Pipe Co., 184 U.S. 540, 22 S.Ct. 431, 46 L.Ed. 679. In such circumstances, the provisions are interwoven and indissoluble in substance. The enacting clause stripped of the limitation is not the legislative expression. This would constitute a construction and effect different from that designed by the Legislature. It would serve to render a limited provision general. To hold that the proviso here is distinct and severable from the underlying general enactment, and so does not vitiate it, would be to concede an exemption to such college fraternities in defiance of the declared legislative will. It would read into the statute an exemption expressly withheld—a palpable usurpation of the legislative function. Vide Johnson v. State, 59 N.J.L. 271, 35 A. 787; McCran v. Ocean Grove, 96 N.J.L. 158, 114 A. 15. Analogous cases are Spraigue v. Thompson, 118 U.S. 90, 6 S.Ct. 988, 30 L.Ed. 115, and Mathews v. People, 202 Ill. 389, 67 N.E. 28, 63 L.R.A. 73, 95 Am.St.Rep. 241.

If the enforcement of a statute with a constitutionally vicious provision eliminated "would cause results not contemplated or desired by the legislature, then the entire statute must be held inoperative." Connolly v. Union Sewer Pipe Co., supra [180 U.S. 540, 22 S.Ct. 441, 46 L.Ed. 679]. To do otherwise would be to write a new law rather than to give effect to the enactment as written. A provision that is unconstitutional, and therefore ineffective as law, is yet to be regarded on the question of the intention of the lawmaker. Attorney-General v. Anglesea, 58 N.J.L. 372, 33 A. 971. In State ex rel. McNeal v. Dombaugh, 20 Ohio St. 167, 174, it was contended that a statute containing an unconstitutional...