Sisters of Charity of St. Elizabeth v. Corey

• Decision Date: 03 January 1907
• Citation: 73 N.J.L. 699,65 A. 500
• Parties: SISTERS OF CHARITY OF ST. ELIZABETH v. COREY, Collector. SAME v. THOMPSON, Collector.
• Court: New Jersey Supreme Court

65 A. 500

73 N.J.L. 699

SISTERS OF CHARITY OF ST. ELIZABETH

v. COREY, Collector.

SAME

v. THOMPSON, Collector.

Court of Errors and Appeals of New Jersey.

Jan. 3, 1907.

(Syllabus by the Court.)

Error to Supreme Court

Certiorari by the state, on the prosecution of the Sisters of Charity of St. Elizabeth, against Frederick A. Corey and William H. Thompson, tax collectors. From a judgment in favor of plaintiff, defendants bring error. Reversed and remanded.

John M. Mills and Charles A. Rathbun, for plaintiffs in error. Alfred E. Mills and Robert H. McCarter (Edward K. Mills, on the brief), for defendant in error.

GUMMERE, C. J. The taxing authorities of the township of Horris and those of the borough of Florham Park laid an assessment for taxes in the year 1904 upon the property of the Sisters of Charity of St Elizabeth located within their respective municipalities, and comprising altogether about 316 acres. The Sisters claim that the whole of the property in question, both the land and the buildings thereon, is exempt from taxation by virtue of paragraph 4 of section 3 of the general tax act of 1903 (P. L. 1903, pp. 395, 396), because, as they say, the buildings are used exclusively for charitable purposes, and the lands are necessary for the fair enjoyment of the buildings.

The legislative provision appealed to is that "all buildings used exclusively for purposes considered charitable under the common law, with the land whereon the same are erected, and which may be necessary for the fair enjoyment thereof shall be exempt from taxation under this act." The Supreme Court held that by force of this provision the whole of the property upon which the assessment was laid was exempt from taxation. They rested their determination, not upon any original investigation, but upon the decision of this court rendered in 1890 in a suit prosecuted by the same charitable organization against the former township of Chatham for the purpose of testing the validity of a tax then assessed upon their property (Sisters of Charity v. Township of Chatham, 52 N. J. Law, 373, 20 Atl. 292, 9 L. R. A 198), feeling themselves bound by that decision because the property then subject to taxation was to a large extent the same as that which is involved in the present litigation, and the uses to which it was then put were—as to most of it—the same as those to which it is not subjected. In our opinion in the earlier case, after reciting the exempting provision of the statute (which remains unchanged except in its phraseology), we proceeded as follows: "No reason is perceived why this statutory immunity should not appertain to the lands comprehended in this controversy. They and the buildings upon them are devoted solely to charitable uses. They consist of about 300 acres of land, only two-thirds of which are productive. Upon this tract is a building in which the Sisters of Charity live. Part of such building is devoted to the use of a school. All that the farm produces is applied to the support of the institution. None of the products were ever sold. If anything remains after the necessities of the Sisters are supplied, it must be applied, according to their rules, either to extend their establishments for the public good or appropriated to the use of the poor. With respect to the school, some of the scholars are educated gratuitously, and the money derived from the tuition of the others is appropriated, as the rules require, to the support of the Sisters, who minister to the sick in hospitals, take care of orphanages and otherwise to the relief of the poor, and for the extension of their charitable institutions. In the light of this description, it does not seem possible to mistake the character of this institution. Its entire aim and end is to instruct the poor, to nurse the sick, and to support the orphan. It seems plain that, if under any conditions buildings and lands can fulfill the statutory requirement of being 'used exclusively for charitable purposes,' the property now in question must be able to do so. It is not necessary, but it is not out of place, to remark that this section of the statute relating to taxation should be construed, not narrowly by its letter, but liberally and in view of its object and spirit."

The determination of the present cases was considered by the Supreme Court to turn upon the question whether the property upon which the assessment of 1904 was laid was still used for purposes identical with, or similar to, those to which it was devoted at the time of the assessment of the earlier tax, and, having ascertained that the user of the greater portion of it was identical with that described in the above excerpt from our opinion, declared it to be exempt from taxation. Whether they determined the character of the user of certain parcels which had been acquired by the "Sisters" since 1890 does not appear, except so far as that determination may be gathered from their adjudication that the whole of the property on which the assessments have been laid is exempt. Assuming, however, that there was a complete adjudication as to the character of the user of the whole property, we are confronted with the question whether that court was controlled by our decision in the former case. So far as that decision put a construction upon the statutory provision, It was binding upon the lower tribunal; but. so far as it adjudicated a question of fact. it must be conceded that in any aspect it could have no binding force upon the Supreme Court, unless the proofs upon which such adjudication rested were substantially the same as those in the cases now under consideration. The proofs in the present case disclose that the property for which exemption is claimed was purchased by the Sisters at various times, a considerable portion of it, apparently, having been acquired subsequent to the erection of the building, which is occupied by them and which is devoted to the charitable purposes for which their organization was formed.

In the earlier case it would seem, so far as can be gathered from onr opinion, that this fact was not disclosed by the proofs, or, at least, that it was not brought to the attention of the court, for the lands are treated as a unit by the opinion. The pregnancy of the fact is apparent. The language of the exemption clause, as it stood upon the statute book in 1890, is that "all buildings used for charitable purposes, with the land whereon the same are erected, and which may be necessary for the fair enjoyment thereof, shall be exempt," etc. The primary object of the exemption is the building. Included with it in the exemption is a certain portion of land—not all the land held in the same ownership and used for the same purposes, but only the land whereon the building is erected. These words are plainly words of limitation. No land of a charitable organization other than that upon which its building has been erected is exempted from taxation under this provision of the act. If it acquires a tract of land and erects thereon a building which it devotes to uses exclusively charitable, and afterward purchases other lands which it devotes to the same uses, such after-acquired property, whether it be adjacent to or located at a distance from the original holding, is not within the exemption provision. It is not the land upon which the building is erected. This limitation in the statute is just as clearly expressed, and should be given as much force, as that which declares that only so much of the land upon which the building is erected as may be necessary for its fair enjoyment shall escape taxation.

The statute creates a double test to be applied for the purpose of determining whether or not a given parcel of land is entitled to exemption from taxation: First, is it the very tract upon which the building was erected, or does it include land acquired at a period subsequent to the erection of the building? Second, if it is the tract upon which the building was erected, then is all of it necessary for the fair enjoyment of the building? Lands which do not meet the double test cannot escape taxation. It follows, therefore, that those parcels of land belonging to this charitable organization which have been acquired by it since the erection of its original building, and upon which no buildings have been erected which are exclusively devoted to the purposes of its organization, are not exempted from taxation by virtue of the provision of the general tax law which has been referred to. But, even if the property upon which the present tax has been imposed had been acquired at one and the same time, our decision that it was necessary for the fair enjoyment of the buildings erected thereon would not have been binding upon the Supreme Court, for that question was not before us for decision, and in determining it we inadvertently overstepped the bounds of our jurisdiction. The case came before us on a writ of error directed to the Supreme Court. The only question which was presented to that tribunal for determination was a question of law, namely, whether, by force of the constitutional amendment with relation to the taxation of property adopted in 1875, the special act of 1869, exempting from taxation all of the property, real and personal, of the Sisters of Charity of St. Elizabeth (P. L. 1869, p. 413, c. 155), was abrogated and annulled. The Supreme Court considered that it was, and for this reason affirmed the tax then under consideration. Sisters of Charity of Elizabeth v. Chatham Tp., 51 N. J. Law, 89, 16 Atl. 225. The question whether the property of the Sisters was exempt from taxation by virtue of the provision of the general tax law of the state, and, if so, to what extent, was not considered or decided by the Supreme Court, but was first mooted before us on the errors assigned upon the judgment of that tribunal. This court is exclusively a court of review. Its sole function is to pass upon the legality of...