Soc'y for Establishing Useful Mfrs. v. City of Paterson

• Citation: 96 A. 92,88 N.J.Law 123
• Parties: SOCIETY FOR ESTABLISHING USEFUL MANUFACTURES v. CITY OF PATERSON et al.
• Decision Date: 16 December 1915
• Court: United States State Supreme Court (New Jersey)

96 A. 92

88 N.J.Law 123

SOCIETY FOR ESTABLISHING USEFUL MANUFACTURES

v. CITY OF PATERSON et al.

Supreme Court of New Jersey.

Dec. 16, 1915.

Certiorari by the Society for Establishing Useful Manufactures against the City of Paterson and others to review tax assessments. Assessments and taxes vacated.

Argued before PARKER, MINTURN, and KALISCH, JJ.

John B. Humphreys, of Paterson, for prosecutor. Edward F. Merry, of Paterson, for defendants.

MINTURN, J. The taxing authorities in the city of Paterson imposed upon the hydroelectric plant of the prosecutor in that city a tax for the year 1914. The imposition of the tax is resisted by the prosecutor, upon the ground that the property in question is exempt from taxation, under the provisions of its charter as construed by the decisions of this court

The Society for Establishing Useful Manufactures was incorporated November 22, 1791 by a special legislative act (Paterson's Laws 1800, p. 104), which act, after reciting in its preamble that the establishing of the society in this state "will be conducive to the public interest," provided in its fourth section as follows:

"And the more effectually to encourage so useful and beneficial an establishment; be it further enacted by the authority aforesaid, that all the lands, tenements, hereditaments, goods and chattels, to the said society belonging, shall be, and they are hereby declared to be free, and exempt, from all taxes, charges and impositions whatsoever, under the authority of this state, whether for state or county uses, or for any other use whatsoever. Provided always, that the said exemption shall not be construed to extend to the private or separate property of any member of the said corporation, in his or her individual capacity; and as touching the lands, tenements, and hereditaments, of the said society, shall continue in force for the term of ten years only, after which term it shall be lawful to lay such taxes, for the use of the state upon the said lands, tenements, and hereditaments, as shall be laid upon other lands, tenements and hereditaments of like value, nature or description: Provided nevertheless, that in case the said taxes shall be laid by way of assessment, it shall be according to a certain rate per centum, to be prescribed in the law, laying such taxes, of the true and absolute value of the lands, tenements, or hereditaments, whereupon the same shall be laid or assessed and shall not extend directly or indirectly to the moneys, goods, or chattels, whether in possession or action, or to the profits, real or supposed, of the said society."

This legislation has frequently been the subject of judicial construction, with the uniform result of conceding to the society an exemption from taxation upon such real estate as is held by it for the purpose of its incorporation.

In State v. Flavel et al. (February term, 1854) 24 N. J. Law, 370, Chief Justice Green, speaking for this court, said that:

"The lands and real estate of the Society for Establishing Useful Manufactures are by virtue of the fourth section of their charter exempt from all taxes, except those raised for state purposes. This exemption only extends to such real estate as is held by them for the purposes of their incorporation; it includes their mills, mill lots, and water power, but does not include mountain lots, farming lands, or building lots."

In four subsequent cases reported In the same volume, i. e., City of Paterson v. Society, etc., 24 N. J. Law, 400, State v. Powers, 24 N. J. Law, 402, State v. Blundell, 24 N. J. Law, 405, and State v. Powers, 24 N. J. Law, 406, this court dealt with the subject of taxation imposed upon the property of the prosecutor, under various contentions, and disposed of the questions there presented in the light of the language of the Chief Justice adverted to, sustaining the exemption.

In the Court of Chancery, upon the authority of these adjudications, a like conclusion was reached upon an application for an injunction to restrain the corporation from transacting its business for nonpayment of the state tax imposed by the tax act of 1884 (P. L. p. 31). In the same court, in an earlier case, Chancellor Williamson, in an opinion supplied to the reporter in the case, by the late Vice Chancellor Pitney, reviews the history of the society, and presents an interesting resum6 of its powers under its charter and the law. Society v. Morris & Essex Canal Co., 30 N. J. Eq. 145.

In the light of this declared status, the defendants imposed the assessment for taxes upon the hydro-electric power plant and a steam plant located upon lands of the society which have been in its...