Woman's Club of Little Falls v. Twp. of Little Falls

• Decision Date: 16 June 1942
• Citation: 20 N.J.Misc. 278,26 A.2d 739
• Parties: WOMAN'S CLUB OF LITTLE FALLS v. TOWNSHIP OF LITTLE FALLS. FORUM CLUB OF MADISON v. BOROUGH OF MADISON.
• Court: New Jersey Supreme Court

26 A.2d 739

20 N.J.Misc. 278

WOMAN'S CLUB OF LITTLE FALLS

v. TOWNSHIP OF LITTLE FALLS.

FORUM CLUB OF MADISON

v. BOROUGH OF MADISON.

New Jersey State Board of Tax Appeals.

June 16, 1942.

Syllabus by the Court.

1. A woman's club, organized for and engaged in activities designed to foster the social, intellectual, and cultural improvement of the members, is a "fraternal organization" and property devoted to its purposes is entitled to exemption from taxation, under R.S. Sec. 54:4-3.26, N.J.S.A. 54:4-3.26.

2. A club formed to promote the "social and general welfare of its members" and actually engaged in fraternal and social activities for the benefit of its members, as well as in charitable work in the community is a "fraternal organization", and property devoted to its purposes is entitled to exemption from taxation, under R.S. Sec. 54:4-3.26, N.J.S.A. 54:4-3.26.

Proceeding in the matter of the applications of the Woman's Club of Little Falls and the Forum Club of Madison for exemption from taxation of real and personal property for the year 1940 by the township of Little Falls and the Borough of Madison.

Judgments for petitioners.

William B. Harley, of Fair Lawn, for Woman's Club of Little Falls.

George T. Anderson, Jr., of Paterson, for Township of Little Falls.

Frank J. Valgenti, Jr., of Madison, for Forum Club of Madison.

Henry G. Pilch, of Newark, for Borough of Madison.

QUINN, President.

These two appeals are disposed of in this common opinion, since both call for application by the board of the construction of the phrase, "fraternal organization", in the exemption statute, R.S. Sec. 54:4-3.26, N.J.S.A. 54:4-3.26, as construed by the Supreme Court in Alpha Rho Alumni Association v. City of New Brunswick, Sup. 1941, 126 N.J.L. 233, 18 A.2d 68, affirmed Err. & App. 1941, 127 N.J.L. 232, 21 A.2d 737. An understanding of the problem presented in these cases will be promoted by a study of the history of this exemption statute. It was originally adopted as a supplement to the General Tax Act of 1918, Chapter 46 of the Laws of 1936, N.J.S.A. 54:4-3.26, as follows:

"All real and personal property used in the work and for the purposes of one or more fraternal organizations or lodges, or any association or society organized on the lodge plan, or affiliated associations, whether incorporated or unincorporated, shall be exempt from taxation under this chapter, if the legal or beneficial ownership of such property is in one or more of said organizations, lodges, associations or societies, and no part of such property is used for pecuniary profit."

By way of amendment, Chapter 170 of the Laws of 1937, N.J.S.A. 54:4-3.26, provided the following: "Nothing herein 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."

In City of Camden v. Camden County Board of Taxation, Sup.1938, 121 N.J.L. 262, 2 A.2d 40, 41, affirmed Err. & App.1939, 122 N.J.L. 381, 5 A.2d 688, the act was declared valid, the classification of property of fraternal organizations for exemption (without reference to the exclusion of property of college fraternities) having been considered by the Supreme Court to be justified on the basis that "the property is admittedly used for purposes that are fraternal in character and substance, beneficial to the public generally * * * "

Relying upon this language, and applying what seemed to us the only construction of the statute which would be consonant with the fundamental understanding that exemptions from taxation are extended and justified only as a quid pro quo for the performance of services essentially public and which the state is thereby relieved pro tanto from performing, Dwight School of Englewood v. State Board of Tax Appeals, Sup.1935, 114 N.J.L. 594, 177 A. 875, we thereafter construed the exemption act as requiring a showing of more than simply that the exemption claimant was, pro forma, a fraternal organization, and we held that unless the property of the organization was shown to be devoted to uses which were of substantial benefit to the public and to the community, as well as to the members themselves, a case for exemption was not established. Township of Lyndhurst v. Italian Benefit Society, Civilty, and Work, New Jersey Tax Reports, 1934-1939, p. 606; Society Di Mutuo Soccorso, Inc., v. City of Hackensack, New Jersey Tax Reports, 1934-1939, p. 668; Centro Espanol of Elizabeth v. City of Elizabeth, New Jersey Tax Reports, 1934-1939, p. 675; Camp No. 62, Patriotic Order of Americans v. City of Camden, Tax App.1941, 17 A.2d 566, 19 N.J.Misc. 115.

All of the foregoing cases antedated the decision of the Supreme Court in the Alpha Rho Alumni Association case, supra [126 N.J.L. 233, 18 A.2d 70]. In that and five companion cases, there were involved the claims for exemption of six college fraternities at Rutgers University in New Brunswick. The court held that the 1937 proviso excluding college fraternities from exemption was unconstitutional, and that the organizations before the court were entitled to exemption under the original act of 1936, which was held to...