Opinion
July 10, 1967
Order of the Supreme Court, Westchester County, dated September 30, 1966, affirmed, with costs to respondents. In 1914 the will of Jacob Langeloth was admitted to probate in New York County. The will provided for the creation of the petitioner "for the purpose of founding and maintaining a Home to be known as the `Valeria Home,' to be adapted and used for the purposes of a Recreation and Convalescent Home for people of education and refinement who cannot afford independent homes or to pay the charges exacted at health resorts or sanitaria." Referring to the intended occupants of the Home as "inmates", the testator described the nature of the Home and the type of users for whom he intended its establishment: "I have observed that homes of this character have been organized for the benefit of the very poor, who are not able to pay anything for their support during their convalescence or during the period of rest necessitated by ill health, while no provisions seem to have been made for people of education and refinement belonging to the middle classes, who would not be justified in asking for or accepting charity, but who are, nevertheless, not able to pay the prices exacted for a sojourn in the usual health resorts or sanitaria." (Emphasis added.) The testator provided that "in no event, shall the general character of the institution, as herein outlined, be changed." The net income of trust funds were "to be used and employed in maintaining and supporting the Home and for the employment of a competent physician or physicians and an adequate number of competent nurses". By chapter 95 of the Laws of 1915, our Legislature gave petitioner its corporate character. "In order to effectuate the testamentary purpose of Jacob Langeloth * * * to found and maintain a recreation and convalescent home." The Legislature provided that petitioner's object was the establishment of Valeria Home "which shall carry out so far as practicable the charitable and benevolent purposes defined and described in the eighteenth paragraph" of the testator's will. In 1960, petitioner began the proceeding at bar to review respondents' 1960 tax assessment of its real property in the Town of Cortlandt, Westchester County, for it was there, on an expanse of 807 acres, that Valeria was established. In 1926 it had been judicially held that, of Valeria's 807 acres, 445 acres were exempt from real property taxation, and thereafter, until 1960, that acreage was listed as exempt property on the tax rolls of respondent town. However, in December, 1960, petitioner's exempt real property was placed on the respondent town's taxable rolls. Hence, pursuant to section 557 of article 16 of the Administrative Code of the County of Westchester and article 7 of the Real Property Tax Law, petitioner sought below, in substance, to cause its hitherto exempt property to be declared exempt from taxation for the year for which respondents had assessed it. In our opinion, the will of Jacob Langeloth, and the statute to which petitioner owes its creation, contemplated the establishment of petitioner for the sole purpose of extending its facilities to persons therein described "during their convalescence or during the period of rest necessitated by ill health". Contrary to that declared objective, the record overwhelmingly shows that petitioner used its facilities with the purposeful design of operating a vacation resort into which convalescents entered, if they entered at all, unsolicited and then only after petitioner had determined that it would not be burdened with their care. Such a variance between corporate character and corporate conduct sustains a denial of exemption by the express language of section 420 Real Prop. Tax of the Real Property Tax Law. ( Matter of Town Hall v. Tax Comm. of City of N.Y., 18 A.D.2d 629; People ex rel. Alumnae Assn. Mount Sinai Hosp., v. Rizzardi, 273 App. Div. 1024; Matter of Corporation of Yaddo, 216 App. Div. 1; see, Matter of City of Lackawanna v. Board of Equalization Assessment, 16 N.Y.2d 222, 230.) Rabin, Acting P.J., Hopkins, Benjamin and Munder, JJ., concur; Nolan, J., dissents and votes to reverse the order and grant the petition, with the following memorandum: Valeria Home was organized for charitable and benevolent purposes, i.e. "the establishment, maintenance and management, without profit of a recreation and convalescent home * * * [to] carry out, so far as practicable the charitable and benevolent purposes defined and described in the eighteenth paragraph of the * * * last will and testament of Jacob Langeloth", which will provided for the founding and maintaining of a recreation and convalescent home for people of refinement and education who cannot afford independent homes or to pay the charges exacted at health resorts or sanitaria. In my opinion, the evidence demonstrates that the property is used exclusively for those purposes.