We think that Pace College is entitled to complete tax exemption. It is true that subdivision 6 of section 4 of the Tax Law withholds exemption from educational or other benevolent corporations to the extent that their properties are leased for other purposes (except under certain circumstances to a similarly exempt organization), but that is not this case. This is not an instance where property has been leased for other than the purposes of incorporation of the lessor (e.g. People ex rel. Frick Collection v. Chambers, 196 Misc. 1026, affd. 276 App. Div. 891). This cafeteria is not being used by the public paying a revenue to the college as in the case of the restaurant in Young Women's Christian Assn. v. City of New York ( 217 App. Div. 406, affd. 245 N.Y. 562), nor was the property otherwise held as an investment as in People ex rel. Young Men's Assn. v. Sayles ( 32 App. Div. 197, affd. 157 N.Y. 677). The situation is different from that in People ex rel. Adelphi Coll. v. Wells ( 97 App. Div. 312, affd. 180 N.Y. 534), where a college athletic field, which the court said would be exempt if used by the college, was held to be taxable for the reason that it was also "utilized as a source of pecuniary income by renting it to outside parties for contests in which the Adelphi College students do not participate and over which the college officers have no control" ( 97 App. Div. 314). Here the cafeteria is not used as a source of income and the equipment which the college owns is put to its own use. This cafeteria is part of the operation of Pace College. Furnishing of meals to students, faculty and staff on college premises is recognized as entering into their use for educational purposes, nor does it customarily disturb full tax exemption ( People ex rel. Seminary of Our Lady of Angels v. Barber, 42 Hun 27, affd. 106 N.Y. 669; Matter of SyracuseUniv., 214 App. Div
The statute demands — as a prerequisite to exemption — not simply that the company's activities be for educational purposes, but that they be "exclusively" so By the provision in question, the Legislature undoubtedly sought to guard against abuses which might arise if a charitable or educational corporation were tempted and permitted to undertake commercial. nonexempt ventures in the hope of increasing its funds for promotion of its exempt purposes. (See People ex rel. Young Men's Assn. v. Sayles, 32 App. Div. 197, affd. on opinion below 157 N.Y. 677; Board of Foreign Missions v. Board of Assessors, 244 N.Y. 42, 46.) It cannot be said that such fears are unfounded. The record before us, for instance, demonstrates that The New Opera Company did not operate "exclusively" for educational ends. First, it was conceded that two of its productions — "The Merry Widow" and "Helen Goes to Troy" — did not effectuate the avowed educational objectives.
Strict compliance with the provisions of the statute in a situation of this nature, must be made. On the petitioner rests the burden of showing that the property is being used exclusively "by the owning corporation or by another such corporation" for carrying out thereupon one or more of the purposes for which the corporations were organized. If the court finds substantial compliance with such use it may relax the rigid applicable rule ( People ex rel. Young Men's Assn. v. Sayles, 32 App. Div. 197, affd. 157 N.Y. 677; Pratt Inst. v. City of New York, 183 N.Y. 151; People ex rel. The Frick Collection v. Chambers, 196 Misc. 1026, affd. 276 App. Div. 891). The uniform rule has long been observed by our courts, which have firmly established a policy of requiring all persons and property to bear a just share of the expenses of government. This is just and equitable.
The courts below were, therefore, right in determining that as to these parcels known as 176 Park Hill avenue, 253 Van Cortlandt Park avenue, 26 Lakeside drive, the relator had made use of them for purposes other than those referred to in section 4 of the Tax Law, affording exemption. It had hired out on some occasions the advantages of these parcels to persons in no way connected with its missionary undertakings and had received an income which it applied to expenses. This user, however, took from it the right of exemption. ( People ex rel. Adelphi College v. Wells, 97 App. Div. 312; affd., 180 N.Y. 534; People ex rel. Young Men's Association v. Sayles, 32 App. Div. 197; affd., 157 N.Y. 677; People ex rel. Mizpah Lodge v. Burke, 228 N.Y. 245.) As to these parcels, we affirm the orders of the Appellate Division. As to the other three parcels, we differ with them and must reverse the orders.
"It is the exclusive use of the real estate for carrying out thereupon one or more of the purposes of the incorporation of the relator which confers the right of exemption, and not the benefits accruing to it and its useful work from the income derived from others in consideration of their use of the real estate for their purposes." ( People ex rel. Young Men's Assn. v. Sayles, 32 App. Div. 197, 202; affd., on opinion below, 157 N.Y. 677.) Relator is primarily a lodge of a fraternal order and incidentally a landlord.
In reinstating the exemption, the Court of Appeals held: "It is true that subdivision 6 of section 4 of the Tax Law [now RPTL 420-a (2)] withholds exemption from educational or other benevolent corporations to the extent that their properties are leased for other purposes [of incorporation of the lessor] (except under certain circumstances to a similarly exempt organization), but that is not this case. This is not an instance where property has been leased for other than the purposes of incorporation of the lessor * * * This cafeteria is not being used by the public paying a revenue to the college as in the case of the restaurant in Young Women's Christian Assn. v. City of New York ( 217 App. Div. 406, affd. 245 N. Y. 562), nor was the property otherwise held as an investment as in People ex rel. Young Men's Assn. v. Sayles ( 32 App. Div. 197, afFd. 157 N. Y. 677). The situation is different from that in People ex rel. Adelphi Coll. v. Wells ( 97 App. Div. 312, afFd. 180 N. Y. 534), where a college athletic field, which the court said would be exempt if used by the college, was held to be taxable for the reason that it was also `utilized as a source of pecuniary income by renting it to outside parties for contests in which the Adelphi College students do not participate and over which the college officers have no control' ( 97 App. Div. 314)" ( Matter of Pace Coll. v Boyland, supra, at 532). The Pace Court concluded:
In sum, it is the "guise for profit-making operations" found impermissible in Gospel Volunteers v. Village of Speculator ( 33 A.D.2d 407, 410, affd 29 N.Y.2d 622, supra). When such operations are undertaken "in the hope, often delusive, of expanding the charity" or to assist it in supporting itself, the exemption is lost (People ex rel. Young Men's Assn. for Mut. Improvement in City of Albany v. Sayles, 32 App. Div. 197, 202, affd 157 N.Y. 677). Accordingly, the judgment of the Supreme Court, New York County (BOWMAN, J.), entered June 26, 1979 is reversed on the law and the assessment reinstated, without costs.
" In People ex rel. German Masonic Temple Assn. of City of N.Y. v Goldfogle ( 136 Misc. 100, affd 229 App. Div. 863, affd 255 N.Y. 586), the rules of construction pertaining to exemptions were set forth as follows (pp 103-104): "Statutes exempting property from general taxation must be strictly construed against the property holder, and if exemption is not plainly expressed it may not be presumed. (People ex rel. Y.M.A. v. Sayles [ 32 App. Div. 197], supra; People ex rel. D.K.E. Soc. v. Lawlor, 74 App. Div. 533.) `Exemptions from taxation are not favored and are to be strictly construed. They will not be sustained unless such clearly appears to have been the intent of the Legislature.
The mere fact that it was bid in on a tax sale, and is held in trust for the public in the hope of eventually getting enough from its sale or use to pay the unpaid taxes, does not give the owner immunity from sharing in the expense of the village government. ( Pickell v. City of Utica, 161 App. Div. 1; affd., 216 N.Y. 740; Village of Watkins Glen v. Hager, 140 Misc. 816, 820; affd., 234 App. Div. 904; Common School District No. 3 v. County of Chemung, 160 Misc. 477, 479; People ex rel. Missionary Sisters v. Reilly, 85 App. Div. 71; affd., 178 N.Y. 609; People ex rel. Blackburn v. Barton, 63 App. Div. 581.) The fact that the revenue derived from the leased lands was paid into the county treasury and used for county purposes does not make the use of the property a public one. ( Matter of Town of Huntington v. Bradford, 273 N.Y. 603; Young Women's Christian Assn. v. City of New York, 217 App. Div. 406; affd., 245 N.Y. 562; People ex rel. Young Men's Assn. v. Sayles, 32 App. Div. 197; affd., 157 N.Y. 677; City of Louisville v. Board of Trade, 90 Ky. 409, 415: 14 S.W. 408.) In Matter of Town of Huntington v. Bradford ( 273 N.Y. 603) the town owned certain real property situated within the village of Northport, Suffolk county, and within the corporate limits of said town, which it held by virtue of certain grants which contained no requirement that it be devoted to public use. A portion of the property was rented to private individuals for business purposes, and a part was vacant.
This conclusion seems to be in harmony with the authorities in this State, in which the courts have uniformly applied the usual rule of strict construction of an exemption statute as against the owner claiming such a tax exemption. ( People ex rel. Mizpah Lodge v. Burke, 228 N.Y. 245; People ex rel. Young Men's Assn. v. Sayles, 32 App. Div. 197; affd., 157 N.Y. 677; People ex rel. N.Y. Lodge No. 1 v. Purdy, 179 App. Div. 805; affd., 224 N.Y. 710; People ex rel. D.K.E.Society v. Lawler, 74 App. Div. 553; affd., 179 N.Y. 535; People ex rel. Schenectady O.F.T.A. v. McMillan, 199 App. Div. 268. ) No question of partial exemption was before the court below and it properly refused to consider the question.