Goldmann, Lewis and Matthews. The opinion of the court was delivered by Lewis, J.A.D.
Respondent City of Pleasantville (herein city) appeals from a final judgment of the Division of Tax Appeals (herein Division). That agency reversed a decision of the Atlantic County Board of Taxation which sustained a 1967 local tax assessment on property of petitioner Catholic Charities of the Diocese of Camden (herein Catholic Charities). The Division also allowed an exemption for the tax year 1968, notwithstanding the failure of Catholic Charities to file an appeal from an assessment for that year. The determinations of the Division as to both years are challenged.
The subject property, formerly the Glen Dale Nursing Home -- a proprietary institution -- was acquired by Catholic Charities in early 1966. After extensive renovations the
new owner reopened the home under the name of Our Lady's Residence (herein Residence) and filed with the city assessor, pursuant to N.J.S.A. 54:4-3.6, an initial statement claiming exemption from taxation for 1967 on the grounds of religious and charitable use. There are no contentions concerning either the quantum of the assessment or the adequacy of the land for exemption purposes.
The following significant facts are undisputed. Catholic Charities was incorporated in 1940 under legislation entitled "An Act to Incorporate Associations not for Pecuniary Profit" (see N.J.S.A. 15:1-1 et seq.). The certificate of incorporation states: "The purpose for which this Corporation is formed shall be for religious and charitable purposes and for the moral, mental and physical improvement of men, women and children."
Residence, operated under the aegis of the Diocese of Camden, is situated in Pleasantville on approximately five acres of land. The property was purchased by Catholic Charities for $731,400. The equipment, furnishings and renovations increased that total cost to approximately $804,450, which was financed by loans from the Diocese on a "religious financing" basis, i.e. , there was "no formal drawing up of notes."
The facility is used exclusively as a nursing home for the care of the aged, ill, infirm and convalescent. It has 106 beds and is maintained by 82 employees, including 15 registered nurses, 4 licensed practical nurses and 40 nurses' aides. At the time of the hearing $90 a week was the highest rate established for incoming patients. The charge to welfare and medicare patients was less than that amount. According to the testimony of Father Herron, the assistant director of Catholic Charities, approximately 80 of the 106 occupants were welfare patients, 31 were classified as total care, ranging from complete senility to paralyzation, 4 were intensive care patients and 51 were wheel-chair cases. Owing to the admission of patients with cancer or other terminal illnesses, there were 34 deaths during the preceding year.
Father Herron further testified, in substance, that all people, regardless of race, creed, color or ability to pay, are acceptable at Residence, and that, in fact, it seeks generally to admit the economically disadvantaged and those receiving public assistance or welfare, and especially those who are ill. To the extent necessary, it is subsidized by the charity of its parent organization, the Diocese of Camden.
The city produced as a witness Jerry Godard, owner and administrator of the Golden Crest Nursing Home, a proprietary institution located in Atlantic City. That home has 208 beds, 115 employees, 8 registered nurses and 7 licensed nurses. Their rates range from $125 to $140 per week, plus additional charges for special services such as hand-feeding and therapy treatments. Godard's testimony accentuated the contrasting differences between the nonprofit functions of Residence and the profit motives underlying the operations of a proprietary nursing home. He testified, "We're supposed to be profit making" and that the institution was 85% occupied, with approximately 50% welfare patients. We note this testimony under cross-examination:
Q. And do you take Welfare patients, initially as Welfare patients?
A. On occasion, we take Welfare patients, but in most cases, they are patients that were private patients or Medicare patients, and they became Welfare patients, and sometimes we take a Welfare patient in, in an emergency, if we have a bed open.
Q. But it is your practice to avoid, if possible, just taking, initially, people ...