Christian Jew Foundation v. State

• Decision Date: 18 May 1983
• Docket Number: No. 13542,13542
• Citation: 653 S.W.2d 607
• Parties: The CHRISTIAN JEW FOUNDATION (Formerly the Christian Jew Hour), Appellant, v. The STATE of Texas, et al., Appellees.
• Court: Texas Court of Appeals

Page 607

653 S.W.2d 607

The CHRISTIAN JEW FOUNDATION (Formerly the Christian Jew

Hour), Appellant, v. The STATE of Texas, et al., Appellees.

No. 13542.

Court of Appeals of Texas,

Austin.

May 18, 1983.

Rehearing Denied June 29, 1983.

Harvey L. Hardy, Philip E. Hamner, San Antonio, for appellant.

Mark White, Atty. Gen., Diane Van Helden, Asst. Atty. Gen., Austin, for appellees.

Before PHILLIPS, C.J., and POWERS and GAMMAGE, JJ.

POWERS, Justice.

Appellant, The Christian Jew Foundation, a non-profit corporation organized and existing under the laws of the State of Texas, appeals from a money judgment entered against it in a suit by the State of Texas for unpaid employer's contributions to the Unemployment Compensation Fund. The fund is administered by the Texas Employment Commission. Tex.Rev.Civ.Stat.Ann. arts. 5221b-5 (1971 and Supp.1982), 5221b-7 (1971).

The Foundation defended the suit on the ground that it was not required to make contributions to the Unemployment Compensation Fund because the services rendered by its employees did not constitute "employment," as they were performed in the employ of a "church" within the meaning of Tex.Rev.Civ.Stat.Ann. art. 5221b-17(g)(5)(E) (Supp.1982). That statute excludes from the term "employment" certain employee services described as follows:

(5) The term "employment" shall not include:

* * *

* * *

(E) Service performed in the employ of a church, convention or association of churches, or an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches.

In the alternative, the Foundation contended that if it was deemed not to be a "church" within the meaning of the statute, then the statute is discriminatory and in violation of certain guarantees of religious freedom contained in Article I, Section 6 of the Constitution of the State of Texas and the First and Fourteenth Amendments to the Constitution of the United States. ¹ The same contentions are urged on appeal in various points of error.

The Foundation admitted in the trial court that the exclusion provided by art 5221b-17(g)(5)(E) did not apply to the Foundation beyond the exclusion given therein to a "church"; but the Foundation argued vigorously that it was indeed a "church" within the article. The State's suit for the past-due contributions followed within a year the Commission's determination, after a "tax coverage hearing," that the Foundation was not a "church" within the meaning of the statute. The Commission's decision took the form of a letter to the Foundation. The letter set forth the following basis for the Commission's determination:

The word "church" is not defined in the [Texas Unemployment Compensation Act] and the Commission has not adopted any rules defining the word. Therefore, the word must be given its ordinary meaning considering the context in which it is used. In the context in which the word is used, Webster's New Collegiate Dictionary defines "church" as a body of Christian believers having the same creed, rights [sic], etc. We conclude that the meaning intended by the Legislature was that expressed in the definition above. Therefore, we must conclude that the Christian Jew Foundation is not a church as described above because it is not a body of Christian believers having the same creed, rights [sic], etc. ²

The letter was included in a series of stipulations by the parties, filed in the trial court, the general effect of which was that the State was entitled to recover in the suit unless the Foundation established that it was a "church" within the meaning of the article. The trial court concluded that the Foundation was subject to the mandatory contributions imposed upon employers by the Texas Unemployment Compensation Act. The necessary implication of that conclusion is, of course, that the Foundation was held not to be a "church" within the meaning of art. 5221b-17(g)(5)(E), although the trial court made no such express determination.

The trial court's findings of fact and the undisputed evidence established the nature of the Foundation and the activities conducted by it from its main office in the City of San Antonio, Bexar County, Texas. The purposes of the Foundation, stated in its articles of incorporation, are to propagate the gospel of Jesus Christ through radio and television broadcasts and printed material and to give support to Christian missions and missionaries. The Foundation's articles of incorporation provide for "members," as permitted but not required by the Texas Non-Profit Corporation Act, Tex.Rev.Civ.Stat.Ann. art. 1396-2.08 (1980), the word "member" in this context being defined as "one having membership rights in [the] corporation in accordance with the provisions of its articles of incorporation or its by-laws." Tex.Rev.Civ.Stat.Ann. art. 1396-1.02(A)(6) (1980). The Foundation owns property which would be subject to ad valorem taxation by the City of San Antonio and Bexar County, but for tax exemptions granted by those authorities, based upon the religious use to which the Foundation's property is devoted and based upon the religious character of the Foundation as an organization. See Tex.Tax Code Ann. § 11.20 (1982). Money received by the Foundation as contributions from the public is exempt from the federal income tax, the Foundation having been determined to be an organization operated exclusively for religious purposes. 26 U.S.C.A. § 501(c)(3) (Supp.1982). Finally, the Foundation has been determined by the Comptroller of Public Accounts to be "an organization created for religious ... purposes," and therefore exempt from the taxes imposed by the Limited Sales, Excise, and Use Tax Act. Tex.Tax Code Ann. § 151.310 (1982).

The Foundation employs in its San Antonio office twenty-six employees who perform clerical, secretarial, bookkeeping, and similar office tasks. In addition, it employs three executive or management-level employees. Each of the three is an "ordained Baptist minister," which is to say that each has been appointed a clergyman. The appointment in each case was by a different local church having the word "Baptist" in its name; and each appointing church is situated in a different part of the United States. Each of the three ministers is a graduate of one or more religious seminaries. One of the ministers serves as "director" of the Foundation. He prepares Biblical discourses, some of which are recorded for radio broadcast over numerous radio stations from which the Foundation purchases broadcast time; other discourses are printed in booklet form and distributed free of charge to those of the public who request them. The director also generally manages the Foundation's affairs. The second minister also prepares Biblical discourses that are similarly broadcast or published in booklet form for free distribution and he conducts as well weekly Bible classes in a "chapel" situated within a building owned by the Foundation in San Antonio. The third minister apparently performs only counseling duties on request therefor by members of the public who come in contact with the Foundation. Two of the ministers are "members" of "Baptist" churches in San Antonio where they regularly attend services. The Foundation employs twenty "missionaries" who propagate the gospel of Jesus Christ outside Texas and in foreign countries. In addition to the booklets mentioned above, the Foundation publishes a bi-monthly "paper" for which it receives from subscribers a voluntary annual payment of three dollars. The content of all radio broadcasts, publications, and Bible classes is strictly spiritual with some emphasis on converting Jews to Christianity. The Foundation's Bible classes, broadcasts, and publications occupy an important place in the spiritual life of three witnesses who testified at trial, one of whom equated the Foundation's messages to her "spiritual food," while another stated that she got "all of her inspiration from them."

The Bible classes mentioned above are open to the public. There are ordinarily about fifteen to twenty people in attendance. Some individuals attend regularly and some on an occasional basis. There are also visitors who merely walk into the chapel from the street to attend only one class. Of those who attend regularly, some are "members" of other churches. The meetings open with religious songs and prayer, followed by the central activity which is an exegetical and topical study of the Bible, chapter by chapter and verse by verse. The meetings last about an hour and a half and close with a prayer.

A booklet introduced in evidence sets forth the spiritual tenets which have governed the Foundation's activities since its beginning and which form the framework of the doctrine which it communicates in its broadcasts, publications, and Bible classes. The director described these tenets as the guiding principles of the Foundation and the beliefs which it seeks to propagate. Suffice it to say, for our purposes, that these tenets reflect historic, basic, and mainstream Christian doctrine, known to be held in one or more points by most Christian denominations and by other Christian churches which are independent of the legal or administrative control of a particular denomination or sect. ³ A divergence of opinion about one or more such points is, of course, a matter consistent with the individual volition, privacy, and freedom of conscience guaranteed by the First Amendment.

The Foundation is successful in its evangelical and Bible-teaching efforts, for it has grown steadily and receives voluntary contributions from the public equal to some $1,500,000 annually, practically all of which is spent to meet operational expenses, including reasonable salaries paid to its employees.

While the State apparently concedes the religious nature of the Foundation's activities, it denies that these activities...