Murray v. Comptroller of Treasury

Decision Date14 February 1966
Docket NumberNo. 189,189
Citation241 Md. 383,216 A.2d 897
PartiesMadalyn E. MURRAY, Trustee, et al. and Lemoin Cree et al. v. COMPTROLLER OF the TREASURY, State of Maryland, et al.
CourtMaryland Court of Appeals

Leonard J. Kerpelman, Baltimore, for Lemoin Cree, et ux. and Freethought Society of America, appellants.

Martin J. Scheiman, New York City (Good & Haffner and Walter S. Haffner, Cleveland, Ohio, on the brief), for Madalyn E. Murray, Trustee, and others, appellants.

Thomas B. Finan, Atty. Gen. (Robert C. Murphy, Deputy Atty. Gen., on the brief), for Comptroller of the Treasury, and others, appellees.

Francis X. Gallagher for The Most Reverend Lawrence J. Shehan, Roman Catholic Archbishop of Baltimore, appellee.

Joseph Allen, City Sol. and Clayton A. Dietrich, Chief Asst. City Sol., on the brief for Supervisor of Assessments of Baltimore City, and others, appellees.

William L. Marbury and Mathias J. DeVito, Baltimore, on the brief for The Convention of the Protestant Episcopal Church of the Diocese of Maryland, appellees.

Marvin Braiterman, Baltimore, for Temple Emanuel of Baltimore, appellee.

George F. Flentje, Jr., Baltimore (Earl E. Manges, Cumberland, on the brief), for

Maryland Synod of the Lutheran Church in America, appellee.

Before PRESCOTT, C. J., and HAMMOND, HORNEY, MARBURY and OPPENHEIMER, JJ.

OPENHEIMER, Judge.

Maryland's statutory exemption from state, county and city taxation of structures used exclusively for public worship and any parsonage and grounds appurtenant thereto is attacked as violative of the Declaration of Rights of the Maryland Constitution and of the First and Fourteenth Amendments to the Constitution of the United States. The question is raised by a taxpayers' suit filed by Mrs. Murray as trustee and Mrs. Mays, as taxpayers and citizens of Maryland, on their own behalf and on behalf of all other taxpayers similarly situated, in the Circuit Court No. 2 of Baltimore City. Mr. and Mrs. Lemoin Cree, residents and taxpayers in Frederick County, and Freethought Society of America, an Ohio corporation which owns real estate in Baltimore City, were permitted to intervene as additional parties plaintiff. The defendants are the Comptroller of the Treasury of Maryland, the State Director of Assessments and Taxation, the Supervisor of Assessments of Baltimore City and the Director of Assessments for Baltimore City. The court below permitted five religious bodies to intervene as parties defendant: the Roman Catholic Archbishop of Baltimore, the Convention of the Protestant Episcopal Church in The Diocese of Maryland, the United Christian Citizens, Incorporated, Temple Emanuel of Baltimore, and the Maryland Synod of the Lutheran Church in America.

The statute attacked as unconstitutional is Code (1965 Repl. Vol.) Art. 81, Section 9(4) which reads as follows:

's 9.--Exemptions.

The following shall be exempt from assessment and from State, county and city taxation in this State, each and all of which exemptions shall be strictly construed:

* * *

* * *

'(4) Churches, parsonages, etc.--Houses and buildings used exclusively for public worship, and the furniture contained therein, and any parsonage used in connection therewith, and the grounds appurtenant to such houses, buildings and parsonages and necessary for the respective uses thereof.'

At the time the suit was filed, there were 57 items of exempt property set forth in Section 9, including the buildings and grounds of hospitals, charitable institutions, educational and literary institutions, nonpolitical clubs and Boy and Girl Scouts. 1

Mrs. Murray, one of the original plaintiffs, 2 and Mr. Cree, an intervening plaintiff, are atheists. Mrs. Murray as trustee and Mrs. Mays, the original plaintiffs, own property in Baltimore City on which, in 1964, they paid taxes of $353.50. Mr. Cree is a Research Analyst in Micro-biology at Fort Detrich, in Frederick County. He and his wife own about two acres of land in that county upon which they paid taxes, in 1964, to the county and State of Maryland in the amount of $40. The Freethought Society of America, Inc. publishes the 'American Atheist', a monthly magazine. It owns a building in Baltimore upon which taxes were paid, in 1964, in the amount of $350.09.

The plaintiffs-appellants contend that the exemptions granted under Subsection 9(4) of the Maryland statute violate Articles 15, 23 and 36 of the Maryland Declaration of Rights; that they are in violation of the Equal Protection Clause of the Fourteenth Amendment to the federal Constitution; and are in violation of the First Amendment to the Constitution made applicable to the states through the Fourteenth. The defendants-appellees maintain that the exemptions are constitutional under both the Maryland Declaration of Rights and the federal Constitution. The appellee Temple Emanuel contended below and contends here that the taxation of property used for worship would unconstitutionally abridge the free exercise of religion protected by the First Amendment. The Maryland Synod of the Lutheran Church joins in this contention in this appeal. All of the appellees contend further that the appellants do not have standing to bring the suit.

At the hearing below, it was shown that the records of Baltimore City indicate the total assessable basis of the city for 1964 as follows:

All taxable real property $2,263,708,768.00

All tax exempt property 578,997,400.00

The approximate total assessments exempt from taxation in the City in the levy for 1964 under the statutory provision here involved was as follows:

Protestant $41,031,430

Roman Catholic 31,339,880

Jewish 6,136,510

The Chancellor found that the total assessed value of real estate in Baltimore City exempt from taxation under Article 81 Section 9 is over 20% of the total assessed value of all real estate in Baltimore. The exemption under the subsection here involved is approximately 2.8% of the total assessed value of all Baltimore City real estate and approximately 13 1/2% of the total assessed value of tax exempt real estate in the City. The state tax rate, levied to protect the bond issues of the State, is fifteen cents for $100 of assessed value.

It was agreed that the Roman Catholic Archbishop of Baltimore is a corporation having title to various properties of the Roman Catholic Church of Baltimore City, including 163 parishes or mission churches with an aggregate value of Diocesan properties in excess of $2,000,000. The Maryland Synod of the Lutheran Church owns property in Baltimore City in excess of $13,600,000. Temple Emanuel is a Reform Jewish Congregation whose synagogue is in Baltimore City.

At the hearing, Mr. John G. Arthur, Director of the Department of Assessments of Baltimore City, who has been with that department for 38 years, testified for the appellants. His testimony as to applying the statutory exemption was summarized by Judge Barnes as follows:

'In applying this exemption, Mr. Arthur and the City Department of Assessments have given the words 'public worship' a comprehensive interpretation. Houses, buildings and appurtenant lands used for teaching or contemplating the beliefs of any philosophical system regardless of whether that philosophical system includes a belief in a Supreme Being, are considered to be exempt under Section 9(4) and such exemptions are granted in the regular course of administering the tax laws. For example, the property used by the Baltimore Ethical Culture Society which does not teach any belief in a Supreme Being, but which confines its teachings to moral and ethical standards and educational purposes has been exempted under Section 9(4). Property used by Buddhist organizations for their religious teachings are exempted. The Philosophical College of Occult Science has had its property exempted under Section 9(4). Over objection and subject to exception, Mr. Arthur testified that after having heard Mr. Cree describe his philosophical system, if application were made, the property of the Freethought Society would be granted an exemption under Section 9(4).'

The Chancellor also found that the real property of churches not used for houses of worship and parsonages, but held for other use and for future construction of church edifices is subject to real estate taxation to the same extent as similar property held by private persons.

At the conclusion of the case below, Judge Barnes, in a comprehensive opinion, found that the plaintiffs-appellants had standing to sue but that the statutory exemption here involved did not violate the Maryland Declaration of Rights or the federal Constitution. In this appeal from his decision, we shall first consider the standing of the appellants to sue, then the questions raised under the Maryland Declaration of Rights and, finally, the issues under the federal Constitution.

The Appellants' Standing to Sue

In Maryland, taxpayers have standing to bring suit to challenge the constitutionality of a statute when the statute as applied increases their taxes. McKaig v. Mayor and City Council of Cumberland, 208 Md. 95, 102-103, 106, 108, 116 A.2d 384 (1955) and cases therein cited. If the taxpayers cannot show a pecuniary loss or that the statute results in increased taxes to them, they have no standing to challenge it. Citizens Comm. of Anne Arundel County, Inc. v. County Comm'rs. of Anne Arundel County, 233 Md. 398, 401-405, 197 A.2d 108 (1964) and cases therein cited.

A class suit is here involved. Under Section 9(4) over $78 million dollars of real estate is exempted from taxation out of a total assessment basis of Baltimore City of over $2 billion. The class of taxpayers represented by the appellants, other than the Crees, would pay less real estate taxes to the City if the exemption were not in effect. The property owners who pay real estate taxes to the state, represented by all the appellants, would pay less taxes to the state if the exempted property were taxed.

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