Supervisor of Assessments of Carroll County v. Peter & John Radio Fellowship, Inc.

• Decision Date: 09 April 1975
• Docket Number: No. 149,149
• Parties: SUPERVISOR OF ASSESSMENTS OF CARROLL COUNTY v. PETER AND JOHN RADIO FELLOWSHIP, INCORPORATED. PETER AND JOHN RADIO FELLOWSHIP, INCORPORATED v. STATE DEPARTMENT OF ASSESSMENTS AND TAXATION.
• Court: Maryland Court of Appeals

Page 353

274 Md. 353

335 A.2d 93

SUPERVISOR OF ASSESSMENTS OF CARROLL COUNTY v. PETER AND JOHN RADIO FELLOWSHIP, INCORPORATED.

PETER AND JOHN RADIO FELLOWSHIP, INCORPORATED v. STATE DEPARTMENT OF ASSESSMENTS AND TAXATION.

No. 149.

Court of Appeals of Maryland.

April 9, 1975.

Ward B. Coe, III, Asst. Atty. Gen. (Francis B. Burch, Atty. Gen. and K. Donald Proctor, Asst. Atty. Gen., Baltimore, on the brief), for Supervisor of Assessments of Carroll Co. and State Dept. of Assessments and Taxation.

Paul E. Burke, Jr., Baltimore (W. Gibbs McKenney and McKenney, Thomsen & Burke, Baltimore, on the brief), for Peter and John Radio Fellowship, Inc.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and O'DONNELL, JJ.

SINGLEY, Judge.

In two appeals in one record, the Supervisor of Assessments of Carroll County (the Supervisor) and Peter and John Radio Fellowship, Incorporated (the Fellowship) each challenged a different order of the Maryland Tax Court. The Supervisor's complaint is that the Tax Court abated an assessment of $147,295.00 which had been imposed for the tax year ended 30 June 1971 on land and improvements owned by the Fellowship in Carroll County. ¹ The Fellowship's unhappiness stems from the fact that in a second order, the Tex Court had affirmed an assessment, for State and City taxes, which had been imposed on the Fellowship's religious bookstore in Baltimore.

Before considering the facts of the cases and the contentions of the parties, we should note the somewhat limited scope of our appellate review of Tax Court orders. Prior to enactment of Chapter 385 of the Laws of 1971, effective 1 July 1971, Maryland Code (1957, 1969 Repl.Vol.) Art. 81, § 229(l) and (m) provided for an appeal from an order of the Tax Court, in the first instance, to the circuit court of any county or to the Baltimore City Court, and for a further appeal to this Court.

Section 229(l) provided for a determination of the case on the record of the Tax Court, and provided for an affirmance of the order unless 'erroneous as a matter of law or unsupported by substantial evidence.' When sections 229(l) and (m) were repealed and reenacted in 1971, now codified as Code (1957, 1969 Repl.Vol., 1974 Cum.Supp.) Art. 81, § 229(l), that section simply provided for an appeal to this Court from an order of the Tax Court.

As a consequence, appeals from the Tax Court are no longer governed by a review fixed by statute. Our cases have held that where no scope of review is thus provided, decisions of an administrative body will not be disturbed on appeal unless they are not supported by substantial evidence or are arbitrary, capricious or unreasonable, Dickinson-Tidewater, Inc. v. Supervisor of Assessments, 273 Md. 245, 255-56, 329 A.2d 18, 24-25 (1974), citing Heaps v. Cobb, 185 Md. 372, 378-80, 45 A.2d 73, 76 (1945).

We have imported into this test the question 'whether a reasoning mind reasonably could have reached the factual conclusion the agency reached,' Dickinson-Tidewater, supra, 273 Md. at 256, 329 A.2d at 25; Warlick v. Supervisor of Assessments, 272 Md. 540, 545-46, 325 A.2d 587, 590 (1974); Fairchild Hiller v. Supervisor, 267 Md. 519, 521, 298 A.2d 148, 149 (1973).

The facts of these cases must be tested against this standard. The Fellowship is a Maryland corporation, incorporated in 1952. It has no power to issue stock and its activities are not conducted for profit. By charter it is empowered to broadcast religious programs and to conduct children's camps, bible camps and conference grounds. It has received an Internal Revenue ruling that it is exempt from federal taxation.

Case No. 33

The first case involves the taxability of a tract of 472.562 acres owned by the Fellowship at Millers, in Carroll County, Maryland. About 13 acres, improved by some 30 buildings, comprise River Valley Ranch, operated as a nondenominational summer camp for children between the ages of seven and 19. The camp, which has a western frontier theme, functions for eight weeks each summer, and can accommodate about 200 campers, who pay a maximum of $35.00 per week. At times when the camp was not in session, other groups, all of them of a religious nature, except for the Carroll County Board of Education, which conducted a spring and fall outdoor educational program of a nonreligious nature, were permitted to use the facilities. All paid a fee, but the camp operated at a loss each year.

Of the remainder of the tract of about 460 acres, two parcels of about 369 acres and 84 acres were being farmed, primarily to raise hay and feed for the more than 40 horses and ponies owned by the camp. A noncontiguous tract of about five acres, bought to prevent encroachment, is wooded, but reached by a trail.

In keeping with the western theme there is a frontier jail, a stage depot, a stage coach, riding and hiking trails, one or two buffalo, a few articles of western attire available for purchase and a rodeo open to the public on Saturdays. Since Saturday is the day when one group of campers is replaced by another, attendance at the rodeo may be from 500 to 1,000 people. Other facilities include a swimming pool, a snack shop open on a limited basis, and picnic areas.

The Supervisor buttresses his case on the statutory exemption as it read at the time of the assessment, found in Code (1957, 1969 Repl.Vol.) Art. 81, § 9:

'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.'

Taking 'houses and buildings used exclusively for public worship' and 'grounds appurtenant to such houses (and) buildings . . . and necessary for the (use) thereof' as his text, the Supervisor argues that land devoted to farm or agricultural use, that lands purchased for future use or to prevent encroachment and that houses, buildings and grounds used as farmhouses, barns, storage sheds, dining halls, kitchens, dormitories, rodeo arenas, swimming pools, simply do not qualify as houses, buildings and grounds used exclusively for public worship.

The Tax Court found the answer in the testimony of John Osborne Bisset, the president of the Fellowship and founder and director of the camp, who explained its underlying philosophy:

'(T)he total program is directed to one purpose; and that is to reach these young people for Jesus Christ, you see. And to do that, you can't just sit them in a church and preach from morning to night. There are many ways to attract young people. Now, referring to the folder that Mr. Derby (E. Stephen Derby, Special Assistant Attorney General) displayed, if I may refer back, he noted specifically-and I want to enlighten Mr. Derby on that-there are no reverends or doctors or titles put in front of the names. We purposely did that, sir. We realized that young people are not running with glee to hear the Gospel or going to church. So with great subtlety, Your Honor, we called it River Valley Ranch because it is attractive. Boys and girls love cowboys and Indians. Even in Scotland where I was born, I loved cowboys and Indians, as I heard about them in America. And the attraction to these young people, we felt, was a subtle way, under God, to get these young people under the sound of God's Holy Word.'

Turning to the 640 acres of fields and woodland, Mr. Bisset said:

'Now, let me suggest, sir-the mention is made about the tilled land. Being a Scotsman, naturally we felt-we used to buy hay, and we found it was utterly financially impossible; so we figured that to be self-sustaining in an operation, we prayed and asked God to send us a good dedicated Christian farmer, which we now have, who gets a very small salary. And we raise hay and crops to feed the animals on which the boys and girls ride. And that's the whole program of our farming-nothing more, nothing less. It's a revolving program around the camp program of reaching these kids for the Lord. Now, if we didn't have the feed, we couldn't have the horses; and if we didn't have the horses, most of the youngsters would never come to River Valley Ranch, sir. . . .'

'Q. Is there any part of the property or facilities of the River Valley Ranch that are not used in conjunction with the operation of this Christian Bible camp? A. No, sir.

'Q. What is the purpose of having such substantial acreage? You have four or five hundred acres up there for this camp, whereas the actual campgrounds themselves, I take it, are somewhat smaller. A. Well, Mr. Burke, first of all, we can thank God that we have the 500 acres the way people are moving in. We are almost like Baltimore suburbs now with the growth. So that we are glad we have an acreage that gives the atmosphere to the children coming out of the City of being on vacation. But that is not the point. You are asking where we use all of this and what's the purpose of having so much. You could not have trail rides. Some of this we do use as part of the farming land to feed the horses. We keep our own and raise our own horses because we found it was far too expensive and too dangerous to go out and buy horses each year. So we do this for one purpose, and that is to use the horses and the farming facilities for the camp program.'

Mr. Bisset also described a typical day at the camp:

'so during the day we start out having breakfast. The bell rings, and we go down to the dining hall. I offer thanks, and we have breakfast. Then one of the main counselors will get up, and he has a verse for the week-a Bible verse-and the youngsters are supposed to learn that verse throughout the day. He gives it to them each morning at the dining room-at the breakfast table in the dining...