Oak Lawn Cemetery v. County Commissioners

Mitchell, J., delivered the opinion of the Court. . On April 24, 1903, the Oak Lawn Cemetery of Baltimore County was incorporated under the general laws of this State authorizing the formation of corporations. The certificate of incorporation sets forth that it is created for the purpose of forming, laying out, and maintaining a cemetery in said county, its term of existence being perpetual, its operations to be carried on in Baltimore County, and its principal office being located in Baltimore City. It further sets forth that the corporation has no capital stock and is not conducted for profit.

A transcript from the by-laws of the company shows that it is managed by a board of nine trustees, with staggered terms of three years, annually elected by those lot holders who meet the requirements designated in the by-laws. The property of the company at this time comprises the following tracts of land: (a) A tract acquired in 1904, containing approximately 71 acres; (b) three tracts of land acquired in 1935, containing respectively three-eighths of an acre, 3% acres and 14 acres, 2 roods and 20 square perches. By the petition, to which reference is hereinafter made, the consideration paid for the several tracts, and the value thereof within five years before ²⁸³ their conversion into or acquirement for cemetery purposes, respectively, is stated as follows: (1) As to the first parcel above mentioned, no consideration passed on the date of the purchase, but the price agreed upon was to be paid from the sale of lots, and was $4,500, its value during the prior five year period being placed at $4,500; (2) as to the three remaining parcels, the purchase prices and prior five year period valuations, respectively, were stated as follows: $500—$300; $4,000—$2,700; $5,250—$4,350. It is further alleged in the petition that all of said lands were purchased and are now held and used for burial purposes in compliance with section 172 of article 23 of the Code; that the same are located wholly within the limits of the cemetery; that they were acquired at their fair value, for the bona fide public purpose of a cemetery, and that neither directly nor indirectly is there involved a profit to the organizer or organizers thereof, as provided in subsection 6 of section 7 of article 81, Code (Supp. ,1935).

Section 7 of article 81 of the Code (Supp. 1935), designates the various classes of property subject to exemption from state, county, and city taxation, and provides that all such exemptions shall be strictly construed; and subsection 6 of section 7 provides for the exemption of cemetery property as follows: “Graveyards, cemeteries (including burying grounds set apart for the use of any family or belonging to any church or congregation) and cemetery companies which are not operated for pecuniary profit and which do not accumulate profits for-any purpose other than the maintenance or improvement of their cemeteries or graveyards as cemeteries or graveyards. To obtain the exemption from taxation allowed by this sub-section the owner or owners of a graveyard or cemetery which do not accumulate profits for any purpose except for the maintenance or improvement of such cemetery or graveyard shall apply to the county commissioners of the county in which such cemetery or graveyard may be located by a written petition, signed and sworn to by such owner or owners, in which petition shall ²⁸⁴ be stated a brief history of the land or lands composing such cemetery or graveyard, the condition of the titles thereto, from whom obtained, at what price bought and upon what terms, and the particulars of the ownership of such land or lands, and its or their value or values for five years prior to its or their conversion into a cemetery or graveyard; and no such exemption from taxation shall be allowed by said county commissioners unless they be satisfied that the land or lands included in such cemetery or graveyard has been acquired for the purposes of a cemetery or graveyard at its or their fair value, and that the formation of such cemetery or graveyard was a bona fide public purpose and neither directly nor indirectly involved a profit to the organizer or organizers thereof.” In compliance with the above subsection, the company, some time in 1936, made application to the Board of County Commissioners of Baltimore County for exemption from state and county taxation on all of said property. The petition was refused, and thereupon, under the provisions of section 183 of article 81 of the Code (Supp. 1935), the company appealed from the action of the said commissioners to the State Tax Commission, which, after a hearing, on May 26th, 1937, ordered that the action of the county commissioners be reversed, and that an assessment of $23,650 on the cemetery property of the petitioners be abated. From that order the County Commissioners, under the provisions of section 186 (a) of article 81, Code (Supp. 1935), appealed to the Circuit Court for Baltimore County, which court reversed the order of the State Tax Commission and denied the abatement, and, from the order of the Circuit Court reversing the action of the State Tax 'Commission, this appeal is before us.

A stipulation is embraced in the record to the effect that the testimony before the commission tended to establish the following facts: (a) That the cemetery corporation is not operated for gain or profit, but the funds received by it, over and above expenses, are used for ²⁸⁵ the maintenance of the cemetery and for no other purpose; (b) that the company has no capital stock, and that no commissions or bonuses are paid to any officer, director or employee; (c) that the trustees or directors are elected by lot holders, as hereinbefore indicated, and receive no compensation; (d) that the management of the company is under the direct supervision of the president, who receives an annual salary of $3,600, and that the other employees consist of a secretary and treasurer, whose annual salary is $1,987.20, a superintendent, three clerks, and laborers, the number of which varies in accordance with the season from eight to eighteen men; (e) that a part of the property recently acquired consists of a colored cemetery which the company proposes to maintain as a cemetery, without disposing of the remaining lots therein, and that in another tract bodies from another cemetery have been reinterred and no revenue is derived from that land by the company; (f) that all funds received by the company, over and above actual expenses, are reserved for the maintenance and perpetual care of the cemetery. Photostatic copies of the rulings of the Commissioner of Internal Revenue, holding the company exempt from federal income and capital stock taxes, supply the only evidence in the record, aside from the certificate of incorporation and the amount of the assessment, in support of the stipulation; and these constituted the record which the commission reviewed. Obviously, however, there was other evidence before the commission, as the memorandum of its opinion recites that 20,000 bodies are now buried in the cemetery, that $12,779, or over fifty per cent of the company’s pay roll, was expended for grave diggers and labor in 1935, and that in 1936 $8,263, or over forty per cent of the pay roll, was expended for the same purpose. It also recites that the company has a reserve fund, amounting to $70,000, on investment, for the perpetual maintenance of the cemetery.

A motion to dismiss the appeal from the State Tax Commission, filed in the lower court, was denied, but, as ²⁸⁶ no objection was raised in this court by. the appellant to the action of the lower court in that respect, the ruling on the motion will not be considered here. At the hearing before the State Tax Commission, under the provisions of subsection (b) of section 185 of article 81, Code (Supp. 1935), three requests for rulings on questions of law submitted by the appellee were rejected as follows: (1) That the commission rule as a matter of law that there was no legally sufficient evidence to entitle the petitioner to the exemption; (2) that the claim must be denied oh the ground of laches, because the petitioner submitted up to 1936 to taxation on its property acquired in .1904; and (3) that the testimony of the president of the corporation as to the purpose for which it was organized be rejected because he had been connected with the company for but seventeen years. A fourth request of the appellee was granted, and by it the commission was asked to rule as a matter of law that the petitioner must establish its claim to exemption by a fair preponderance of evidence that its cemetery is not operated for profit, and that the other conditions justifying exemption exist. In connection with the above rulings, the appellant requested the commission to rule that, if it found from the evidence that the company was not being operated for pecuniary profit, and did not accumulate profits for any purpose other than the maintenance and perpetual care of the cemetery, that the salaries and wages paid to its officers and employees were not excessive, and did not involve profit to them over actual services rendered, that the lands included in the cemetery were acquired for the purposes of the same at their fair value, and that the formation of the company was for a bona fide public purpose, and did not directly nor indirectly involve a profit to the organizers or its directors, officers, or employees, then, as a matter of law, it was entitled to exemption from all assessments for the purposes of state and county taxation.

Section 183 of article 81, Code (Supp. 1935), among ²⁸⁷ other things provides that any taxpayer claiming to be aggrieved because of an assessment or classification, or refusal to reduce, abate, or modify an assessment or change a classification by the county commissioners, may appeal to the State Tax Commission. And section 184 of the same article provides that upon such appeal the