SALT LAKE COUNTY, a Body Politic, Plaintiff, v. TAX COMMISSION of the State of Utah ex rel. GREATER SALT LAKE RECREATIONAL FACILITIES, Defendants.
No. 15737
Supreme Court of Utah
May 22, 1979
596 P.2d 641
The earnest money receipt and offer to purchase, executed in July of 1970, provided for the purchase of eighty acres of irrigated farm land. Evidence was adduced to show the amount of water required to irrigate an acre of land to be four acre feet. There was evidence showing the cost of one share of water, which is composed of four acre feet, to be $1,200.
The trial court had before it the contract which set forth a total purchase price of $26,500. For this amount Casados was to receive eighty acres of irrigated land, and the amount of water necessary to irrigate it would have been 320 acre feet.
Prior to the execution of the Earnest Money Receipt and the resulting Uniform Real Estate Contract, viz., in March of 1970 Covrig had sold 120 acre feet of the water he had theretofore used on the land. This was not made known to Casados at the time Covrig contracted to sell him the eighty acres of irrigated farm land. It did not become known to him until the state engineer informed him he was using more water on the land than that to which he was entitled about two years later.
Relative to this aspect of the matter, Covrig cites to us
His claim is, by law, Casados had notice of the sale of 120 acre feet of water because of the recordation in March 1970. Under these circumstances, Covrig could not avail himself of this statute to vary the terms of a contract he made in July 1970.
The trial court found the contract to provide for eighty acres of irrigated land at a total price of $26,500. Also, in 1970 this irrigated land was worth $330 per acre; Casados received only 45.7 acres of irrigated land; and such had a total value of $15,081. In addition, the 34.3 acres of land for which there was no water had a value of $75 per acre, amounting to $2,572.50, resulting in a total value for the irrigated and unirrigated land of $17,653.50. Consequently, the court concluded Casados had suffered damage in the sum of $8,847, the difference between the purchase price and the value of the land actually received.
With the exception of the finding assigning a $75 value per acre to the unirrigated land, all are supported by credible evidence. The excepted finding is challenged by appellant on the ground it is not specifically supported by the evidence. We agree.
The evidence sustains the trial court in the other aspects of this matter. Consequently, we remand for an evidentiary hearing for the purpose of specifically determining the value of the acreage for which Casados did not receive the water he contracted to buy.1
CROCKETT, C. J., and HALL, WILKINS and STEWART, JJ., concur.
Theodore L. Cannon, Salt Lake County Atty., Bill Thomas Peters, Sp. Deputy County Atty., Salt Lake City, for plaintiff.
Robert B. Hansen, Atty. Gen., Frank V. Nelson, Asst. Atty. Gen., Leon W. Crockett, Thomas G. Kimble, Salt Lake City, for defendants.
We here review a determination by the Defendant Tax Commission of the State of Utah (the “Commission“) that certain property (the “Sports Mall“) in Murray City (the “City“) is exempt from taxation either because it is “property of” the City or because it is “used exclusively for . . . charitable purposes.” The Constitution of
Plaintiff Salt Lake County taxed the realty; the Salt Lake County Board of Equalization denied the taxpayer‘s claim of tax exemption, and that denial was reversed by the Commission‘s decision we now review.
The facts with regard to the Sports Mall‘s ownership and uses are stipulated. We consequently are concerned only with the validity of the Commission‘s interpretation of the applicable constitutional language.
For $285,000 in 1973, Sports Mall, Inc., a business corporation, acquired the Sports Mall for development as an athletic and recreational facilities complex. After the location was rezoned and annexed to the City, Sports Mall, Inc. sold the realty to Defendant Greater Salt Lake Recreational Facilities, Inc. (“GRF“), a nonprofit corporation, for $650,000 in cash and notes secured by the realty. GRF‘s board of trustees is composed of individuals who are, with one exception, officers and directors of Sports Mall, Inc. GRF engaged Sports Mall, Inc. to manage the Sports Mall over a twenty year period for 5% of gross receipts. The contract is terminable by GRF, if it is dissatisfied with the management performance.
The City, by its ordinance No. 369, approved GRF‘s issuance of $2.05 million in bonds under the City‘s sponsorship. The City has no responsibility for payment of the bonds. In the event of GRF‘s dissolution, its assets are distributable to the City, and the City additionally has an option, so long as any bonded indebtedness is outstanding, to purchase the Sports Mall by paying principal and interest remaining on all outstanding bonds and notes. When the bonds are fully paid by GRF, title to the Sports Mall will, by the terms of various instruments underlying the bonding transactions, pass to the City. If GRF defaults to its secured creditors and the City chooses not to exercise its purchase option, the Sports Mall will be subject to public sale.
The Sports Mall generates income from membership initiation and transfer fees, dues, charges for use of facilities, and lessons by staff professionals. Memberships are available to the public in the priority of application filing. Fees and other charges are geared to operating costs including debt retirement and payment of the management fee. The public has access to the facilities (except as reserved by members) for fees at or near what members pay. Some of the facilities are utilized for organized team play on a scheduled basis, and team members need not be Sports Mall members.
On the stipulated facts, we cannot agree that the Sports Mall is property of the City. The City has rights in the realty which may influence the value at which the rights of GRF could legitimately be appraised, but GRF holds record title to the realty, and rights in real property are subject to taxation unless used exclusively for charitable purposes.
Charity is the contribution or dedication of something of value to the poor2 or at least to the common good. What constitutes “common” and what constitutes “good” are subject to judgment in the light of changing community mores. By exempting property used for charitable purposes, the constitutional convention sought to encourage individual or group sacrifice for the welfare of the community. An essential element of charity is an act of giving.
In BPOE v. Commission, Utah, 536 P.2d 1214 (1975)3 and Baker v. One Piece of Improved Real Property, Utah, 570 P.2d 1023 (1977),4 we considered the situation of non-profit
In the case before us, it is difficult to identify a gift or a charitable impulse. The principals of Sports Mall, Inc. continue to be in charge of the enterprise they founded in 1973. For the twenty year term of the above noted management contract, barring unlikely contingencies, the Sports Mall will be operated for their economic gain. The proceeds from operation are dedicated first, of course, to the payment of the bonded indebtedness but otherwise to the payment of (1) Sports Mall, Inc.‘s management fee and (2) the remainder of the purchase price for which GRF acquired the Sports Mall from Sports Mall, Inc.
Defendants argue that any organization which, without hope of profit, engages in activity contributing to the physical, mental, or spiritual betterment of the citizenry is a charitable organization, and its property is exempt from taxation. We do not agree that the generalization is valid where a profit motive underlies the activity. It is not within the constitutional purview that tax exemption be granted merely because a “non-profit” corporation is interposed between an entrepreneur and his customers even though the activity to which the enterprise is oriented is physically, mentally, or spiritually uplifting.
In applying for review of the Commission‘s decision in this case, Salt Lake County did not expressly waive (as our statute5 contemplates that it should) its right of access to the Third Judicial District Court for the relief it seeks here. We treat the omission as a pleading deficiency of the kind to which the pleader‘s adversary must make timely objection or the right to object is waived.6 In this connection, it is significant that the County‘s power to tax is not dependent on the above cited statute; the statute merely regulates the exercise of that power. The statute does not undertake to remove the review of Commission decisions from the jurisdiction of this Court; it merely states a condition which an applicant for review is obligated to satisfy.7 Defendants did not, by motion or in written or oral argument, raise any objection to the defect; we do not view the defect as one which goes to the heart of the controversy, and the right to object is waived.
We remand with instructions to the Commission that it deny the exemption.
MAUGHAN, HALL and STEWART, JJ., concur.
CROCKETT, C. J., having disqualified himself, does not participate herein.
CROFT, District Judge1 (concurring).
I concur. However, in doing so I wish to note the 1977 legislation2 by which the legislature gave to the tax division of the district court the exclusive jurisdiction over all appeals from and petitions for review of decisions by the state tax commission rendered after formal hearings before the commission. A party aggrieved by a decision of