406 F.2d 957 (D.C. Cir. 1968), 21667, District of Columbia v. Orleans

Docket Nº:21667.
Citation:406 F.2d 957
Party Name:DISTRICT OF COLUMBIA, Petitioner, v. Julius ORLEANS, Trustee, Arnold Orleans, Trustee, and Mervyn I. Aronoff, Trustee, Respondents.
Case Date:November 13, 1968
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 957

406 F.2d 957 (D.C. Cir. 1968)



Julius ORLEANS, Trustee, Arnold Orleans, Trustee, and Mervyn I. Aronoff, Trustee, Respondents.

No. 21667.

United States Court of Appeals, District of Columbia Circuit.

November 13, 1968

Argued Sept. 25, 1968.

Mr. Robert C. Findlay, Asst. Corporation Counsel for the District of Columbia, with whom Messrs. Charles T. Duncan, Corporation Counsel, Hubert B. Pair, Principal Asst. Corporation Counsel, and Henry E. Wixon, Asst. Corporation Counsel, were on the brief, for petitioner.

Page 958

Mr. C. Richard Beyda, Washington, D.C., for respondents.

Before BAZELON, Chief Judge, and MCGOWAN and LEVENTHAL, Circuit judges.

LEVENTHAL, Circuit Judge:

Our ruling on the primary issue in this case is that the exemption from the D.C. deed recordation tax provided for 'deeds between parent and child' 1 made without consideration, is applicable to a conveyance of real property made by parents to trustees under a trust they established for the benefit of their children. We therefore affirm the judgment of the D.C. Tax Court which ordered refund to respondents of the recordation tax assessed.

The District contends that the statutory exemption language applies only to an outright conveyance from parent to child, and is inapplicable to a conveyance in trust. It invokes the maxim that exemptions are to be strictly construed. Legal formulae are likely to be valid only as generalizations, as indicators of how the bulk of cases will be decided, rather than as precise instruments of decision of a particular case. Canons of statutory construction in particular are often useful only as a crude guide to the legislative intent. The precept of strict construction of tax exempt provisions has vitality for doubtful cases, but it may not be properly used to defeat the purpose of the legislature. 2 Here the force of the maxim is outweighed by the clear manifestation of legislative purpose that the recordation tax is not applicable to conveyances from parents to children, that have no 'actual' consideration. 3 To construe this provision as inapplicable whenever conveyances are made in trust form would virtually nullify the exemption so far as minor children are concerned. Use of trustees for making gifts of real property to minor children is not only routine, but is virtually a necessity, possibly in legal contemplation and in any event in terms of commercial realities. What lawyer...

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