First Nat. Bank of Boston v. Harvey

• Decision Date: 01 October 1940
• Docket Number: 1680
• Parties: FIRST NATIONAL BANK OF BOSTON, TRUSTEE UNDER THE WILL OF CHARLES H. BAYLEY v. ERWIN M. HARVEY, COMMISSIONER OF TAXES
• Court: Vermont Supreme Court

16 A.2d 184

111 Vt. 281

FIRST NATIONAL BANK OF BOSTON, TRUSTEE UNDER THE WILL OF CHARLES H. BAYLEY v. ERWIN M. HARVEY, COMMISSIONER OF TAXES

No. 1680

Supreme Court of Vermont

October 1, 1940

May Term, 1940.

On Motion for Reargument, October Term, 1940.

Opinion upon Motion for Reargument filed November 6, 1940.

1. Recognizance under P. L. 909.---2. P. L. 2114 Limited to Chapter 92.---3. Statutory Construction by Intent.---4. Elements of Statutory Construction.---5. P. L. 875.---6. P L. 875 and 590, IV.---7. Construction of Tax Statute.---8. Tax Exemption Strict.---9. "Used Exclusively".---10. Non-exempt Income Taxable.---11. P. L. 872, II Defines "Fiduciary".---12. P. L. 873.---13. Fiduciaries' Tax Returns.---14. P. L. 918,---15. State Taxing Power.---16. Statutory Construction as Extraterritorial.---17. Construction of Taxing Statute.---18. Element of Statutory Construction.---19. P. L. 874, I.---20 P. L. 874, II.---21. P. L. 873.---22. "Fiduciaries" in P. L. 874.---23. P. L. 872, 873 and 874.---24. P. L 883.---25. P. L. 883 as Intra-territorial.---26. P. L 872.---27. P. L. 918.---28. P. L. 874 (No. 38 of Acts of 1937).---29. Taxation of Non-resident Trustees.---30. Taxation of Court Appointed Trustees.---31. Statutory Construction re Non-resident Fiduciaries.---32. Taxation of only Resident Fiduciaries.---33. G. L. 703, IV and V.---34. P. L. 872, 873, 874 and 611.---35. P. L. 2758.---36. Title of Testamentary Trustee.---37. Jurisdiction of Probate Court.---38. Equity Powers of Probate Court, P. L. 3022--3047.---39. Bond of Testamentary Trustee, P. L. 3022 and 3023.---40. P. L. 3032, 3034, 3035, 3036, 3041, 3042, 3043, 3044, 2776.---41. Designation of Executor.---42. Vacating Designation of Executor, P. L. 2781 and 2788.---43. Accountability of Trustee.---44. Descent and Devise a Privilege.---45. No Constitutional Guaranty of Testamentary Disposition.---46. Domiciliary Control of Personalty.---47. Control of Testate Personalty.---48. Situs of Testamentary Trust.---49. Source of Trustee's Designation.---50. Tax Situs not Extra-territorial, P. L. 874.---51. Situs of Executor's Property.---52. Situs of Trust Funds.---53. Statutory Construction by Analogy.---54. Construction of Tax Statutes.---55. Intent in Statutory Construction.---56. Consequences in Statutory Construction.---57. Questions on Re-argument.---58. Determination of Taxability.---59. Implications in Statutory Construction.---60. Doubts in Statutory Construction.---61. Privileges of Charities-Vt. Constitution, Chap. II, Sec. 64.---62. Tax Exemption of Charity.---63. Non-Charitable Use Avoiding Exemption.---64. Function of Legislature.

1. A recognizance conditioned upon prosecuting an appeal to effect and to pay the intervening damages and costs if unsuccessful as required by P. L. 2114 is unnecessary in an appeal under P. L. 909.

2. P. L. 2114 which provides for security by way of recognizance on appeal is applicable only to proceedings authorized by Chapter 92 of the Public Laws.

3. A statute should be construed to accomplish the purpose for which it is intended.

4. The intention and meaning of the Legislature are to be ascertained and given effect in the construction of a statute, not from the letter of the law, but from an examination of the act, the subject matter, the effects and consequences, and the reason and spirit of the law, even though the construction thus ascertained conflicts with the literal sense of the words.

5. Paragraphs (a) to (e) inclusive of P. L. 875 speak of income "received" or "acquired", while paragraph (f) of P. L. 875 mentions an individual or fiduciary who "holds" in trust.

6. Consideration as a whole of Chapter 39 of the Public Laws of which P. L. 875 is a part, with regard to the provisions of P. L. 590, IV clearly shows that the Legislature intended to exempt the income from a fund held in trust and "to be used exclusively" for the purposes enumerated, whether the income is from tangible or intangible property.

7. A tax exemption statute is strictly construed.

8. No claim for tax exemption can be sustained unless it comes within the express letter or the necessary scope of the exemption clause.

9. The phrase "used exclusively" in P. L. 875 (f) applies to the entire use of the fund and not merely to the part used for the purposes enumerated.

10. If any part of a trust fund is used for non-exempt purposes all of the income thereof is subject to taxation under Chapter 39 of the Public Laws.

11. P. L. 872, II defines "fiduciary" to include a guardian, trustee, executor, administrator, receiver, conservator, or any person, whether individual or corporate, acting in any fiduciary capacity for any person, estate or trust.

12. P. L. 873 imposes an income tax upon every resident of the state at the rates and with the exemptions therein set out.

13. P. L. 883 requires every fiduciary subject to taxation under Chapter 39 of the Public Laws, as provided by P. L. 874, to make an income tax return and be subject to all the provisions of the chapter which apply to individuals but permits a return by one of two or more joint fiduciaries.

14. P. L. 918 requires the payment or securing of all taxes under Chapter 39 of the Public Laws before allowance of the final account of a fiduciary by a Probate Court.

15. The taxing power of the State extends to all persons and property within its jurisdiction not protected therefrom by Federal supremacy.

16. A statute is to be construed as not intended to have extra-territorial effect, but only an intra-territorial effect, unless it clearly indicates a different intent.

17. The real meaning and purpose of the law given is to be sought in a taxing statute, and if fair and reasonable construction discloses it, it is to be given effect, otherwise such a statute is not to be extended by implication beyond the clear import of the language used, and doubts are to be resolved against the taxing power and in favor of the taxpayer.

18. The intention and meaning of the Legislature are to be ascertained from an examination of the whole and every part of the act, the subject matter, the effects and consequences, and the reason and spirit of the law.

19. P. L. 874 sub. div. I seems to include every fiduciary relation.

20. P. L. 874 sub. div. II makes the tax imposed a charge against the estate or trust, though it makes it the duty of the fiduciary to pay.

21. P. L. 873 imposes an income tax only upon residents.

22. The word "fiduciaries" in P. L. 874 is not limited to "resident fiduciaries."

23. The taxes imposed upon residents by P. L. 873 are by P. L. 874 imposed upon fiduciaries as defined by P. L. 872.

24. P. L. 883 requires each fiduciary subject to taxation by P. L. 874 to make returns and pay the taxes required of individuals and does not limit the tax upon fiduciaries to those that are residents as does P. L. 873 in the case of individuals.

25. P. L. 883 not clearly disclosing an extra-territorial effect is construed as having only intra-territorial effect and is confined to fiduciaries, estates and trusts over which the state has jurisdiction.

26. The definition of fiduciary in P. L. 872 includes both resident and non-resident fiduciaries.

27. P. L. 918 and our statutory provisions relative to the administration of estates and trusts shows the legislative intent to tax even a non-resident fiduciary with respect to an estate or trust being administered in our probate courts.

28. P. L. 874, since the amendment by No. 38 of the Acts of 1937, does not mention non-resident fiduciaries, and since the situation in this case does not come within the terms of the second sentence of P. L. 874 prior to the amendment it is not necessary to construe it.

29. It may be that non-resident trustees designated for a lawful purpose by other than the Probate Court are outside the taxing power of the State.

30. Whether non-resident trustees appointed by a Vermont Court are subject to tax depends on the power of the State to tax them.

31. Though there be nothing in taxing statutes that exempts non-residents by implication or otherwise, such statutes are presumptively confined to fiduciaries over whom the State has jurisdiction.

32. By apt language a legislature may indicate its intent to tax only resident fiduciaries.

33. G. L. 703 sub. divs. IV and V indicate the long time provision for the taxation of the personal estate of resident wards and resident decedent.

34. A fair and reasonable construction of P. L. 872, 873 and 874 in the light of G. L. 703 [Now P. L. 611] discloses the Legislative intent to continue the taxation of personal estate of resident wards and decedent and the further intent to tax all fiduciaries within its power to tax.

35. Under P. L. 2758 a will passes neither real nor personal estate until it is proved and allowed.

36. No title can rest in a testamentary trustee until the will is probated.

37. The Probate Court has plenary and exclusive jurisdiction in the settlement of the estates of deceased persons.

38. P. L. 3022--3047 gives to the Probate Court general equity powers in regard to trusts and trust funds that arise in the settlement of estates.

39. P. L. 3022 and 3023 require that a testamentary trustee give a bond before entering upon his duties and set forth the conditions of the bond.

40. P. L. 3032, 3034, 3035, 3036, 3041, 3042, 3043, 3044, 2776 concern failures of trustee to give bond, removal of trustee, appointment of additional trustee, filling a vacancy, trustee's duties, sales and investments, annual accounting and appointment of resident process agent by non-resident executor, administrator or trustee.

41. A testator may designate the executor of his will subject to the latter's acceptance of the trust and filing a proper...