In re Charles Downer's Estate

• Decision Date: 11 May 1928
• Parties: IN RE CHARLES DOWNER'S ESTATE
• Court: Vermont Supreme Court

142 A. 78

101 Vt. 167

IN RE CHARLES DOWNER'S ESTATE

Supreme Court of Vermont

May 11, 1928

February Term, 1928.

Taxation---Policy as to Public Charities---What Constitutes "Public Charity"---"Charity"---Acts of 1919, No. 48 1---Taxability of Legacy to Town Which May Be Used Either for Charitable or Public Purposes---Implied Exemption of Town's Property Devoted to Public Use---Inheritance Tax Not Property Tax---Power of State To Tax Its Own Property and That of Its Municipalities---Property---Exempt from General Tax May Be Subject to Inheritance Tax---Construction of Statutes---Manner of Determination of Legislative Intent---Inference To Be Drawn from Express Exemption of Legacies to Towns "For Cemetery Purposes" under Laws 1919, No. 48, 1---Application of Maxim "Expressio Unius Est Exclusio Alterius"---Status of Trustee in Determining Application Inheritance Tax Law---Trust Construed as Making Town Beneficiary and Not Trustee.

1. The general policy of law is not to tax public charities.

2. In a legal sense, a public charity is a gift applied consistently with existing laws for benefit of an indefinite number of persons by bringing their minds and hearts under influence of education or religion, by relieving their bodies from disease, suffering, or restraint, by assisting them to establish themselves in life, or by erecting and maintaining public buildings or works, or otherwise lessening burdens of government.

3. In its widest sense "charity" denotes all good affections which men ought to bear toward one another, and in that sense embraces what is generally understood by benevolence, philanthropy, and good will, but in a more restricted sense it means merely relief or alms to the poor.

4. Where under terms of trust created by will for benefit of a town, many of objects to which income therefrom might be devoted were charitable in nature, but it also provided that fund might be used "for the permanent upbuilding" of the town and

"in doing things of a public nature which the town would not naturally do nor could afford to do at its own expense," on question whether legacy was exempt from inheritance tax provided by Laws 1919, No. 48, 1, as a public charity, held that since things of a public nature need not necessarily be things of a charitable nature, and it could not be assumed that fund would be so applied, uncertainty respecting use, or uses, to which income from legacy might be applied rendered it impossible to say that such legacy constituted a public charity so as to come within the exemption from taxation provided by G. L. 684, subdivision VI, since where power is given to apply a bequest, or income therefrom, either to uses which are or those which are not within classes included as charities, whole bequest fails as a charity.

5. It is not policy of State to subject its own property, nor that of its municipalities which is devoted to a public use, to a general property tax, and there is an implied exemption in favor of property so owned and used which can be overcome only by most positive legislative enactment.

6. Inheritance tax imposed by Laws 1919, No. 48, 1, is not a property tax, but is a condition placed by State upon privilege accorded by it of taking property by devise or descent.

7. State has power to tax its own property, and that of its municipalities.

8. Property exempt from a general property tax may be, and unless otherwise provided is, subject to an inheritance tax that is, such tax is assessed upon valuation of entire estate or distributive share notwithstanding fact that some part thereof is exempt from taxes of former class.

9. Intent of Legislature is to be gathered from statute itself taken as a whole, if possible; if not, resort may be had to such extrinsic matters as Legislature may presumably have had in mind at time of its enactment.

10. Language of Laws of 1919, No. 48, 1, relating to inheritance taxes, not only indicates no intention to exempt from its operation legacy in trust for benefit of town which might be used either for charitable purposes or for purposes of public nature not necessarily charitable, but fact that statute mentions cities and towns in making exemptions, and as to them expressly limits exemption to legacies "for cemetery purposes." repels any possible inference that Legislature intended to in-

clude them among charitable, educational, and religious societies and institutions mentioned in statutes.

11. Under Laws of 1919, No. 48, 1, relating to inheritance taxes express exemption therefrom of legacies to cities and towns "for cemetery purposes," by application of maxim, Expressio unius est exclusio alterius, held to indicate an intention that tax should apply to legacies to cities and towns for other purposes.

12. While maxim, Expressio unius est exclusio alterius, expresses a rule of construction and not of substantive law, and is not of universal application, it properly applies when in natural association of ideas in mind of reader that which is expressed is so set over by way of strong contrast to that which is omitted that contrast enforces affirmative inference that what is omitted must be intended to have opposite and contrary treatment.

13. Where will left property to a trust company in trust for a town, and, although some objects to which income therefrom might be devoted were charitable in nature, trust also provided that fund might be used "in doing things of a public nature," if status of trustee is determinative of whether under Laws 1919, No. 48, 1, inheritance tax should apply thereto, legacy is taxable, since named trustee was in no sense a charitable, educational, or religious society within meaning of statute.

14. Although will, leaving property to a trust company in trust for benefit of town, specified the use or uses to which fund should be devoted by town, latter is nevertheless beneficiary and not co-trustee with trust company.

APPEAL direct to Supreme Court from order of probate court for the district of Hartford, assessing inheritance tax upon bequest in will of Charles Downer, deceased, to town of Sharon. Henry S. Wardner appealed from such decision as executor of the last will and testament of Charles Downer, and on his own behalf as a residuary legatee under said will. The opinion states the case.

Decree of probate court affirmed. Let the result be certified to that court.

Wm. B.C. Stickney for the appellant.

The bequest is for a public charity, and the general policy of the law is that property devoted to such use shall not be taxed. Re Curtis' Estate, 88 Vt. 445, 450, 451; Girard v. Philadelphia, 7 Wallace (74 U. S.) 1, 19 L.Ed. 53, 56; Const. of Vermont, Ch. 2, Sec. 64; Jackson v. Phillips, 14 Allen (96 Mass.) 539, 555, 556; Story's Eq. Jur., 1165, 1169, 1181; Cooley on Taxation (2nd ed.) pp. 172, 202, and cases cited; Stiles v. Newport, 76 Vt. 154, 164; Merriwether v. Garrett, 102 U.S. 472, 26 L.Ed. 197, 204; Montpelier v. East Montpelier, 27 Vt. 702, 710; Village of Hardwick v. Town of Wolcott, 98 Vt. 343, 352, 353.

The law does not contemplate direct or indirect taxation of municipalities created trustees, for public charities, nor as beneficiaries thereof, and the town as a representative of the State is exempt from inheritance tax on this bequest. G. L. 3986--3989; Union Refrigerator Transit Company v. Kentucky, 199 U.S. 194, 211, 50 L.Ed. 150, 153; Const. of Vermont, Ch. I, Art. 9th; Boston v. Boston & Albany R. R., supra; note to Kidder v. French, Smith, N.H. 155, 157, cited in Grafton County v. Haverhill, 68 N.H. 120, 40 A. 399; Salstonall v. Sanders, 11 Allen, 446, 456; Atty. Genl. v. Aspinwall, 2 Mylne and Craig, 613, 618; Perin v. Carey, 65 U.S. 465, 16 L.Ed. 701, 712; Stiles v. Newport, supra, p. 162, Village of Hardwick v. Town of Newport, supra, pp. 352, 353; 1 Cooley on Taxation (3rd ed.) 263; In the Matter of Macky, 46 Colo. 79, 96--98, 102 P. 1075; City of Denver v. Bonesteel, 28 Colo. 483, 485; Henson v. Monday, 143 Tenn. 418, 224 S.W. 1043.

The municipality is expressly exempt from inheritance tax when reasonable construction is given the statute as to the Legislature's intention. G. L. 1090, 1909. See, also, In the Matter of Burnham, 112 Misc. (N. Y.), 560; Essex v. Brooks, 164 Mass. 79, 83. Erwin M. Harvey, commissioner of taxes, for the State.

The statutes of Vermont do not exempt from inheritance tax bequests which are merely for public purposes. Acts 1896, No. 46; 1904, No. 30; G. L. 1090, as amended Acts 1919, No. 48; Estate of Curtis, 88 Vt. 445.

A public use and a charitable use are not the same, and this is recognized in the general tax laws of Vermont. G. L. 684, subdiv. VI.

Exemptions from taxation rest on statutory enactments and not on general law. G. L. 684, and subdivisions.

General exemptions from taxation are to be strictly construed and limited exemption to a town or city will not be enlarged. State, Apt. v. Richardson, Admr., 269 Ill. 275; In re Arp's Estate (Ind.), 147 N.E. 297; Gleason & Otis on Inheritance Taxation (4th ed.), p. 484; Barringer v. Cowan, 55 N.C. 436; Leavell v. Arnold, 131 Ky. 426, 115 S.W. 232; Miller v. Commonwealth, 27 Gratt (Va.) 110; In re Frick's Estate, 121 A. 35.

Present: WATSON, C. J., POWERS, SLACK, MOULTON, and CHASE, JJ.

OPINION

SLACK

The question for review is whether a certain legacy under the will of the late Charles Downer is subject to the collateral inheritance tax provided by Act No. 48, Laws 1919, Sec. 1 which reads as follows: "Every person other than the father, mother, husband, wife, lineal descendant, stepchild, child adopted as such during his minority in conformity with the laws of this State, child of a stepchild or of such adopted child, wife or widow of a son, or husband of a daughter of a decedent, a...