In re McIntire's Estate

• Decision Date: 25 June 1934
• Docket Number: 24990.
• Citation: 34 P.2d 432,178 Wash. 81
• Court: Washington Supreme Court
• Parties: In re McINTIRE'S ESTATE. v. STATE et al. MARSHALL et al.

34 P.2d 432

178 Wash. 81

In re McINTIRE'S ESTATE.

MARSHALL et al. v. STATE et al.

No. 24990.

Supreme Court of Washington, En Banc.

June 25, 1934

Appeal from Superior Court, Snohomish County; Ralph C. Bell, Judge.

Petition by W. H. L. Marshall and another, as executors of the estate of Ida Noyes McIntire, deceased, for distribution and for exemption of a charitable bequest from inheritance tax opposed by the State and W. H. Pemberton, Supervisor of Inheritance Tax and Escheat Division. From an adverse judgment, petitioners appeal.

Affirmed.

Mulvihill & Anderson, of Everett, for appellants.

William H. Pemberton and John M. Boyle, Jr., both of Olympia, for respondents.

MILLARD, Justice.

Ida Noyes McIntire, a resident of Everett, Wash., died testate in that city June 25, 1932. Under the fifteenth clause of her will, reading as follows, she devised and bequeathed the residue of her estate to the Congregational Board of Ministerial Relief, a foreign corporation subject to the direction and control of the National Council of the Congregational Churches of the United States, in trust to be devoted to certain charitable uses:

'All the rest, residue and remainder of my estate, of whatever nature or wherever found, I give, bequeath and devise unto the Congregational Board of Ministerial Relief, a corporation organized under the laws of the State of Connecticut in 1907, to be held by said Board as a perpetual trust for the uses and purposes and upon the terms herein set forth, to-wit:

'The said trust fund is to be known as the 'Dr. Ida McIntire Trust' with acknowledgment of credit for such gift to be given as follows: $900.00 thereof as coming from Lillis Sanford, formerly of Red Crossing, Snohomish County, State of Washington; $1500.00 thereof as coming from Lucina N Noyes, formerly of Everett, Washington, and the remainder thereof as coming from myself, Dr. Ida Noyes McIntire, of Everett, Washington.

'The said trustee shall sell and convert into cash at such time and upon such terms as in the judgment of the trustee shall be for the best interest of the trust estate any property passing to it under the residuary clause, and the proceeds of such sale shall become a part of said trust fund.

'The said fund is to be invested and reinvested by the said Board, and its income only shall be used to assist in the support and maintenance of aged, needy and dependent ministers of the Congregational Church in the State of Washington and their widows; it being my intention that this bequest to the Congregational Board of Ministerial Relief shall be limited for use within the State of Washington and shall be granted for the relief of only such aged, needy and dependent ministers and their widows as may be actually resident within said state.

'The selection of the beneficiaries of said trust, subject to the limitations hereinBefore specified, shall be made by the committee on grants of the said trustee and the payments by the trustee shall be made as the needs of such persons and the income of said trust fund may warrant.'

In their petition for distribution of the estate, the executors prayed for exemption of the above-described bequest from inheritance tax. The trial court held that the bequest was subject to an inheritance tax. The executors have appealed.

Counsel for appellants argue that, as a charitable bequest, the same is exempt from inheritance tax under the provisions of Rem. Rev. Stat. § 11218, reading as follows:

'All gifts, bequests, devises and transfers of property situated within or under the jurisdiction of the State of Washington shall be exempt from the payment of any inheritance tax, when the same are for one of the following charitable purposes, namely, the relief of the aged, indigent and poor people, maintenance of sick or maimed, the support or education of orphans or indigent children, and all gifts, bequests, devises and transfers of property made to the State of Washington, or to any county, incorporated city or town or school district therein, or to any public park or playground within the State of Washington, whether municipal or otherwise, and all gifts, bequests, devises and transfers made to any municipal corporation within the State of Washington for eleemosynary, charitable, educational or philanthropic purposes, and all gifts, bequests, devises and transfers made to schools and colleges in the state supported in whole or in part by gifts, endowments or charity, the entire income of which said school or college, after paying the expenses thereof, is devoted to the purposes of such institution and which is open to all persons upon equal terms, and any property in this state which has been given, devised, bequeathed or transferred for such purposes and upon which a state inheritance tax is claimed or is owing is hereby declared to be exempt from the payment for such tax: Provided, That all such gifts, bequests, devises and transfers be limited for use within the State of Washington.'

Appellants further insist that, as it was made to a religious organization organized and conducted primarily and chiefly for religious purposes, the bequest is exempt from inheritance tax under the provisions of Rem. Rev. Stat. § 11218-1, reading as follows:

'All gifts, bequests, devises and transfers made to or for the use of any religious or nonsectarian organization or association, organized and conducted primarily and chiefly for religious purposes and not for profit, where such religious or non-sectarian organization or association is supported in whole or in part by gifts, endowments or charity, and where the entire income of such religious or non-sectarian organization or association, after paying the expenses thereof, is devoted wholly to the use of such organization or association, or for the educational, benevolent, protective or social departments growing out of, or related to, the religious work of such organization or association, shall be exempt from the payment of an inheritance tax: Provided, That all such gifts, bequests, devises and transfers be limited for use within the State of Washington.'

Concededly, the trustee is a benevolent and charitable corporation, and all of the funds received by it are expended for benevolent and charitable purposes. We may also assume, for the sake of the argument, that the bequest was made to or for the use of a religious organization organized and conducted primarily and chiefly for religious purposes. However, as the Congregational Board of Ministerial Relief is a foreign corporation, it is not exempt from taxation under the inheritance law of this state. The exemption provisions (Rem. Rev. Stat. §§ 11218, 11218-1) of the statute do not exempt bequests to charitable institutions or religious organizations located outside this state from an inheritance tax. The overwhelming weight of authority is, as stated in Alfred University v. Hancock, 69 N. J. Eq. 470, 46 A. 178, 179, '* * * that, where the legislature grants exemption from such a tax to corporations or organizations, it includes in the exemption only domestic corporations and organizations.' See, also, Morgan v. Atchison, T. & S. F. R. Co., 116 Kan. 175, 225 P. 1029, 34 A. L. R. 625; annotations at page 681, vol. 34 A. L. R.; and annotations at page 338, vol. 62 A. L. R.

In re Hunter's Estate, 147 Wash. 216, 265 P. 466, is not an apt authority. In that case, which was decided prior to the 1931 amendment of sections 11218 and 11218-1 adding thereto the proviso that all such bequests be limited for use within the state of Washington, we held that a bequest, by a will executed in Colorado by a resident of that state, of property in Washington, directing payments to Colorado charitable institutions, was exempt from inheritance tax. No question was raised or point made as to the place where the charity was to be distributed. The case is clearly, as stated in annotations at page 338 of 62 A. L. R., opposed to the prevailing view (see page 681, vol. 34 A. L. R.) that the exemption from inheritance tax extends only to domestic corporations and not to foreign corporations.

The statute (Rem. Rev. Stat. §§ 11218 and 11218-1) provides 'that all such gifts, bequests, devises and transfers be limited for use within the State of Washington.'

While the will provides that the income from the bequest shall be limited for use within this state, the bequest itself must go out of this state into the state of Connecticut to be used in that state by the foreign corporation to produce the income...