In re Noble's Estate

• Decision Date: 10 May 1938
• Docket Number: 28240.
• Citation: 80 P.2d 243,183 Okla. 148,1938 OK 324
• Parties: In re NOBLE'S ESTATE. v. NOBLE'S EX'RS. STATE ex rel. OKLAHOMA TAX COMMISSION
• Court: Oklahoma Supreme Court

80 P.2d 243

183 Okla. 148, 1938 OK 324

In re NOBLE'S ESTATE.

STATE ex rel. OKLAHOMA TAX COMMISSION v. NOBLE'S EX'RS.

No. 28240.

Supreme Court of Oklahoma

May 10, 1938

Rehearing Denied June 14, 1938.

Syllabus by the Court.

1. A tax exemption claim cannot be sustained unless it is shown that it comes clearly within the provisions of the law under which the exemption is claimed.

2. An alleged grant of exemption from inheritance tax will be strictly construed and must be in such specific and certain terms as to leave no room for doubt.

3. The exemption of gifts or bequests for the use, benefit, or support of religious, charitable, or educational institutions provided for in subdivision (i) of section 3, art. 5, c. 66 S.L.1935, 68 Okl.St.Ann. § 963 (i), relating to inheritance and transfer taxes, refers to religious, charitable and educational institutions of Oklahoma, and not to those of another state.

Appeal from District Court, Carter County; John B. Ogden, Judge.

Proceeding in the matter of the estate of Eva E. Noble, deceased wherein the State of Oklahoma, on the relation of the Oklahoma Tax Commission, opposed by the executors of the estate of Eva E. Noble, deceased, sought to tax, under the provisions of the inheritance and transfer tax laws, certain bequests made to foreign religious, charitable, and educational institutions by Eva E. Noble, deceased. From an adverse judgment, the State of Oklahoma, on the relation of the Oklahoma Tax Commission, appeals.

Judgment reversed and cause remanded, with instructions to enter judgment for the State of Oklahoma, on the relation of the Oklahoma Tax Commission.

C. D Cund, of Oklahoma City, A. L. Herr, of Chickasha, and Wendell Barnes, of Oklahoma City, for plaintiff in error.

Johnson, McGill & Johnson, of Ardmore, and Jameson & McMahon, of Tulsa, for defendants in error.

PHELPS Justice.

This is an appeal from a judgment declaring that certain foreign corporations, to wit, the Board of Relief of the Presbyterian Church of the United States, and the Board of Home Missions of the Presbyterian Church of the United States, existing as religious, charitable and nonprofit institutions, are exempt from paying an inheritance tax upon the property left to them by the will of the decedent. The material facts are stipulated and are as follows:

"It is further stipulated and agreed that the Presbyterian Board of Relief of the United States is a corporation organized and existing under and by virtue of the laws of a State other than the State of Oklahoma; that it derives its funds by donations or bequests and by a percentage of the salaries or wages paid to Presbyterian preachers throughout the United States, and by payments to it by the various Presbyterian churches throughout the United States. Its principal activity is that of furnishing pensions to aged preachers, who may, by reason of their physical disability, no longer be able to earn a livelihood; that it is engaged in carrying on charitable activities and that a portion of its funds is expended by it within the State of Oklahoma for charitable purposes, and that it looks after and attends to such matters within the State of Oklahoma.

It is further stipulated and agreed that the Board of Home Missions of the Presbyterian Church of the United States is a corporation incorporated under the laws of the State of New York, that it derives its funds from various sources, and that its funds are expended throughout the United States under its supervision and direction in support of missionaries preaching and teaching among the various communities of Whites, Indians and Negroes; that a portion of its funds is expended by it and under its supervision and direction within the State of Oklahoma, in support of schools, missions, churches, missionaries, and persons within the State of Oklahoma, preaching and teaching among the various communities of Whites, Indians and Negroes within the State and that it was engaged in such activities long prior to the time of the death of the said Eva E. Noble, and that it has continued to engage in such activities since her death up to the present time."

The sole question in the case is whether, under subdivision (i) of section 3, article 5, chapter 66, S.L.1935, 68 Okl.St.Ann. § 963 (i) such foreign corporations are exempt from the payment of the tax. The statute reads as follows: "Provided, that all transfers, gifts or bequests made in good faith to, or in trust for, the use, benefit or support of any charitable, educational or religious institution incorporated or operating under the laws of this State, or to, or in trust for, the education, support and relief of the poor, indigent, blind or crippled of this State, shall be exempt and shall be deducted from the gross estate."

Neither side of this controversy has favored us with any holding of this court, or of any other court, sustaining its contention and we are unable to find any decision directly in point. However in similar cases while there is a division of authorities the majority of the courts hold that a gift to a charitable or religious institution extends only to domestic corporations and not to foreign corporations. In 26 R.C.L. at pages 226, 227, we find this principle stated: "The character of legacies which are exempt depends in each case on the phrasing of the statute, but there are a few general principles which may be laid down. Thus it is agreed that the grant of an exemption will be construed strictly against one claiming the benefit of it. An exemption of gifts to literary, educational and charitable corporations will apply only to corporations established by the laws of the state imposing the tax, and will not apply to a foreign corporation even if it carries on some of its work within the state, nor will it apply to a gift to trustees to pay over to a domestic charitable corporation not in existence until after the death of the testator." See note, 34 A.L.R. 681; L.C. Morgan et al., Trustees of Marsh Foundation, etc., v. Atchison, T. & S. F. Ry. Co., State of Kansas, Intervenor, ...