In re Smith's Estate

• Decision Date: 17 October 1933
• Citation: 144 Or. 561,25 P.2d 924
• Parties: In re SMITH'S ESTATE. v. STATE TREASURER. POE
• Court: Oregon Supreme Court

25 P.2d 924

144 Or. 561

In re SMITH'S ESTATE.

POE v. STATE TREASURER.

Supreme Court of Oregon

October 17, 1933

Department 2.

Appeal from Circuit Court, Multnomah County; George Tazwell, Judge.

In the matter of the estate of Lotta Chase Smith, deceased, wherein Rufus C. Holman, State Treasurer, claimed inheritance tax from Sarah Ellen Poe, executrix of the estate of Lotta Chase Smith, deceased. From an order of the probate department of the circuit court in favor of the executrix, the State Treasurer appeals.

Affirmed.

David Husted, of Portland (I. H. Van Winkle, Atty Gen., on the brief), for appellant.

O. C Roehr, of Portland (Pendergrass, Wiggins, Barzee & Roehr, of Portland, on the brief), for respondent.

RAND Chief Justice.

This is an appeal from an order of the probate department of the circuit court for Multnomah county, holding that a bequest made by the last will and testament of Lotta Chase Smith, who died in said county on January 20, 1931, was not subject to an inheritance tax under section 10-601, Oregon Code 1930. The bequest is in these words:

"Second. I give and bequeath unto the Board of Directors of the First Church of Christ Scientist in Boston, Massachusetts all my estate both personal and real, except as herein mentioned, to hold, own, possess, use, and to sell, lease or rent, the proceeds to be used in the interest of the 'Christian Science Monitor', an International newspaper, founded 1908 by Mary Baker Eddy."

Section 10-601, Oregon Code 1930, then provided:

"All property within the jurisdiction of the state, and any interest therein, whether belonging to the inhabitants of this state or not, and whether tangible or intangible which shall pass or vest by dower, curtesy, will or by statutes or inheritance of this, or any other state, or by deed, grant, bargain, sale or gift, or as an advancement or division of his or her estate made in contemplation of the death of the grantor, or bargainor, or intended to take effect in possession or enjoyment after the death of the grantor, bargainor or donor to any person or persons, or to any body or bodies, politic or corporate, in trust or otherwise, or by reason whereof any person or body politic or corporate shall become beneficially entitled, in possession or expectation, to any property or income thereof, shall be and is subject to tax at the rate hereinafter specified in section 10-603, to be paid to the treasurer of the state for the use of the state; and whenever property, real or personal, other than estates held by the entirety, is held in the joint names of two or more persons, or deposited in banks or other institutions or depositories in the joint names of two or more persons and payable to either or the survivor, upon the death of one of such persons, the right of the surviving joint tenant or tenants, person or persons to the immediate ownership or possession and enjoyment of such property shall be deemed a transfer taxable under the provisions of this act in the same manner as though the whole property to which such transfer relates belonged absolutely to the deceased joint tenant or joint depositor and had been devised or bequeathed to the surviving joint tenant or tenants, person or persons, by such deceased joint tenant or joint depositor by will, excepting therefrom such parts thereof as may be shown to have originally belonged to such surviving joint tenant, joint depositor or person, and never to have been acquired from the decedent for less than a fair consideration in money or money's worth, and if said property shall have been acquired from decedent for less than such fair consideration, there shall be excepted from the value of said property a portion equal to the amount of the consideration so furnished; and all heirs, legatees and devisees, administrators, executors and trustees, and any such grantee under a conveyance, and any such donee under a gift made during the grantor's or donor's life, shall be respectively liable for any and all such taxes, with interest thereon, until the same shall have been paid as hereinafter provided; provided, however, that devises, bequests, legacies and gifts to benevolent, charitable or educational institutions, societies, associations or corporations organized or existing within this state and actually engaged in this state in carrying out the objects and purposes for which so organized or existing, or to a corporation, association or society to be organized for such purposes under the laws of this state pursuant to the terms of the instrument providing such devise, bequest or gift; and devises, bequests, legacies or gifts to any corporation, society, institution, person or persons or association of persons in trust for such charitable, benevolent or educational purpose where such devise, bequest, legacy or gift is limited by the donor for use within the United States of America shall be exempt from taxation under the provisions of this act."

The material part of this statute, under the facts involved in the case at bar, is that contained in the proviso under which an exemption arises. That exempts from taxation, under the act, all property given in trust to any corporation, society, institution, person or persons, or association of persons for charitable, benevolent, or educational purposes where the gift is limited by the donor for use within the United States of America. That the Legislature, by using the terms "charitable," "benevolent," and "educational" in the disjunctive, intended that the purposes for which the gift was made should include more than merely charitable purposes, is obvious. For the purposes of this case, however, it is only necessary for us to consider what is a charitable purpose within the meaning of the act. There have been many definitions of what constitutes a charity. The most satisfactory one seems to be that given by Lord Macnaghten in Commissioners of Income Tax v. Pemsel, 1891, A. C., at p. 583. He said: "Charity in its legal sense comprises four principal divisions: Trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads. The trusts last referred to are not the less charitable in the eye of the law because incidentally they benefit the rich as well as the poor, as, indeed, every charity that deserves the name must do, either directly or indirectly."

The case was tried in the court below on a stipulation of facts and without the taking of any oral testimony. Among the facts stipulated was a copy of a special act passed by the General Court of Massachusetts and approved February 28, 1917 (Sp Acts Mass. 1917, c. 132). In the first section thereof, the act refers to the First Church of Christ, Scientist, in Boston, Mass., as "a body corporate," and authorizes it to acquire and hold real estate, gifts of money, and other personal estate for religious, educational and charitable purposes; to manage, improve, sell, and dispose of the same for such purposes...