PENNSYLVANIA CO. FOR INSURANCE ON LIVES, ETC. v. Helvering, 5797.

• Decision Date: 26 June 1933
• Docket Number: No. 5797.,5797.
• Parties: PENNSYLVANIA CO. FOR INSURANCE ON LIVES AND GRANTING OF ANNUITIES v. HELVERING, Commissioner of Internal Revenue.
• Court: U.S. Court of Appeals — District of Columbia Circuit

66 F.2d 284 (1933)

PENNSYLVANIA CO. FOR INSURANCE ON LIVES AND GRANTING OF ANNUITIES v. HELVERING, Commissioner of Internal Revenue.

No. 5797.

Court of Appeals of the District of Columbia.

Argued June 9, 1933.

Decided June 26, 1933.

Edward B. Burling and Wm. Merrick Parker, both of Washington, D. C., for appellant.

G. A. Youngquist, Sewall Key, and A. H. Conner, all of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and VAN ORSDEL, HITZ, and GRONER, Associate Justices.

GRONER, Associate Justice.

The issue presented on this appeal is whether a bequest to the American Anti-Vivisection Society of Philadelphia is exempt from estate tax under the provisions of section 303 (a) (3) of the Revenue Act of 1924 (43 Stat. 253, 26 USCA § 1095 note). Petitioner is the executor of the estate of one A. Sydney Logan, deceased, who by last will bequeathed to the society a sum of money in excess of $200,000.

The applicable statute (section 303) provides: "For the purpose of the estate tax the value of the net estate shall be determined — (a) In the case of a resident, by deducting from the value of the gross estate — * * * (3) The amount of all bequests, * * * to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual. * * *"

The Commissioner declined to allow the deduction, and the Board of Tax Appeals, one member dissenting, sustained his determination. If the society is a corporation organized and operated exclusively for a charitable purpose, the decision of the Board must be reversed, for it is admitted that no part of the net earnings of the society inures to the benefit of a private stockholder or individual.

It is stipulated the purpose of the society is the abolition of all vivisectional experiments on animals and other experiments of a painful nature. In its activities it gives rent-free the use of certain rooms to the Animal Rescue League and contributions to the expenses of that organization, which takes off the streets of Philadelphia animals which in some cases might find their way into vivisectional laboratories. It provides free lectures in its educational work against the cruelties of vivisection. It publishes a monthly magazine in which there is always some article in like manner exposing the cruelty of vivisectional experiments. It employs a man to watch the laboratories of the University of Pennsylvania to learn whether stolen dogs are delivered there for vivisectional purposes, and advises the owners so that the dogs may be reclaimed. The purpose of the society, as explained by its president, is to prevent cruel experiments on dumb beasts. "We try to keep them from falling into the hands of any vivisector to insure that they be kept out of the hands of those who would subject them to pain and suffering." He testified further that the term "vivisection," as understood by the society, means "experiments on animals from which cruelty results; * * * the cutting up of an animal alive, * * * and any kind of experiments upon animals involving pain, such, as for instance, inoculation of animals with some disease or drug which at the moment may be an inconsiderable pin prick but results, or is intended to result, in some form of disease under which the animal afterwards suffers." The publication of the society, among other things, records experiments made by various vivisectionists and calls attention to the pain and suffering thus inflicted on the animals experimented on. The purpose of this is to create public opinion against the practice. The members of the society believe that in this way they will encourage a universal spirit of humanity and kindness, and believe this humane spirit will be better developed by inculcating in the human mind abhorrence of the practice of inflicting pain and suffering on animals. They therefore contend the purpose of the society is charitable because its members honestly believe it will benefit mankind.

It is a matter of common knowledge that there are a large number of persons who oppose vivisection, and that societies for this purpose are established and exist in nearly all the states and in many European countries.

The problem, therefore, is whether such societies are charitable within the meaning of the act, and to find the answer we must look to established law to determine the meaning of the word "charitable." The question is not without difficulty, for there is no hard and fast rule applicable in all circumstances. The definition of a charitable trust or of a charity is variously stated to meet particular facts. Perhaps the best known of the definitions is that of Mr. Binney in the Girard will case. It is quoted with approval by Mr. Justice Swayne in Ould v. Washington Hospital, 95 U. S. 303, 309, 24 L. Ed. 450, and the opinion in that case points out the 21 charities included under the Statute of Elizabeth and that Mr. Justice Baldwin in examining the early English statutes and the early decisions of the courts of law and equity found 46 specifications of pious and charitable uses recognized as within the protection of the law. While the cases in this country in which charitable trusts have been upheld have been numerous, and have in nearly each instance been controlled by the particular facts, the great weight of opinion seems to be that a charitable trust which is neither against public law nor public policy may be applied to almost anything that tends to promote the well-doing and well-being of social man. This is the definition given in Perry on Trusts at § 687.

In the English case In re Foveaux, 2 Ch. (1895) 501, Sir J. W. Chitty, one of the justices of the court of chancery, in discussing what is a charity under the Statute of Elizabeth, held that a charitable purpose must always be declared where the society or organization was one with a purpose tending to the benefit of a community, and he likewise observed that, in examining the purposes of any particular trust, courts take a liberal, rather than a narrow, view of the subject, and he illustrated this tendency by a quotation from Thornton v. Howe, 31 Beav. 14, in which Sir John Romilly upheld a trust for the publication of the works of Joanna Southcott, though he found in them much that was foolish, incoherent, and confused. The Foveaux Case involved the precise question here involved, and Mr. Justice Chitty, after reviewing a number of cases holding valid bequests for the benefit of birds and animals, including gifts to societies for the protection of animals liable to vivisection, summed up the result as follows:

"There is a balance of judicial opinion in favour of the defendant...