Honorable Geo. H. Sheppard 

Comptroller of Public Accounts 

Austin, Texas 

Dear Sir: Opinion No. O-5342 

Re: Whether a bequest to 

the Masonic Temple 

Associationof Fort 

Worth Is exempt from 

the payment of inheritance taxes. 

In your letter oft May 28, 1943, you inquired whether 

a bequest to.the Masonic Temple Association of Fort Worth is 

exempt from inheritance taxes by virtue of its being a bequest 

to a charitable organizstion. 

The inheritance taxes normally applicable to bequests 

and devises to associations and corporations are contained in 

Article 7122, v. A. c. s., but the rate schedule therein established is s.ubject to the following proviso: 

"Provided, however, that this Article shall 

not apply on property passing to or for the use 

of the United States or any religious, educational 

or charitable organization when such beq.uest, 

devise or gift is to be used within this State." 

It is apparent that this exemption obtains only when (a)~ 

the bequest is to one of the named types of organization, and 

(b) the property bequeathed is to be used by such organization within this State. 

Pertinent portions of the charter of the Masonic 

Temple Association of Fort Worth are as follows: 

"First. The name of this corporation is "MABONIC 

TEMPLE ASSOCIATION OF FORT WORTH." 

"Second. The purpose for which this corporation 

is formed is to support charitable and benevolent 
Honorable Geo. H. Sheppard, Page 2 

undertakings through the erection and maintenance of 

a building for the benefit of the various contributing lodges. 

"Third. The corporation shall have its place of 

business in the City of Fort Worth, Tarrant County, 

Texas. 

"Fourth......... 

"Fifth.......... 

"Sixth. No money coming into the possession of 

this association, nor property of any kind, now or 

hereafter owned or to be owned by it, nor any assets 

arising therefrom, shall ever go or enure to the 

benefit of any certificate of donation holder in this 

association. All moneys realized by this association 

by the conveyance of properties from the respective 

contributing lodges' or orders, and all moneys received 

by contiribution, gifts and otherwise, shall be used for 

the liquidation of the indebtedness on the buildings 

and improvements of the association and for the 

carrying ,out of the purposes for which this association 

is organized. 

"Seventh. This association shall not have any 

capital stock, but for the purpose of raising and supplying part of the funds with nhich to erect and,maintain a building, and to retire and pay off the bonds 

and other evidences of indebtedness which will be 

required in the building and completion of said building, 

the various lodges and orders contributing property, 

both real and personal, for such purposes shall be, issued 

certificates of donation pro rata upon the basis of 

such assets received from such contributing lodges 

or orders as the same bears to the total value of the 

buildings and property when said building and improvements 

have been fully completed. 

"Eighth. Each contributing lodge or order shall 

entitled to be represented upon the board of trustees 

of said corporation by the election or appointment of 

three of its members respectively and each such 

be 

contributing lodge or order shall be entitled to one 

vote at any meeting of said board of trustees, 

irrespective of the amount of certificates of donation 

owned by any one of said contributing lodges or orders. 
Honorable Geo. H. Sheppard, Page 3 

"Ninth........." 

Although the charter describes the Association in 

q'uestion as o;e formed to "support charitable and benevolent 

undzrtakings, we feel that the Association is not the type 

of charitable organization", comprehended by the proviso to 

Article 7122. 

In the case of Masonic ,Temple Association et al 

v. Amarillo Independent School District., 14 S.W. (2d) 128 

(error refused), a corporation identical to the one here in 

question in all material respects ex$ept that membership 

therein was specifically limited to various Masonic bodies 

and lodges of Amarillo, Texas," claimed an exemption from 

ad valoretn taxation under Section 2 of Article VIII of our 

Constitution permitting the legislature to exempt "buildings 

used exclusively and owned by . ..institutions of purely public charity" and under Article 7150 (7), V.A.C.S., exempting 

"all buildings belonging to institutions of purely public 

charity. ~ :.I" ~. Tndenying the,exemptionJudge Jackson ,~' 

pointed o.ut that since the various Masonic orders which were 

stockholders in the Association and who used the building 

were not "orders which do nothing but dispense charity, b,ut 

which do dispense charity," the building in question was not 

owned and used exclusively by an institution of purely public 

charity. 

Admittedly, the constitutional and statutory 

provisions involved in the Amarillo case differ from those 

here under consideration, yet we feel that the principles 

enunciated in that case are applicable here. If the Fort 

Worth Association is a "charitable organization" within the 

language of Article 7122, it obtains that status only because 

of the use which is to be made of its building. Under the 

charter the users of the building are denominated only as 

the "various contributing lodges or orders," and the lodges 

or orders which may be,accepted as holders of certificates of 

donation may be Masonic or non-Masonic, domestic or foreign, 

charitable or non-charitable. Moreover, although the building is to be erected and tnalr$ained 'for the benefit of the 

vario,us contributing lodges, the charter affords no other 

indication of the nature of the building or the 'use to which 

it shall be put. Even if we could assume that all of the 

contributing lodges will be, to a certain extent, charitable 

organizations, the charter affords no guarantee that the 
Honorable Geo. H. Sheppard,.Page 4 

buildingwill be used wholly or In part to further the 

charitable functions of such organizations. 

Furthermore, to claim the exemption provided by 

Article 7122 it Is necessary that the bequest be one which 

is to be used within, this State. Under the sixth clause 

of the charter the bequest in question must be used for the 

liquidation of the indebtedness on the buildings and improvements of the Association and for the carrying out of the 

purposes for which the Association was organized. The 

charter provides no indication or guarantee that the 

buildings or Improvements of the Association will bye located 

within this State, and the testator's will in no way 

restricts the Association to using the bequest for buildings 

or improvements within this State or to retiring the 

indebtedness on such buildings or improvements. While the 

Association is a domestic corporation~and while its place of 

business is established at Fort Worth, still these facts are 

not incompatible with out-of-state operation, nor, we feel ,j 

do they give rise to a presumption that the Association nil1 

confine its activities to this State. In the case of San 

Jacinto National Bank v. Sheppard, 125 S.W. (26) 715, in 

construing a statute (Article 7119, V.A.C.S., prior to its 

amendment in 1933) which taxed sharitable bequests whioh 

uere "to be used without this State," Justice Baugh said 

at p. 716: I 

"Roxhere in its charter was anything required 

to be done in Texas. Bar, @d the will of Milroy require the funds derived from his devise to it to be 

us& in Texas. Clearly under the charter and said 

will the beneficiary corporation could have used 

the devise anywhere the directors thEreof should 

determine in their me,etinga in Ohio+ 

Although the facts in that case involved a corporation located 

In Ohio and operating in Texas but which was not required by 

its charter to do ,so, while the facts immediately at hand 

involve a c.orp,oration locatea inTexas nhi& may operat,e 

el,sewhere and which is not-forbidden by Its, charter to do so, 

yet we feel that t,he ,language af JusticeBaugh is here 

p.e,rtinent . In accsrdanoe wi,th this language, we feel that 

a bequest is made exempt under Artible 7122 anly .when the 

bequest is specifically required by the t,epms ,of the will 

to be used in t,Ns S,tate or when the pawexs of .the, beneficiary 

are limited in ,such a manner that it ,canno,t legally ma$e use 

of the bequest out,s,ide, of this State. C.onsequent,ly, you are 
Honorable Geo. H. Sheppard, Page 5 

respectfully advised that the bequest in question falls 

without the exemption contained in Article 7lZ! and that 

said beq,uest is subject to the inheritance tax. 

Trusting that the foregoing fully answers yo'ur 

inquiry, we are 

Very truly yours 

ATTORNEY GENERAL OF TEXAS 

By /s/R. Dean Moorhead 

Assis.tant 

Approved July 15,, 1943 

Grover Sellers 

First Assistant Attorney General 

RDM/JP/c,s 

APPROVED 

OPINION COMMITTEE 

BY BWB 

Chairman