Court Opinion

ID: 9454053
Source: CourtListenerOpinion
Date Created: 2023-08-04 18:34:17.495514+00
Date Added: 2024-06-11T17:33:56.840882
License: Public Domain

DURFEE, Judge
(concurring).
I concur in the opinion of the majority for the reasons stated therein, and for further reasons underlying the tax policy of allowing deductions for bequests to domestic municipalities which do not apply to bequests to foreign municipalities.
There are two requirements set forth in § 2055(a) (3). The first is that the bequest be made to “a trustee or trustees.” It is clear that the “Mayor and Magistratraete” of the City of Fuerth could qualify as “trustees.” However, the second requirement, that the bequest be intended “exclusively for * * * charitable * * * purposes,” is not, in my opinion, satisfied.
In the first place, I agree with the majority’s reading of the statute, and its interpretation of the common law cases cited. In addition, the other eases which equate “beneficial” with “charitable,” and which would apparently support the contention that the Wasserman bequest was within the ambit of the statute, are not controlling.
Cases which have held bequests for “benevolent” purposes to be “charita*730ble,” and thus within the statute, have either dealt with bequests to domestic corporations or municipalities (see, for example, Union & New Haven Trust Co. v. Eaton, 20 F.2d 419, 421 (D.Conn. 1927) and Koehler v. Lewellyn, 44 F.2d 654 (W.D.Pa.1930)), or have dealt with bequests which have been construed as charitable because of the language used in the trust instrument. For example, the court in Hight v. United States, 256 F.2d 795 (2d Cir.1958) construed a legacy for “such charitable, benevolent, religious or education institutions as my executors hereinafter named may determine,” to be deductible. (Emphasis supplied.) It held there that “benevolent” was “charitable” because of the principle of ejusdem generis. Quoting a number of authorities, including 10 American Jurisprudence, p. 590, and Restatement of Trusts, see 398, the court stated that where “benevolent” is used in conjunction with “charitable,” the former word has no wider application than the latter. The cases cited in footnote 2 of Hight, supra, at 798, also had “benevolent” used in conjunction with “charitable.” In the Wasserman bequest, however, no such limitation for charitable purposes can be implied, absent a similar context. As the court said in Hight:
The overwhelming weight of authority supports the principle that the word “benevolent” particularly when used with the word “charitable" applies to institutions which are within the scope of Section 303(a) (3) of the Revenue Act of 1926 * * *. Id. at 802. [Emphasis supplied]
Even if bequests “for the benefit of” a municipality were considered “charitable” without more being said in the trust instrument, the policy underlying the availability of a deduction would not necessarily be applicable to a bequest to a foreign municipality. Hight, supra, and St. Louis Union Trust Co. v. Burnet, 59 F.2d 922 (8th Cir. 1932), indicate that
* * * [t]he law of his state, with reference to which the testator may be presumed to have made testamentary disposition of his property, is not without some force as indicating his intent and purpose * * *. Id. at 927.
A look at Illinois law, and the basis for calling bequests “charitable,” shows that no deduction is justified here. For example, in Dickenson v. City of Anna, et al., 310 Ill. 222, 141 N.E. 754, 30 A.L.R. 587 (1923), land was bequeathed to a school, which eventually went out of existence. The gift over to the city was held to be charitable. The court said it was well-settled that a devise to a city is charitable, as long as the testamentary instrument indicated that the property was to be used for the benefit and use of its inhabitants. Such a condition is present in the Wasserman trust, and thus it too should be considered “charitable,” except for the rationale given in Dickenson.
It is thoroughly settled by the authorities that a devise or conveyance to a government or to any municipality for the purpose of lessening the burdens of government or taxation to the inhabitants thereof, that such devises or gifts are charitable gifts. 141 N.E. 754, 757 (1923).
This rationale would be valid as applied to a U.S. municipality, but quaere whether it is an underlying policy of the tax laws to reduce the tax burden on foreigners imposed by their own governments? And even if it could be argued that under the Dickenson rationale a gift to a foreign municipality is charitable, this would only be supported by common law cases, and would disregard the express language of § 2055. Nowhere is any Illinois statute mentioned by plaintiffs which dictate that a trust for “beneficial use” of a city is “charitable.” Therefore, common-law precedents are not persuasive in the face of explicitly Federal statutory language, as the majority opinions points out. Thus, neither the language of the will, nor public policy, support a deduction under § 2055 (a) (3).
*731COLLINS, Judge
(concurring).
I concur completely in the opinion of the majority. In other circumstances, I would not hesitate to construe the doubtful language of the devise in plaintiff’s behalf, thereby effectuating the policy underlying section 2055(a) (3) in favor of charitable gifts. When, as here, the devise is to a foreign municipality, however, I believe that additional and overriding considerations forbid such a loose construction.
I agree that the donative phrase “for the benefit of” could, not improperly, be read to authorize use of the gift by a municipal trustee for other than charitable purposes. It is therefore conceivable that, under similar language, a gift to the appropriate officials of a foreign municipality could be used for purposes deemed beneficial to the particular municipality, but which, at the same time, would be inimical to the interests of the United States. On the other hand, it is clear that many gifts to foreign political units will unquestionably inure not only to the benefit of the recipient, but, by creating goodwill, to the benefit of the United States as well. What is crucial, however, is that the court is in no position to weigh the political significance and impact a tax deduction for a gift to a foreign political unit might have under an ambiguous devise such as that in the instant will. Any decisions concerning the advisability of encouraging, by favorable tax treatment, unrestricted gifts to other than domestic political units should be left to Congress and the Executive Department, which have the information available and the duty to make such decisions. Viewed in this light, I do not believe that section 2055(a) (3) can be properly construed to authorize a charitable deduction for the devise in trust to Fuerth under the language used in this will.