Court Opinion

ID: 6868751
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:58:03.233398+00
Date Added: 2024-06-11T16:05:22.094510
License: Public Domain

MORTON, Circuit Judge
(dissenting).
The statute allows as a deduction “any part of the gross income * * * which pursuant to the terms of the will or deed creating the trust” is paid to charities as defined by the act. In the present case the deed of trust expressly authorized the trustee to pay to charities “such sums” (not necessarily income) as in its judgment *135might be so paid without jeopardizing certain specified annuities, and directed that on the termination of the annuities the entire fund should be so paid. Under this provision the trustees made payments to certain proper charities.
The question is whether these payments are deductible from the income of the trust. It is a very narrow question, depending on what is meant by the statutory expression, “pursuant to the terms of the will or deed.” The Board of Tax Appeals held that these words covered only payments absolutely directed or required to be made by the will or deed in question.
I think this construction unduly narrows the statute. “Language used in tax statutes should be read in the ordinary and natural sense.” Helvering, Commissioner, v. San Joaquin Fruit & Inv. Co., 297 U.S. 496, 499, 56 S.Ct. 569, 570, 80 L.Ed. 824. “Pursuant to” is by no means the equivalent of directed or required.. Its common synonyms are "under” “in accordance with,” or “authorised by.” The phrase as used in this statute seems not to have been judicially defined except in Charles P. Moorman Home for Women v. United States, 42 F.(2d) 257, a District Court case which is followed in the majority opinion. In other statutes, and in indictments, it has always been given its natural meaning. As used in an old English statute, it was held to cover anything done in good faith, “either under the powers which the Act gives or in the discharge of the duties which it imposes.” Smith v. Shaw, 10 B. & C. (Eng.) 277. See, too, Hermann v. Seneschal, 13 C.B.(N.S.) 392. “Pursuant to law,” used in United States Revised Statutes, § 848 (28 U.S.C.A. § 601), has also been given a broad construction. Hanchett v. Humphrey (C.C.) 93 F. 895, 896; United States v. Sanborn, 28 F. 299, 302 (C.C.Mass.), reversed on other grounds. United States v. Nunnemacher, Fed.Cas. No. 15,903, 7 Biss. (U.S.) 129, 137, and United States v. Boyden, Fed.Cas.No.14,632, 1 Lowell (U.S.) 266, show how the phrase has been construed in indictments. See, also, Quarles v. Robinson, 2 Pin. (Wis.) 97, 99.
The interpretation placed upon the statute in the majority opinion seems to me to be completely at variance with the ordinary understanding of the phrase used and with the long-recognized judicial interpretation of it. It is well settled that provisions in favor of charities should receive, as against the government, a liberal interpretation in order to encourage such gifts. This purpose is certainly not furthered by straining the language of the act, so as to refuse the deduction on payments to charity authorized by a will or deed to be made if certain facts exist; the determination as to the required facts being left to the discretion of trustees. The decisions relied on in the majority opinion relate to other statutes, not containing the phrase in question, and to essentially different questions and facts. They do not seem to me significant on the present question, except perhaps the observation in Burnet v. Whitehouse, 283 U.S. 148 at page 151, 51 S.Ct. 374, 376, 75 L.Ed. 916, 73 A.L.R. 1534, that, “The exemption * * * is plain, and should not be destroyed by any strained construction of general language,” etc. McReynolds, J. Under this statute I think that any payment to charity as therein defined which is authorized by the will or deed is an allowable deduction.