63 A.2d 635 | Md. | 1949
This is an appeal by Walter C. Clarke, Register of Wills for Montgomery County, appellant, from a decree of the Circuit Court for Montgomery County ordering that $117,033.57, devised under the will of Edward L. Morrison to the Shriners' Hospital for Crippled Children, hereinafter known as the Shriners' Hospital, is *130 exempt from the Maryland Collateral Inheritance Tax imposed by Article 81, § 110, of the Annotated Code of Maryland, 1943 Supplement.
The facts of the case were stipulated and agreed to by counsel for the respective parties and are substantially as follows. Edward L. Morrison died testate, a resident of Montgomery County on August 14, 1946. Under his Last Will and Testament he devised specific bequests to his widow. He also devised the rest and residue of his estate in trust for the benefit of his widow for her life and upon her death said residue was to be paid free of the trust to Shriners' Hospital. The widow renounced the will and elected to take her legal share in all the property of the decedent. The Shriners' Hospital then became and is entitled to receive one half of decedent's net estate. The amount which it is entitled to receive is $117,033.57, upon which the appellant claims there is due and payable inheritance tax of seven and one half percent, or $8,777.44.
Shriners' Hospital is a non-profit corporation, organized under the laws of the State of Colorado. It has no capital stock and no profits inure to the benefit of any person. The purpose for which this hospital is organized follows. "To maintain, control, conduct and superintend any and all charities, benevolences and Shriners Hospitals for Crippled Children established, maintained, owned and controlled by this Corporation, or which may now or hereafter be established by Shriners Hospitals for Crippled Children or any subsidiary or affiliated corporation thereof."
This corporation maintains twelve hospitals in the Continental United States, one in Hawaii, two in Canada, and one in Mexico. One hospital is located in Philadelphia which serves crippled children who are residents of the District of Columbia, Virginia, West Virginia, Maryland, New Jersey, Pennsylvania, and New York. These hospitals furnish medical and surgical treatment for children. There is no charge exacted or received from any child treated in these hospitals or from the parent, guardian, *131 or any other person. Only such children who cannot afford other treatment are received in these hospitals. This corporation receives no contributions from any state or subdivision thereof but is maintained by voluntary contributions made by Shriners and other charitable minded persons throughout the country.
During the years 1936 to 1945 and through September, 1946, the total number of children treated at the hospital in Philadelphia was 2,031. Of this number ninety-six were from the State of Maryland. Of the children treated, the ninety-six from Maryland were .0473 of the total number of children treated. Although not stipulated, it appears that within the last ten years two tenths of one percent of all the money spent by this corporation was spent on Maryland children.
The Shriners' Hospital, a separate corporation, is an affiliate of the Imperial Council of the Ancient Arabic Order of the Nobles of the Mystic Shrine for North America, a benevolent and fraternal corporation existing under the laws of the State of Iowa, and hereinafter called the Shrine. The officers and directors of Shriners' Hospital and the Shrine are the same with the exception that the former has two officers, namely, chairman of the board of trustees and assistant secretary, which the latter does not have. There are two temples or units of the Shrine in Maryland, one located in Baltimore and the other located in Cumberland. It is the policy of the Shrine that each of the members constitutes himself a committee of one to report to his temple the discovery of any crippled child who may be classified as an orthopedic case. When such a report is made, the matter is referred to a special committee of the temple which investigates the matter and if certain requirements are met, including the inability of the parents or family to pay for medical attention, and an examination by a medical unit or committee of the respective Shrine temple, the child is admitted to the Shriners' Hospital in Philadelphia. If the parent of any child admitted to the Hospital is financially unable to visit the crippled child *132 in Philadelphia the temple, upon application of the parent, furnishes to such parent the necessary financial assistance and transportation to the Hospital in Philadelphia.
The defendant below, appellee here, the Union Trust Company of the District of Columbia, a corporation, executor of the estate of Edward L. Morrison, deceased, has not yet paid any inheritance tax on the said sum of $117,033.57 claiming that such tax is not payable. From a decree of the Circuit Court for Montgomery County signed by two judges, (Judge Prescott filing a dissenting opinion), upholding the contention of the appellee, the appellant appeals here, contending that the inheritance tax is due.
Article 81, § 110, of the 1943 Supplement of the Annotated Code of Maryland, providing for inheritance tax also contains the following provision: "And provided further that nothing in this section shall apply to property passing, in trust or otherwise, to or for the use of a corporation, trust or community chest, fund, or foundation, created or organized under the law of the United States or of any State or territory or possession of the United States, 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, a substantial partor all of the activities and work of which are carried on in theState of Maryland, and no part of the net earnings of which inures to the benefit of any private shareholder or individual." (Italics supplied here.)
The question for our decision therefore is whether a substantial part or all of the activities and work of the Shriners' Hospital are carried on in the State of Maryland. We will first consider the question whether any part of the activities and work of the Shriners' Hospital is carried on in Maryland. On this question the appellee cites a number of cases. The case of Layman Foundation v. City of Louisville,
The case of State v. Holcomb,
In the case of Jackson v. Phillips, and others, 14 Allen, Mass., 539, at page 556, in discussing the definition of a legal charity, the court said the following: "A charity, in the legal sense, may be more fully defined as a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government. It is immaterial whether the purpose is called charitable in the gift itself, if it is so described as to show that it is charitable in its nature."
In Lloyd Library Museum v. Chipman,
Apparently the exemption, under the Ohio statute exempting from taxation bequests to charitable institutions, is very similar to that of this State. The appellee cites to us cases decided by probate courts of Ohio which sustain appellee's contention and one of which is alleged to be a transfer by will to Shriners' Hospital, as in the instant case. However, as these decisions give no reasons for their conclusions they are not of much assistance to us here.
There is no doubt in this State that statutory exemptions from taxation are strictly construed against all types of taxpayers. Code, 1947 Supplement, Article 81, § 7. Before a taxpayer can obtain an exemption, it is upon him to show affirmatively that the alleged exemption has been clearly allowed by law. The exemption cannot be sustained unless it is shown to be within the spirit as well as the letter of the law. The right of taxation is never presumed to be surrendered unless it be the result of express terms or necessary inferences. Exemptions from taxation claimed under legislative acts should be rigidly construed and established beyond reasonable doubt. It is only where a deliberate purpose of the Legislature to grant an exemption is expressed in clear and unequivocable terms that a claim to an exemption can be maintained. Appeal Tax Court v. Gill,
It was said by Chief Judge McSherry in the case of Sindall v.Baltimore City,
As contended by the appellee, while exemption statutes must be strictly construed, no construction should be placed upon a statute which violates the purposes for which the statute was passed. Also no construction should be placed upon statutes which in effect violates the very purposes for which the exemption statute is passed. Carroll County Com'rs v. B.F. Shriver Co.,
From the stipulation it appears that Shriners' Hospital has no office, officer, doctor, nurse, employee, hospital, agent, plant, equipment, physical assets of any kind, place of business, or establishment within the State of Maryland. Nor does Shriners' Hospital contend that it spends one cent of its income in Maryland. It cannot be contended that the work done in reporting crippled children by the Shrine in this State, a separate corporation, is work done by the Shriners' Hospital.
The case of Grand Lodge, Knights of Pythias v. Baltimore,
Of course, the work done by the Shriners' Hospital is very worthwhile and of the highest benevolent character. The allowance however of the exemption asked is not *138 within the power of the judiciary. It is a legislative problem.
We know that the purposes of the collateral inheritance tax was to raise revenue for the State of Maryland. Whether the Shriners' Hospital carries on any of its activities and work in Maryland is at least doubtful. The exemption on which the appellee relies is a comparatively recent one and was not adopted by the Legislature until the Session of 1943 by Chapter 964. Had the Legislature intended to exempt dispositions to foreign corporations, if their work or activities benefited residents of Maryland, it would have been very easy for this to have been stated. As has been said many times by this Court and as hereinbefore set forth, "todoubt is to deny an exemption". The decree must therefore be reversed and the case remanded for the passage of a decree ordering that the transfer by the will of Edward L. Morrison of the sum of 117,033.57 to the Shriners' Hospital for Crippled Children is subject to the Maryland Inheritance Tax imposed by Article 81, § 110 of the Annotated Code of Maryland, 1943 Supplement.
Decree reversed, with costs, and case remanded for the passageof a decree as herein set forth. *139