*1 general a location of merely intended given lot as was pany pur- conveyed, and for that parcel upon the incumbrance it cannot be sufficiently accurate. It follows was pose it Company that the north line of the Oil of law as a matter said conveyed, as the parcel north line of the part of the lot was exception is sustained. charged. This in effect court opening evidence, defend plaintiffs’ At close overruled, was verdict. motion ant moved for directed The evidence exception Thereupon defendant introduced noted. at action, motion the close in defense of the but did not renew his By evidence, introducing of all the evidence in the case. so previously exception defendant waived his noted to the over Pashby, his D’Orazio v. ruling of motion. 70.
Judgment and cause reversed remanded. Boston, National Bank First Trustee under Will Bayley H. Charles M.
Erwin Harvey, Commissioner of Taxes.
May Term, 1940. Reargument, Term,
On Motion for October 1940. Moulton, J., Sherburne, Buttles, Present: C. Sturtevant
Jeffords, JJ.
Opinion filed October 1940. Opinion Reargument Motion filed November *6 Jones, Attorney General, Harvey,
Lawrence G. and Erwin M. Taxes, pro se, (Gelsie Commissioner of J. and Philip Monti B. Billings brief), on the Tax defendant Commissioner.
George George Fuller, original petitioner L. Hunt appellee. as Charles Bayley, J. H. late a resident of New-
Sherburne, bury, leaving this State, January 28, 1928, deceased testate on large probate by probate estate. His will was admitted to Bradford, testamentary court for the district of and letters thereon were therein petitioner, issued named executor. By probate April 29, petitioner, decree of the court on having duly in the will, qualified, as the trustee named received securities, the residue and remainder of said estate cash “wholly it has since held administered State of ’’ By Massachusetts. the terms will and the decree of the *7 court, probate remainder, this residue and and the accumulations thereon, upon are to be held and the trust, pay invested to widow pay certain other life annual and incomes, and beneficiaries to annually stated amounts to certain charities within and located without the State. After the death the last life beneficiary, of the terminated, is to be and principal trust the and accumulations are to be distributed to certain trusts for within charities the State, and to certain charitable institutions without the State. duly petitioner years
The filed income returns the for 1933, 1934, 1935, 1937, upon 1936 and was the and assessed taxes undistributed from the funds. about March income trust On or 13,1936, petitioner duly applied taxes, the to of the commissioner pursuant the provisions to of P. L. for a revision of the taxes against years assessed it on account of such income for the 1934; on or 8, 1938, applied and about March it for a revision of against the tax it year 1935; assessed for the on or May 2, about applied it a against for revision of the tax assessed it for year 1936; the or and on about June applied it for a re- against of the tax year vision assessed 1937. ap- These were and together, held heard and plications hearing after thereon, were, August on by denied the commissioner taxes; petitioner thereupon petitioned of and the Washington the a of deter- County Court, pursuant to P. L. revision the any paid taxes and a of commissioner, the refund mination of illegally The case assessed. be found to have been which should exceptions parties. of both comes here the peti- dismiss the filed motion to petitionee In this Court the a county did not court take presiding judge the tion because conditioned security way recognizance petitionee, by the will appeal its to effect it petitioner prosecute if fails petitionee damages accruing and pay intervening costs by motion by required P. L. This appeal, of such reason was overruled. peti
P. L. 909 citation attached directs signed by county says nothing about shall be clerk tion recognizance required whether was any recognizance. As to recogni determine, it is clear that the kind of a we need not but unnecessary. part L. 2114 up zance set the motion was P. is a chapter Laws, of the Public which has to do with new trials supreme, county municipal eours; setting aside with court, by county judgments municipal rendered of default or hearing unjustly of a deprived or a trustee is when the defendant an mistake; to enter by granting with leave fraud, accident pre petitioner has been probate where the appeal from court entering appeal fraud, an accident or taking or vented from setting judgments justice aside of a mistake; and with hearing fraud, mistake, accident and in certain cases peace jurisdiction determining having action court an examination P. L. justice. such From appealed from causes only provisions applicable clearly appears that its 2114, it chapter. such proceedings authorized exempt income is claims that the undistributed
The petitioner 875, II, L. (f), of P. under from taxation *8 follows:— reads as ‘gross do not include "II. words income’ The exempt which shall be from following items,
the taxation, provided: except otherwise chapter, under this as “ (f) fiduciary holds in An individual or who exclusively charitable, to be used for trust fund pur- religious, public or educational benevolent, ’’ poses. ‘‘ ’’ given view in gross
In of the of income as divi- definition gains, profits sion I of this section to include income and derived salaries, compensation personal service, from or or wages, vocations, business, commerce, net professions, trades, from and personal property, rentals from real and the net income from provisions rate, under the of P. L. is taxed one while which, at rate, may the at income from investments taxed another have inept (f) been rather put paragraph supra, to sec. than in referring income, although a section if a to investment fund was tangible producing personal estate invested income real and. property, aptly placed. to extent it is fairly If done, it can be statute so must be construed accomplish purpose intended, as for which it is the and the in Legislature of meaning tention and the are to and be ascertained given effect, not from the letter law is not in of the all cases guide, a safe but an examination every from of the whole and part subject act, the matter, consequences, effects and spirit law, although and the reason and intention and meaning thus ascertained with conflict the literal sense Larose, words. 105 Vt. Brammall v.
cases cited. An prior (a) examination of the paragraphs (e) ‘‘ they speak inclusive shows that of certain classes income re “acquired,” ceived” or paragraph (f) while mentions an indi fiduciary or vidual who “holds” in Taking chapter trust. 39 of the Public relative taxes, Laws to income of which sec. 875 is a part, regard as a whole, having also P. L. IV exemption relative from taxation of real and personal granted, sequestered estate or public, pious used for uses, charitable long which had been prior force to the enact law, clear, ment income it is ruled, the court below Legislature exempt intended income from a fund exclusively” held in trust “to be used purposes enumerated, although proper words to set specifically forth exemption income not and this used, applies to all kinds of fund, income received from such a whether tangible from or in tangible property.
A providing exemption statute from taxation is to strictly be claim for construed, exemption no can be sus express tained unless within letter or necessary scope
291
110
Rutland,
Vt.
Spaulding
City
exemption clause.
of
105
Companion,
Vt.
City Winooski v.
556;
Atl. 2d.
192, 3
of
100
Assn.,
House
v. Sheldon Poor
795;
Atl.
Town
Sheldon
Estate,
The court fund, income of this trust the undistributed upon not taxable paid. excep- refund of the taxes The gave judgment for a require applicable an examination of the saved tions Public Laws. “fiduciary” By guardian, means 872, II, sec. conservator, administrator, receiver, any per or executor, trustee, any fiduciary corporate, acting ca son, whether individual By 873, an or trust. sec. income person, estate pacity for State, and the imposed upon every resident rates and follows: Sec. reads as exemptions set out. chapter shall imposed “I. this be The taxes fiduciaries, taxes shall be imposed levied, which annually respect paid with to: collected ‘‘ (a) of the net income and income part That agreements bonds, notes, or other in- stocks, from bearing securities of or trusts
terest estates during to beneficiaries has not been distributed income ciaries, part year. joint In the case of more fidu- two or state, whom are nonresidents of the income part the net shall be treated as if such each share; (By fiduciary equal received an had No. III, 38 of the Acts of Part sec. last out.) sentence was amended “(b) The net income and from stocks, income bonds, agreements or notes, bearing other interest during year securities received the income de- who, at ceased individuals death, the time of were during year residents and who have died without the tax having a return; made *10 “(c) stocks, from The net income and income bearing
bonds, notes, agreements or other interest incompetent indi- securities of resident insolvent or viduals, is held portion whether or not thereof beneficiaries, future use of where fiduciary complete charge has of such net income. upon fiduciary by “II. this imposed The tax a chapter charge against shall be a the estate or ’’ trust. By subject sec. 883 “each fiduciary provi- under the to taxation chapter, provided 874, sions of this shall as section make a return,” and shall subject provisions be to all the thereof which apply individuals; may provided by that a return be made joint one By. provided of two or more 918 it fiduciaries. sec. is fiduciary final by no account of a shall allowed pro- be until the finds judge imposed by bate court that all chap- taxes upon fiduciary 39 such paid ter have been secured. inquiry
At the our outset of relative to the claim recognize we here raised four fundamental doctrines. First. That taxing power persons of the extends all and property State jurisdiction protected within its not therefrom Federal su premacy. State v. National 167, Clement 84 Vt. Bank, 179, 78 22; Ann. Cas. 1912D 944, City Burlington, Clark v. 101 397, 143 391, Vt. Atl. 677. Second. That a statute to be con not strued as intended to have extra-territorial effect, only but an effect, clearly it intra-territorial unless indicates a in different Peet, 80 tent. v. Vt. 68 Atl. 661, 14 (N. L. R. S.) State A. 998; Rep. 130 Am. St. State 677, v. Bank, Clement National supra, page 200. That the meaning at Third. real and purpose of sought lawgiver is to be after in a taxing statute, if and fair it, given and reasonable construction discloses it is to effect, be a otherwise such statute is not to be implication extended be yond import language clear used, of the and doubts are to be against taxing power resolved and in favor of the taxpayer. Helvering v. Enskilda Bank, 84, Stockholms 293 S. 55 Sup. U. Ct. 211; 50, Estate, 79 In 96 L. Ed. re Fulham’s Vt. 119 Atl. 433; Campbell, Vt. Ry., Inc. v. Central 192 Atl. 197, 111 A. L. R. 175. Fourth. That the intention meaning Legislature of the to be ascertained from an examination every part act, subject matter, the whole the effects Brammall law. spirit of the reason and and the consequences, ose, supra. Lar scope of sec. comprehensive called to Attention is every fiduciary rela that about It would seem sub. div. I. charge tax made By II the sub. div. has been covered. tion is im duty pay it although the trust, so, against the estate or estate or upon fiduciary, is in fact a upon posed imposes a tax see. claims, that true, petitioner It is as trust. “fiduci limit the word this does not only, residents but upon The effect of fiduciaries. 874 to “resident” as used sec. aries” residents imposed taxes provide that the same 874 is to see. term is de as that imposed upon fiduciaries in sec. 873 shall be points that sec. Then, too, it should be noted fined sec. in sec. provided fiduciary subject taxation out that each subject to all the return, shall be 874 shall make *11 as pay shall the same taxes apply individuals, is, to that tax. fiduciaries mention that the individuals, and makes no under sec. 873. as in the case of individuals is limited to residents an in clearly disclose Comprehensive as the statute is it does not is effect, hence it to be construed tention to have extra-territorial only being confined to having an effect and as intra-territorial jurisdic has fiduciaries, estates and trusts over which State limit the intra-terri However, this construction does not tion. fiduciary The definition of is broad torial effect of the statute. enough fiduciaries, and, resident and non-resident to include both statutory in to the administration provisions view of our relative testamentary trusts, very significant, sec. 918 is of estates and and with the other sections mentioned tends to show that the Legislature fiduciary even a with intended to tax non-resident being respect an estate or trust administered our probate courts, power if of the to tax. within the State except in paragraph (a), the last sentence of
Sec. (No. 1937 38 prior III, to the amendment of the Acts of Pt. says 3), nothing only about non-resident fiduciaries. As Sec. one determine, unnecessary fiduciary exactly is here involved it is Legislature by can, intended however, what the this sentence. We suggest might apply. a situation to which it It is well known that may fiduciary by be ap a relation created other than a will'or the may person property a A turn pointment of court. over to trus accomplishment purpose. lawful an tees Under such 294 trustees, these
arrangement, if were several and some of there might taxa subject be State, residing resided this those here might tion tax here, residing while those not be outside the here ing Bank, power of State. National See State Clement supra, 199; City Avery, Albans v. page Vt. at St. hand, in the testa On the other case of mentary court, appointed trustees or trustees Vermont the non-resident trustees sub determination of whether would be ject depend upon power to tax to the tax would of this State provision may In in the been them. such a case the statute have liability fidu purpose fixing intended for on the various acting jointly, petitionee suggests. ciaries who were as the There provisions exempts nothing im non-residents plication except presumptively otherwise, that it confined to jurisdiction. Legisla the State has If fiduciaries over whom only fiduciaries, regardless intended to resident ture power whether it has to tax certain fiduciaries, non-resident easily in apt language. could have said so contends, may be, petitioner
It as the prior law, enactment income tax has attempted Vermont never statutory to tax non-resident trustees. The definition “fidu ’’ ciary, however, guardians includes and executors and adminis trators, long provided has this State taxation personal estate of resident wards and resident G. L. decedents. 611], P. L. sub. IV V. petitioner’s clivs. Under [Now interpretation necessary of the statute all that it would be to do to escape get taxation here would be appointed non-resident trustee, guardian, executor or administrator, which cer would tainly a departure practice be from our guard former relative to ians and administrators, executors and and under the *12 874, I, of sec. paragraph sub. div. (b) the income of a resident during might received his life-time escape decedent thus taxation. A fair and reasonable construction of the of the stat have called Legisla utes which we attention discloses that to the practice the of subjecting ture intended to continue personal the wards and resident decedents to taxation, estates of in and also power all fiduciaries within its tended to tax to tax. petitioner contends that its The title as exists trustee probate independent will, of the of the and cites New York cases to, executors testamentary effect that and may trustees ex-
295 may- the rule However probate. in without the trusts a will eeute in a will law, this State at common jurisdiction, or be in that al- and proved unless it is estate, personal real nor passes neither county supreme in or by appeal or probate court, in lowed in the trustee consequently no title can vest court, P. L. and probated. until the will is jurisdic and exclusive plenary has probate
The court In re persons. deceased estates of in the settlement tion 13; 192 Atl. Walher’s Guardian Curtis, 44, 49, 109 Vt. Estate of Sparrow Watson, 87 334; 137 v. 362, 364, 100 Atl. Hendee, Vt. v. Hinde, 86 Vt. 468; Brothers v. 89 Atl. Hurlburt 366, 370,
Vt.
regard
in
general equity powers
given
it is
Many foregoing are similar to those right exec appoint A testator has a his relative to executors. probate shall utor, peremptory and the statute is that the court testamentary named, accepts if he person issue letters to the theory upon which proper trust and files the bond. The whole controlling right implies person rests, to make a will property may death, his life determine its dominion after Rounds, 50 direct who shall make distribution of it. Sabine v. 74; In 60 14 697. Estate, 224, 227, Vt. re Bellows’ Vt. Atl. subject possible right Undoubtedly, appeal, pro appointment an because of failure bate court can vacate such 2781, bond, pursuant grounds to file a to P. L. and because of Although has in P. L. 2788. a testator specified removal trustee, trustee, it is clear that right appoint such the same executor, strictly probate accountable to the court like an management disposition of the trust estate. by acquirement property by The descent will or by right, privilege is not a natural but a accorded the State. Estate, 259, 264, In 62 6 re Hickok’s 78 Vt. Atl. Ann. Cas. 578; Hagar, In 98 Vt. 126 re Estate Atl. provision there is no cases cited. And of our Consti 507, and right tution, States, that of the United secures the or dispose property of his after In re one to control death. supra. Hagar, Estate of of, personal the distribution and succession to,
Since governed property, situated, wherever the laws of the country or state where owner had his time domicile at the final death, of his and the settlement and distribution of the according estate are to be to the laws of that In state, re Law Will, 424, 430, 431, rence’s 93 Vt. 108 387; Atl. In re Dennis Estate, 98 129 166; it follows from the fore going Legislature that the the power had to provide, as it has done, intangible personal property of a testator, resident whose will has probate been allowed court, shall be within jurisdiction of that court all purposes administration, jurisdiction no matter in what a trustee named in will such may reside, or property where the kept. Lozier, Lozier v. Ohio St. 167; N. E. Chase, Chase v. (Mass.) Allen *14 in Harrison approve reasoning v. Commis
We the Taxation, 422, 172 N. E. Corporations 272 Mass. sioner and of the 677, power 71 L. R. the effect that a state has A. testamentary purposes for of taxation over establish a situs intangible in by its deceased residents funds, created trust own being by appointees administered of its personal property thus for laws, practical its own and to continue court, under and trusts, all over the jurisdiction within its control purposes taxation; hold that under especially purposes control for of and Legislature here for the has established such situs our statutes whether trustee taxing funds, such trust and the purpose by is makes no differ appointed in the will the court named respect. This no extra-terri ence in this conclusion attributes torial P. L. 874. effect to L. R. 393, shown in an annotation in 67 A. there
As is in vari diversity considerable the statutes and decisions of the jurisdictions ous personal relative to the situs taxation of therein, property, by trustees, or interests held executors or Generally administrator, administrators. an executor, or trustee purposes regarded owner, property taxation, as the property by office, which he holds of his and virtue personal in in which he is taxable the state domiciled. There are cer upon the depending property, tain location of whether trends fiduciary, in domicile the state of decedent’s or that of fiduciary and were whether deceased domiciled jurisdictions states. Some treat same or different executors differently testamentary trustees, from administrators and some testamentary ap differentiate between trustees and trustees pointed by jurisdictions adopt theory a court. A few anof official, distinguished residence, from personal, seem do, at the same ultimate conclusion that we to arrive but we do necessary adopt theory in support that not consider of our holding. Property” also “The Taxation of See Trust Pro Kentucky 23 Brown, Journal, C. fessor Robert Law very some jurisdictions It is evident that troubled taxation, regardless possibility double but of the de sirability avoiding taxation, apparent double it is from the Curry v. 307 holdings McCanless, 357, 59 Sup. U. S. Ct. 1339; Graves, L. Ed. New York ex rel. Cohn U. S. Sup. 81 L. Ed. 108 A. L. R. 721 Ct. and other United cases, question Supreme
States Court that raises no objection ground. constitutional on foregoing unnecessary In view of the conclusions it is de- questions presented. cide the other Judgment reversed, petition dismissed with costs. por
Upon Reargument Motion duly leave, obtained, J. On counsel peti- Sherburne, reargument, tioner have pending filed a motion for which the entry judgment has been withheld.
Objection is holding raised to the word “exclu- *15 sively” applies fund, to the entire use of the merely trust and not part to that of the income from the fund which is to be used purposes, for charitable and that as the is in fund to be used part non-exempt purposes, all the undistributed income there- subject petitioner to taxation. The from believes that the disposing in exceptions, has erred of its Court and has over- misapprehended respect certain looked matters with thereto alleges: in presented brief, its and disregarded 1. That we have overlooked and the fact that notwithstanding the rule exemption of strict construction of they given statutes are not be a distorted or unreasonable in construction, as said Brattleboro Retreat v. Town Brattle boro, 106 Vt. Atl. 209.
2. That we have a arrived at most result, unreasonable and quite likely one not intended the Legislature, against the cardinal rule of construction that a statute must be so construed accomplish purpose as to the for which it was intended, if it fairly done, consequence be and that the can and natural and proposed effect of a reasonable construction if it leads to an consequence, always absurd must possible, 'be avoided if under in Larose, the rule stated Brammall v. 165 Atl. 96 A. L. R. 595.
3. That in our construction of the statute we have overlooked disregarded and following: the part
a. That no of the undistributed income for the taxable year goes to the widow, and that is only part a of the future income that undistributed earnings from reinvestment the years. that.goes to her in future year taxable income That even if the undistributed
b. there exclusively purposes, for charitable is not used bound be be otherwise. it will used possibility is no reasonable provision in of the exemption, view a denial of the c. That 64) requires a construction (Ch. II, sec. of our Constitution encouragement, of chari- rather than derogation, in the statute most justified only clear ties, that such result and statute, not from a doubtful expressions of explicit balancing deduced from or a conclusion construction probabilities.. argued con originally petitioner this case was
When exemption like construed our statute should be tended that that, provides which law, Federal income tax provision * * * part as a deduction be allowed “There shall * * * will to the terms of the pursuant gross income * * * * * # charitable, exclusively religious, used is to be great went at petitioner’s brief purposes,” or educational exemption. Al length citing construing cases the Federal ques though petitioner excepting party upon this was exemption tion, although petitionee claimed our strictly construed, petitioner all in its must that the said brief be incidentally of Brat in answer thereto was to mention the case note Brattleboro, supra, Retreat Town at tleboro argument page disputed con bottom of a under its relative to a will, by any terms as to possi struction of the whether *16 bility might undistributed income be needed some the at future annuity bearing make widow, time out the minimum as to upon occurring. probability the reasonable such an event of
The Federal is so different from we statute ours that two, no between the hence there was no could see connection any if probability to ascertain reasonable the undis occasion might at some future income time need to be so used. tributed arriving give in conclusion dis However, at our we did not contrary statute, torted or unreasonable construction of our to case,' supra, the Brattleboro Retreat nor a strained construction Legislature, contrary adverse to the real intention the to of Spaulding City Rutland, v. 110 Vt. 3 Atl. 2d. of opinion. in have we at an unreasonable cited the Nor arrived result, in Brammall v. contrary to the rule stated absurd
Larose, supra. construction, None these rules of nor points briefs, in arguments made were overlooked. unnecessary it is
In view of what we have said
ground
upon paragraphs
further to comment
a and b of the 3rd
entirely
presents
question
c
an
new
Paragraph
motion.
which is not
under
rules re
entitled to be now considered
specting
Ryan
reargument
for
in
Orient
motions
mentioned
Co.,
Ins.
291, 304, 306,
Vt.
It is true ultimately that this entire tax will fall charities, on the but section of our Constitution re provides ferred also may enjoy charities privileges their regulations immunities under such Assembly the General shall direct. If this fund had been exclusively limited charity it exempt would be from long taxation. So as a part of the income, this case half, more than goes for pur non-charitable proper poses, was for Assembly reasonable the General provide that none of the income should exempt. be It body, legislate. not Courts, reargument
Motion denied. entry Let go down. full