177 A.D. 786 | N.Y. App. Div. | 1917
Laura S. Rockefeller died on the 12th day of March, 1915, leaving a will which was duly admitted to probate. The 16th clause of the will provided: ‘ ‘ All the rest, residue and remainder of my property of every description, real, personal and mixed, and wheresoever situated, I give, devise and bequeath to my said executors who shall qualify and their successors and successor, in trust, for charitable uses as follows:” (naming one
On the hearing of the appeal before the surrogate the fact of the payment of these sums by the executors to the various beneficiaries was stipulated. Objection to the reception of the fact was made by the State Comptroller. The Comptroller offered certain evidence to which objection was made by the attorneys for the executors and the surrogate expressed doubt as to his power to consider the evidence, upon the ground that it was no part of the record before the appraiser.
In our opinion he did not have power to consider the evidence. The statute requires the notice of appeal “shall state the grounds upon which the appeal is taken” (Tax Law, [Consol. Laws, chap. 60; Laws of 1909, chap. 62], § 232, derived from Laws of 1892, chap. 399, § 13, as amd. by Laws of 1895, chap. 556, and revised by former Tax Law [Gen. Laws, chap. 24; Laws of 1896, chap. 908], § 232, as amd. by Laws of 1908, chap. 310, and prior statutes), and none but those specified can be considered. (Matter of Davis, 149 N. Y. 539,
The questions that have been properly raised and are before us for determination are whether the Rockefeller Foundation and the Bureau of Social Hygiene are corporations of such character that they are exempted from the tax upon transfer of property to them by section 221 of the Tax Law (as amd. by Laws of 1913, chap. 795);
The Rockefeller Foundation was incorporated by a special act of the Legislature (Laws of 1913, chap. 488) “for the purpose of receiving and maintaining a fund or funds and applying the income and principal thereof to promote the well-being of mankind throughout the world. It shall be within the purposes of said corporation to use as means to that end research, publication, the establishment and maintenance of charitable, benevolent, religious, missionary, and public educational activities, agencies and institutions, and the aid of any such activities agencies and institutions already established, and any other means and agencies which from time to time shall seem expedient to its members or trustees.” Section 3 of said act provides: “No officer, member or employee of this corporation shall receive or he lawfully entitled to receive any pecuniary profit from the operations thereof except reasonable compensation for services in effecting one or more of its purposes, or as a proper beneficiary of its strictly charitable purposes.” Upon the hearing before the appraiser the Rockefeller Foundation claimed that the legacy to it was exempt from taxation, and put in evidence its charter, and an affidavit of its secretary, “ That ever since the corporation was organized, and up to the present time, said corporation has been engaged exclusively in carrying out its strictly charitable and benevolent purposes. * * * That no officer, member or manager of said corporation receives or has received any pecuniary profit from the operations thereof. That the only persons * * * who now receive or who have received any compensation or pecuniary profit whatsoever from the operations thereof are hired assistants and clerks who receive reasonable compensation for the services performed by them for said corporation.”
It is well settled that the character of a corporation must be determined by its charter. (Matter of White, 118 App. Div. 869; Matter of Mergentime, 129 id. 367, 374; affd., 195 N. Y. 572; Matter of Loeb, 167 App. Div. 588, 589; Matter of De Peyster, 210 N. Y. 216, 219.)
The character of this corporation is shown from its purposes as stated in its charter (§ 1): “For the-purpose of receiving
If, as claimed by the Comptroller, some of the funds of the corporation have been used by it for uses foreign to its corporate powers, or if it has exceeded its corporate powers in assuming to act as trustee for other charities, this would not affect its status as a charitable and benevolent corporation unless these uses were for the purpose of the personal enrichment of its officers or members. If these acts were ultra vires, on a proper application by the Attorney-General, the power of the Supreme Court over such corporation could be invoked, and the trustees called upon to account. But such matters are not within the jurisdiction of the Surrogate’s Court, nor do they properly arise in a transfer tax proceeding.
The Membership Corporations Law (§ 2)
It has been the settled policy of the State of New York to encourage the benevolently inclined to dedicate a portion of their property to charitable and benevolent purposes for the relief of the sick or distressed, the amelioration of the condition of the unfortunate or the advancement of the physical, mental or spiritual wellbeing of its inhabitants, and to that end to free the property thus dedicated, so long as it shall be used for those purposes, from taxation. The Transfer Tax Law, in harmony with this general purpose, has provided that bequests, devises
The decision of the learned surrogate was right and the order should be affirmed, with costs.
Clarice, P. J., Scott, Smith and Davis, JJ., concurred.
Order affirmed, with costs.
Since amd. by Laws of 1916, chap. 548.—[Rep.
Since amd. by Laws of 1915, chap. 664, and Laws of 1916, chap. 323.—[Rep.
Since amd. by Laws of 1914, chap. 167.—[Rep.