
    TAX COMMISSION v LIVINGOOD
    Ohio Appeals, 1st Dist, Hamilton Co.
    Decided Feb 2, 1931
    . W.. H. -Middleton, Jr., Waverly, for Tax Commission, plaintiff in error. .
    Taft, Stettinius & Hollister, Cincinnati, for Livingood, Exr, defendant in error.
   HAMILTON, J.

The Tax Commission in this error prodding presents two questions: First: Was Probate Court correct in exempting the ’-"'luest of the residuary estate to the Thomas J. Emery Memorial, as an instituyan for purposes only of public charity un§5334 GC? Second: It is contended that 5334-l GC, containing what’ is known as >he “reciprocal law” is violative of §7 of Article XII and §2 of Article I of the Constitution of Ohio.

We will first consider the question • of Vhe exemption of the bequest of the residuary estate under §5334 GC. The pertinent part of that section is as follows:

T¿e succession of any property passing to or for the use of * * * an institution for purposes only of public charity, carried on in whole or in substantial part within this state, shall not be subject to the provisions of the preceeding sections of this subdivision * * * of this chapter. * * *

The Thomas J. Emery Memorial is admittedly an institution. The question is: Is it an institution “for purposes only of public charity" within the language of the statute? This requires a consideration of Item XII of the will of Mary M. Emery, which is as follows:

“All the rest, residue apd remainder of my property and estate, real, personal and mixed, of whatsoever kind and wheresoever situated, of which I shall die, seized or possessed or which I shall be entitled to dispose of by appointment or otherwise at the time of my death, and including any of tlje foregoing legacies and devises which may have lapsed, I do give, devise and bequeath to Isabella F. Hopkins, Charles J. Livingood, Frank H. Nelson, Morrison R. Waite and Robert A. Taft, the survivors or survivor of them, and their successors, in Trust, to create and endow, or if already created, then to endow, the Thomas J. Emery Memorial, such Memorial to be my residuary legatee and devisee.

The trust fund shall be kept invested by my said Trustees, and their successors in said trust, and the income therefrom shall be used for the physical, social, civic and educational betterment of residents of the United States, preferably those in the State of Ohio, on humanitarian lines, but'I authorize said Trustees, and their successors in said trust from the principal of the said trust fund to purchase real estate and to erect such building or buildings as in their opinion may from time to time be needed for the purposes of this trust. The said trustees may also make expenditures for disseminating such information, evidence and argument, as they may think necessary or desirable in order to secure efficient Government, State or Municipal action for the object of the trust.

The general purpose of the Memorial shall be to secure a Citizenry which will be more sane, sound and effective because of more satisfactory initial conditions of environment and education.

I direct that there shall, at all times, be five Trustees of this fund, and that if any individual above named as Trustee shall at any time fail to qualify, decline, die, resign, be removed or otherwise be incapable of acting as Trustee hereunder, the vacancy or vacancies so created shq.ll be filled by written appointment by the remaining Trustees.

I desire that such Memorial shall be kept a separate and distinct Memorial, and not be merged with any other, or placed under the control or direction, in any manner, of any other Board, public or private, or of any institution which now exists or may hereafter be created and shall not be under any joint control with any other board or institution.

Provided, however, that my said Trustees may in their discretion cause the said Memorial to be incorporated, and in such event it is my desire that there shall at all times be at least five Directors of the corporation so formed.”

The Thomas J. Emery Memorial was incorporated as a corporation not for profit. It was organized some two and a half years prior to Mrs. Emery’s death. The purpose clause in the articles of incorporation reads as follows:

“Third The purpose for which the corporation is organized is as follows: To bring about the physical, social, civic and educational betterment on humanitarian lines of residents of the United States, and preferably of those residing in the State of Ohio: To take such steps as shall be calculated to produce a citizenry which will be more sane, sound, and effective because of more satisfactory conditions of environment and education; to improve the physical, mental and moral condition of humanity, and generally to advance charitable and benevolent objects; to extend*financial or other aid or assistance to such institutions used exclusively for charitable purposes as are now or may hereafter be engaged in furthering the purposes above named or either of them without gam or profit to their members, stockholders, trustees or directors, and to establish, promote, maintain and endow in whole or in part any such institution; and incidentally to the said main purpose the corporation «hall have power to erect, manage and operate a building or buildings; to acquire by deed, devise, bequest, gift, purchase, or otherwise Teal and personal property, and to hold, invest, reinvest, manage and dispose of the same; and to do all other things necessary or incidental to the said purposes of any of them.”

While the purpose clause does not determine the character of the purpose as .declared in the will, it does have a bearing' on the intention of the testatrix, since the same was incorporated more than two years prior to her death. She undoubtedly knew of the purpose clause and approved of the same as being in conformity with her intention under the will.

It is argued that the rule of construction in an application for exemption from taxation requires a strict construction of the exemption statute.

Counsel for the estate urges that there is no reason for strictness, that the splendid objects to be. attained under the charity would call for liberality in determining its character. We find no difficulty in arriving at the conclusion hereinafter apnohn'Ced either from a liberal or strict interpretation.

The provisions of Item XII of the will seem to us to be so clearly expressed that no other conclusion can be arrived at, but that it was so intended, and is a broadly expressed purely public charity.

It is argued by counsel for the Tax Commission that the discretion given to the Trustees, under which they might render assistance to an individual or for a specific thing, destroys its public character. The' answer to this is, that no public charity ' could possibly be dispensed generally without resulting in benefit to individuals or single institutions. The charity to be bestowed through the Memorial is as comprehensive as humanitarian considerations; it is as wide as the states; and, that a substantial part of the charity to be bestowed is within the State of Ohio is indicated.

When she says in the provision of her , will: “and the income therefrom shall be used for the physical, social, civic and educational betterment of residents of the United States, preferably those in the States, preferably those in the State of Ohio, on humanitarian lines, * * *” her preference is expressed for residénts of the State of Ohio, and this is binding upon the Trustees. Thar, they are so administering the trust, recognizing this injunction to prefer the resi dents of the State of Ohio, is indicated by the activities of the Trustees, set forth in the agreed stipulation of facts.

Counsel for the Tax Commission relias largely on the case of Tax Commission v Paxon, et, 118 Oh St, 36. We are of the opinion that the Paxon case is in no wise determinative of the question here. The trust provision in Che will under consideration in the Paxon case declared for certain 2 casons: “I desire to create a fund from which m'embers of his profession (Dr Wilson’s) may be compensated for alleviating the suffering of the unfortunate, needy; afflicted and thus rendering a service which he in his lifetime took great pleasure in rendering personally.” Further on in the will, the testatrix authorized and empowered the trustees, if they should find “in their judgment, it would best subserve the objects and'purpose of this bequest, they may expend any part of, or all of said fund * * * in the erection of said hospital.” This was the extent of the provision of this charity. It was given strictly for private charity, to create a fund for the benefit of doctors, and was not of, a public character.

There is a wide difference between creating a charity for compensating the medical profession and' one created to be “used fo'r tfe'e physical, shbiafl, civic and fiducational betterment of residents of the United States, preferably those in the State of Ohio, on humanitarian lines, * * *” and “to secure a citizenry which will be morn sane, sound and effective because of more satisfactory initial condition of environment and education.” ■

The language of the will is so clear it seems unnecessary to discuss the proposition further.

Our conclusion is, that the bequest of the residuary estate to the Thomas J. Emery Memorial is a bequest to an institution “for purposes only t>f public charity,” and was properly exempted under §5334 GC.

This conclusion makes it unnecessary to consider the second proposition as to the constitutionality of §5334-1, GC.

The judgment of the Court of Common Pleas of Hamilton County, affirming the finding of the Probate Court as to the exemption is affirmed.

CUSHING, PJ, and ROSS, J, concur.  