                           November     20,   1951


Hon. Robert S. Calvert                  Opinion      No. V-1351
Comptroller   of Public Accounts
Austin, Texas                           Re:   Exemption from inherit-
                                              ance taxes of bequest to
                                              Kerr County War Memo-
Dear   Sir:                                   rial Association.

            You have requested the opinion of this office as to
whether a bequest to Kerr County War Memorial      Association  is
exempt from inheritance  taxes by virtue of Article 7122, V.C.S.

            From the file submitted with your request we have
gathered the following facts. In his last will and testament Wal-
ter Jarmon made the following provision:

               “FOURTH:    All the rest and residue of my prop-
       erty and estate, whether the same be real, personal
       or mixed, monies, notes, bonds, stocks, proceeds from
       insurance policies,   chases in action, and all other prop-
       erty belonging to me of whatever type or description
       it may be, I hereby give, bequeath and devise to W. G.
       Garrett, Jr. and L. D. Garrett, as Trustees,    for the
       use and benefit of Kerr County War Memorial       Associa-
       tion, or its successors,   said Association being formed
       for the purpose of perpetuating the memory of those
       persons who lost their lives in the service and defense
       of the United States, and which said Trustees    shall have
       the following rights, powers and duties:

              ,“l. To hold, manage, control, sell, execute con-
       veyances of, dispose of, incumber,          invest, reinvest
       proceeds of, rent or lease, all or any part of my said
       property and estate, and any amounts so received, as a
       result of the execution of said above powers, shall be
       paid over to the said Kerr County War Memorial             Asso-
       ciation, or its successors,       by my said Trustees,    as in
       their discretion    they shall deem proper, such sums so
       paid over to be used by the said Association         or its suc-
       cessors    in the erection,   construction,   maintenance    or
       upkeep of a Memorial        Building to be erected in memo-
       ry of those persons who gave their lives in the service
       of and defense of this Country.
                                                                         .

Hon. Robert    S. Calvert,      Page    2 (V-1351)




             “2. I do hereby empower my said Trustees,      if
      in their discretion they deem proper, to convey and
      execute proper instruments   of conveyance   to the said
      Kerr County War Memorial     Association   or its succes-
      sors, of my said property and estate, or any part of
      the same.

             “3.  The said trust herein created shall continue
      to exist for a period of ten years, unless sooner ter-
      minated by the said Trustees    by the execution of any
      of the powers herein conferred.     In the event such trust
      is not so terminated,  then at the expiration of such ten
      year period, all of my property and estate then remain-
      ing shall pass to and vest in fee simple in the said
      Kerr County War Memorial      Association,   or its succes-
      sors:

              Articles II, III, and VI of the Constitution and By-laws
of the Kerr   County War Memorial      Association   read as follows:

                             “Article     II - Object

      “Section 1~
             The object      of this association        shall be

              (a)   to erect, equip, maintain and operate a
                    memorial   community building to honor all
                    those who served in World Wars.
              (b)   to provide opportunities   in such building
                    in Kerr County for wholesome      recreation,
                    education, civic and other leisure-time
                    activities on a democratic    community-wide
                    basis.

                     “Article    III - Board     of Directors

      “Section 1~
             The management      and administration    of the affairs
      of this association   shall be vested in a board of direc-
      tors of 50 members      who shall serve until January 1,
      1946. One month previous to January 1, 1946 the Presi-
      dent of the association    shall call a meeting of the citi-
      zens of Kerr County for the purpose of electing a New
      Board to carry on the affairs of the association.       Said
      board to consist of as many directors       and to serve such
      time as shall at that time be determined.

                          “Article      VI - Meetings                        -.
     Hon. Robert   S. Calvert,   Page   3 (V-1351)




            “Section 1.
                   There shall be an annual~meeting of the citizens
            of Kerr County the first Monday in November.     Such
            meeting shall be publicized through the local papers.

            “Section 2.
                   (a) There shall be an organization    meeting of
            the board of directors   held as soon as possible after
            the annual meeting of members      for the purpose of
            electing officers, appointing committees    and transact-            ,
            ing such other business as shall come before it.
                          .I
                    . . .

                  Article  7122, V.C.S.,  provides an exemption from in-
     heritance taxes for “property    passing to or for the use of the United
     States or any r,eligious, educational   or charitable organization when
     such bequest, devise or gift is to be used within this State.”

                 In Attorney General’s    Opinion V-958 (1949), this office
     pointed out that the exemption allowed for charitable bequests is
     not limited by the requirement    that property pass directly to a
     charitable corporation  or institution, but is allowed if the property
-,   passes to or for the use of a charitable organization.

                  The devise and bequest made by the above quoted por-
     tions of Mr. Jarmon’s   will therefore passed at his death tax free
     if the Kerr County War Memorial      Association constitutes a “char-
     itable organization”  within the meaning of Article 7122.

                  In general, the distinctive features of a charitable or-
     ganization are that it has no capital stock and no provision for
     making dividends or profits, but derives its funds mainly from
     public and private charity and holds them in trust for tfe objects
     expressed  in the instrument creating the organization;      and the



            ‘In construing the exemption from ad valorem          taxation al-
     lowed institutions of purely public charity, our Supreme Court
     made the following statement:
            “In our opinion, the Legislature      might reasonably    con-
        clude that an institution was one of ‘purely public charity’
        where:      First, it made no gain or profit; second, it accom-
        plished ends wholly benevolent;       and third, it benefited per-
        sons, indefinite in numbers and in personalities,        by prevent-
        ing them, through absolute gratuity, from becoming burdens
        to society and to the state.
            .I
               . . . Charity need not be universal to be public.       It is
        public when it affects all the people of a community or state,
        by assuming,       to a material extent, that which otherwise
        might become the obligation or duty of the community or
        the state.”      City of Houston v. Scottish Rite Benev. Assoc.,
        111 Tex. 191, 230 S.W. 978, 981 (1921).
Hon. Robert        S. Calvert,   Page 4 (V-1351)




test is whether the organization  exists to carry out a purpose
recognized   in law as charitable or is maintained for gain, profit,
or private advantage.    People ex rel. Hellyer V. Morton, 373 Ill.
72, 25 N.E.2d 504, 506 (1940); Congregational    Sunday School &
Publishing Society vn Board of Review, 290 Ill. 108, 125 N.E~ 7,
9 (1919).

              In Boyd v. Frost National Bank, 145 Tex. 206, 196
S.W.2d 497 (1946)    the court discusses charitable purposes.  We
quote the following excerpt from page 501 of the opinion:

                     The authorities   leave no doubt that the
              6.

                    ”   ”   I



      words ‘charitable    purposes’ have a fixed meaning in
      law and that a judicial determination      may be made
      with satisfactory   certainty in every case where the
      question of whether a given purpose is or is not char-
      itable arises.    Chapter 4 of the statutes of 43 Eliza-
      beth, enacted in 1601, known as the Statute of Charita-
      ble Uses, although not adopted in Texas,       “is regarded
      by many authorities     as the principal test and evidence
      of what the law will consider charitable      uses,’ and the
      enumeration    of those uses as set out in the preamble
      to the act was accepted as authoritative      in Powers v.
      First National Bank of Corsicana,       138 Tex, 604, 161
      S.W.2d 273.

             “Illuminative   in this regard is the following quo-
      tation from Zollman’s     American     Law of Charities,   8.187,
      pa 123: ‘It must never be forgotten that the words “char-
      ity” and “charitable”    are technical terms.     Since the
      statute of Elizabeth,   they have had a technical meaning
      both in England and America,       including even those states
      in which the statute has been repealed or has not been
      re-enacted    or adopted,   “They are lifted from their
      popular and lexicographical      meaning.   In them survives
      a history from which they have derived a special sig-
      nificance.   They condense volumes of controversy        and
      decision into a phrase which must be now read by the
      growing light under which it has been developed.”        ’

              “And the following excellent definition of ‘charity’
      and ‘a charitable   use’ is evolved in 2 Perry, Trusts
      and Trustees,   7th ed., § 697, p” 1182:  ‘It will be seen
      that the words “charity*’ and “a charitable use” have a
      somewhat technical meaning in the law. * * * The
      word “charity” in its widest sense, denotes all the good
      affections  men ought to bear toward each other; in a
      more restricted    sense, it means relief or alms to the
      poor; but in a court of chancery the signification    of the
Hon. Robert   S. Calvert,     Page   5 (V-1351)




      word is derived from the statute of Elizabeth,          [and a
      public charity need have no special reference          to the
      poor.]   Hence it has been said that those’purposes           are
      considered   charitable which are enumerated          in the
      statute, or which by analogy are deemed within its
      spirit or intendment.     Another short but practical       def-
      inition ha’s described   it as ‘a gift to a general public
      use, which extends to the poor as well as the rich.”
      But Mr. Justice Gray has given a definition which in-
      cludes all the facts and circumstances,        and all vari-
      eties of charity under the law, and leaves nothing to
      be desired.    In his words, a charity in a Legal sense
      may be more fully defined as a gift to be applied, con-
      sistently with existing laws, for the benefit of an in-
      definite number of persons,--either       by bringing their
      hearts under the influence of education or religion, by
      relieving their bodies from disease,       suffering,    or con-
      straint, by assisting   them to establish    themselves      for
      life, or by erecting or maintaining public buildings or
      works, or otherwise lessening      the burdens of govern-
      ment.” ’

             “Current legal concepts of what are charitable
      purposes are well gathered into the following classifi-
      cation in II Restatement, Trusts, 6 368, p. 1140:

              * ‘Charitable    purposes    include

                   (a)   the relief of poverty;
                   (b)   the advancement     of ~education;
                   (c)   the advancement     of religion;
                   (d)   the promotion of health;
                   (e)   governmental    or municipal purposes;
                   (f)   other purposes the accomplishment        of
                         which is beneficial    to the community.’

             “Other guides which will satisfactorily    conduct
      the inquirer to an answer of the question, what are char-
      itable purposes,   are 2 Bogert, Trusts and Trustees,
      8~361 et seq.; Zollman, American     Law of Charities,   set,
      184 et seq.; 14 C.J.S.,  Charities,  5 1 et seq., p. 410 et
      seq.; 10 Am. Jur., Charities,    pa 584 et seq.”

              The following testamentary     gifts have been held ex-
empt from death taxes as passing for charitable or public purposes
or to charitable institutions:   a gift for the support of a symphony
orchestra,   State v. Central Trust Co., 17 Ohio App. 423 (1923); a
bequest to Shakespeare     Memorial   Theatre organized to keep alive
Shakespeare’s    memory by the production and presentation       of plays
                                                                                   ’ ..
Hon. Robert   S, Galvert,   Page   6 (V-1351)




and also to assist poor members      of the theatrical profession,   In
re Hackett’s Estate, 234 N.Y.S. 299 (1929); a bequest for the use
of a farm foundation which was established      to encourage   commu-
nity effort and to improve rural life, People v. First Nat. Bank,
364 Ill. 262, 4 N.E.Zd 378 (1936); a bequest to an incorporated
memorial,    the purposes of which were to bring about the civic
betterment    of the residents of the United States and preferably
of those residing in the State of Ohio, Tax Commission       v. Livin-
good, 40 Ohio App. 543, 178 N.E. 707 (1931); a gift to the inhabit-
ants of a town for the construction    and maintenance   of a town hall,
In re Clark, 131 Me. 105, 159 Atl. 500 (1932).

              Cases recognizing   as charitable trusts for the com-
memoration,    maintenance,   or preservation  of particular events
or objects,  monuments,   memorials,    and shrines are discussed   in
12 A.L.R.   2d 888-893.

             In view of the foregoing authorities,  as the purposes
or objects of the Kerr County War Memorial       Association   previ-
ously quoted are clearly charitable,    we conclude that it is a “char-
itable organization”  within the meaning of Article 7122.     Since the
further statutory requirement    that the bequest or devise must be
used within the State is also met, the property which passed under
the fourth clause of Mr. Jarmon’s     will passed tax free.

                              SUMMARY

             The Kerr County War Memorial      Association,
      organized for the purpose of erecting and maintaining
      a memorial   community building honoring all who served
      in World Wars, is a ‘charitable   organization”    within
      the meaning of Article 7122, V.C.S.    Since the require-
      ment of Article 7122 that the bequest or devise must be
      used within the State is also met, no inheritance     taxes
      are due on property which passed by will to trustees
      for the use of the Association.

                                      Yours     very   truly,
APPROVED:
                                       PRICE DANIEL
W. V. Geppert                         Attorney General
Taxation Division

Everett Hutchinson                    B $4$usz-h<,                     4&
Executive Assistant                      Mrs. Marietta          9
                                                                Mc   regor Creel
                                                                      Assistant
Charles D. Mathews
First Assistant

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