Register of Wills v. Cook

Oppenheimer, J., delivered the opinion of the Court. This case involves the question of whether bequests to help ²⁶⁷ further the passage of the proposed Equal Rights Amendment and to aid women who may be in distress or suffer any injury as a result of any inequalities in the laws of Maryland or other states or of the United States are exempt from inheritance tax under the Maryland law. The taxes involved were paid under protest and the appellees appealed to the Maryland Tax Court. The court awarded refunds; the Register of Wills appealed to the Baltimore City Court, which affirmed the Tax Court decision, and this appeal resulted.

Jessie Marjorie Cook died December 29, 1960, a resident of Baltimore City, and her will was probated in the Orphans’ Court of Baltimore City. The provisions involved read as follows : “TWENTY-SECOND: I give and bequeath unto Helen Elizabeth Brown and Rose S. Zetzer, attorneys at law, the sum of $10,000.00 to be held in Trust for the following purposes: to pay unto the Maryland Branch of the National Woman’s Party, One Hundred ($100.) Dollars per year for a period of ten years, if said organization remains in existence and is active for that length of time; the rest and residue of said bequest in trust shall be used to help further the passage of and enactment into law of the EQUAL RIGHTS AMENDMENT to the Constitution of the United States; the said Trustees or their successors, if any, shall have absolute control of said sum of money and use the same as in their joint judgment may seem best to carry out the purposes for which this bequest is intended. “TWENTY-THIRD: I give and bequeath unto Helen Elizabeth Brown and Rose S. Zetzer, attorneys at law, in Trust and to their successors, in trust, the sum of $25,000.00 for the purpose of aiding and assisting any woman who may be in distress or suffer any injury to herself or her property as a result of any inequalities in the laws of the State of Maryland or of any of the United States; said Trustees or their successors in trust shall have absolute control of said trust fund and shall use the same as in ²⁶⁸ their best judgment jointly may be deemed advisable to carry out the purposes for which said bequest is intended and their decision shall be final.. “In the event, however, that said Trustees shall be unable to agree, each Trustee shall select one competent person who shall consider the matter and file their opinion. If these two arbitrators fail to agree, then these two shall mutually select a competent third person and the decision of any two of the three persons thus selected shall be conclusive and be accepted as final. “TWENTY-EIGHTH: All the rest and residue of my estate, whether real, personal or mixed and wheresoever situate, which I now own, possess or to which I may be entitled to at the time of my death, or at any time thereafter, I give, devise and bequeath in Trust to' my Trustees above named; viz: Helen Elizabeth Brown and Rose S. Zetzer, to be used to further the cause of equality for women in civil and economic rights and to carry on the work for women in accordance with the objectives as outlined in paragraphs Nos. ‘Twenty-second’ and ‘Twenty-third’ herein.” Vernon Cook, Jr., the testatrix’s brother and executor, filed a bill in equity to test the validity of the bequests and to determine whether his sister’s will executed the power of appointment in the will of Vernon Cook, Sr., his father and the father of the testatrix. The litigation resulted in a settlement under which Mr. Cook received one-half of the residue of the trust held by Mercantile-Safe Deposit & Trust Company under the will of Vernon Cook, Sr., and the trustees under Miss Cook’s will received the amounts of the specific bequests and the residue of Miss Cook’s estate plus the remaining half of the residue of the Mercantile-Safe Deposit fund.

The trustees under the testatrix’s will received approximately $190,000 from each source, in the total amount of about $380,000, and placed the administration of the fund under the general jurisdiction of the Circuit Court. Code (1965 Repl. Vol.) Article 81, sec. 150, imposes a col ²⁶⁹ lateral inheritance tax of 7y%, with certain exemptions. The exemption provision here involved is as follows: “* * * 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 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, if no part of the net earnings of which inures to the benefit of any private shareholder or individual, and (i) if a substantial part or all of the activities and work of which are carried on in the State of Maryland or in the District of Colum- The taxes were paid under protest and the refunds awarded by the Maryland Tax Court totaled approximately $25,000 with interest from July, 1963. 1 In the hearing before the Maryland Tax Court, the two trustees named in the will, Helen Elizabeth Brown and Rose S. Zetzer, both testified.

In addition, various documents were offered in evidence. One exhibit was a statement of the purposes and functions of the Maryland Branch of the National ²⁷⁰ Woman’s Party, of which Miss Brown is a past president. Thé statement reads in part as follows: “The Maryland Branch of the National Woman’s Party has for its fundamental objective to secure for women complete equality under the law with respect to their property, personal, social economic and civil rights and privileges, and to that end to inform, detail and specify what rights and privileges women possess presently, and to what extent these rights and privileges are curtailed or limited. These rights and limitations of rights are brought to focus by way of public discussion and education.

Furthermore, to accomplish these purposes, the National Woman’s Party, Maryland Branch, whose membership ^consists of businesswomen, homemakers, lawyers, and civic minded women, arrange, through public meetings and discussion groups, to further the cause of equality of opportunity under the law for women in business, professions and public offices and encourage the enlightened representatives and leaders in our community to remove every vestige of discrimination which is rampant in many of our antiquated customs * * *” The testimony shows that the Maryland organization works for the passage of the Equal Rights Amendment, and to remove discriminations in the laws against women throughout the United States. It is a branch of the National Woman’s Party, which is incorporated. At the time Miss Cook’s will was probated, the Maryland Branch may not have been incorporated. Another exhibit put into evidence was the report of the President’s Commission on the Status of Women made in 1963.

This report includes the following statements: “Eight out of ten women are in paid employment outside of the home at some time during their lives * * *” “In the face of these amendments, however [the Fifth and Fourteenth Amendments to the Federal Constitution] there remain, especially in certain State laws and official practices, distinctions based on sex which discriminate against women.” “Lower pay rates for women doing the same work as men are not uncommon.” While in 1963 the ²⁷¹ Federal Fair Labor Standards Act of 1938 was amended to require equal pay for equal work, “State laws should establish the principle of equal pay for comparable work.” “In many specific areas of State law, the disabilities of married women are considerable.” The testatrix was deeply interested in women’s rights. Her trustees conceive their duties as “educational primarily and charitable.” Miss Zetzer testified that a major legal “discrimination” in Maryland is the wife’s obligation to accept a suitable domicile selected by her husband. The trustees believe, however, that there is greater and more serious legal discrimination in other states. There was also testimony that, in Maryland, discriminations have been found in certain employment practices and that women still do not have equal pay for equal work.

There was testimony about guidelines for the administration of the trust which the trustees formulated under the title “The Marjorie Cook Foundation.” The testimony is unclear as to whether this formulation was made prior to distribution. There was also testimony as to the scope and nature of the trusts after distribution. However, counsel agree that the legal questions involved in this appeal are to be adjudicated on the basis of the provisions made in the will, irrespective of what may or may not have been done by the trustees after distribution. The appellant contends that the bequests are not to a trust “organized and operated exclusively for religious, charitable, scientific, literary or educational purposes.” Counsel have submitted thorough, fair and helpful briefs.

The case, in our view, involves two questions. First, is the general nature of the bequests charitable under the Maryland law?; and, second, if the first question is answered in the affirmative, are the trusts exclusively for charitable purposes, in view of the right of the trustees to employ the funds to support candidates for political office who favor women’s rights, to contribute to the Maryland Branch of the National Woman’s Party, and to work for the passage of the Equal Rights Amendment? Counsel agree that, if the trusts are not charitable, the bequests are taxable. ²⁷² The history of the statutory provision as to the exemption of charitable trusts is set forth in Second Nat’l. Bank v. Second Nat’l.

Bank, 171 Md. 547, 555-57, 190 Atl. 215 (1937). Many gifts for charitable uses had been declared to be invalid because of the indefiniteness of the donees. In 1931, an Act (now Code (1957) Art. 16, sec. 195) was passed declaring that henceforward the statute of 43 Elizabeth Ch. 4 applies to gifts and trusts for charitable purposes. Judge Sloan, for the Court, said: “This statute did not mark the beginning of charitable uses, as courts of equity had, before it was enacted, assumed jurisdiction of charitable trusts.

It made legal and enforceable trusts and gifts which had been declared invalid because indefinite and general. Vidal v. Philadelphia, 2 How. 127, 196, 11 E. Ed. 205, 233. The courts, in states where the statute had been adopted, did not confine themselves to the charities expressly named, and many objects have been upheld as charities, which the statute neither mentions nor distinctly refers to. Thus a gift ‘to the poor’ generally, or to the poor of a particular town, parish, age, sex, race, or condition, or to poor emigrants, though not falling within any of the descriptions of poor in the statute, is a good charitable gift.” In State Tax Comm’n. v. Whitehall Foundation, Inc., 214 Md. 316, 320-21 , 135 A. 2d 298 (1957), Judge Hammond, for the Court, said: “The State Tax Commission’s argument that tax exemption must be strictly construed is sound.

This Court has said often that to doubt is to deny an exemption. Thus the statute’s direction in Code, 1951, Art. 81, Sec. 8, is declaratory of the law. Nevertheless, strict construction does not require that an unreasonable or unusual meaning must be given to the words used in exemption statutes. We find nothing to show that the words ‘charitable’ and ‘educational’ were intended by the Legislature to have and convey other than their usual meaning in law. ²⁷³ “Considering only the activities of Whitehall Foundation, Inc., at Blakeford Farms, and reading the words of the statute as having their usual legal meaning, we think that those activities are charitable and educational.

Rab inowits v. Wollman, 174 Md. 6 , shows the breadth, in the legal sense, of charitable purposes. This breadth is reiterated in Restatement, Trusts, cited, relied on in the Rabinomts case. Sec. 368 b says: 'The nature of charitable purposes. A purpose is charitable if its accomplishment is of such social interest to the community as to justify permitting the property to be devoted to the purpose in perpetuity.

There is no fixed standard to determine what purposes are of such social interest to the community; the interests of the community vary with time and place. At common law in England and in the United States it is agreed that the relief of poverty, the advancement of education and of religion, the promotion of health, the accomplishment of governmental or municipal purposes, are of such social interest to the community as to fall within the concept of charity. As to what other purposes are of such interest to the community as to be charitable, no definite rule can be laid down. These various purposes are dealt with in the following Sections.' " The bequest to the trustees in the Twenty-Second paragraph of the will is for two purposes: Payments to the Maryland Branch of the National Woman’s Party and to help further the passage of the Equal Rights Amendment to the Constitution of the United States, which is designed to prohibit discrimination against women by reason of their sex.

The bequest to the trustees in the Twenty-Third paragraph is for the purpose of aiding and assisting any woman who may be in distress or suffer any injury to herself or her property as a result of any inequalities in the laws of Maryland or of the United States. The residuary bequest to the trustees in the Twenty-Eighth paragraph is to further the cause of equality of women in civil and economic rights and to carry on the work for women in accordance with the objectives outlined in the Twenty-Second and Twenty-Third paragraphs. ²⁷⁴ The primary purposes of all the trusts, in our view, are the elimination of discriminations against women and to give relief to women injured by such discriminations. The passage of the Equal Rights Amendment is one of the methods set forth by the testatrix to endeavor to accomplish these objectives, both directly and by contributions to the Maryland Branch of the National Woman’s Party. Trusts to eliminate discriminations and to provide relief for the persons discriminated against have been generally upheld as charitable.

Collier v. Lindley, 203 Cal. 641 , 266 P. 526 (1928), and Edgeter v. Kemper, 73 Ohio L. Abs. 297 , 136 N. E. 2d 630 (1955) (trust to eliminate discriminations against Indians and to provide for their relief); Lewis’s Estate, 152 Pa. 477 , 25 Atl. 878 (1893) (trust to eliminate discrimination against Negroes); In Re Murphey’s Estate, 7 Cal. 2d 712, 62 P. 2d 374 (1936) (trust to eliminate discriminations against Jews). “If the general purposes for which a trust is created are such as may be reasonably thought to promote the social interest of the community, the mere fact that a majority of the people and the members of the court believe that the particular purpose of the settlor is unwise or not adapted to the accomplishment of the general purposes, does not prevent the trust from being charitable * * * “The Courts do not take sides or attempt to decide which of two conflicting views of promoting the social interest of the community is the better adapted to the purpose, even though the views are opposed to each other * * *” Restatement, Trusts 2d (1959) § 374 comment 1. By the great weight of authority, if a trust is essentially charitable in nature, it is still charitable even though one of its purposes is to endeavor to effectuate a change of existing law. George v. Braddock, 45 N. J. E. 757, 18 Atl. 881 (1889); Garrison v. Little, 75 Ill. App. 402 (1897); Taylor v. Hoag, 273 Pa. 194 , 116 Atl. 826 (1922); Collier v. Lindley, supra.

See also Haines v. Allen, 78 Ind. 100 (1881). ²⁷⁵ Restatement, Trusts 2d (1959) § 374 comment j reads as follows: “Change in existing law. A trust may be charitable although the accomplishment of the purpose for which the trust is created involves a change in the existing law. If the purpose of the trust is to bring about changes in the law by illegal means, such as by revolution, bribery, illegal lobbying or bringing improper pressure to bear upon members of the legislature, the purpose is illegal. See § 377.

The mere fact, however, that the purpose is to bring about a change in the law, whether indirectly through the education of the electors so as to bring about a public sentiment in favor of the change, or through proper influences brought to bear upon the legislators, does not prevent the purpose from being legal and charitable.” Bogert and Scott take the same