# First Nat'l B'k v. Comr. of Taxes > Supreme Court of Vermont · October 1, 1940 · 111 Vt. 281 URL: https://www.frixlaw.com/law-library/cases/9834544 ## Case - **Full name:** First National Bank of Boston, Trustee Under the Will of Charles H. Bayley v. Erwin M. Harvey, Commissioner of Taxes. - **Court:** Supreme Court of Vermont - **Decided:** October 1, 1940 - **Citations:** 111 Vt. 281; 16 A.2d 184; 1940 Vt. LEXIS 158 - **Precedential status:** Published - **Opinion:** On rehearing by Sherburne - **Judges:** Moulton, Sherburne, Buttles, Sturtevant, Jeffords - **Cited by:** 25 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9834544 ## How later opinions describe it (automated extraction) - finding that the intention and meaning ascertained by a broader consideration of a statute is valid even when the it conflicts with the literal sense of the statutory language ## Opinion text Upon Motion por Reargument Sherburne, J. On leave, duly obtained, counsel for the petitioner have filed a motion for reargument, pending which the entry of judgment has been withheld. Objection is raised to the holding that the word “exclusively” applies to the entire use of the trust fund, and not merely to that part of the income from the fund which is to be used for charitable purposes, and that as the fund is to be used in part for non-exempt purposes, all the undistributed income therefrom is subject to taxation. The petitioner believes that the Court has erred in disposing of its exceptions, and has overlooked or misapprehended certain matters with respect thereto presented in its brief, and alleges: 1. That we have overlooked and disregarded the fact that notwithstanding the rule of strict construction of exemption statutes they are not to be given a distorted or unreasonable construction, as said in Brattleboro Retreat v. Town of Brattleboro, 106 Vt. 228, 239 , 173 Atl. 209 . 2. That we have arrived at a most unreasonable result, and one quite likely not intended by the Legislature, against the cardinal rule of construction that a statute must be so construed as to accomplish the purpose for which it was intended, if it can fairly be done, and that the consequence and natural and reasonable effect of a proposed construction if it leads to an absurd consequence, must always 'be avoided if possible, under the rule stated in Brammall v. Larose, 105 Vt. 345 , 165 Atl. 916 , 96 A. L. R. 595. 3. That in our construction of the statute we have overlooked and disregarded the following: a. That no part of the undistributed income for the taxable year goes to the widow, and that it is only a part of the future *299 earnings from the reinvestment of that undistributed income that.goes to her in future tax years. b. That even if the undistributed income for the taxable year is not bound to be used exclusively for charitable purposes, there is no reasonable possibility that it will be used otherwise. c. That a denial of the exemption, in view of the provision of our Constitution (Ch. II, sec. 64) requires a construction of the statute in derogation, rather than encouragement, of charities, and that such a result is justified only by the most clear and explicit expressions of the statute, and not from a doubtful construction or a conclusion deduced from the balancing of probabilities.. When this case was originally argued the petitioner contended that our statute should be construed like the exemption provision in the Federal income tax law, which provides that, “There shall be allowed as a deduction * * * any part of the gross income * * * which pursuant to the terms of the will * # * is to be used exclusively for religious, charitable, * * * or educational purposes,” and petitioner’s brief went at great length in citing cases construing the Federal exemption. Although the petitioner was the excepting party upon this question, and although the petitionee claimed that our exemption must be strictly construed, all that the petitioner said in its brief in answer thereto was to incidentally mention the case of Brattleboro Retreat v. Town of Brattleboro, supra, in a note at the bottom of a page under its argument relative to a disputed construction of the terms of the will, as to whether by any possibility the undistributed income might be needed at some future time to make out the minimum annuity to the widow, as bearing upon the reasonable probability of such an event occurring. The Federal statute is so different from ours that we could see no connection between the two, hence there was no occasion to ascertain if by any reasonable probability the undistributed income might at some future time need to be so used. However, in arriving at our conclusion we did not give a distorted or unreasonable construction of our statute, contrary to the Brattleboro Retreat case,' supra, nor a strained construction adverse to the real intention of the Legislature, contrary to Spaulding v. City of Rutland, 110 Vt. 186, 192 , 3 Atl. 2d. 556, cited in the opinion. Nor have we arrived at an unreasonable *300 or absurd result, contrary to the rule stated in Brammall v. Larose, supra. None of these rules of construction, nor any points and arguments made in the briefs, were overlooked. In view of what we have said it is unnecessary further to comment upon paragraphs a and b of the 3rd ground of the motion. Paragraph c presents an entirely new question which is not entitled to be now considered under the rules respecting motions for reargument mentioned in Ryan v. Orient Ins. Co., 96 Vt. 291, 304, 306 , 119 Atl. 423 , and Goodwin v. Gaston, 103 Vt. 357, 367, 368 , 154 Atl. 772 . However, Congregational Society v. Ashley, 10 Vt. 241, 244-246 , the only authority cited for that proposition, does not support it. The question in that case was whether the Congregational Society came within the terms of the then statute so as to be subject to a tax upon its funds, not whether it was entitled to an exemption. That case properly held that whether the Society was taxable must not be the result of doubtful construction or a conclusion deduced from the balancing of probabilities. As we have said in the main opinion in discussing other features of this case, unless a fair and reasonable construction discloses the real meaning and purpose, a taxing statute is not to be extended by implication beyond the clear import of the language used, and doubts are to be resolved against the taxing power and in favor of the taxpayer. It is probably true that this entire tax will ultimately fall on the charities, but the section of our Constitution referred to also provides that charities may enjoy their privileges and immunities under such regulations as the General Assembly shall direct. If this fund had been limited exclusively to charity it would be exempt from taxation. So long as a part of the income, in this case more than half, goes for non-charitable purposes, it was proper and reasonable for the General Assembly to provide that none of the income should be exempt. It is for that body, not the Courts, to legislate. Motion for reargument denied. Let full entry go down. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9834544. Public record. Not legal advice.