Kirkwood v. American Friends of the Hebrew University

FOURT, J. This is an appeal from an order determining, in effect, that a devise made by the decedent went to a tax exempt New York corporation instead of to a university in Israel which did not qualify for exemption from estate and inheritance taxes.

Louis Cavner, a resident of Los Angeles County, California, made a will April 1, 1953, wherein, after specifying certain gifts, he devised a one-fourth of the residue of his estate “to the Hebrew University in Israel, with the request that it be used for the purpose of combating cancer, and that a suitable memorial for Louis Cavner and Bella Cavner be established by the University.”

The testator died May 17, 1956, and his will was admitted to probate. An inheritance tax appraiser was appointed by the court and in due time he appraised the estate and filed his tax report dated September 17, 1957. The report showed that the appraiser valued the interest of the “Hebrew University of Israel” at $74,954.11, and reported a tax due thereon of $7,240.99. A notice of filing the report of the appraiser was filed on December 5, 1957. This notice set forth, among other things, in effect, that all persons interested in the estate could appear and file objections to such report within 10 days and that if no objections were filed an order confirming the report and fixing the tax in accordance therewith could be signed.

On December 9, 1957, the attorneys who presently appear for the petitioner filed “Objections to Inheritance Tax Report” for the Hebrew University in Israel. In this document it is set forth that Hebrew University is a legatee and devisee under the will; that the report is erroneous and incorrect in that the “Hebrew University of Israel” is improperly charged with the tax in the sum of $7,240.99, because the University was organized solely for charitable, educational, etc. work, and as such was exempt from inheritance tax. One of counsel verified the document as the attorney for the Hebrew University of Israel. The issues raised in that report and the objec[262]tions thereto apparently have not as yet been tried and determined.

On January 24,1958, there was filed a “Statement of Claim of Interest in the Estate and Petition for Determination” by the “American Friends of the Hebrew University,” a New York corporation. This document set forth, generally, that Louis Cavner died; that he had devised one-quarter of the residue of his estate, amounting to about $75,000 to “Hebrew University in Israel;” that there is no entity of such name; that there does exist an entity by the name of “The Hebrew University Association ’ ’ which is a nonprofit entity organized to run a university near the city of Jerusalem; that the only agency of said Hebrew University Association within the United States is the American Friends of the Hebrew University, the New York corporation. Further it is set forth that the testator, in devising one-quarter of the residue of his estate, intended that the said money be devised to the agency of the Hebrew University in the United States which qualified as an entity exempt from estate and inheritance taxes; further, that on the date of death of the decedent a bequest directly to the Hebrew University Association would not be exempt from California state inheritance taxes by reason of the fact that at such time the state of Israel did not have a reciprocal provision, which under California law is necessary before a charity in a foreign jurisdiction can qualify as a tax exempt entity; that the decedent did not intend to devise one-quarter of the residue of his estate to the Hebrew University Association in that such a devise would be subject to inheritance taxes. It was also set forth that all proceeds donated to the New York corporation are transmitted to the Hebrew University Association for use in connection with the University; that if the petition be granted, and the money distributed to the New York corporation, the proceeds would then be sent by the New York corporation to the Hebrew University Association free and clear of any California State inheritance tax.