BUFFINGTON, Circuit Judge.
On July 1, 1921, Edward Bok, by indenture signed by himself as founder, by certain others as trustees and by the Girard Trust Company, as depository, transferred securities owned by himself aggregating $210,000, and increased by subsequent amounts. The instrument provided as follows:
"Whereas the Founder believes that service to others tends to make lives happy and communities prosperous and that the ideal of service as a test of good citizenship should be kept constantly before the minds of the people of Philadelphia in general and of the young in particular; and further believes that this may by some measure be accomplished through the making, under proper conditions of an annual award in recognition of some service rendered by a Philadelphian which shall have redounded to the good of the City."
It gave the fund absolutely and in perpetuity on certain trusts, which, as far as here pertinent, were:
"I. After the ending of each calendar year they shall determine what resident of Philadelphia or its suburbs or vicinity has during said year done an act or rendered a service of such advantage to the City or to its inhabitants as to be eminently worthy of public recognition and reward.
"II. When the Trustees shall have determined the person who has thus deserved best of the City they shall announce that such person has been selected to receive the Philadelphia Award for the preceding year and shall proceed with appropriate dignity and ceremony, in the American Academy of Music or in some other suitable place, to confer the Award upon the person so selected.
"III. The ceremony of conferring the Philadelphia Award shall include the making of the payment of $10,000 to the person selected to receive it and the delivery of a suitable certificate or other permanent record or symbol of distinction.
"IV. The nature of the act or service for which the Award may be made is not to be determined by a strict interpretation of the language of this instrument. The language is to be regarded by the Trustees rather as indicating the spirit in which the Award is to be made than as imposing limitations upon their discretion in making it.
"V. In case the Trustees shall determine that in the preceding year no act or service worthy of the Award has been done, or rendered, they shall have the right to apply the said $10,000 of the net income of the trust fund for that year to or toward free scholarships for boys and girls resident in Philadelphia, its suburbs or vicinity; such scholarships to be divided at the discretion of the Trustees among the following institutions:
"University of Pennsylvania,
"The Pennsylvania Museum and School of Industrial Art,
"The Jefferson Medical College of Philadelphia,
"Bryn Mawr College,
"Pennsylvania Academy of The Fine Arts,
"The Settlement Music School,
"The Drexel Institute,
"The National Farm School,
"Pennsylvania School of Horticulture for Women. * * *
"Eleventh: In case at any time hereafter the Trustees shall deem that the execution of the general spirit and intent hereof has become impracticable, the trust shall not wholly fail; but the trust fund shall thereupon become subject to the jurisdiction of a court of equity to be disposed of and administered cy pres."
In his income return for 1921, Mr. Bok claimed a deduction by virtue of that section of the Revenue Act of 1921 which provides: "That in computing net income there shall be allowed as deductions: * * * gifts made within the taxable year to or for the use of * * * any corporation, or * * * fund, or foundation, organized and operated exclusively for * * * charitable * * * or educational purposes * * * no part of the net earnings of which inures to the benefit of any private stockholder or individual" (section 214(a) (11), 42 Stat. 241), and "that when used in this Act * * * the term `corporation' includes associations" (section 2 [42 Stat. 227]). The taxing authorities denied this claim and over the taxpayer's protest collected the tax. Thereupon the taxpayer brought this suit. On trial the court below sustained the government's contention and entered judgment in its favor. Thereafter this appeal was taken.
It remains then to inquire whether the foundation is "organized and operated exclusively for * * * charitable or educational * * * purposes, * * *" for, if so, undoubtedly the foundation meets the other test, viz., "No part of the net earnings of which inures to the benefit of any private stockholder or individual."
Charity, derived from the Latin caritas, originally meant love. In the thirteenth chapter of first Corinthians the revised version
It cannot be doubted that Mr. Bok's gift was a charitable gift as the word "charitable" is used and understood by courts and lawmaking bodies. What he did was done for the love of his neighbors in the community which he had adopted as his home. Every activity recognized by the awards that have been made is an activity for the promotion of which a charitable trust might be created. A trust for popular education in music, or for making higher education accessible to the many, or for stimulating American patriotism by recalling the unselfish sacrifices of the fathers, or for the relief of human suffering through new and improved surgical methods, or for the encouragement of craftsmanship, or for the beautification of a city, would be a charitable trust tested by any of the definitions which the authorities supply. And if a trust for the promotion of any one of these interests would be a charitable trust, it follows that a foundation to promote all of them is a trust that partakes of the nature of each. The making of an award to the citizen who renders conspicuous service in any field is one way (and an impressive one) to hold up that particular activity as an object of honorable effort and to encourage the many to follow in the train of the one thus conspicuously honored. Manifestly it was within the purpose of Congress, in granting this exemption, to encourage men and women to follow the examples of those whose well doing has made them the lights of the world in their several generations. In our judgment this court is giving effect to the intent of Congress when it holds, as we now do, that the disinterested gift of Mr. Bok for the good of his neighbors and for the promotion of interests technically charitable and really educational is entitled as such to the exemption Congress meant to give.
The judgment below will therefore be vacated and the record remanded for further proceedings in accordance with this opinion.
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