dissenting: I am impelled to express my dissent from the Court’s ultimate conclusion herein, under which it has denied any deduction for the purported gift of $7,500 which Marjorie Wardwell made to Friendship Haven, Inc.- — a home for the aged and infirm, which concededly was organized and operated exclusively for charitable purposes, and with respect to which the Internal Bevenue Service has ruled that contributions made to it are deductible by the donors.
The Court’s conclusion is that said payment does not legally qualify as a “gift”; but that it was made “in consideration of [her] being granted admission into the home in the near future.” I believe that such conclusion is inconsistent with, and not supported by, the Court’s own findings of fact; that it confounds “motive” with “consideration,” and “expectations” with legal “rights”; that it fails to give effect to the intent of the controlling statute; and that it embodies tests for the recognition of charitable gifts which, if applied generally, will seriously handicap charitable organizations in their efforts to induce contributions for their essential needs.
1. It is well settled that, “Nothing is consideration * * * that is not regarded as such by both parties.” 1 Williston, Contracts, sec. 100 p. 320 (rev. ed.); Cardozo, J., in McGovern v. City of New York, 234 N.Y. 377, 388, 138 N.E. 26, 31. It also is settled that, “Motive is not the same thing with consideration”; “nor can any motive serve in itself as consideration.” See 1 Williston, Contracts, sec. 111, p. 377, including footnote.
Here, the $7,500 pledge and payment were not regarded by both parties, or indeed by either of them, as legal “consideration” for any binding contract. As stated by the Court in its opinion, “Respondent admits Marjorie M. Ward well might not have received a legally en-forcible right of such room occupancy but there was the expectation * * *.” (Emphasis supplied.) The Court further found as facts: That “such an endowment [of a room] would not give the individual making it any property rights in any room and no right to life care”; that “there was no contract in the legal sense for such occupancy * * *”; and that “Friendship Haven, Inc., does not enter into life contracts with individuals.” (Emphasis supplied.) Also, the Court stated in its opinion, “Of course, it is possible that she might have been admitted [to the home] without the payment * * *.” All of this, in my view, definitely negatives any conclusion that the purported gift was made for any “consideration” (other than the stated consideration “of the like promise of others,” which is a characteristic of most agreements to make a charitable contribution); and also negatives any conclusion that the “gift,” in itself, gave her any legal “right” to anything.
What actually happened here was this. Marjorie Wardwell was a bedridden invalid, whose husband had recently died, whose sons were in the military service, and who was dependent on hired help and friends to care for her. In this situation, her minister communicated with Friendship Haven, described her plight, and inquired whether it might be possible for her to be admitted to the home. Her case was investigated in the usual manner by Friendship’s executive director; and during the course of such investigation, an offer made by her to enter into a contract with the home for life care, was rejected with the explanation that Friendship did not enter into such contracts. Thereafter, she submitted an application in the usual form, for admission to the home; and after about 8 days, she was advised by letter that the admissions committee had approved her apnlication, subject to the home’s working out satisfactory arrangements. (Regarding such arrangements, the Court found: “there were problems of personnel and space to be worked out since one wing of Friendship Haven, Inc.’s second building was then under construction.”) Said letter of acceptance also contained the statement: “They [the admissions committee] rather felt that for you to give a room and pay your monthly care would be fairer to you and your estate.” (Emphasis supplied.) This represented the solicitation of a gift; but it provides no warrant for a conclusion that the home, in approving the application for admission, acted other than altruistically.
About 3½ weeks after having been advised that her application for admission had been approved, Marjorie Ward well executed the written pledge to make the “gift” of the $7,500 here involved. In this pledge, she declared it to be her intention that the amount thereof was a gift made “in consideration of the like promise of others”; and she agreed that, in the event of her death before payment, the same would become a valid claim against her estate. The pledge was absolute and unconditional; and the entire amount thereof was paid.
Undoubtedly, Marjorie Wardwell did “expect” that, pursuant to the action taken on her application for admission, she would enter the home; and she was aware that, under the home’s established policy, she would there be given the same care which was provided for all other residents, and would be expected to pay therefor the same rates which the home, for reasons satisfactory to it, fixed uniformly for all other residents who had endowed rooms. These matters were not subject to any bargaining, but were determined by the home alone, as part of its own internal policy. As hereinbefore mentioned, her “expectations” created no legal “rights”; and they provided no “legal consideration” for her pledge and payment of the $7,500. In the absence of such “consideration,” and in the absence of obtaining any legal “rights,” her payment of the pledge qualified, in my judgment, as a charitable contribution.
2. I believe also, that there is no warrant for failing to give effect to an expressly declared gift to a charitable institution, made without legal “consideration,” merely because the donor in making such gift may have been motivated by the realization that he was then receiving, or expected to receive, benefits from the charity’s activities which his gift helped to support. No such restriction or limitation was expressed by Congress in its enactment of the statute which provides deductions for charitable contributions. The Duberstein case (363 U.S. 278), which is the only case cited by the Court in its opinion, did not involve any charitable contribution; nor did it involve the construction or application of the here controlling statute. And my search has failed to reveal any decided case in which such restrictive principle has been approved.
Moreover, I think that adoption of any such principle would disregard realities. Many charitable gifts, and particularly those made to local charities, yield benefits to the donor; and the existence of absolute purism in a donor’s motive for making a charitable gift, is not commonly regarded to be material. For example, gifts to churches are often made because the donor and his family are receiving, or are expecting to receive, the benefits of the church or its Sunday school as a place for worship, baptism, and marriage — or he may even receive the privilege of occupying a designated pew. (The Internal Revenue Service has ruled that so-called pew rents qualify as charitable deductions. A.R.M. 2, 1 C. B. 150.) Gifts to a college for use in erecting a building, developing an athletic field, or founding a chair of learning, may be made with the understanding or expectation that the same will thereafter bear the name of the donor or that of a friend or relative designated by him — and thereby become a permanent monument. Also such college gifts are frequently solicited with the suggestion that the donor has a moral obligation to make reimbursement for the education received by him at less than its actual cost. And a gift made to facilitate the creation of a public park, may be made by the donor with the expectation that such park will improve and enhance the value of the surrounding property, including that owned by him.
Moreover, solicitation of charitable gifts are frequently accompanied by a statement that they will qualify for income tax deduction by the donor, and with the further suggestion that the income tax benefits may be increased, if property or securities which have appreciated in value are given in kind. In the recent case of Maysteel Products, Inc., 33 T. C. 1021, this Court upheld for deduction under the statute, gifts to charities which had been made as part of a scheme of the donors to obtain tax benefits.
Congress made provision for the deduction for charitable gifts, in order to induce and encourage the making of such gifts. See S. Rept. No. 1567, 75th Cong., 3d Sess., reprinted in 1939-1 C. B. (Part 2) 779, 789. And this Court has held that, “Tax provisions as to charities are begotten from motives of public policy and are not to be narrowly construed.” Estate of J. B. Whitehead, 3 T. C. 40, affd. 147 F. 2d 977; Helvering v. Bliss, 293 U.S. 144. I believe that in applying such provisions, the donor’s motive for making the charitable gift is immaterial.
In my view, Marjorie Wardwell’s payment of the $7,500 to Friendship Haven does qualify as a charitable gift. I would have allowed the claimed deduction therefor.
FoeResteR, J., agrees with this dissent.