which have adhered to the change made by the grand lodge in Charleston, and that the lodges who adhered to the ancient charter had contributed but little to the fund. This may be, and I believe is, correct, but it cannot have any influence upon this cause; for whenever individuals, or portions of a corporation, quit the main body, they leave all the rights and funds of the corporation which remain in its perfect character. ***I am satisfied that the individuals who have left an incorporated society, and formed a voluntary one, cannot maintain a suit to recover the corporate funds, more especially as that corporation remains, in my judgment, entire, and is in full possession of all its rights." The present case is unlike that of Watson v. Jones, 13 Wall. 679. In that case the trustees, both by the act incorporating them, as well as by the rules of the church, were the mere nominal title holders and custodians of the church property, and others could be elected by the congregation to supply their places once in every two years. In the use of the church building and property for all religious services and ecclesiastical purposes, the trustees were under the control of a church body, called the "Church Sessions," and the court held that the question who constituted the church sessions and the congregation entitled by their religious faith to the use of the church buildings for religious purposes was a matter proper to be decided by the highest judicatory in the church itself, which in that case was the Presbyterian Church. In such a case the court said the preponderating weight of judicial authority in this country, and under our system of laws, was that the legal tribunals must accept as final and binding the decisions of the highest judicatory in the particular church upon questions "of discipline, or of faith, or ecclesiastical rule, custom, or law." But this corporation is of a very different character, created for a very different purpose, and vested with very different powers from those conferred upon the church trustees by the corporation laws of Kentucky in that case. And much less does the case before us resemble, either in its facts or in the principles decided, the memorable one of the Methodist Book Concern, reported in 16 How. 288. There a great church organization had in its general conference agreed upon a plan of separation into a Church North and a Church South, which plan carried with it a pro rata division of the common property belonging to the whole church, including that of the "Book Concern," and the bill was filed to enforce that division. The court simply held that the plan of separation was validly adopted, and that its effect, as to the division of the property, was such as the complainants insisted upon. The other cases cited by counsel for the appellants do not appear to us to have any more direct bearing upon the questions involved in the present case than these two, and we therefore deem it unnecessary to review them. Whatever powers the higher lodges in such an organization as this may have to make rules or laws for the government of the subordinate lodges, and the discipline of their members, we think it quite certain that the courts can never recognize as valid any rule or law so made, the effect of which is to confiscate property, or to arbitrarily take away property rights from one set of members, and give them to another set; nor will the courts allow or recognize the enforcement of any such rule when its enforcement will accomplish, and is designed to accomplish, such a result. But there is another view that may be taken of the case, so far as the endowment sinking fund is concerned. In our opinion in the former case we said the endowment plan (the adoption of which has given rise to the present litigation) was practically a system of mutual or co-operative life insurance. A re-examination of that plan has convinced us of the soundness of this position. Under it a book of endowment certificates was furnished to each subordinate lodge, and one of these certificates was issued to each member; and it stipulated for the payment of $1,000, upon his death, to his widow and children if he left any, and, if not, then to a beneficiary to be designated by him, whose name must appear in the body of the instrument. Such certificates differ in nosubstantial point from ordinary life insurance policies issued by ordinary life insurance companies. The death dues and the contributions to the sinking fund are nothing more nor less than premiums exacted as in ordinary cases, by the payment of which the policies are kept alive. If an organization like this chooses to go into that kind of business, it must expect that the courts will deal with and adjudicate the rights of the policyholders upon the same principles of equity and justice that they apply in the usual and ordinary cases of life insurance contracts. Policy-holders who have paid, and are willing to continue to pay, their premiums or contributions and are otherwise in good standing in their particular lodge, cannot have their policies forfeited; and this, as we understand it, is the position in which the majority of the members of Jedidjah Lodge now stand. On the other hand, such policies may be lawfully forfeited (and most commonly are) by the refusal or neglect of the insured to pay the stipulated premiums, and that is the position in which these complainants stand. There was no legal impediment in the way of their still adhering to this incorporated lodge after its conventional charter was forfeited, and at the same time forming a voluntary lodge in connection with the general order, but they have not only voluntarily seceded from the lodge, but have repudiated all connection with it, and since their secession have refused to pay any dues or contributions thereto. By this action they have clearly and justly forfeited their endowment certificates or policies, and consequently all just claim upon the fund by which the payment of such certificates or policies was protected or secured. Entertaining these views of the case, we must affirm the decree dismissing the bill. NOTE. BENEVOLENT SOCIETIES-RIGHTS OF SUBORDINATE BODIES. Mutual benefit associations may provide methods for redress of grievances and deciding controversies, and may compel members to resort to the prescribed methods of procedure before invoking the power of the courts, Oliver v. Hopkins, (Mass.) 10 N. E. Rep. 776; Bauer v. Samson Lodge K. of P., (Ind.) 1 N. E. Rep. 576; but they cannot create judicial tribunals for the final and conclusive settlement of controversies, Supreme Council O. C. F. v. Garrigus, (Ind.) 3 N. E. Rep. 818; Bauer v. Samson Lodge K. of P., supra. A society organized under the incorporation act of a state cannot subject itself or its members to the jurisdiction of an authority existing outside the state, and beyond the control of the state laws. Allnutt v. High Court of Foresters, (Mich.) 28 N. W. Rep. 802; State v. Miller, (Iowa,) 23 N. W. Rep. 241; Lamphere v. Grand Lodge A. O. U. W., (Mich.) 11 N. W. Rep. 268. Where a subordinate lodge of a benevolent order has been duly incorporated under such a state law, the charter thus granted cannot be forfeited by the grand or superior lodge, whether acting in its conventional or corporate capacity. District Grand Lodge v. Jedidjah Lodge No. 5, (Md.) 3 Atl. Rep. 104; State v. Miller, (Iowa,) 23 N. W. Rep. 241. And if the grand lodge deciares the charter of the subordinate lodge forfeited, and claims the endowment sinking fund of such lodge, it may stand on its legal charter, and in equity its rights to the fund will be protected from the claim of the grand lodge. District Grand Lodge v. Jedidjah Lodge No. 5, supra. (67 Md. 112) MAYOR, ETC., OF BALTIMORE v. HUSSEY. 1. TAXATION-POWER OF NON-RESIDENT-CHOSES IN ACTION. The taxing powers of a state are limited to persons and property within and subject to its jurisdiction, and therefore do not extend to intangible personal property owned by a non-resident of the state. So, where one residing in the state of New York owned stock representing the debt of the city of Baltimore, such stock is not taxable by the state of Maryland. 2. SAME-ILLEGAL TAX-VOLUNTARY PAYMENT. The interest on the debt was payable, at certain banks in the city of Baltimore, semi-annually on the first July and January; and from July 1, 1878, to July 1, 1884, the banks deducted, by direction of the city register, from the July installment of interest, the annual tax levied by the state of Maryland for state purposes, and remitted the balance to appellee, in New York. Plaintiff knew that the state tax was being collected in this manner. Held that, by thus accepting the interest less the tax deducted, year after year, without objection, she must be considered as having ratified the payment of the same; and though the tax was illegal as to her, she could not recover it back.1 Appeal from Baltimore city court. Bernard Carter, for appellants. Charles Marshall, Thomas W. Hall, and D. K. Este Fisher, for appellee. ROBINSON, J. The appellee, a resident of the state of New York, is the owner of $119,000 of the debt of the city of Baltimore, commonly called "City Stock;" and the question is whether this stock is liable to taxation in this state. Were this a question of first impression, it would seem to be clear, on general principles, that the stock thus held by the appellee could not be subjected to taxation by the laws of this state. The taxing powers of a state must be necessarily limited to the taxation of persons and property within and subject to its jurisdiction; and, if so, this state can acquire no jurisdiction over the person of the appellee for the purpose of taxation, because she is a non-resident. And, as to the certificates of stock owned by her, they are mere evidence of indebtedness on the part of the city, by which it promises to pay to the owner a certain sum of money, with interest thereon. As such they are unquestionably personal property in the hands of the creditor, and have their taxable situs at the domicile of the owner. The mere right to receive of the city the principal or interest within the state, is a right personal to the creditor as owner of the debt, and is not, therefore, subject to taxation in this state. But this can no longer be considered an open question, because it was fully considered and decided by the supreme court in the cases of Foreign-Held Bonds, 15 Wall. 317, and Murray v. Charleston, 96 U.S. 432. In the former case, bonds issued by a railroad company, and owned by non-residents, were held not to be liable to taxation by the state in which the company had its domicile. "Debts owing by a corporation," say the court, "like debts owing by individuals, are not property of the debtors in any sense. They are obligations of the debtor, and only possess value in the hands of the creditor. With them they are property, and in their hands may be taxed. The bonds issued by the railroad company in this case are undoubtedly property, but property in the hands of the holders, not property of the obligors. So far as they are held by non-residents of the state, they are property beyond the jurisdiction of the state." In the latter case of Murray v. Charleston, where the plaintiff, a non-resident, was the owner of certificates of stock issued by the city of Charleston, and the city subsequently imposed a tax of 2 per cent. on the value of all property within its limits, and, treating its stock as part of such property, directed that the tax assessed upon it should be retained by the city treasurer, the court held that the stock owned by the appellee, a non-resident, was not liable to taxation by the city; and, further, that the exaction of the tax, as against the plaintiff, was an impairment of its obligation upon the contract, inhibited by the federal constitution. The city stock owned by the appellee not being, then, liable to taxation in this state, the next question is whether an action can be maintained by her to recover back the money deducted from the interest due on said stock, and applied by the city register to the payment of the state tax assessed thereon. There can be no controversy about the law by which this question is to be determined. If the money was thus applied by the authority or with the approval and sanction of the appellee, with knowledge on her part of the facts and circumstances under which the tax was demanded and paid, it is well See note at end of case. settled that an action will not lie to recover back the money, although it was paid by the appellee through a mistake as to her legal rights. This has been time and again decided by this court. Lefferman's Case, 4 Gill, 431; Lester's Case, 29 Md. 418; George's Creek Coal, etc., Co. v. County Com'rs, 59 Md. 260. Was the money then paid by the authority of the appellee, with full knowledge of the facts? Now, what are the circumstances under which it was paid? The interest on the stock was payable at certain banks in the city of Baltimore, these banks being authorized agents of the city for this purpose. The interest was payable semi-annually, on the first July and first of January. From the first of July, 1878, to July 1, 1884, there was deducted from the July installment of interest the annual tax levied by the state of Maryland for state purposes. This tax was deducted by said banks by the direction of the city register, and the net amount of interest, after such deduction, was transmitted to the appellee by drafts drawn to her order, and sent to Alexander B. Lamberton, her duly-constituted attorney. The money thus deducted for state taxes was all paid over to the state by the city register, and paid by him without objection on the part of the appellee or her attorney, and without claim or demand to refund the same. During all this time, extending for a period of six years, the appellee had full knowledge that the state tax was assessed on the stock, and that the money was annually deducted from the July installment of interest, and applied to its payment. Whatever, then, was done by the banks and the city register in the premises was done with her knowledge, and with her approval and consent. By thus accepting the interest, less the amount deducted for the payment of the state tax, year after year, without objection, she must be considered as having sanctioned and ratified the payment of the same by the city register. And, if so, the payment must be treated as one voluntarily made by the appellee, with full knowledge of the facts and circumstances under which the taxes were demanded and paid. Such being the case, the pro forma judgment must be reversed. Judgment reversed.. NOTE. TAXATION-RECOVERY OF ILLEGAL TAX-WHAT IS A VOLUNTARY PAYMENT. Money voluntarily paid for the discharge of an illegal or invalid tax cannot be recovered, Sonoma Co. Tax Case, 13 Fed. Rep. 789, and note; in California, Maxwell v. San Luis Obispo Co., 12 Pac. Rep. 484; Younger v. Board Sup'rs, 9 Pac. Rep. 103; Indiana, Churchman v. City of Indianapolis, 11 N. E. Rep. 301; Michigan, Baker v. Big Rapids, 31 N. W. Rep. 810; Peninsula Iron, etc., Co. v. Town of Crystal Falls, 26 N. W. Rep. 840; Louden v. East Saginaw, 2 N. W. Rep. 182; Minnesota, Shane v. City of St. Paul, 6 N. W. Rep. 349; Nebraska, Welton v. Merrick Co., 20 N. W. Rep. 111: Foster v. Pierce Co., 17 N. W. Rep. 261; Rhode Island, Dunnell Manuf'g Co. v. Newell, 2 Atl. Rep. 766; Vermont, Sowles v. Soule, 7 Atl. Rep. 715; Wisconsin, Rutledge v. County of Price, 27 N. W. Rep. 819; Babcock v. City of Fond du Lac, 16 N. W. Rep. 625. A payment is voluntary, if made by a party informed of all the facts connected with the subject-matter of payment, and under the influence of no duress or coercion, even though it be accompanied by a written or verbal protest. Sowles v. Soule, (Vt.) 7 Atl. Rep. 715; Sonoma Co. Tax Case, 13 Fed. Rep. 789; Baker v. Big Rapids, (Mich.) 31 N. W. Rep. 810; Rutledge v. County of Price, (Wis.) 27 N. W. Rep. 819; Peninsula Iron Co. v. Town of Crystal Falls, (Mich.) 26 N. W. Rep. 840; Shane v. City of St. Paul, (Minn.) 6 N. W. Rep. 349; Louden v. City of East Saginaw, (Mich.) 2 N. W. Rep. 182. But in Iowa, if a tax is not merely informal and irregular, but is illegal and void, as being levied upon property not liable to taxation, and the owner of the property makes payment under protest, he may recover it. Thomas v. City of Burlington, 28 N. W. Rep. 480; Winzer v. City of Burlington, 27 N. W. Rep. 241; Dickey v. County of Polk, 12 N. W. Rep. 290. So, also, in Nebraska, an invalid tax paid under protest may be recovered, Caldwell v. City of Lincoln, 27 N. W. Rep. 647; Welton v. Merrick Co., 20 N. W. Rep. 111; Foster v. Pierce Co., 17 N. W. Rep, 261; and in Michigan provision is made by statute for an action to be brought within 30 days for the recovery of money paid under a specific protest, which must point out the true cause for complaint, Peninsula Iron Co. v. Town of Crystal Falls, 26 N. W. Rep. 840; but the payment of a tax under a general protest is a voluntary payment, and the amount thereof cannot be recovered. Baker v. Big Rapids, 31 N. W. Rep. 810; Peninsula Iron Co. v. Town of Crystal Falls, supra; Louden v. East Saginaw, 2 N. W. Rep. 182. The payment is not voluntary if made under compulsion of legal process, accompanied by a protest that the demand is illegal, and that the payor intends to take measures to recover back the money paid, Dunnell Manuf'g Co. v. Newell, (R. I.) 2 Atl. Rep. 766; Babcock v. Township of Beaver Creek, (Mich.) 32 N. W. Rep. 653, and 31 N. W. Rep. 423; Parcher v. Marathon Co., (Wis.) 9 N. W. Rep. 23; and to constitute compulsion of legal process it is not necessary that the officer may have seized, or to be immediately about to seize, property of the payor by virtue of the process, but is sufficient if he demands payment by virtue thereof, and manifests an intention to enforce collection by seizure and sale of the payor's property at anytime. Breucher v. Village of Port Chester, (N. Y.) 4 N. E. Rep. 272; Babcock v. Beaver Creek, (Mich.) 31 N. W. Rep. 423; Louden v. East Saginaw, (Mich.) 2 N. W. Rep. 182; Parcher v. Marathon Co., supra. The payment of taxes based upon an illegal assessment, in order to prevent the property assessed from being returned delinquent, is a voluntary payment. Younger v. Board Sup'rs, (Cal.) 9 Pac. Rep. 103. So is one to prevent a sale or conveyance by the collector of property of which he has no possession, under an assessment made in accordance with the provisions of the California constitution relating to the assessment of railroad property, which violates the provision of the fourteenth amendment of the constitution of the United States, and it is therefore void, and such sale or conveyance creates no cloud on title, Sonoma Co. Tax Case, 13 Fed. Rep. 789, and note; and one to prevent the execution of a tax deed of land that has been illegally sold for taxes under a judgment void upon its face, the owner being in possession of the requisite information and means for impeaching the validity of the sale, Rutledge v. County of Price, (Wis.) 27 N. W. Rep. 819; Shane v. City of St. Paul, (Minn.) 6 N. W. Rep. 349; and one to avoid liability to civil and criminal prosecutions in case of refusal to pay certain license taxes, in which prosecutions the validity of the law which authorized the collection of the taxes have a perfect defense, a party making payment is not under duress or compulsion, Maxwell v. San Luis Obispo Co., (Cal) 12 Pac. Rep. 484. So is the payment of a tax assessed against another person, and for which a tax collector attempted to distrain plaintiff's bank stock, and advertised it for sale, as bank stock cannot be legally taken and sold on a tax-warrant, Sowles v. Soule, (Vt.) 7 Atl. Rep. 715; and one by a purchaser of land, against whose grantor an assessment has been levied for a local improvement, such assessment not being a lien on realty until it is returned delinquent, Louden v. City of East Saginaw, supra. The mere fact that the business necessities of the plaintiff compelled him to pay a license which was excessive does not make it an involuntary payment. Custin v. City of Viroqua, (Wis.) 30 N. W. Rep. 515. One who is arrested and tried on a plea of "not guilty" to a charge of violating a town ordinance which is void, but without disputing its validity, and is found guilty, fined, and pays his fine without protest, cannot recover the amount of the fine in an action against the incorporated town imposing the penalty. Bailey v. Town of Paulina, (Iowa.) 29 N. W. Rep. 418. When the taxing officers deliberately value certain property at double the value of all other property of the same kind, and levy a tax thereon accordingly, the proceeding is quasi judicial, and the result cannot be questioned in an action at law; but a suit to enjoin the collection of the tax so levied can be maintained on the ground of fraud, and it is therefore a question whether or not the judgment of tax was really compulsory. Balfour v. City of Portland, 28 Fed. Rep. 738. (79 Me. 191) JONES D. FIRST NAT. BANK and others. 1. INSOLVENCY-DISCHARGE-ACCOUNT-BOOKS. To entitle a merchant or trader to a discharge in insolvency, he must, under Rev. St. Me. c. 70, 246, have kept for the period material to the inquiry "a cash-book and other proper books of account," and this requirement is absolute, and the motive of the insolvent in not keeping such books is entirely immaterial. 2. SAME-FALSE SWEARING-INTENT. False swearing by the insolvent, in material matters, before the insolvency court, deprives him of a discharge, under Rev. St. Me. c. 70, 246; and, if heswears falsely in such matters, the presumption of fraudulent intent on his part is conclusive. On motion from supreme judicial court, Cumberland county. Harvey D. Hadlock, for appellant. Symonds & Libby, for appellee. Reported by Leslie C. Cornish, Esq., of the Augusta bar. |