Statement of the Case.

GRAND LODGE F. AND A. MASONS OF LOUISIANA v. NEW ORLEANS.

ERROR TO THE SUPREME COURT OF THE STATE OF LOUISIANA.

No. 111. Argued January 19, 1897. Decided March 15, 1897.

Act No. 225 of the legislature of Louisiana of March 15, 1855, exempting the hall of the Grand Lodge from state and parish taxation, "so long as it is occupied as a Grand Lodge of the F. & A. Masons," did not constitute a contract between the State and the complainant, but was a mere continuing gratuity which the legislature was at liberty to terminate or withdraw at any time.

If such a law be a mere offer of bounty it may be withdrawn at any time, although the recipients may have incurred expense on the faith of the offer.

THIS was a petition originally filed in the Civil District Court for the parish of Orleans by the Grand Lodge of the F. & A. Masons of the State of Louisiana, to enjoin the city of New Orleans from proceeding to sell, for the taxes of 1888, 1889 and 1890, certain property owned by the petitioner, and claimed to be exempt from taxation.

The petition set forth that the Grand Lodge was incorporated by a perpetual charter, granted by the legislature in 1816; that petitioner was the owner of a lot of ground, with buildings and improvements thereon, at the corner of St. Charles and Perdido streets, known as the hall of the Grand Lodge, etc., which property it had purchased in 1853 by a notarial act, in which was incorporated a resolution of the Grand Lodge, which, in substance, devoted the entire net revenues of such property "to the relief of worthy distressed members of the order, their wives, children and families, and as a permanent charitable fund"; that such resolution was in strict accord with the objects of the institution, of which the Grand Lodge is the superintending body or organization, "the principles of which are charity and universal benevolence," and "to the end thereof, that charitable insti

Statement of the Case.

tutions may be promoted," the act of incorporation was enacted; that further to promote this object the legislature, by an act (No. 255), approved March 15, 1855, acts of 1855, p. 270, exempted said hall from city and parish taxation, so long as it was occupied by the Grand Lodge of F. & A. Masons, which exemption was claimed to have become a contract between the State and the Grand Lodge so long as the property was owned and occupied by it. The petitioner alleged that the principles and objects of Free Masonry are still unchanged, and that the net revenues arising from the property have not been diverted; that the city now claims that the property is subject to taxation, and threatens to enforce the collection of the taxes.

The answer of the city was simply a general denial.

Upon the trial it appeared that the Grand Lodge was incorporated by act of March 18, 1816, with full power and authority to take, hold and enjoy real and personal property, etc.; that the hall was erected in the year 1845 for a commercial exchange, and was purchased by the Grand Lodge for a hall in 1853; that on March 15, 1855, the general assembly enacted that the building, whose location and name were given in the act, should be exempt from state and parish taxation so long as it was occupied as the Grand Lodge of the F. & A. Masons. It further appeared that the objects proposed by the institution were charity and universal benevolence; that contributions were exacted from each member of the order for the ordinary expenses of the lodge and as a fund for the purposes of charity, to be distributed as occasion required, and that from 1853 to the present time the whole of the revenue, except that used for insurance, repairs and current expenses, has been exclusively devoted to charitable purposes as stated in the charter and act of sale. These revenues averaged over $3000 per year.

It further appeared that in 1879 a new constitution was adopted by the State, of which article 207 was as follows: "The following property shall be exempt from taxation and no other, viz. All public property, places of religious worship or burial, all charitable institutions; provided, the

Opinion of the Court.

property so exempted be not used or leased for purposes of private or corporate profit or income.”

Upon the hearing in the District Court, the property was held to be exempt from taxation, and an injunction granted. The city appealed to the Supreme Court, which reversed the decree of the District Court and dissolved the injunction. Upon a rehearing, the decree was amended by recognizing the exemption of that part of the property occupied by the grand and subordinate lodges of Masons, and in other respects the demand was rejected, and the case remanded to the court below with directions to hear evidence and ascertain what property was thus occupied, and what property was rented or used for private or corporate profit or income, and to pass upon and decide the relative values of that part of the property thus occupied by said Masons to that leased or used as aforesaid, that is, "from the assessed value of the property, viz., $60,000, must be deducted the value of the property exempted aforesaid."

The case having been remanded and reheard in the District Court, a new judgment was rendered in favor of the city for the city taxes of 1888, on an assessment of $20,000; of the year 1889, on an assessment of $10,000, and for the year 1890, on an assessment of $6200. The case was then appealed and reheard in the Supreme Court, and the judgment of the District Court affirmed. Whereupon petitioner sued out this writ of error.

Mr. Charles F. Buck for plaintiff in error. Mr. J. Q. A. Fellows was on his brief.

Mr. Samuel L. Gilmore for defendant in error. Mr. W. R. Sommerville was on his brief.

Mr. M. J. Cunningham, Attorney General of the State of Louisiana, Mr. F. C. Zacharie and Mr. Alexander Porter Morse filed a brief on behalf of the State.

MR. JUSTICE BROWN delivered the opinion of the court.

VOL. CLXVI-10

Opinion of the Court.

The only question in this case is whether the act of 1855, exempting the hall of the Grand Lodge from state and parish taxation, "so long as it is occupied as a Grand Lodge of the F. & A. Masons," constitutes a contract between the State and the complainant, or was a mere continuing gratuity which the legislature was at liberty to terminate or withdraw at any time, and which the State did subsequently withdraw by the adoption of a constitution, which secured the exemption of the property of "all charitable institutions, provided, the property so exempted be not used or leased for the purposes of private or corporate profit or income." It appeared in this case that, during the years in which the assessments complained of were made, a part of the ground floor of the exempted property was rented for stores; that some of the rooms were rented for other like purposes, and that from these sources a large amount of corporate income had been realized, although that income was devoted to charitable purposes.

If the act of 1855 be regarded as a contract within the case of Dartmouth College v. Woodward, 4 Wheat. 518, then it is clear that the exemption from taxation was valid, and beyond the power of the legislature to abrogate. State Bank v. Knoop, 16 How. 369; New Jersey v. Wilson, 7 Cranch, 164; Gordon v. Appeal Tax Court, 3 How. 133; Dodge v. Woolsey, 18 How. 331; Jefferson Branch Bank v. Skelly, 1 Black, 436; McGee v. Mathis, 4 Wall. 143; Wilmington Railroad v. Reid, 13 Wall. 264; Humphrey v. Pegues, 16 Wall. 244; Farrington v. Tennessee, 95 U. S. 679; New Jersey v. Yard, 95 U. S.

104.

To make such a contract, however, there is the same necessity for a consideration that there would be if it were a contract between private parties. If the law be a mere offer of a bounty, it may be withdrawn at any time, notwithstanding the recipients of such bounty may have incurred expense upon the faith of such offer. Thus, the legislature of the State of Michigan, desiring to encourage the manufacture of salt, which had been recently discovered in the Saginaw Valley, in 1859, offered exemption from taxation and a bounty of ten cents per bushel to all individuals, companies or corporations formed

Opinion of the Court.

for the purpose of boring for and manufacturing salt. It was held in the Salt Company v. East Saginaw, 13 Wall. 373, that, if the salt company plaintiff had been incorporated by a special charter, containing the provision that its property should be exempt from taxation, and that charter had been accepted and acted upon, it would have constituted a contract; but that this was a bounty offered to all corporations and individuals who should manufacture salt, and there was no pledge that it should not be repealed at any time; that as long as it remained a law, every individual or corporation was at liberty to avail himself or itself of its advantages, by complying with its terms, and doing the things which it promised to reward; but was also at liberty at any time to abandon such a course; that it was a matter purely voluntary upon both sides—giving to one party the power to abandon the manufacture of salt, and to the other to repeal the exemption from taxation and the bounty of ten cents per bushel. The consequence of a different decision in this case might easily have become disastrous, since the arguments which were urged upon this court at that time would have been equally forceful at any time thereafter, and the State might have found itself bound by a perpetual pledge to pay ten cents upon every bushel of salt thereafter manufactured by the companies, which had embarked in the enterprise under the encouragement of the bounty. A like ruling was made in Welch v. Cook, 97 U. S. 541, in which an act of the legislature of the District of Columbia, exempting from general taxation for ten years such real and personal property as might be employed within the District for manufacturing purposes, did not create an irrepealable contract with the owners of such property, but merely conferred a bounty, liable at any time to be withdrawn.

Complainant, while admitting the soundness of this proposition, claims that the requisite consideration existed in the deed by which the property was acquired, wherein the Grand Lodge solemnly declared and proclaimed said purchase to be made for the purpose and object of creating a fund for charitable purposes, in the relief of worthy distressed members of