Nat'l Council of Junior Order of United Am. Mechanics of United States of Am. v. State Council of Junior Order of United Am. Mechanics of State of N.J.

• Decision Date: 23 January 1903
• Citation: 53 A. 1082,64 N.J.E. 470
• Parties: NATIONAL COUNCIL OF JUNIOR ORDER OF UNITED AMERICAN MECHANICS OF UNITED STATES OF AMERICA v. STATE COUNCIL OF JUNIOR ORDER OF UNITED AMERICAN MECHANICS OF STATE OF NEW JERSEY et al.
• Court: New Jersey Court of Chancery

53 A. 1082

64 N.J.E. 470

NATIONAL COUNCIL OF JUNIOR ORDER OF UNITED AMERICAN MECHANICS OF UNITED STATES OF AMERICA

v. STATE COUNCIL OF JUNIOR ORDER OF UNITED AMERICAN MECHANICS OF STATE OF NEW JERSEY et al.

Court of Chancery of New Jersey.

Jan. 23, 1903.

Action by the National Council of the Junior Order of United American Mechanics of the United States of America against the State Council of the Junior Order of United American Mechanics of the State of New Jersey and others to enforce a trust. Judgment dismissing the bill.

B. B. Hutchinson and Charles L. Corbln, for complainant.

P. A. Dennis and A. H. Strong, for defendants.

PITNEY, V. C. The bill was filed by the National Council of the Junior Order of United American Mechanics of the United States against the state council of the same order for the state of New Jersey, and three of its officers, defendants. The object of the bill is to enforce a trust of moneys. The allegation of the bill is, in brief, that the defendant has in the hands of its treasurer a certain sum of money received by it in trust for, and therefore belonging to, the complainant. The suit corresponds precisely with an action at law for moneys had and received, and the cause of action, if it exists as alleged, would warrant an action at law. But a court of equity has clear jurisdiction on the score of taking an account, and no objection is made by the defendant on the ground of want of jurisdiction. The complainant is a corporation of the state of Pennsylvania, created in accordance with its laws, by articles of association made, filed, and approved in one of the courts of that state on the 11th of April, 1893. The defendant was incorporated by a special act of the legislature of this state, approved February 25, 1875 (P. L. p. 52). The objects of the association are stated thus: "The objects of this association shall be to maintain and promote the interests of the American youth; to assist them in obtaining employment; to encourage them in business; to afford relief to the members thereof, and to defray the expenses of their funerals or such other cases of distress as shall be defined by the by-laws." The defendant association had been organized several years before its incorporation, and had united with similar organizations in some of the adjoining states in organizing a national council, which latter was unincorporated until 1893. The complainant corporation has a constitution, by-laws, and officers, and a legislative body composed of delegates or representatives from the various state councils throughout the United States. The defendant corporation also had a constitution, by-laws, and officers, and a state council composed of delegates sent up by the subordinate councils located in various parts of the state, who also had their respective officers and individual members. The individual members of the local councils appear to be the only constituent members of the different grades of council. Neither the state council nor the national council has, I understand, individual members. The national council raises funds by levying a capitation tax on each member of the subordinate councils. The aggregate of the tax depends, of course, on the number of the membership. The order for this tax is transmitted to the, officers of the state council. It mentions no gross sum to be raised, but merely fixes the amount per head. The state council procures funds to meet this demand by the national council, and at the same time funds for its own purposes, by imposing a single per capita tax on the individual members of the subordinate councils,—greater, of course, than the national tax. This process is much like that of the tax imposed by a county upon the property of its different citizens, which is raised and levied by the taxing and collecting officers of each township or other municipality, and which latter adds to the amount so levied what is necessary for its own purposes, collects the whole, pays over the amount collected for the county, and retains the balance. In June, 1899, the national council, at its regular annual meeting, levied a tax of 15 cents for its general purposes, and 10 cents for the support of an orphan home, a benevolent institution conducted by the order—in all, 25 cents,—upon each and every member of the order under its jurisdiction, and made it payable one-half on the 15th of October, 1899, and one-half on the 15th of April, 1900. The allegation of the bill, which was filed on April 17, 1901, is that this tax was levied and assessed by the defendant corporation, the state council, and collected by it, to the amount of over $7,000, and that it has refused to pay it over. The defendant denies that it levied a tax for that purpose. It admits the levying a per capita tax in October, 1899, but it sets up that it had thrown off its allegiance to, and dissolved its connection with, the complainant, before it levied any tax upon the members of the subordinate councils after the assessment by the national council in 1899, and that no tax was levied or collected for that council. It appears that it is the duty of each state council in each year to make a report to the national council, stating, among other things, the number of its members. The bill alleges, and the answer admits, that the defendant failed and refused to make this report for the year 1899. The bill also sets out, and the answer admits, the adoption by the defendant of certain rebellious resolutions in October, 1899, hereafter to be stated. The practice of the state council is to hold an annual meeting in the month of October, when the financial officers make a report of their finances up to that date. The requisition for tax from the national council is laid before the meeting and dealt with, and a tax is levied at that time, to be paid in January and July of the next year. A tax of 40 cents per head was levied by the state council in the month of October, 1899, and collected during the next year (1900), and sufficient was collected to have paid the tax levied by the national council.

The precise question is whether the moneys realized by the defendant from that tax are impressed with a trust in favor of the national council. The complainant alleges the affirmative, and the defendant denies it. In considering this question, it must be borne in mind that the relation between the parties is a purely voluntary one. The constitution of the national council provides for the collection of a tax in the manner hereinbefore stated, but it is hardly necessary to remark that it has no power to enforce it So with the state council; it imposes a tax upon the different subordinate councils, but has no power to enforce it. Neither have the officers of the subordinate councils any power to enforce a tax which they lay upon their members. Any member may withdraw at any time. The adhesive power which holds these several bodies together' is the supposed benefit, first, to the individual members by reason of their membership, then to the subordinate council by reason of its connection with the state council, and then to the state council by reason of the benefit supposed to be derived by its connection with the national council. The relation, indeed, between them, is quasi contractual; but I can find no warrant anywhere in the case, nor in the law applicable thereto, for the notion that the national council could bring an action at law against any state council, and recover damages for its refusal to collect any tax which the national council may impose. Whatever right of that sort exists is unenforceable by legal action, and...