Appeal Tax Court v. Grand Lodge of Ancient Free & Accepted Masons

Robinson, J., delivered the opinion of the Court. The Grand Lodge of Ancient Free and Accepted Masons of Maryland, was incorporated in 1821, as a benevolent and charitable institution; and was authorized to hold real and personal property to an amount, not exceeding twenty thousand dollars in annual value. By the Act of 1867, ch. 23, the gi’ound and building belonging to the appellee in Baltimore City, known as ⁴²⁸ “ The Masonic Temple,” and the stock issued by the corporation for the erection of the building, were both exempted from taxation so long as the building should be used for the purposes for which the appellee was chartered. It is now contended, that the exemption thus granted, is in the nature of a contract between the State and the corporators, and therefore irrepeatable.

Whatever doubts may have at one time existed, it seems now to be settled that it is competent for the Legislature, in special cases, to relinquish the power of taxation. In all such cases, however, a consideration of some kind is essential to the validity of the contract. If there b‘e no consideration, the exemption is a mere gratuity, revocable at the pleasure of the Legislature. Now, in this case, the exemption claimed by the appellee formed no part of its original charter, but was granted by a subsequent Act of the Legislature, which merely declares that certain property belonging to the corporation shall be exempt from taxation.

There is no consideration expressed, nor is there anything in the Act from which one can be inferred, and tbe case comes, therefore, directly within the decision in Rector, &c. of Christ Church vs. County of Philadelphia, 24 Howard, 300 . There, the property belonging to Christ Church Hospital was, by an Act of the Legislature, exempted from taxation, so long as the same should belong to said Hospital; and it was contended, as in this case, that the exemption thus granted was a contract, and therefore heyond the power of a subsequent Legislature to repeal. The Supreme Court, however, held it to be a mere privilege, revocable at the pleasure of the power that granted it. In Home of the Friendless vs. Rouse, 8 Wallace, 430, the exemption formed a part of the charter of the corporation, and a majority of the Court were of opinion that the benefit resulting to the public from a charity of ⁴²⁹ that kind, was a sufficient consideration to support the contract.

But this case cannot he considered as overruling, or in any manner contravening the decision in 24 Howard. On the contrary, in the subsequent case of Tucker vs. Ferguson, 22 Wallace, 528, the doctrine laid down in 24 Hoiuard is reviewed and affirmed, and all the Judges concurred in holding, that an exemption from taxation granted to a railroad company after its incorporation, was a mere privilege, revocable at pleasure. Mr. Justice Swayne, in delivering the opinion of the Court, says: “ The provision of the thirty-seventh section of the Act of 1871, exempting the lands specified from local taxation until three years from the 1st of April, 1871, which period has not elapsed, was not a contract. There was no consideration.

As between individuals the stipulation would belong to the category of nude pacts. It has no higher character, because one of the parties was a State, the other a corporation, and it was put in the form of a statute. It was the promise of a gratuity spontaneously made which might be kept, changed or recalled at pleasure.” We are of opinion, therefore, that the exemption granted to the appellee by the Act of 1867, was a mere -privilege, which a subsequent Legislature could revoke whenever, in their judgment, the public good required it. Now the Act of 1876, ch. 260, exempts the property belonging to benevolent and charitable institutions only so far as the same is used for the benefit of the indigent and afflicted, and the ground which the buildings so used shall actually cover.

If the buildings, or any portions