Omaha daily bee., 1906-06-22
RESERVE FUND FREE
Supreme Court Passes on Case Appealed BY
the Royal HighlanderS
ALLOWED OFFSET AGAINST POLICIES
Held Under New Revenue Law to Be on
Same Basis as Merchants.
ARE NOT CHARITABLE INSTITUTIONS
Real Estate and Other Property Owned BY
Them is Taxable,
RE NOT CHARITABLE INSTITUTIONS
SETTLES woODMEN OF WORLD DISPUTE
No Occasion for Removing Head
quarters 20 some other state, a.
only objection Was to Taxa
ton of Reserve Fund.
(From a stan Correspondent


LINCOLN, June II. Especial by per-
mttng fraternal insurance company to
set off its outstanding policies against its
reserve fund the supreme court today de-
cided in favor of the Royal Highlanders IT.
the case brought by Hamilton county To-
assess the reserve fund OF that order. The
judgment Of the district court of Hamn-
ton county is reversed. The decision will
practically release from assessment the re-
serve fund of the Woodmen OF the World
and all Nebraska life insurance companies,
though fraternal orders are held not to
be charitable associations. The Royal High
landers, which has its home office at Au-
rora, was assessed on its Office building
and other property to the value of 81, l3S.
also $4,000 in cesh. The county assessor
assessed the company on S455,g0O it owned
in securities deposited as credit with the
state auditor. The company appealed to
the district court and also took the matter
before the State Board of Assessment. The
district court decided the reserve fund was
| taxable and the case was appealed to the
supreme court and that judgment is now
| reversed The opinion of the court was
written by Judge Barnes and concurred in
specially by Judge Letton, Chief Justice
| sedgwick dissenting. The syllabus is as
follows:
A fraternal beneficiary association, con
Quoted for the mutual benefit OF its mem
bers and for the purpose of providing a
| FUND by the payment Of stated dues and
| fees from such members for the payment
| of special amounts upon the death OF each
member to a beneficiary named by him, Is
| not a charitable association and it's prop
! erty and funds are not used exclusively for
charitable purposes SO as to be exempt
| from taxation by the laws of this state
| Where the legislature has passed an act
providing for a new system OF raising
mer methods OF procedure relating to mat
| ters OF taxation the courts In construing
it's provisions are not bound by any ad-
| ministrative construction of the former
| revenue law. Under the rule established
by the decisions OF this court for the taxa
tion OF credits fraternal beneficiary as
sociation il entitled to set off the amount
| Of it's outstanding beneficiary certificates,
matured and unmatured. against securities
in it's fidelity or mortuary fund, get apart
and devoted exclusively TO the payment OF
such certificates.
This decision will mean that the con-
troversy over the removal from Omaha OF
the national headquarters of the Woodmen
of the World is at an end and that tbs
order remains here. The amount of the
woodmens reserve fund is $4,000, 900 an
the order has complained that II this re-
serve fund had to be taxed 1t would i'm
pose greater burden upon 1t than IL
could or would submit to, hence IL de-
cided that rather than pay this heavy tax
alton II would go to some state where its
| reserve fund would be exempt. As is gen
orally known several states, notable Mic-
souri,. Michigan, Texas and Kansas, "N-
erted strenuous efforts to capture the
| order but, while the executive council
held more than one meeting i'm Omaha on
the proposition, no definite action wa
taken and no bid accepted, for il had been
the hope of the Woodmen all along "a
circumvent the obstacle I'm some way ant
remain in Nebraska, thus avoiding thu
enormous expense attached TO a removal
and the exchange or sale of heavy prop
eIty interests in Omaha and the state
The commercial interests of Omaha arr
NJ tbraska will greet with much satisfac
, tion that action which viii insure the re
tention Of the headquarters in Omaha, tn
place OF the orders birth.
Sovereign Commander Root was out a
the city last night and could not b,
reached for an expression on this decision
hut when Sovereign Clerk Y-tes learned u
It he was grathed in the extreme, thouEl
nc did not display undue excitement, as h,
felt that in some way what his order 81
himly adVoCated--the relief OF taxation o
the reserve fund was right and woul'
win--would prevail.
THAT will put an end to the agitation
, Of the removal OF headquarters from
- Omaha, as the only object I'm the propose,
, removal was to escape paying taxes Of
, the reserve" said Mr. Yates.