after stating the case: Plaintiff’s counsel in their well prepared brief and able argument in this court, raise a question of practice, insisting that under the provisions of the statute, Rev., sec. 781, “When any garnishee makes such a statement of facts that the court cannot proceed to give judgment thereon, then the court shall order an issue to be made up which shall be tried by a jury and, on their verdict, judgment shall be rendered.” It is clear that plaintiff, upon the suggestion that he wished to traverse the return, was entitled without any formal or verified statement to have the issue tried as directed by the statute. It seems, *415however, that defendant made its motion upon tbe return and plaintiff thereupon made an issue of law, as upon a demurrer, admitting, for the purpose of the motion, the truth thereof. The appeal comes to us in that form and has been argued upon the merits. We concur with the plaintiff that His Honor correctly refused to vacate the warrant of attachment. It is in all respects regular and if so advised, the plaintiff may, upon his affidavit, have other warrants against any property which the defendant may have in this State. The service of summons on the commissioner of insurance brings the defendant corporation into court, and all such further proceedings may be had in the cause in ascertaining and declaring plaintiff’s rights, as may be in accordance with the law upon tire facts as found by the court or jury. Plaintiff suggests that the defendant corporation cannot raise the question whether, upon the return to the notice, the money in the hands of Mr. Johnson is liable to garnishment or attachment. That only the garnishee or collector can raise the question at this time, or until after judgment it is sought to have the funds applied to its discharge. We think that in view of the contention of the defendant corporation that it is entitled and that it is its duty to receive and hold this money upon an express trust, that it may, at this stage of the litigation, make such motions and pursue such course as may be proper to protect the fund. It is always the duty of a trustee to protect the trust property and for that purpose institute actions, intervene in actions pending, and in any other way, in accordance with orderly procedure, protect such property. Having disposed of these preliminary questions of practice, we are confronted with the real question in debate. Taking the return to be true, together with the affidavits filed in support thereof, is the money in the hands of Mr. Johnson, collector, subject to attachment for the claim of the plaintiff ? The solution of this question depends upon the answer to the further question, whether the money col*416lected by him is impressed with an express trust. The process with which we are dealing is rather an attachment than a garnishment. The money held by Johnson is the property of defendant and not a debt due by Johnson, which is usually the subject of garnishment. It is not material to discuss or attempt to distinguish the two kinds of process. Johnson says that he is the treasurer of Naleigh Council, the members of which are assessed by the supreme council, monthly, for the amount fixed and that he collects such assessments for the widows’ and orphans’ benefit fund created by the council and held by it in special trust to pay to the wife, children, relatives of or persons dependent upon members holding certificates at their death. That the amount in his hands, at the time of notice of attachment, was collected and received from the individual members of the said local council as assessment No. 350 for the widows’ and orphans’ benefit fund and should have been turned over to the treasurer of said council, whose duty it is to send the same to the treasurer of the supreme council for the purpose of holding same. He says that he had no other money which is, or can be called, the property of the supreme council. That this fund is, under the charter, constitution and laws of the supreme council and the laws of Massachusetts raised for and is held as trust fund to be paid out solely for death benefits. The other affidavits and exhibits all tend to sustain the truth of the return. The portions of the constitution, etc., in evidence declaring the objects of the order are consistent with the return. In paragraph 5 it is expressly stated that one of the objects of the order is “To establish a widows’ and orphans’ benefit fund from which, on satisfactory evidence of the death of a member of the order * * * a sum not exceeding three thousand dollars shall be paid to the wife,” etc. The funds from which the payment of such benefits shall be made shall be derived only from assessments collected from the members, except as provided in sections eight., nine *417and ten. The fund from which the expenses shall be defrayed may be derived from a per capita tax, dues and expense assessments. Provision is made for creating, from the assessments, in excess of the current death losses, an emergency fund, from which, if assessments are insufficient to meet death losses, they may be paid. The emergency fund shall be used only for the death or disability benefits. We think it apparent from the portions of the charter, laws and statutes quoted and others in the record that the assessments received by Mr. Johnson, collector, are made and paid for the purpose set out in his return. It is his duty to pay them over to the treasurer of Raleigh Council to be 'sent to the supreme treasurer. Mr. Robson says that he is 'the supreme secretary and knows the method by which the assessments are añade, collected and remitted. That afterf receipt by the grand treasurer, the assessments become aj part of the widows’ and orphans’ benefit fund, all of which, he says, is regulated by the charter, laws, etc., of the corporation and the laws of Massachusetts. The question is of first impression in this State, but we find that in other courts, the status of funds held by orders or-societies of the class to which defendant belongs has been considered. “Whether a fund formed by the contributions of members of a society has been impressed with a trust and so accepted, is a question of fact always open to judicial enquiry, and whether the alleged trustee be an individual, incorporated or otherwise, no act, declaration or decision of such trustee will prevent such enquiry. If the terms of the alleged trust are contained in an instrument of gift, 'that instrument will be examined and the intentions of the donor carried into execution. If expressed in the articles of a voluntary society, these articles will be carried into specific execution for the purpose of enforcing ’ the trust, and if in the fundamental law, or in the ordinances and by-laws of a society, on the faith of which- contributions have been made, the court will *418adopt tbe construction, of tbe members and apply relief according to tbeir own views of tbe law. An ordinance of a society, wbicb provides for tbe creation of a fund for tbe benefit of tbe widows, orphans, beirs or designated beneficiaries of tbe members, and commits tbe administration of sucb fund to tbe officers of tbe society, impresses any money paid into sucb fund witb tbe qualities of a trust for tbe special purposes expressed therein; and tbe fund thus formed can properly be applied only in that particular manner pointed out in sucb ordinance, wbicb is in this regard to be treated as .an express declaration of trust.” Niblack Benefit Soe., 247.
Our statute, Eev., sec. 4790-98, recognizes tbe distinction between “assessment companies,” “fraternal orders” and insurance companies. By section 4792 assessment companies are prohibited from issuing policies or transacting business not authorized by its charter. By section 4795, fraternal orders are defined bringing tbe defendant corporation within STicb definition, and providing “That sucb order, society or association paying death benefits may also create, maintain, apply or disburse among its membership a reserve or emergency fund as may be provided in its constitution or by-laws; but no profit or gain shall be added to tbe payments made by a member.” Sec. 4796 provides that funds for sucb orders must be derived from assessments and dues. “Sucb societies or associations shall be governed by tbe laws of tbe State governing fraternal orders, and shall be exempt from tbe provisions of all general insurance laws of this State, and no law hereafter passed shall apply to sucb societies, unless fraternal orders be designated therein.”
This general statement of tbe law is sustained by a number of decided cases — we find none to tbe contrary. In Nat. Park Bank v. Clark, 77 N. Y., Supp., 1089, the relative rights of members and creditors of an order of. this character were involved and passed upon. An order or association, *419in some respects similar to the defendant, chartered in Indiana, became insolvent and a receiver was appointed by the court in that State. The order had subordinate councils in New York, and they, in turn, established a grand council in that State. The supreme council maintained a general fund for the purpose of defraying its ordinary expenses, etc., and a. relief fund for the benefit of members disabled, etc. The funds were derived from assessments of an amount fixed according to age, etc., paid by members of the subordinate councils and transmitted by them to the supreme council, 90 per cent of which went into the relief fund, and 10 per cent into the general fund. Certificates were issued to the members very similar in form and substance to that issued to plaintiff. No assessments were made for any particular claim. Eor the convenience of claimants, depositories of the relief fund were appointed, one of them being the National Park Bank. Several creditors attached the funds deposited therein. A receiver was appointed by the New York courts to protect the funds in that State for the benefit of claimants residing there. The question as to the'rights of attaching creditors and the receiver came up before the Supreme Court. Wright, J., said: “So we have a fund devoted by the law providing for its existence, and also by the subsequent agreement of every member of the order, to a certain definite purpose. It was paid by the members to the supreme council for that purpose, and it was hedged about by rigid provisions for its protection against diversion from that object by the supreme council or any other authority. The body of beneficiaries, entitled to this fund, was determined by the claims that were, from time to time, passed upon and allowed * * Prom the foregoing, it clearly appears that said fund was impressed with a trust for the purpose aforesaid.” After discussing the rights of all claimants to an equitable distribution of the fund, it is said: “The counsel for the attaching creditors cite several eases for the purpose of endeavoring to *420substantiate their claims to a preference by virtue of their liens of attachment; but those cases do not apply to a case like this, when the fund attached is a trust fund.” The court directed the receiver appointed by the New York court, after paying the expenses of the receivership, to pay over the fund to the Indiana receiver to be 'administered in accordance with the terms of the trust. In Knight Templars v. Vail, 68 N. E. (Ill.), 1103, in discussing the status of the funds derived from assessments and set apart for a specific purpose, a distinction is drawn between such funds and those of the ordinary life insurance company, Ricks, J., saying: “It may be observed that appellant is not an ordinary insurance company, which pays tribute to the State upon the theory that it reaps, from the business, pecuniary profit, but, on the contrary, its existence is only authorized upon the theory as the title of the act authorizing it provides that it was organized 'for the purpose of furnishing life indemnity or' pecuniary benefits to widows, orphans, etc., to the members thereof.’ In the eye of the law, the members and those bearing certain relations to them, are the beneficiaries of all the funds realized by such 'corporation, and not the corporation itself. The corporation stands but as a trustee handling the funds paid by the members and to be issued to them, and the beneficiaries authorized by the act, according to the plain restrictions provided by the act.” The same view is taken in Com. v. Eq. Ben. Asso., 18 Atl. Rep. (Penna.), 1112, wherein, after discussing the theory upon which insurance companies is based, it is said: “What is known as a ‘beneficial association,’ however, has a wholly different object and purpose in view. The great underlying purpose of the organization is not to indemnify or secure against loss. Its design is to accumulate a fund from the contribution of its members for beneficial or protective purposes, to be used in their own aid or relief in the misfortune of sickness, injury or death.” In Allen v. Thompson, 56 S. W. (Ky.), 823, the question under eonsid-*421eration. is sharply presented. Plaintiff borrowed from the Granger’s Mutual Benefit Society a sum of money, and secured its payment by a mortgage. The society, of which he was a member, becoming insolvent, he sought to use, as a counterclaim, the amount paid by way of assessments or the cash value of his certificate. The assessments were made for and paid into the mortuary fund held by the society to pay death claims of the members. The court said: “These monthly dues were a sum certain, payable every month, and not contingent in any way upon the death of members, as under the old policy. Still the company had no assessments, and no means of meeting this obligation, except from the mortuary fund above referred. to. Every member who took a policy was compelled to know that his only reliance for the payment of his policy in ease of his death was the collection of the dues of the members. It was, therefore, strictly a mutual company, and for this reason the funds of the two classes were required to be kept separate, so that no part of the funds of one class should be required to pay the losses of the other. Besides, the mortuary fund, by the express terms of the charter, could be used only in the payment of death claims or in resisting claims on the fund. It was thus a guaranty fund for the payment of death losses, and cannot be appropriated to any other obligation so as to leave them unpaid.” He was not permitted to set up his counterclaim. In Sherman v. Harbin, 100 N. W. (Iowa), 623, the court, in this connection, used the following language: “Such an association acts as trustee in the collection of funds and their distribution to the beneficiaries entitled to receive them.” The question, as it arose in that case, is discussed at length, and the concluson reached in harmony with what we have quoted from other courts. Ins. Com. v. Provident Aid Soc., 36 Atl., 627. In Wilber v. Torgerson, 24 Ill. App., 119, it appeared that the directors for the purpose of paying a death loss, advanced the money from their personal funds. There*422after they repaid themselves out of the reserve fund set apart to pay death losses, the amount so advanced. The association became insolvent. Plaintiff was entitled to be paid the amount due on a certificate issued to his wife. He insisted that the directors had no right to repay themselves out of the reserve fund, the amount so advanced. Upon appeal from a judgment against the directors, Moran, P. J., said: “We think this action of the court was correct. It was the duty of the directors to make an assessment upon the members to pay the death claim and, if instead of doing so, they saw fit to advanee their own money to discharge said claim, they did not thereby gain a right to appropriate the reserve fund in payment to themselves of such advance as long as there was any certificate holder who had the right to have such reserve fund paid out to him as a mortuary benefit * * * under the terms of the certificates which the association issued; such reserve fund was a trust fund to be used only for mortuary benefits, without assessments, or applied otherwise for the promotion of the objects, for which, by the by-laws, it was set apart. The advance of the directors made them only ordinary creditors, and the trust fund could not be used to pay such debt if there were trust purposes to which it could be applied.” The relation which the members or holders of certificates issued by the Royal Arcanum hold to the order came under discussion in Saunders v. Robinson, 144 Mass., 306, in which it was held that the sum due the beneficiary named in the certificate was not subject to attachment or garnishment. Devens, J., said: “An example of the whole system shows that the association was established, among other things, for the purpose of affording mutual aid to its members, and also for the purpose of establishing what is termed a widows’ and orphans’ benefit fund, for the payment of specified sums to the widows, orphans and other dependents of deceased members. It transacts its business mainly through the agency of grand councils composed from the subordinate councils in *423each State, and through the agency of these subordinate councils, both of which councils operate under charters granted by the supreme councils, and in obedience with the rules prescribed in such charters.” While not strictly analogous, we find in Duke v. Fuller, 9 N. H., 536 (32 Am. Dec., 392), an interesting discussion of the principle as involved in the charter, etc., of a lodge of Eree Masons. This court held in Lord v. Hardie, 82 N. C., 241, that the communion service owned by the trustees of a church could not be sold under execution. Smith, C. J., said: “It is thus apparent that the trustees hold the property vested in them by law, in their corporate capacity, for the exclusive use of the congregation, and under its direction and control.” They are depositories of the naked, legal title. “An attaching creditor can acquire no greater interest in attached property than the defendant had at the time of the attachment.” Ward v. Waterman, 85 Cal., 488. Whether we treat the funds -collected by Mr. Johnson, collector, as the property of the corporation immediately upon its receipt by him or as the property of the members of Ealeigh Council until transmitted is immaterial. If the first, it is impressed with an express trust, if the second, it cannot be attached for a debt of the Supreme Council of the Eoyal Arcanum. The results which would follow if a creditor of the supreme council could attach the assessments paid by members for the widows’ and orphans’ benefit fund would be disastrous to thousands of innocent people. To what extent the failure of the subordinate councils to forward the assessments, by reason of attachments served on them, would operate to cancel the certificates of its members, we need not inquire. If, however, we permitted the assessments to be diverted from the purposes for which they are paid, we would be powerless to protect the sufferers. We have no power to control by mandamus or injunction the supreme council. If the plaintiff shall establish his claim against the corporation, he will have final process against *424any property it may bave within this State. Eor such other property, he will be compelled to resort to the courts of Massachusetts. Blackwell v. Mutual Reserve, at this term.
After a careful examination of the authorities, we are of the opinion that the levy of the attachment on the funds in the hands of the officers of Raleigh Council should have been vacated and set aside.
Let this be certified to the Superior Court of Mecklenburg County.
Error.