Wright v. Knights of Maccabees of the World

• Decision Date: 23 November 1909
• Citation: 196 N.Y. 391,89 N.E. 1078
• Parties: WRIGHT v. KNIGHTS OF MACCABEES OF THE WORLD
• Court: New York Court of Appeals Court of Appeals

196 N.Y. 391

89 N.E. 1078

WRIGHT

v.KNIGHTS OF MACCABEES OF THE WORLD

Court of Appeals of New York.

Nov. 23, 1909.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by Dennis L. Wright against the Knights of the Maccabees of the World. A judgment dismissing the complaint of the merits was affirmed by the Appellate Division (128 App. Div. 883,112 N. Y. Supp. 1150), and plaintiff appeals. Reversed.

The defendant is ‘a mutual, fraternal benefit insurance association,’ organized under the laws of the state of Michigan, with its principal office in the city of Port Huron in that state, and with branches or subordinate bodies, known as tents, in various places in many states, one of which, located in the city of Watertown, N. Y., is known as Tent No. 418.' The plaintiff, a resident of Watertown, became a member of the defendant and of said tent in the month of June, 1897, In January, 1905, he was suspended by the defendant, and the suspension, if lawful, involved the forfeiture of his right to participate either in the benefit fund of the association or in the fraternal privileges of his tent. Claiming that such suspension was in violation of law, he brought this action to procure his reinstatement as a member in good standing, the restoration of his certificate of insurance, and an injunction against the defendant restraining it from changing the contract or the dues and assessments thereunder. The history of the controversy, which has been before the courts for several years, may be found by consulting the case as reported in 48 Misc. Rep. 558,95 N. Y. Supp. 996; 119 App. Div. 914,104 N. Y. Supp. 1151; 122 App. Div. 904,106 N. Y. Supp. 1150; 128 App. Div. 883,112 N. Y. Supp. 1150. Upon the last trial the Special Term dismissed the complaint on the merits, without costs, and the Appellate Division affirmed; one of the justices dissenting, and one not sitting.

John Conboy, for appellant.

B. A. Field and Devere Hall, for respondent.

VANN, J. (after stating the facts as above).

This appeal was heard on the judgment roll, no case having been made and none of the evidence or exhibits being printed, except as portions of the latter appear in the findings of the trial court. The following facts, found by the court, present the questions that we are called upon to decide: In his application to become a member of the defendant, dated June 9, 1897, the plaintiff stated: ‘I hereby agree that * * * the laws of the Supreme Tent of the Knights of the Maccabees of the World now in force, or that may hereafter be adopted, shall form the basis of this contract for beneficial membership * * *; that any * * * neglect to pay any assessment which shall be made by the Supreme Tent within the time provided by the laws thereof, or neglect to pay the dues fixed by said laws, in the manner and at the time provided by said laws, or the by-laws of the tent to which I may belong, shall vitiate my benefit certificate and forfeit all payments made thereon. * * * This application and the laws of the Supreme Tent now in force, or that may hereafter be adopted, are made a part of the contract between myself and the Supreme Tent; and I, for myself, and my beneficiary or beneficiaries, agree to conform to and be governed thereby.’ On the 19th of June, 1897, the defendant issued to the plaintiff a certificate or policy of insurance stating in part as follows: ‘This certifies that Sir Knight Dennis L. Wright has been regularly admitted as a member of Watertown Tent No. 418, located at Watertown, state of New York, and that in accordance with and under the provisions of the laws of the order he is entitled to all the rights, benefits, and privileges of membership therein, and that at his death one assessment on the membership, not exceeding in amount the sum of $1,000, will be paid as a benefit to Mary Wright * * * provided he shall have in every particular complied with the laws of the order in force or that may hereafter be adopted.’

The plaintiff, who at the date of the certificate was of the age of 50 years, complied with the rules of the defendant and paid all dues, assessments, and charges against him until and including the month of December, 1904. According to the laws of the association in force at the time of plaintiff's admission to membership the annual dues were $3 per year, and in January, 1898, with his acquiescence, they were changed to $4 per year, and he thereafter paid at that rate. According to said laws when the plaintiff was admitted each monthly assessment was $1.40, and, as the court found, ‘it was further agreed that ‘he shall pay the same rate of assessment thereafter so long as he remains continually in good standing in the order.’' Provision was made, however, that in case one assessment per month should not be sufficient to pay death and disability claims as they should occur, additional assessments might be made from time to time to pay such claims. At the time the plaintiff joined the defendant the by-laws provided that ‘any member holding a benefit certificate who shall become totally and permanently disabled from any cause, not the result of his own illegal act, to perform or direct any kind of labor or business, or who shall arrive at the age of seventy years, and who has paid all legal dues and assessments since the date of his initiation to the date of such disability or period in life, shall be relieved from the payment of any further dues or assessments levied under these laws, or the by-laws of the tent of which he is a member, and shall be entitled to receive from the disability fund annually one-tenth part of the sum for which his benefit certificate is issued, provided, however, that the aggregate of such installments received by him shall in no case exceed the sum specified in such certificate.’

In July, 1904, the defendant, without the consent of the plaintiff, so amended its by-laws as to provide that ‘on and after January 1, 1905, all present life benefit members of the association who are then fifty-five years of age, or over * * * shall pay three dollars per month for each $1,000 of life benefits carried.’ The amendment also provided for a per capita tax of ten cents per month and a ‘fraternal tax of fifty cents a year,’ upon every member of the association.Additional assessments at the new rate were authorized to pay death and disability claims whenever the amount of the life benefit fund was not sufficient for the purpose. On January 1, 1905, the plaintiff had passed the age of 55 years. The amended laws further provided that ‘A life benefit member of the association who shall become totally and permanently disabled by other than his own illegal, reckless, or foolhardy act from performing or directing any and all kinds of labor or business, whether such directing is his customary occupation or not, and he is in good standing in the association at the time of such disability, may receive total and permanent disability benefits, provided that such member shall continue to pay all monthly rates, additional assessments, dues, and fines which he would have been required to pay if such disability had not occurred. * * * A member so disabled may receive from the life benefit fund annually one-tenth part of the amount named in his life benefit certificate, which amount shall be paid in quarterly payments, provided that such installments shall be paid only during the good standing of such member in the association and the aggregate of such installments shall in no case exceed the amount in his life benefit certificate.’ As the plaintiff declined to pay at the rate as increased by the amendments of 1904, he was suspended, and owing to the suspension, according to the by-laws, he forfeited absolutely all his rights derived from membership. In January, 1905, he duly tendered to the defendant in due time the sum of $2.40, which included all that he was owing at the old rate of $1.40 per month, and $1 dues for the quarter beginning on the first of the month, but the defendant refused to accept less than $4.10, the amount due according to the new rate.

The court further found that according to the defendant's experience the rate assessed at the time the plaintiff became a member ‘at twelve assessments per year is not sufficient for its perpetual maintenance and without an additional number of assessments to pay death and disability claims as they occur, it will be compelled to go out of business within eighteento twenty-five years from September, 1905;’ and ‘that the increase in the rate, or the number of assessments, was necessary for the continued existence of the defendant.’ The contract between the parties consisted of the application, certificate, and the by-laws in force when the certificate was issued. Seven years after the contract was made the by-laws were changed by the defendant, without the consent of the plaintiff, so as (1) to increase the monthly assessments from $1.40 to $3 and to require a per capita tax of 10 cents per month together with a fraternal tax of 50 cents per annum, the provision for additional assessments being still continued in force; (2) to abolish the right of a member, upon reaching the age of 70 years, to relief from the payment of any further dues or assessments: (3) to abolish the right of a member on reaching that age to receive annually one-tenth of the sum named in his certificate, and (4) to so modify the disability clause as to entitle a member to the benefit of the annual payment of one-tenth, only in case he should continue to pay precisely the same as if he had not become disabled, and even to continue to pay after he had received the full amount called for by his certificate. The question presented for decision is whether the reservation by the defendant of a general power to amend its by-laws, without specifying in what respects, authorized it to amend them in all the particulars above mentioned. In other words, can such an...