Attorney General v. Supreme Council, A. L. H.
| Decision Date | 24 May 1910 |
| Citation | 92 N.E. 140,206 Mass. 168 |
| Parties | ATTORNEY GENERAL v. SUPREME COUNCIL A. L. H. In re DUNLAVY. In re CLEMENTS. In re OSTERHOUT. In re TUSKA. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
H. A. Wyman, pro se.
S. C Bennett, L. M. Friedman, J. C. Ivy, R. G. McClung, and L. C McBride, for certain claimants.
J. J Higgins and Angier L. Goodwin, for members in good standing.
Dunlavy's Case (claim 151) is another of the 17 appeals from the decree of the single justice dated October 29, 1909. See Attorney General v. American Legion of Honor (Hall's Case) 92 N.E. 136.
In this case the member, for a period of one year and seven months after October 1, 1900, paid 'without protest' assessments (28 in number) of the reduced amount, 'as on a certificate of two thousand dollars ($2,000) to the date of his death,' which occurred on May 29, 1902 (one year and eight months after the by-law went into effect). On September 25, 1902, the defendant paid the beneficiary $2,000 and the certificate was surrendered to it. On July 20, 1904 (over a year and nine months later), action was brought in Texas to recover the difference between the sum paid and $5,000.
It is agreed that the member, after October 1, 1900, paid assessments as 'on a certificate of $2,000.' It appears that notice of the change in by-law 55 was sent to each subordinate council. More than that, the conditions which led up to the enactment of by-law 55 had been the subject of previous discussion and had resulted in the adoption of an amendment to by-law 55 of a more limited nature in the previous year. Such a notice, taken in connection with the radical nature of the change made by the new by-law, must have provoked discussion. We are of opinion that unless there is evidence to the contrary each member must be taken to have known of the provisions of the new by-law 55. The member under whom this beneficiary claims, knowing of the by-law, paid assessments of the reduced amount, without protest, for one year and eight months after this by-law went into effect.
In addition to the statement as to the good faith of the defendant in making the reduction made by by-law 55, set forth in Hall's Case, supra, there is this statement: 'Between said October 1, 1900, and May 29, 1902 (the date of the death of the member), and September 25, 1902 (the date of the settlement), and July 20, 1904 (the date of the suit or demand against the order), the order had conducted its business, levied assessments, and admitted new members on the basis of the liability under this certificate, being two thousand dollars ($2,000), and having been settled by the payment of that sum.'
The first ground on which the beneficiaries rest their claim is that since the emergency fund has not been exhausted they are by the terms of by-law 55 entitled to payment of the whole $5,000. They cite in support of that contention a case in the Court of Civil Appeals for the Third District of Texas. Supreme Council American Legion of Honor v. Storey, 75 S.W. 901. This case was affirmed on appeal, but the question now under consideration was not raised in the appellate court. Supreme Council American Legion of Honor v. Story, 97 Tex. 264, 78 S.W. 1.
There is nothing in this contention. The claim relied on by the beneficiaries is founded upon these words in by-law 55: 'Provided, that the face value of the benefit certificate shall be paid so long as the emergency fund of the order has not been exhausted.'
In construing this clause of by-law 55 it is to be borne in mind that it was provided by St. 1899, c. 442, § 11 (now Rev. Laws, c. 119, § 6), that benefit certificates shall provide that if the death of the member shall occur when one full assessment would not amount 'to the face sum' of the maximum certificate of such corporation, the amount to be paid to the beneficiary shall not exceed the amount of the full assessment or the proportionate part which said face sum bears to such maximum certificate, 'but this restriction shall not apply to a * * * corporation having an emergency or reserve fund until such fund shall have become exhausted.' The proviso in by-law 55 relied upon by this beneficiary follows a clause providing that if at the death of a member one full assessment upon each of the members shall not amount to the full sum of two thousand dollars, then the sum to be paid shall not exceed the amount collected by said assessment. It is plain that the clause relied on was inserted to give a right to the whole sum otherwise due as a death benefit where one full assessment fell short, so long as the emergency fund was not exhausted (as provided in St. 1899, c. 442, § 11) and not to give or preserve a right to the original sum of $5,000 so long as the emergency fund was not exhausted.
Had this clause been inserted for the purpose contended for by this beneficiary the object aimed at by the adoption of by-law 55 would have been defeated by the insertion of it in that by-law. The occasion of the adoption of the by-law was because unless something was done to cut down the benefits or raise the assessments the order must come to an end. To preserve to the members who had $5,000 certificates a right to collect the original amount so long as the emergency fund was not exhausted would have defeated the purpose for which the reduction provided for by by-law 55 was adopted.
The correctness of this construction is borne out by the practice of the corporation and by the amendment of this by-law made in 1901.
The second ground on which the beneficiaries claim to be entitled to the difference between the sum paid them and $5,000 is that by-law 55 was void. This question therefore is presented for decision: Can the beneficiary of a member, who acquiesced in the reduction made by by-law 55 for a period of one year and eight months, now prove against the emergency fund on the footing that the by-law was void from the beginning?
This question was not presented in Newhall v. American Legion of Honor, 181 Mass. 111, 63 N.E. 1. The member in that case died on October 13, 1900, before any assessments had been made under the new by-law.
In deciding the question now presented for decision it is to be noted in the first place that this is not an action at law against the corporation brought on the contract between it and the member. A judgment against the corporation would now be an empty one, as is pointed out in Attorney General v. American Legion of Honor, 196 Mass. 151, 81 N.E. 966.
The present proceeding is a claim to share in the emergency fund. It is founded on the contract. But the only purpose of enforcing the rights given by the contract at the present time is to share in that trust fund. It is apparent that but for the by-law and the acquiescence of the members generally in it there would have been no fund in existence out of which this death benefit could be paid, when the member here in question died. It appears from a statement of the receiver made in this report, that on May 29, 1901, one year before the member here in question died (eight months after this by-law went into effect), there was a deficit of $72,914.14. That is to say, crediting the order with the assessments paid on the new basis, the assessments and the emergency fund were not sufficient to pay the death benefits which had accrued (on the basis that by-law 55 was void) by $72,914.14. It also appears that this deficit on the same basis increased during the next year to $564,317.51. In these statements of condition the assessments collected were assessments of the...
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