Dill v. Supreme Lodge, Knights of Honor

• Decision Date: 10 September 1915
• Docket Number: 4444.
• Citation: 226 F. 807
• Parties: DILL et al. v. SUPREME LODGE, KNIGHTS OF HONOR.
• Court: U.S. District Court — Eastern District of Missouri

226 F. 807

DILL et al. v. SUPREME LODGE, KNIGHTS OF HONOR.

No. 4444.

United States District Court, E.D. Missouri, Eastern Division.

September 10, 1915

Max Ruler and Horace L. Dyer, both of St. Louis, Mo., for plaintiffs.

F. H Bacon, R. P. Williams, and C. B. Williams, all of St. Louis Mo., for respondent.

Before TRIEBER and DYER, District Judges.

TRIEBER District Judge (orally).

In the case of Dill et al. v. Supreme Lodge of the Knights of Honor we have given the matter the most careful consideration realizing fully the importance of the case. Thousands of men women, and children are interested in the result of this case. Perhaps in a large majority of the cases the insurance obtained in this lodge is probably the only provision they have made for the protection of their wives and children after death. The able arguments made by counsel have aided us considerably in reaching our conclusions. We have carefully examined the numerous authorities, which the diligence of counsel has submitted to us, and given them such force and effect as we have thought they are entitled to. There were quite a number of questions argued to the court, all of which have received careful consideration.

In determining this matter we should take into consideration, first, the nature of this bill. It is not strictly a creditors' bill, nor is it a bill for the purpose of winding up an insolvent corporation. A creditors' bill is simply an effort on the part of judgment creditors, who have exhausted all the remedies which the law affords them, and, being unable to collect their debts, to apply to a court of equity for the purpose of reaching the equitable interests of the judgment debtor. Usually it is for the purpose of reaching some property which has been fraudulently conveyed by the debtor, and, the legal title being in other parties, of course it is impossible in an action at law to reach them. This is not such a bill, nor is it a bill to wind up a manufacturing or mercantile corporation which has become insolvent.

While it is true that this is a corporation, yet it is not a business corporation, nor a corporation for the purpose of doing business for a profit. It is simply an aggregation of individuals to create a fund in order to enable the parties to make provision for their wives, children, or their heirs in case of death. There is no profit in it; assessments are made for the purpose of paying death benefits; no one receives any profits; no investments are made; there is no capital. We might properly call it a charity in the nature of a trust fund to provide in the case of death for the survivors of the deceased members.

That courts of equity have jurisdiction in all cases of trust is elementary. In a case of this nature the question of creditor is practically immaterial, because the parties who are members may suffer just as great an injury by the dissolution of a corporation of this nature, while they are alive, as those who have departed this life. It is true that, upon the winding up of a corporation like this, those whose claims have matured would be preferred to those still living. Still there is a contingent interest possessed by every member which may become vested at any time by reason of the death of the member.

It has been the public policy of every state in the Union-- in fact, we might say, of every civilized government-- to try and protect the members of such organizations by preventing the corporation, fraternal society of this nature, from carrying on its business whenever proof establishes beyond question, as it does in this case, that it would be impossible for the corporation to carry out the objects of its existence and induce its members to continue paying assessments, especially when they are increased periodically, which would be perpetrating a fraud on them.

In this case the evidence shows beyond question that this Supreme Lodge is unable to continue its business for any length of time. If the assessments are raised to an extent which would be necessary in order to provide for all the members thereof when the average age has reached as high as it has in this case, the rates would be correspondingly high, with the result that, either owing to poverty, inability to pay, or fear that the assessments would be raised continually, and just about the time the man dies, the institution would be unable to pay. This would naturally cause a great many members to withdraw, and the worst of it is that the withdrawal of members in cases of this nature is generally of those members who are most valuable to the institution by reason of their good health and age. If the average age of its members, as has been stated here, now exceeds 55, it will in less than a year exceed 60, because all younger members in perfect health will try to withdraw, because they will find the assessments are too great and uncertain. The decrease of membership has been so continuous for the last 15 or 20 years that for the court to presume for a...