Elliott v. Knights of the Modern Maccabees

• Decision Date: 27 April 1907
• Parties: ELLIOTT v. KNIGHTS OF THE MODERN MACCABEES.
• Court: Washington Supreme Court

89 P. 929

46 Wash. 320

ELLIOTT v. KNIGHTS OF THE MODERN MACCABEES.

Supreme Court of Washington

April 27, 1907

Appeal from Superior Court, Spokane County; Miles Poindexter, Judge.

Action by John Elliott against the Knights of the Modern Maccabees. From a judgment for plaintiff, defendant appeals. Reversed and cause remanded with instructions to dismiss.

Warren W. Tolman, for appellant.

Wiley &amp Wiley and L. L. Westfall, for respondent.

CROW J.

The Knights of the Modern Maccabees, a corporation, is a fraternal society, organized on the lodge plan, for mutual protection of its members, upon whom it levies assessments to pay death losses and endowments. Its by-laws provide that all male persons of good moral character over 18 and under 51 years of age may be admitted as beneficial members. On November 14 1890, John Elliott, wishing to become a member of Tent No. 357, then being organized by one F. A. Osborne, a deputy commander at Lake City, Mich., signed a written application, in which he stated that he was 50 years of age. On February 2, 1891, an endowment certificate reciting his age as 50 years was issued to him for $2,000, payable at death, or, in the event of his living to the age of 70, to be then payable to him in 10 equal annual installments. The certificate provided that it was subject to the conditions limitations, warranties, and agreements contained in his application. On November 27, 1891, being suspended for nonpayment of assessments, Elliott made a written application for reinstatement, in which he stated that he was then 51 years of age. He was afterwards re-examined and reinstated. At the date of his original application Elliott was, in fact over 55 years of age. Knowledge of his true age did not come to the society until he was actually 70 years old, when he attempted to collect annually one-tenth of his endowment. On February 15, 1905, he wrote the grand commander of the order as follows: 'I was 70 years old on the 13th day of January, but, of course, my certificate shows 65 years old, but the way that comes is this: They started a Tent in Lake City, Michigan, and I went in as a charter member on these conditions that I was to have no trouble hereafter, as I told them, that I was too old to join the order. I told F. A. Osborne, deputy commander. He was after me for a week to join. I told him I was too old, and he said he would work me in without any trouble if I should go in as they lacked one man, and did not know where to get him, so that they could organize the Tent. * * *' Some correspondence followed, and the society, learning that Elliott was over 55 when admitted, refused to receive further assessments from him, and forfeited his certificate, together with all assessments theretofore paid. The forfeiture was declared under the following stipulation contained in his written application for membership, and made a part of his certificate: 'I hereby declare that the above are fair and true answers to the foregoing questions, and I hereby agree that these statements, with this application and the constitution and laws now in force or that may hereafter be adopted, * * * shall form the basis of the contract for endowment; that any untrue or fraudulent answers, and suppression of any facts in regard to my health and age, * * * shall vitiate my beneficiary certificate and forfeit all payments made thereon. * * *' Elliott thereupon commenced this action to recover $348 paid by him on assessments. He claims that he truthfully stated his age to Osborne, the deputy commander; that he then knew he was not eligible to beneficial membership; that Osborne agreed to work him in, and filled a blank application falsely stating his age to be 50 years; that after giving truthful answers to Osborne he, without reading the application, in good faith, signed the same. It is not claimed by Elliott that Osborne or any officer of the defendant filled the blank when his application for reinstatement was made one year later, although he denies that he did so himself. The case was tried without a jury, and the trial judge, after making findings of fact and conclusions of law, entered judgment in favor of the plaintiff. The defendant has appealed.

There is not much conflict in the evidence, which shows the facts above stated. The appellant, in support of its assignments of error, contends that respondent knew he was not entitled to beneficial membership; that he not only signed the original application containing a false statement as to his age, but also signed another application for reinstatement, repeating the false statement; that during all the years he paid assessments he held his certificate reciting that he was only 50 years of age when admitted; that he and Osborne conspired to deceive the appellant into admitting him to beneficial membership; and that his certificate was void ab initio rendering his payments liable to forfeiture. The respondent contends that when he stated his true age to Osborne, who was appellant's agent, Osborne's knowledge became its knowledge, and that the appellant, having received the assessments after acquiring such knowledge, is estopped from declaring any forfeiture. Accepting as truthful the respondent's statement that he told his correct age to Osborne, we nevertheless conclude from the evidence that he and Osborne did, in fact, conspire to defraud the appellant into accepting him as a beneficial member. The general rule in the law of agency is that notice to an agent is notice to his principal. But an exception to the application of this general rule arises when the agent's conduct is such as to raise a clear presumption that he will not communicate to his principal his knowledge of the fact in controversy, as where he acts in his own interest and adversely to the interest of his principal. 1 Enc. of Law (2d Ed.) 1144, 1145; Hanf v. Northwestern Masonic Aid Association, 45 N.W. 315, 76 Wis. 450. From respondent's statements we must infer that Osborne was acting in his own interest, desiring to secure a sufficient charter membership for organization. Respondent knew this, and had no right to assume that Osborne would communicate his true age to the appellant. In National Life Ins. Co. v. Minch, 53 N.Y. 144, 150, the court said: 'If a person colludes with an agent to cheat the principal, the latter is not responsible for the acts or knowledge of the agent. The rule which charges the principal with what the agent knows is for the protection of innocent third persons, and not those who use the agent to further their own frauds upon the principal.' We are convinced that the respondent participated in defrauding the appellant, for the reasons that the false statement as to his age was repeated in his application for reinstatement; that he knew his age was incorrectly stated in his endowment certificate, and that, when he actually arrived at the age of seventy, he...