Graves v. Knights of the Maccabees of the World

• Decision Date: 28 October 1910
• Citation: 199 N.Y. 397,92 N.E. 792
• Parties: GRAVES v. KNIGHTS OF THE MACCABEES OF THE WORLD.
• Court: New York Court of Appeals Court of Appeals

199 N.Y. 397

92 N.E. 792

GRAVES

v.KNIGHTS OF THE MACCABEES OF THE WORLD.

Court of Appeals of New York.

Oct. 28, 1910.

Appeal from Supreme Court, Appellate Division, Third Department.

Action by Electa R. Graves against the Knights of the Maccabees of the World. From a judgment of the Appellate Division (128 App. Div. 660,112 N. Y. Supp. 948) affirming a judgment for plaintiff, defendant appeals. Reversed, and new trial granted.

George P. Keating, for appellant.

Frank C. Sargent, for respondent.

HISCOCK, J.

This action was brought to recover on two certificates of insurance issued by the appellant on the life of one Graves and payable to the respondent, his wife. The sole defense is that all rights under these certificates had become forfeited because after their issue Graves became engaged in the sale of liquors in violation of one of appellant's by-laws. On the facts established in support of that defense hereafter recited, the trial court refused to hold as matter of law that there had been a violation, but allowed the jury to say whether there had been, and, the latter having answered this question in the negative, the Appellate Division by a divided court have approved the course taken by the trial court and affirmed the judgment against the appellant.

We shall assume for the moment, reserving for subsequent consideration a single minor question, that the certificates on which suit is brought are subject to a regulation adopted by the appellant in 1895 and subsequently from time to time amplified, and which provided as follows: ‘Sec. 142. No person shall be admitted as a beneficial member of this order who is engaged in any of the following occupations: Blasting, coal mining, submarine operations, manufacturing highly inflammable or explosive materials nor who is an aeronaut or lineman in the employ of electric companies, either in the construction or repairing of lines over which the electric current passes, or who is engaged in any other occupation deemed extra hazardous by the Supreme Medical Examiner, and no person shall be eligible for membership in the order who is engaged either as principal, agent or servant in the manufacture or sale of spirituous, malt or vinous liquors as a beverage, and should any beneficial member of the order engage in any of the above named prohibited occupations after his admission, his benefit certificate shall become null and void from and after the date of his so engaging in such prohibited occupation, and he shall stand suspended from all rights to participate in the benefit funds of the order, * * * and the record keeper, when any such suspension takes place, shall not receive further assessments from such suspended member.’

The acts proved by the appellant as constituting a violation and working a forfeiture of the certificates were the following: Graves, the insured, formed a partnership with his son for the purpose of carrying on a saloon business. He personally applied for and took out a license in the firm name, and the saloon was owned and operated for several months by said copartnership; there being nothing to indicate that the ordinary rules of ownership and legal control of the copartnership property and business, and of sharing in profits and losses, did not prevail. It was testified to, however, that, while Graves lived in the same house in which the saloon was conducted, he did not, as a matter of fact, take any part in the actual management of the business or in the sale of liquors. Under these circumstances, the courts below have permitted a recovery on the theory that the language of appellant's by-laws only prohibited an active or perhaps physical participation in, or relation to, the sale of liquors, and did not include a passive proprietary interest in the business.

No case has been cited which is controlling of the question now presented, and its decision, therefore, must be governed by the ordinary rules of construction. Applying these, we are of the opinion that, although the issue may seem somewhat close, the construction of the by-law thus far permitted is too narrow, and that it should have been held as matter of law that the acts of the insured were a violation of its terms and worked a forfeiture of the certificates.

It is beyond controversy that the appellant had a perfect right in a proper manner to adopt a by-law applicable to certificates thereafter issued which, as broadly as might be thought wise, would prohibit beneficial members from becoming engaged even indirectly in the business of manufacturing or selling liquors. In determining what it did do, we of course are mindful of the cardinal rules that when permissible a construction should be employed which will avoid forfeitures, and that the penalties for ambiguous words should be visited on him who has selected them. But necessarily before these rules can be of assistance to a party in such a case as this it must appear that the application to words of that fair and ordinary meaning which must be presumed to have been in the minds of the parties fails to make the intent clear and does in fact leave some uncertainty concerning whose solution intelligent men might reasonably differ and argue. We do not think that such...