Griffith v. Supreme Council of Royal Arcanum

• Decision Date: 07 April 1914
• Parties: THEO. BUCKNER GRIFFITH, Respondent, v. SUPREME COUNCIL OF THE ROYAL ARCANUM, Appellant
• Court: Missouri Court of Appeals

166 S.W. 324

182 Mo.App. 644

THEO. BUCKNER GRIFFITH, Respondent, v. SUPREME COUNCIL OF THE ROYAL ARCANUM, Appellant

Court of Appeals of Missouri, St. Louis

April 7, 1914

Appeal from St. Louis City Circuit Court.--Hon. W. B. Homer, Judge.

AFFIRMED.

Judgment affirmed.

F. H Bacon for appellant.

(1) It is settled law that notice to an agent of a corporation is notice to the latter only of matters within the scope of his agency and not otherwise. Williams v. Dittenhoefer, 188 Mo. 134. (2) There was no waiver by the supreme council of any of its laws, nor is it now estopped from relying on same. (a) Waiver is the intentional abandonment or relinquishment of a known right and the intention to do so is the essential element involved. There was no knowledge on the part of the supreme council of the acts of the local council and hence there could be no intent to waive its by-laws. The contract provided that there could be no waiver. Brix v American Fidelity Co., 153 S.W. 789; Reed v. Bankers Union, 121 Mo.App. 419; Head v. Insurance Co., 241 Mo. 403; Supreme Lodge, etc. v. Anderson, 142 S.W. 1069; Plumer v. Continental Casualty Co., 77 S.E. 917. (b) The supreme council is not estopped by any action of the local council because it did not know of such action and because Griffith knew that there was no power on the part of the local council to waive the laws of the order and hence could not have been misled. A. S. Robinson was not an agent with an apparent authority to waive the laws of the order so that his knowledge was that of the supreme council. Blodgett v. Perry, 97 Mo. 263; State ex rel. v Branch, 151 Mo. 622; Hequembourg v. Edwards, 155 Mo. 514; Pounder v. Colvin, 170 Mo.App. 55. (3) Under the contract in this case no officer of a subordinate council nor the subordinate council itself could waive, or dispense with, any of the by-laws of the supreme council. The doctrine of waiver does not apply. Borgraefe v. Knights of Honor, 22 Mo.App. 141; Modern Woodmen v. Tevis, 117 F. 367; Harvey v. Grand Lodge, 50 Mo.App. 477; Supreme Lodge v. Keener, 6 Tex. Civ. App. 267; Eaton v. Supreme Lodge, 8 F. Cas. 275; McCoy v. Roman Catholic, etc., 152 Mass. 272; Sweet v. Society, 78 Me. 641; Kocher v. Supreme Council, etc., 65 N.J. L. 649. (4) There is no authority justifying a different conclusion than that above stated. The cases relied upon by respondent, namely, McMahon v. Maccabees, 151 Mo. 522; Burke v. Grand Lodge, 136 Mo.App. 450; Oldham v. Modern Brotherhood, 170 Mo.App. 564, must be distinguished because the facts in this case are different.

Joseph A. Wright and John H. Matthews for respondent.

(1) A chief executive officer of the supreme governing body of a fraternal beneficiary society and a member of the executive committee of such supreme body, by approving the non-observance of a society's laws in the council, binds the society. McMahon v. Knights of Maccabees, 151 Mo. 522; Clair v. Sup. Lodge of Royal Arcanum, 172 Mo.App. 718; Oldham v. Modern Brotherhood, 170 Mo.App. 564; Galvin v. Knights of Father Mathew, 169 Mo.App. 496; Britt v. Woodmen of World, 153 Mo.App. 698; Shartle v. Modern Brotherhood, 139 Mo.App. 440; Burke v. Grand Lodge, 136 Mo.App. 459; Cloverdale v. Royal Arcanum, 193 Ill. 91. (2) Corporations generally, including fraternal beneficiary societies, are chargeable when such knowledge comes to an executive officer, his knowledge being imputed to his principal. 3 Cook on Corporations (7 Ed.), Sec. 727, pp. 2582-84; 2 Thompson on Corporations (2 Ed.), pars. 1645, 1651; Phillips v. Railroad, 211 Mo. 419; Cook v. American Tubing and W. Co., 28 R. I. 41; 9 L.R.A. (N. S.) 193, 212; Orme v. Baker, 74 Ohio St. 337, 354; Atlantic Trust, Etc., Co. v. Union Trust, Etc., Corporation, 111 Vt. 574; Dromgold v. Royal Neighbors of America 103 N.E. 584. (3) In addition to the knowledge which came to A. S. Robinson in the dual capacity of supreme treasurer and member of the executive committee of the supreme council, the laws of the Royal Arcanum expressly vested in him the power of a director of a corporation under the laws of the Commonwealth of Massachusetts, and his knowledge and actions are conclusive on the corporation, under the Massachusetts authorities. Sec. 22 et seq., Chap. 110, Vol. II, Revised Laws of Massachusetts, 1902; Merchants National Bank v. Citizens Gaslight Co., 159 Mass. 505; 34 N.E. 1083; Beacon Trust Co. v. Souther, 183 Mass. 413; Corcoran v. Snow Cattle Co., 151 Mass. 74; Atlantic Mills v. Indian Orchard Mills, 147 Mass. 268; Parrot v. Railroad, 207 Mass. 184; McGenness v. Adriatic Mills, 116 Mass. 177.

NORTONI, J. Reynolds, P. J., and Allen, J., concur.

OPINION

NORTONI, J.

This is a suit on a certificate of life insurance. Plaintiff recovered and defendant prosecutes the appeal.

Plaintiff, an infant, who sues by her next friend, is the daughter of George S. Griffith, the insured, and the beneficiary of the fund under the provisions of the certificate.

The insured defaulted in the payment of a monthly assessment of $ 2.12 a few days before his death, and it is insisted plaintiff may not recover for the reason the insurance was forfeited because of that fact, through the operation of defendant's by-law. But there is evidence tending to prove defendant waived this by-law, in that it permitted a course of dealing between Compton Hill Council and the insured member which induced him to believe a forfeiture would not be invoked and the assessment would be paid for him by the council unless he was notified to the contrary. There is no controversy about the facts of the case, and the question for consideration relates alone to the waiver of the by-laws referred to through a course of dealing well known to one of defendant's superior officers, its Supreme Treasurer, A. S. Robinson, a member of Compton Hill Council, and a consequent estoppel against defendant to assert the contrary, in view of the fact that the insured, plaintiff's father, relied thereon.

Defendant is a fraternal beneficiary society, incorporated under the laws of the State of Massachusetts, but duly qualified to do business here, under the laws of Missouri. The society it represents is composed of a Supreme Council and numerous local, or subordinate, councils, one of which is Compton Hill Council, located in the city of St. Louis. Compton Hill Council consists of 1056 members. The officers of the local, or subordinate, council elected by it are, among others: a secretary, who keeps a record of the proceedings of the semi-monthly meetings; a collector, who collects the assessments; and a treasurer, who receives the money so collected by the collector and in turn pays it over to the supreme treasurer of the supreme council, A. S. Robinson, whose office is in the city of St. Louis. As before stated, A. S. Robinson, the supreme treasurer of the order, is a resident of St. Louis and a member of Compton Hill Council. The powers and duties of a subordinate council of the order, such as Compton Hill Council, are prescribed by the by-laws of the supreme council, among which is the following:

"The council and its officers, in performing the duties and administering the powers provided by the laws of the order, shall be the agent or agents of the members thereof, and not of the supreme council, and no act or failure to act by the council or by any officer or member thereof, shall create, or be construed so as to create, any liability on the part of the supreme council.

"Neither the council or its officers or any one or more thereof shall waive the performance of, or compliance with, any law or requirement of the supreme council, and such waiver shall be inoperative to bind, or create any liability upon, the supreme council."

The fund from which benefits are paid by the order is derived from the proceeds of monthly assessments. The assessments are payable to the collector of the subordinate council monthly, without notice, on or before ten o'clock p. m. of the last day of each calendar month, and the penalty for nonpayment within the prescribed time is ipso facto suspension under defendant's by-law, which, it is asserted, in the instant case, is waived.

Another by-law of defendant provides that a subordinate council is authorized, out of a fund provided by it for that purpose, to pay for its members an assessment or assessments as a loan or gift. But with respect to this matter it is also provided by defendant as follows:

"A by-law or resolution whereby a council agrees to pay an assessment for a member as a loan is not binding upon the supreme council unless it is complied with, and no claim of a member, in case the assessment is not paid, shall be recognized or valid. If the collector shall omit to pay, within the prescribed time, an assessment for a member, in compliance with such resolution or by-law, the member stands suspended at the expiration of the time for payment."

Compton Hill Council had established a code of by-laws under the powers conferred upon it by the supreme council, and one article of these--that is, the laws of the local council--provided for a special relief fund, out of which the collector of the council was authorized to pay one assessment for any member who failed to pay his assessment within the prescribed time, and if such assessment were paid out of such fund, to render a bill to the member for the amount, plus twenty-five cents fee for the use of this loan fund. No member was entitled, under the by-laws, to the use of the fund for a second failure to pay, unless he had refunded the council the amount of the previous assessment paid by it for him. This fund belonged to the local council and was under its control, and was not the property of the supreme council. Section five of the by-laws of the...