Jaeger v. Grand Lodge of Order of Hermann's Sons

• Decision Date: 23 April 1912
• Citation: 149 Wis. 354,135 N.W. 869
• Parties: JAEGER ET AL. v. GRAND LODGE OF ORDER OF HERMANN'S SONS.
• Court: Wisconsin Supreme Court

149 Wis. 354

135 N.W. 869

JAEGER ET AL.

v.GRAND LODGE OF ORDER OF HERMANN'S SONS.

Supreme Court of Wisconsin.

April 23, 1912.

Appeal from Circuit Court, Milwaukee County; Warren D. Tarrant, Judge.

Action by Gustave Jaeger and others, minors, by Gustave Jaeger, their general guardian, against the Grand Lodge of the Order of Hermann's Sons. From a judgment for plaintiffs, defendant appeals. Affirmed.

This action was brought against the defendant to recover upon a benefit certificate or policy for $1,000 issued September 1, 1888. The plaintiffs recovered judgment for $363.93 damages and costs; said damages being the amount which the court below held balance due plaintiffs upon the certificate or policy. Upon the trial the defendant admitted there was due and paid over $536.07, and the judgment recovered was the difference between this amount and the face of the certificate less $100. The case was tried by the court without a jury, and the court found: That the defendant made the certificate or policy September 1, 1888, to the deceased, Claus Jaeger. That said Jaeger paid all assessments levied and imposed upon him by the Grand Lodge for the maintenance of his certificate or policy, and did also pay all lodge dues imposed upon him and required to be paid and at the time of his death was in all respects a member of said order in good standing. That at a regular meeting of said Grand Lodge in 1897 a by-law was enacted requiring every member then belonging to said order, or who should subsequently join, to submit to a deduction of 10 per cent., or $100, of the $1,000 stipulated in his policy to be paid his beneficiary or beneficiaries upon his death, said $100 to be paid into a guaranty fund, and the remaining $900 only should be paid to the beneficiary or beneficiaries designated in said policy. That the wife of said Claus Jaeger, who was designated as beneficiary in his said policy, died at the city of Milwaukee on or about the 1st day of January, 1906. That, in pursuance of a stipulation contained in said policy, said Claus Jaeger did on the 27th day of February, 1906, change the beneficiary originally named, and designated his six children as beneficiaries, namely, Adolph, Carl, Henry, Helen, Paul, and Fred, and requested that the amount of insurance due on such policy less 10 per cent. be paid to said newly designated beneficiaries, and that such 10 per cent. thereof, pursuant to the above mentioned by-law, be paid into the guaranty fund, and that a memorandum of such declaration changing such beneficiaries and providing for a deduction of 10 per cent. of the amount designated in the policy be paid into the guaranty fund was indorsed on said policy and subscribed by the Grand Secretary of said Grand Lodge. That from and after said incorporation of said Grand Lodge of Wisconsin of the Order of Hermann's Sons said defendant corporation duly assumed all the obligations of said Grand Lodge, which it had entered into prior to its said incorporation, and thenceforth and up to the time of the death of said Claus Jaeger received and collected all the assessments payable by said Jaeger upon said policy and all other assessments levied upon all members of said order. That about the year 1897 said Grand Lodge enacted a certain by-law to meet the losses due the increasing death rate of members, also to the effect that all members who should be such on and prior to the 1st day of March, 1898, should from and after that day be required to pay for the maintenance of their respective policies of $1,000 each certain monthly assessments, varying according to ages attained by such members at the time of becoming members, increasing from ages between 18 and 25 years up to ages between 40 and 45 years, and that members who at the time they became members had attained an age between 40 and 45 years should pay a monthly assessment of $2.75, and that by said by-law it was further provided that all members who should become members after said 1st day of March, 1898, should be required to pay on policies of $1,000 lower monthly assessments, which also varied and increased between the ages of 18 and 25 years up to between 40 and 45 years, and that all personswho at the time of becoming members had attained an age between 40 and 45 years should pay a monthly assessment of $2.04. Said Claus Jaeger became a member of Robert Blum Lodge No. 4 in 1879, and was then 44 years of age, and from and after March 1, 1898, paid for the maintenance of his policy a monthly assessment of $2.75 up to the time of his death, all of which assessments were duly paid to said Grand Lodge. Said Jaeger died on the 3d day of January, 1910, and at the time of his death was a member in good standing of said Robert Blum Lodge No. 4. That on the 11th day of January, 1910, due notice of the death of said Claus Jaeger was given in writing to said Grand Lodge, and more than 90 days expired before the commencement of this action. That on the 26th day of March, 1910, Adolph Jaeger, Carl Jaeger, Henry Jaeger, and Fred Jaeger, four of the beneficiaries designated in the policy, did for value received duly assign and transfer to plaintiff, Gustave Jaeger, all their right, title, and interest in said policy, and in and to said sum of $1,000 mentioned therein, and ever since said Gustave Jaeger has been, and still is, the owner of an undivided four-sixths of said policy and the money thereby secured. That the plaintiffs Paul Jaeger and Helen Jaeger, two of the beneficiaries designated, are minors, and are still the owners of an undivided one-sixth each of said policy. That upon proceedings duly had in the county court of Milwaukee county said Gustave Jaeger was on the 9th day of April, 1910, duly appointed general guardian of the above-named minors, and letters of guardianship were duly issued, and said Gustave Jaeger ever since has been and still is the general guardian of said minors. That the defendant Grand Lodge has in its possession a reserve fund exceeding $20,000. That before the commencement of the trial of this action said defendant paid to the plaintiffs $536.07, the amount admitted to be due upon said policy, without prejudice to the rights of plaintiffs to continue said action for the sum of $463.93 and interest thereon, denied by defendant to be due. That at its annual session in August, 1909, said defendant adopted an amendment to its by-laws to the effect that all members of said order, who were such prior to the 1st day of March, 1898, should be advanced to their attained age as of that date, or, in lieu thereof, be given the following options: First, the privilege of paying in cash the amount they ought to have paid into the benefit fund had they been charged the present table of rates from the time they were initiated into the order to the 1st day of March, 1898, to wit, that they should be charged one payment a month at the age at which they were initiated at the rate provided by the present table of rates, against which they should be credited with the amount they actually paid during that period of time, and the balance should be the deficiency; second, that said members may have said deficiency charged against their benefit certificate with 2 1/2 per cent. simple interest so long as the same remains unpaid, with accrued interest thereon, which deficiency, with interest at the time of the death of said member, should be deducted from the face of his benefit certificate, and that said by-laws should apply only to members who were initiated into the order before March 1, 1898. That, pursuant to the above by-laws, the Grand Secretary of said defendant did about September, 1910, compute the amounts of said alleged deficiencies to be charged against the respective policies of members who joined before March 1, 1898, and that the amount so computed as a deficiency against the policy of Claus Jaeger was $363.93, and that said secretary issued a printed circular in which each member was requested to signify his choice, whether he would pay the deficiency in cash, or would suffer the same to be deducted with 2 1/2 per cent. interest from the amount of his policy at his death. That said Claus Jaeger never acquiesced in said amendment, and did not manifest any choice as to whether he would pay cash or suffer the same to be deducted from the amount of his policy. That, before the commencement of this action, the plaintiffs duly demanded of defendant payment of the amount of $1,000 named in the policy, which payment was refused.

The court concluded that said by-law of 1897 which required every member then belonging to said order and every future member to submit to a deduction of 10 per cent. or $100 at his death from his $1,000 policy to be paid into a reserve fund, and that only the remaining $900 should be paid to the beneficiary or beneficiaries of such policy, was and is unreasonable and void as to said Claus Jaeger, and all members who joined said order prior to the passage of said law, but that since in and by the written declaration made by said Claus Jaeger for the substitution of said six children as beneficiaries in lieu of his wife, who had died, he requested that 10 per cent. or $100 of the amount of the policy be deducted from such policy and paid into the reserve fund of said Grand Lodge, he, said Claus Jaeger, consented to such deduction, and thereafter was, and these plaintiffs now are, estopped from questioning or disputing the right of the Grand Lodge to deduct said $100 from the amount of said policy; that said amendment of its laws enacted by said defendant at its session in 1909, to the effect that each member of said order who had joined prior to the 1st day of March, 1898, should be required to pay the difference between the total amount of assessments he had paid from time of initiation to said 1st day of March, 1898, and the amount which he would have paid had he paid the highest rate of assessment then payable by him...