Macdowell v. Ackley

• Decision Date: 03 May 1880
• Citation: 93 Pa. 277
• Parties: MacDowell <I>versus</I> Ackley.
• Court: Pennsylvania Supreme Court

Page 277

93 Pa. 277

MacDowell versus Ackley.

Supreme Court of Pennsylvania.

February 25, 1880.

May 3, 1880.

February 25th 1880.

Before SHARSWOOD, C. J., MERCUR, GORDON, PAXSON, TRUNKEY and STERRETT, JJ. GREEN, J., absent

Error to the Court of Common Pleas, No. 2, of Philadelphia county: Of January Term 1880, No. 146.

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P. F. Rothermel, Jr., for plaintiff in error.—The plaintiff contends that her right to recover should be determined by the contract, as evidenced by the provisions of the constitution on the subject of the gratuity fund, as adopted in December 1875; and that, MacDowell could not be affected by the addition of 1877, to which he did not assent.

When the Stock Exchange adopted the gratuity fund section, it converted itself into a mutual life insurance company; and, as in all such companies, the insured were members of the company, and bound by its rules and regulations. But the right of each member as an individual insured in the company, is not merged in his membership; so far as the contract with the company which entitles his nominees, &c., to $2000, on his death, is concerned, he is as much a stranger to the company as if he were not a member; though bound by the amendments to the constitution and by-laws as a member of the body, collectively, his contract with them, in which he stands as a stranger, cannot be affected without his express consent: Insurance Company v. Connor, 5 Harris 136; Beadle v. Chenango County Mutual Fire Ins. Co., 3 Hill 161; Great Falls Mutual Fire Insurance Company v. Harvey, 45 N. H. 292; N. E. Mutual Fire Ins. Co. v. Butler, 34 Me. 451; Angell & Ames on Corporations 242. To hold that MacDowell forfeited his interest in the gratuity fund, is to hold, that a forfeiture will be decreed for breach of a condition, where no injury was inflicted on the other party, and the breach was not wilful. In the present case, no injury could be suffered by the exchange, as they were amply protected by their lien on MacDowell's membership.

As the stock exchange received the full amount claimed by them for gratuity, dues and assessments, from the proceeds of the sale of MacDowell's membership, and applied the same to the liquidation of his indebtedness to them on that account, it is clear from the authorities, that they have waived the forfeiture: Lycoming County Mutual Ins. Co. v. Schollenberger, 8 Wright 259; Froehlich v. Atlas Life Ins. Co., 47 Mo. 406.

A. Sydney Biddle, for defendants in error.—MacDowell was suspended from active membership on account of the non-payment of his regular (not gratuity) dues, by a rule in existence when he joined, and the validity of which is acknowledged. By the gratuity fund rule, as originally enacted, mere suspension from the exchange did not debar the suspended member from the benefit of the gratuity fund; and, if MacDowell had continued to make the payments required by that rule, for the perpetuation of the gratuity fund, his child would undoubtedly have been entitled to have received the sum of $2000 upon his death.

If this rule were treated as an ordinary policy of insurance, the contract by the Exchange to pay the gratuity, was dependent upon the contract by MacDowell to pay his assessments, and to pay those assessments upon certain dates. If the law were otherwise, the legal representative of an insured, whose policy had lapsed by nonpayment of premiums, could always elect to take the benefit of the policy, by paying the accrued premiums after the death of the deceased.

The amendment of 1877 was undoubtedly binding on MacDowell. The amendment was passed in November 1877. MacDowell remained an active member until August 1878, nearly nine months after the passage of the amendment, without the expression of dissent of any kind. He remained compos mentis, so far as we know, until April 28th 1878, over five months after the resolution was passed.

Very distinct evidence must be produced before waiver by an association of this character would be inferred. But there was no waiver. The case here is in no way analogous to that of life insurance. No action could have been maintained, even if there had been a balance, until the finding of the arbitration committee (Thompson v. Adams, ante, page 55), which has not taken place; and the payment of the $61.15, was a mere transfer from one account to another upon the books of the owners of the fund. If the arbitration committee should, on the objection of one of MacDowell's creditors, find the transfer to have been improper, that sum must be restored, but the whole would still belong to the members of the Philadelphia Stock Exchange.

Mr. Justice MERCUR delivered the opinion of the court, May 3d 1880.

This was a case stated. It was agreed that certain facts "be stated for the opinion of the court in the nature of a special verdict with power to the court to draw the same inferences of fact as a jury might draw." Afterwards the matter was referred to a referee under the Act of 14th May 1874. He decided in favor of the defendant, and entered judgment accordingly. It may be that the referee was rather liberal in his inferences of fact under the submission; but no exceptions were filed, nor is any error assigned by reason thereof. The complaint is to the entry of judgment in favor of the defendant.

Looking then at all the facts agreed on and found, the important ones are these....