Supreme Council Cath. Knights of America v. Gambati

• Decision Date: 14 May 1902
• Citation: 69 S.W. 114
• Parties: SUPREME COUNCIL CATHOLIC KNIGHTS OF AMERICA v. GAMBATI et ux.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Court of Appeals

69 S.W. 114

SUPREME COUNCIL CATHOLIC KNIGHTS OF AMERICA v. GAMBATI et ux.¹

Court of Civil Appeals of Texas.

May 14, 1902.

Appeal from district court, Harris county; Chas. E. Ashe, Judge.

Suit by O. F. Gambati and wife against the Supreme Council Catholic Knights of America. From a judgment for plaintiffs, defendant appeals. Reversed.

W. P. & A. R. Hamblen, for appellant. Otto Pape and Coleman & Abbott, for appellees.

GILL, J.

This suit was brought by O. F. Gambati and wife against appellant, the Supreme Council of the Catholic Knights of America, a fraternal insurance association, to recover from the order the premiums which Gambati had paid in on a life insurance certificate, with interest thereon. There was also a prayer for exemplary damages. The case was heard by the court without the intervention of a jury, and judgment was rendered in favor of appellees for the sum of the premiums paid in and interest. Nothing was allowed on the prayer for exemplary damages. From this judgment the association has appealed.

The facts out of which the suit grew are as follows: The association is a fraternal organization, with the usual insurance feature. It is composed of a supreme council and subordinate councils, the latter getting their authority for existence from the supreme council. The authority, powers, and rules of government are prescribed by the constitution and by-laws of the order. To each member making proper and satisfactory application therefor there is issued a certificate for life insurance, wherein the association promises to pay to a named beneficiary the sum of $2,000 upon the death of the member insured. The sum to be paid to the beneficiary might be less than $2,000 if the membership of the order was less than that number, but could not in any event exceed that amount. The fund out of which this sum is to be paid is maintained by mortuary assessments upon the members, and failure to pay these assessments within stated times operates as a forfeiture of the insurance. There were other sums payable as dues for the general purposes of the order. In 1886 Gambati became a member of the order in Albany, Ga., paying all sums prescribed by its rules to entitle him to its benefits, and there was issued to him a benefit certificate for $2,000, payable to his wife upon his death. In April, 1892, appellee removed to Houston, and transferred his membership to a subordinate lodge called "St. Patrick's Branch, No. 354," located at that place. He maintained his membership in the last-named lodge, paying all lawful dues and assessments, when, about March 4, 1900, he was informed by an officer of the local lodge that he had been suspended from the subordinate branch, and that the suspension forfeited his policy. On the 7th of March, 1900, Gambati wrote to the supreme secretary of the order, complaining of the action of the local branch, and received a reply, dated March 10th, stating that the local branch had acted without authority, and advised him that his complaint had been forwarded to the supreme council. On April 4, 1900, the supreme secretary wrote to the secretary of the local branch regarding the matter, calling attention to the invalidity of the action of the local branch in suspending Gambati. This suit was filed on April 7, 1900. The order of suspension was rescinded about two months after it was made, and Gambati was notified of the fact. The supreme council never marked Gambati suspended, nor considered him suspended. They voluntarily considered the case at their first meeting after suspension, and advised the local branch that it had no legal effect,— that Gambati was still a member,—and directed them to proceed to collect his dues. The reason for the expulsion was that Gambati had joined the Knights of Pythias, a secret order under the ban of the church. Joining a secret order under the ban of the church was prescribed in the constitution as a cause for expulsion, and a forfeiture of all rights and benefits. The Knights of Pythias was an order which was under the ban, and Gambati had joined it. Expulsion for this cause could be had only after notice to the member, and an opportunity given him to withdraw from the forbidden order. He was suspended without written notice or formal trial. The constitution of the order provides fully and intelligently for a formal trial under the rules of evidence, upon charges in writing, a copy of which must be served upon the member. Appeal to the supreme council is also provided for. The order of expulsion was made in Gambati's absence, and upon the verbal report of a member who had been appointed to ascertain the facts.

Appellant defended upon the grounds: First, that the order of expulsion was void, and Gambati was still a member in good standing; second, because he had failed to appeal and seek redress in the tribunals of the order; third, because the rescission of the order of expulsion was a bar to the suit; fourth, because the supreme council was not bound by the unauthorized act of the local council. These grounds are urged here as reasons for reversal. Complaint is also made that the judgment is unauthorized because much of the amount sued for is barred by limitation, and because Gambati was actually insured during the years he was a member of the order, and the value of this insurance should be deducted from the sums paid in.

The defense of limitation is untenable, because, if there were any cause of action, it arose upon his expulsion, and not earlier. The claim that appellant was entitled to a credit for the value of the insurance during the time it was in force cannot be maintained, for it is well settled that an insurance concern which wrongfully terminates the contract of insurance must refund the premiums, with interest, if demanded. Insurance Co. v. McAden (Pa.) 1 Atl. 256; Van Werden v. Society (Iowa) 68 N. W. 892; 2 Am. & Eng. Enc. Law (2d Ed.) p. 964.

That the order of expulsion was void for want of notice and trial does not of itself constitute a defense, for if the supreme council had, by...