Supreme Lodge, Knights of Pythias v. Mims

• Decision Date: 12 June 1916
• Docket Number: No. 345,345
• Parties: SUPREME LODGE, KNIGHTS OF PYTHIAS, Plff. in Err., v. S. MIMS
• Court: U.S. Supreme Court

241 U.S. 574

36 S.Ct. 702

60 L.Ed. 1179

SUPREME LODGE, KNIGHTS OF PYTHIAS, Plff. in Err.,

v S. MIMS.

No. 345.

Argued May 1 and 2, 1916.

Decided June 12, 1916.

Messrs. M. M. Crane, H. P. Brown, Edward Crane, James P. Goodrich, Ward H. Watson, James E. Watson, and Sol. H. Esarey for plaintiff in error.

Messrs. Lawrence C. McBride, Joseph E. Cockrell, and Edward Gray for defendant in error.

Mr. Justice Holmes delivered the opinion of the court:

This is a suit against a corporation chartered by Congress on June 29, 1894 (chap. 119, 28 Stat. at L. 96), to recover all sums paid by the plaintiff, the defendant in error, to the defendant and its predecessors; the ground alleged being that the defendant, the plaintiff in error, has demanded monthly dues in excess of its rights, and thereby has entitled the plaintiff to recover all that he had paid, with interest.

The facts are as follows: The plaintiff originally took out two certificates of insurance from an earlier corporation of the same name, the charter of which expired on August 5, 1890. In May, 1885, he surrendered these certificates and took out a new one in what was called the Fourth Class, by which, in consideration of his original declarations and representations, and of the payment 'of all monthly payments as required, and the full compliance with all the laws governing this rank, now in force, or that may hereafter be enacted and shall be in good standing under said laws,' the sum of $3,000 was to be paid to the plaintiff's wife, or such other beneficiary as he might direct in proper form, upon notice and proof of death and good standing at the time; provided, as hereafter stated. It was further stipulated that any violation of the conditions mentioned or the requirements of the laws governing this rank should avoid all claims. By the certificate of incorporation the corporation had power 'to alter and amend its Constitution and by-laws at will;' the laws of 1880, then in force, provided that 'these laws [regulating assessments inter alia] may be altered or amended at any regular session of the Supreme Lodge K. of P.;' and by his original application the plaintiff agreed to conform to the laws and regulations of the order then in force or that might thereafter be enacted, or submit to the penalties therein contained.

The plaintiff contends that his contract took him out of these reiterated provisions for possible change; and his ground is that by article 5, § 4, of the laws of 1884, creating the Fourth Class, the endowment fund for the payment of benefits in that class was to be derived from monthly payments from each member for each $1,000 of endowment, to be graded according to the age of the member at the time of making application, and his expectancy of life, the age to be taken at the nearest birthday, 'Said monthly payments shall be based upon the average expectancy of life of the applicant, and shall continue the same so long as his membership continues.' A table appended gave the rate for the different ages from twenty-one to sixty. At that time members were transferred to the Fourth Class at the original entry age, which, in the plaintiff's case, was forty-two. These same laws of 1884 repeated the former provision as to amendment by the Supreme Lodge, now requiring a two-thirds vote. The recension of 1886 repeated the last-mentioned provision, and set forth a form of application by which the applicant agreed not only, as heretofore, that he, but also that 'this contract, shall be controlled' by the laws then in force or that might be enacted thereafter. The power to alter was applied in 1888 to the payments to be made by the Fourth Class. The board of control was ordered to rerate members transferred to the Fourth Class as the plaintiff was, so that thereafter they should pay as of the age at which they were transferred, instead of that at which they first became members. Thereafter the plaintiff paid as of the age of forty-eight.

After the charter expired, in 1890, the business was kept going under the same name by a voluntary association, the plaintiff paying his assessments as before, until on June 29, 1894, the act of Congress mentioned incorporated certain persons named, 'officers and members of the Supreme Lodge Knights of Pythias,' by the name of 'The Supreme Lodge Knights of Pythias,' and authorized them to use the powers 'incidental to fraternal and benevolent corporations within the District of Columbia.' By the 3d section of the charter 'all claims, accounts, debts, things in action, or other matters of business of whatever nature now existing for or against the present Supreme Lodge Knights of Pythias, mentioned in § 1 of this act, shall survive and succeed to and against the body corporate and politic hereby created; provided that nothing contained herein shall be construed to extend the operation of any law which provides for the extinguishing of claims or contracts by limitations of time.' This is the main ground upon which the defendant is sought to be charged with the certificate issued by the former corporation. By § 4 'said corporation shall have a constitution and shall have power to amend the same at pleasure; provided, that such constitution or amendments thereof do not conflict with the laws of the United States or of any state.' Amendments to the laws of the association were adopted this same year, 1894, by one of which the existing rates were retained, and it was provided that each member of the endowment rank should continue to pay the same amount each month thereafter so long as he remained a member, 'unless otherwise provided for by the Supreme Lodge or board of control of the endowment rank.' A similar provision was made in 1900, but the rate for the age of forty-eight was made $2.45, or $7.35 for the $3,000 in the certificate. The plaintiff paid the rates as established from time to time.

The split came in 1910. In that year the corporation passed a law providing for a rerating of every member of the Fourth Class on January 1, 1911, in accordance with his attained age and...