Supreme Lodge Knights of Pythias v. Stein

• Decision Date: 08 March 1897
• Citation: 75 Miss. 107,21 So. 559
• Court: Mississippi Supreme Court
• Parties: SUPREME LODGE KNIGHTS OF PYTHIAS v. ROZALIE STEIN

21 So. 559

75 Miss. 107

SUPREME LODGE KNIGHTS OF PYTHIAS v. ROZALIE STEIN

Supreme Court of Mississippi

March 8, 1897

March 1897

FROM the circuit court of Leflore county HON. R. W. WILLIAMSON Judge.

This was an action for $ 5, 000 brought by Rozalie Stein on a benefit certificate for that sum issued to her husband, Marx Stein, on the twenty-third of January, 1893, by the board of control of the endowment rank, Knights of Pythias, under the seal of the supreme lodge. The certificate was, by its terms subject to the conditions expressed in the application, and the application contained at condition of forfeiture in the event of the member's suicide. The certificate recited as part of the consideration thereof, the compliance by Stein with all the laws then in force or that might thereafter be enacted by the supreme lodge or the board of control. The anti-suicide law that gave rise to the condition was adopted by the board of control on January 12-13, 1893. The clause in the charter of the association on the subject of the endowment rank is as follows: "That the supreme lodge shall have power to establish the uniform rank and the endowment rank upon such terms and conditions, and governed by such rules and regulations as to the said supreme lodge may seem proper."

There had been, prior to Marx Stein's death, no enactment by the supreme lodge of an anti-suicide law, nor any enactment ratifying the provision adopted by the board of control in respect to suicide, nor had the said provision been published in the official journal of the supreme lodge. The defendant the supreme lodge, pleaded the condition against suicide, and the fact of suicide by plaintiff's husband, the deceased certificate holder. The plaintiff replied, setting up want of authority in the board of control to adopt the anti-suicide law, and made the charter of defendant, and all amendments thereof, and the constitution adopted for the endowment rank, part of her replication. The defendant demurred to these replications on the grounds [1] that, by section 6, article 2, of the constitution adopted for the endowment rank by the supreme lodge, said rank was authorized to issue certificates in sums as high as $ 5, 000, under the general laws adopted by the board of control of the endowment rank, and that said condition against suicide is contained in the form of application prescribed by section 3 of article 11 of the said general laws adopted October 22, 1892, in pursuance of the authorization contained in said constitution; and [2] that, whether authorized or not, the condition against suicide was a condition precedent to the execution of the contract evidenced by the certificate sued on, without which said contract would not have been entered into, and the said contract, as entered into and containing said condition, is the only one existing between the parties and is indivisible, and, if void in part, is void in toto.

The demurrer was overruled, and, defendant declining to plead further, judgment was rendered in favor of plaintiff for the amount sued for, whereupon defendant appealed.

Affirmed.

Nugent & Mc Willie, for appellant.

1. The deceased member, desiring to increase his insurance, surrendered a former certificate for $ 3, 000 and applied for one of $ 5, 000. There is a condition against suicide in the written application for this $ 5, 000 certificate, which itself is made subject, by its terms, to all the conditions expressed in the application, the two instruments together forming one contract, as in ordinary life insurance contractus Without this condition against suicide, the contract would never have been entered into, and the certificate issued and delivered to the deceased. Doe, Caillaret v. Bernard, 7 Smed. & M., 319.

The contract is an entire and indivisible one, and if this essential condition is void for the reason urged, it does not lie in the mouth of the plaintiff to say so, since she relies on and is seeking to enforce a contract that grows out of anti rests upon that very condition. McCoy v. Northwestern Mutual Relief Association, 92 Wis. 577; Dunlap v. Petrie, 35 Miss. 590; Bank of Newberry v. Stegall, 41 Miss. 142; Wooten v. Miller, 7 Smed. & M., 380.

The condition in question is not to be classed among the things that are either mala per se or mala prohibita. On the contrary, it is in aid of public policy, as going to discourage suicide. The breach of it is in a matter that the parties manifestly treated as vital to its existence, and in such cases the promisee is discharged. 3 Am. & Eng. Enc. L., 914.

If the plaintiff relies upon the contract, she must take it in its entirety. If she wants to disaffirm it, and it is indeed void for want of authority in the board of control, and illegal, her only remedy is to seek a rescission on that ground, and on a count for money had and received, a recovery of the premiums or assessments paid. 27 Am. & Eng. Enc. L., 367-371, and notes; Pittsburg, C. & St. L. R. Co. v. Keokuk & H. Bridge Co., 131 U.S. 371 ; Dill v. Wareham, 7 Met., 438; Green's Brice's Ultra Vires, 2d ed., note p. 729.

Everyone dealing with a corporation is presumed to know the extent of its powers. 1 Bacon, Ben. Soc. & Life Ins., sec. 81; State Board of Agriculture v. Citizens' Street Ry. Co., 47 Ind., 407. If the plaintiff has not performed his part of the contract, defendant is not liable on the contract, although he may be for such expenditures as the plaintiff may have made in partial performance of the contract. Tucker v. Woods, 12 Johns., 190 ; McKinley v. Watkins, 13 Ill. 140; James v. Fulcrod, 5 Tex., 513 ; Commercial Bank v. Nolan, 7 How. [Miss.], 508.

In the case of concurrent considerations, the plaintiff's promise is executed, but the thing to be performed is executory. Though the acts to be done by the plaintiff are not conditions precedent, but concurrent with the thing to be done by the defendant, yet he cannot maintain an action without showing performance, or an offer to perform. Mount v. Lyon, 49 N.Y. 552; Coonley v. Anderson, 1 Hill, 519; Giles v. Giles, 9 Q. B., 164; 2 Wait, Act. & Def., 365.

2. The plea of ultra vires should not, as a general rule, prevail, whether interposed for or against a corporation, when it would not advance justice, but, on the contrary, would accomplish a legal wrong. Whitney Arms Co. v. Barlow, 63 N.Y. 69 ; Ohio & M. R. Co. v. McCarthy, 96 U.S. 258 . What is bad as a by-law may be good as a contract, since "a man may part with a common right voluntarily, of which it would be impolitic and unjust to deprive him by a by-law passed without his assent, or perhaps knowledge, by those who would not consult his individual interests." 1 Bacon, Ben. Soc. & Life Ins., sec. 87; Ang. & A. Corp., sec. 342; Austin v. Searing, 16 N.Y. 112 [69 Am. Dec., 665, and notes]; Goddard v. Merchants' Exchange, 78 Mo. 609; Mc Coy v. Northwestern Mut. Relief Asso., 92 Wis. 577.

The constitution adopted for the endowment rank of the supreme lodge contains the general laws under which it exists and acts, and is analogous to the charter of an ordinary mutual life insurance company. Bacon, Ben Soc.& Life Ins., secs. 7881, 145, 146, 321. The board of control is the equivalent of the board of directors of the ordinary corporation, being the managing body to which the entire charge and full control of the rank is committed, with power to direct its affairs, and pass all needful regulations for its government. As so empowered, it could pass such needful regulations as it might see fit, and no matter what the amendment in question is denominated, it is, in its nature and character, essentially a rule adopted for the regulation of the business of the rank, and duly and properly adopted, and is binding upon all the members of that rank. 1 Bacon, Ben. Soc. & Life Ins., secs. 186-188; Supreme Commandery K. of G. R. v. Ainsworth, 71 Ala. 436

As a member of the endowment rank, accepting the form of contract prescribed by the board of control, Stein will be taken to have assented to such rules and regulations, or laws, if you please, as it had then, or might thereafter adopt. 1 Morawetz, Priv. Corp., sec. 501, and cases cited. The power of the board to adopt all needful regulations for the government of the rank has been recognized. Supreme Lodge K. of P. v. Kalinski, 13 U.S. App., 574 ; Theobald v. Supreme Lodge K. of P., 59 Mo. App., 87; Montgomery County Farmers' Mut. Ins. Co. v. Milner, 90 Iowa 685.

The charter of the supreme lodge authorized the establishment, or appointment, of this agent. The power of appointment carried along with it the power to clothe this instrumentality with the authority necessary to perform the functions for which the agency was created, and, as well, all the authority usually exercised by those similarly employed. 1 Am. & Eng. Enc. L., pp. 348, 349, 363, 371. The supreme lodge was authorized to appoint, and did appoint, the board of control of the endownent rank its general agent for the transaction of a life insurance business, and clothed it, in so doing, with all the power usually exercised by mutual benefit societies. 1 Bacon on Ben. Socs. & Life Ins., secs. 132, 133, 145.

One of the inherent powers of all corporations, mutual life insurance and mutual benefit concerns as well as others, is that of passing by-laws, and where an agency is established, under competent authority in every respect to serve the purpose of such an association, it must be taken to have the power to provide by-laws and other regulations for its government, especially when it appears that the only by-laws and regulations in existence are such as it has established. 1 Thomp. on Corp., sec. 955; 1 Bacon on Ben. Socs. & Life Ins., sec. 127.

The exercise of the power to make by-laws does not...