Supreme Lodge of Fraternal Union of America v. Light

• Decision Date: 14 March 1912
• Docket Number: 3,598.
• Citation: 195 F. 903
• Parties: SUPREME LODGE OF FRATERNAL UNION OF AMERICA v. LIGHT.
• Court: U.S. Court of Appeals — Eighth Circuit

195 F. 903

SUPREME LODGE OF FRATERNAL UNION OF AMERICA v. LIGHT.

No. 3,598.

United States Court of Appeals, Eighth Circuit.

March 14, 1912

Charles L. Allen, B. M. Webster, and Allen T. Sanford, for plaintiff in error.

Edward B. Critchlow and William J. Barrette, for defendant in error.

Before SANBORN and ADAMS, Circuit Judges, and WM. H. MUNGER District judge.

ADAMS Circuit Judge.

This was a suit by a beneficiary named in a benefit certificate issued in 1898 by the Supreme Lodge of the Fraternal Union of America to John Pawlas, a member of one of its constituent subordinate lodges. He died in 1908 after having paid all assessments made against him during his lifetime. The defense was that in 1906 Pawlas engaged in the business of selling malt liquors to be used as a beverage, and continued to do so during the balance of his life, in violation of a prohibition in that particular contained in an amendment to the constitution of the Supreme Lodge which was adopted in 1902. The defendant offered to return to plaintiff an amount of money equal to all assessments paid by Pawlas during his lifetime.

The question is whether Pawlas, whose membership and benefit certificate antedated the amendment of 1902, was subject to its provisions. His original certificate issued in 1898 reads as follows: 'This certificate issued by the Supreme President and Supreme Secretary of the Fraternal Union of America, by its authority, witnesseth: That Frater John Pawlas, a member of Sego Lodge No. 138, located at Ogden Utah, is, while in good standing in this fraternity, entitled to j participate in its benefit fund to the amount of twenty-four hundred dollars, which shall be paid at his death to Lillian Pawlas (wife) by its Supreme Lodge, subject to all the conditions named in this certificate and the provisions contained in its constitution, and liable to forfeiture if said Frater shall not comply with said provisions and conditions, laws and such by-laws and rules as are or may be adopted by the Supreme Lodge or the Local Lodge of which he is a member.' case, reads: 'Should any member who now is or who shall hereafter become a member of this order, hereafter enter upon the manufacture or sale of malt, spirituous or vinous liquors, to be used as a beverage, in the capacity of proprietor, stockholder, agent or employe, * * * he shall ipso facto forfeit all rights as a member of this Order either social or beneficial, and his certificate shall thereby become absolutely null and void. * * * ' Whatever other questions may arise, it is clear, we think, that Pawlas by the acceptance of his certificate actually agreed to be bound by any by-laws or rules which the Supreme Lodge might thereafter adopt.

It is argued that his agreement in this respect related only to his social status as a frater or member of the lodge, and did not empower the Supreme Lodge to legislate so as in any manner to affect his business relation with the lodge; that is, his insurance contract. But we are unable to discover any such limitation to the scope of his agreement. By clear and unequivocal language contained in the certificate which he received he agreed that, not only his right to membership, but his right to participate in the benefit fund of the lodge, should be subject to any by-laws or rules which the Supreme Lodge might thereafter adopt. We think this is so clear as to require no attempt at demonstration.

The question most debated is whether his agreement to be subject to future legislation empowered the Supreme Lodge by such legislation to prohibit him from engaging in the sale of malted liquors to be used as a beverage. In other words, did such legislation impair a vested right? Counsel for plaintiff invoke the decision of this court in the case of Knights Templars' & Masons' Life Indemnity Co. v. Jarman, 44 C.C.A. 93, 104 F. 638, as authority for their contention. We there held that the legislative acts of private corporations are presumptively intended to operate prospectively only, and that, when such an act would change the contracts made by its outstanding certificates by reducing the amounts payable thereon, it would impair the obligation of the existing contracts, and the presumption that the amendment was intended to act prospectively only would be indulged. This doctrine may well be conceded, but it has no applicability to the present case. There is in this case no attempt to reduce the amount of indemnity which the company had promised to pay in the event of the death of the member, and thereby lessen the value of his policy.

They also call attention to the case of Mathews v. Modern Woodmen of America, 236 Mo. 326, 139 S.W. 151, where it was held that, if an amended law impairs the substantial property rights of the member in his insurance contract, it would be inoperative. This general proposition need not be disputed; but that case went off on a construction of two provisions of the policy which the court held, when taken together, permitted a forfeiture only when the death resulted from engagement in the prohibited occupation, and is no authority for plaintiff's present contention. Many other cases are also cited by them announcing the propositions stated in Knights Templars' & Masons' Co. v. Jarman supra, that subsequent legislation, reducing the amount promised to be paid or otherwise materially affecting the enforcement of the substantial right secured to a member by his original contract, is an invasion of vested rights and inoperative. They also call attention to the cases of Tebo v. Supreme Council of Royal Arcanum, 89 Minn. 3, 93 N.W. 513, Barnett v. Grand Lodge...