Newhall v. Supreme Council American Legion of Honor

Holmes, C. J. This is an action on a certificate of membership issued by the defendant to Eben D. Newhall and promising to pay the plaintiff $5,000 upon certain conditions which have been performed. The defendant sets up that since issuing the certificate it has changed its by-laws and cut down the highest amount to be paid upon any benefit certificate to $2,000. The plaintiff denies the power of the defendant thus to diminish a member’s rights under his contract. The promise is made “in consideration of the full compliance with all the by-laws . . . now existing or hereafter adopted,” but the conditions attached to the promise refer to the by-laws only so far as to require payment of assessments and the deduction of advances for sick or disability benefits in accordance with them. Subject to these conditions the promise is absolute. Upon these facts we are of opinion that the plaintiff is right and is entitled to recover the larger sum. If the plaintiff’s rights stood simply upon the by-laws in force at the time when the certificate was issued, as was the case in Pain v. Société St. Jean Baptiste, 172 Mass. 319, the question would be raised whether such a change of by-laws, if necessitated by the condition of the society, was permissible as against her, or was unreasonable and an abuse. See Messer v. Grand Lodge United Workmen, 180 Mass. 321; Smith v. Galloway, [1898] 1 Q. B. 71; Fugure v. Mutual Society of St. Joseph, 46 Vt. 362; Fullenwider v. Supreme Council of the Royal League, 180 Ill. 621; Niblack, Voluntary Societies, (2d ed.) § 25. But the plaintiff’s rights do not stand upon the by-laws alone. They [117] stand also upon express contract. The promise to pay $5,000 is conditioned by the by-laws only to the extent that has been stated. Even if the “ full compliance with all the by-laws ” which is mentioned as a consideration for the promise is not interpreted and limited by the more specific provisions of the express conditions, “ compliance ” in this connection means doing what, the by-laws may require the member to do, not submission to seeing his only inducement to do it destroyed. The case is not like Daley v. People’s Building, Loan, & Savings Association, 172 Mass. 533, and Moore v. Union Fraternal Accident Association, 103 Iowa, 424, where the promise to pay a fixed sum was qualified by reference to a fund from which the payment was to come and which might turn out inadequate from causes over which the defendant had no control. Stating our opinion in a different form, whatever compliance with bylaws may be construed to mean, it does not mean absolute submission to whatever may be enacted in good faith, and it does not extend to permitting a direct deduction from the sum which, on the face of the certificate, any ordinary man would be led to suppose secure. With reference to him the by-law is a plain abuse. Gaut v. American Legion of Honor, 107 Tenn. 603. Langan v. American Legion of Honor, 70 N. Y. Supp. 663, 665. Knights Templars’ & Masons’ Life Indemnity Co. v. Jarman, 44 C. C. A. 92, 99. Pokrefky v. Detroit Firemen's Fund Association, 121 Mich. 456. Wist v. Grand Lodge A. O. U. W. 22 Ore. 271, 281. Another by-law undertakes to deduct five per cent from the face value of certificates for an emergency fund. Whatever may be the right to assess for this purpose, it follows from what we have said that the attempt to cut down the amount to be paid by the defendant under its contract must fail. St. 1899, c. 442, § 12, is not to be construed as attempting to impair the obligation of existing contracts. Judgment for $4,800.