Knights of Pythias v. Weller

Harrison, J., delivered the opinion of the court. In 1881 William H. Weller received from the Supreme Lodge Knights of Pythias of the World a certificate of membership for $1000 in the “ Endowment Rank,” which is in effect the insurance branch of the order. In 1885, upon his own application, he was transferred from the first to the fourth class of the insured, surrendering his original certificate, and receiving in lieu thereof a new certificate or policy, which is the one sued on in this action. He remained a member in good standing, continuing to pay his dues and assessments from the time he became a member of the order until his death, which occurred September 11, 1893. This action of covenant is brought by his widow, Maggie S. Weller, in her own right, and as guardian and next friend of her children, against the “ Supreme Lodge Knights of Pythias ” to recover the amount of said policy, it being for her and their benefit, and payable to them. In addition to the general issue, the defendant Society filed two special pleas upon which issue was joined, which set forth in substance that the deceased had voluntarily taken his own life, and that, under a by-law of the association which constituted in part the contract of the assured with the defendant, his right to recover was forfeited. Upon the trial, the defendant Society offered to prove that the assured did voluntarily destroy himself, but this evidence was rejected by the court for the reason that the matter sought to be proved did not constitute a defence in the absence of a contract relieving the Society from liability for death from suicide, and that the by-law set out with the defendant’s plea, and relied on as showing such a contract, was [611] void in so far as it affected the deceased. This ruling was excepted to, and constitutes one of the assignments of error. It appears from the record the Supreme Lodge Knights of Pythias of the World was incorporated in the District of -Columbia in the year 1870, under and in accordance with an act of Congress entitled “An act to provide for the creation of Corporations in the District of Columbia by general law,” approved May 5, 1870. This general law provided that the life of all corporations formed under it should be limited to twenty years. The by-law relied on by the defendant to defeat the recovery in this case purports to have been adopted as an amendment to the existing laws at a regular meeting of the Board held January 12th and 13th, 1893—more than two years after .the time fixed by law when the life of the corporation should cease. The record shows that a special committee on incorporation, appointed for the purpose, reported in September, 1894, to the Society, that after a careful examination they had found that the charter granted the Supreme Lodge Knights of Pythias of the World had expired by limitation, and, deeming it of great importance that the order should be legally incorporated, they had procured from Congress an Act of Incorporation, dated June 29, 1894. This new act incorporated the order as the “ Supreme Lodge Knights of Pythias,” leaving off the words “ of the world.” It is contended by the defendant Society that this act of incorporation was a mere continuation of the original charter, that the new charter of 1894 was not necessary, but was secured only out of abundant caution; and further that, even if the original charter expired in 1890, the Society was a dejado corporation, continuing its regular business, and that the question of its legal existence was one that could only be raised by the power which created it, and not by a member, or any one claiming under him; that the provision in [612] the new charter “that all claims, debts, accounts, 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 section one of this act, shall survive, and succeed to and against the body • corporate and politic hereby created,” is a declaration of the existence of the corporation of 1890 by the power which created it. These contentions cannot be sustained. When the limit of corporate power is fixed, the corporation is dissolved when the period of limitation is reached, with all the consequences of a dissolution by any other mode. In 5 Thomp. Corp., sec. 6651, the law is stated thus : “If the charter or governing statute of the corporation fixes a definite period of time at which its corporate life shall expire, when that period is reached, the corporation is ipso facto dissolved, without any direct action to that end, either on the part of the State, or of its members; and no powers created by the charter or governing statute can thereafter be exercised, except such as are continued by force of the statute law for the purpose of winding up its affairs.” When the twenty years life of the charter of 1870 had expired, the corporation as such was dead, and it was absolutely without power to adopt the by-law relied on in this case. Nor did those who took charge of the affairs and assets of the corporation, after its charter had expired, have-power to pass such a by-law. The provision in the new charter, already quoted, binds-the new Society to pay all the liabilities of the old, in the most unqualified and unconditional way; but it does not, as-claimed, revive the old corporation, or give any life to the-by-law now relied on by the defendant. Inasmuch as the new charter makes no allusion to this by-law, it is to be presumed that Congress did not intend that the forfeiture contained in it should survive to the new corporation. [613] There was no error in the ruling of the lower court rejecting the evidence of suicide until the defendant had established a contract with the assured relieving it from liability for death from suicide; and it follows from what has been said that there was no error in holding further that the by-law set out in the defendant’s special plea, and relied on as the evidence of such a contract, was void in so far as it affected the deceased. The defendant Society further insists that inasmuch as the twenty-year limit to the corporation of 1870 was not embodied in its charter, but only found in the general law authorizing such charters to be created, and as Congress in 1884 passed an amendment to said general law striking out the twenty-year limit, the life of said corporation thereby became indefinite. This position is not tenable. It is not necessary that the general law should be copied in the charter. It forms an essential part of it, and all parties are bound by its terms, whether copied in the charter or found only on the statute book. The amended act of 1884 striking out the twenty year limit only, applied to corporations thereafter chartered. It had no application to corporations in existence at the time it was passed. A statute does not have a retroactive effect unless clearly expressed, or necessarily implied. As already shown, the new Society undertook to pay the liabilities of the old, as one of the terms and conditions of its incorporation; and this action of covenant is brought by the plaintiffs against the new Society, and the policy or certificate issued to deceased in 1885 is declared on as having been issued by the defendant Society, and the declaration •contains no allegation that the liability had become that of the defendant. Upon the trial the defendant moved the court to strike out the evidence of the plaintiffs, upon the ground that the •declaration did not allege that the liability sought to be [614] enforced had become the liability of the defendant Society chartered in 1894. On the contrary, it appeared from the evidence produced by the plaintiffs, that the obligation sued on was a covenant made by the corporation which expired in 1890. This motion was overruled by the court and the ruling excepted to. No question has been raised as to the form of action adopted in bringing this suit. Ordinarily, assumpsit would seem to be the proper action under the circumstances here disclosed, and it has not been without doubt, that the conclusion has been reached to sustain the action of covenant in this case. The language used by the defendant in its charter, in acknowledging the liabilities of the old Society as its own, would seem to be broad enough to justify the same form of action against the Society taking upon itself the liability that could have been maintained against the Society issuing the policy. It was, however, essential that the declaration should allege that the debt sued for had become that of the defendant. The evidence must be confined to the issues made by the pleadings. There was a variance between the allegations and the proof, and the defendant’s motion to strike out the plaintiffs’ evidence ought to have been sustained. As this case must be sent back for a new trial, it becomes unnecessary, and would be improper, to pass upon other assignments of error that may not arise on the next trial, or might arise, if at all, in a different form. For the error of the court in overruling the defendant’s motion to strike out the plaintiffs’ evidence because it did not correspond with the allegations of the declaration, its judgment must be reversed, the verdict set aside, and the cause remanded to the Hustings Court for a new trial to be had therein, with direction to grant leave to the plaintiffs to amend their declaration, if they shall be so advised. Reversed.