Supreme Lodge Knights of Pythias v. Stein

Whitfield, J., delivered the opinion of the court. We held, in Kramer v. Supreme lodge, at the last spring term of this court (no opinions tiled), that the supreme lodge could not delegate to a subordinate managing committee — the board of control — the legislative power vested by the charter in the supreme lodge alone, approving Supreme Lodge K. of P. v. LaMalta, 95 Tenn., 157 (30 L. R. A., 838), in that regard, to which case we also refer for the history of the organization and development of the order of the Knights of Pythias. The anti-saicide clause in this case was adopted by the board of control, in Chicago, January 12 and 13, 1893; but it was never, before Stein’s death, published in the official journal of the supreme lodge, or adopted, ratified or. enacted by the supreme lodge. It follows that the regulation against suicide, if considered as a by-law, is void, because the board of control, a mere ministerial committee, vested with administrative functions in relation to the endowment rank, had no power to pass a law like this, fundamental in its character, providing a new condition avoiding absolutely the benefit certificate of one who should commit suicide. : But, assenting to this view, as already established by the two cases (Kramer v. Supreme Lodge and Hughes v. Supreme Lodge), it is insisted that, if the anti-suicide provision be void as a by-law, it is a valid element of a contract manifested by the application and the benefit certificate, and that, Stein having signed an application which bound him to the observance of all laws then in existence, or thereafter to be passed by the supreme lodge or the board of control, and this application containing this anti-suicide clause, he is bound by it, as an integral and inseparable element of an indivisible contract. To a proper understanding of the case in this view, it will be well to set out the facts of the case. In June, 1892, Stein, being then a Knight of Pythias, and as such knight entitled to insurance in the endowment rank, upon compliance with the provisions of the charter (act congress, May 5, 1870, as amended 1882),. [118] and valid rules passed in accordance therewith, was admitted to the endowment rank, and received a benefit certificate for f3,000. No anti-suicide clause was at that time in his application, or known to the order. The supreme lodge, at its seventeenth session, held in Kansas City, Missouri, August 23 to September 3, 1892, adopted and promulgated the constitution of the ' Endowment Rank of the nights of Pythias of the World,” under secs. 5 and 6 of article 2, of which constitution this knight, Stein, was entitled to receive a benefit certificate of $5,000 upon compliance with the provisions of the charter, and valid regulations passed in pursuance of it. No anti-suicide provision was in that constitution adopted by the supreme lodge, or even up to Stein’s death, in August, 1893; but on January 12 and 13, 1893, the board of control — a mere managing committee, without authority — adopted such provision. On January 20, 1893 — seven or eight days only thereafter, and when this provision had not been published, as required by article 14 of the constitution of the supreme lodge itself — Stein applied for the increased insurance, and signed the application herein, and received the benefit certificate herein for $5,000, surrendering his previous certificate for $3,000, the application and certificate having been prepared in accordance with this anti-suicide clause, adopted just seven or eight days before, illegally; and thereafter, in August, 1893, Stein committed suicide, the supreme lodge having never, up to that date, adopted the anti-suicide provision. These being the facts, the exact question on this branch of the case for decision is: What was the contract in this case ? "The conclusion, ’ ’ says Mr. Bacon (vol. 1, Ben. Soc. & Life Ins., sec. 161), “from an examination of all the cases, is that the contract is found in the certificate, if one is issued, but is to be construed and governed by the charter and by-laws of the society, and the statutes of the state of the domicile of the corporation. ’ ’ See, also, Id., secs. 48, 91a. The contracting parties here are Stein and the supreme lodge, not the board of control; and, so far as the supreme [119] lodge is concerned, it had never assented to this anti-suicide clause up to the time of Stein’s death. It is essential to a contract that both parties shall agree to the same thing. The case so much relied on by appellant — McCoy v. Northwestern Mut. Relief Asso., 92 Wis., 577 — is not in point. The association is not the same, and in that case the anti-suicide provision was adopted by the association itself, in accordance with its charter, on January 15, 1890, McCoy having been actually notified twice before it was adopted, and not having died till some two years after its due adoption. So Daughtry v. Knights of Pythias, 48 La. Ann., 1203, was a case where the by-law was conceded to have been validly enacted — “ approved by the supreme lodge,” says the court. In Hoffmeyer v. Muench (1894), 59 Mo. App., 20, the charter of the order did not require the beneficiary to be one dependent upon the assured; but a local lodge of the order adopted a constitution, according to section 7 of which the beneficiary had to be one so dependent. The court held that section 7 was void in that view, saying: ‘ ‘ The contract is made with the corporation, and not with the subordinate lodge, and it is not for the subordinate lodge to say what contracts the corporation may make,” citing Bacon’s Ben. Soc. & Life Ins., sec. 144. In Knights Templar & M. Life Indemnity Co. v. Berry, 4 U. S. App., 353 (1 C. C. A., 501; 50 Fed. Rep., 511), the policy contained this anti-suicide provision when signed by Berry, and was the only policy he ever had. A statute of Missouri prohibited this defense, unless the assured contemplated suicide when he applied for the policy. Berry committed suicide, and the defense was this clause, the company conceding, however, that it was bound to pay back the premiums. The suit was on this policy, and the defense disallowed, as a by-law or as a contract. It will be noticed that here not even the premiums are offered to be returned, and the forfeiture of the $3,000 as well as of the $5,000 is insisted on, although section 7 of article 2 of the [120] constitution of the endowment rank required premiums paid to be refunded. To the same effect with the case just cited are Ætna L. Ins. Co. v. Florida, 32 U. S. App., 753 (16 C. C. A., 618; 69 Fed. Rep., 932; 30 L. R. A., 87), and Hale v. Equitable Aid Union, 168 Pa., 377, in which the assured agreed in his application to be bound by all rules and regulations then existing or thereafter adopted by the union, and it afterwards adopted a regulation changing the amount the beneficiary was to receive from one-half to one-tenth of the amount. Though adopted by the union itself, it was held that it would not affect the policy issued before its adoption. See, generally, 1 Bacon, Ben. Soc. & Life Ins., passim. See, specially, Id., sec. 92, and Wist v. Grand lodge A. O. U. W., 22 Or., 271. The charter is as much a part of this contract as if written on its face. That charter prohibited any person but the supreme lodge from passing this regulation against suicide. That charter is the law of this contract, and the anti-suicide clause must be regarded as written out of the contract by the charter. The suits in the cases just cited were, just as here, on the policy with this clause in them, and they, properly analyzed, are a distinct holding that neither as a by-law nor as a contract can this provision be upheld. What was validly agreed on in accordance with the charter, constitutes the contract in those cases and in this. The objection that this view destroys the board of control and the endowment rank is fanciful, not real. The board, as an organization, remains. All the administrative functions properly conferred on it remain. Our holding merely denies it what the charter denied it — -the power to pass laws, fundamental in their nature, governing the endowment rank, which was vested by the charter in the supreme lodge alone. It is easy for the supreme lodge to enact such provision, and when validly enacted by it there can be no objection to it's enforcement. But it was .clearly not in the power of this board of control — a mere ministerial administrative committee — to usurp to itself the legislative authority granted to the supreme lodge [121] as the sole'source of such authority, and insert this provision illegally in this application, and force it upon Stein, already a knight, and a member of the endowment rank. Affirmed.