Dornes v. Supreme Lodge Knights of Pythias

Whitfield, J., delivered the opinion of the court. The present order of. Supreme Lodge, Knights of Pythias, is a new corporation, acting under charter granted by act of congress, June 29, 1894, and accepted by the order, effective as of said date. There are- two constitutions known to this order— the constitution of the order itself, called the ‘ ‘ supreme constitution, ’ ’ arid the "constitution of the endowment rank. ’ ’ In the first, ‘ ‘ supreme constitution, ’ ’ that of the old corporation, it was provided (article 14) that “ all laws,” etc., “ of the supreme lodge should become of force from date of the publication of the official journal of the supreme lodge, unless otherwise provided by the supreme lodge. ’ ’ This is not now in [478] force, there being substituted for it in the present supreme constitution, adopted September 1, 1894, section 19, which provides that "all statutes shall take effect sixty days after final passage, unless otherwise therein provided.” Publication of the laws in the official journal, therefore, does not now enter into the question of their validity. The resolution putting in force the suicide amendment was adopted by the supreme lodge September 7, 1894, and, as more than sixty days elapsed thereafter before the insured’s death, that question is eliminated, and the supreme lodge itself having adopted this suicide amendment by the passage of the resolution, the sole question in this case is whether the mode of its adoption was proper. Very stringent provisions are set forth in the present supreme constitution as to how laws of the supreme lodge — “supreme statutes” — shall be enacted, and as to how that supreme constitution shall be amended. But both the supreme constitution and the constitution of the endowment rank are wholly the acts of the corporation (the order), and in no sense any part of the charter (the governing statute, the said act of congress). And that act of congress uses, in its fourth section, the word “ constitution ” in its accepted legal signification. Now, these constitutions are of no higher dignity than by-laws. All are, alike, the creations of the corporations, and the power which creates can alter or repeal. So far, therefore, as the mere mode of enacting the law — the suicide amendment— is concerned, it must necessarily follow that the adoption of the suicide amendment by the resolution was a repeal of the stringent provisions of the supreme constitution referred to, since the power which first enacted them was competent to repeal them by the passage of any law in a different mode. The valid passage of a law by the supreme lodge, in any mode not prohibited by its charter br the general law of the land, is necessarily a repeal of a previous law passed in any other mode prescribed by the same supreme lodge — the same source of power. The authorities make this perfectly clear. [479] In Supreme Lodge v. Knight, 117 Ind., 495 (20 N. E., 483), it is said: “ Charters are not created by the act of the corporation or association, bat are granted by the sovereign power of the state. A constitution of a voluntary association or a corporation is nothing more than a by-law under an inappropriate name. The power that can enact a by-law, whether called a constitution or not, can alter or abrogate it, unless some higher rule restrains or prohibits a change or repeal. When the authorities speak of a charter, they mean an essentially different thing from a law or constitution of the association’s own creation. What counsel call a charter is nothing more than a code of laws, established, not by the sovereign power of the government, but by the creature of that power — the corporation or association. The most that can justly be .said is, that the later by-laws are in conflict with the earlier. There is, therefore, no clashing between corporate utterances and charter provisions. ’ ’ And this was said by Elliot, C. J., speaking of provisions of the supreme constitution of the order itself. In Richardson v. Society, 58 N. H., 188, the court says: “ Complaint is made that the amendment of by-law 13, requiring a two-thirds vote for the admission of new members, was not properly and legally enacted, because its passage was not obtained by a vote of two-thirds of those present, according to by-law 12, requiring a vote of two-thirds of the members present to alter or amend the by-laws of the society. . . . Bylaw 12 was no part of the charter or constitution of the society, and not a law for the guidance of its officers and agents. It was an enactment made by one meeting of the society to govern the proceedings of future meetings, and was inoperative beyond the pleasure of the society, acting by a majority vote at any regular meeting. The power of the society, derived from its charter and the laws under which it was organized, to enact bylaws, is continuous, residing in all regular meetings of the society so long as it exists. Any meeting could, by a majority vote, modify or repeal the law of a previous meeting, and no [480] meeting could bind a subsequent one by irrepealable acts or rules of procedure. The power to enact is a power to repeal; and a by-law requiring a two-thirds vote of members present to alter or amend the laws of the society, may itself be altered, amended or repealed by the same power which enacted it. Ang. & A. Corp., 459; Com. v. Mayor, etc., 5 Watts, 152, 155; Christ Church v. Pope, 8 Gray, 140, 142. The society, by a majority vote, might amend or repeal by-law 12. By a like vote they might adopt any mode for the admission of members. ” This is directly in point. Mr. Thompson, in Commentaries on the Law of Corporations (vol. 1, sec. 943), lays down the same rule, saying: “If the charter is silent as to the formalities to be observed, a by-law may be adopted by acts as well as by words.” To the same effect is Mr. Freeman, in his learned note to Sayre v. Association, 85 Am. Dec., 618. The case of Kent v. Mining Co., 78 N. Y., 159, is easily susceptible of misconstruction. It is properly discriminated in Poultney v. Bachman, 31 Hun, 53, which upholds our view. There is a dictum to the contrary of our view in Heintzelman v. Association, 38 Minn., 140 (36 N. W., 100), but it is clearly erroneous, and the point decided is not affected by the dictum. And this dictum is all that exhaustive search has disclosed in conflict with this settled view, above laid down. It is said, however, that the resolution adopting the suicide amendment is in no sense a by-law; that it is not a by-law adopted in any mode; not in its nature a. by-law, nor in its mode of adoption; not a by-law at all. But Mr. Thompson says (vol. 1, Corp., sec. 936): “A resolution is not necessarily a by-law, though a by-law may be in the form of a resolution. ” And the same doctrine is announced in Drake v. Railroad Co., 7 Barb., 540, and in 5 Am. & Eng. Enc. L. (new edition), top of page 88. The mere fact that a by-law is in the form of a resolution is not determinative. There is much seeming force, at first blush, in the contention most earnestly insisted on, that the as [481] sured’s rights are not to be taken away by this suicide amendment, adopted in this resolution, made by the adoption of this document No. 159, “in a corner,” as it is said. But two considerations are a perfect answer to this contention: (1) That the insured contracted, in his application and certificate, to be bound by ‘ ‘ all laws then in force or thereafter to be enacted by the supreme lodge; ’ ’ and (2) nearly two years elapsed after the law went into force before the insured’s death. In the very case relied on by learned counsel for appellant (Hobbs v. Association (Iowa), 47 N. W., p. 984), it is said: ‘ ‘ But it does not follow that they will be bound by all those [by-laws] adopted after their contracts of membership are made. Whether they will be or not will depend upon the terms of their contract. If that provide that members shall be bound by all articles or by-laws which may at any time be adopted, we know of no reason why it is not valid. In such cases, changes made are not in violation of the contract, but are in harmony with it. ’ ’ That is the case here, and the supreme lodge — the source of power — having adopted the law, the insured is bound by it. To this point are, emphatically, Bowie v. Grand Lodge (Cal.), 34 Pac., p. 104; Supreme Commandery v. Ainsworth, 71 Ala., 436; Stohr v. Society, 82 Cal., p. 560 (22 Pac., 1125); Supreme Lodge v. LaMalta (Tenn. Sup.), 31 S. W., 493; Supreme Lodge v. Stein, ante, p. 107, and many other authorities.- It will be noted that this by-law steers clear of the objection that it is not general and equal in its operation, and does not fall under the condemnation of cases like Budd v. Railway Co. (Ore.), 15 Pac., p. 661. Stein’s case turned upon the fact that this very by-law was there adopted by the board of control, whose action was a nullity. Here, the supreme lodge itself — the true source of power — has enacted it. It follows from these views that the judgment must be, and it is hereby, Affirmed.