Ayers v. Grand Lodge of the Ancient Order of United Workmen

80 N.E. 1020, 188 N.Y. 280, 26 Bedell 280, 1907 N.Y. LEXIS 1126

• Court: New York Court of Appeals
• Decided: April 16, 1907
• Status: Published

Opinion

Vann, J.

This case cannot be distinguished in principle from a long line of cases decided by this court. (Evans v. Masonic Belief Assoc., 182 N. Y. 453; Beach v. Supreme Tent, Knights of Maccabees, 177 N. Y. 100; Langan v. Supreme Council, American Legion of Honor, 174 N. Y. 266,269; Shipman v. Protected Home Circle, Id. 398; Weber v. Supreme Tent, Knights of Maccabees, 172 N. Y. 490; Deuble v. Grand Lodge, Ancient Order of United Workmen, 66 App. Div. 323, 327; 172 N. Y. 665; Parish v. New York Produce Exchange, 169 N. Y. 48 ; Engelhardt v. Fifth Ward P. D. S. & Loan Assoc., 148 N. Y. 281, 297; Matthews v. Associated Press, 136 N. Y. 333, 342; Kent v. Quicksilver Mining Co., 78 N. Y. 159.)

It is well established by these authorities 11 that a general power reserved either by statute or by the constitution of a society to amend its by-laws does not authorize an amendment impairing the vested rights of members.’' An amendment of by-laws which form part of a contract is an amendment of the' contract itself and when such a power is reserved in general terms the parties do not mean, as the courts hold, that the contract is subject to change in any essential particular at the election of the one in whose favor the reservation is made. It would be not reasonable and hence not within their contemplation, at least in the absence of stipulations clearly specifying the subjects to be affected, that one party should have the right to make a radical change in the contract, or one that would reduce its pecuniary value to the other. A contract which authorizes one party to change it in any respect that he chooses would in effect be binding upon the other party only and would leave him at the mercy of the former, and we have said that human language is not strong enough to place a person in that situation. (Industrial c& General Trust, Limited, v. Tod, 180 N. Y. 215, 225.)

. While the defendant may doubtless so amend its by-laws, for instance, as to make reasonable changes in the methods of administration, the manner of conducting its business and the like, no change can be made which will deprive a member of a substantial right conferred expressly or impliedly by the contract itself. That is beyond the power of the legislature as well as the association, for the obligation of every contract is protected from state interference by the Federal Constitution. (Art. 1, § 10.)

The defendant promised by the contract whicli it made with the assured to pay to the beneficiary designated by him upon his death the sum of $2,000. The obligation of that contract was not limited by the occupation of the assured, for in the absence of any r strietion made by the parties he had an absolute right to engage in any lawful business that he might select. After this contract had been in force for more than twelve years and he had paid all the assessments as they became due and had complied with all the rules and regulations of the defendant, an attempt was made to restrict him in the choice of an avocation by amending the by-laws to that effect without his consent. When he had heen insured for over nineteen years and had reached an age when other insurance could not be procured without a decided increase in cost, and perhaps not at all, he engaged in a new business requir-, ing less strength and activity and died within a few months thereafter. He continued to pay his dues after he made the change, and, as the trial court expressly found, the duly authorized officer of the defendant knew when he received such dues that the insured “ was engaged in the hotel business.” The amended by-law, if enforced according to its terms, would deprive him of a right which he acquired by contract nearly twenty years before, and which he had preserved by paying to the defendant substantial sums of money every year during that period. The reservation of a general power to amend the by-laws, without reserving the specific right tó so amend them as to restrict the occupation, did not permit an amendment in that respect, and the attempt made without the consent of the assured wras beyond the power of the defendant and absolutely void as to him.

The effort was not to reduce the amount of insurance, but to destroy it altogether, unless the assured would conform to a by-law passed in violation of a vested right, for the privilege, allowed because not forbidden, of engaging in any lawful business was a vested right. It was an immediate right, open to enjoyment at all times during the existence of the contract, which the insured paid for when he 'joined the association, as well as every time he met an assessment. It was a natural right, of which he could not be deprived without his consent, and he never consented. It was a right which had pecuniary value, for it left the door open to change of employment by which more money could be made. The assured was not obliged to continue at manual labor all his life, but when he had acquired capital enough to go into business and employ others to work for him, he had the right to do so, and the right was obviously of such value as to Constitute a vested right, within the meaning of that term as known to the law.

We think that the amendment as made was without effect upon tlie contract, and that the promise of the defendant to pay "the sum of $2,000 was in full force at the death of the assured. While a different rule prevails in some states, the law in the state where the defendant was organized does not permit, as to existing contracts, such an amendment of its by-laws as it now pleads to defeat this action.

The judgment appealed from should be affirmed, with costs.

Cullen, Oh. J., Gray, Werner, Willard Bartlett and Hiscocit, JJ., concur; Criase, J., not sitting.

Judgment affirmed.