Brown v. Supreme Court

66 A.D. 259, 72 N.Y.S. 806

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 15, 1901
• Status: Published

Opinion

Spring, J .:

The defendant is a Canadian corporation based on the fraternal and mutual benefit plan, and carrying on its business within the State of New York. The beneficial and social features usually incident to such organizations aré embodied in its constitution, but its primary purpose is to insure the lives of its members and afford thém assistance in case of physical disability or sickness in the manner prescribed in. its constitution and by-laws. The framework of the organization consists of subordinate orders, or courts,.with a supreme court as its central or governing body. Assessments are made each month upon its members and payment is to be made by the members “ thirty-one days before the first day of each and every month ” to the financial secretary of the subordinate order by whom the .money is to be transmitted to the supreme secretary “ on the first week day of each month ” accompanied by a report showing the condition of the local order of which he is secretary and other matters provided for in the laws of the defendant. In case this officer is in default in forwarding his monthly report and remittance until the third day of the month, the subordinate order may be suspended by the supreme chief ranger, who is the chief functionary of the organization. If this default continues until the end of the month, then the subordinate order “ shall ipso facto stand suspended * * * on the first day of the month succeeding; ” that is, an entire month may elapse after the payment of the assessments by the members before the order is suspended. The suspension of the order carries with it the member's thereof. The constitution (§ 248) provides for the reinstatement of the order within ninety days “ by sending the proper reports and by paying the amount for which the court became suspended ” and by complying with other demands, “ and by each member seeking reinstatement presenting a certificate of good health on form Ho. 4, or passing- the Medical Board if required by the Executive Council or by the Supreme Chief Ranger.”

The financial secretary of the subordinate order of which the relator was a member neglected to remit to the supreme court the assessments for the month of September, 1900, and this default continued for the entire month so that the subordinate order was suspended on the first day of October by reason of this delinquency. Up to the time of this suspension the relator was a member in good standing of the subordinate order Ho. 3,664 located in Buffalo, and subsequent thereto and on the fifteenth of October, conformably to the constitution and by-laws of the defendant, he applied for reinstatement, but his application was refused on the ground that he had failed to pass the required medical examination. The reason for this failure was due to a surgical operation performed while he was a member in good standing and before October first. It appears to be conceded that the relator is now disqualified for restoration to the order, if his good health is a necessary prerequisite thereto.

The constitution of the defendant provides (§ 44) for certain appeals within the order, and they extend along in a sequence to its supreme court, and section 213, subdivision 1, prohibits resort to legal proceedings until the various appeals provided for within the order have been exhausted. In fact, the evident aim of the constitution (§ 43) is to deprive the member of any resort to the’ civil courts, for redress for any grievances by the action of the defendant or of any of its appellate tribunals, for it enacts that the decision of its supreme court “shall be final and conclusive in all cases” (§ 43, subd.. 2). In the succeeding subdivision it is added that if the aggrieved party fails to take an appeal from any decision of the inferior court as required by the charter of the' defendant such party “ shall be bound by such action, or decision, and shall have no further recourse, whether in law or in equity, in respect of the subjectimatter of such action or decision.” No appeal from the decision of the supreme chief ranger was taken by the relator, and this omission constitutes one of the objections to the writ in this case. By the express terms of his agreement the relator has-agreed to conform to the constitution and by-laws of the order. He has made his contract, and it' is the policy of the courts not to interfere with the internal management of these fraternal societies where each member, stipulates to abide by the constitution and by-laws of the order. Whatever remedies are provided for by the laws of the society must be first undertaken if such remedies are proper and reasonable. (Lafond v. Deems, 81 N. Y. 507; Poultney v. Bachman, 31 Hun, 49; Johansen v. Blume, 53 App. Div. 526; Nibl. Mut. Ben. Soc. § 111.)

. While due force will be given to the contract made by any member of one of these mutual benefit societies, it cannot be expected that the State courts will abdicate their jurisdiction and be supplanted by courts provided for by the constitution and laws of the association. And wherever an unreasonable or unjust restriction Or burden is put upon a member of a fraternal society, the courts will interfere to protect the rights of such member.

We are disposed in the present case to coincide with the trial justice in his conclusion that, the regulations .concerning appeals are unreasonable. A reading of the constitution of the defendant shows that the supreme chief ranger is its masterful officer. He first rejected the application of the relator for reinstatement. An appeal lies from his decision to the executive council over which be presides and which convenes at his volition, or at the direction of a majority of' the members composing that body. An appeal from the decision of this council is to the supreme court, and the supreme chief ranger also presides over that body. The next session of this supreme court is at Los Angeles, Cal., in April, 1902, and its regular sessions are held triennially or quadriennially. There was no opportunity, therefore, for the relator to obtain any ultimate decision of his application for a year and one-half after the suspension of the subordinate order to which he belonged, and then to be present upon this hearing he must travel 3,000 miles. Any requirement which holds in abeyance the status of an alleged member of the order for two years ■ is unreasonable. And this unfairness is accentuated in view of the burden which substantially prohibits the personal attendance of an aggrieved member residing in New York State at the court which reviews the ruling or decision against him. Again, the prominence given to the supreme chief ranger from the inception to the close of these appeals vests that official with undue authority. Beyond this, the nature of this appeal shows the utter futility of attempting to secure a reversal of the decision of any court within the order. The requirement is imperative that the member seeking rehabilitation must obtain the favorable certificate of the medical examiner, and that certificate this officer very properly declined to give. The supreme chief ranger was within the strict letter of the law of his order when* he refused to re-establish the relator in his membership, and no contrary decision could be expected. The fundamental' law of the defendant must undergo a change to afford any relief to the relator within the order.

The constitution further provides (§ 147, subd. 2) that the supreme court is not responsible for the acts of the financial secretary or other officers of the subordinate court, and that “ all payments for whatsoever purpose made to any officer of a court shall be received by such officer as agent of the member making the payment.” The relator was compelled to pay his assessments and dues to this local secretary, and the latter’s dealings were wholly with the defendant as' to the payment over of these dues and. assessments to the proper officer of the supreme court. The local secretary was not amenable to or under the control of the relator, but was within the control of the supreme court of the defendant. When the money was paid it belonged to the defendant. The relator parted with his title to it, -and continued by virtue of its payment tó be a member in good standing. He paid in compliance with the laws of the defendant and in the only.manner permitted by tliem. Through no dereliction of his own he finds'himself suspended, and by reason of physical disability, inflicted since he joined the defendant and before' his order was suspended, is unable to .secure reinstatement, and his unfortunate condition prevents him from obtaining other insurance. The constitution of the order may hedge about this local official with declarations that the supreme order is not accountable for his acts, and that he is performing his duties with-the defendant solely in behalf of the member, but the acts of the official characterize his agency rather, than statements embodied in the constitution. The supreme court cannot in its dealings notoriously recognize the authority of the financial secretary and -then limit that authority by provisions in its constitution. This is well, settled. In Knights of Pythias v. Withers (177 U. S. 260) monthly payments were required to be made to the secretary of the subordinate section before the tenth of each month. This secretary .was required to forward to the board of control these assessments during the month, and unless received by that body by the last day of the month the members of the delinquent order were suspended. Restoration was permitted within thirty days if the amounts were paid in, provided no deaths occurred .during the interim There was a clause in the constitution, similar to the one under considera/tion, that the local officers were to be regarded as the agents of the members. The insured made his payments seasonably, but the secretary failed to' remit to the board of control promptly, and the remittance was not received until the fourth day of the'month, and in the meantime the member died. The United States Supreme Court held that the provision constituting the secretary the agent of the - insured was repugnant to 1ns acts and visible authority, and hence void, and that the beneficiary named in the certificate of the deceased member could recover.

The court, in discussing the effect of this attempted repudiation, of the agency of the secretary, use this language at page 267:. The position of the secretary must be determined by his actual power and authority, and not by the name which the defendant chooses to give him. To invest him with the duties of an agent and to deny his agency is a mere juggling with words. Defendant cannot thus play fast and loose with its own subordinates. Upon its theory the policyholders had absolutely no protection. They were bound to make their monthly payments to the secretary of the Section, who was bound to remit them to the Board of. Control; but they could not compel him to remit, and were thus completely at his mercy. If he chose to play into the hands of the company it was possible for him, by delaying his remittance until after the end of the month, to cause a suspension of every certificate within his jurisdiction; and in case such remittance was not made within thirty days from such suspensión (sec. 6), apparently to make it necessary under section 4 for each policyholder to regain his. membership by making a new application, surrendering his forfeited certificate, making payment of the required membership fee, undergoing a new medical examination, and paying a premium determined by his age at the date of the last application. In other words, by the failure of the secretary, over whom he had no control, < to remit within thirty days, every member of the Section might lose his rights under his certificate and stand in the position of one making a new application, with a forfeiture of all premiums previously paid. The new certificate would, of course, be refused if his health in the meantime had deteriorated and the examining physician refused to approve his application. This would enable the company at its will to relieve itself of the burdens of undesirable risks by refusing certificates of membership to all whose health had become impaired since the original certificate was taken out, though such certificate holder may have been personally prompt in making his monthly payments.” A like decision was made in Whited v. Germania Fire Ins. Co. (76 N. Y. 415). In other States kindred provisions have been held to be nugatory. (Schunck v. Gegenseitiger Wittwen und Waisen Fond, 44 Wis. 369; McMahon v. Maccabees 151 Mo. 522; Henry v. Order of United Friends, 52 N. J. Eq. 770.)

Section 175 of the defendant’s constitution provides that a member in good standing, whose order has been suspended, may be admitted into any other court. It is essential; however, that this be done with the sanction of the supreme- chief ranger and the supreme secretary,, and the application must be made “ forthwith upon such * * * suspension,” or else be accompanied with “ a certificate of good health,” and, in addition, the applicant may. be required to pass the'medical board. It does not appear that the relator ever received any order or notice that he coal'd be restored to membership- pursuant to that provision. The record does not show that there Was any other subordinate order of defendant in. ' Buffalo or accessible to the relator. The return filed and the facts stipulated do not disclose any dereliction of duty on his part in failing to apply for reinstatement in compliance with this section. The' sole ground of objection to his- application was the failure to present a. satisfactory certificate from the medical examiner. This rejection was made by the officer whose written consent must precede admission in accordance with section 175, and it is .fair to. assume that he would not receive -the relator into another order when he declined to restore him to the one in which he was in good standing when it was suspended. The relator applied opportunely and in; the manner pointed out by the laws of the order to be replaced, and no question was made on the trial that he ought to have pursued some other remedy. On the contrary; it is conceded that the application-was made by the relator to the proper officer, of the defendant within the. time required by the constitution, and by-laws of the defendant.” ,

The judgment should be affirmed, With costs and disbursements to the respondent.

All concurred.

Judgment affirmed, with -costs'.