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Green v. Supreme Council of Royal Arcanum

Supreme Court of New York, Appellate Division

May 19, 1911

SAMUEL GREEN, Respondent,
v.
SUPREME COUNCIL OF THE ROYAL ARCANUM and VAL M. SCHMITS, Regent of De Witt Clinton Council, No. 419, of the Royal Arcanum, Appellants.

Page 762

APPEAL by the defendants, Supreme Council of the Royal Arcanum and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 23d day of July, 1910, upon the decision of the court rendered after a trial at the Kings County Special Term.

COUNSEL

Howard C. Wiggins [Curtis H. Waterman with him on the brief], for the appellants.

F. J. Moissen, for the respondent.

BURR, J.:

This action involves the validity of an amendment to defendant's by-laws made in 1905. In the case of Mock v. Supreme Council (121 A.D. 474) the validity of this amendment was considered by this court and sustained. We are controlled by such decision unless, as is claimed by plaintiff, subsequent decisions of the Court of Appeals in similar cases are in conflict therewith.

The cases so relied upon are Wright v. Knights of Maccabees (196 N.Y. 391) and Dowdall v. Catholic Mutual Benefit Assn. (Id. 405). The Dowdall case may be dismissed without further consideration as wholly inapplicable to the questions here involved. There was in that case no suggestion of even a general reservation of power to amend by-laws, rules or requirements. Whatever the rule may be in other jurisdictions we think it must now be deemed to be the settled law of this State that when the contract entered into between a member of a fraternal beneficiary organization and such organization provides for the payment of a fixed sum upon the happening of some event, such as the death of the member, and that assessments shall be at a fixed and specified rate, neither the conditions upon which the sum shall become payable can be altered, nor the sum to be paid be reduced, nor the amount of the specified assessment increased, without the consent of such

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member, and this rule is not altered by the fact that there may be reserved in such contract a power of amendment of the laws of the association in purely general terms. ( Wright v. Knights of Maccabees, supra; Parish v. New York Produce Exchange, 169 N.Y. 34; Langan v. Supreme Council Am. L. of H., 174 id. 266; Shipman v. Protected Home Circle, Id. 398; Weber v. Supreme Tent of K. of M., 172 id. 490; Ayers v. Order of United Workmen, 188 id. 280.)

On the other hand, if there is reserved in the contract a power of amendment of the laws governing such association, reasonably designating the subjects thereof, so that a person when he makes application for membership is fairly advised that the terms of the contract in which he is about to enter may be altered in the respects thus referred to, subsequent changes in such laws when reasonably made by the proper authorities of the organization are within their power and must be deemed assented to by him. (Beach v. Supreme Tent K. of M., 177 N.Y. 100.) In that case the court said: 'If the certificate had provided that the payments therein specified should be subject to such modification as to amount, terms and conditions of payment and contingencies in which the same were payable as the endowment laws of the order from time to time might provide, the amendments would be applicable to existing members.'

Although the court there used the word 'certificate,' we think that it was not intended necessarily to limit the effect of a reservation to the words contained in the certificate alone. In Sabin v. Phinney (134 N.Y. 423, 428) the court says: 'The statute under which the corporation was organized, its by-laws, together with the application for, and the certificate of membership constituted the contract which existed between the member and the society, which instruments construed together measure the rights of these litigants.' In other words, the question is one of construction of the contract, whether such contract is expressed in the statutes under which the corporation is organized, the constitution and laws existing when application for membership was made, the application for membership, the certificate thereof, or one or more of these combined. The test is, was the reservation of a power to subsequently

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alter the terms of the contract so clearly and definitely expressed that the member party to the contract must be deemed to have understood and assented to the same.

With this guiding principle let us now consider the contract between plaintiff and the defendant ...


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