Opinion
10-17-1911
POOLE v. SUPREME CIRCLE BROTHERHOOD OF AMERICA, et al.
Frank S. Katzenbach, Jr., of Trenton, for complainant. John F. Harned, of Camden, and Miles M. Dawson, of New York City, for defendants.
Bill by Hamlet Poole against the Supreme Circle, Brotherhood of America. Heard on pleadings and proofs. Decree for plaintiff.
See, also, 85 Atl. 453.
Frank S. Katzenbach, Jr., of Trenton, for complainant.
John F. Harned, of Camden, and Miles M. Dawson, of New York City, for defendants.
WALKER, V. C. The bill in this case is filed by the complainant on behalf of himself and all other members of the death benefit fund of the Supreme Circle, Brotherhood of America, and is a class bill. If successful,the decree will beneficially affect all of the class, notwithstanding none of them have made themselves active parties to the suit. Dan. Ch. Pl. & Pr. *238 et seq.; Wallworth v. Holt, 4. My. & Cr. 619, 635.
On September 17, 1904, the complainant became a member of the William Penn Circle, one of the subordinate circles or homes of the grand body, the Supreme Circle, Brotherhood of America, and in virtue of such membership he thereby became a member of the death benefit fund of the Supreme Circle. He made an application for membership in the fund, which stated the different benefits to be paid upon his death, according to the cause of death. This application was forwarded to the Supreme Circle by the subordinate circle, with request to register the complainant as a member of the death benefit fund. In response, the Supreme Circle sent to the William Penn Circle a communication, saying that the complainant had been registered in the fund. At the time of his admission the complainant was furnished with a copy of the constitution and by-laws of the William Penn Circle, and of the death benefit fund laws of the Supreme Circle, which latter provided, in article 15, § 14, that "the dues to this fund shall be fifty cents per month for all members, * * * provided, however, that when the receipts * * * are not sufficient to pay the liabilities * * * the trustees shall increase the monthly dues to sixty cents until the income and cash in hand shall equal the liabilities." In 1909 the Supreme Circle amended the death benefit fund laws by establishing a new rate of dues, which change made the dues payable by the complainant 90 cents instead of 50 cents a month, an increase of 80 per cent. In the cost of the complainant's insurance.
The Supreme Circle seeks to justify its action in thus raising the complainant's dues under article 18, § 1, of the supreme laws, which provides that "alterations and amendments to these laws can be made after such alterations and amendments shall have been proposed in writing," etc.
There is no claim but that the amendment in question was adopted with due formality. The question is one of power. It will be observed that there is no express power to alter the provisions as to the death benefit fund, which were part of the laws of the order at the time the complainant became a member. The power to make the alteration, if it exists, is to be implied from the provision quoted.
I have no hesitation in holding that the complainant's membership in the death benefit fund constitutes a contract between him and the order, and one which could not be materially altered under the assumption of power to amend existing in the laws of the order in general terms. The remarks of Mr. Justice Pitney (now Chancellor), speaking for the Supreme Court in O'Neill v. Supreme Council, etc., 70 N. J. Law (41 Vroom) 410, 420, 57 Atl. 463, 467 (1 Ann. Cas. 422) are particularly apposite. He said, at page 420: "The third plea sets up that the benefit certificate was made in consideration of the full compliance by the plaintiff with all by-laws of the order then existing or thereafter to be adopted, and avers that on August 22, 1900, an amendment of the bylaws was made that went into effect on the 1st of October, declaring that $2,000 should be the highest amount paid on the death of a member upon any benefit certificate theretofore or thereafter issued; wherefore the plaintiff is bound by the reduction of the benefit from $5,000 to $2,000, and has no cause of action by reason of such reduction. But it is very generally, if not universally, held that these benefit certificates, like other contracts, confer a vested interest upon the member which may not be impaired by a subsequent amendment, even though the power to amend be reserved in general terms. If the member's stipulation to comply with all by-laws thereafter enacted could be construed to relate to a by-law that reduced the benefit from $5,000 to $2,000, it must also relate to a by-law canceling the benefit certificate entirely—a result wholly unjust and absurd. This stipulation must be construed as referring only to reasonable bylaws and amendments adopted in furtherance of the contract, and not to such as would overthrow it or materially alter its terms."
The fact that when the complainant became a member of the order the death benefit laws provided that his dues might be increased 20 per cent. affords some reason for the proposition that they could not be increased beyond that figure without his consent; and that therefore they could not be increased at all under the general reserved power to alter or amend the laws of the order. However, upon the authority of the O'Neill Case, it seems to me it must be held that the order had no power to increase the dues 80 per cent. If this increase is to be held good, then it would appear that the complainant and those in the class with him are at the mercy of the Supreme Circle with reference to any impairment of their contracts of membership in the death benefit fund which that circle may see fit to make. It is not an answer to say that the increase is necessary to the prosperity of the order. The plea of necessity is never, as I understand it, a valid defense against the performance of a contract.
The impression made upon my mind at the conclusion of the oral arguments was that the complainant was entitled to prevail. Since then I have very carefully reviewed the case and considered the able and voluminous briefs submitted, and have made an examination of the authorities bearing uponthe question at issue, and find that my first impression has been strengthened.
There will be a decree for the complainant, with costs.