SUPREME LODGE KNIGHTS OF PYTHIAS OF THE WORLD v. KALINSKI, 57 F. 348

LOCKE, District Judge, (after stating the facts as above.) Under the assignment of error, the only questions for us to consider are — -First, whether refusing to charge, in effect, that the forfeiture of the membership of Kalinski depended solely upon the fact of his being in arrears to his lodge to the amount of a year’s ■dues, was error; or, secondly, whether charging that the fact that the keeper of records and seal of the order to which Mr. Kalinski belonged failed to notify the

section of which he was a member of the fact that he was in arrears for dues to said lodge, and ihat the lodge failed to suspend him in accordance with law, and that the Endowment rank had received the monthly assessment up to the time of Ms death, would bar the forfeiture of his membership, was error. The

section of the Endowment rank of the order is a separate and distinct organization from the lodge, and for insurance purposes only. The dues and assessments of each are kept, distinct, and the nonpayment of one does not affect the amount of the other, but' it is provided that no one can be a member of a

section unless he is a member of a lodge. There is no question as to the sufficiency and integrity ■of the original certificate of membership, but it is claimed by plaintiff in error that under the agreement of the insured, as found in his application, and under the rules of the order, he was in arrears to his lodge for an amount equal to one year’s dues, and had forfeited Ms membership in the

section and rank, and rendered void his endowment certificate. The penalty of a forfeiture of rights nnder a contract of indemnity or insurance is not favored in law, and it is only by positive, direct, and unavoidable terms in the agreement that 'it will be enforced'. Especially is it so in such a case as this, where payment or nonpayment of the amount unpaid is a nonessential to the contract of insurance; where it neither increases nor diminishes the fund from which the payment of death losses was derived, or increases or diminishes the risks' to which the insured is exposed.

A careful examina!ion of the application of Kalinski for membership shows that the only thing found (herein, which can be invoked to forfeit his membership, is found in the paragraph: “I hereby agree that I will punctually pay all duos and assessments for which 1 may become liable, and that 1 will be governed, and this contract shall be controlled, by all "the laws, rules, and regulations of the order, governing this rank, now in force, or that may hereafter he enacted, or submit to the penalties therein contained.” There is no penalty of forfeiture declared in this language, and although he there promised to pay all dues, unless there is such penalty attached to such nonpayment by some other rule or regulation, it cannot be held to ensue.

It is claimed 1ha,t such rule is found in what was at that time

article 10, § 1, and what has since become

article 8, § 1, of the code of laws, rules, and regulations of the order adopted by the board of control of the supreme lodge of the order, 'which is: “When a member of the Endowment rank becomes in arrears to his lodge for an amount equal to one year’s dues, he shall forfeit his membership to the

section and said rank, and render void his endowment certificate.” Upon the binding force of this rule the questions in this case depend. The deceased bad bound himself to be governed, and stipulated that the contract should be controlled, by all 1he laws,, rules, and regulations of the order, and by this measure alone can rhe rights of his ben.efi.dary be determined. The constitution of the order, which must be accepted as the fundamental, organic, and controlling law, provides for the manner of the forfeiture of the rights of members, and in

article 11, § 1, declares that, if one resign, “such resignation shall cause* a. forfeiture of all amounts paid into, and all claims upon, the Endowment rank.”

Section 2 provides that: ‘‘Whenever a member of the Endowment rank withdraws from Ms lodge, or whenever Ms membership therein ceases, from any canse other than death, he thereby severs his connection with this rank, and forfeits all his right; title, and interest in and to the endowment fund.” Sec I ion 3 provides for an appeal, in case of a suspension of a. member, to the grand or supreme lodge.

This would certainly seem to provide for the manner in which and by which a member should be held to forfeit his rights of membership, and raise the very serious question whether any rule by which this manner was changed, which declared any other manner of forfeiting such membership, did not infringe upon the constitutional rights of the members, and was therefore null and void. The well-established principle of “expressio unius exclusio alterius est” would seem to apply, and the providing one way of determining forfeiture preclude another, and more stringent.

But we do not find that we are compelled to decide such question, as we consider it has already been done by the order itself. The constitution further provides, in the organization of the order, for a board of control, and states very fully its duties and powers.

Article 8, § 5, provides that: “Tlie board shall have entire charge and full control of the Endowment rank, subject to such restrictions as the supreme lodge may from time to time provide. They shall hear and determine all appeals, and their findings shall be final, unless reversed by the supreme lodge in session.”

Section 9: “The board is hereby authorized to enact general laws, rules, and regulations, in conformity with this constitution, for the sections and the membership of the Endowment rank, and alter and amend such general laws, rules, and regulations, when, in their judgment, the needs of the rank require such action.” In accordance with sucb provisions, the board of control adopted certain general laws, rules, and regulations, and provided in

article 3, § 5, of the same, that the secretary of each

section shall keep a financial account with each member, and in January furnish to the master of finance of the several lodges a list of the names, and request such officer to. inform him whenever any member of the lodge became in arrears to the lodge, of an amount equal to a year’s dues. They also provided, as quoted in

article 8, § 1, that when a member became in arrears to his lodge he should forfeit his membership id the section. It was by this board, and under the powers thus given, that the laws, rules, apd regulations by one of which it is claimed the forfeiture took effect in this case were enacted. But it will be seen that the'ir authority to esablish rules was limited to those which should be “in conformity with this constitution;” otherwise, they had full control of the Endowment rank, not only to make laws, but to hear appeals.

They not only constituted the chief legislative body, but also the supreme court of the order, whose findings were to be final, unless reversed by the supreme lodge in session. This was the organization, and these the established laws, of the order. The constitution had provided that when a member withdrew from his lodge, or his membership .therein ceased from any cause other than death, he forfeited his rights, title, and interest to the endowment fund. The board of control had declared that if he was one year in arrears for dues the forfeiture took place.

Whether this rule was or was not in conformity with the constitution, and how far it was binding, was directly, submitted to the board of control, sitting as a judicial body, and passed upon. In addition to the copies of such constitution, regulations, and by-laws, we find in the record, and made a part of the bill of exceptions, by special declaration, a finding and' decision of the board of control, as found in volume 5 of the journal of the supreme lodge of Knights of Pythias for the year 1887-88, p. 4097, in a case presented to that hoard by the supreme secretary.

It is contended by the plaintiff in error that this exhibit was not offered or received in evidence, and is not, therefore, a fact to be considered, and can have no bearing or weight in this case. We cannot accept these views of this exhibit. It is brought directly into this court by the plaintiff in error. Its validity is not questioned, nor that it was presented and considered by the court below; and, if the substance or matter contained is relevant, we consider it; too late to object to the manner in which it is presented for consideration.

When we examine the matter of this exhibit, we find that if; is a decision and ruling of the board of control, ro whom the constitution of this order had given entire charge of tills Endowment rank, under which this certificate , had been given, and who had power to make, and who had made, ail laws, rules, and regulations, and in whom was the power to alter ami amend such rules and regulations, when, in their judgment, ike needs of the rank required action. Kot only was it a decision and ruling of theirs upon a subject of which they had full jurisdiction, but one in which their word became law.

The facts also presentía! by the supreme secretary made it a case in which any ruling established became directly relevant in the questions herein pending. The case submitted to the board of control, as shown by the record of the journal of the supreme lodge, was: "Brother John A. Jlanikheim, a member of Sec. Xo. 63, Endowment rank, of Washington, I). 0., died on ilie 11th day of January, 1887. At the time of his death lie was in arrears to his lodge for one year’s dues, bnt had paid all of his assessments to his

section of the Endowment rank.” The decision was: "The hoard of control, after a very careful consideration of the facts in this ease, decided, in view of the fact that the keeper of records and seal of the lodge to which the late John A. jtfanikheim belonged had failed to notify the

section of whie.li he was a member of the fact that said Brother iianikheiin was in arrears for dues to said lodge, and that said lodge had failed to suspend said Ahmikheim in accordance with the law, and that said

section nf the Endowment rank had received the monthly assessments of said lUanikheim up to the date of his death, the Endowment rank is liable for the full amount of the endowments, and the supreme secretary is instructed to pay the beneficiaries the amount due.” The question therein presented was the exact one, in point of fact, as shown by the evidence, as in the case at bar: The brother of the order was in arrears for oue year’s dues, the keeper of records and seal of the lodge of which he was a member had failed to notify .he

section of which he was a number of the fact that he was in ¡«'mus for dues, and said lodge had failed to suspend him, and the

section of the Endowment rank liad received the monthly assessments up to the time cf Ms death. There can be but one conclusion drawn from this decision. The hoard of control had been, by the case presented by the supreme secretary, brought face to face with their rule providing that simply the being in arrears for a year should forfeit membership as viewed in the light of, and compared with,

article 11 of the constitution, and the question fairly presented whether a forfeicure of rights in a manner not provided for in the constitution was in conformity with it. Their decision was a construction placed upon

article 8 of the laws which made it in conformity with the constitution, and become of equally binding effect as the previous rule. That this was so considered by the supreme chancellor of the order is plainly seen by the immediate issue of the instructions contained in the same exhibit, calling to the attention of the officers and members of the sections the importance and necessity of immediately forwarding information of arrears of dues. It is true that subsequently to this decision, in the general laws and regulations adopted by the board of control October, 1890, the provisions of

article 10, § 1, were continued in

article 8, § 1, only changing the terms of arrears necessary to entail a forfeiture from six months to a year; but this in no way, do we consider, added to its force. The board of control had already construed the law of

article 10, § 1, and, in effect, declared it not in conformity with the provisions of the constitution; and a re-enactment of the same, with such immaterial change, could not do away with the force of the rule of construction given. We can in no degree accept the position urged by the plaintiff in error, that this decision was res inter alios acta, and of no weight or relevancy in this case. This case is to be determined by the rules and regulations of the order.

The order had, in its organization, established a board, to whom was given an almost unlimited power to establish rules and regulations which should control the relations, rights, and duties of its hundreds of thousands of individual members, and to change and amend them as deemed best; and to hold that such a finding as this .was simply to determine an individual ease “out of consideration for the beneficiary,” and might be changed in the next case from personal motives, would show a lack of appreciation of the principles, aims, and objects of the order, and the good faith of its board, to which we consider it justly entitled.

We consider that the decision in the Manikheim Case was not only not res inter alios acta, but was a rule established by the same power', and entitled to the same respect, as the original

article 10, § 1, and'pronounced after more careful consideration than that with which the former was enacted. As well might it be claimed that the decisions of any supreme judicial tribunal, state or national, establishing a rule of property or of individual rights, was res inter alios acta, and could not be relied upon as. of any binding force by those who had subsequently acquired property or claimed rights under identically the same circumstances. In this case even more weight should be given to such decision, for here the board was not only judicial, but was also legislative.

It could not only say what the law was, but what it should be. The question, then, turns upon whether Kalinski was at his death a member of his lodge, notwithstanding his being more than one year in arrears.

The constitution and by-laws of Syracuse Lodge, of which, the deceased was a member, provide (article 16, § 5) that: “A member who is in arrears to the amount of one year’s dues, and has been notified to pay the same, shall be susi>ended by the chancellor commander in open lodge, and a record of the same kept in the minutes.” Until suspended in open lodge in accordance with this section, we find no law that would forfeit the membership of Kalinsld, al1 hough he had been notified of his being in arrears. But another view of this case may well he considered. In the case of Insurance Co. v. Eggleston, 96 U.

S. 572, Justice Bradley, in speaking for the court, says: “Any agreement, declaration, or course of action, on the part of an insurance company, which leads a party insured honestly to believe that by conforming thereto a forfeiture of his policy will not be incurred, followed by due conformity on his imrt, will and ought to -estop the company from insisting upon the forfeiture, though it might be claimed under the express letter of the contract.” Here the order, the insurance company, in the most public and authoritative manner, had published, as a portion of the journal of its supreme lodge, the solemn judgment and decree of its highest legislative and judicial body, declaring that a member from whom the monthly assessments had been received, and who had not been suspended at the time of his death, although a year’s dues in arrears, had not forfeited his membership, but his beneficiary was entitled to his benefit.

This publication was made nearly four years before the death of Kalinski, and the suggestion that he may not have known of it cannot for a moment be accepted. .What declaration hy an insurance company could he more entitled to respect and confidence, and, if misleading, more liable to mislead? Such a published declaration, made by a private or joint-stock insurance company, would unquestionably prevent the forfeiture of any policy coming within the terms of its provisions.

How much more should it have such effect within the limits of an order like this, where it is presumed that such published declarations are for the information and guidance of those whose mutuality of interest is one of the principles of its organization. Considering the decision in the Ufuiikheim Case 'in either way, as the establishment of a, new rule, or as the publication of the decision of the hoard of control, we consider the plaintiff in error as estopped from pleading a forfeiture, and we find no error in the court below, and the judgment is affirmed, with costs.