Tebo v. Supreme Council of Royal Arcanum

START, C. J.

Action to recover $1,000, the amount of a benefit certificate issued May 8, 1900, by the defendant to Earl Charles Tebo, hereafter designated as the “insured,” payable out of its widows’ and orphans’ benefit fund to his mother, the plaintiff, upon his death. The organization and purposes of the defendant are stated in Bost v. Supreme Council of Royal Arcanum, 87 Minn. 417 , 92 N. W. 337 . On the trial of the action, and at the close of the evidence, the trial judge directed a verdict for the defendant, and the plaintiff appeals from an order denying her motion for a new trial.

*8 The evidence was practically undisputed, and established these facts: In his application for membership the insured agreed, among other things, for himself and his beneficiary, as follows:

_ “I will, and they shall, conform to and be bound by the constitution, laws, rules, and usages of said council and order now in force or which may hereafter be adopted by the same.”

It was also stipulated in his certificate, as a condition to any right thereunder by him or his- beneficiary, that he would comply with the

“Laws, rules, and regulations now governing the said council and fund, or that may hereafter be enacted by the supreme council to govern said council and fund”;

and, further, that, to entitle the beneficiary to any payment thereunder, the insured must have been a member in good standing at the time of his death. Attached to and made a part of his application for membership was the following statement:

“Extra-Hazardous Risks, WHICH MUST BE REFERRED TO THE MEDICAL EXAMINER IN CHIEF.

Applicants employed * * *

5. In railroading, if employed on freight cars, coal trains, and driller, shifting, or yard engines. * * *

The above classes * * * should be referred by the state medical examiner to the medical examiner in chief, not as applicants who are necessarily to be rejected, but because they must show to his satisfaction that their manner of lif^ will not expose them to constant danger of fatal accident or disease.”

There was, however, on May 8, 1900, when the certificate was issued, no rule or by-law of the defendant which prohibited the insured from changing his occupation and engaging in the work of a railway freight brakeman, or that in any manner affected his membership in the order, or his certificate, if he did so. After-wards the by-laws of the defendant as to proscribed occupations were amended, to take effect August 1, 1900, the here material provisions of which, as amended, are these:

“Sec. 272. Application shall not be received from the following *9 classes of persons: * *5. Freight brakemen, common section hand, switchmen, car coupler in large yards. * * *

“Sec..272. (a) A member who, during the first five years of his membership, shall enter upon or become engaged in a proscribed occupation, shall thereby and thereupon stand suspended from all rights and privileges in the order, cease to be in good standing, forfeit all the rights and privileges of membership and in his benefit certificate, which shall be void, and he shall be recorded as having voluntarily withdrawn from the order, and no assessments or dues shall be received from him.”

No provision was made for notice of the amendment to be given to pre-existing members and certificate holders of the defendant, and no evidence was offered on the trial of this action tending to show that the insured ever had in fact' any notice of such amendment, except that the secretary of the subordinate council to which he belonged testified that he- received, as' such secretary, printed copies of the amendment either before, on, or after the date August 1, 1900, when it went into effect, and thereafter kept them in his possession for use and inspection.

On May 8, 1900, when the certificate was issued to the insured, he was a clerk in a railroad office, and so continued to be until June, 1901, when-he changed his occupation to that of a railroad freight brakeman. He paid his assessments for the month of June, July, and August, on or about August 15, 1901, to the collector-of his subordinate council, and then told him that he had become a railroad brakeman, but did not state that he was a freight brakeman. He was accidentally killed on August 20, 1901, while discharging his duties as such brakeman. Due proofs of his death, in which the cause and manner thereof were stated, were made, which were received by the defendant. The money paid by the insured for such assessments was also forwarded to and received by the defendant. It has never returned or offered to return the money, or any part thereof.

It is obvious from the facts we have stated that it cannot be held as a question of law that the insured had notice in fact of the change in the by-laws of the defendant as to proscribed occupations. The question presented by these facts for our decision is whether the trial court erred in directing a verdict for the defendant.

*10 The first and most important contention of the plaintiff is that it was error so to instruct the jury because the amendment in question is arbitrary and void, if it is to be construed so as to give it a retrospective effect, and make its penalties and forfeitures applicable to pre-existing members having no notice thereof. Whether this amendment, by its terms, applies to pre-existing members, who were actually engaged in one of the prohibited occupations at the time it took effect, or whether, if it be so construed, it would be valid, we need not determine, for such is not this case. We are, however, of the opinion that the express language of the amendment makes it applicable to a pre-existing member, who, after it became operative, entered upon one of the prohibited occupations. The words, “A member who * * * shall enter upon or become engaged in a proscribed occupation shall thereby and thereupon * * * forfeit all the rights and privileges of membership and in his benefit certificate,”

as used in the amendment, indicate clearly that a pre-existing member who should thereafter enter upon or become engaged in any of the prohibited occupations would forfeit his benefit certificate. The insured belonged to this class. On May 8, 1900, he became a member, and received his certificate. He then had the right to engage in the occupation of a freight brakeman without incurring a forfeiture of his membership or certificate. On August 1, 1900, the amendment went into effect declaring, in case any member engaged in such occupation, a forfeiture ipso facto of membership and certificate, without any provision for notice thereof to him or any pre-existing member. In June thereafter, relying, presumably, upon the right which his certificate gave him, and without any notice at any time to the contrary, he entered upon the occupation of a freight brakeman, and thereafter paid his assessments and dues for three months, which the defendant received and retains.- On August 20 he met his death in ignorance of the amendment to the by-law, which, if valid as to him, had forfeited months before the provision he had made for his mother. These facts bring the case within the terms of the amendment, *11 and the question is, is it valid as to the insured and his beneficiary?

The' insured, by his application of membership and acceptance of his certificate, agreed to comply with and be bound by the rules and regulations of the defendant, and those that might thereafter be enacted by it. Counsel for the defendant claims, in effect, that by virtue of this agreement the insured is conclusively presumed to have known of the amendment, because he agreed unqualifiedly to be bound by any rules and laws the defendant might make in the future, and therefore he knew that changes in the by-laws might be made, and he was bound to keep himself informed as to such changes. But such agreement to be bound by any rules or laws made in the future is subject to the implied condition that they must be reasonable, otherwise they will be void as to preexisting members. Thibert v. Supreme Lodge, 78 Minn. 448 , 81 N. W. 220 :

In that case the agreement in the application and certificate as to existing laws and rules and those to be thereafter enacted was in all essential respects the same as the agreement in this case. In that case the insured, at the time he became a member of the order, was entitled to written notice of the number and amount of his assessments. The by-law to this effect was amended without his knowledge or consent so that assessments were required to be paid by a certain date without notice, and, if not paid, the member should stand suspended, and his rights forfeited, unless reinstated. It- was held that the amendment was unreasonable, and not binding on a pre-existing member. We are unable on principle to distinguish the two cases. In the one case, by a change of the by-law, the right of a pre-existing member to receive notice of assessments was abrogated" without notice to him. In the other the right of such a member to engage in the occupation of a freight brakeman was, by an amendment to the by-law, taken from him without notice, and, in ignorance that such right hád been set aside, he entered upon such occupation, whereby,, if the amendment is reasonable, his membership and certificate were forfeited without his ever knowing it. If the amendment was unreasonable in the former case, it most certainly is in the latter.

*12 It would be difficult to conceive of a change in the by-laws which would be more liable to prejudice the rights of pre-existing members without notice than the one here in question. Unquestionably, there was no such intention on the part of the officers of the defendant in making the change here in question, but this does not alter the fact that, if the amendment is binding on pre-existing members without notice, it is well calculated to entrap them into doing an act — that is, changing their occupation — which would forfeit their certificates. We therefore hold, following Thibert v. Supreme Lodge, supra, that the amendment to the defendant’s by-laws here in question was unreasonable and void as to the insured in this case, and that the trial court erred in directing a verdict for the defendant.

Order reversed, and a new trial granted.