85 Ky. 1 | Ky. Ct. App. | 1887
delivered the opinion of the court.
By an act of the Kentucky Legislature, approved January 9, 1880, appellant was created a body-politic for the purpose of providing financial aid to the widows, orphans, heirs, legatees and assigns of its deceased ■members.
On the tenth day of August, 1881, Samuel Helburn became a member of appellant’s Society, and received a certificate of membership from appellant, in which appellant agreed to pay the appellees, sons of Samuel Helburn, in sixty days after satisfactory proof of the death of Samuel Helburn, the sum of money to which the beneficiaries might be entitled.
On the twenty-fifth day of April, 1884, Samuel Helburn died, and the appellees presented to appellant proper proof of his death, and demanded the payment of the sum of three thousand dollars, which they alleged was due them according to the terms of said certificate and membership of Samuel Helburn. The appellant' refused to pay said sum or any part of it. Thereupon appellees brought suit in the Jefferson Court of Common Pleas against the appellant, by which they sought to recover judgment against the appellant for the sum of three thousand dollars. The appellant, by its answer, attempted to defend the action upon the ground that Samuel Helburn, in his lifetime, had failed to pay some assessments made against him by the appellant, to meet the payment of the policies of several members of said society who had died, and that he refused to pay said assessments, and by reason thereof he forfeited his membership in said society, and all benefits arising from his membership therein. The lower court sustained a demurrer to the answer. Appellant then amended its answer. A demurrer was sustained to the amended answer. The appellant again amended its answer. A demurrer was sustained to that also. Another amendment was offered, which the court rejected, and thereupon gave judgment for the appellees for the sum of three thousand dollars. So much of the answer as it is material to notice is as follows: “De
The third section of appellant’s charter provides that it shall be controlled by a Board of Directors. The thirteenth section provides that the Board of Directors may appoint an executive committee of three, to make assessments, etc. Section ten provides that “upon the death of any member of the Society, each surviving member may be assessed, and when assessed, shall pay to the secretary as follows: Members of the first class, 90 cents; members of the second class, 95 cents; members of the third class, $1.15; and members of the fourth class, $1.80.” Section eleven provides that “any member failing to pay his annual due or assessment within thirty days after notice has been served upon him or sent to him, shall forfeit his membership and all benefits arising therefrom,” etc. Section twelve provides for the raising of a permanent fund from-so much of the admission fees, annual dues and assessments not used in paying benefits and expenses. And if said permanent fund should, at any time, reach an amount sufficiently large, in the opinion of the directors, they may have the power to suspend the assess
The foregoing quotations from appellant’s charter show, first, that assessments to pay the benefits to the representatives of its deceased members must be made upon the surviving members of the Society by its Board of Directors, or that they may delegate that authority to an executive committee. Second, that by the direction of the Board of Directors, the benefits due to the representatives of the Society’s deceased members need not be raised by assessments on its surviving members, but may be paid out of the Society’s permanent fund. Thus, we see, that no assessment can be made on the surviving members of the Society to pay the benefits due the representatives of its deceased members, unless the assessments are made by the Board of Directors, or by an executive committee, appointed by them for that purpose. Also, that the Board of Directors may dispense with the assessments on the surviving members, and direct the payment of the benefits to be made out of the permanent fund. Under the charter no legal assessment can be made upon the surviving members of the Society to pay the benefits due the- representatives of its deceased members, except in the manner above indicated. Also, the Board of Directors have a discretion to dispense with said assessments, and direct the payment of the benefits out of the permanent fund. And no one but the Board of Directors has this power. The question then arises, before a member of the Society can be 'compelled to pay an assessment against him, or forfeit his membership and benefits arising therefrom by
May on Insurance, section 557, says: “An assessment can only be valid when laid under the conditions-stated in the charter. A general vote of the directors to assess to a certain amount to pay the indebtedness of the company is no valid assessment. It must appear that such a state of affairs existed when the vote was passed as to authorize the vote itself, as that losses and expenses had actually been incurred beyond the available assets in hand, which could not be met but by an assessment. * * The liability of the assured is-conditional, and depends upon the contingency of the happening of losses and expenses to which he shall be-liable to contribute, which have been duly ascertained by the directors, and which make necessary a resort to an assessment thereon. It is a credit given for a part of the consideration of the contract. The promise of the insured is to pay upon such conditions, and the existence of these conditions must be established affirmatively before a call for payment * * can be en-enforced. * * And the assessment must be made in strict accordance with the authority given. Even a more equitable -mode than that provided by the charter cannot be adopted. Where the charter authorizes the directors to make an assessment, it can be made by them only.”
In the case of Thomas v. Whallon, 31 Barbour,
Thus, we see, that in making assessments by the appellant upon its members, it does not act in a judicial, but in a ministerial capacity. Therefore, no presumption can arise in favor of the regularity or legality of its assessments. That the appellant’s Board of Directors, or an executive committee appointed by them, are the only persons authorized by appellant’s charter to make assessments against its surviving members to pay the benefits due the representatives of its deceased members. That a deceased member of the Society should have died, and that his representative was entitled to a benefit arising from his death, and that an assessment upon all of the surviving members was actually made by the Board of Directors, or an executive committee appointed by them, for the purpose of paying said assessments, are conditions precedent to the right of the appellant to demand payment of an assessment from any of its members. And they are not bound-to pay any assessment until these things occur. Nor' do they forfeit their membership by reason of their failure to pay such assessments, unless these things have occurred. And when the Society relies upon the failure of any of its members to pay his assessment as a forfeiture of his membership and benefits under its charter, it must show affirmatively that the assessment was made in the manner indicated, other
For the foregoing reasons the judgment of the lower court is affirmed.