76 A.D. 151 | N.Y. App. Div. | 1902
The learned judge below has held that the by-laws passed in November, 1892, and those in March, 1893, were ineffective and void because they discriminated in providing for the payment in full of the certificates of those members who became such after September, 1892. He then finds that the by-laws of January, 1892, have been repealed. Upon this finding he has directed judgment for the full amount of the certificate. If the by-laws of January and November, 1892, and of March, 1893, are thus disposed of, the plaintiff’s right would seem to rest upon the by-laws of 1886. There seems to be no proof in the case as to what would have been received under one assessment under the by-laws of 1884 and 1886, and without that proof I am unable to understand upon just what basis the judgment can rest. The assessment made in 1895 was-made at the rate prescribed in the by-laws of 1893. That rate was prescribed upon the basis of one assessment per month, and was naturally much, larger than an assessment would be if, under the by-laws, an assessment was to be made upon the death of each member. The fact, therefore, that the sum of $4,000 was received upon the November assessment in 1895, is not, in my judgment, sufficient to show that an assessment under the by-laws of 1886 would have produced a sum sufficient to pay the plaintiff’s certificate.
The right of the defendant to make by-laws and to alter them seems to be within the law. These mutual insurance companies are not organized for profit but for mutual protection. It is essential to their existence that, with varying circumstances and with greater demands for death losses, the rates should change as well as the mode of payment of death claims. Evans, in his application, agreed to be bound by the by-laws of the association “ now in force or which may hereafter be adopted by the same or its board of directors.” This application, together with the certificate of membership and the
The by-laws of November, 1892, and March, 1893, have been" held to be void as discriminating between different classes of certificates. This has been held to be an unreasonable by-law. But this by-law was enacted by statutory requirement. If the by-law had not been passed, the statute itself would have worked out the same discrimination and compelled the payment in full of policies thereafter taken. It can hardly be said to be unreasonable, as it has worked to the direct advantage of this plaintiff. Since the passage of the by-law a large number of members have been admitted, who have .contributed their share to make up this fund, to a part of which this plaintiff is entitled, while among the beneficiaries to be paid there is; one under a certificate taken since September 30, 1892. From the assessment he gets the exact proportion as does the plaintiff. He is, required to be paid in full, and lie is paid in full from a surplus fund held by the corporation. To this fund this plaintiff had no' right whatever for the payment of her certificate. As long
But the by-laws of January, 1892, are challenged as ineffective for two reasons. Those by-laws provided that they were to become effective when the board of directors deemed it expedient to put them in force. There appears to have been no formal resolution of adoption passed by the board of directors. For this, as one reason, plaintiff claims that they never became effective. But directly after their passage they were in fact accepted and adopted by the board of directors. These by-laws changed the method of assessment and the entire method of payment of death claims. From the time of their passage all assessments were made thereunder, and all death losses paid in accordance with the rule therein specified. Under these conditions we think that a formal resolution of adoption by the board of directors was unnecessary. The actual adoption of
A more serious objection, however, is raised to the validity of these by-laws. They were to become effective whenever the board of directors deemed expedient. The General Corporation Law (Laws of 1892,. chap. 687, .§ 11) authorizes the association, and not its board of directors, to make and amend by-laws. The plaintiff contends that, by leaving it to the directors to say when the by-laws shall be adopted, it has delegated to the directors the making of the by-law and. that such by-laws are, therefore, void. It is true that whether the by-law shall become effective depends upon the judgment of the board of directors, and to this extent they are allowed to say whether the association shall proceed under the old by-laws or under the amended by-laws.
The appellant’s answer to this ob jection is that, where an association is authorized to make by-laws, it may delegate the power to some select body. To this proposition some cases are cited holding this as, a general proposition, but as applied to this case the answer is not quite satisfactory. These by-laws are not ordinary by-laws governing the method of procedure, only. They are by-laws which affect and alter the very contract itself. I should hesitate, therefore, to hold that the statutory power, given to the association to make by-laws affecting and altering the Contract of insurance, might be delegated to any select body, even though it be the board of directors of the corporation. A better answer- to the objection seems to me to be that the power to make or amend a by-law has not in this case been delegated to the directors. The time when it shall take effect only is given to the directors to determine, and this they are to determine when the affairs of the association are such as to render it expedient- in their. judgment that the by-law should take effect. In Cincinnati, W. & Z. R. R. Co. v. Commissioners of Clinton County (1 Ohio St. 77), it was held that, an act of the General Assembly, authorizing the commissioners of said county to subscribe to the capital stock of the relator, did not delegate legislative power in providing that the subscription should not be made until the assent of a majority of the electors of the county was first obtained at an election held -for -that purpose. The objection was there made that;
But appellant has another ground upon Avhich, 1 think, it may securely stand in this controversy. These amended by-laws Avere passed and put into operation in 1892. It does not appear .in the case whether Evans was present and consented to their original adoption. In his application for membership he has consented to be bound by the by-laws which might thereafter be adopted by the association “ or its board of directors.” He is presumed conclusively to have knowledge of the by-laws of the association. (1 Bacon Ben. Soc. & L. Ins. [2d ed.] § 81.) Aside from this presumption, the change in the method of assessment was notice to him of the change in the by-law. Under this changed method of assessment lie pro
For the reasons stated and within the authorities cited, we are unable to agree with the learned trial judge in the conclusion reached.
All concurred, except Parker, P. J., dissenting.
Judgment reversed on .law and facts, and new trial granted, with ■costs to appellant to abide event.