35 N.Y.S. 214 | N.Y. Sup. Ct. | 1895
The defendant, Alpha Lodge of the Knights of Sobriety, Fidelity & Integrity, is a corporation organized under the act relating to fraternal and beneficiary societies, and the other defendants are officers of the order. Laws 1889, chap. 520, p. 711. The object of the organization, as
On the 17th of July, 1889, the relator, Chauncey P. Meads, received a certificate of membership in the participating rank, and thereby became a beneficiary member - of the local lodge known as Alpha Ho. 1. He has ever since paid or tendered all assessments as they became due, amounting in the aggregate to a considerable sum of money. On the 25th of August, 1892, a meeting of the lodge was held, the relator not being present, although he had received a general notice to attend, but no notice that any business would be transacted in which he was especially interested. At that meeting charges in writing were preferred against him by an honorary member, alleging that he had violated his duty as an officer by refusing to sign certain checks until a sum of money that he claimed was due him should be paid, and that li'e was thereby guilty of “ dishonest conduct, or conduct unbecoming a brother; ” that later, and after he had been deposed from office, he refused to obey “ the behests ” of the supreme convention of the order by boisterously declining to leave the council chamber, where he had no right to be, until he was
At the same meeting a committee of five was appointed by the presiding officer to try the relator, and the next day a copy of the charges, with notice of trial, was personally served upon him. September 8, 1892, anew specification was added to the charges, alleging the disclosure by the relator of the* secrets of the society, by publishing in the press the charges previously preferred against him as aforesaid. An active member, named George De Land, united in the amended specifications as a complainant and verified the same by his oath. This Mr. De Land, who thus actively engaged in the prosecution, was a brother of Gordie E. De Land, a member of the trial committee, and the two brothers De Land were sons of the officer who had appointed the committee originally, and who, without notice to the relator and in his absence, reappointed the same members after said amendment was made and it was known that the new complainant was a brother of one of the judges who were to pass upon the charges. It does not appear that any resolution was passed by the lodge authorizing the committee to pass upon the amended charges, and there is no by-law authorizing the trial of a member by committee.
A copy of the amended charges, with notice of hearing, was
The sole question presented for decision is whether the relator was lawfully expelled from the order, and in discussing it I shall assume that the evidence before the trial committee was sufficient to support the eight specifications sustained by their report. Whether the charges, if true, were all sufficient to justify expulsion is open to question and will be considered later.
The defendant lodge is not simply a social club, but is also an insurance company, with a surplus of $150,000 in its treasury for use as a reserve fund and the payment of losses. The relator, when expelled, had a vested property right in that money, of which he could not be deprived without due process of law. In case of severe sickness he was entitled to receive for a certain period the sum of twenty-five dollars per week. If he died, his family was to be paid $500, and if he lived for seven years from the date of his admission, of which period nearly one-half had expired when lie was expelled, he was to receive $1,000. He has. therefore, been deprived of a right of property of considerable value, for his expulsion involved the forfeiture of all pecuniary interest in the assets of-the order. While-courts are slow to look into such transactions of private corporations as affect no vested right that may be measured in money, they are prompt to interfere, upon proper application, when by an arbitrary or unlawful ■exercise of power .a member has been deprived of that which costs him and is worth a definite sum of money. Life insurance, through the medium of benefit societies, is now practiced upon a vast scale, and many millions of dollars have been invested by persons of moderate means in social -fraternities in order to provide against the accidents of life and the certainty of death. It will not do to allow these valuable rights to be forfeited by the capricious or interested votes of those who will be benefited by the forfeiture, unless the method of procedure is in strict accordance with tne law of the land, or the reasonable by-laws of the association itself. As was
Where such serious results follow a deposition from membership those who allege regularity of procedure in the effort to expel must be held to strict proof, for no presumption will be indulged to support a forfeiture, which the law abhors. 1 Bacon, § 110 ; People v. Medical Society, 32 N. Y. 187, 193; Pulford v. Fire Department, 31 Mich. 458. The relator was entitled to a fair trial, after due notice, before an impartial tribunal, and, as the method was not regulated by the laws of the association, it should be analogous to ordinary judicial proceedings, so far, at least, as to promote substantial justice. Wachtel v. N. W. & O. Ben. Soc., 84 N. Y. 28; People ex rel. Roehler v. Mechanics’ Aid. Soc., 22 Mich. 86. The only trial, or opportunity for trial, that he had was by committee, yet the by-laws authorize no such proceeding, and, in the absence of a regulation to that effect, the weight of authority requires trial by the body of the order. Mr. Bacon says: “ The power of expulsion of members of a society, club or corporation belongs to the body at large, and, in the absence of the clearest authority in the constitution and by-laws, cannot be delegated to a committee' or officer.” § 100. Many cases are cited by the leaimedauthor in support of this position, from one of which the following extract is made: “ The transfer ‘from the body of the society, where it properly .belongs, to a small fraction of its-members of so large and dangerous a power as that of expulsion must appear, if it be claimed to exist, by the plainest language. It cannot be established by inference or presumption, for no such presumption is to be made in derogation of the rights of the whole body, nor is it to be supposed, unless it appears by the most express and unambiguous language.
Mr. Hiblack, in his work on Mutual Benefit Societies, says: “ The power of expulsion must belong to the society at large, unless, by the fundamental articles, or some by-law founded on those articles, it is transferred to a select number.” § 72. See, also, Green v. Society, 1 S. & R. 254; State v. Chamber of Commerce, 20 Wis. 63 ; State v. Miller, 66 Iowa, 26.
There are respectable authorities which hold that where no mode of procedure is specified for trial the society may adopt such mode as it pleases, subject only to the limitation that it must be fair, even including a trial by committee. Spilman v. Home Circle, 157 Mass. 128; Pitcher v. Board of Trade, 13 N. E. Rep. 187. I regard such practice as loose and dangerous, and refuse to adopt it in the absence of a controlling authority in this state. It may well be that a corporation may delegate to a committee the power to take the evidence and report it to the members for them, duly assembled for the purpose, to act upon, but the trial itself, and the decision of the issue, should be by the whole and not by a small part. Loubat v. LeRoy, 40 Hun, 546. The only trial of the relator was by a committee that not only took the evidence, but decided the facts, and, without reporting the evidence, recommended expulsion. The association simply fixed the penalty by voting to expel, without hearing the evidence. Tet according to the by-laws the power to expel had been confided to the officers, the members having power simply to recommend expulsion. . The officers, as such, not only did not vote to expel, but they did not conduct the trial nor hear the evidence. Furthermore, the vote was taken without due notice to the relator or to the officers or members. General notice of the meeting was given to the officers and members, as usual, without specifying the nature of the business that was to be transacted. The relator had no other or different notice. Thus, even if the previous proceedings had been regular and
In Loubat v. LeRoy, 40 Hun, 546, by the constitution of a club the power to expel was vested in a governing committee, which a2>pointed a subcommittee to investigate and report the facts 'relating to the alleged misconduct of a member. ¡Notice was given to him, and he appeared and submitted a statement to the subcommittee, which afterwards reported to the governing committee, and the lattei’, without ■ further notice to him, passed a resolution of expulsion. It was held that the failure of the governing committee to give him notice of the meeting and an opportunity to be heard deprived the resolution of exjralsion of all legal effect as to him.
If all the members had been notified that the lodge was to take action upon the relator’s case, instead of only eighteen the whole membership might have attended and a majority of the votes have been cast in his favor. Members who might think that their attendance was unnecessary for the usual routine of business, might feel it their duty to attend a matter involving the rights of a fellow-member. ¡Niblack, § 71. Where a meeting was called for “ special business,” or “ to take into consideration the conduct of a member,” it was held insufficient to justify expulsion, although the member proceeded against was' 2'>resent. Marsh v. Huron College, 27 Grant, 605; Cannon v. Toronto Corn Exchange, Id. 23; Dean v. Bennett, L. R. (9 Eq.) 625.
The courts hold that the notice should state distinctly what the object of the meeting is. Where the power of expulsion is in the society at large, notice that it is intended to expel
The relator may have said sharp and unjust things about his associates, and his conduct in other respects may have been annoying and offensive, so that from a purely social club his expulsion would have been justifiable for misconduct of that nature. But a member cannot be expelled for such reasons from a business association, organized, in part at least, as a mutual insurance company, because it would be unreasonable to thus forfeit important rights of property. The forfeiture would be in the nature of confiscation, and would require express authority by statute. A by-law would not warrant it, for all .by-laws must be reasonable. Angel! & Ames Corp. § 347; 2-Am. & Eng. Ency. of Law, 173. The failure to pay dues, fraudulent conduct toward the society, the conversion of its property, or any act or omission so directly affecting its welfare as to threaten its existence or success, would, of course, furnish just cause for expulsion. Perhaps other and less grave-
The refusal of the relator to sign certain checks as treasurer, if a violation of duty, was cause for amotion as an officer, not for disfranchisement as a member.
The charge that the relator slandered the lodge itself was probably sufficient, as that might impair its efficiency and prove a permanent injury. The willful circulation of false and injurious reports about the organization differs in principle from an attack upon its members, as it involves disoyalty and a serious violation of corporate duty.
All of the authorities agree, and the learned counsel for the defendants concede, that the trial must be fair or the expulsion cannot stand. This implies that it shall not only be fair in form, but also before an impartial tribunal. The trial in this case took place, so far as any consideration was given to the evidence, before a committee of which a brother of one of the prosecutors was a member. That committee may, in fact, have been entirely fair and have acted only from the most disinterested motives, but what is the legal presumption? Ho judge ofu our courts can sit if he is related to any party to the controversy within the sixth degree, even with the consent of all the parties. Code Civ. Proc. § 46; Oakley v. Aspinwall, 3 N. Y. 547. Mr, Cordie P. De Land, in acting as a member of the trial committee, acted as a judge, not in the official sense meant by the Code, but in the sense that he was to bear fairly and determine justly a charge against a fellow-member involving both property rights and private character. It may be that he has that judicial temperament that would enable him to do this, although his own brother was a complainant, but the presumption arising from common experience is to the contrary. He could not have sat as a juror in a court of law, under like circumstances, to try the most trivial action, yet his decision has aided in depriving the relator of a valuable property right. So far as the principle is concerned, the committee might as well have been composed entirely of brothers of the prosecutor. While it is true that the complainant was not a party in the sense that he was to be benefited by the result any more than the members generally, it is none the less true that he preferred the charges, swore to all of them, and they were tried before his own brother, who voted to find the relator guilty. While I can find no controlling authority upon.
The claim that the relator should have exhausted his remedies within the society by bringing an appeal to the supreme lodge before applying for this writ cannot be sustained, for the by-laws gave him no right to appeal. The further claim that he has waived any of his rights is not supported by the authorities. People ex rel. Deverell v. Musical Union, 118 N. Y. 101; Downing v. St. Columba's Soc., 10 Daly, 262, 264 ; Marsh v. Huron College, supra; Cannon v. Toronto Corn Exchange, supra; Bacon, § 102.
There must he judgment restoring the relator to membership, with costs.
Ordered accordingly.