127 A. 10 | Conn. | 1924
The trial court was undoubtedly justified by the broad language of the decision in Coughlin v.Knights of Columbus,
The plaintiff challenges the soundness of the decision in the Coughlin case on principle and on authority, and asks us to re-examine the doctrine there announced in so far as it holds that a member of a mutual assessment insurance association, being charged with knowledge of the limitations imposed by the by-laws upon the authority of its agents and officers, is in no position to claim that he was misled by and relied on a long-continued custom of disregarding forfeitures, although such custom was known to and acquiesced in by the general officers of the association. Of course, a member of such an association cannot claim that the association has conferred upon an agent ostensible authority to do that which the member knows he is forbidden to do, simply because the agent has done the thing forbidden. This proposition is elementary in its application to a single act done in violation of a limitation of authority known to the person dealing with the agent, though he be a general officer of the association. Lyon
v. Royal Society of Good Fellows,
The debatable ground seems to begin at the point where disregard of the by-laws ceases to be a discrimination in favor of individuals, and attains the proportions of a recognized custom of indiscriminately treating the belated payment and acceptance of assessments *652
as automatically restoring delinquents to membership; thus interpreting the forfeiture declared by the bylaws as a device for securing prompt payment, which has accomplished its intended purpose when payment is made within a reasonable time after it is overdue. In almost all of the decided cases, the organization of the mutual benefit association has included a central corporate body — the defendant in the action — and a number of subordinate branches each possessing a more or less independent legal personality; and a "decided conflict" of opinion has arisen upon the question whether or not a custom of disregarding forfeitures on the part of a subordinate branch will bind the central corporation. Bixler v. Modern Woodmenof America,
We are not in this case directly concerned with the merits of this conflict, for the reason that the defendant in this action has no subordinate branches but deals directly with its members in all of its activities. Nevertheless, the cases are instructive. Some of them hold that a custom of disregarding forfeitures established by a local branch will bind the parent corporation without any evidence of actual knowledge and acquiescence by its general officers. Painter v. Industrial Life Asso.,
All these cases, though not squarely in point, suggest more or less strongly that the central corporation would have been held bound by the custom in case its managing officers had known of and approved it. Thus inKocher v. Supreme Council, Cath. Ben. Legion, supra, at page 654, it is said: "There is a class of cases which may, perhaps, form an exception to the application of the general principles above laid down. And that is where a course of dealing by officers and agents of a corporation, at variance with the strict limitation of duty, has been established by proof of the usage, which has been permitted to grow up in the transaction of its business, and of the acquiescence of its managing officers charged with the duty to provide and control the company's business." And in Modern Woodmenof America v. Tevis, supra, it is said, at page 375: "The acts of the clerk of the local camp in extending the times of payment of the assessments upon its members and in reinstating delinquent members without warranties *654 of good health, were unauthorized by the society, and, in the absence of knowledge and acquiescence in them by some of the chief officers of the head camp, were ineffective to establish any estoppel against the society, or any waiver by it of any of the provisions of the agreement." The Tevis case was cited and the foregoing excerpt quoted with approval in Bixler v. Modern Woodmenof America, supra, reaffirming Knights of Columbus v. Burroughs, supra. In Kennedy v. Grand Fraternity,supra, at page 344, it is said: "`Where the waiver relied on is the act of an agent, it must be shown either that the agent had express authority from the company to make the waiver, or that the company subsequently, with knowledge of the facts, ratified the act of the agent.'" We have found no decision except theCoughlin case, holding that a custom of disregarding forfeitures known to and acquiesced in by the managing officers of the insuring corporation is not binding upon it, when acted on and relied on by a member.
On the other hand, all the cases we have found in which it has been shown that a technically delinquent member has acted in reliance upon an established custom adopted and approved by the insuring corporation itself, — acting by its managing officers, — of disregarding forfeitures imposed by its by-laws, are unanimous in holding that the corporation is bound by its own established custom of conducting its own business. "The custom of the subordinate lodge . . . could not, of itself, and without the knowledge and approbation, express or implied, of the grand lodge, operate as a waiver of the provisions for the forfeiture of the insurance and the suspension of the member appearing in General Law 197. But we think if this custom was brought to the notice . . . of the grand lodge, and instead of being reprobated, received either express approval or that approval which should be *655
implied from silence, the general law must be regarded as modified by the existing custom." Burke v. GrandLodge, A. O. U. W.,
In Crowley v. A. O. H. Widows and Orphans Fund,
In view of this array of authority, little remains to be said. An insurance policy, no matter what by-laws are incorporated in it by reference, is but the written expression of a contract, which the parties themselves *657
(not being under legal disability or prohibition) may modify by mutual consent. This is the legal basis of most so-called "waivers" of conditions in insurance policies. As to the legal capacity of the defendant to consent to the modification evidenced by the custom testified to, it is probably true that a mutual benefit association cannot make a discriminatory contract of insurance in violation of the principle of mutual equality guaranteed to its members by its constitution or by-laws. Societa Unione Fratellanza Italiana v. Leyden,
On the testimony before us, the jury might reasonably have found that the custom testified to was known to and approved by the defendant corporation; that its assistant secretary, employed at headquarters, was permitted, if not instructed, to receive belated payments from members as a matter of course; that such custom had prevailed for three years or more, and that it was known to and relied on by the deceased. Whether the payment in question was received by the defendant before Mr. Perrigo's death was a question for the jury.Crowley v. A. O. H. Widows and Orphans Fund, *658
There is error and a new trial is ordered.
In this opinion the other judges concurred.