88 N.Y.S. 44 | N.Y. App. Div. | 1904
The plaintiff by this action seeks to recover the sum "of $5,000, the amount of a benefit certificate issued by the defendant to Charles Smith, the husband of the plaintiff, as a member of the defendant corporation, a mutual benefit insurance society. By the terms of the Certificate defendant agreed to pay to the plaintiff $5,000 upon satisfactory proof of the death of the insured while a member of the defendant in good standing. It was shown upon the trial that the certificate was issued to the insured February 14, 1889, and that he remained in good standing until his death, which occurred on the 15th day of November, 1902, a period of thirteen years and nine months, during which time he paid all assessments and dues that were levied or demanded. The-defendant admitted these facts,' but averred as a defense to a recovery upon the certificate that its members were subject to the rules and regulations set forth in the constitution and by-laws as was provided in the benefit certificate issued to the insured; that after the issuance of the certificate the defendant changed its laws by an amendment which went into effect October 1, 1900, whereby it was provided that thereafter $2,000 should be the highest amount paid upon any benefit certificate .theretofore or thereafter issued and that it admitted liability to the amount of $2,000 and averred a tender of that sum in discharge of the liability under its certificate; that after the 1st day of October, 1900, and continuously down to the date of the death of the insured all assessments which were levied upon the insured by the defendant were levied upon the basis of the modified contract or plan of a benefit certificate of the value of $2,000 only. It did not appear, however, that any new benefit certificate for that amount was ever accepted by the deceased, or that it was ever issued to him by the defendant, although it appeared that the
We think the learned court was correct in the conclusion which it reached. It is settled by indubitable authority that the reserved right to amend the laws which constituted a part of the contract between the insured and the defendant does not confer authority to destroy vested rights, and without the consent of - the holder of the certificate to such change it is inoperative and void. This was so held in respect to the amendment now under consideration (Langan v. Supreme Council, American Legion of Honor, 174 N. Y. 266 ; Williams v. Supreme Council, 80 App. Div. 402), and also as applied to other similar contracts sought in like manner to be so changed. (Parish v. N. Y. Produce Exchange, 169 N. Y. 34; Weber v. Supreme Tent of K. of M., 172 id. 490.)
It is said, however, that the insured by paying the reduced assessment from October 1, 1900, to the day of his death on the 15th day of November, 1902, has by such act acquiesced in the change in the law and the reduction of the certificate to the sum of $2,000, and that the beneficiary is now estopped from asserting any right for a larger amount. A person cannot be deemed to have acquiesced in and ratified a transaction unless he has knowledge of the action to which the acquiescence and ratification applies. This rule is elementary, as a person cannot be said to acquiesce in and ratify that of which he has no knowledge. The court found that neither the insured nor the plaintiff consented to the reduction in amount of the benefit certificate, and did not ratify such modification, and that no notices of the change in the law was given to either of them. This finding
We should not deem this discussion necessary were it not for a decision of the third department in Evans v. Southern Tier Masonic R. Association (76 App. Div. 151), decided by a divided court. Therein it was held upon a state of facts quite similar to the present that the payment of the reduced assessment was notice to the insured of a change in the by-laws, and that by such payment he acquiesced therein. There, as here, such change operated to destroy vested rights. The decision proceeded upon the ground that the insured was presumed conclusively to have knowledge of the by-laws of the association, and, consequently, of this amendment at the time when he was making the payment, and. that aside from this presumption the change in the method of assessment was actual notice to him of the change in the by-laws. We hesitate in. disagreeing with the learned court that made this decision, but with all deference thereto we are of opinion that it is in conflict with the law as announced in the second department in Simons v. Supreme Council (supra), and with the law of the case.' Nor do we think the authorities cited by the learned court in support of its conclusion decide the question as' therein announced. For the first proposition the cofirt relies upon' Bacon on Benefit Societies and Life Insurance (2d ed. § 81), wherein it is stated as a general proposition that the by-laws of a society are binding upon all the members and all are conclusively presumed to know them, but it is evident from a reading of the entire section, to which reference is made, that it has regard to laws and by-laws existing at the time when the insured becomes a member. By the provisions of sections 79 and 80 of the 1st edition, which discuss the authority to make and change by-laws, it is shown that the by-laws to be'binding upon all members must
In Borgards v. Farmers' Mutual Insurance Co. (19 Mich., 440) the plaintiff was the holder of a policy of insurance issued by the defendant, which was organized under an act authorizing the incorporation of mutual fire insurance companies. Policies were issued to the members and membe'rship was maintained by the payment of certain fees, and one mill per cent on the amount insured at the time of issuing the policy with the assessments made thereafter. In the charter of the company power was expressly conferred upon the members to pass by-laws at any annual or special meeting, which should be binding alike upon the corporation and the directors. The policy was issued and received under an express agreement to be subject to all changes which should thereafter be made in the charter and by-laws, and the charter provided that at the annual meeting members present might determine, among other things, a limitation of single hazards and adopt by-laws. At a regu
If these views are sound, it follows that the judgment should be affirmed, with costs.
Van Brunt, P. J., O’Brien, Ingraham and McLaughlin, JJ., concurred.
Judgment affirmed, with costs.