Heath v. New York Safety Reserve Fund

Brown, J.

On the 7th day of April, 1884, the Southern Tier Masonic Belief Association issued to John S. Heath a certificate stating that he was a member of such association in class “A” and is entitled to all its rights and privileges and benefits and subject to the laws and regulations governing said association ”; that such certificate was in favor of Catherine M. Heath, the wife of John S. Heath, and that the amount of such benefit was $2,000. At the time of issuing such certificate, under the by-laws then in force there were three classes of membership; and upon the death of a member of class “A,” which Heath joined, he became liable to an assessment for $1.84, and in ease of his own death his widow became entitled to have an assessment imposed upon the members of that class graded according to age and to receive the same but not to exceed the sum of $2,000; provided, however, that, should a death occur when one assessment on each member would not amount to the sum named in his certificate, then the sum paid should be a proportionate amount of one assessment on each member in class “A” at the date of such death. At the time Heath joined the association he signed an application for membership in which he agreed to make punctual payment of all dues and assessments for which he might become liable and to conform in all respects to the by-laws, rules and regulations of the association then in force or which might thereafter be adopted by the same or its board of directors. In January, 1886, the by-laws were amended so that all three classes were consolidated into one class, and the amount thereafter to be paid upon the death of a member was graded according to the age of the member paying the same; and, under the table of rates then adopted, Heath was required to pay $2.24 upon the decease of each member of the association, and in the event of his death his widow became entitled to have an assessment imposed upon the members of the association and to receive the same but not to exceed $2,000; provided, however, that should a death occur when one assessment on each member would not pay such-sum then the sum paid should be a proportionate amount of one assessment on each member at the date of the payment of the claim. By amend*454ment of the by-laws January 11, 1892, the amount of the assessment required to be paid by Heath was increased to $7.50; and the amount to which his widow would be entitled was to be ascertained by deducting the necessary running expenses of the association from the sum of an assessment, made during the month of his death and the succeeding month, and dividing the balance pro rata per $1,000 of insurance held by the beneficiaries of those who had died during that period of two months, which sum so divided should constitute the entire amount due upon any certificate then terminated by death of a member; provided that no beneficiary should receive a larger amount than that named in the certificate, and also provided that the directors of the association “ may order the payment of one or more death claims from the surplus whenever in their judgment such fund will warrant it.” On the 29th day of Hovember, 1892, the by-laws were again amended so as to provide that the amount payable to a beneficiary shall be the amount as designated in the certificate of membership,” and also to provide that no rates, terms or conditions shall be changed upon the policies in force on the first' day of Hovember, 1892, but shall remain subject to the by-laws as existing prior to the adoption of these presents.” On March 20, 1893, the by-laws were again amended so. as to provide that upon all policies in force September 30, 1892, the amount to be paid beneficiaries should be ascertained as specified in the amended by-laws of January 11, 1892.

On February 10, 1892, the Southern Tier Masonic Eelief Association, at the request of John S. Heath, substituted the plaintiff as the beneficiary in his-certificate of membership in place of Catharine M. Heath, deceased. John S. Heath continued a member of such association until his death on March 19, 1909, having paid all the dues, assessments and other sums required and died a member in good standing; such assessments having been levied under the by-laws in force at the time of such levy. On September 8, 1908, the Southern Tier Masonic Eelief Association paid the defendant $9,000, in consideration of which the defendant agreed to fulfill and perform all of the obligations law*455fully arising under each and every one of the certificates of the Belief Association as and for and in place of the association. On June 22, 1909, the defendant notified the. plaintiff that her claim as the beneficiary named in the certificate of John S. Heath had been adjusted and that, under the by-laws of 1893 of the Masonic Belief Association, there was due her the sum of $338.20 which was ascertained by deducting from the assessments of $2,391.74, levied during the months of March and April, 1909, othe sum of $531:62, the expenses of these months, and dividing the balance of $1,860.12 by $11,000, the amount of the benefits accruing during that period, thus ascertaining that each thousand of' benefits was entitled to $169.10. At the time of making the assessments for March and April, 1909, to pay benefits' accruing to the plaintiff and beneficiaries of other members dying during these months, the defendant had on hand the sum of two thousand dollars as its reserve or emergency fund, as required by section 205 of the Insurance-Law.

The plaintiff refused to accept the sum of $338.20 in settlement of her claim and brought this action to recover the sum of $2,000, alleging that, under the by-laws of the Masonic Belief Association in forcé and which were binding upon John S. Heath, that sum was her due and that, if sufficient moneys could not be realized by assessment upon the members of the association, the defendant should take, from its reserve or emergency fund and from the $9,000 paid it in-September, 1908- by the relief association, sufficient moneys to pay the $2,000 in full.

The difficulty with plaintiffs contention ' is that, by the terms of the certificate under which she claims and the bylaws in force when it was issued, the Southern Tier Masonic Belief Association simply contracted that she should have all the benefits realized by one assessment upon all. members of the order in class “A”, not exceeding $2,000. When class “A” was abolished in 1886, the contract then became that she would be entitled to the benefits realized by one assessment on all the members of the order not exceeding $2,000. Tfie contract sued upon never has been that she should have $2,000; the amount she was to receive always depended upon *456the number of the members who were liable to he assessed for her benefit and the amount each member should he assessed. •If the amount of each such individual assessment is to be determined by the by-laws of 1884, the plaintiff’s claim can he readily ascertained from the proofs. The plaintiff, however, contends that she is entitled to one assessment against all the members in good standing, March 19, 1909, at the rates' then in force, producing $1,242.56. The difficulty with such contention is that the.rates in force in 1909 were promulgated upon the plan of having only two assessments in two months, and the sums realized should pay all expenses and the balance discharge the association’s liability for all benefits that accrued during that period, no matter how many members died. The effect of such plan is that, in March and April, 1909, there were eight deaths, maturing $11,000 of benefits, which were paid off and discharged by $1,860.12. Manifestly a member joining tbe order under circumstances whereby his liability for eight deaths is discharged by paying two assessments cannot be said to have agreed or incurred the liability of being compelled to pay one assessment for each death. The by-laws of 1884 required the association to make one assessment for plaintiff’s benefit. Tbe by-laws of 1892 in force in 1909 simply require defendant to malee two assessments in two months to pay all claims that may mature in tbe two months. In so far as tbe by-laws of 1892 defeat plaintiff’s right to have one assessment made for her benefit, -they must be deemed as impairing her contract right and of no validity. The members joining after the amendments of 1892 and 1893 joined at a time when the by-laws provided that no rates, terms or conditions should be changed upon the policies in force September 30, 1892, but should remain subject to"the by-laws existing prior to May 29, 1892. This provision amounts to a contract on the part of members joining the order since 1892 that they will pay one assessment a-t the rates in force when such policies were issued as a benefit to the pex*son named in the cexrificate of a new member; and it ■also is a contract made by tbe association that the plaintiff, under her certificate issued in 1884, would he entitled to one assessment upon all the members at the date of the death of *457Joseph S. Heath at the rates provided by the by-laws of 1884. Such an assessment would produce the sum of $488. &3.

Defendant contends that the contract must be construed so as to read that plaintiff is entitled to one assessment upon the members of class “A” who were alive March 19, 1909, each such assessment to be for the amount specified in tbe by-laws of 1884, thus producing for plaintiff $200.72. But class “A” was abolished in 1886, and from that date tbe Southern. Tier Masonic Belief Association held out and represented to John S. Heath that there was but one class of members, all-liable to assessment according to their several rates to pay the benefit accruing upon the death of one of their number. Heath died a member in good standing, not of class “A” merely, but of tbe association, having paid bis assessments to provide benefit funds accruing upon tbe death of not only members of original class “A” but those joining years after - class “A” was abolished. It will not do for defendant to say that class “A” has been kept alive, a separate, distinct class by itself, for tbe purpose of restricting bis beneficiary to tbe avails of an assessment upon tbe survivors of this class, when,. in fact, this class “A” was consolidated with all other classes, and the plan of making all members as of one bar an equal class was approved and consented to by tbe deceased.

Plaintiff is entitled to judgment for $488.6-3 and interest from June 22, I960.

Judgment for plaintiff.