Krecek v. Supreme Lodge of Fraternal Union

Sedgwick, J.,

dissenting.

I cannot concur in the opinion of the majority in this case, because it is not in harmony with the former decisions of this court, and makes the rights of the beneficiaries and policy-holders in these fraternal benevolent associations absolutely uncertain in a most important and vital matter. The majority opinion says: “When the constitution of one of those societies provides in unmistakable terms that a person engaged in a certain business cannot become a member of the society, and that if, after becoming a member, he enters upon such prohibited occupation, the doing so ‘shall ipso facto forfeit all rights as a member of this order,■’ and that his certificate shall thereby become absolutely null , and void without any action on the part of his local or supreme lodge, and that the payment by him of any dues and assessments thereafter shall not have the effect of waiving such forfeiture or reinstating such certificate-holder to any rights, benefits or privileges as a member, the society cannot be made liable by estoppel or waiver, for the reason that he could not be admitted to membership, or permitted to remain a member, by the most solemn affirmative action on the part of either the *435supreme officers or the local lodge of the society.” The provision of the constitution that “if, after becoming a member, he enters upon such prohibited occupation, the doing so ‘shall ipso facto forfeit all rights as a member of this order,’ and that his certificate shall thereby become absolutely null and void without any action ón the part of his local or supreme lodge,” is, of course, rightly considered by the majority as effectual to terminate the membership of the insured and cancel his rights as such member, as much so as the “prohibited occupation” would be effectual to prevent his “becoming a member.” It makes no difference when he enters upon the prohibited occupation. If he does so before he applies for membership, he cannot become a member. If he does so after becoming a member, his membership ipso facto ceases.

In this case, a very few months after Mr. Krecek had been admitted to membership in the local lodge through the fraudulent conduct of the officers of that lodge, those officers who participated in that fraud ceased to hold their official positions, and other members of the lodge who had nothing to do with assisting Krecek to become a member became the officers of the lodge. For the 10 years following, the officers of the lodge were disinterested, and were, so far as this evidence shows, constantly endeavoring to do their duty as such officers. They received the dues from Mr. Krecek regularly and remitted them to the supreme lodge, and so, if we say that the admission of Mr. Krecek into the lodge was in its inception fraudulent, the question is as to the right of the association to receive his clues, recognizing him as a full member of the lodge for 10 successive years, knowing his occupation, and then upon his death refuse further to recognize his beneficiary. During these 10 years he was following the prohibited occupation; Such conduct on his part ipso facto forfeited his rights under his contract. The majority opinion says that he could not be “permitted to remain a member, by the most solemn affirmative action on the part of either the supreme officers or the local lodge of the society.” This is in direct conflict with the holding in Pringle v. *436Modern Woodmen of America, 76 Neb. 384, and, upon rehearing, 388. Pringle’s certificate of membership contained the provision “that it shall become null and void if, while such a member, he shall become convicted of a felony.” This statement in the opinion is a brief summary of the effect of the clause in the constitution and certificate, which were substantially the same as the provision of the constitution and certificate in the case at bar. Mr. Pringle was convicted of a felony. After he was arrested for the offense, and before the trial, “he deposited with the clerk of the local camp a sum of money sufficient to pay his dues and assessments, thereafter to accrue, for the term of four months and directed the clerk so. to apply it as such obligations should mature. This direction the clerk obeyed by remitting the required sums monthly to the head camp; such remittances being made all, or nearly all, of them after the conviction and with the knowledge by the clerk of that fact.” About six months afterwards Mr. Pringle died in the penitentiary. If anything could forfeit the rights of membership in these associations, it would seem that to commit a felony and suffer conviction and imprisonment for the crime would forfeit such rights, and that his certificate would “thereby become absolutely null and void without any action on the part of his local or supreme lodge.” But this court held that the deposit of the dues with the clerk of the subordinate lodge and paying those dues to the supreme lodge by the clerk, while the insured was being prosecuted for felony and was suffering imprisonment therefor, was a waiver of the forfeiture, and the beneficiary was allowed to recover. After Mr. Pringle’s death “an officer or agent of the head camp made or attempted to make a tender to the plaintiff of the sums accepted as dues and assessments after the date of conviction,” and the court said: “In our view of the matter the fact is not material.” The court also quoted from' Modern Woodmen of America v. Colman, 64 Neb. 162: “It is a settled law of this state that if a beneficiary insurance association, like the plaintiff in error in this action, continues to collect dues and mortuary assessments *437from a member who bas forfeited Ms beneficiary certificate, after knowledge of suck forfeiture by its officers or agents intrusted with the duty of making assessments, it shall be held to have waived such forfeiture, without regard to any restrictions or limitations incorporated in its certificates of membership or by-laws with respect to the power or authority of such persons to make such waivers.” To be convicted and imprisoned for felony cannot be regarded as a less serious ground for forfeiture than to be the keeper of a saloon. At all events, the keeper of a saloon was not so seriously regarded by" the lodge of which Mr. Krecek was a member, the members of which were natives of Bohemia, and were familiar with saloons and saloon-keepers, and regarded them quite favorably as the officers of the supreme lodge well knew. Notwithstanding the majority opinion emphatically. states that “if, after becoming a member, he enters upon such prohibited occupation, the doing so ‘shall ipso facto forfeit all rights as a member of this order,’ and that his certificate shall, thereby become absolutely null and void without any action on the part of his local or supreme lodge,” it does not admit that it is overruling Pringle v. Modern Woodmen of America, supra, but says, “We have no disposition to recede from the rule announced in those cases,” thereby, as it seems to me, making it impossible to foretell what the decision of this court will be in subsequent cases.

The object is to prevent convicts and saloon-keepers from being members, because the risk is supposed to be greater, and the limitation expressly applies alike to those who are trying to get in and to those who are trying to remain in. A saloon-keeper or convict cannot become a member. If a member becomes a convict or saloon-keeper, his membership “ipso facto” ceases. Our former decisions are that knowledge on the part of the local officers, who receive and forward dues, that the applicant is, or that the member has become, a saloon-keeper or convict is through such local officers notice to the supreme officers, and through the supreme officers notice to all whom they *438represent and for whom they act. And to receive dues implies an agreement on the part of all these to waive the objection or forfeiture, and that if the local officers, the supreme officers and the policy-holders agree to waive the objection or forfeiture, and receive money on that agreement, the waiver is valid and the beneficiary can recover. This holding is now reversed without conceding that the law is changed, but with a solemn statement that we adhere to our former decisions. The attempted distinction that the disqualification of a convict or saloon-keeper to become a member cannot be waived, while the disqualification to remain a member can be waived, is a distinction without a difference, and cannot be relied upon by intelligent business men, and is so clearly without any basis in these contracts of membership that the profession will not be justified in relying upon it as settled law of this state in advising their clients in the adjustment of their claims.

I am not now attempting to discuss the question whether it would be more reasonable and logical to hold that such forfeitures cannot be waived than to hold that they can be so waived. Undoubtedly substantial reasons can be urged for either position. Until the present case, the theory has been that public policy favored the view that, they can be waived. The constitutions and by-laws of such associations are generally quite formidable documents, and, together with the certificate of membership, contain a multitude of provisions and requirements that are well understood by the promoters of the association and its supreme officers, but not always fully comprehended by those who accept such insurance and pay the dues. The dues paid by the insured benefit all policyholders, and the policy-holders select the supreme officers to represent and act for them. It is conceded that the supreme officers ai’e bound by notice to the local officers who receive and forward the money paid by the certificate holder. The majority opinion says that notice to the local officers is notice to the supreme officers who receive the money from them, and there is some reason to conclude that the general policy-holders, who benefit by the receipt *439of these (lues, should he held responsible for the acts of the supreme officers whom they choose to conduct their business for them. Notice to the local officers who remit this money being notice to the supreme officers who receive it, there is some reason for holding that notice to these supreme officers is notice to the other policy-holders who selected them and for whom they act, and that the waiver of forfeiture by these supreme officers is waiver by their superiors, the general policy-holders.

On the other hand, it may well be suggested that, the association being mutual, and each policy-holder being in a sense a partner with all others, their solemn agreement among themselves that they shall not be liable to contribute to the beneficiary of a convict in the penitentiary or the keeper of a public saloon should be respected, and ought not to be considered waived by receiving and appropriating dues paid by the insured, when their contract expressly provides that the receipt of such dues shall not constitute such waiver.

But there should be certainty in the law, and one position or the other should be adopted and adhered to, so that all parties may know, or be advised, as to their rights. The law, which heretofore was supposed to be definite, is now most unfortunately rendered wholly uncertain.

Letton, J. I think the opinion inconsistent with cases cited in Judge Sedgwick’s dissenting opinion.