By the rules of the beneficial or insurance branch of the
Supreme Lodge Knights of Pythias, persons holding certificates of
endowment or insurance were required to make their monthly payments
to the Secretary of the subordinate section before the tenth day of
each month, and it was made the duty of the Secretary to forward
such monthly payments at once to the Board of Control. If such dues
were not received by the Board of Control on or before the last day
of the month, all members of the section stood suspended and their
certificates forfeited, with the right to regain their privileges
if the amounts were paid within thirty days after the suspension of
the section; provided, no deaths bad occurred in the meantime.
There was a further provision that the section should be
responsible to the Board of Control for all moneys collected, and
that the officers of the section should be regarded as the agents
of the members, and not of the Board of Control. The insured made
his payments promptly, but the Secretary of the section delayed the
remittance to the Board of Control until the last day of the month,
so that such remittance was not
received until the fourth
day of the following month. The insured in the meantime died.
Held that the Supreme Lodge having undertaken to
Page 177 U. S. 261
control the Secretary of the section by holding the section
responsible for moneys collected, and requiring him to render an
account and remit each month -- a matter over which the insured had
no control -- he was thereby made the agent of the Supreme Lodge,
and that the provision that he should be regarded as the agent of
the insured was nugatory, and that the insured having made his
payments promptly, his beneficiary was entitled to recover.
This was an action originally begun in the Circuit Court of Hale
County, Alabama, by Josephine R. Withers, to recover of the
defendant the amount of a certain certificate or policy of
insurance upon the life of her husband.
The case was removed to the Circuit Court of the United States
for the Middle District of Alabama, upon the petition of the
defendant and upon the ground that the Supreme Lodge Knights of
Pythias was a corporation organized by act of Congress, and hence
that the controversy arose under the Constitution and laws of the
United States.
The case was submitted to a jury upon an agreed statement of
facts, and the court instructed a verdict for the plaintiff in the
sum of three thousand dollars, the amount of the policy, with
interest, upon which verdict a judgment was entered for $3,392.54.
The case was taken by writ of error to the circuit court of
appeals, which affirmed the judgment. 89 F. 160. Whereupon the
defendant sued out a writ of error from this Court.
The facts, so far as they are material, are stated in the
opinion of the Court.
MR. JUSTICE BROWN delivered the opinion of the Court.
The Supreme Lodge Knights of Pythias is a fraternal and
benevolent society, incorporated by an Act of Congress of
Page 177 U. S. 262
June 29, 1894, 28 Stat. 96, as the successor of a former
corporation of the same name, organized under an act approved May
5, 1870. The beneficial or insurance branch of the order is known
as the endowment rank, which is composed of those members of the
order who have taken out benefit certificates. Such members are
admitted into local subordinate branches known as sections. The
members of each section elect their own president and secretary.
The endowment rank is governed by a Board of Control, whose
officers are a president and secretary and whose place of business
is in Chicago. The endowment rank is governed by a constitution and
general laws enacted by the Supreme Lodge, and by rules and
regulations adopted by the Board of Control and approved by the
Supreme Lodge.
On January 1, 1883, Robert W. Withers made application for
membership in the endowment rank, and in that application made the
following statement:
"I hereby agree that I will punctually pay all dues and
assessments to which I may become liable, and that I will be
governed, and this contract shall be controlled, by all the laws,
rules, and regulations of the order governing this rank, now in
force,= or that may hereafter be enacted, or submit to the
penalties therein contained."
His application was accepted, and, after receiving a certificate
under the first act of incorporation which he voluntarily
surrendered, he received the certificate upon which this action is
brought. This certificate recited the original application for
membership dated January 1, 1883, the surrender of the former
certificate and the application for transfer to the fourth class,
which were
"made a part of this contract, . . . and in consideration of the
payment heretofore to the said endowment rank of all monthly
payments, as required,
and the full compliance with all the
laws governing this right, now in force or that may hereafter be
enacted, and shall be in good standing under said laws, the
sum of $3,000 will be paid by the Supreme Lodge, etc., to Josephine
R. Withers, wife, . . . upon due notice and proof of death
and
good standing in the rank at the time of his death, . . . and
it is understood and agreed that any violation of the
within-mentioned conditions or other
Page 177 U. S. 263
requirements of the laws
in force governing this right
shall render this certificate and all claims null and void, and the
said Supreme Lodge shall not be liable for the above sum or any
part thereof."
Withers was a member of section 432 at Greensboro, Alabama, of
which one Chadwick was secretary. By the laws of the endowment
rank, Withers was required to pay $4.90 monthly in accordance with
his age and the amount of his endowment.
In January, 1894, defendant adopted and promulgated the
following general laws:
"SEC. 4. Monthly payments and dues of members holding
certificates of endowment shall be due and payable to the secretary
of section without notice, on the first day of each and every
month, and a failure to make such payment on or before the tenth
day of each month shall cause, from and after such date, a
forfeiture of the certificate of endowment and all right, title,
and interest such member or his beneficiaries may have in and to
the same, and membership shall cease absolutely. In case of such
forfeiture, membership may be regained by making application in the
form prescribed for new applicants, the payment of required
membership fee and surrender of the forfeited certificate. If
approved by the medical examiner-in-chief and accepted by the Board
of Control, a new certificate shall be issued, and the rating shall
hereafter be at the age of nearest birthday to the date of the last
application."
"SEC. 6. The secretary of the section shall forward to the Board
of Control the monthly payments and dues collected immediately
after the 10th day of each and every month."
"If such payment and dues are not received by the Board of
Control on or before the last day of the same month the section so
failing to pay, and all members thereof, shall stand suspended from
membership in the Endowment Rank, and their certificates and all
right, title, and interest therein shall be forfeited. Notice of
such suspension shall be forthwith mailed by the secretary of the
Board of Control to the president and secretary of such
section."
"Provided, that the section whose membership has forfeited
Page 177 U. S. 264
their endowment, and whose warrant has been suspended, shall
regain all right as a section, and any surviving members thereof
(not less than five) shall regain full rights and privileges held
previous to such forfeiture, if within thirty days from suspension
of warrant said section shall pay to the Board of Control the
amount of all monthly payments, assessments, and dues accrued upon
said members."
"SEC. 10. Sections of Endowment Ranks shall be responsible and
liable to the Board of Control for all moneys collected by the
secretary or other officers from the members for monthly payments,
assessments, or dues not paid over to the board within the time and
manner prescribed by law. Officers of sections are the agents of
members, and shall in no wise be considered as the agents of the
representatives of the Board of Control or of the Endowment Rank or
of the Supreme Lodge."
For over twelve years, Withers made his monthly payments as
required by law to the secretary of the section, and the money was
regularly remitted to the Board of Control at Chicago. His last
payment was made prior to October 10, 1895, as required by section
4, for the dues of that month. As there were a large number of
members in the section, and as their dues were not all collected
until the latter part of the month, the secretary of the section
did not send the money to the Board of Control until October 31,
when he mailed to the secretary of that board a check covering all
the amounts due by all the members of the section for that month.
The letter did not leave the post office until the next day, and
was received by the Board of Control November 4. No notice was ever
mailed by the Board of Control to Withers notifying him of his
suspension; but on November first, as required by section 6, the
secretary of the Board of Control mailed to Mr. Chadwick, the
secretary of the section at Greensboro, a notice of the suspension
of all members thereof, with an intimation that the members of the
section might regain their rights under certain conditions therein
named. No notice was mailed to the president of the section. In
view of the technical character of the defense, it is worthy of
mention that the Board of Control did not strictly comply with its
own regulation in this particular.
Page 177 U. S. 265
Upon receiving the remittance, and on November 4, the secretary
of the Board of Control mailed the following postal card to the
secretary of the section:
"Office Board of Control"
"Chicago, November 4, 1895"
"Received of Section No. 432 one hundred and thirteen 30-100
dollars in payment of monthly payments and dues for October, 1895,
on condition that all members for whom above payment is made were
living at date of this receipt."
"H.B. Stolte"
"Secretary Board of Control"
The insured was suddenly taken ill and died of an attack of
cholera morbus on November 1, 1895. Proofs of death were waived by
the defendant, which, however, refused to pay the amount of the
certificate.
It is hardly necessary to say that the defense in this case is
an extremely technical one, and does not commend itself to the
average sense of justice. It ought to be made out with literal
exactness. It is admitted that Withers for twelve years paid all
his dues promptly to the secretary of the section as required by
section 4 of the general laws, and that the failure of the Board of
Control to receive them on or before the last day of the month was
the fault of the secretary, and not of the insured. The whole
defense rests upon the final clause of section 10, declaring
that
"officers of sections are the agents of the members and shall in
no wise be considered as the agents of the representatives of the
Board of Control of the Endowment Rank or of the Supreme
Lodge."
It appears to have been the habit of the secretary, Mr.
Chadwick, not to remit each payment as it was made, but to allow
all the dues of each month to collect in his hands and to remit
them together by a check covering the whole amount, about the close
of the month. In this connection, he makes the following statement:
"It had never been the custom of my office for me to send the money
off by the twentieth of the month" (although section 6 required him
to forward it immediately after the tenth).
"I usually sent the money off about the last days of the month.
For the previous year, I had mailed to the secretary of the Board
of Control the dues of the section as follows: October 27, 1894,
November 28, 1894, December 29, 1894, January 29, 1895, February
27, 1895, March 30, 1895, April 29, 1895, June 29, 1895, July 8,
1895,
Page 177 U. S. 266
August 29, 1895, September 28, 1895, October 28, 1895, October
31, 1895 -- all of which sums were accepted by the Board of
Control."
The position now taken by the defendant, that in receiving the
money from the insured members, and remitting the same to the Board
of Control, the secretary of the section was the agent of the
insured, and not of the Board of Control, is inconsistent with the
requirement of section 4, which makes it obligatory upon policy
holders to pay their monthly dues to the secretary of the section,
and to him only, as well as with the provision of section 10,
that
"sections of Endowment Rank shall be responsible and liable to
the Board of Control for all moneys collected by the secretary, or
other officers, from the members for monthly payments, assessments,
or dues not paid over to the board within the time and manner
prescribed by law."
The question at once suggests itself, to whom does the money
belong when paid to the secretary of the section? If to the
insured, it was within his power to reclaim it at any time before
it was remitted. If to the Board of Control, it was the duty of the
secretary of the section to remit it. Why, too, should the Board of
Control attempt to deal with it at all beyond requiring it to be
paid them by a certain day? Section 10 is a complete answer, since
that makes the sections responsible to the Board of Control from
the moment the money is collected, and section 6 makes it the duty
of the secretary to remit it at once.
There seems to have been an attempt on the part of the defendant
to invest Mr. Chadwick with the power and authority of an agent,
and at the same time to repudiate his agency. But the refusal to
acknowledge him as agent does not make him the less so, if the
principal assume to control his conduct. It is as if a creditor
should instruct his debtor to pay his claim to a third person, and
at the same time declare that such third person was not his agent
to receive the money. It would scarcely be contended, however, that
such payment would not be a good discharge of the debt, though the
third person never accounted to the creditor; much less, that it
would not be a good payment as of a certain day, though the
Page 177 U. S. 267
remittance, through the fault of the person receiving it, did
not reach the creditor until the following day.
The position of the secretary must be determined by his actual
power and authority, and not by the name which the defendant
chooses to give him. To invest him with the duties of an agent, and
to deny his agency, is a mere juggling with words. Defendant cannot
thus play fast and loose with its own subordinates. Upon its theory
the policy holders had absolutely no protection. They were bound to
make their monthly payments to the secretary of the section, who
was bound to remit them to the Board of Control; but they could not
compel him to remit, and were thus completely at his mercy. If he
chose to play into the hands of the company, it was possible for
him, by delaying his remittance until after the end of the month,
to cause a suspension of every certificate within his jurisdiction,
and in case such remittance was not made within thirty days from
such suspension (sec. 6) apparently to make it necessary under
section 4 for each policy holder to regain his membership by making
a new application, surrendering his forfeited certificate, making
payment of the required membership fee, undergoing a new medical
examination, and paying a premium determined by his age at the date
of the last application. In other words, by the failure of the
secretary, over whom he had no control, to remit within thirty
days, every member of the section might lose his rights under his
certificate and stand in the position of one making a new
application, with a forfeiture of all premiums previously paid. The
new certificate would, of course, be refused if his health in the
meantime had deteriorated, and the examining physician refused to
approve his application. This would enable the company at its will
to relieve itself of the burdens of undesirable risks by refusing
certificates of membership to all whose health had become impaired
since the original certificate was taken out, though such
certificate-holder may have been personally prompt in making his
monthly payments.
It could not thus clothe the secretaries of the sections with
the powers of agents by authorizing them to receive monthly
payments and instructing them to account for and remit them to
Page 177 U. S. 268
the Supreme Lodge at Chicago, and in the same breath deny that
they were agents at all. The very definition of an agent, given by
Bouvier, as
"one who undertakes to transact some business, or manage some
affair, for another, by the authority and on account of the latter,
and to render an account of it"
presupposes that the acts done by the agent shall be done in the
interest of the principal, and that he shall receive his
instructions from him. In this case, the agent received his
instructions from the Supreme Lodge, and his actions were at least,
as much for the convenience of the lodge as for that of the
insured. If the Supreme Lodge entrusted Chadwick with a certain
authority, it stands in no position to deny that he was its agent
within the scope of that authority.
The reports are by no means barren of cases turning upon the
proper construction of this so-called "agency clause," under which
the defendant seeks to shift its responsibility upon the insured
for the neglect of Chadwick to remit on the proper day. In some
jurisdictions, it is held to be practically void and of no effect;
in others, it is looked upon as a species of wild animal, lying in
wait and ready to spring upon the unwary policyholder, and in all,
it is eyed with suspicion and construed with great strictness. We
think it should not be given effect when manifestly contrary to the
facts of the case, or opposed to the interests of justice, wherever
the agency clause is inconsistent with the other clauses of the
policy, conferring power and authority upon the agent, he is
treated as the agent of the company, rather than of the policy
holder. The object of the clause in most cases is to transfer the
responsibility for his acts from the party to whom it properly
belongs, to one who generally has no knowledge of its existence. It
is usually introduced into policies in connection with the
application, and for the purpose of making the agent of the company
the agent of the party making the application, with respect to the
statements therein contained.
It was formerly held in New York
Rohrbach v. Germania Fire
Ins. Co., 62 N.Y. 47, and
Alexander v. Germania Fire Ins.
Co., 66 N.Y. 464, that, where the insured had contracted that
the person who had procured the insurance should be deemed his
agent, he must abide by his agreement, and where
Page 177 U. S. 269
such person had, through fault or mistake, misstated in the
application to the company the declarations of the assured, the
latter must suffer for the error or wrong; but in a subsequent
case.
Whited v. Germania Fire Ins. Co., 76 N.Y. 415, this
doctrine was held to be limited to such acts as the agent performed
in connection with the original application, and that in a renewal
of the policy such party was treated as the agent of the defendant,
for whose acts it was bound, and that it was within his power to
make a valid waiver of the conditions of the policy. Said the court
in its opinion: "That he was the agent of the defendant it would be
fatuous to deny; were it not for a clause in the policy" (the
agency clause)
"upon which the defendant builds. . . . But if the insured is to
be now bound as having thus contracted, there must be mutuality in
the contract. No man can serve two masters. If the procurer of the
insurance is to be deemed the agent of the insured, . . . he may
not be taken into the service of the insurer as its agent also, or,
if he is so taken, the insurer must be bound by his acts and words,
when he stands in its place and moves and speaks as one having
authority from it, and
pro hac vice at least, he does then
rightfully put off his agency for the insured and put on that, for
the insurer. . . . Nor will it hold the plaintiff so strictly to
the contract he made as to permit the defendant to ignore it and
take his agent as its agent, and yet make him suffer for all the
shortcomings of that person while acting between them and while
under authority from the defendant to act for it."
So in
Sprague v. Holland Purchase Ins. Co., 69 N.Y.
128, the insured signed a blank form of application, which was
filled up by the company's agent without any knowledge or dictation
of the insured. There were false statements therein, occasioned by
the mistake or inadvertence of the agent. The policy contained the
agency clause, as well as the condition that the application must
be made out by the defendant's authorized agent, and it was held,
using the language of the court in the
Whited case, that
the latter clause "swallowed down" the former, and that there was
no warranty binding upon the plaintiff.
In
Patridge v. Commercial Fire Ins. Co., 17 Hun. 95, it
was said of the agency clause:
"This is a provision which deserves
Page 177 U. S. 270
the condemnation of courts whenever it is relied upon to work
out a fraud, as it is in this case. The policy might as well say
that the president of the company should be deemed the president of
the assured. . . . Such a clause is no part of a contract. It is an
attempt to reverse the law of agency and to declare that a party is
not bound by his agent's acts. Whether one is an agent of another
is a question of mixed law and fact, depending on the authority
given expressly or impliedly. And when a contract is in fact made
through the agent of a party, the acts of that agent in that
respect are binding on his principal."
In
Nassauer v. Susquehanna F. Ins. Co., 109 Pa. 509,
under a bylaw providing that, "in all cases, the person forwarding
applications shall be deemed the agent of the applicant," it was
held, under the circumstances of the case, that the agent of the
company soliciting insurance was not the agent of the applicant,
and that such bylaw was not binding upon him. Although the insured
is supposed to know at his peril the conditions of the policy, that
will not bind him to a provision which is not true, and one which
the company had no right to insert therein. "We do not assent,"
said the court,
"to the proposition that the offer [that the agent made his own
valuation of the property] was incompetent, because Laubach was the
agent of the assured in filling up the application and forwarding
it to the company. He was not the agent of the assured. The latter
had not employed him for any purpose. He was the agent of the
defendant company, and as such called upon the assured and
solicited a policy, and having obtained his consent, proceeded to
fill up the application for him to sign. As to all these
preliminary matters, the person soliciting the insurance is the
agent of the company."
The court, speaking of the agency clause, observed:
"This Court, in the case above cited,
Columbia Ins. Co. v.
Cooper, 50 Penn.St.. 331, characterized a somewhat similar
provision as a 'cunning condition.' The court might have gone
further and designated it as a dishonest condition. It was the
assertion of a falsehood, and an attempt to put that falsehood into
the mouth of the assured. It formed no part of the contract of
insurance. That contract consists of the application and the policy
issued in pursuance thereof. In point of
Page 177 U. S. 271
fact the assured does not see the policy until after it is
executed and delivered to him. In many instances, it is laid away
by him and never read, especially as to the elaborate conditions in
fine print. Grant that it is his duty to read it, his neglect to do
so can bind him only for what the company had a right to insert
therein. He was not bound to suppose that the company would falsely
assert, either by direct language in the policy or by reference to
a bylaw, that a man was his agent who had never been his agent, but
who was, on the contrary, the agent of the company. Notwithstanding
this was a mutual company, the assured did not become a member
thereof until after the insurance was effected. Hence, a bylaw of
the company of which he had no knowledge, and by which he was not
bound, could not affect him in matters occurring before the
granting of the policy. . . . And even a bylaw of a mutual company
which declares that black is white, does not necessarily make it
so."
Similar cases are those of
Eilenberger v. Ins. Co., 89
Pa. 464,
Susquehanna &c. Ins. Co. v. Cusick, 109 Pa.
157, and
Kister v. Lebanon Mut. Ins. Co., 128 Pa. 553.
The case of
Lycoming &c. Ins. Co. v. Ward, 90 Ill.
545, resembles the case under consideration. In that case it was
held that where the assured contracts with one as the agent of the
insurer, believing him to be such, and does not employ such
supposed agent to act for him in obtaining insurance, such person
has no power to act for or bind the insured, though the policy may
provide that the person procuring the insurance shall be deemed the
agent of the insured, and not of the company. Plaintiff paid the
premium to the person with whom she contracted for the insurance,
and of whom she obtained the policy. It was held that, such person
assuming to be the agent of the company, the payment was binding
upon the company whether he paid the money over or not. In that
case, the person to whom the money was paid was not in reality an
agent of the company, although plaintiff believed him to be such,
but only a street insurance broker who represented himself to be
the agent of the company. Said the court:
"Under such circumstances, who should bear the loss arising from
the fraud committed by the street broker? Should it fall upon the
plaintiff, who was
Page 177 U. S. 272
an innocent party in the transaction, or should it fall upon the
company, who alone enabled Puschman to successfully consummate the
contract of insurance by placing in his hands the policy for
delivery? The street broker was not the agent of the plaintiff for
any purpose. If the evidence be true, he had no authority to act
for her or bind her in any manner whatever by what he might do in
the premises, and while he may not have been in fact the agent of
the company, still the company, by placing the policy in the hands
of the street broker for delivery, is estopped from claiming that
the payment made to him upon delivery of the policy is not binding
upon the company."
In Indiana, it is also held that a recital in the policy that
the broker obtaining an insurance is the agent of the insured is
not conclusive upon that subject.
Indiana Ins. Co. v.
Hartwell, 100 Ind. 566. In
North British &c. Ins. Co.
v. Crutchfield, 108 Ind. 518, the agency clause was held to be
absolutely void as applied to a local agent, upon whose counter
signature the validity of the policy, by its terms, was made to
depend.
In
Boetcher v. Hawkeye Ins. Co., 47 I. 253, it was held
that, if the assured had the right to believe the soliciting agent
was the agent of the company, the insertion of a clause in the
policy providing that he was the agent of the assured constituted a
fraud upon the latter, of which the company could not take
advantage.
Speaking of the agency clause in
Continental Ins. Co. v.
Pearce, 39 Kan. 396, it is said:
"This is but a form of words to attempt to create on paper an
agency which in fact never existed. It is an attempt of the
company, not to restrict the powers of its own agent, but an effort
to do away with that relation altogether by mere words, and to make
him in the same manner the agent of the assured, when, in fact such
relation never existed. . . . We do not believe the entire nature
and order of this well established relation can be so completely
subverted by this ingenious device of words. The real fact, as it
existed, cannot be hidden in this manner; much less can it be
destroyed and something that did not in reality exist be placed in
its stead. The substance is superior to the mere drapery of words
with which one party wishes to bring into existence and clothe
an
Page 177 U. S. 273
unreal authority."
See also Kausal v. Minnesota &c. Ins. Asso., 31
Minn. 17, in which the act of an insurance agent in making out an
incorrect application was held chargeable to the insurer, and not
to the insured, notwithstanding the insertion of an agency clause
in the policy.
In
Planters' Ins. Co. v. Myers, 55 Miss. 479, an agency
clause in a policy of insurance was held to be void, as involving a
legal contradiction. The applicant made truthful answers to certain
interrogatories propounded by the agent, who stated certain things
that were not true. They were held not to be binding upon the
insured. Speaking of the agency clause, it is said:
"The verbiage of this condition is not candid; it seems to have
been used with studied design to obscure the real purpose. It is a
snare, set in an obscure place, well calculated to escape notice.
It is not written or printed on the face of the policy. It is not
so much as alluded to in the application; nor is the agent in his
printed instructions enjoined to inform those with whom he treats
of it. . . . Its inevitable effect is to greatly weaken the
indemnity on which the assured rely. It is inconsistent with the
acts and conduct of the insurance companies in sending abroad all
over the land their agents and representatives to canvass for
risks. It is an effort by covenant to get the benefits and profits
which these agents bring them, and at the same time repudiate the
relation they sustain to them, and to set up that relationship with
the assured, and that, too, without their knowledge and consent. It
is not a limitation or restriction of power, but the dissolution of
the relationship with themselves and the establishment of it
between other parties."
The case of
Schunck v. Gegenseitiger Wittwen und Waisen
Fond, 44 Wis. 369, is almost precisely like the instant case.
The constitution of the defendant corporation, whose governing body
or directory was elected by the several "groves" (corresponding to
the sections in this case) of the United Ancient Order of Druids,
declared that every member whose assessment was not paid by his
grove to the directory within thirty days after demand made
forfeited his claim to have a certain sum in the nature of life
insurance paid to his widow, or heirs,
Page 177 U. S. 274
after his death. It was held that, in view of all the provisions
of such constitution, the benevolent object of the corporation, and
the fact that the several groves are at least, as much its agents
to collect and pay over the dues of their members, as they are
agents of the latter, in case of a member whose dues have been
fully paid to his grove at the time of his death, the amount of
insurance might be recovered, notwithstanding a default of the
grove in paying over such dues to the defendant.
The agency clause was also once before this Court in the case of
Grace v. American Central Ins. Co., 109 U.
S. 278, in which a clause in the policy that the person
procuring the insurance to be taken should be deemed the agent of
the assured and not of the company, was held to import nothing more
than that the person obtaining the insurance was to be deemed the
agent of the insured in the matters immediately connected with the
procurement of the policy, and that, where his employment did not
extend beyond the procurement of the insurance, his agency ceased
upon the execution of the policy, and subsequent notice to him of
its termination by the company was not notice to the insured.
In the following cases, the officers of the subordinate lodge,
or conclave, were treated as the agents of the Supreme Conclave in
the matter of granting extensions of time for the payment of
assessments:
Whiteside v. Supreme Conclave, 82 F. 275;
Knights of Pythias v. Bridges, 15 Tex.Civ.App. 196.
In the case under consideration it may be immaterial, except as
bearing upon the equities of the case, that the agency clause was
introduced into the general laws of the order in January, 1894,
eleven years after the first certificate was issued to the assured,
and nearly nine years after the certificate was issued upon which
suit was brought. There is no evidence that it was ever called to
Withers' attention, or that he had actual knowledge of it. If he
were bound at all, it could only be by the stipulation in his
original application, and by the terms of his certificate that "he
would be bound by the rules and regulations of the order, now in
force or that may hereafter be enacted." All that is required of
him is a full compliance with such laws, and there is not the
slightest evidence that he failed
Page 177 U. S. 275
personally in any particular to comply with any laws of the
order, present or future. The only failure was that of the
secretary of the section, who, to say the least, was as much the
agent of the order as he was of Withers, although the latter is
sought to be charged with his dereliction by a clause inserted in
the general laws, long after the certificate was issued. The
decisive consideration is this: Chadwick was the agent of the
defendant, and of the defendant only, after the receipt of the
money from Withers. Under section 10, he then became responsible
for it to the Board of Control. In rendering his monthly accounts
and paying over the money he acted solely for the defendant. From
the time he paid the money to Chadwick the insured had no control
over him, and was not interested in its disposition. Unless we are
to hold the insured responsible for a default of this agent, which
he could not possibly prevent, we are bound to say that his payment
to this agent discharged his full obligation to the defendant. That
it should have the power of declaring that the default of Chadwick,
by so much as one day (and it did not exceed four days in this
case), to pay over this money, should cause a forfeiture of every
certificate within his jurisdiction, is a practical injustice too
gross to be tolerated.
Without indorsing everything that is said in the cases above
cited, we should be running counter to an overwhelming weight of
authority were we to hold that the agency clause should be given
full effect regardless of other clauses in the certificate or the
bylaws, indicative of an intention to make the officers of
subordinate lodges agents of the supreme or central authority. We
should rather seek to avoid, as far as possible, any injustice
arising from a too literal interpretation, and only give the clause
such effect as is consistent with the other bylaws and with the
manifest equities of the case. We are therefore of opinion that in
this case the secretary of the section was in reality the agent of
the Supreme Lodge from the time he received the monthly payments,
and that the insured was not responsible for his failure to remit
immediately after the tenth of the month.
We have not overlooked in this connection the case of
Campbell
Page 177 U. S. 276
v. Knights of Pythias, 168 Mass. 397, in which a
different conclusion was reached upon a similar state of facts. In
that case, plaintiff put his right to recover upon the theory that
the mailing of the remittance was a compliance with the requirement
of section six that such payments and dues should be received on or
before the last day of the month. This position was held by the
court to be untenable. It was said that the money must have been
actually received at the office of the Board of Control before the
end of the month. The question of agency was not considered, and
the trend of the argument is so different that the case cannot be
considered an authority upon the propositions here discussed. The
cases of
Peet v. Knights of Maccabees, 83 Mich. 92, and
McClure v. Supreme Lodge, 59 N.Y.Supp. 764, are not in
point.
The judgments of the circuit court and of the court of appeals
were right, and they are therefore
Affirmed.