People ex rel. Meads v. Alpha Lodge, No. 1, of Knights of Sobreity, Fidelity, & Integrity

The defendant Alpha Lodge of the Knights of Sobriety, Fidelity, and Integrity is a corporation organized under the act relating to fraternal and beneficiary societies, and the other defendants are officers of the order. Laws 1889, c. 520, p. 711. The object of the organization, as declared in its constitution, “is to combine the efforts of all its members with the view to efficient mutual relief, aid, and systematic contributions of benevolence and charity during their lifetime, and to their respective families, from time to time, when rendered necessary by disability or death.” It consists of a single supreme lodge, or governing body, composed of delegates from subordinate lodges, and a large number of local lodges, separately incorporated. The supreme lodge is the lawmaking power for the entire association. Each lodge, at short intervals, collects from its assessable or beneficiary members, constituting what is known as the “Participating Bank,” certain assessments, and, in case of disability or death, pays a specified sum, depending on the amount of the assessments, which are graded according to age, to the member or his family, or at the end of seven years a gross sum to the member himself, if living. As evidence of the contract between the society and its members, a certificate of membership is issued to each. On the 17th of July, 1889, the relator, Chauncey P. Meads, received a certificate of membership in the participating rank, and thereby became a beneficiary member of the local lodge, known as “Alpha, No. 1.” He has ever since paid or tendered all assessments as they became due, amounting in the aggregate to a considerable sum of money. On the 25th of August, 1892, a meeting of the lodge was held, the relator not being present, although he had received a general notice to attend, but no notice that any business would be transacted in which he was especially interested. At that meeting charges in writing were preferred against him by an honorary member, alleging: That he had violated his duty as an officer, by refusing to sign certain checks until a sum of money that he claimed was due him should be paid, and that he was thereby guilty of “dishonest conduct, or conduct unbecoming a brother.” That later, and after he had been deposed from office, he refused to obey “the behests” of the supreme convention of the order, by boisterously declining to leave the council chamber, where he had no right to be, until he was ejected by force. That he had maliciously assailed the order and its officers through the public press, charging that he had been rejected as an officer after a mock trial by star chamber; that certain officers and members had made false, libelous, and blackmailing statements, and false reports to the insurance de

The sole question presented for decision is whether the relator was lawfully expelled from the order, and, in discussing it, I shall assume that the evidence before the trial committee was sufficient to support the eight specifications sustained by their report. Whether the charges, if true, were all sufficient to justify expulsion, is open to question, and will be considered later.

The defendant lodge is not simply a social club, but is also an insurance company, with a surplus of $150,000 in its treasury for use as a reserve fund and the payment of losses. The relator, when expelled, had a vested property right in that money, of which he could not be deprived without due process of law. In case of severe sickness he was entitled to receive, for a certain period, the sum of $25 per week. If he died, his family was to be paid $500, and if he lived for seven years from the date of his admission, of which period nearly one-half had expired when he was expelled, he was to receive $1,000. He has therefore been deprived of a right of property, of considerable value, for his expulsion involved the forfeiture of all pecuniary interest in the assets of the order. While courts are slow to look into such transactions of private corporations as affect no vested right that may be measured in money, they are prompt to interfere, upon proper application, when, by an arbitrary or unlawful exercise of power, a member has been deprived of that which costs him, and is worth, a definite sum of money. Life insurance, through the medium of benefit societies, is now practiced upon a vast scale; and many millions of dollars have been invested by persons of moderate means in social fraternities, in order to provide against the accidents of life and the certainty of death. It will not do to allow these valuable rights to be forfeited by the capricious or interested votes of those who will be benefited by the forfeiture, unless the method of procedure is in strict accordance with the law of the land, or the reasonable by-laws of the association itself. As was recently said by an able writer upon the subject:

“Courts are lath to adopt the rule that societies doing a life insurance business can expel a member for some infraction of a by-law regulating personal conduct, and thereby cause him to forfeit his insurance, for which he has, perhaps, paid for a long period, and at a time, too, when possibly, from ill health or other reasons, he may not be able to replace the indemnity.” 1 Bac. Ben. Soc. § 107.

“The power of expulsion of members of a society, club, or corporation belongs to the body at large, and, in the absence of the clearest authority in the constitution and by-laws, cannot be delegated to a committee or officer.” Bac. Ben. Soc. § 100.

Many cases are cited by the learned author in support of this position, from one of which the following extract is made:

“The transfer from the body of the society, where it properly belongs, to a small fraction of its members, of so large and-dangerous a power as that of expulsion, must appear, if it be claimed to exist, by the plainest language. It cannot be established by inference or presumption, for no such presumption is to be made in. derogation of the rights of the whole body. Nor is it to be supposed, unless it appears by the most express and unambiguous language, that the members of the society have consented to hold their rights by so frail a tenure as the judgment of a small portion of their own number.” Hassler v. Association, 14 Phila. 233 .

Mr. Niblack, in his work on Mutual Benefit Societies, says:

“The power of expulsion must belong to the society at large, unless, by the fundamental articles, or some by-law founded on those articles, it is transferred to a select number.” Section 72.

See, also, Green v. Society, 1 Serg. & R. 254 ; State v. Chamber of Commerce of Milwaukee, 20 Wis. 63 ; State v. Miller, 66 Iowa, 26 , 23 N. W. 241 .

There are respectable authorities which hold that, where no mode of procedure is specified for trial, the society may adopt such mode as it pleases, subject only to the limitation that it must be fair, even including a trial by committee. Spilman v. Supreme Council, 157 Mass. 128 , 31 N. E. 776 ; Pitcher v. Board (Ill. Sup.) 13 N. E. 187 : I regard such practice as loose and dangerous, and refuse to adopt it, in the absence of a controlling authority in this state. It may well be that a corporation- may delegate to a committee the power to take the evidence, and report it to the members, for them, duly assembled for the purpose, to act upon; but the trial itself, and the decision of the is-sue, should be by the whole, ánd not by a small part Loubat v. Le Roy, 40 Hun, 546 . The only trial of the relator was by a committee that not only took the evidence, but decided the facts, and, without reporting the evidence, recommended expulsion. The association simply fixed the penalty by voting to expel,

The relator may have said sharp and unjust things about his associates, and his conduct in other respects may have been annoying and offensive, so that, from a purely social club, his expulsion would have been justifiable for misconduct of that nature. But a member cannot be expelled for such reasons from a business association, ■organized, in part at least, as a mutual insurance company, because it would be unreasonable to thus forfeit important rights of property. The forfeiture would be in the nature of confiscation, and would require express authority by statute. A by-law would not warrant it, for all by-laws must be reasonable. Ang. & A. Corp. § 347; 2 Am. & Eng. Enc. Law, 173. The failure to pay dues, fraudulent conduct towards the society, the conversion of its property, or any act or omission so directly affecting its welfare as to threaten its existence or success, would, of course, furnish just cause for expulsion. Perhaps other and less grave offenses might also be included, but not, according to the authorities, the libel or slander of members, who can seek redress in the civil tribunals, and do not need the extreme remedy of excluding the offender from all share in assets arising partly from his own contributions. So, mere violations of good taste or propriety by a member cannot be made the basis of removal from a business organization. Even the betrayal of secrets of a secret society of that kind would scarcely be adequate cause for expulsion, where the only disclosure was through the publication of charges preferred against the member himself. That would hardly be a secret, within the meaning of a by-law imposing the duty of secrecy, for it would not be material or vital to the society itself, as its passwords or ritual might be. Clearly, some transactions of such an order are, by implication, removed from the ban of secrecy. The right to defend implies the right to disclose the charges. The certificate of membership issued to the relator might have been made public by him, for it was a business contract. As the evidence of membership might be disclosed, why not the means adopted to deprive him of membership? Both were personal to him, and neither can properly be regarded as a secret of the order. If everything is secret, how can persons be informed as to the nature and object of the order, so as to be induced to join? Upon the trial the defendant officers voluntarily produced and freely exhibited the book of minutes of the lodge, said to be a complete record of all its transactions, without apparently regarding it as a betrayal of secrets.

The charge that the relator slandered the lodge itself was probably sufficient, as that might impair its efficiency, and prove a permanent injury. The willful circulation of false and injurious reports about the organization differs in principle from an attack upon its members, as it involves disloyalty, and a serious violation of corporate duty.

Upon charges, the most of which are condemned *by the courts as inadequate, the relator was expelled; yet, as at least one charge was adequate, probably no relief can be based upon this ground. The fact, however, is not without significance, as characterizing the proceedings, and suggesting hasty action, caused by the excitement of the hour. All of the authorities agree, and the learned counsel for the defendants concede, that the trial must be fair, or the expulsion cannot stand. This implies that it shall not only be fair in form, but also before an impartial tribunal. The trial in this case took place, so far as any consideration was given to the evidence, before a committee of which a brother of one of the prosecutors was a member. That committee may in fact have been entirely fair, and have acted only from the most disinterested motives, but what is the legal presumption? No judge of our courts can sit if he is-related to any party to the controversy within the sixth degree, even with the consent of all the parties. Code Civ. Proc. § 46; Oakley v. Aspinwall, 3 N. Y. 547 . Mr. Cordie R. De Land, in acting as a member of the trial committee, acted as a judge,—-not in the official sense meant by the Code, but in the sense that he was to hear fairly, and determine justly, a charge against a fellow member, involving both property rights and private character. It may be that he has that judicial temperament that would enable him to do this, although his own brother was a complainant, but the presumption arising from common experience is to the contrary. He could not have sat as a juror in a court of law, under like circumstances, to try the most trivial action, yet his decision has aided in depriving the relator of a valuable property right. So far as the principle is concerned, the committee might as well have been composed entirely of brothers of the prosecutor. While it is true that the complainant was not a party, in the sense that he was to be benefited by the-result any more than the members generally, it is none the less true that he preferred the charges, swore to all of them, and they were-tried before his own brother, who voted to find the relator guilty. While I can find no controlling authority upon this question, I cannot regard such a trial as fair. Loubat v. Le Roy as reported in 15 Abb. N. C. 1 , was reversed in 40 Hun, 546 . It is opposed to-natural justice to deprive a man of his property under such circumstances. The common judgment of mankind is that a brother would not be impartial in such a contingency, no matter how hard he strove to do his duty. “Blood is thicker than water,” and the sympathy arising from ties of near kindred tends to pervert the judgment and bias the action of the most honest man.

There must be judgment restoring the relator to membership, with costs. Ordered accordingly.