U.S. Supreme Court
Knights of Pythias v. Kalinski, 163 U.S. 289 (1896)
Knights of Pythias v. Kalinski
Argued May 1, 1896
Decided May 18, 1896
163 U.S. 289
A society extending throughout the country, which was divided into lodges, whose members were subject to an annual lodge assessment and had also the right to become members of a separate assessable organization within the society called the endowment fund, having had some differences with a member who had paid all his endowment assessments but was in arrear for his dues to his lodge, the supreme head (called the board of control), after careful consideration, decided that in view of the fact that the keeper of records and seals of the lodge to which he belonged failed to notify the section of which he was a member of the fact that he was in arrears for dues to his lodge and that the lodge had failed to suspend him in accordance with the law, and that his section of the endowment rank had received his monthly assessments up to the date of his death, the endowment rank was liable for the full amount of the endowment.
Held: that while the courts are not bound by this construction of the organization, the association has no right to complain if its certificate holders act upon such interpretation, and is not in a position to claim that the ruling was more liberal than the facts of the case or a proper construction of the rules would warrant, and that whether the ruling was right or wrong, it established a course of business on the part of the society upon which its certificate holders had a right to rely.
The continued receipt of assessments upon an endowment certificate up to the day of the holder's death is, under the circumstances of this case, a waiver of any technical forfeiture by reason of nonpayment of lodge dues. chanroblesvirtualawlibrary
This was an action originally begun in the Civil District Court of the Parish of Orleans, in the State of Louisiana, by the defendant in error, Eugenie Kalinski, to recover of the Supreme Lodge Knights of Pythias of the World (as association incorporated under an act of Congress, and domiciled in Washington) the amount of a certain certificate of membership whereby the defendant contracted and bound itself to pay to petitioner, on the death of her husband, Achille Kalinski, the sum of $3,000, the said certificate being in effect a life insurance policy.
The case was removed upon the petition of the defendant to the Circuit Court of the United States for the Eastern District of Louisiana upon an allegation that the defendant was created by and organized under an Act of Congress approved May 5, 1870; that it was domiciled in Washington, and that the controversy arose under and was to be determined by such act of Congress; that the suit was based upon a beneficial or life certificate issued under authority of such act of Congress, and the defense to said suit arose under the laws of the United States.
The answer admitted that during his lifetime, the said Achille Kalinski became a member of the endowment rank of the Order of Knights of Pythias, in section 363 thereof, paid the initiation fee, and that there was issued to him the certificate mentioned in the petition. But it denied that Kalinski, during his lifetime, complied with the obligations imposed upon him under such certificate, and averred that under the terms of his application for membership in said endowment rank, and in the said certificate, and the constitution and bylaws of said endowment rank, Knights of Pythias of the World, all being and forming parts of the contracts between them, it was provided that any failure or neglect on the part of said Kalinski to pay assessments or dues, as provided by the laws of the rank or order, should work a forfeiture of all his rights, and the rights of his heirs and beneficiaries, in the premises, to all benefits and privileges accruing to members of said rank; that, by said laws, it was, among other things, especially provided that, when a member of the endowment rank became in chanroblesvirtualawlibrary
arrears to his lodge for an amount equal to one year's dues, he should forfeit his membership in the endowment rank, and his endowment certificate should thereupon become void.
The answer further averred that, at the time of his death, May 24, 1891, Kalinski was in arrears for, owed, and was indebted to Syracuse Lodge, No. 50, of said order, of which he was a member or to which he belonged, in an amount in excess of one year's dues, and that he had at the time of his death forfeited his membership in the said section and rank, and the said certificate became null and void. It further averred that
"after being so in arrears and the forfeiture of all rights as aforesaid, of which forfeiture, however, your respondent was then, without its fault or negligence, unaware, said Kalinski paid certain assessments under such certificate,"
but that, as soon as made aware of the forfeiture heretofore mentioned, respondent made legal tender to the plaintiff of the amount of such assessments so paid, and that she refused the same.
In a supplemental answer, defendant deposited in court, and tendered back to plaintiff, the amount of assessments so paid, namely, $16.20, with five percent interest thereon from April 1, 1891, to date.
The case came on for trial before the district judge and a jury, was tried twice, and resulted each time in a verdict and judgment for plaintiff for the full amount of her certificate or policy, and, upon writ of error to the circuit court of appeals, that judgment was affirmed, whereupon defendant sued a writ of error from this Court.