Knights of Pythias v. Withers, 177 U.S. 260 (1900)

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Knights of Pythias v. Withers

No. 170

Argued March 6, 1900
Decided April 9, 1900
177 U.S. 260

ERROR TO THE CIRCUIT COURT OF

APPEALS FOR THE FIFTH CIRCUIT

Syllabus

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 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.