Case Name: Fritz Lewin, Respondent, v. The Koerner Benevolent Association, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1908-03-04
Citations: 125 A.D. 91
Docket Number: 
Parties: Fritz Lewin, Respondent, v. The Koerner Benevolent Association, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 125
Pages: 91–94

Head Matter:
Fritz Lewin, Respondent, v. The Koerner Benevolent Association, Appellant.
Fourth Department,
March 4, 1908.
Insurance —mutual benefit corporation — right to reduce amount of payment— erroneous charge.
Where the certificate of incorporation of a mutual benefit association states that its object is to aid its members in case of sickness by means of contributions as the by-laws of the society may from time to time prescribe, the corporation may by amendments to its constitution and by laws reduce the amounts payable to a sick member, although his disability occurred prior to the amendment, if such reduction is reasonable and necessary to carry out the object of the corporation and to perpetuate its existence.
In an action against such corporation it is error to charge in substance that the beneficiary on becoming ill obtained vested rights, even, though the question of the reasonableness of the amendment has been properly submitted to the jury, for it may have been understood that the defendant had no right to reduce the amount of benefit in any event.
McLennan, P. J., dissented.
Appeal by the defendant, The Koerner Benevolent Association, from a judgment of the Connty Court-of Erie county in favor of the plaintiff, entered in the office of the clerk of said county on the 6th day of December, 1906, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 6th day of December, 1906, denying the defendant’s motion for a new trial made upon the minutes.
Ferdinand J. Bommer, for the appellant.
Leo F. Donnelly, for the respondent.

Opinion:
Kruse, J.:
The defendant is a domestic mutual benefit corporation. Its object, as declared by its. certificate of incorporation, " "x" shall be to aid its members in case of sickness and the families of deceased members of such society, by means of contributions, as the by-laws of the society may from time to time prescribe. The constitution provided for sick benefits and death benefits to its members ; $200 upon the death of a member and $50 upon the death of his wife. The society was organized in 1873, and the plaintiff was one of the charter members. The original constitution of the defendant provided for the payment of $3 a week to a member so long as he was sick. In 1893 it was changed to $5 a week until he received $150; then at the rate of $3 a week until he had drawn $130, and if his sickness still continued, $2 a week so long as he remained sick. In 1898 the constitution was again amended by reducing the above $2 weekly allowance to $1 a week, and on October 3, 1899, the constitution was finally amended by providing that after a member had received the $150 and the $130 aid he should have no further claim for sick benefits, but the sick member should be relieved from paying dues for balls and" picnics.
The plaintiff became ill on July 27, 1894, and has remained so ever since. He drew sick benefits up to the 3d day of October, 1899; in all the sum of $751.10. If the last amendment to the constitution is valid the plaintiff will have no further claim for his present sickness.
For the purpose of prompt payment of the benefits the defendant society accumulated a fund which, in 1896 and 1897, amounted to about $6,400. In 1898 it decreased about $400, and in 1899 it decreased a further sum of about $400. At the time of the last amendment the defendant had a membership of 151, whose quarterly dues were at the rate of $1.23. Six members were then sick, and the proof tended to show that its sick benefit fund was steadily declining.
We think, under the express provisions of the certificate of defendant's incorporation, it had the right to amend its constitution and by-laws by changing thé amount of the sick benefit if it was reasonably necessary to carry out its objects and perpetuate its existence. (Berg v. Badenser Under sturtzungs Verein, 90 App. Div. 474.) It was therein provided that the aid to sick members and the families of deceased members should be by means of contributions " as the by-laws of the society may from time to time prescribe." The same rule has recently been applied in cases less favorable to the right of so amending the constitution and by-laws of such associations than this case. (Mock v. Supreme Council, 121 App. Div. 474, decided in the second department in October, 1907 ; Wright v. Knights of Maccabees, 122 id. 904, decided in the third department in November, 1907.) The above cases were followed by us in Dowdall v. Supreme Council (123 App. Div. 913, decided in January, 1908).
While the question of the reasonableness of this amendment was correctly submitted by the learned trial judge in his charge, the plaintiff's counsel was not content with the charge as made upon that subject. After the main charge plaintiff's counsel asked the court to charge : " I ask your Honor to charge that the defendant could not pass an amendment to the constitution and by-laws which would divest the plaintiff of a vested right. The Court: If you want that in the case I will give it to you. I so charge. Counsel for defendant excepts."
Still, not content, he further asked the court to charge as follows: " I ask your Honor to charge that at the time Mr. Lewin became sick he had vested right to sick benefits. The Court: At the time he became sick he did receive benefits and they were paid to him. Why do you put that in the case ? Mr. Grass : They cut him off. The Court: I will charge as you request and give the defendant the exception."
We think the jury might well have received the impression from this charge that the defendant had no right to amend its constitu tion and by-laws, so as to cut off the plaintiff from receiving any further sick benefits for the sickness which he was then undergoing. That depended upon the question as to whether the amendment was reasonable. If it was, the defendant had the right to amend its constitution and by-laws as it did. If it was not a reasonable amendment, then it did not have such right. But, as the charge was finally left, the jury may well have understood that the defendant had no such right in any event.
For this error the judgment should be reversed and a new trial granted.
All concurred, except McLennan, P. J., who dissented upon the ground that plaintiff's rights became fixed upon his becoming sick, and so could not be affected by amendment.
Judgment and order reversed and new trial ordered, with costs to appellant to abide event.