Black v. Supreme Council

Citations

• 120 F. 580
• 1903 U.S. App. LEXIS 5293

Syllabus

<p>1. Life- Insurance — Benefit Associations — Liability for Breach of Contract.</p> <p>Where a fraternal benefit association or order is incorporated, and empowered to make insurance contracts with its members, such contracts are made by it as a legal entity; and in an action for breach of such a contract the internal affairs of the corporation and the equities of its members inter sese are matters which are immaterial, and which cannot affect its liability.</p> <p>2. Same — Repudiation of Contract — Action by Member to Recover Payments.</p> <p>Where an incorporated fraternal insurance association, having the power, but not the legal right, so amends its laws as to arbitrarily reduce the amount payable to the beneficiaries of its members on their death below that which it contracted to pay, a member who did not assent to such reduction has the right to treat the contract as rescinded, and to be restored to the situation he occupied before it was made by recovering the amount he has paid thereon; and it is immaterial in such an action what use the association has made of the money so paid, nor is it any •defense against its legal liability for breach of the contract that its charter and laws make no provision for raising funds to discharge such liabilities, when it had power to make the contracts.</p>