
    Fourth Department,
    July, 1912.
    Henry J. Simmelink, Respondent, v. The Supreme Court of the Independent Order of Foresters, Appellant.
    
      Insurance—fraternal benefit organization ^-increase of rates.
    
    Appeal from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Monroe on the 15th. day of April, 1911.
    Judgment reversed and new trial granted, with costs to appellant to abide event. Held (1) that the action is prematurely brought; (3) that the right of the defendant to increase its rates is controlled by the laws of Canada and not by the laws of this State. All concurred, except Spring and Kruse, JJ., who dissented in an opinion by Spring, J.
   Spring, J. (dissenting) :

The defendant, a fraternal insurance organization on the assessment plan, originally incorporated in the Province Of Ontario, was reincorporated in 1889 by special act of the Parliament of the Dominion of Canada, and with a constitution and laws duly adopted by the Supreme Court, which is the governing body of the society, with its head office in the city of Toronto. Its scheme of insurance is carried on by means of subordinate courts or branches established in conformity to the act mentioned, and it was authorized to establish lodges and carry on its business in the State of New York, and that privilege has continued unrevoked. Iii 1890 the plaintiff, with others in the city of Rochester, applied for a charter for a local court in that city, which was granted, and the usual -certificate or contract of membership was issued to the plaintiff April twenty-third of that year. At that time he was thirty-five years of age, and the contract provided that upon reaching his. seventieth birthday he should receive $100 and a like sum On each succeeding birthday until the sum of $1,-000 was paid, also a fixed sum to him in case -of total and permanent disability, and $1)000 to his widow'or personal representatives on satisfactory proof of his death.- The only requirement in order that a member might reap these benefits was that he should “be a member in good standing in the Order and hot disqualified according to the Constitution,, Laws, Rules and Regulations of the Supreme Court.” The monthly assessment of the plaintiff was seventy-eight cents, which he paid regularly, and was in good standing at the time of the commencement of this action. The subject of increasing the assessment rates had been considered at the annual conventions of the defendant, which consisted of delegates from the subordinate courts. In the month of May, 1908, a meeting was called to convene in Toronto June sixteenth of that year with' the . avowed purpose of increasing the rates, which, according to the plan designed, would' raise the assessment of the plaintiff to $1.65 per month; and this action was commenced June fourteenth of that year to enjoin permanently the defendant from making said increase, and a temporary injunction was granted. The general plan was adopted in June, 1908, in pursuance of the call for the convention, became effective in ■ October of that year and has since been in operation. The plaintiff challenges the power of the organization to add to the assessment which was fixed at the time he joined the defendant. When he was asked to become a member, and at the time of his admission, there was delivered to him a pamphlet to be used in soliciting others to unite with the order, which contained this provision: “The monthly assessments, which are payable invariably in advance, may be paid monthly, quarterly, semi-annually or annually, at the convenience of the member; and they do not increase as the member grows older, but remain the same so long as he remains continuously in good standing ’ in the Order. The right is reserved, however, as required by law, to levy extra assessments should the necessities of the Order ever require it.” The constitution fixed the schedule of monthly rates, and that of a man of thirty-five at seventy-eight cents; and at the end of this table is added: “ And shall pay the same rate of assessments thereafter so long as he remains continuously in good standing in the Order and in the same class.” There is no distinct provision in .the constitution, certificate or application, and they together constitute the contract, authorizing the defendant to increase the assessment rates. There is a provision providing a method for amending the general laws of the order, but it does not refer specifically to any addition to the assessment charges, and it would be a strained construction to include that authority within the compass of this provision. (Ayers v. Order of United Worhmen, 188 N. Y. 280.) In the application which the plaintiff, with others, presented for the charter, which was granted, is contained this clause: “We do further severally agree, to be bound by all the provisions of the Constitutions and Laws of the Order, as enacted from time to time by the Supreme Court of the Independent Order of Foresters.” Apparently it was not intended by the founders of the society to increase the rates at all. The pamphlet so indicates and the language "of the constitution, already quoted, was intended to limit the assessment to that established when the member joined the • organization. The right to levy an extra assessment, if “the necessities of the Order” require it, was probably deemed sufficient for any emergency which might arise, but that authority gave no power to increase the amount which any member must pay to meet the assessment. That sum was supposed to be unchangeable. The April, 1908, of $11,891,747.97; and that in March, 1910, the said undivided surplus funds, so applicable to the purposes of the defendant, amounted to. $14,961,799.15, and that the said surplus funds are growing at the rate of $1,000,000 a year.” It also refused to find the distinct request: “That the rate of assessment paid by plaintiff was at all times inadequate with its other available funds to enable defendant to pay all obligations created under all certificates issued prior to 1908.” It also refused to find several requests made by the defendant, the purport of which was to show inadequacy of the assessments under the rates prevailing at the time the action was commenced. The evidence shows, therefore, that the assets not only were not diminishing, but were increasing from year to year. Mr. Grant, an actuary, testified on behalf of the defendant to the present valuation of its liabilities by virtue of its insurance certificates and which tended to show a marked inadequacy of assets to meet these liabilities. The estimates deduced by this expert were largely speculative. As was said in Wright v. Knights of Maccabees {supra, at p. 404): “ Moreover, the existence of the defendant, according to the findings, is not now threatened, nor will it be until after the lapse of from eighteen to twenty-five years, and no one.can foresee the changes that will take place in the meantime. If the wonderful growth of the defendant, as stated by its counsel, continues, the danger now apprehended as to what may take place a quarter of a century hence, may wholly disappear before that period expires.” It is to be noted also that if the Canadian membership is retained, with the augmented rates, the sums received may be sufficient to meet every obligation of the defendant. In its broader aspect we are not prepared to hold that this foreign corporation may obtain the privilege of doing its business in the State of Mew York, and under the shield of that license be vested with greater authority than is granted to like organizations incorporated in ora own State. The comity which exists among friendly nations and which enables the corporation of one to carry its charter into the other jurisdiction does not signify that the privilege is to be used to the detriment of the domestic organizations within the invaded territory. If they are placed on a level, with an equal opportunity to secure and develop business, the full measure of courtesy to which it is entitled has been extended to the foreign body. The appellant relies upon Canada Southern R. Co. v. Gfebhard (109 U. S. 537). In that case the railway corporation was organized and its entire track and equipment and its business were in Canada. Bonds were issued by the corporation, and some of them were sold to residents of the State of Mew York, and payable at the Union Trust Company in the city of Mew York. The railway corporation became embarrassed and was unable to meet the interest on these bonds. A refunding arrangement was adopted by the corporation, providing for the surrender of the outstanding bonds and the substitution of other security in lieu thereof, which received the assent of two-thirds of the bondholders, and was ratified and made effective by act of the Dominion Parliament, requiring all the bondholders to conform to this plan. The Mew York bondholders withheld their assent and sought to recover on their bonds, and they were defeated in the United States Supreme Court on the ground that the railway corporation was organized in Canada-and subject to the control and regulation of its Parliament, and as to-whatever business it did in New'York, and which was confined to the sale of its bonds, -it carried its charter with it. The bondholders knew it was a foreign corporation and that its business was carried on in Canada. It was not required to receive any authority from our- State to sell its bonds to its residents. They purchased them in open market. If the corporation were operating a railroad in New York State I assume it would only be on a parity with other railroad corporations in the State. If it was permitted- by the Parliament of Canada to charge- passengers at the rate of five cents a mile to be transported over its line, that rate would not be available to it here. The defendant in this- case asked and obtained permission to transact business in this State in competition with like domestic- organizations. I-n granting the courtesy the defendant was not elevated on a pedestal above- other similar bodies. - It is urged that the effect of the decision made is to discriminate against the Canadian members and in favor of the plaintiff and other members of the society in this State. The same disparity existed in the cases referred to. In some States the right to increase rates has been- held to rest with the association. If so, the new rates may be prevalent in those- States and the old ones in the State of New York. Again, the defendant itself has created differences in rates. In 1898- they were augmented as to members thereafter uniting with the order, the validity of which could not be successfully assailed, and yet the result of the increase was to make a substantial difference in the monthly rates of two men of the same age — the one joining before the increase and the-other thereafter. The position of the appellant that the action was prematurely commenced does, not seem to be tenable, There had been considerable agitation and discussion over the subject of increasing the. assessment rates. Finally a convention was called to meet in Toronto June 16, 1908, the declared purpose of which was to -accomplish this'increase and the trend of sentiment indicated the enactment of the- desired resolution. The increase was made in pursuance- of the call, confirming the regularity of the procedure in calling the convention- and the-rates as then- fi-xed have been in operation. We think the judgment should be-affirmed. Kruse, J., concurred. _  