"WHAT HAVE THE FRATERNAL SOCIETIES DONE FOR AMER

ICA?"

An address by Hon. W. Holt Apgar, Trenton, New Jersey, General Attorney of the Loyal Association, delivered before the Law Section at its annual meeting held at Mackinac Island, Michigan, in August, 1905.

Mr. Apgar spoke as follows:

The subject given to me upon which to prepare a paper for this session does not seem to indicate a legal problem. With the limited. time at our command for the important legal queries that have arisen and will continue to arise in this branch of fraternal work, it seems to me as though I ought not to generalize, but see if it be possible to hew out anything that will show any beneficial changes in our civil law, that has benefited mankind or the profession because of the rise, strength and growth of Fraternal Beneficiary Societies.

Many most excellent titles have been given the beneficiary system of America because of the overwhelming and almost unaccountable deeds of humanity performed by them through their members. They have been aptly and tersely called the "mortgage raisers" for widows and orphans; "the educators" of the children, left without the breadwinner's supporting arm, etc., and as we analyze the work of each of the different Societies, we can realize how truly applicable are such designations. The millions of dollars that have been distributed to the widows and orphans, the families, the relatives and the dependents of the members of the beneficiary system I am sure have reduced the tax rate in almost every municipality.

Education is a preventer of crime. Children have been educated who, without these beneficiary funds, would have been compelled, without education, to have attempted earning of their own livelihood, and as we all well know, without such mental training as is given in our schools today, crime, the result of their ignorance, would have led many of them in different paths, down the steep grade, and in all probability would have cost our different municipalities many

thousands of dollars in trials and convictions, and in support in penitentiaries and prisons. Likewise, the poorhouses have been minus many individuals who, without the help given from these Societies, would have been compelled to have sought admission thereto, all of which would have been an expense and burden to some municipality. The untold good, therefore, that has come to the individual because of homes that have been saved, education that has been given, thus lessening contact with ignorance and crime, have unquestionably reduced the governmental expenses, and stand as an evertowering monument to these institutions which, I think we might rightfully term, are among the most humanitary and philanthropic endeavors of a twentieth century civilization. Many another untold advantage can be found, but I will endeavor to find out if in the legal aspect of the query, we can say, that the Fraternities of America have enlightened, made better or improved the jurisprudence of the nations and States. The laws and the contract of our fraternal societies have indisputably a new feature therein. It is a maxim as old as the law itself that no retroactive law can be enacted which will affect a contract made prior thereto; and yet by a reservation of power, it would seem as though the Courts have almost universally recognized the contracts of Fraternal Beneficiary Societies as those which can be affected by laws enacted after such contracts have become effective and in force.

It is most vital to these societies that that reservation of power permitting the amending in the future of a contract of one of these Societies, shall be maintained. In a crude method and manner, which, at the present time, is looked upon, we might say, with disdain, these Societies commenced their marvelous work. As they grow older and stronger the errors incorporated in the system are gradually being eradicated; many of them can be, that could never have been remedied in the past, nor could they be in the future, had it not been for this reservation of power and its being upheld by the Courts. While, therefore, we might smile at the crudeness and errors appearing in the work of the pioneers who have given us the foundations for these various structures, yet their wisdom, and we might also say, their boldness, in providing this safeguard, this reservation of power, this right to amend existing contracts, so as to fit them for the exigencies of the future day, must command greatest admi

ration and call forth highest praise. Other errors would have wrecked them long before this, had these modifications of the contract, which in our later days we find necessary, been impossible.

I doubt not that many of you, active practitioners, in some Court where you have pleaded a subsequent law that has modified the contract, have had the query from the Court: "Why, my dear sir, your contract states so and so. How could you modify it without the consent of the other party?" And then how gratified you have been when, after carefully explaining the contract, the necessity of reservation and what is accomplished thereby, to-wit, the life of the association itself, to have the Court say: "Why that is a new phase and one which surprises me. I think, however, you have a good legal foundation.' And then how much more gratified have you been when, in the opinion of the Court, you learned that your views were sustained by it. It has worked somewhat of a revolution inso-far as the ironclad sentiments regarding contracts are concerned. And yet it is the promulgation of a simple proposition which is as old as the law itself, that it is within the power of any party to a contract to modify it, providing the power so to do was reserved, and the same be done by the one to whom such power of modification was given.

This doctrine must be sustained by our Courts relative to its retroactive laws. The struggle through which every Fraternal Society has gone, or is now going, relative to adequate rates, can be solved only by the Courts sustaining the power to modify which the founders of these Associations inserted therein, and which have so uniformly been construed to the advantage of these Societies. Inadequate, unscientific rates mean the wreck of every Association now in existance that has not repudiated the same. To repudiate these involve adoption of the adequate and scientific rates and to apply them to present contracts, means that if the Courts refuse to uphold this doctrine, then the Societies themselves must cease to exist.

A noted jurist in one of our States has well said that the contracts originally made under the unscientific and inadequate rates that were promulgated at the inception of most of the Fraternal Societies, mean contracts impossible to perform, and a contract impossible to perform is unenforceable. Therefore, the reservation of power, as well as the necessity of amending the contract, appeals so

forcibly to common sense and to law, that when such changes are involved, and adequate and scientific rates are ingrafted in the law of any Fraternal Beneficiary Society, the same will pass legal scrutiny and be added thereto. More tersely and as opportunely the same judge has said: "No Court can compel a Beneficiary Society to furnish life insurance less than cost."

These societies are mutual. The members must furnish the means with which to pay death claims. If they do not, the object for which they were incorporated, and came into existence, fails; the Society itself becomes insolvent, and the member who thinks that by adhering to the straight letter of his contract and attempts to test in law any changes which may be made whereby adequate and scientific rates are ingrafted in the contract, is making his own condition worse, because insistment upon the fulfillment of the letter of the contract means the insolvency of the institution. When that time arrives, however, every member, not only the fellow who is kicking, but all others, even those who are willing to pay proper rates, will alike be cast out, and the protection for which men banded together and which each pledged to the other, is gone. We, therefore, can see that upon one of the greatest legal propositions which can be submitted to a Court, the Fraternal Societies of America have caused a new feature to be considered, a new construction placed, which is for the good, for the advantage, of all.

In a legal sense the Fraternities of America have provided a protection which a speculative, a drunken or a worthless husband, father or brother, is unable to divert entirely from the channel in which it should go. It is a wise provision in our laws, and our Courts are to be commended for sustaining the same, that the member himself cannot take the funds which he may designate as belonging to beneficiaries who must be related within a certain degree, or dependent upon him, and use them for his own advantage, should he desire to speculate or to waste the same. Our law in that regard and its being sustained by the Courts, takes speculation, in a great measure, away from the consideration of the members of the Fraternal Benefit Societies. The moneys cannot be diverted to any great extent, but must reach the goal for which they were intended by the founders of the Orders and those who are continuing their work. It might be true that ofttimes the pledge of an insurance

policy may help a careful man, one who has been usually successful, from failure at a critical moment. But there are so many more instances of where the speculating fever has used up that which was set aside for the wife and children, that the rigid enforcement of our law by the Courts can be looked upon as being most beneficial.

Some of our Courts have likewise denominated the designation. in a benefit certificate as a LAST WILL and TESTAMENT, and in so doing have aided materially in having funds belonging to the Societies kept in their proper channels and free from the debts of the member and which, had they been used for that purpose, would unquestionably have left the widow and orphans dependent upon the cold charity of the world, and, if unable to earn their own livelihood, most likely to have become subjects dependent upon the State or the county, either through the penitentiary or the almshouse.

The Fraternities of America have also persuaded Legislatures in most, if not all of the States, to pass legislation which has aided materially in putting a premium upon thrift, and in cultivating a most laudable desire, that should most strongly take possession of every man, to provide for his family at a time when he shall be no more. We often say that there is too much legislation. I believe that is true, but yet there is room for some dwelling by Legislatures upon laws guarding the interest of those who invest their money in life insurance, especially with financiers, whose sole desire it is to get great commissions and salaries for themselves, and too little regard for the poor policy holder, or the dividends promised when soliciting.

The Fraternities of America have also demonstrated that united action by them before any house of Congress or any State Legislature means a power that cannot be successfully opposed. They have -found a most effectual and great advantage in organized efforts to obtain the objects sought for, or to oppose vicious measures, and when the Fraternities of this land arise, as they have in times past, and unitedly say that that which interferes with fraternal protection to the people of this land must not succeed, even millionaire life insurance company presidents and $20,000 per year solicitors of the same, although United States Senators, were forced to bow to the edict.

The Fraternities of America have educated in the three decades. and a little over that they have been in existence, more people to the