the plaintiff's experience he ought or ought not to have done. The timber was to be moved as it was piled, and the danger that one of the sticks might fall was, we think, an obvious risk incident to the employment and as such was assumed by the plaintiff. See Campbell v. Dearborn, 175 Mass. 183, 55 N. E. 1042; Allard v. Hildreth, 173 Mass. 26, 52 N. E. 1061; Thompson v. Norman Paper Co., 169 Mass. 416, 48 N. E. 757; De Lisle v. Ward, 168 Mass. 579, 47 N. E. 436; Lothrop v. Fitchburg R. R. Co., 150 Mass. 423, 23 N. E. 227.

Where an action is submitted on an agreed statement of facts, in the absence of a stipulation that inferences may be drawn from the facts stated, the question is whether the facts. actually stated establish the plaintiff's case; the court not being authorized to draw inferences either for or against plaintiff.

[Ed. Note.-For cases in point, see vol. 46, Cent. Dig. Trial, § 880.]

2. CORPORATIONS-CONTRACT-VALIDITY.

Where one ordered articles and they were charged to him three months before the organization of a corporation, though in contemplation of its incorporation, the corporation to which the articles were transferred is not liable therefor, in the absence of elements constituting a sufficient foundation for a new contract.

[Ed. Note.-For cases in point, see vol. 12, Cent. Dig. Corporations, § 1789.]

Appeal from Superior Court, Franklin County.

Action on a contract by Arthur Koppel against the Massachusetts Brick Company, to recover for goods and materials ordered of plaintiff on December 30, 1901, by one Welch, by whom they were transferred to the defendant on its incorporation, and for goods ordered by Welch as agent of the corporation after incorporation. From the judgment, plaintiff appeals. Affirmed.

Dana Malone, for appellant. John E. Crowley, for appellee.

KNOWLTON, C. J. This is an appeal by the plaintiff from a judgment of the superior court upon an agreed statement of facts, for a sum less than that claimed by him in his declaration. The defendant did not appeal, but says in its brief that "there is no error of law shown by the record." We therefore have no occasion to consider the last part of the account, on which the finding was for the plaintiff.

Upon a submission of an action on an agreed statement of facts, the decision is to be made upon the facts actually stated. In the absence of a stipulation that inferences

may be drawn from the facts stated, the question is whether the matters agreed upon establish the plaintiff's case. Neither the superior court nor this court can draw inferences of fact either for or against the plaintiff. Schwarz v. Boston, 151 Mass. 226, 24 N. E. 41; Mayhew v. Durfee, 138 Mass. 584. In this case the disputed items of the account are for articles ordered by one Welch and charged to him by the plaintiff. Afterwards a suit was brought against Welch by the plaintiff, to recover the price of them, and on his payment of $1,000 to the plaintiff, a settlement was made and Welch was given a release of all demands, without prejudice to the plaintiff's claim against this defendant. The defendant corporation was not in existence when the order for these articles was given, nor for nearly three months afterwards, and it was not authorized to do business under Rev. Laws, c. 110, §§ 43, 44, until the expiration of nearly a month after its certificate of incorporation was issued, and more than two weeks after the last of the articles had been delivered to Welch.

Even if Welch had assumed to act for a corporation which was then expected to be formed, which does not appear in the statement of facts, and if the corporation had attempted to ratify his act as its agent, it could not have made the orginal contract binding upon it without introducing into the transaction such elements as would be a sufficient foundation for a new contract. Penn Match Company v. Hapgood, 141 Mass. 145, 7 N. E. 22; Abbott v. Hapgood, 150 Mass. 248-252, 22 N. E. 907, 5 L. R. A. 586, 15 Am. St. Rep. 193; Holyoke Envelope Company v. United States Envelope Company, 182 Mass. 171, 65 N. E. 54.

In this case nothing is stated which has any tendency to connect the defendant with the sale of these goods by the plaintiff. We have only the fact "that after incorporation the property came into the possession of the defendant by a transfer from Welch," which, so far as it shows anything, indicates a sale by Welch to the defendant.

(191 Mass. 487)

MAGNOLIA METAL CO. v. GALE. (Supreme Judicial Court of Massachusetts. Suffolk. May 17, 1906.)

1. APPEAL-EXCLUSION OF EVIDENCE-REC

ORD.

The sustaining of an objection to a question asked of a witness will not be reviewed on appeal, where the bill of exceptions contains nothing to indicate the character of the expected answer.

[Ed. Note.-For cases in, point, see vol. 3, Cent. Dig. Appeal and Error, § 2905.] DAMAGES-BREACH OF CONTRACT-INSTRUCTIONS-REQUEST TO CHARGE.

In an action for breach of a contract, a request to charge that, in estimating damages sustained by plaintiff, a reasonable deduction should be made for the less time plaintiff was engaged after the breach, was covered by an instruction that defendant was entitled to have

the expenses which plaintiff would have been subjected to in carrying out the contract deducted from the profit which would have accrued to plaintiff by the completion of the contract.

3. TRIAL-INSTRUCTIONS APPLICABILITY TO EVIDENCE-DAMAGES.

Where, in an action for breach of contract, there was no evidence that plaintiff had been saved any trouble, risk, or responsibility by defendant's breach of contract, a requested instruction that a reasonable deduction should be made from the damages plaintiff would otherwise be entitled to recover for such release from care, etc., attending the execution of the contract, was properly refused.

Exceptions from Superior Court, Suffolk County; John Lathrop, Judge.

Action by the Magnolia Metal Company against George W. Gale. A verdict was rendered in favor of plaintiff, and defendant brings exceptions. Overruled.

A. S. Bacon, I. R. Clark, and G. F. Ordway, for plaintiff. Geo. F. Piper and Walter H. Thorpe, for defendant.

KNOWLTON, C. J. The trial in which these exceptions were taken was confined to an assessment of damages. The first exception is to the exclusion of the testimony of a witness called by the defendant, who said that he was formerly employed by the plaintiff, and that, in the beginning, he had some conversation with the plaintiff's managing agent in regard to the sale of magnolia metal. He was asked to state the conversation, and upon objection by the plaintiff the question was excluded. There is nothing in the bill of exceptions to indicate what the conversation was, or that there was anything in it which would have been favorable to the defendant in the trial of the case. The record calls for the application of the familiar rule that an exception cannot be sustained, unless it appears, not only that the ruling objected to was erroneous, but also that the plaintiff was injured thereby. Mosseau v. Landy, 177 Mass. 104, 58 N. E. 182; Com. v. Smith, 163 Mass. 411, 429, 40 N. E. 189.

The only other exception argued is to the refusal of the court to instruct the jury that, "In estimating the damages sustained by the plaintiff, a reasonable deduction should be made for the less time engaged, and the release from care, trouble, risk and responsibility attending the full execution of the contract by the plaintiff." So far as there was any saving of expense to the plaintiff from the less time engaged, that was covered by the instruction given, in accordance with the decision in Magnolia Metal Co. v. Gale, 189 Mass. 124, 75 N. E. 219, that the defendant "was entitled to have deducted from the profit which would have accrued to the plaintiff the expenses which the plaintiff would have been subjected to in carrying out the provisions of the contract on its part, during the period that the contract would have been in force if there had been no breach."

78 N.E.-9

As to the part of the instruction requested which relates to the "release from care, trouble, risk and responsibility attending the execution of the contract," there was no evidence in the case which would have justified such an instruction. If the contract had been of a kind in which these matters could have been considered as elements of damage, the plaintiff well might have contended, upon the evidence, that its care, trouble, risk and responsibility were greatly increased by the continuous wrongful conduct of the defendant and his associates in breaking the contract.

Exceptions overruled.

(192 Mass. 150)

REYNOLDS v. SUPREME COUNCIL
ROYAL ARCANUM.

(Supreme Judicial Court of Massachusetts. Suffolk. May 17, 1906.)

1. INSURANCE-MUTUAL BENEFIT SOCIETIESCHANGE OF PLAN-INCREASED ASSESSMENTS -AUTHORITY.

Rev. Laws, c. 125, § 6, and Id. c. 119, § 2, authorize mutual benefit societies organized thereunder to adopt by-laws declaring the manner in which the purposes of its incorporation may be accomplished and to prescribe the assessments and benefits in case of disability or death and the conditions under which the same shall be paid, the method of amendment of the bylaws and such other provisions as the corporation may determine. Section 6 declares that the corporation may make provision for the payment of benefits in case of death or disability or both, the funds for which shall be derived only from assessments collected from members which shall be as required in the by-laws of the corporation. Held, that where a society incorporated under such act was founded on a plan which would ultimately result in its inability to pay certificates issued, it was thorized by such sections to so amend its bylaws as to increase its benefit assessments to an amount equal to the cost of insurance. 2. SAME-CLASSIFICATION OF MEMBERS.

The classification of the members of the society according to age in determining the rates that different members should pay for death benefits in the association was proper. 3. SAME-CHANGE OF ASSESSMENTS-VIOLATION OF CONTRACT.

Where every member of a mutual benefit society at the time of joining the same entered into an express agreement to conform to and abide by the constitution, laws, rules, and usages of the council and order then in force or which might thereafter be adopted and the certificates of the society promised payment of death benefits only on condition that the member complied with the laws, rules and regulations governing the council and fund or that might thereafter be enacted by the Supreme Council to govern the said council and fund, etc., by-laws subsequently adopted by the Supreme Council changing the society's plan and adopting an increased graduated benefit assessment schedule sufficient to cover the cost of insurance did not constitute a violation of the then existing contracts of members.

Case Reserved from Supreme Supreme Judicial Court, Suffolk County.

Bill by one Reynolds against the Supreme Council of the Royal Arcanum. Case reserved for full court. Bill dismissed.

Moorfield Storey and John P. Leahy, for plaintiff. John Haskell Butler and Curtis H. Waterman, for defendant.

From

KNOWLTON, C. J. This is a bill in equity to set aside certain changes in the defendant's by-laws which affect the rights of certificate holders. The defendant is a fraternal beneficiary association, organized under the laws of Massachusetts in 1877, and now subject to the provisions of Rev. Laws, c. 119, and the acts in amendment thereof. The plaintiffs are certificate holders, who bring this bill for themselves and in behalf of others. the time of its organization the defendant issued certificates to members, agreeing to pay to a designated beneficiary a sum not exceeding a certain number of dollars on the death of the member, upon compliance by him with certain conditions therein stated. The by-laws provided that the death benefit should be for a definite amount, and payments of these definite amounts have always been made. The words "not exceeding" are inserted in the certificate to meet the possibility of a single full assessment not being equal to the amount stated. This limitation of the payment to the amount of an assessment, except when there is an emergency fund, was expressly called for by St. 1899, p. 471, c. 442, § 11, which is now found in Rev. Laws, c. 119, § 6. Until 1898 the assessments paid by members, from which the death benefits were derived, were certain sums dependent upon the age of the member at the time of receiving his certificate, which sums remained the same as the years went by. These sums were paid to meet assessments as members died, and the amount for the first year would equal the cost to the corporation of the insurance of these members. But as the members grew older the risk of their death increased, and as their payments remained constant, and as there was at no time a payment of any surplus beyond the amount required to meet losses, the payments by members of long standing were not nearly enough to equal the cost of their insurance to the corporation. So the only way in which the amounts required to meet losses could be obtained was from the payments made by new members.

In 1898 the by-laws were amended so as largely to increase the payments to be made by all members, and to require the payments monthly. These amendments went into effect on August 1, 1898, and it appears by the agreed facts that no objection thereto has ever been made by any member of the order. These payments, while much larger than those required by the original by-laws, were upon the same relative basis; that is, the increase upon all was in the same proportion, and they were all determined by the age of the member when he received his certificate, and were not to be afterwards changed as a member grew older.

When these amendments were made it was

thought that the increase would provide for the future payments called for by the certificates, and that an adequate emergency fund would be created from this income. Under these amendments there was a surplus in 1898 from the excess of receipts above payments amounting to more than $455,000, and afterwards there was annually a steadily diminishing surplus from the same cause to and including the year 1903. In the year 1904 the payments exceeded the receipts, and there was a deficit of $270,540.50.

Prior to the session of the Supreme Council in May, 1905, the executive committee caused mortality tables of the order to be prepared, and made extended investigations and studies with the aid of competent actuaries, to devise some method, through a change of by-laws, which should enable the corporation to meet its obligations to members. The actuaries prepared for them new tables, each the mathematical equivalent of the others, the first being the regular rates, and three others optional alternatives. These were founded upon the payment by the order of the maximum value of each certificate, and the payment by the member of a rate adequate, without further modification or additional assesssment, to pay the certificate at the maturity thereof. It is agreed that "competent actuaries would testify, and the case may be taken as though they had testified, that the old plan of assessments was faulty, according to the assumptions made by the actuaries, and that the order could not meet the maximum face of its certificates under it; that upon their assumptions a change was expedient or necessary; that the plans proposed and adopted were mathematically correct; that if the members paid the amounts fixed in these tables the order could continue to pay the maximum face value of its certificates at their maturity; that such amounts are no higher than necessary for this purpose, and that they fairly and equitably apportion among the members their contributions to the widows' and orphans' benefit fund, taking into consideration their age and risk." "The plaintiffs do not controvert this evidence in this case, but reserve the right to discuss its materiality, the basis and theories upon which it rests, and its application to this case." On January 1, 1905, the members of the corporation were 305,083 in number, and they held benefit certificates amounting to $680,848,000.

Under these conditions the changes recommended by the actuaries were adopted by an amendment of the by-laws by an almost unanimous vote of the members of the Supreme Council, and the question is whether the changes are legal and binding upon the members.

From facts agreed it is plain that a great corporation, managing and controlling important financial interests for hundreds of thousands of families, was conducting its business upon unsound principles, which, if

the purposes of its incorporation may be accomplished." Rev. Laws, c. 125, § 6; Id., c. 119, § 2. These by-laws may prescribe the "assessments and benefits in case of disability or death, and the conditions upon which the same shall be paid, * *, the method of the amendment of the by-laws, and such other provisions as the corporation may determine." Rev. Laws, c. 119, § 2. Such a corporation "may make provisions for the payment of benefits in case of death or disability or both. The funds from which the payment of such benefits shall be made shall be derived only from assessments collected from the members. * * * Such provisions, funds, assessments, and payments shall be as required in the by-laws of the corporation." Rev. Laws, c. 119, § 6.

Plainly the statute contemplates that such corporations shall have power to establish by their by-laws a system of giving death benefits which shall be sound and equitable, and founded on principles which can reasonably be expected to furnish proper security for the performance of their contracts with members. The power to make proper changes in these particulars by amendment of the bylaws from time to time is expressly given.

There is no ground for the contention that it is a violation of the statute or of the defendant's chartered rights to provide for such assessments as will be likely to insure the payment of the sums named in the certificates. The statute expressly authorizes, not only a death fund amounting to three full assessments upon the members, but also the accumulation of an emergency fund amounting to 5 per cent. upon the face value of all outstanding benefit certificates. The emergency fund is to be invested in safe securities, and all of these are to be deposited with the treasurer of the commonwealth. Rev. Laws, c. 119, § 7. As the promise to pay the beneficiary is binding upon the corporation, it ought to make adequate provision to obtain the means of payment. Newall v. American Legion of Honor, 181 Mass. 111, 63 N. E. 1.

The objection that the amendments are il legal by reason of the division of the members into classes cannot prevail. There is no objection to a classification of members according to age, and it would be unjust to disregard age in determining the rates that different persons shall pay for death benefits in an association of this kind.

The distinctive features of such organizations remain since the adoption of the amendments as well as before. The fraternal plan, with mutuality and without profit, distinguishes the work of such an association from

a commercial enterprise. It is a charitable and benevolent organization, with a limitation of membership to a special class, and a limitation upon the choice of beneficiaries. It is not allowed to employ paid agents in soliciting or procuring business, except within very narrow limits prescribed by the statutes. Rev. Laws, c. 119, § 16. Looking to the nature and purposes of fraternal beneficiary corporations, we see nothing in the amendments at variance with the laws. cannot have been intended that such corporations should be limited to a method of assessment that would be sure to bring about their early dissolution.

Another question is whether the amendments are in violation of the contract rights of members. It is stated in the record that "the agreements between the plaintiff and the defendant concerning assessments and benefits are not contained in any one specific instrument, but are, found in the application for membership, the benefit certificate, the laws of Massachusetts constituting the charter and the constitution and laws of the order." If there were no express stipulation in regard to the by-laws in the application for membership or in the certificates, all members of such a corporation would be bound by by-laws regularly made or amended. Durfee v. Old Colony, etc., R. R. Co., 5 Allen, 230, 242; Pain v. Societe St. Jean Baptiste, 172 Mass. 319, 52 N. E. 502, 70 Am. St. Rep. 287; Oliver v. Hopkins, 144 Mass. 175, 10 N. E. 776; Spilman v. Supreme Conncil Home Circle, 157 Mass. 128, 31 N. E. 776; Wright v. Minn. Mutual Life Ins. Co., 193 U S. 657, 24 Sup. Ct. 549, 48 L. Ed. 832; Supreme Lodge Knights of Pythias v. Knight, 117 Ind. 489, 20 N. E. 479, 3 L. R. A. 409.

Every member of this corporation, at the time of joining it, enters into an express agreement to "conform to and abide by the constitution, laws, rules and usages of the said council and order, now in force or which may hereafter be adopted by the same." The certificates promise payment only on condition that the member complies "with the laws, rules and regulations now governing the said council and fund, or that may hereafter be enacted by the Supreme Council to govern the said council and fund," etc. Here in the contract is full authority to amend the laws, rules and regulations.

In regard to a similar provision under which a mutual fire insurance company changed its by-laws, so as to increase the assessments upon certain policy holders, the Supreme Court of the United States uses this language: "The liability of members of this institution is of a twofold nature. It results both from an obligation to conform to laws of their own making as members of the body politic and from a particular assumption or declaration which every individual signs on becoming a member. The latter is remarkably comprehensive. 'We will abide by, observe and adhere to the constitution, rules

and regulations which are already established or may hereafter be established by a majority of the assured * or which are or may hereafter be established by the president and directors of the society.'

As to what is contended to be a material alteration in their charter, we consider it merely as a new arrangement or distribution of their funds, and whether just or unjust, reasonable or unreasonable, beneficial or otherwise, to all concerned, was certainly a mere matter of speculation proper for the consideration of the society, and which no individual is at liberty to complain of, as he is bound to consider it as his own individual act. Every member, in fact, stands in the peculiar situation of being party on both sides, insurer and insured. Certainly the general submission which they have signed will cover their liability to submit to this alteration." Korn v. Mutual Assurance Co., 6 Cranch, 192, 3 L. Ed. 195. This part of the present case is covered in principle by the decisions of this court in Messer v. Grand Lodge, 180 Mass. 321, 62 N. E. 252, and Pain V. Societe St. Jean Baptiste, 172 Mass. 319, 52 N. E. 502, 70 Am. St. Rep. 287, in which cases changes similar to those made by the defendant were upheld under like contracts. same general doctrine has been stated in many cases in other courts. Wright v. Minn. Mutual Life Ins. Co., 193 U. S. 657, 24 Sup. Ct. 549, 48 L. Ed. 832; Fullenwider v. Supreme Council Royal League, 73 Ill. App. 321; s. c. 180 Ill. 621, 54 N. E. 485, 72 Am. St. Rep. 239; Bartram v. Supreme Council Royal Arcanum, 6 Ont. W. R. 404; Gaines v. Supreme Council Royal Arcanum (C. C.) 140 Fed. 978; Fugure v. Society St. Joseph, 46 Vt. 362; Supreme Lodge Knights of Pythias v. Knight, 117 Ind. 489, 20 N. E. 479, 3 L. R. A. 409; Haydel v. Mutual Reserve Fund Life Ass'n, 104 Fed. 718, 44 C. C. A. 169; Gant v. Same (C. C.) 121 Fed. 403, 409; Richmond v. Supreme Lodge Order of Protection, 100 Mo. App. 8, 71 S. W. 736; Barbot v. Mutual Reserve Fund Life Ass'n, 100 Ga. 681, 28 S. E. 498; Mutual Reserve Fund Life Ass'n v. Taylor, 99 Va. 208, 37 S. E. 854.

The

There are many cases in which it is held that the amount expressly promised to be paid in a certificate like those issued by the defendant cannot be cut down by an amendment of the by-laws. Newhall v. American Legion of Honor, 181 Mass. 111, 63 N. E. 1; Langan v. Same, 174 N. Y. 266, 66 N. E. 932; 'American Legion of Honor v. Getz, 112 Fed. 119, 50 C. C. A. 153. But in many of these, as in the case from this court last cited, a distinction is made between the express stipulation of the corporation to pay a certain sum and other provisions relating to the methods of the corporation, and the duties of the certificate holders, which properly may be a subject for regulation by by-laws, even though they affect the rights of the parties under their contract. The assessments to be paid for death benefits in this

case are provided for by the by-laws, while the promise in writing to pay a certain sum to a particular person is, as to that person, a matter outside of those corporate rules which may be expected to be changed by an amendment of the by-laws. This promise on one side is set over against the promise of the member on the other. The promise of the member is to do what may be called for by the by-laws then existing or that may afterwards be adopted. The promise of the corporation is stated expressly, without mention of the by-laws. The member occupies a dual position, as an insurer and the insured. As one of the association agreeing to provide for the payments that may become due to members, he agrees to be subject to the by-laws. As the insured person to whom a particular sum of money is promised, he has a right to stand on the terms of the promise.

That the duties of members prescribed by the by-laws remain subject to modification when a power of amendment is reserved has often been decided. Loeffler v. Modern Woodmen of America, 100 Wis. 79, 75 N. W. 1012; Langnecker v. Grand Lodge A. O. U. W., 111 Wis. 279, 87 N. W. 293, 55 L. R. A. 185, 87 Am. St. Rep. 860; Lawson v. Hewell, 118 Cal. 613, 50 Pac. 763, 49 L. R. A. 400; Gilmore v. Knights of Columbus, 77 Conn. 58, 58 Atl. 223; Ellerbe v. Faust, 119 Mo. 653, 25 S. W. 390, 25 L. R. A. 149.

Most of the cases relied on by the plaintiffs, when rightly analyzed, turn on the distinction between an attempted amendment of the by-laws directly affecting the promise to the certificate holder as an insured person, and an amendment affecting his duties as a member of the corporation bound to perform his part in providing means or otherwise as one of the association of insurers. Hale v. Equitable Aid Union, 168 Pa. 377, 31 Atl. 1066; Fargo v. Supreme Tent, 96 App. Div. 491, 89 N. Y. Supp. 65; Weber v. Supreme Tent, 172 N. Y. 490, 65 N. E. 258, 92 Am. St. Rep. 753; Sautter v. Supreme Conclave (N. J. Sup.) 62 Atl. 529; Tebo v. Royal Arcanum, 89 Minn. 3, 93 N. W. 513: Deuble v. Grand Lodge, 66 App. Div. 323, 72 N. Y. Supp. 755; Deuble v. Grand Lodge, 172 N. Y. 665, 65 N. E. 1116; Beech v. Supreme Tent, 177 N. Y. 100, 69 N. E. 281; Startling v. Royal Templars, 108 Mich. 440, 66 N. W. 340, 62 Am. St. Rep. 709; Peterson v. Gibson, 191 Ill. 365, 61 N. E. 127, 54 L. R. A. 836, 85 Am. St. Rep. 263; Wist v. Grand Lodge, 22 Or. 271, 29 Pac. 610, 29 Am. St. Rep. 603; Roberts v. Cohen, 60 App. Div. 259, 70 N. Y. Supp. 57; Roberts v. Grand Lodge, 173 N. Y. 580, 65 N. E. 1122; United Workmen v. Stumpf, 24 Tex. Civ. App. 309, 58 S. W. 840; Hadley v. Woodman, 1 Tenn. Ch. App. 413; Spencer v. Grand Lodge, 53 App. Div. 627, 65 N. Y. Supp. 1146. Other cases cited by the plaintiffs are clearly adverse to the view which we take. See Ebert v. Mutual Ass'n. 81 Minn. 116, 83 N. W. 506, 834, 84 N. W. 457;