A few states have amended the sections to escape the effect of the decisions quoted above. The Mobile Act, as I understand, exempts these funds "either before or after payment."

The Tennessee statutes contain the words, "shall neither before nor after being paid."

There is no doubt but the construction placed upon the words, "to be paid," as limiting the exemption to a period prior to the payment of the fund to the beneficiary, was not the intention of the framers of the Fraternal Congress Act. But that it was the intention that this fund should be exempt from the creditors of the beneficiaries, not only while the money remained in the hands of the societies, but after it had been paid to the beneficiaries. And that view would be in consonance to the general purpose of our societies and of the application of funds paid by them.

The Supreme Court of Minnesota in Bank vs. How, 65 Minn., 187, and re. How, 59 Minn., 415; 61 Minn., 217; and in Brown vs. Balfour, 46 Minn., 68, placed such a construction upon a statute which did not in express terms exempt the debts of the beneficiary, but the exemption ran only "to pay no debt or liability of a member."

The Supreme Court of Kentucky, in Shillings vs. Bows, 85 Ky., 357, in a statute almost identical with the Minnesota Statute, arrived at the same conclusion as the Minnesota Court.

In Miles vs. The Odd Fellows' Mutual Aid Association, 76 Conn., 132, the action against the defendant was by process of foreign attachment, and the answer was that the defendant was an association composed exclusively of members of Odd Fellow Lodges in the New England States. And it sought to bring itself within the provisions of Section 3588 of the Connecticut Statutes, set forth above, and thus invoke the exemption of that section.

This section, 3582, is in terms the fraternal congress act, and among other requisites of such a society is, that it shall have "a ritualistic form of work." The defendant in its answer did not allege that it had a "ritualistic form of work," and therefore the court held that it did not come within the provisions of Section 3588, and the money was not exempt under that statute.

President Mellwain, in his letter advising me of the assignment of the subject presented, made this suggestion:

"The subject assigned you is an important one. Let me suggest to you the thought that if the Fraternal Societies confine their business to the homes of their members there would be very strong reasons why the fund paid to the beneficiaries of those members should be exempted, but if the Fraternal Societies embark in a general insurance business, where the funds paid by them may go to the 42nd cousin, it is difficult to see any good reason why the money paid to that 42nd cousin should be exempted from the payment of the debts of that 42nd cousin. I make this suggestion to you; you will develop it."

I fail to find myself able to see the force of our good President's suggestion. The cases where distant relatives who come within the classes defined in the statutes, are made beneficiaries, are not frequent (at least such is the experience of my own society) and where there are so made beneficiaries, in almost all cases the member, for some reason, is moved by proper motives to protect such relatives. And if his reasons are proper, and his relatives need the protection, it is difficult to see why they should not be equally entitled to the benefit of the exemption with those who are nearer in relationship to the member.

In other words, the exemption is granted not because of the relationship of the beneficiary to the member being near or far, but because of the presumption that persons who are made beneficiaries in societies like ours are, as a rule, persons who need the benefit of the exemption. And the need exists without regard to the degree of relationship to the member; and I think it would be a most unwise move in any exemption provision which may be inserted into Fraternal Society acts, to attempt to make any distinction between the classes of persons who would be entitled to the exemption and make that distinction rest upon the degree of relationship to the member.

We have but to look around us in our daily experience and see that these exemption provisions, as applied to the funds of fraternal societies, are most wise and beneficent. They should be carefully guarded and made so full and broad that there will be no attempt on the part of creditors to assail this particular form of property. If there should be classes of beneficiaries who do not need the exemption, it will be those who have other property at their command, and that other property could no doubt be subject to legal process.

AUTHORITY OF OFFICERS OF SUBORDINATE LODGE TO BIND

SOCIETY.

By J. A. McLaughry.

Read Before Law Section, Annual Meeting, Mackinac Island, Michigan, August 28, 1912.

Recent decisions concerning the agency of the collector in the subordinate lodge and his power to bind the society have been the occasion of considerable concern and perhaps uneasiness with the officials of the societies. A decision was rendered on January 8, 1912, in the Court of Appeals of the State of Colorado in the case of Knights of Maccabees of the World vs. Pelton, which gave the opinion of the Court that local officers of the fraternal society are agents of the association in collecting and forwarding dues, notwithstanding contrary provisions in the by-laws and constitution. Twenty years ago the societies held generally to the view that local officers were the agents of the members for all purposes, and the fundamental laws of nearly all of the societies were formed with the belief that the local collector was the agent of the member, should be his agent, and as long as the society existed, would continue to be.

Agency, in its broadest sense, includes every relation in which one person acts for or represents another by his authority; but in a more restricted sense, the term is used in law as the relation which results where one party, called the principal, authorized another, called the agent, to act for him in business dealings with third persons. There can be no agency only by the will of the principal and with the consent of the agent. It is, therefore, essential for the formation of the relation that the principal shall appoint the agent and that the agent shall in some way accept the appointment. There is no particular way in which an agent must be appointed, and the relation of principal and agent does not depend upon an express appointment and acceptance thereof. An agency may be implied where one person by his conduct holds out another as his agent, and thereby invests him with apparent authority as agent.

There is no more interesting phase of the question of agency than that which arises in cases involving the relation of the officers of the subordinate lodge of a fraternal benefit society to the supreme body. A number of the societies have, through a by-law of the association, declared that the subordinate lodge and its officers shall be the agents of the members and not the agents of the supreme body, but the courts have declared that it is not for the supreme body of the fraternal society to say what constitutes agency, but that the conduct of the local officers for their societies would indicate whether the act itself was that of the agent or the principal.

The relation of the societies with the subordinate lodge is a necessary one, and it is, therefore, very important to the societies that they keep in close touch with the decisions of the court in reference to this relationship, and that they also give to the local officers, especially to collectors of the assessments, such instructions as would not be harmful to the society. It is absolutely necessary that the local society exist and that all money collected from members should come through that channel, and one member must be appointed to collect the dues and forward them to the supreme officers. The collector of the funds acts as the agent of some person. He is instructed by the supreme body as to what amount to collect, when it should be collected, from whom he should collect, and when all money must be remitted to the supreme body. The contract of insurance is made with the supreme body, and not with the subordinate lodge, though it is made with the supreme lodge through the agency, and exclusively through the agency, of the subordinate lodge. There is no relation between the supreme body and the members of the order except through the intervening agency of the subordinate lodge. Every act done by the officers of the lodge in respect to the insurance is an act done for the supreme body.

Two questions, therefore, are of important consideration for the officials of the fraternal societies. First, to what extent can the local officer bind the society; second, what are the societies doing to meet the changed condition and carry the increased responsibility?

First, to what extent can the local officer bind the society, The benefit societies are like life insurance companies in that they are engaged in the same kind of business. Subordinate lodges are the agents through which the supreme body transacts business. The question arises that if this be true, then the local officers, when acting for the superior organization, in bringing in new members, taking applications, and consummating the contract, are doing just what the ordinary life insurance agent does. There are many points that are

unlike in the methods of conducting business, but nevertheless, the principles underlying the contract in both cases are very much the The officers of the local lodges are like the agents of the life insurance companies in that they can only solicit applications. and the officers of the superior body accept or decline them.

same.

Bacon in his work says: "The law of benefit societies is still in its infancy, and many important questions are still to be determined in regard to the authority of the local lodges when acting as agents of the responsible corporation, but eventually the courts must soon decide to what extent the knowledge of the local lodge is that of the superior; whether notice to the former binds the latter, and how far the principal is liable for the misfeasance or neglect of the agent. The probabilities are that future decisions will trace stronger resemblance between benefit societies and life insurance companies, and as their methods of business become more alike, so it will be easier to apply the same rule to the contracts of both and emphasize the distinctions because of differences in the methods of doing business."'

In the case of Melbina A. Campbell vs. Knights of the World, 168 Massachusetts, 1897, there is shown the distinction between the decisions of that period and recent decisions on the subject. In the laws of the defendant society, there was a provision that the officers were the agents of the members. The member had paid all assessments including February, 1895, to the secretary of the local lodge. The rules required that it be paid before the tenth of the month, and must be paid by the secretary to the supreme officer before the last day of the month. The secretary mailed a draft for the amount on the first day of March, and it was received a day or two later by the supreme officer. It was held in this case that the secretary was the agent for the member and not the agent of the society.

In the case of Peet vs. Knights of Maccabees, 83 Michigan, page 92, the member had made payment of dues within the time required but the local collector had failed to forward the money to the supreme officer within the time given to him for such purpose. The court held that the collector was the agent of the member and should have forwarded the amount within the time. These two cases are cited to show the position taken by the courts as to the agency of the officers of the local lodge in the earlier history of beneficial societies.

Since the cases above cited, the law has changed and it is well established that the local collector is the agent of the society, and where the member has paid the dues to the collector within the time limit, he cannot suffer for the negligence of the collector in for