That the statute did not contemplate any such action by associations incorporated under its provisions, and that the result is contrary to the theory upon which the statute has grown up, is admitted; but it is contended that, inasmuch as the corporation has the general right, incident to incorporation, to make by-laws not inconsistent with law, such inconsistency only arises where the action contemplated by the proposed amendment conflicts with some direct prohibition in the statute; or, in other words, everything is permitted which is not expressly prohibited by some provision in the law (see R. L., c. 119, § 2).

Whatever may be the force of this reasoning, it is clear that the determination of the question must depend upon the construction and scope of the power reserved to the corporation to make by-laws not inconsistent with law, and, in this case, not inconsistent with the provisions of R. L., c. 119.

If such inconsistency can only arise upon a direct contravention of some express provision or prohibition in the statute, it may be admitted that the proposed amendment is not illegal. I am of opinion, however, that a broader definition of inconsistency must be applied than that above suggested. A by-law may be so framed as not to be in contradiction to any express provision of an act, and yet be so inconsistent with the whole spirit of the law as to render it an unlawful exercise of power on the part of the corporation to adopt it. That such may be the case, even with regard to the contractual relation entered into by the corporation with its individual members, is intimated by the court in Messer v. the Ancient Order of United Workmen, above referred to: "It may be conceded that some amendments might be so foreign to the general scheme and purpose of the organization, and so contradictory to its fundamental law and the contracts made under it, as not to be within the power of amendment referred to; but this is not true of an amendment which merely changes forms and methods, while the substance of the general plan and purpose of the organization is preserved."

Whether the amendment in question is so foreign to the general plan and purpose of the statute under which the Portuguese Fraternity is incorporated as not to be within the power of

amendment reserved to the corporation, may be best determined by a consideration of the scope and intention of c. 119. It was the evident purpose of the statute to place in the hands of the corporation as a whole the control and management of the death, disability and emergency funds provided for, together with the assessments therefor and the payments therefrom. Such funds are repeatedly referred to in the singular number, and provisions are made which could not conveniently apply if the disability fund were divided among the various subordinate lodges. "Before such certificate is granted, the corporation must present satisfactory evidence to the insurance commissioner that at least five hundred persons have each paid one advance assessment for its mortuary or disability business or both, if such business is combined, at its established rates," etc. (§ 4). "Section 7. A corporation may hold as a death fund . . . not more than the amount of three assessments from a general or unlimited membership, or of three assessments from each limited class or division of its members; and in addition thereto may create, collect, maintain, disburse and apply an emergency fund in accordance with its by-laws. . . . The emergency fund shall be used only for the payment of death or disability benefits." "Section 8. Death, disability and expense assessments may be called together." Section 4, above stated, plainly sets forth the intention of the law that the Insurance Commissioner shall, through the corporation itself, have direct and restrictive control over the affairs and finances of the corporation, both as to mortuary and disability business.

The statute further contemplated a corporation represented by a supreme lodge or council, composed of the officers and directors of the corporation and such representatives as the subordinate organizations might elect in accordance with the by-laws, which should be responsible for and have possession of the various funds provided for by law, and should regulate the rates of assessment and the amounts of death or disability benefits to be paid.

Under by-laws similar to those which the Portuguese Fraternity of the United States proposes to adopt, instead of a single

corporation which is responsible for and in possession of the disability fund, there are numerous separate and irresponsible bodies which control their respective funds, collecting assessments and paying the so-called "sick benefits" in such manner as they may see fit. The practical effect of such a condition is that the corporation, as represented by the supreme lodge, has delegated its entire powers with regard to the conduct of disability business to the subordinate organizations. Such a corporation could not conveniently make use of the emergency fund for the payment of disability benefits. It could not collect death, disability and expense assessments together, and it would have made no adequate provision for the payment of benefits in case of disability, as provided by § 6.

The provisions regulating the management of the death fund clearly prohibit such a course with regard to that particular fund (§§ 6 and 7), and it is admitted that such a by-law, if applied to the death fund, is inconsistent with the provisions of the act. It is argued, however, that, because certain express provisions are made in §§ 6 and 7 for the collection, maintenance and disbursement of the death fund, which do not specifically extend to the disability fund, the respective funds are separable throughout the act; and that a disposition of the disability fund which would be clearly prohibited if attempted in the case of the death fund is not inconsistent with any of the provisions of the statute if limited to the disability fund.

Upon its face this contention has force, but it is, I think, refuted by consideration of the legislation on the subject. The statutes regulating this form of insurance, beginning with St. 1899, c. 442, did not establish death and disability business upon the same footing. By far the more important of the two was the payment of death benefits, and disability benefits were merely an incident. It was therefore natural that careful provision should be made for the collection, maintenance and disbursement of the death fund; while the disability fund, for payments which were incidental, was less carefully safeguarded, the idea being to keep on hand only sufficient funds to meet the claims as they arose (St. 1899, c. 442, § 13). It was, however, found advisable, under

later acts, to increase the amount to be kept on hand for the payment of disability benefits from the amount of one assessment to the amount of three assessments. The reason why no provision is made for the investment of the disability fund appears to be that it is desirable, if not necessary, to keep such fund on hand to meet promptly the claims which may arise from time to time. For example: there are many more disability claims presented in winter than in summer, owing to the greater prevalence of sickness in the former season; but, by keeping a considerable amount in the disability fund, it is possible to equalize, to a great extent, the assessment during the different seasons. The reason why no provision is made as to the person to whom disability benefits shall be paid similar to those in § 6, with regard to death benefits, is clearly because they are paid to the person himself, who may thereafter dispose of them as he desires.

For these reasons I am of opinion that no valid distinction can be drawn between the management of the death fund and the management of the disability fund, and that a disposition which is prohibited in the case of the former must also be held to be at least impliedly prohibited in the case of the latter.

Section 10 was also relied upon by the Portuguese Fraternity of the United States as supporting its position; but I am of opinion that it not only lends it no support, but is in effect one of the strongest arguments against the proposed amendment. The purpose of that provision was to enable a Massachusetts corporation, which consisted of a grand lodge and subordinate lodges, to maintain and continue their affiliation and relations with some supreme body, either incorporated or not, which was without the Commonwealth. The specific reason for its enactment was the conflict which arose in 1899 between the grand lodge of the Ancient Order of United Workmen, which was incorporated in Massachusetts, and the supreme lodge of that order, which was at that time unincorporated, over an attempt by the latter to levy a war assessment upon the Massachusetts corporation.

The language of the latter part of the section is significant. It provides, in effect, that a Massachusetts corporation may pay death benefits to or for the beneficiaries of deceased members

holding benefit certificates issued not by such corporation, but by the supreme body or by one of the grand or subordinate bodies. thereof, organized or incorporated elsewhere than in this Commonwealth. The section further provides: "But this authority shall not permit the payment of benefits other than those arising from death." As I understand it, this provision authorizes the corporation to pay death benefit certificates which are not issued by the corporation itself, but by some organization which is a part of it or with which it is affiliated; from which it is to be implied that, under the other provisions of the chapter, only certificates issued by the corporation can be paid by it.

This authority is not extended in any case to the payment of certificates other than death certificates, and there can be no question as to the illegality of the payment by any organization of a disability certificate not issued by the corporation itself.

The issuance of such a certificate implies an obligation to meet the payment thereof whenever it may fall due; and this the corporation cannot assume under by-laws like those referred to, where the benefit business is entirely in the hands of individual subordinate lodges. It seems to me, therefore, that the legal and logical conclusion to be drawn from the requirement that the corporation shall issue benefit certificates is that it must also assume the obligation to provide for them; and that the issuance of such certificates can be made only by the corporation itself by the provisions of the statute; that the responsibility of paying them when due is placed upon the corporation, and authority cannot be delegated by it to subordinate lodges to maintain funds, and to assume the responsibility of paying the disability certificates in such manner and to such extent as such subordinate lodges may themselves determine.

Upon the whole, therefore, I am of opinion that the Insurance Commissioner cannot properly approve the proposed by-law of the Portuguese Fraternity of the United States.