Scottish Court of Session Decisions

This was an action at the instance of a member of a Friendly Society against the president and office-bearers of the Kirkcaldy branch of the said Society, for the sum of £100, alleged to be due to the pursuer under the rules of the Association, and in consequence of his having been disabled from working by an accident. On 24th March 1866 Manners had the forefinger of his right hand amputated. He obtained medical certificates that he was permanently disabled from working as an iron-turner, and applied to the Society under Rule 23. By this rule it is provided “that any free member, not more than 16s. in arrears, who may, by losing a limb, or having one disabled by accident, or otherwise, or through blindness, imperfect vision, apoplexy, epilepsy, or paralysis, be rendered permanently unable to follow any of the branches of trade mentioned in the preamble of these rules—provided such was not the result of intemperance or other improper conduct—shall receive the sum of £100, on the production to the executive council of satisfactory medical and other testimony of such permanent disablement.”

The Kirkcaldy branch were desirous of granting the request, but the council, not being satisfied with the nature of the medical testimony adduced, refused it.

The executive council referred to in Rule 23 is constituted according to the 9th Rule of the Society, and consists of thirty-seven members, appointed by the branches therein referred to. By the 4th section of that rule it is enacted that “the local council shall consist of the eleven members appointed by the branches of the London district.” That six members of the council shall form a quorum, and shall transact the ordinary business of the Society.

By the 7th branch of the 9th Rule it is enacted, with regard to appeals, that “the council shall decide in cases of appeal, such decision to be final, except in the case of a branch, which, being dissatisfied with a decision of the local council, shall appeal to the general council, or in a case where a branch may give notice of its intention to appeal to the delegate meeting, in accordance with the 34th Rule. In all cases of appeal to the general council the members of the local council shall not form part of the general council during the hearing of these appeals, but shall be represented by one of their members, elected by them for that purpose.” And by the 3d branch of the 34th Rule there is power given to have the judgment of the local council reviewed by the provincial members of the general council, as a court of arbitration, as follows:—“Any branch feeling aggrieved with the decision of the local council, shall have the power to appeal to the provincial members of the general council, as a court of arbitration, constituted in accordance with the 7th clause of the 9th Rule; and, if the branch be dissatisfied with the decision of that court, it shall have the power to appeal to the delegate meeting, by giving notice of its intention to do so. But, in case of appeal against the decision of the general council, the branch appealing shall only be allowed to appeal after complying with such decision.” Delegate meetings are constituted according to Rule 29, and by the 5th branch of that rule it is enacted that “whatever is agreed at the delegate meeting shall be binding upon all the members.” The delegate meeting is composed of delegates from each branch of the Society in the United Kingdom, in Australia, and in the United States of America. The rules of the Society are not certified by the Registrar of Friendly Societies. But provision has been made by the statute applicable to friendly societies, 18

Page: 372↓

and 19 Vict. c. 63, for the settlement of disputes arising in uncertified societies, like that of the defenders. The 44th section of said statute enacts that, “in the case of any friendly society established for any of the purposes mentioned in section 9 of this Act, or for any purpose which is not illegal, having written or printed rules, whose rules have not been certified by the Registrar, provided a copy of such rules shall have been deposited with the Registrar, every dispute between any member or members of such society, and the trustees, treasurer, or other officer, or the committee of such society, shall be decided in manner hereinbefore provided with respect to disputes, and the decision thereof, in the case of societies to be established under this Act, and the sections in this Act provided for such decision, and also the section in this Act which enacts a punishment in case of fraud or imposition by an officer, member, or person, shall be applicable to such uncertified societies: Provided always that nothing herein contained shall be construed to confer on any such society whose rules shall not have been certified by the Registrar, or any of the members or officers of such society, any of the powers, exemptions, or facilities of this Act, save and except as in and by this section is expressly provided.”

Further, the 40th section of said statute enacts, as to the determination of disputes, as follows:—“Every dispute between any member or members of any society established under this Act, or any of the Acts hereby repealed, or any person claiming through or under a member, or under the rules of such society, and the trustee, treasurer, or other officer, or the committee thereof, shall be decided in manner directed by the rules of such society, and the decision so made shall be binding and conclusive on all parties without appeal; provided that, where the rules of any society established under any of the Acts hereby repealed shall have directed disputes to be referred to Justices, such disputes shall, from and after the 1st day of August 1855, be referred to and decided by the County Court, as hereinafter mentioned.”

The defender pleaded, inter alia—“(1) This action is incompetent, in respect that the dispute in regard to the claim made must, by the rules of the Society, be decided by the councils therein specified. (2) No jurisdiction, in respect that the members of the local council and of the executive general council, who alone have power to decide upon the pursuer's claim, are all resident out of Scotland. (5) The pursuer not having produced the testimony required by the 23d Rule to the general council as to his permanent disability, the defenders ought to be assoilzied. (6) The pursuer not being permanently disabled, the defenders ought to be assoilzied.”

After a proof, the Lord Ordinary ( Gifford) pronounced this interlocutor and Note:—

“ Edinburgh, 30 th November 1871.—The Lord Ordinary having heard parties' procurators, and having considered the closed record, proof adduced by the parties, and whole process, repels the pleas stated in defence, and decerns and ordains the defenders to make payment to the pursuer of the sum of £40, 15s. sterling, being the balance of the sum sued for, after deducting therefrom the sum of £59, 5s., being the amount of sick money admittedly received by the pursuer from the defenders up to 15th April 1870, together with interest at the rate of five per cent. per annum on the said balance of £40, 15s. from said 15th April 1870 and until paid: Finds the pursuer entitled to expenses, and remits the account thereof, when lodged, to the auditor of Court to tax the same and to report.

Note.—The defenders in this case are the office-bearers of the Kirkcaldy branch of the Amalgamated Society of Engineers, Machinists, Millwrights, Smiths, and Patternmakers. The defenders are in the full administration and management of the whole affairs of the said branch, and are in possession of its funds. By the laws of the Amalgamated Society it is provided (preamble) that ‘every branch of this society shall appoint its own officers and conduct its own business,’ and it is proved that the defenders receive the whole contributions of the branch, and make all disbursements therefrom to their own members and contributors.

Such being the case, the Lord Ordinary thinks that the parties called as defenders are the proper parties to defend the action, and that the action is rightly laid against them. The defenders' pleas of no jurisdiction, in respect that the action should be laid against a London committee, none of whom have either residence or funds in this country, appear to be ill-founded.

No action would lie against either the London or the provincial committees, even if there were jurisdiction, for these committees or councils, as they are called, have not the funds from which the pursuer's claims, if well-founded, are to be paid. The general council has a mere power of equalising branch funds, but this power does not appear to have been exercised as to the Kirkcaldy branch funds, and at all events it is not pretended that the Kirkcaldy branch has no funds to meet the claim. The Lord Ordinary reads the laws as constituting each branch a separate society, with merely certain duties and relations to the Amalgamated Society to which it is affiliated.

The next, and the most important question, in the case is, whether the pursuer's claim is not excluded by there having been a decision against him by the tribunal appointed by the laws, which decision, either by the laws themselves or by the provisions of the Friendly Society Acts, is not subject to review.

The laws of the amalgamated societies, and which are binding on all the branches, are somewhat complicated and difficult to read. Indeed, some of the provisions are not very easily reconciled with others, and it requires both attention and construction to reach a fair and consistent interpretation. The Lord Ordinary is of opinion, after carefully considering the whole laws and the whole minutes, that there is no proper decision at all against the pursuer's claim, and that, even if there were, that is, even if the minutes of the London council could be held to be a decision against the pursuer, that decision is not made final to the exclusion of the present action either by the laws or by the Friendy Society Acts.

The pursuer, on 24th March 1866, met with an accident to his right hand while at work at his trade. The greater part of the forefinger had to be amputated, and the second and third fingers were much crushed. The pursuer's case is that this accident has prevented and will permanently prevent the pursuer from practising his trade as an iron turner, and that he is in respect thereof either entitled to the superannuation allowance, or to the allowance for permanent disablement provided under the laws of the society.

Evidence has been led before the Lord Ordinary as to whether the pursuer is or is not permanently

Page: 373↓

disabled from working at his trade by reason of the injuries which he sustained in March 1866. The evidence led by the pursuer and defenders is conflicting, but the Lord Ordinary has no hesitation in saying that the preponderance of evidence is in favour of the pursuer. The Lord Ordinary prefers the evidence of Dr Handyside and Dr Bell to that of Dr Dunsmure and Mr Annandale, not only as more satisfactory in itself, but as more in accordance with what the Lord Ordinary holds to be the real evidence in the case. The evidence might have been better on either side, both parties apparently declining or omitting to call the medical gentlemen who at the time of the accident and subsequently attended the pursuer. But, as the evidence stands, the Lord Ordinary, acting as a jury, holds it to be sufficient. He cannot altogether lay out of sight the successive certificates which the pursuer obtained, and from time to time submitted to the defenders and to the London council; and though the verity of these certificates has not been proved by calling the gentlemen who granted them, the fact that they were submitted, and never questioned or objected to, is a material fact in the case. If, therefore, the claim were a mere claim resting upon the evidence in process, the Lord Ordinary would hold it to be sufficiently proved.

But the present judgment is supported on other and different grounds.

The branch Society of Kirkcaldy has never decided against the pursuer, or refused to admit his claim. On the contrary, it appears that the branch Society of Kirkcaldy was unanimously in favour of giving the pursuer the £100 due under the 23d Rule. The branch authorised a committee of their number to negotiate with the pursuer, that if he would give up all claim on the Society he would receive the £100, and this was reduced to writing by Mackie, is No. 24 of process, and was duly reported to the Society. This settlement or compromise was really a most wise and beneficial arrangement for the defenders, for if the pursuer, instead of the £100, were to get either continued sick money or superannuation allowance, it would soon come to a far larger sum.

The obstacle against payment did not come from the Kirkcaldy branch at all, who seem to have been quite satisfied with the evidence of the pursuer's permanent disablement, and who had employed and paid their own doctor, who had certified to this effect. The objection seems to have come from the local council in London, who, for some untold reason, which could not even be explained at the bar, seemed to have been not satisfied with the certificates transmitted. So far from the Kirkcaldy Society opposing the pursuer, they even appealed in his favour to the executive council—an appeal which, though taken more than two years ago, has not yet been disposed of, and it is difficult to say when it will be.

But the Lord Ordinary is of opinion that the London council or the ‘local council’ had no right to object to the Kirkcaldy branch paying a claim which the Kirkcaldy branch were satisfied was justly due, and regarding which they had made a special contract with the pursuer himself. Each branch is to manage its own business, and pay its own claims, and is to all intents and purposes a separate society; and although in certain cases the funds of one branch, when superfluous, may be made to contribute to the deficient funds of other branches, the Lord Ordinary has found nothing in the laws entitling the executive or general council, much less the mere local council of London, to interdict a branch from paying sick money, or superannuation, or any other benefits, to its own members, when the branch is satisfied that such benefits are really and honestly due.

The local council no doubt has reprimanded the Kirkcaldy branch for entering into the agreement with the pursuer about the £100. Nay, it even finds fault with the branch for paying 6s. to its own surgeon for examining and giving a certificate regarding the pursuer, which was quite satisfactory. It is thought the local council had no right to interfere thus, for that is not allowing each branch to conduct its own business and make its own payments, but is arrogating to a mere London committee, chosen by London branches, and in whose appointment the Kirkcaldy branch has not the slightest say, power over funds with which they have no concern, or at least no concern except for a special purpose of equalisation.

The defenders maintained that the local council or committee was made final on appeal. This is not so. It is the executive council which is final on appeal. But there was no appeal at all to the executive council either by the pursuer or by the Kirkcaldy branch, who were quite agreed. It is impossible to read the provision that satisfactory certificates shall be transmitted to the executive council as an appeal in any sense, or as entitling the executive council or the local council, which is a different body, arbitrarily to say that the certificates are not satisfactory. In the present case the certificates were quite satisfactory in themselves; but it is sufficient to say that they were quite satisfactory to the persons who were to disburse the funds.

The effect of depositing the laws of the Amalgamated Society with the English Registrar was much commented on. It is doubtful whether deposition in England would have any effect as regards a Scotch branch, which is, for purposes of contribution and of distribution and payment, and even for all purposes, a separate society. But apart from this, the finality clauses in the Friendly Society Acts are quite inapplicable to the present case, where there is no competent decision of any kind to which these clauses can apply.

It was admitted that under the laws the pursuer cannot have both sick-money and the £100 benefit ‘for the same complaint’ or injury, and as the pursuer admitted that he had received £59, 5s., the Lord Ordinary has deducted this from the sum sued for, but he has given interest on the balance from the date when the sick allowance ceased.

As the pursuer has been throughout successful, he is entitled to expenses. The defenders ought to have settled in terms of the written bargain made by their authority by Mr Mackie. Indeed they would have done so but for the action of the local council. In the Lord Ordinary's view, this litigation has been wholly caused by the improper conduct of that council.”

The Society reclaimed.

Fraser and Hall for them.

Burnet and Rhind in answer.

The Court unanimously recalled the Lord Ordinary's interlocutor, and dismissed the action.