Opinion
March 8, 1939.
1. JURISDICTION: Case Certified by Court of Appeals. Where an appealed case is certified to the Supreme Court by the Court of Appeals in accordance with Article VI, Section 6, Missouri Constitution as amended, 1884, the Supreme Court determines such case as if it had been appealed directly to the Supreme Court.
2. FRATERNAL BENEFICIARY ASSOCIATION: Full Faith and Credit. Where a member of a fraternal beneficiary association of Nebraska defaulted in the payment of assessments after thirty years, a holding by the Supreme Court of Nebraska that a provision in the law of the order for a free life membership after payment for thirty years was ultra vires, under the full faith and credit clause of the United States Constitution, Section 1, Article IV, is binding upon the Missouri Supreme Court in an action in Missouri on such a certificate.
Appeal from Clinton Circuit Court. — Hon. Richard B. Bridgeman, Judge.
AFFIRMED.
Elliott Crouse and E.H. Gamble for appellant.
(1) The faith and credit clause (U.S. Const. Art. IV, Sec. 1) is not an issue in this case, because — (a) Defendant's answer did not allege that the faith and credit clause compelled a decision in its favor, in the light of the Nebraska statutes and decisions, and stated no connection between the clause and its defense, and even if the clause had been properly pleaded it was abandoned in the trial court. Also the decision of that question was not necessary to and did not inhere in the trial court's decision. Quincy, etc., Railroad Co. v. Sohney, 223 U.S. 705, 32 Sup. Ct. 517; Sohoney v. Ry. Co., 132 S.W. 1039; Miller v. Connor, 157 S.W. 81; Bealmer v. Hartford Ins. Co., 220 S.W. 954; State ex rel. Wolfe v. Mo. Dental Board, 221 S.W. 70; Burns v. Prudential Ins. Co., 247 S.W. 159; Zach v. Fidelity, etc., Co., 257 S.W. 124; Corbett v. Lincoln, etc., Assn., 4 S.W.2d 824; Sutton v. Anderson, 31 S.W.2d 1026; McGill v. St. Joseph, 31 S.W.2d 1038; Schildnecht v. Joplin, 35 S.W.2d 35; Dietrich v. Brickey, 37 S.W.2d 428; Hohlstein v. St. Louis Roofing Co., 42 S.W.2d 573; Early v. Maccabees, 48 S.W.2d 890; State ex rel. Rose v. Webb City, 64 S.W.2d 597; Rechow v. Bankers Life Co., 73 S.W.2d 794; State ex rel. Karbe v. Bader, 78 S.W.2d 835; Ragsdale v. B.R.T., 80 S.W.2d 272; Bolin v. W.O.W., 98 S.W.2d 681; State ex rel. Power Co. v. Allen, 100 S.W.2d 868; Bushnell v. Mississippi, etc., Dist., 102 S.W.2d 871; Robertson v. Sec. Ben. Assn., 114 S.W.2d 1009. (b) Even if defendant had properly presented and not abandoned the constitutional question in the trial court, defendant did abandon it on appeal to the Kansas City Court of Appeals by making no effort to have the appeal transferred to this court, which alone has jurisdiction of such issues, and by defendant submitting the case in the Kansas City Court of Appeals on other grounds and without raising the constitutional question there. Wabash Ry. Co. v. Flannigan, 117 S.W. 722; Parker-Washington Co. v. Field, 219 S.W. 598; California Road Dist. v. Bueker, 248 S.W. 927; Sutton v. Anderson, 31 S.W.2d 824; McGill v. St. Joseph, 31 S.W.2d 1038; Bankers Mtg. Co. v. Lessley, 31 S.W.2d 1055; Schildnecht v. Joplin, 35 S.W.2d 35. (2) No such Nebraska statutes as are cited either in defendant's answer or on page 3 of defendant's brief in this court were produced in evidence. There are no such statutes. Moreover, defendant can derive no benefit from any statutes of Nebraska, which adopted no statute restricting the terms of fraternal policies until 1897, long after the Baker policy was issued. Neb. Comp. Stats. 1887, p. 268, ch. 6, secs. 198-205; Neb. Comp. Stats. 1891, secs. 442-450; Neb. Sess. Laws, 1895, p. 176, ch. 42; Neb. Sess. Laws, 1897, p. 226, ch. 47, secs. 1-24; Neb. Comp. Stats., 1897, ch. 43, secs. 349a-349w; Neb. Sess. Laws, 1899, p. 198, ch. 45; Neb. Anno. Stats., 1911, sec. 6636; Neb. Sess. Laws, 1913, p. 472; Neb. Comp. Stats., 1913, p. 930, sec. 3296. (3) The Haner and Trapp decisions are not in point with this case on the record made by defendant herein. Haner v. Grand Lodge, A.O.U.W., 168 N.W. 189; Trapp v. W.O.W., 168 N.W. 191; Garretson v. W.O.W., 243 S.W. 257; Sov. Camp, W.O.W., v. Wheeler, 101 So. 914; Sov. Camp. v. Wirtz, 254 S.W. 637; Wirtz v. Sov. Camp, W.O.W., 268 S.W. 438; Sov. Camp, W.O.W. v. Wheeler, 146 S.E. 914. (4) Of five Missouri decisions on W.O.W. Missouri policies containing the "payments to cease" provision, all except the first, the Garretson case, have upheld and enforced it. The reasoning of the four later cases is sound, and should be followed here. Laws, 1911, pp. 284-291; R.S. 1929, secs. 5732-5740, 6005; Westerman v. K.P., 94 S.W. 470; Schmidt v. Forresters, 129 S.W. 653; Garretson v. W.O.W., 243 S.W. 257; Neff v. W.O.W., 48 S.W.2d 564; Rechow v. Banker's Life, 73 S.W.2d 794; Bolin v. W.O.W., 98 S.W.2d 681; Bolin v. W.O.W., 112 S.W.2d 582; Baker v. W.O.W., 116 S.W.2d 513. (5) The power of a state over foreign corporations doing business therein is equal to the power of the state over domestic corporations. Orient Ins. Co. v. Daggs, 172 U.S. 557, 19 Sup. Ct. 281; Equitable Life v. Pettus, 140 U.S. 226, 11 Sup. Ct. 822; N.Y. Life Ins. Co. v. Cravens, 178 U.S. 389, 20 Sup. Ct. 962; Northwestern Natl. Life v. Riggs, 203 U.S. 243, 27 Sup. Ct. 126; Erie Railway Co. v. Tompkins, 58 Sup. Ct. 187.
Rainey T. Wells, Charles F. Keller and Harding, Murphy Tucker for respondent.
The Nebraska decisions having held that the marginal note on which appellant's case rests is void, it is the duty of the Missouri courts under Section 1, Article IV, United States Constitution, to give full faith and credit to the Nebraska decisions so holding and defining the powers of the society. It is immaterial whether the contract is a fraternal certificate or an old line policy. A constitutional question is involved and it follows that the plea of estoppel is not available. The fact that no license was required of the society in Missouri when the certificate was written does not affect the constitutional issue. Sec. 1, Art. IV, U.S. Const.; Robertson v. Sec. Bene. Assn., 114 S.W.2d 1009; Garretson v. Sov. Camp, 210 Mo. App. 539, 243 S.W. 257; Rechow v. Ins. Co., 73 S.W.2d 794, 335 Mo. 668; Modern Woodmen v. Mixer, 267 U.S. 544, 45 Sup. Ct. 389; Royal Arcanum v. Green, 237 U.S. 531, 35 Sup. Ct. 724; Hartford Life Ins. Co. v. Ibs, 237 U.S. 662, 35 Sup. 692; Hartford Life Ins. Co. v. Barber, 245 U.S. 146, 38 Sup. Ct. 54; Hartford Life Ins. Co. v. Johnson, 248 U.S. 490, 39 Sup. Ct. 336; W.O.W. v. Shelton, 46 Sup. Ct. 207, 270 U.S. 628; Young v. Ins. Co., 211 S.W. 2, 277 Mo. 694; Van De Water v. Travelers, 77 F.2d 333; Wertheimer v. Assn., 64 F.2d 436; Supreme Council v. Galery, 278 F. 502; Parker v. Parker, 82 F.2d 576; Chicago Alton Ry. Co. v. Wiggins Ferry Co., 119 U.S. 615; Canada Southern Railway Co. v. Gebhard, 109 U.S. 537; Relfe v. Rundle, 103 U.S. 226; Gaines v. Sup. Council Royal Arcanum, 140 233 F. 978; Haynes v. Fraternal Aid Assn., 34 F.2d 307; Wirtz v. Sov. Camp, 254 S.W. 637; Central Trust Co. v. Cas. Co., 139 U.S. 59; Steele v. Fraternal Tribunes, 74 N.E. 122; 2 Story on Constitution, secs. 1309-10, p. 176; Black on Constitution, pp. 248-252; 1 Willoughby on Constitution, p. 258; 12 C.J., p. 436; Dey v. Knights Ladies of Security, 113 Kan. 86, 213 P. 1066; Messenheimer v. Fraternal Aid Union, 103 Kan. 552, 175 P. 679; Mooney v. Brotherhood of Ry. Trainmen, 162 Minn. 127, 204 N.W. 957; Dartmouth College v. Woodward, 4 Wheat. 636; McClement v. Supreme Court, 222 N.Y. 470, 119 N.E. 99; Sanger v. Upton, 91 U.S. 58; Wall v. Bankers Life Co., 208 Iowa 1053, 223 N.W. 257; Supreme Lodge, N.E.O.P. v. Hines, 82 Conn. 315, 73 A. 791; Supreme Colony, U.O.P.F. v. Towne, 87 Conn. 644, 89 A. 264; Palmer v. Welch, 132 Ill. 141, 23 N.E. 412; Grimme v. Grimme, 198 Ill. 265, 64 N.E. 1088; Supreme Council A.L.H. v. Green, 71 Md. 263, 17 A. 1048; Supreme Council, R.A. v. Brashears, 89 Md. 624, 43 A. 866; United Order, G.C. v. Merrick, 165 Mass. 421, 43 N.E. 127; Gibson v. Imperial Council, 168 Mass. 391, 47 N.E. 101; Larkin v. Knights of Columbus, 188 Mass. 22, 73 N.E. 850; Tepper v. Supreme Council, 59 N.J. Eq. 321, 145 A. 111; Bockover v. Life Assn. of America, 77 Va. 85; Smoot v. Bankers Life Assn., 138 Mo. App. 438, 120 S.W. 719; DeVore-Norton v. Brotherhool of Locomotive Firemen, 132 Okla. 130, 270 P. 14; M.W.A. v. Crudup, 51 P.2d 718; Sov. Camp W.O.W. v. Smith, 176 Okla. 545, 56 P.2d 408; Wilson v. W.O.W., 64 P.2d 1064; Korn v. Mutual Assur. Assn., 6 Cranch 192, 3 L.Ed. 195; Kirk v. Fraternal Aid Assn., 95 Kan. 707, 149 P. 1066; Head and Amory, v. Ins., 2 Cranch, 127.
The question for decision in this case is whether full faith and credit was given to the public acts, records and judicial proceedings of the State of Nebraska as required by Article IV, Section 1 of the Constitution of the United States.
After a judgment for defendant in the circuit court, plaintiff appealed to the Kansas City Court of Appeals which reversed the judgment and remanded the cause with directions to enter a new judgment as prayed in plaintiff's petition. [Baker v. Sovereign Camp, W.O.W. (Mo. App.), 116 S.W.2d 513.] One of the judges of the appellate court dissented on the ground that the majority opinion conflicts with Robertson v. Security Benefit Assn., 342 Mo. 284, 114 S.W.2d 1009, and with other cases and caused the appeal to be certified to this court. We determine this case as if it had been directly appealed to this court. [Const. of Mo. as Amended 1884, Art. 6, Sec. 6.]
This is an action to recover the benefits provided in a certificate issued on December 23, 1896, by respondent, a fraternal beneficiary association, to W.C. Baker, husband of the beneficiary. The insured paid all assessments up to and through the month of October, 1931. Thereafter he made no further payments. Under the laws of respondent he became automatically suspended on December 31, 1931, for nonpayment and remained so until his death on August 31, 1932.
The certificate specifically provided that it was issued subject to all the conditions printed thereon and to all conditions named in the constitution and laws of the society. On its margin was stamped "Payments to cease after 30 years." Section 82 of the Laws adopted by the society in 1895 stipulated that when the certificate of a member who had joined the society, as did Baker, between the ages of 16 and 33, had been in force and binding for 30 years, the insured should not longer be liable for any dues or assessments and at the expiration of said period the society would issue a free life membership certificate. In addition to the death benefits plaintiff also sued for the amount of the premiums paid after December 23, 1926, the date on which the certificate had been in force for a period of 30 years.
The respondent's answer alleged that because of the default in the payment of assessments the certificate became void prior to Baker's death; that the contract between Baker and the society consisted of the certificate, the application therefor and the laws of the society in force on December 23, 1896, and the laws thereafter adopted; that the provision of the certificate for free life membership after payments for 30 years was void because first, the law of the society creating it was repealed in 1899; and second, the Supreme Court of Nebraska had declared that such law was ultra vires the society in a class suit in Trapp v. Sovereign Camp, W.O.W., 102 Neb. 562, 168 N.W. 191; that under Article IV, Section 1 of the Constitution of the United States, full faith and credit must be given by the courts of Missouri to this decision of the Supreme Court of Nebraska. This contention must be sustained.
The same issues for determination in this case were determined by the United States Supreme Court in the case of Sovereign Camp of the Woodmen of the World v. Bolin, 305 U.S. 66, 59 Sup. Ct. 35, 83 L.Ed. 58, decided November 7, 1938.
In that case judgment against this same defendant was obtained on a certificate issued to Pleasant Bolin in 1896. The Kansas City Court of Appeals by its judgment affirmed the action of the trial court. [Bolin et al., v. Sovereign Camp, W.O.W. (Mo. App.), 112 S.W.2d 582.] The United States Supreme Court granted certiorari to the Court of Appeals on the claim, which it later sustained, that such judgment denied full faith and credit to the public acts, records and judicial proceedings of the State of Nebraska. It found that the Trapp case was a class suit "in which it was determined that the petitioner (W.O.W.) lacked the power, under the law of Nebraska, to issue such certificates." It further held that "in such a suit the association represents all its members and stands in judgment for them, and even though the suit had a different object than the instant one, it is conclusive upon all the members of the association with respect to all rights, questions or facts therein determined."
In the Bolin case, as in the instant one, stress was laid on the fact that the certificate was issued during the hiatus in the Missouri Fraternal Insurance Law, which existed between 1889 and 1897 when there was not in force any law relating to foreign fraternal societies but laws relating only to domestic ones. Foreign associations were not forbidden from doing business in the State but their certificates issued in that interim were held by our courts to be subject to the general insurance laws. In discussing that fact the United States Supreme Court found that our courts had not been called on to apply this rule of decision to the question of the power of a fraternal society, under the law of the State of its incorporation, to write a particular sort of beneficiary certificate. It said: "the decision (of the court below) that the principle of ultra vires contracts was to be applied as if the petitioner were a Missouri old line life insurance company was erroneous in the light of the decisions of this court which have uniformly held that the rights of members of such associations are governed by the definition of the society's powers by the courts of its domicile."
In the case of Reece v. The Security Benefit Assn., 344 Mo. 29, 124 S.W.2d 1146, the fraternal beneficiary certificate sued on was issued during the same hiatus above mentioned. The certificate contained an endowment provision which was the kernel of contention. Previously, in two cases against the same association, Robertson v. Security Benefit Assn., 342 Mo. 284, 114 S.W.2d 1009, and Clark v. Security Benefit Assn., 343 Mo. 263, 121 S.W.2d 148, we had ruled that we were bound to give full faith and credit to a decision of the Supreme Court of Kansas, the domicile of the association, which held, in effect, that the endowment provision in all such certificates had been legally cancelled.
These cases presented the same questions as the Reece case except the one pertaining to the issuance of the certificate during such hiatus. Since this latter point had been settled by the United States Supreme Court in the Bolin case, we held that these two cases ruled the Reece case.
It follows that the judgment of the trial court in favor of defendant should be affirmed. It is so ordered. All concur.