National Union v. Marlow

• Citation: 74 F. 775
• Decision Date: 11 May 1896
• Docket Number: 709.
• Parties: NATIONAL UNION v. MARLOW.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

74 F. 775

NATIONAL UNION v. MARLOW.

No. 709.

United States Court of Appeals, Eighth Circuit.

May 11, 1896

Arcadia L. Marlow, the defendant in error, brought a suit against the National Union, the plaintiff in error, which is a corporation of the state of Ohio, to recover the amount alleged to be due to her on the following benefit certificate: '$5,000.00.

No 41,246.

'National Union Benefit Certificate.

'This is to certify that Geo. W. Marlow is a beneficiary member of Economy Council, No. 215, National Union, located at St Joseph, Missouri, according to evidence furnished by said council, and makes fifth-rate payments to the benefit fund of the order. This certificate is granted upon the express condition that all statements and representations made by said member in his application for membership in said council, and all statements made to the medical examiner by him, are true, and upon the further condition that this friend complies in the future with the laws, rules, and regulations controlling said benefit fund, or that shall hereafter be enacted by the senate to govern said council and fund. The application of the member, a copy of which is hereto attached, is hereby made a part of this certificate. If these conditions are faithfully complied with, the National Union hereby promises and agrees to pay out of its benefit fund to Arcadia L. Marlow 'wife,' five thousand dollars, pursuant to the provisions of the laws of the order governing said fund, upon sufficient proof of the death of the said friend, and upon the surrender of this certificate: provided, always, that the said friend shall be in good standing in this order at the time of his death. In testimony whereof the senate of the National Union has hereunto affixed its seal, and caused this certificate to be signed by the president of the senate, and attested and recorded by the secretary of the senate, this eighth day of February, A.D. 1892.'

George W. Marlow, the person named in said certificate, was the plaintiff's husband. At the time of his death, as well as when said certificate was executed and delivered, he was a resident of the city of St. Joseph, Mo. The case was tried in the circuit court upon an agreed statement of facts. It was admitted in the agreed statement that the foregoing benefit certificate was duly executed and delivered to the deceased, George W. Marlow, at St. Joseph, Mo., some time during the month of February, 1892, while he was a member of Economy Council, No. 215; that he subsequently paid all dues and assessments that were exacted of him as a member; and that he complied with all the rules and regulations of the National Union that were obligatory upon him until November 16, 1893, when he committed suicide by shooting himself with a pistol. Attached to the agreed statement, and forming a part thereof, was a pamphlet containing the constitution and laws of the National Union, as well as a copy of the constitution of subordinate councils of the National Union. Such provisions found therein as are deemed most material will be referred to hereafter. The defendant company contended that the suicide of the deceased constituted a full and complete defense to the suit. On the other hand, the plaintiff below insisted that the defendant company was engaged in the business of life insurance when the benefit certificate was issued, that the suit was founded upon a contract of life insurance, and that suicide could not be pleaded as a defense to the action, by virtue of the provisions contained in section 5855, Rev. St. Mo. 1889, which reads as follows: 'In all suits upon policies of insurance on life hereafter issued by any company doing business in this state, it shall be no defense that the insured committed suicide, unless it shall be shown to the satisfaction of the court or jury trying the cause, that the insured contemplated suicide at the time he made his application for the policy, and any stipulation in the policy to the contrary shall be void. ' The circuit court sustained the latter view, and rendered a judgment in favor of the plaintiff below. The case comes to this court on a writ of error which was sued out by the defendant company.

Chas. J. Kavanagh (Saml. P. Huston and Thos. H. Parrish with him on brief), for plaintiff in error.

M. A. Reed (W. K. James with him on brief), for defendant in error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER Circuit Judge, after stating the case as above, .

The contract sued upon in this case is, in form and substance, a contract of life insurance, as has heretofore been held in the state of Missouri, where it was executed. State v. Merchants' Exchange Mut. Benev. Soc., 72 Mo. 146, 160. It was delivered by the defendant company, within the state of Missouri, to a resident of the state, while the company was there doing business through the agency of a local council. For these reasons the contract is governed, as to the obligations thereby incurred and imposed, by the laws of the state of Missouri; and suicide cannot be pleaded as a defense to a suit to enforce the contract, unless some provision is found in the statutes of said state which exempts it from the operation of section 5855, above quoted in the statement. Assurance Soc. v. Clements, 140 U.S. 226, 11 Sup.Ct. 822; Equitable Life Assur. Soc. v. Hiett's Adm'r, 19 U.S.App. 173, 178, 7 C.C.A. 359, 58 F. 541; Berry v. Indemnity Co., 46 F. 439. These propositions are not denied. It is claimed, however, that the defendant company is a 'fraternal-beneficial society,' rather than an insurance company, and that inasmuch as the laws of the state of Missouri provide for the incorporation of fraternal-beneficial societies, and permit them to issue benefit certificates insuring the lives of their members without being subject to the insurance laws of the state, the defendant company, though a foreign corporation, may likewise issue benefit certificates to its members resident within said state without accountability to local insurance laws. It is said, in substance, that the laws of Missouri permit domestic corporations to be organized precisely as the defendant is organized, and for the same purposes and objects, and that they exempt such corporations, when formed, from the operation of all laws relating to the subject of insurance. It will be seen, therefore, that the right asserted by the defendant company to insure the lives of its members within the state of Missouri, and at the same time to claim exemption from the provisions of section 5855, supra, which excludes suicide as a defense, rests wholly upon the assumption that it is a fraternal-beneficial society, within the meaning of the Missouri laws. We shall accordingly proceed to inquire whether this contention is well founded.

Chapter 42 of the Revised Statutes of Missouri of 1889 relates entirely to the organization of corporations of various kinds, and prescribes their powers and duties. Article 10 of that chapter (Rev. St. Mo. 1889, p. 719) relates to the organization of 'benevolent, religious, scientific, fraternal-beneficial, educational and miscellaneous associations. ' In this article are found the following provisions, to wit:

'Sec. 2821. Any number of persons, not less than three, who shall have associated themselves by articles of agreement in writing, as a society, company, association or organization formed for benevolent, religious, scientific, fraternal-beneficial or educational purposes, may be consolidated and united into a corporation. Such articles of agreement may be organic regulations, or a constitution, or other form of association, and any corporate name, not already assumed by another corporation, may be chosen as the title of the corporation; provided, always, that the purpose and scope of the association shall be clearly and fully set forth.

'Sec. 2822. The persons holding the offices respectively of president, secretary and treasurer of the association, or other chief officers, by whatever name they may be known, shall submit to the circuit court having jurisdiction in the city or county where such association is located, the articles of agreement, with a petition praying for a pro forma decree thereon. If the court shall be of the opinion that such articles of agreement and purposes of association come properly within the purview of this article, and are not inconsistent with the constitution or laws of the United States or of this state, the court shall enter of record an order to that effect, a certified copy of which order shall, by the clerk, be indorsed upon or attached to said articles. * * * And whenever the judge to whom such petition shall have been presented shall entertain any doubt as to the lawfulness or public usefulness of the proposed corporation, it shall be his duty to appoint some competent attorney as a friend of the court, whose duty it shall be to examine said petition and show cause, if any there be, on some day to be fixed by the court, why the prayer of said petition should not be granted, and said attorney shall not be confined in his examination to said petition and articles of association, but may introduce such testimony as may be available and proper in order to fully disclose the true purposes of the association; and upon the hearing thereof the court shall make such further order granting or dismissing said petition as to it may seem best, and upon the granting of such petition, the petitioners shall cause the articles of agreement, with the certificate aforesaid, to be recorded in the office of the recorder of deeds of the county in which the association is located, and then filed in the office of the secretary of state. * * *

'Sec. 2823. Fraternal-beneficial societies may provide for the

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