Columbian Nat. Life Ins. Co. v. Cross

• Decision Date: 30 June 1937
• Citation: 298 Mass. 47,9 N.E.2d 402
• Parties: THE COLUMBIAN NATIONAL LIFE INSURANCE COMPANY v. CLAUDE B. CROSS.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

298 Mass. 47

9 N.E.2d 402

THE COLUMBIAN NATIONAL LIFE INSURANCE COMPANY v. CLAUDE B. CROSS.

Supreme Judicial Court of Massachusetts, Suffolk.

June 30, 1937

November 6, 9 1936.

Present: RUGG, C.

J., FIELD, DONAHUE & QUA, JJ.

Constitutional Law Controversies between citizens of different States. Jurisdiction, Of Federal courts. Assignment. Equity Jurisdiction, To enjoin prosecution of proceeding in another State. A Massachusetts corporation has no constitutional right to a trial in a

Federal court of an action by a citizen of Massachusetts to whom a citizen of another State made a colorable assignment of the cause of action. A colorable assignment by a citizen of Missouri to a citizen of

Massachusetts of a claim against a Massachusetts corporation, which prevented removal to the Federal Court of an action afterwards brought on the claim by the assignee in a State court of Missouri and was made for that purpose, was not alone ground for the maintenance of a suit in equity here to enjoin prosecution of such action.

BILL IN EQUITY, filed in the Superior Court on September 22, 1936. The suit was heard by Walsh, J.

F. H. Nash, for the plaintiff. E. C. Park, for the defendant.

RUGG, C.J. The plaintiff seeks by this suit in equity to restrain the defendant from prosecuting an action at law brought by him in the State of Missouri. The defendant filed a demurrer, which was in substance on the ground that no cause for relief in equity against the defendant was stated in the bill. The case was reported to this court to determine the correctness of the interlocutory decree sustaining the demurrer before further proceedings.

The allegations of fact well pleaded in the bill of complaint are, for the purposes of the present decision, admitted by the demurrer. Jubilee Yacht Club v. Gulf Refining Co. 245 Mass. 60 , 61. Whiting v. Mayor of Holyoke, 272 Mass. 116 118. Dealtry v. Selectmen of Watertown, 279 Mass. 22 , 26-27. They may be summarized as follows: The plaintiff is a corporation organized under the laws of this Commonwealth with its principal place of business in Boston. It is engaged in the business of insurance. The defendant is a member of the bar of this Commonwealth, resident here, who does not practice in Missouri and who has no connection with Missouri "beyond such casual matters as might come to the attention of any Boston lawyer." In March, 1915, the plaintiff issued a policy of accident insurance to one Edward L. Foulke whereby he was insured "against loss resulting from bodily injuries effected directly and independently of all other causes through accidental means." The plaintiff also agreed by the policy to pay the sum of $7,500 to one Nelle Foulke as beneficiary "if such injuries result in" the death of the insured "within ninety days of the accident, or if as the result of such injuries the insured continuously from the accident to date of loss is totally disabled." The policy was delivered in Missouri. Nelle Foulke (hereafter called the beneficiary) is a citizen and resident of that State. On June 22, 1934, while the policy was in force, the insured died. The cause of his death "was coronary occlusion and arteriosclerosis" and was not the result of bodily injuries effected directly and independently of all other causes through accidental means.

An autopsy showed that the cause of the coronary occlusion was a congenital ring of cartilage imbedded in the aorta. On or about July 11, 1934, the beneficiary made claim on the plaintiff for payment to her of $7,500 on the ground that the death of the insured had resulted from accidental injury. Said "claim was without foundation in fact" and the plaintiff "therefore refused to make the said payment as demanded.

" If an action on the policy is litigated in the Federal court, the insurance company will have a right under the well settled rule of the Federal courts in the Eighth Circuit, which includes Missouri, to a directed verdict in its favor. In the State courts of Missouri the contrary rule prevails. For the sole purpose of preventing the plaintiff from contesting her claim in the Federal courts, the beneficiary made a pretended assignment of the policy to the defendant. He knew all the facts. He paid no consideration for the pretended assignment and acquired no beneficial interest in the policy, or in its proceeds, or in the claim of the beneficiary against the plaintiff. Thereupon the defendant, at the direction of the beneficiary and by her procurement, commenced an action at law against the plaintiff in a State court in Missouri. The plaintiff caused that action to be removed to the District Court of the United States for the Western Division of the Western District of Missouri, but that court allowed the defendant's motion to remand the case to the State court "solely upon the ground that the United States statutes relating to removal of causes do not authorize removal where an assignment has been made by the real party in interest to a citizen of the State of which the defendant is a citizen and resident, although such assignment is colourable and made for the sole purpose of preventing removal to the courts of the United States."

The plaintiff contends that it is entitled under the Constitution of the United States to litigate the claim made under this policy in the Federal courts and that therefore the defendant ought to be enjoined from prosecuting the action pending in the State court of Missouri.

The question thus raised has not been decided in this Commonwealth. In Carson v. Dunham, 149 Mass. 52 , it had been found as a fact that the assignee was the absolute owner of the chose in action there in question, and it was held that there was no ground to restrain such assignee from prosecuting his action in the courts of another State. It there was said, at pages 55, 56, that, in view of the fact that the assignee was the absolute owner of the claim, "it is immaterial what his motives were for purchasing it. He had the right to enforce it in any competent tribunal. The Supreme Court of the United States has held that, even if the assignment to Dunham was colorable, it furnishes no ground for removing the case to the Circuit Court of the United States, and intimates that it is for the State court to decide whether this fact furnished any defence in the suit pending before it. Carson v. Dunham, 121 U.S. 421. Provident Savings Life Assurance Society v....