Iowa State Traveling Men's Ass'n v. Ruge

• Decision Date: 31 May 1917
• Docket Number: 4533.
• Citation: 242 F. 762
• Parties: IOWA STATE TRAVELING MEN'S ASS'N v. RUGE.
• Court: U.S. Court of Appeals — Eighth Circuit

242 F. 762

IOWA STATE TRAVELING MEN'S ASS'N v. RUGE.

No. 4533.

United States Court of Appeals, Eighth Circuit.

May 31, 1917

Rehearing Denied August 9, 1917.

Robert A. Holland, Jr., of St. Louis, Mo. (Sullivan & Sullivan, of Des Moines, Iowa, and Holland, Rutledge & Lashly, of St Louis, Mo., on the brief), for plaintiff in error.

Charles Hutchinson, of Des Moines, Iowa, and Jesse H. Schaper, of Washington, Mo. (Hugo Muench, Lambert E. Walther, and Julius T. Muench, all of St. Louis, Mo., on the brief), for defendant in error.

Before HOOK and SMITH, Circuit Judges, and REED, District Judge.

REED District Judge.

This action was brought by the defendant in error, hereinafter called the plaintiff, in a state court of Missouri, against the Iowa State Traveling Men's Association, an Iowa corporation, the plaintiff in error, who will be called the defendant, to recover from said defendant upon a certificate or policy of accident insurance alleged by the plaintiff to have been issued by the defendant in the state of Missouri to Oscar A. Ruge, a citizen of that state, February 20, 1903 insuring him against injuries or death arising from external violent, and accidental means. In case of the death of the insured by such means, it is alleged, the amount of insurance is by the terms of said policy made payable to his wife, Alma M. Ruge, the plaintiff in this action.

In due time the action was removed by the defendant to the court below upon the ground of the diverse citizenship of the parties. The defendant answered, admitting the issuance of the certificate or policy of insurance sued upon, the death of the insured, and that due proofs of his death were made to the defendant company; but denied that the policy was issued in the state of Missouri, and averred that it was issued in the state of Iowa, and was an Iowa contract, governed by the laws of that state, and was not a Missouri contract, governed by the laws of Missouri. The answer also averred that the policy does not cover death by suicide; that the insured died as the result of a wound resulting from the discharge of firearms by himself where there was no eyewitness to the discharge except himself. In other words, that he committed suicide. At the close of the evidence the defendant moved for a directed verdict in its favor upon the ground, among others, that the insured committed suicide by the discharge of a gun or pistol, thus causing his own death, when there was no witness to the discharge of the gun or pistol except himself, which motion was denied by the court. The cause was then submitted to the jury, which returned a verdict for the plaintiff for the full amount of the policy, $5,000, with interest, upon which judgment was duly entered for the plaintiff, and the defendant brings error.

1. Was the certificate or policy in suit issued in Missouri or in Iowa? This was the principal question upon the trial in the court below.

The defendant is an accident insurance company or association organized in Iowa about 1880, under section 1784 of the Iowa Code (1897), with its principal office or place of business at Des Moines, in that state. That it is a mutual assessment association, and not a fraternal association organized solely for benevolent or charitable purposes, was held by the Iowa Supreme Court in Connell v. Iowa State Traveling Men's Ass'n, 139 Iowa, 444, 116 N.W. 820.

The method by which the insured Ruge became a member of this association is as follows: He was a citizen of Missouri, residing in the town or city of Washington, in that state, a traveling salesman for a St. Louis grocery house, and eligible to membership in said association. A Mr. Bleekman, also a resident of Washington, a traveling salesman and a member of the defendant association, solicited Mr. Ruge, as he (Bleekman) was authorized by the defendant to do, to become a member of the defendant association, and furnished Ruge with a membership blank of the company for that purpose, which he usually carried with him, or requested the company to send a blank to Mr. Ruge at Washington, to enable him to make application. Upon receipt of such blank it was either prepared by Mr. Bleekman or Mr. Ruge, signed by the latter, and approved by the former as a member of the association, which was essential to its acceptance by the association, and then sent by mail, postage prepaid, with the requisite fee, to the home office of defendant in Des Moines. The certificate was then signed by the proper officers of the defendant on February 20, 1903, and mailed to Mr. Ruge at his residence or post office address in Washington, where it was received by him and retained until his death in June, 1911. All annual dues and assessments upon the policy were paid by Ruge up to the time of his death upon notice of the amount thereof from the company, by a bank draft or postal money order, procured by him at Washington, and sent by mail from that place to the defendant at Des Moines, Iowa, either by him or his wife, and the proper receipts returned by the defendant to the insured therefor. This was the usual method or manner in which the defendant procured its membership in Iowa, Missouri, and other states, and to whom it issued and sent its beneficiary certificates or policies of insurance. After Ruge became a member of the association, the defendant sent to him at Washington, Mo., from its home office in Des Moines, quarterly notices of dues, together with a blank application for new members, and a printed circular or letter upon the letter head of the association, which, except the date, reads in this way:

'Des Moines, Iowa.

'To the Members: Notice of Assessment No. 87, $2.00, due August 1st, enclosed. Don't lay this aside and run the chance of becoming delinquent. Pay it now. Also you can prove your loyalty to our organization, your ability as a salesman, your sincerity as a booster, your energy as a worker, by bringing into our midst a new member. We need 'em. You can surely induce one of your traveling acquaintances to sign the enclosed application and come across with $2.00, which will pay his dues until November. Go to it and land him. Use your own methods, technic and tactics, but land him. Bring to bear all of your persuasive powers, your ingenuity and tact. Bombard him with arguments so convincing, inducements so alluring, that he will consider it a crime against society, his family and himself, if he fails to join us instanter. The pocketbook offer is still on. See slip enclosed for particulars. The new member brings you the premium. Go to it. Very truly. (Signed by the Secretary.)' It was customary to send letters or circulars of this nature to all members of the association when informing them of their dues, and assessments when made.

At the time Ruge became a member of the association, in 1903, the association had a total membership of over 19,000, and in the year 1914 its membership had increased to more than 50,000 members residing throughout the United States and some in foreign countries, who had in the manner described become members, and to whom certificates and indemnity insurance had been issued. Of that number over 5,000 resided in the state of Missouri carrying a large amount of insurance in the defendant company. The defendant's method of doing business is more fully shown by the testimony of Frank D. Harsh, the head of its claim department, who, after stating that the defendant maintained a claim department consisting of examiners, investigators, and physicians, to examine and adjust claims made against it, who they send into Missouri and other states, where the claimant resides, testified as follows:

'Q. Mr. Harsh, I believe you stated that you had about 50,000 members in association at this time? A. It is my understanding. Q. And in how many different states and territories are you now doing business? A. We are doing business in the state of Iowa. Q. Anywhere else? A. No, sir. Q. You have members in other states? A. Yes; we have members in every state in the Union. Q. So you draw a distinction between doing business and having members in the states? In how many states and territories do you have members then? A. In every state and territory in the Union. Q. Getting down to this question of doing business; will you kindly explain here the different method in which you handle your business in Iowa to what you do in other states that you have members? A. There is no difference. Q. I think Mr. Hill (president of defendant) testified that you have no special license to do business in the state of Iowa? A. I don't think we have; except as we have under our incorporation. We were speaking with reference to a license from the Insurance Department. We have no such license in any state in which we have members; nor from any one else. Q. So that there is no difference in that respect in the way you carry on your business in Iowa or in any state? A. No. Q. Will you explain the difference, if there is any, in the way that you would handle an application for membership from some outside state or from Iowa? A. That is outside of my department. Q. You have a general knowledge? A. There is no difference. Q. If it is sent in by mail from Ottumwa, Iowa, the application would be treated in the same manner as if it came in by mail from Union, Missouri? A. Yes; or from Hong kong, China. Q. And the manner of forwarding the certificate to the member and collecting the dues, etc., would be the same as if the member lived in Hong kong or New York? A. It is my understanding; yes. yes. Q. And the same would be true as to the methods employed in the

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