Supreme Lodge v. Meyer

• Decision Date: 28 April 1924
• Docket Number: No. 214,214
• Citation: 68 L.Ed. 885,44 S.Ct. 432,265 U.S. 30
• Parties: SUPREME LODGE, K. P., v. MEYER
• Court: U.S. Supreme Court

265 U.S. 30

44 S.Ct. 432

68 L.Ed. 885

SUPREME LODGE, K. P.,

v MEYER.

No. 214.

Argued March 12, 1924.

Decided April 28, 1924.

Messrs. W. J. Connell, of Omaha, Neb., Sol H. Esarey, of Indianapolis, Ind., and Thomas P. Littlepage and Sidney F. Taliaferro, both of Washington, D. C., for plainin error.

Mr. D. W. Livingston, of Nebraska City, Neb., for defendant in error.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

This case is here on error and also upon petition for writ of certiorari. Consideration of the latter was postponed until hearing on the merits.

Defendant in error was the beneficiary named in a benefit certificate of life insurance issued to one of its members, by the plaintiff in error, a fraternal order created by Act of Congress of June 29, 1981, c. 119, 28 Stat. 96. Upon the death of the assured an action was brought in a state court by the beneficiary to recover the amount of the insurance, and judgment was rendered in his favor. On appeal to the state Supreme Court the judgment was affirmed on the authority of the decision of the same court on a former appeal.

After the insurance policy had gone into effect, the Supreme Lodge, by an amendment, increased the dues from $5.70 per month to $26.30 per month. Prior to the effective date of the new rates the assured had paid all dues assessed under the old rates. After such date he refused to pay at the new rates, upon the ground, among others, that in disregard of a state statute the society was not operating under a representative form of government when the rates were increased; but he regularly and duly tendered payment at the old rates.

Section 4 of the congressional act provides:

'That said corporation shall have a constitution, and shall have power to amend the same at pleasure: Provided, that such constitution or amendments thereof do not conflict with the laws of the United States or of any state.'

A statute of Nebraska in force at the time the new rates were adopted defines a fraternal benefit society as a corporation, etc., organized and carried on for the sole benefit of its members and their beneficiaries and not for profit, and provides:

'Each such society shall have a lodge system, with ritualistic form of work and representative form of government.' Laws of 1897, p. 266, c. 47, § 1.

According to the stipulation of facts, the Supreme Lodge when it made the amendment increasing rates, 'was composed of 163 members and that of such members 9 were Past Supreme Chancellors, 8 were Supreme Officers of the defendant, 98 were holders of certificates in the Insurance Department, and 146 were delegates elected by the various Grand Lodges within the order,' all of whom participated in enacting the amendment. On the first appeal, the state Supreme Court, after a full discussion of the question and of the facts, and a review of its earlier decisions, held that the body above described did not constitute a representative form of government, within the meaning of the state statute. 104 Neb. 505, 177 N. W. 828. Upon rehearing the court adhered to this conclusion, 104 Neb. 511, 180 N. W. 579; and, upon the second appeal, again affirmed it, 189 N. W. 839.

Under the settled rule of this court, declared so frequently and uniformly as to have become axiomatic, we must accept this decision of the highest court of the state fixing the meaning of the state legislation, as though such meaning had been specifically expressed therein. See, for example, Leffingwell v. Warren, 2 Black, 599, 603, 17 L. Ed. 261; Green v. Lessee of Neal, 6 Pet. 291, 297-300, 8 L. Ed. 402. And we follow the state construction, even though it may not agree with our own opinion. Supervisors v. United States, 18 Wall. 71, 82.¹ Shelby v. Guy, 11 Wheat. 361, 367, 6 L. Ed. 495; Tioga R. R. v. Blossburg & Corning R. R., 20 Wall. 137, 143, 22 L. Ed. 331. No question is raised as to the necessity for compliance with the provisions of the state statute; but the defense pleaded and relied upon is that the matter was concluded by a decree of the federal District Court of Indiana, affirmed by the Circuit Court of Appeals, Holt v. Supreme Lodge Knights of Pythias, 235 Fed. 885, 149 C. C. A. 197, establishing the validity and enforceability of the increased rates; that such decree was binding, as res adjudicata, upon Meyer, the plaintiff; and that the court below, in declining to so consider it, denied full faith and credit to the judicial proceedings of another state, in contravention of article 4, § 1, of the Constitution of the United States, and of section 905, Revised Statutes (Comp. St. § 1519).

While the judicial proceedings of the federal courts are not within the terms of the constitutional provision, such proceedings, nevertheless, must be accorded the same full faith and credit by state courts as would be required in respect of the judicial proceedings of another state. Hancock National Bank v. Farnum, 176 U. S. 640, 644, 20 Sup. Ct. 506, 44 L. Ed. 619; Embry v. Palmer, 107 U. S. 3, 9, 2 Sup. Ct. 25, 27 L. Ed. 346. It appears from the record in the Holt Case, which was in evidence and is in the record here, that the court expressly found that the society was, during its entire existence, operating under a representative form of government. We assume, for present purposes, that the plaintiff is bound by that decree; but the question—and the vital question—still remains, is the issue the same? We are of the opinion that it is not the same, and that the plea of res adjudicata fails.

The principal place of business of the order was in Indiana; and the question presented in the Holt Case, which was brought in Indiana, evidently was whether there was a representative form of government within the meaning of the statute of that state (section 5043; 2 Burns' Indiana Stats. 1914, p. 882), since the federal statute made no requirement on the subject, and the finding, unless to satisfy the Indiana law, would have been meaningless. The question of compliance with the statute of Nebraska or those of other states was not involved. The Indiana statute is reproduced in the margin,² and, as will be seen, differs from the Nebraska statute, in that the former specifically defines what shall constitute a representative form of government, while the latter does not. But if we assume, for the moment, that the two statutes are alike, nevertheless, our determination must be the same. It was within the competency of the federal court to construe the Indiana statute in one way, and it was equally within the competency of the Nebraska Supreme Court to construe the Nebraska statute in an opposite way; and, since the construction becomes part of the statute and is to be read as though in its text, in the one case as in the other, the result is that they are, in effect, not the same, but different statutes. In Christy v. Pridgeon, 4 Wall. 196, 203 (18 L. Ed. 322) this court said:

'Nor does it matter that in the courts of other states, carved out of territory since acquired from Mexico, a different interpretation may have been adopted. If such be the case, the courts of the United States will, in conformity with the same principles, follow the different ruling so far as it affects titles in those states. The interpretation within the jurisdiction of one state becomes a part of the law of that state, as much so as if incorporated into the body of it by the Legislature. If, therefore, different interpretations are given in different states to a similar local law, that law in effect becomes by the interpretations, so far as it is a rule for our action, a different law in one state from what it is in the other.'

In Louisiana v. Pilsbury, 105 U. S. 278, 294 (26 L. Ed. 1090) it was said:

'So far does this doctrine extend that, when a statute of two states, expressed in the same terms, is construed differently by the highest courts, they are treated by us as different laws, each embodying the particular construction of its own state, and enforced in accordance with it in all cases arising under it.'

See Shelby v. Guy, supra; May v. Tenney, 148 U. S. 60, 64 13 Sup. Ct. 491, 37 L. Ed. 368; Detroit v. Osborne, 135 U. S. 492, 498, 10 Sup. Ct. 1012, 34 L. Ed. 260; Chicago Union Bank v. Kansas City Bank, 136 U. S. 223, 235, 10 Sup. Ct. 1013, 34 L. Ed. 341.

It follows that there is not identity of issue in the two cases, since, so far as this court is concerned, the statutes which determine it are of exactly opposite import. In principle, it is the same as though the Indiana statute, which controlled the question decided in the first suit, had been superseded by a later Indiana enactment to the contrary effect, and a second suit, arising under and controlled by the later enactment, was brought, involving the same question. The intervention of the new and antagonistic statute in either case furnishes a new basis for the litigation, and the issue is no longer the same. Memphis City Bank v. Tennessee, 161 U. S. 186 192, 16 Sup. Ct. 468, 40 L. Ed. 664; Utter v. Franklin, 172 U. S. 416, 424, 19 Sup. Ct. 183, 43 L. Ed. 498; Erskine v. Steele County (C. C.) 87 Fed. 630, 636; affirmed 98 Fed. 215, 220, 39 C. C. A. 173.

Prior decisions of this court are pressed upon our attention, of which Supreme Lodge, Knights of Pythias, v. Mims, 241 U. S. 574, 36 Sup. Ct. 702, 60 L. Ed. 1179, L. R. A. 1916F, 919, and Supreme Council of the Royal Arcanum v. Green, 237 U. S. 531, 35 Sup. Ct. 724, 59 L. Ed. 1089, L. R. A. 1916A, 771, are examples. They are not in point. Neither the effect of state statutes imposing conditions like the one here under review, nor the question in respect of identity of issue, upon which the plea of res adjudicata in the present case turns, was involved or considered.

Under section 709 Revised Statutes (Judicial Code, § 237; Comp. St § 1214), this case would be properly here upon writ of error, Pittsburg, etc., Ry. Co. v. Long Island Loan & Trust Co., 172 U. S. 493, 508, 19 Sup. Ct. 238, ...