Weiditschka v. Supreme Tent Knights of Maccabees of World

• Decision Date: 15 January 1919
• Docket Number: 32437
• Parties: W. WEIDITSCHKA, Administrator, Appellee, v. SUPREME TENT KNIGHTS OF MACCABEES OF THE WORLD, Appellant
• Court: Iowa Supreme Court

170 N.W. 300

188 Iowa 183

W. WEIDITSCHKA, Administrator, Appellee, v. SUPREME TENT KNIGHTS OF MACCABEES OF THE WORLD, Appellant

No. 32437

Supreme Court of Iowa, Des Moines

January 15, 1919

SUPPLEMENTAL OPINION ON REHEARING, JANUARY 20, 1920.

Appeal from Bremer District Court.--JOSEPH J. CLARK, Judge.

A certificate of insurance was issued, January 16, 1905, by defendant, a fraternal society organized under the laws of Michigan, with indemnity of $ 1,000 in event of death of William Nuhn, payable to Lillian I. Ingalls, described therein as a dependent. The assured died, May 24, 1913. Proofs of loss were furnished, and the indemnity paid to the beneficiary named. Weiditschka was appointed administrator of the decedent's estate, June 27th following, and this action begun by him, as administrator, to recover the indemnity, March 19, 1914. To the petition praying for recovery, the defendant interposed several defenses. Demurrer to five of these was sustained. As to the sixth defense, the cause was continued. The defendant appeals.

Affirmed.

Sager & Sweet and Miller & Wallingford, for appellant.

Pickett Swisher & Farwell, Henry Vollmer, and F. P. Hagemann, for appellee.

LADD C. J. EVANS, PRESTON, and SALINGER, JJ., WEAVER, C. J., and LADD, JJ., concurring.

OPINION

LADD, C. J.

A certificate of membership was issued to William Nuhn, January 16, 1905, by the defendant, a fraternal beneficiary association, organized under the laws of Michigan. Its funds are raised by assessment. It is managed for the benefit of its members, and not for profit. The beneficiary named in the certificate was Lillian I. Ingalls, a dependent, not related in any way to the assured. Upon the death of Nuhn, May 24, 1913, proofs of loss were submitted, and the association paid the stipulated indemnity to the beneficiary named. W. Weiditschka was appointed administrator of decedent's estate, June 27th following. This suit for such indemnity was begun March 19, 1914, by the administrator of decedent's estate, and is met with several objections to recovery.

I. The association has a lodge system, with ritualistic form of work. Nuhn applied to a local lodge at Waverly, Iowa, known as Waverly Tent No. 2, for membership, and the application was mailed by its officers to the head officers of the association in Michigan, by whom it was accepted, and the certificate of membership issued and mailed to the record-keeper of Waverly Tent No. 2, and by him countersigned, and then delivered to Nuhn. Thereupon, the latter was initiated into the association by the local lodge, paid the fee asked therefor, and his first assessment.

Contrary to appellant's contention, the contract of insurance so consummated is governed by the laws of Iowa, rather than those of Michigan. The recent cases are quite in accord in holding that the place where the final act occurs which makes the insurance binding is the place of the contract, and that the validity and construction of the contract are, therefore, to be determined by the laws of that place. Northwestern Mut. Life Ins. Co. v. McCue, 223 U.S. 234 (56 L.Ed. 419, 32 S.Ct. 220); Haas v. Mutual Life Ins. Co., 90 Neb. 808 (Ann. Cas. 1913B 919, 134 N.W. 937, with cases collected at page 926); Wilde v. Wilde, 209 Mass. 205 (95 N.E. 295). See Collver v. Modern Woodmen, 154 Iowa 615, 135 N.W. 67, as to agency of the officers of local lodge in such a case. Nothing in Bush v. Modern Woodmen of America, 182 Iowa 515, 152 N.W. 31, is in conflict with the above. The question under consideration was not involved in that case.

II. It is argued, however, that the decision we reach would violate the clause of the Constitution exacting that:

"Full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state." Section 1, Art. IV, Constitution of the United States.

Nothing in violation of this clause can be inferred from a decision that the contract is governed by the laws of the state where made, rather than where one of the parties was organized and has its chief place of business, nor enforcing that contract by compelling compliance therewith by payment to the person entitled thereto, even though the amount has been turned over to another.

The defendant association had no right to transact business in this state without permission, and even then was bound to proceed in accordance with its laws. Nelson v. Nederland Life Ins. Co., 110 Iowa 600, 81 N.W. 807; American Fid. Co. v. Bleakley, 157 Iowa 442, 138 N.W. 508; New York L. Ins. Co. v. Cravens, 178 U.S. 389 (44 L.Ed. 1116, 20 S.Ct. 962). In the last named case, the court said:

"The power of the state over foreign corporations is not less than the power of a state over domestic corporations. No case declares otherwise. We said in Orient Ins. Co. v. Daggs, supra: 'That which a state may do with corporations of its own creation, it may do with foreign corporations admitted into the state. This seems to be denied; if not generally, at least as to plaintiff in error. The denial is extreme, and cannot be maintained. The power of a state to impose conditions upon foreign corporations is certainly as extensive as the power over domestic corporations, and is fully explained in Hooper v. California, 155 U.S. 648, 39 L.Ed. 297, 15 S.Ct. 207.'"

In American Fidelity Co. v. Bleakley, 157 Iowa 442, 138 N.W. 508, we said:

"The appellant's claim that the policy in question should issue because of interstate comity cannot be sustained. The state has the undoubted right to say whether foreign corporations shall be permitted to do business here at all, and, if such permission is granted, it may be upon such terms and conditions as the state shall prescribe. And where it is the manifest intention to limit or restrict the powers given to such corporation by its charter, courts have no authority to override such legislation on the ground of comity between the states. Within its power, the state, through its legislature, is supreme, and the court's duty is ended when it determines what the statutory law is."

See, also, Frick v. Hartford Life Ins. Co., 179 Iowa 149, 159 N.W. 247.

Nor can an infraction of the Fourteenth Amendment to the Constitution of the United States be said to be involved in compelling an insurance association to pay the stipulated indemnity to those entitled thereto, even though payment has been made to another not lawfully entitled thereto.

III. Section 1832 of the Code Supplement, 1913, in addition to prescribing conditions on which associations like defendant may transact business in this state, declares that:

"If the auditor of state shall approve the articles and also the by-laws or rules, he shall issue to the society, order or association a permit in writing, authorizing it to transact business within this state for a period of one year from the first day of April of the year of its issue. Societies, orders or associations not organized under the laws of this state, in addition to the requirements of the provisions of Section 1829 of the Code, must also comply with all of the provisions of this chapter, except as to the residence of membership."

Section 1824 of the Code forms a part of this chapter and provides that:

"No fraternal association created or organized under the provisions of this chapter shall issue any certificate of membership to any person under the age of fifteen years, nor over the age of sixty-five years, nor unless the beneficiary under said certificate shall be the husband, wife, relative, legal representative, heir or legatee of such member."

Appellant argues that the former section has no application to the latter, but applies only to the general provisions having reference to foreign companies, and bases its argument largely on the legislative construction. The language quoted, however, is too plain to permit of any doubt; for the requirements are in addition to Section 1829 of the Code, and exact compliance, not with part, but "with all of the provisions of this chapter, except as to the residence of membership." The language could not well be plainer; and, as the subsequent acts of the legislature are not inconsistent with the exaction of obedience to Section 1824, we have no trouble in reaching the conclusion that foreign associations admitted to do business are bound by Section 1824 of the Code.

IV. One of defendant's by-laws provides for payment of every loss under the certificate to a dependent, and that, "if the designation of beneficiary shall fail, for illegality or otherwise, the benefit shall revert to the Life Benefit Fund." As contended by appellant, the members of such an association, as well as their heirs, are bound by its by-laws, if valid. Ross v. Modern B. of A., 120 Iowa 692, 95 N.W. 207; Boeck v. Modern Woodmen, 162 Iowa 159, 143 N.W. 999; Roeh v. Business Men's Prot. Assn., 164 Iowa 199, 145 N.W. 479; Elliott v. Home Mutual Hail Assn., 160 Iowa 105, 140 N.W. 431.

Possibly, where there is no provision to the contrary, the indemnity may be made payable to someone other than those defined by a statute. See Grand Lodge A. O. U. W. v. Cleghorn, (Tex.) 42 S.W. 1043. Section 1824 of the Code excludes any not named therein, by declaring that:

"No fraternal association created or organized under the provisions of this chapter shall issue any certificate of membership to any person, * * * unless the beneficiary under said certificate shall be the husband, wife, relative, legal representative, heir or legatee of such member."

As no such certificate shall be issued to the beneficiary other than of the classes named, designating a dependent as such or even the association, would seem to be prohibited. See Smith v. Supreme Tent, Knights of Maccabees, 127...