Petition for A Writ of Certiorari — Supreme Lodge, Knights of Pythias v. Meyer

SUPREME LODGE KNIGHTS OF PYTHIAS,

é Petitioner, eo

v8.

é}

GEORGE 0. MEYER,

Respondent.

i

PETITION FOR WRIT OF CERTIORARI AND PETI.. ‘

TIONER’S BRIEF.

.

Waxp H. WATSON,

Sou H. ESAREY, —

ater for Petitioner,

IN THE

Supreme Court of the United States

OCTOBER TERM, 1922.

SUPREME LODGE KNIGHTS OF PYTHIAS,

Petitioner,

No.

vs.

GEORGE O. MEYER, Respondent.

PETITION FOR WRIT OF CERTIORARI.

To the Honorable, The Supreme Court of the United States:

The Supreme Lodge Knights of Pythias, in support of

this, its petition for a writ of certiorari to be directed to

the Supreme Court of the State of Nebraska to review a

judgment rendered by said Supreme Court of the State of

Nebraska on the 4th day of October, 1922, and from the

judgment of said Supreme Court of the State of Nebraska

affirming and confirming said judgment, by its order over-

ruling your petitioner’s petition for a rehearing which was

duly filed within the time provided by the statute of said

state and which was duly considered and decided by said

court on the 20th day of November, 1922, affirming the

judgment and decree of the District Court of Otoe County

in the said State of Nebraska, for the respondent herein,

Peaeiaa sare ye ROARS IT IR PAINS ORE ERS kT PORE RE

2

who was the plaintiff, in the sum of $————— respectfully

shows: ;

1. That this action was begun by a complaint on behalf

of the respondent against the petitioner upon a certificate

of insurance, alleging that the respondent had executed to

the assured a certificate of insurance in the sum of $2,000;

that the assured maintained his good standing in the order

and that the respondent was designated in said certificate as .

the beneficiary thereof and that the petitioner agreed to pay

said sum of $——————- upon satisfactory proof of the death

of the assured; that the assured had done all things required

of him to be performed, and that the defendant refused to

pay sa d insurance or any part thereof. Judgment was de-

manded for the amount of the certificate together with at-

torney’s fees.

2. That the defendant, your petitioner, duly filed its

answer to said complaint alleging that it duly issued the

certificate sued upon; that said defendant was duly au-

thorized to transact business in the State of Nebraska. That

said defendant was created by a special act of Congress and

that its powers were given to it by virtue oi id act of

Congress; that it had been acting under said powers and

by virtue thereof and that said powers can only be deter-

mined finally by the courts of the United States.

Said answer further admitted that the assured had died

and further alleged that said certificate was not an abso-

lute insurance on the life of the assured but that it was

conditional and subject to the regular payment of monthly

premiums to become due and to all changes in the laws of

said defendant that might thereafter be enacted under and

by virtue of said special act of Congress.

PEPE ELE LEO MINES CREE ER APN Rad OI PAN TSE oneal

3

Said answer further alleged that neither the assured or

any other person paid the assessments and dues required

from said assured under the terms of said certificate from

January, 1911, until the death of the assured. That by

reason of the neglect and refusal of the assured to pay said

assessments and dues said certificate became forfeited under

the terms of the statutes of said defendant.

Said answer further alleged that under and by virtue

of the right and power of said special act of Congress and

the acts amendatory thereof the defendant promulgated and

made an increase of rates of insurance and the amount re-

quired to be paid by the assured and of those of his class,

which rates became effective January 1, 1911, and of which

said assured was duly notified and informed; that said in-

crease of rates was necessary for the maturing of the cer-

tificates held by the assured and all others who held certifi-

cates of insurance therein; that the defendant had the au-

thority and power, to enact, adopt and pass the legislation

and by-laws increasing said rates. That said rates were

obligatory upon the assured therein as well as all others

who were members of said Insurance Department; that said

increase of rates and the action taken therein by said de-

fendant were in the nature of internal regulations and man-

agement of the Insurance Department of said defendant, and

were binding and obligatory upon the entire membership

of said Insurance Departments regardless of where they

lived, or the State in which they resided, and no member or

class of members had any greater right or privilege than

any other member or class of members, and that notwith-

standing the duty and the obligation of the assured to pay

the said rates, he purposely failed, neglected and refused to

4

pay any part of said dues or assessments from January 1,

1911, until his death April 11, 1916.

Said answer further alleged that the right and the power

of the defendant to increase said rates were expressly ad-

judicated and determined and the validity of such rates was

settled by a judgment and decree of the United States Dis.

trict Court for the District of Indiana, in a suit therein

brought by Joseph Holt who was a member of said Insur-

ance Department and held a certificate similar in all re-

spcts to the certificate of the assured which is involved in

this action, and others on behalf of themselves and of all

other members of said Department similarly situated against

the defendant herein in which judgment it was finally de-

cided and determined that the defendant herein had the

right, power and authority to make such change and in-

crease in its rates and that said increase was reasonable,

proper and necessary, and that said defendant had a rep-

resentative form of government at the time the said rates of

insurance were increased ; that the said Holt ct al., plaintiffs

in said suit were members of said {isurance Department in

the same class as the assured herein. That said U. S. Dis-

trict Court had full power and jurisdiction of all matters

involved in said suit and of the parties thereto and that its

decision therein was final, conclusive, and res judicata of

all matters involved in said suit, among which was the

validity of the rates so fixed and the validity of all the

laws enacted in reference to the increase of rates.

It was further alleged that by reason of said judgment

and decree of said U. S. District Court for the District of

Indiana, the assured herein and his beneficiary herein are

barred and estopped from again litigating the question of

the validity of said increase of rates or the question of the

representative form of government, or the obligation of the

assured to pay said rates which questions are decisive of the

questions involved in this case; that said decision remains

in full force and effect, and is in mo manner changed, modi-

fied or reversed, and which decision adjudged and finally de-

termined that this defendant had and maintained a repre-

sentative form of government at all times and that it had

authority, right and power to increase its rates as alleged

heerin and that said increases were binding and effective on

all its members and that a failure, neglect or refusal of any

member to pay such increased rate resulted in and caused

a forfeiture of his certificate of membershin. the same hav-

ing been finally approved and affirmed by the Supreme Court

of the United States.

Said answer further alleged that said defendant claimed

the benefits of Article 4, of Section 1, of the Federal Con-

stitution guaranteeing full faith and credit to said judgment

of the U. S. District Court for the District of Indiana, and

also that it claimed the benefits of Section 905 revised stat-

utes of the United States extending the full faith and credit

clause of said Federal Constitution to the Courts of the

United States, situated within the districts of the various

states and also claims the right to have said judgment duly

credited by the Courts of the State of Nebraska that said

judgment had within the district of the United States Dis-

trict Court for the District of Indiana.

Said answer further alleged that the authority and

power of said defendant to increase its rates and that said

legislation was duly and validly enacted by said defendant at

the time it so increased its rates was adjudicated and finally

decided and determined by the Supreme Court of the United

States on June 12, 1916, in a cause therein pending on writ

—— oper _=— wo PEELE SLL BION, SOE L OE LLIGIE LLY EBA IAISG Rh osha,

6

of error from the Court of Civil Appeals of the State of

Texas, wherein the Supreme Lodge Knights of Pythias, be-

ing defendant, was plaintiff in error and Mims was de-

fendant in error; that said Mims was a member of said

fendant’s Insurance Department of the same class as the

assured herein; that said action in said Mims case was

originally commenced in the District Court of Dallas County,

State of Texas, May 19, 1911. That the plaintiff in said

cause alleged that said increase of rates, being the same

increase involved as in this action was alleged and that

the law enacting such increase was wrongfully and illegally

passed ; that the answer of the defendant therein, being the

defendant herein, alleged that said laws were just, reason-

able and necessary, and that they were duly passed in ac-

cordance with the power and authority given under the Fed-

eral Statute creating the defendant and that the plaintiff's

failure to comply with said laws caused a forfeiture of. his

insurance and his rights thereunder.

Said answer further shows that said cause was finally

decided by the said Supreme Court of the United States

which court had full power and jurisdiction over all mat-

ters involved in said suit and of the parties thereto, and

that said laws were adjudged valid and binding upon all

members of said Insurance Department, and the defend-

ant herein alleged that said decision is decisive of the rights

of the plaintiff herein, and that the plaintiff is barred and

estopped from litigating said questions or denying the con-

clusiveness of said decisions in said case.

Said answer further alleged that the application of the

assured herein and the certificate sued upon in this case were

both conditioned upon the obligation of the assured to abide

by and do all things required by the laws then in force

7

and the laws that might thereafter be enacted governing

the Insurance Department. That the claim of the plaintiff

herein is governed by and is dependent upon the defend-

ant’s charter of incorporation under said Federal Statute

and the rules, laws and regulations adopted and promul-

gated by the defendant under and by virtue of said Federal

Statute, and that the plaintiff is now estopped from denying

or controverting the right of the defendant to enforce the

rates so enacted and promulgated.

3. That the plaintiff in reply to said answer alleged that

in this action there is not involved the construction of any

Federal Statute, or any question arising under the laws of

the United States which only the courts of the United States

can determine: that the assured did not fail, neglect and

refuse to pay the assessments required under his certificate

at any time, and that his certificate did not become for-

feited.

Said reply further alleged that said defendant was not

empowered or given athority to make an increase of rates

of insurance so as to affect the certificate of the assured,

and further denied that any change of rates was made af-

fecting or which was binding upon the assured at any other

time, and further denied that any attempt to change the

rates was ineffective and that the certificate so held by the

plaintiff was in full force and effect at the death of the as-

sured, and that no adjudication was ever had in any court

binding upon plaintiff or upon the assured in his lifetime.

Said reply further alleged that in the case of Meyer v.

Supreme Lodge, which case was appealed to the Supreme

Court of the State of Nebraska and which involved the right,

power and authority of the defendant to make, change or

increase the rates of insurance, the validity of the rates

—_——— e SHIT PtP ai , FPP LANE ED NRTA RO ZOU NS

of the defendant and as to whether the defendant had a

representative form of government, which case was decided

April 30, 1920, the defendant was without any right, power

or authority to make any change or increase of its rates

and that said rates so made were void and that defendant

did not have a representative form of government; that

said judgment and opinion of said Supreme Court of the

State of Nebraska is unreversed, and in full force and ef-

fect, and is res judicata of the questions raised in the de-

fendant’s answer.

4. That the record, a certified copy of which is presented

herewith, shows no conflict of evidence the respondent re-

lying solely upon the ground that the undisputed facts com-

pel the legal conclusion that said increase of rates was in-

valid and void as to the plaintiff herein.

5. That the record shows that the assured held a cer-

tificate of insurance under date of 1885 and that he con-

tinued to pay the assessments and dues thereon until Jan-

uary 1, 1911; that he was then notified that an increase

of rates had been enacted and that thereafter said increase

of rates would be effective; that he refused to pay said in-

crease and continued to tender his former rate to the Section

Secretary whose duty it was to receive the assessment from

the members of assured’s lodge; that he continued to tender

said old rate up to the time of his death; that the defendant

refused to receive the said amount or any part thereof so

tendered, but demanded the increased amount, which the as-

sured refused to pay and denied the authority of the defend-

ant to make an increase of the rates effective as against him.

It was further shown that in March, 1911, Joseph Holt

and many others, in their own behalf and on behalf of all

orl

fea ate a

beeitee ose.

= Si

9

others similarly situated brought a suit in the U. S. District

Court for the District of Indiana, alleging that the legisla-

tion increasing the rates upon the members of the fourth

class of which they were members and also the insured here-

in was invalid and void and that such legislation was a vio-

lation of their rights and prayed that said legislation be

declared void and that the officers of the Insurance Depart-

ment of the defendant be enjoined and restrained from en-

forcing any part of said legislation; that an answer was

filed thereto and also a cross-complaint filed ; that the issues

so made in said cause involved the validity of all the legisla-

tion of the defendant affecting or increasing the rates of

insurance upon any and all members of said Fourth Class.

Said record further shows that said cause was referred

to a Master in Chancery to hear the evidence and to report

the facts together with his conclusions thereon; that said

Master did hear all the evidence on behalf of the plaintiffs

and of the defendant, and that he made a report to the Dis-

trict Court of his finding of facts and his conclusions there-

on; that among said facts so found were that the defendant

was created by virtue of a Federal Statute; that its Supreme

Lodge and law making body at the time of enacting said

rates was the same and created the same as when said Fed-

eral Statute was enacted creating said defendant ; that it had

at that time and at all times theretofore mentioned a repre-

sentative form of government; that it was properly acting

within the powers given to it by virtue of said act of Con-

gress being Act of June 29, 1894, 28 U.S. Statutes at large

96-97.

Said record further shows that said Master expressly

found that said increase of rates was obligatory and binding

upon all members of said Fourth Class, and that the rates

DRAINS oe bie

10

established in said legislation were reasonable, proper and

necessary for the life of said Department, and for the ma-

turing of the certificates outstanding as well as those to be

issued. Said Master reported his conclusions thereon in fa-

vor of the defendant.

The record further shows that the court after hearing

the arguments thereon and after considering the evidence

and said findings held that the Master’s findings were proper

and that his conclusions were correct, and that he thereupon

entered a decree and judgment in favor of the defendant and

against the plaintiffs.

The record further shows that exceptions were filed to

the Master's findings of facts and to his conclusions and

that said District Court overruled said exceptions and that

the plaintiffs appealed from said judgment and decree to

the Circuit Court of Appeals for the Seventh Circuit and

that said eppeal was heard by said court and that the judg-

ment of the District Court of the United States for the Dis-

trict of Indiana was affirmed on July 18, 1916, 149 C. C. A.

197, 235 Federal 883.

The record further shows that an appeal was taken from

said judgment of the Circuit Court of Appeals for the Sev-

enth Circuit, to the Supreme Court of the United States and

that said appeal was dismissed October 21, 1918, 248 U. S.

588, 63 L. ed. 434.

The record further shows that the rates in force prior to

January 1, 1911, were insufficient for the purpose and could

not mature the policies outstanding; that the Insurance De.

partment was in very embarrassing circumstances; that

the disbursements were exceeding the income and that with-

in a very few months the small surplus would have been ex-

hausted; that the rates had theretofore been increased sev-

2 Bt a Cae EIT BES KASAI Pe AE IRS RR OTF OM % ’ WES AM ft Levringes =

11

eral times and that many extra monthly assessments had

been made; that the membership was becoming restless that

the Supreme Lodge had gravely considered the matter of

increase for sometime and that they had called an expert

actuary who had examined their certificates and had ad-

vised them that the only way to prevent the destruction of

the Insurance Department was to increase the rates; that

they used as the basis of said increase the American Experi-

ence Table of Mortality and an interest assumption of 314% ;

that the rates established were based upon the attained ages

of the members without medical examination; that all were

treated exactly alike.

Said record further shows that the application of the

assured, as well as the certificate in suit contained a pro-

vision that the assured will abide by the laws in force and

by all laws subsequently enacted.

6. The court found in favor of the plaintiff for the

amount of the certificate sued upon, together with attorney’s

fees and costs. From this judgment the defendant, your

petitioner herein, appealed to the Supreme Court of the

State of Nebraska, which affirmed the judgment of the Dis-

trict Court in favor of the respondent.

7. That the questions of law for the determination by

the District Court were as follows:

(a) Was the assured, and his beneficiary, required by

the laws, to observe and obey the Supreme Statutes of the

defendant increasing the rates of insurance on the Fourth

Class, of which he was a member?

(b) Did the Supreme Lodge of the defendant have the

power, authority, and right under the Federal Statute of

12

June 29, 1894, 28 Statutes at large, pp. 96-97, to enact and

promulgate the Supreme Statutes regulating and increasing

the rates of insurance on the members of the Fourth Class?

(c) Was the Class suit by Joseph Holt and others

against the defendant in this case, the petitioner herein,

binding upon the assured herein?

(d) Did the District Court and later the Supreme Court

give full faith and credit to said decision in their decision

of the present case, as required by Article 4, Section 1, of

the Federal Constitution?

(e) Did the District Court, and later the Supreme Court

of the State of Nebraska give to the defendant therein, your

petitioner, its right, as guaranteed by Section 905, Revised

Statutes of the United States, giving effect to the judgment

of the United States Court for the District of Indiana in the

State of Nebraska the same as said judgment has in and

for the said District of Indiana.

(f) Is the judgment of the United States District Court

of Indiana res judicata of the question of representative

form of government, validity of rates and duty of members

of the Fourth Class in respect to the increase of rates.

(g) Does any member of said Fourth Class have the

right again to contest the validity of the increase of rates

in view of the decision of the United States District Court

for the District of Indiana in said class suit of Holt et al. v.

Supreme Lodge Knights of Pythias and in view of the deci-

sion of the United States Circuit Court of Appeals for the

Seventh Circuit affirming said judgment, and of the dis-

missal of the appeal therefrom by the United States Su-

preme Court.

13

8. That the facts before stated under paragraph 5 were

uncontradicted. The District Court of Nebraska held that

the said statutes increasing the rates were void as to the

plaintiff, the respondent herein, that the governing body of

the defendant was not properly constituted and that no leg-

islation enacted by the said body was valid or binding upon

any member of the Insurance Department thereof in said

State of Nebraska. That the judgment of the District Court

of the United States for the District of Indiana was not

res judicata as to any questions involved in this suit. The

Supreme Court of the State of Nebraska held that the plain-

tiff was entitled to recover on the ground that the defend-

ant did not have a representative form of government and

that all legislation enacted by said body was invalid and

void, and therefore, could not be enforced against the plain-

tiff; that said increased rates being invalid, did not affect

the assured’s right to the payment of his old rates and,

therefore, that his certificate did not become forfeited and

was valid and enforceable. That his rights were not affected

by the judgment of the United States Court either in the

Holt case or in the Mims or Smyth cases, and that those

adjudications did not affect the plaintiff’s rights.

9. The Supreme Court of the State of Nebraska in af-

firming and confirming, on rehearing its judgment and de-

cree affirming” the judgment of the District Court of Otoe

County, erred in striking down the Supreme Statutes of

your petitioner, which statutes were enacted pursuant to

and in accordance with its powers granted under the Fed-

eral Act of June 29, 1894, 28 Statutes at large, pp. 96-97,

for the reason that such Supreme Statutes have already been

adjudicated and declared valid by your Honorable Court in

14

the cases of Supreme Lodge Knights of Pythias v. Mims, 241

U. S. 574, 60 L. ed. 1179. And the case of Supreme Lodge

Knights of Pythias v. Smyth, 245 U. S. 594, 62 L. ed. 492,

and the decision in the case of Holt v. Supreme Lodge

Knights of Pythias, 149 C. C. A. 197, 235 Fed. 885.

10. That the Supreme Court of the State of Nebraska

erred in refusing to extend full faith and credit, as required

by Article 4, Section 1, of the Federal Constitution to the

judgment and decree of the United States District Court

for the District of Indiana in the Class suit of Joseph Holt

et al. v. The Supreme Lodge Knights of Pythias, wherein

suit was brought on behalf of the plaintiffs to have declared

null and void the Supreme Statutes of your petitioner in-

creasing the rates, being the same statutes involved in the

present action, and wherein said District Court of the Unit-

ed States expressly held valid and obligatory all of said

statutes.

11. That the Supreme Court of the State of Nebraska

in affirming the judgment of the District Court of said State

erred in failing to give effect, and full faith and credit as re-

quired by Article 4, Section 1, of the Federal Constitution of

the powers, rights, and privileges to your petitioner herein

as granted to it under and by virtue of the Federal Statute |

creating your petitioner, that is, the Act of June 29, 1894,

28 Statutes at large 96-97. The said statute having been

judicially construed by the Honorable Supreme Court of the

United States in the cases of Supreme Lodge Knights of

Pythias v. Mims, 241 U.S. 574, 60 L. ed. 1179, and Supreme

Lodge Knights of Pythias v. Smyth, 245 U.S. 594, 62 L. ed.

492.

RRC AT RCO Na toms pene euRiaRetAn So seen ceeeanemees _e et

15

12. That the Supreme Court of the State of Nebraska

erred in refusing to give full faith and credit, as required

by Section 905, R. S. U. S., to the judgment of the United

States District Court for the District of Indiana, which ex-

pressly adjudicated the validity of the Supreme Statutes of

your petitioner increasing its rates of insurance being the

same statutes involved in the present action.

In the case of Joseph Holt et al. v. Supreme Lodge

Knights of Pythias, which judgment and decree of said Dis-

trict Court was affirmed on appeal to the U.S. Circuit Court

of Appeals of the Seventh Circuit (149 C. C. A. 197, 235

Fed. 885).

13. The Supreme Court of the State of Nebraska in af-

firming the judgment of the District Court of Otoe County,

erred in refusing to hold that under its Federal charter, be-

ing the Federal Act of June 29, 1894, 28 Statues at large,

pp. 96-97, the governing body of said charter had the power,

right and authority to enact the legislation involved in said

action, increasing the rates of insurance upon its members.

14. That the Supreme Court of the State of Nebraska

erred in failing to give full faith and credit to the judgment

and decree of the United States District Court for the Dis-

trict of Indiana in the case of Joseph Holt v. Supreme Lodge

Knights of Pythias, the same being a class suit brought by

and on behalf of the plaintiff therein and all other members

of the Fourth Class of said Insurance Department, including

the assured in this case, wherein it was adjudged that the

the Supreme Lodge Knights of Pythias had and maintained

a representative form of government at the time of the

enactment of the Supreme Statutes involved in this case in-

creasing the rates of insurance.

16

Your petitioner insists that its defense to said action

should have been sustained and that the judgment of the

District Court of the United States of the District of Indi-

ana, should have been given the full faith and credit to

which it was entitled under Article 4, Section 1, of the Fed-

eral Constitution and of Section 905, R. S. U. S. extending

full faith and credit to the judicial acts and records of the

courts of other states, and that your petitioner's rights

under its charter were unlawfully denied to it. Your peti-

tioner presents herewith as a part of this petition its brief

showing more fully its views upon the questions involved

and also a transcript of the record of the Supreme Court of

the State of Nebraska which brief and record are made part

of this petition.

WHEREFORE, your petitioner respectfully prays that

a writ of certiorari be issued out of and under the seal of

this court, directed to the Supreme Court of the State of

Nebraska, commanding said Court to certify and to send

to this court, on a day certain to be therein designated, a

full and complete transcript of the record and all proceed-

ings of said Supreme Court in this case which was entitled

in that court, George O. Myer, Appellee, v. Supreme Lodge

Knights of Pythias, Appellant, to the end that said cause

may be reversed by this court as provided by law, and that

your petitioner may have such other and further relief or

remedy in the premises as to this court may seem appropri-

ate, and that said judgment of the Supreme Court of the

State of Nebraska be reversed by this Honorable Court.

SUPREME LODGE KNIGHTS OF PYTHIAS,

By ~ tary AAAS

President of Jnsurance Department.

tat Mas yb ¢ ° r ~~

17

State of Indiana, ae

County of Marion,

Harry Wade, being duly sworn, says that he is the pres-

ident of the Insurance Department of the Supreme Lodge

of Knights of Pythias, that he has read the aforesaid peti-

tion by him subscribed and that the facts therein stated are

true to the best of his information and belief.

~

Gg Sig tae AO A Dire Bin oe

Subscribed and sworn to before me this27_day of Jan-

uary, 1923. Z™~ Vf

Aten LA Cae

Notary Public in and for said State of

Indiana. 5

My commission expires Dec. 5, 1926.

ee eel

Attorneys for Petitioner.

IN THE

Supreme Court of the United States

Ocroser TERM, 1922.

———

SupREME LopGe KNIGHTS OF PYTHIAS, |

Petitioner.)

ve. No.

|

Grorce O. MEYER, Respondent. |

PETITIONER'S BRIEF.

The petitioner herein was created by act of Congress on

June 29, 1894, 28 U. S. Statutes at Large, pp. 96, 97, Chap.

119. Said statute is as follows:

“An Act to incorporate the Supreme Lodge of

the Knights of Pythias.

Re it enacted by the Senate and House of Repre-

sentatives of the United States of America, in Con-

gress assembled :

That Geo. B. Shaw, of the City of Eau Claire,

State of Wisconsin; William W. Blackwell, of the City

of Henderson, State of Kentucky; Walter B. Richie,

of the City of Lima, State of Ohio; Robert L. C.

White. of the City of Nashville, State of Tennessee ;

Philip T. Colgrove, of the City of Hastings, State of

Michigan, and Tracy R. Bangs, of the City of Grand

Forks. State of North Dakota, officers and members

of the Supreme Lodge Knights of Pythias, and their

successors, be and they are hereby incorporated and

20

made a body politic and corporate in the District of

Columbia, by the name of “The Supreme Lodge

Knights of Pythias,” and by that name it may sue

and be sued, plead and be impleaded, in any court

of law or equity, and may have and use a common

seal, and change the same at pleasure, and be entitled

to use and exercise all the powers, rights and priv-

ileges incidental to fraternal and benevolent corpora-

tions within the District of Columbia.

Sec. 2. That the said corporation shall have the

power to take and hold real and personal estate, not

exceeding in value one hundred thousand dollars,

which shall not be divided among the members of the

corporatioy, but shall descend to their successors for

the promotion of the fraternal and benevolent pur-

poses of said corporation.

Sec. 3. That all claims, accounts, debts, things in

action or other matters of business of whatever na-

ture now existing for or against the present Supreme

Lodge Knights of Pythias, mentioned in section 1 of

this act, shall survive and succeed to and against

the body corporate and politic hereby created; pro-

vided, that nothing contained herein shall be con-

strued to extend the operation of any law which pro-

vides for the extinguishing of claims or contract by

limitations of time.

Section 4. 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.

Section 5. That Congress may at any time amend,

in any business for gain; the purpose of said corpora-

tion being fraternal and benevolent.

Section 6. That Congress may at any time amend,

alter or repeal this act.

Approved June 29, 1894.”

21

1.

A corporation created by a federal statute is “inherently

entitled to invoke” the federal jurisdiction.

Texas Pacific R. Co. v. Hill, 237 U. S. 208, 59 L.

Ed. 918;

Texas Pacific R. Co. v. Marcus, 237 U. S. 215, 59

L. Ed. 924;

Supreme Lodge Knights of Pythias v. Mims, 241

U. S. 574, 60 L. Ed. 1179;

Supreme Lodge Knights of Pythias v. Smyth, 245

U. S. 594, 62 L. Ed. 492.

2.

The proper construction of a federal statute is primarily

for the federal courts; and the charter rights and powers of

petitioner under its federal charter are for the final determ-

ination of the federal courts.

Union Pacific R. Co. v. Myers, 115 U.S. 1, 29 L. Ed.

319;

Texas Pacific R. Co. v. Cody, 166 U. 8. 606, 41 L.

Ed. 1132;

Matter of Dunn, 212 U.S. 387, 53 L. Ed. 563.

3.

The charter of a corporation as construed by the courts

of its domicile or creation is the measure of its rights every-

where, and where a class suit is brought in the courts of the

jurisdiction of the corporation's domicile, the judgment de-

fining the rights of said corporation are obligatory every-

22

where under the ful! faith and credit clause of the federal

constitution.

Supreme Council Royal Arcanum v. Green, 237 U.

S. 531, 59 L. Ed. 1089;

Hartford Life Ins. Co. v. Ibs, 237 U. S. 662, 59 L.

Ed. 1165.

4,

Of necessity, the courts of the jurisdiction creating a

corporation must constitute the final authority as to the

validity of its rules, regulations, and by-laws.

Clark v. Mutual Reserve Fund Life Assn., 14 App.

Cas. (D. C.) 154, 43 L. R. A. 390;

Condow v. Mutual Reserve Fund Life Assn., 89 Md.

98, 44 L. R. A. 149, 73 Am. St. 169;

State ev. Shain, 245 Mo. 78, 149 S. W. 479.

Brenizer v. Supreme Council Royal Arcanum, 141

N. C. 409, 5 L. R. A. N. S. 235, 53 S. E. 835;

Royal Fraternal Union v. Lunday, 51 Tex. Civ.

App. 637, 113 S. W. 185;

Taylor v. Mutual Reserve Fund Life Assn., 97 Va.

60, 46 L. R. A. 621.

5.

The case of Holt, et al. v. Supreme Lodge Knights of

Pythias, was a class suit, having been brought and main-

tained by the complainants “in their own behalf and on be-

half of all others similarly situated,” in the United States

District Court for the District of Indiana; and the judgment

therein rendered, which was affirmed on appeal (See 149 C.

64 if

23

C. A. 197, 235 Fed. 885), is res judicata as to all matters

therein alleged, one of which was that the Supreme Statutes

of the order increasing rates was and is valid and obliga-

tory, said judgment expressly holding said rates valid.

Supreme Tribe Ben Hur v. Cauble, 255 U. S. 356;

Supreme Council Royal Arcanum v. Green, 237 U.

S. 531, 59 L. Ed. 1089;

Hartford Life Ins. Co. v. Ibs, 237 U.S. 662, 59 L.

Ed. 1165.

6.

Although said judgment was specially pleaded in peti-

tioner’s answer and was introduced in evidence, the District

Court of Otoe County failed and refused to give effect to

said judgment, and the Supreme Court of the State of Neb-

raska in aflirming said judgment failed and refused to give

full faith and credit to said judgment as guaranteed by the

Art. 4, Section 1, of the Federal Constitution and by Section

905, R. S. U.S.

Hartford Life Ins. Co. v. Ibs, 237 U. S. 662, 59 L.

Ed. 1165;

Supreme Council Royal Arcanum v. Green, 237 U.

S. 521, 59 L. Ed. 1089.

7.

Where the highest court of the jurisdiction creating the

corporation being the United States Supreme Court in this

case, has adjudicated the rights and powers possessed by a

24

corporation, it is the duty of other courts to follow such

adjudication and to give effect to such powers.

Supreme Council Royal Arcanum v. Green, 237 U.

S. 531, 59 L. Ed. 1089;

Hartford Life Ins. Co. v. Ibs, 237 U. S. 662, 59 L.

Ed. 1165.

8.

Judgments of the Federal courts are entitled to full faith

and credit in the state courts, the same as judgments of the

state courts, under Art. 4, Sec. 1, of the federal constitution,

and section 905, R. S. U.S.

Hancock Nat. Bank v. Farnum, 176 U.S. 645, 45 L.

Ed. 622;

Union, etc., Bank v. Memphis, 189 U. S. 75, 47 L.

Ed. 715;

Metcalf v. City of Watertown, 153 U.S. 671, 38 L.

Ed. 861.

9.

A judgment must be given the same force and binding

effect in another state which it has in the state rendering

such judgment.

Hampton v. McConnell, 3 Wheat. 234, 4 L. Ed. 378;

Mills v. Durgee, 7 Cranch 481, 3 L. Ed. 411;

Fauntleroy v. Lum, 210 U.S. 236, 52 L. Ed. 1042.

The plaintiff’s assured having been a party to the Holt

case, brought to declare void and illegal, all the supreme

statutes of the petitioner, increasing the rates of insurance,

25

cannot now, after such rates have been held valid and obliga-

tory, in such case, raise the question of the validity of such

rates, even though a different ground therefor be alleged,

which there is not.

Holt County v. National Life Ins. Co., 25 C. C. A.

469, 80 Fed. 686;

Dimack v. Revere Copper Co., 117 U. S. 559, 29 L.

Ed. 994;

Reynolds v. Mandel, 175 Ill. 615, 51 N. E. 649;

Bates v. Brodie, 245 U. S. 526, 62 L. Ed. 444;

Mitchell v. First Nat. Bank of. Chicago, 180 U. S.

471, 45 L. Ed. 627;

Union Pacific R. Co. v. Wyler, 158 U. S. 285, 39 L.

Ed. 983;

Boston, etc., R. Co. v. Hurd, 47 C. C. A. 615, 108

Fed. 116, 56 L. R. A. 193.

In view of the foregoing provisions of our federal consti-

tution, and statutes, and the uniform adjudications there-

under; and under our system of government and the applica-

tion of our federal and state laws, your petitioner has not

‘received its legal rights, and is entitled to a reversal of the

judgment of said Supreme Court of Nebraska.

Respectfully submitted,

OWN GC 4K Ue aa

Attorneys for Petitisner.

RY WAC Md gi RR NN a oo = PGE TD IRI APS NR

shRNA RE RARITIES Y= ag

: DEC 24 1923

WM, R, STANSBURY

No. 214. CLERK

IN THE

Supreme Court of the United States

OcTOBER TERM, 1923. |

SN

SUPREME LODGE KNIGHTS OF PYTHIAS,

Plaintiff in Error,

Vv.

GEORGE O. MEYER,

Defendant in Error.

IN ERROR TO THE SUPREME COURT OF THE STATE OF

NEBRASKA.

BRIEF OF PLAINTIFF IN ERROR.

T, P. LITTLEPAGE,

W. J. CONNELL,

GEorGE A. BANGS,

SoL H. ESAREY,

Warp H. WATSON,

Attorneys for Plaintiff in Error.

eT

E. A. HARDIN PRINT, INDIANAPOLIS.

INDEX.

PAGE

EE nica cent ehnmdnnahdgeime marddlink 2

ee ee 26-30

Bangs, Geo. A., Testimony of.......-..------- ‘ciate 24, 25

NN ini cus thing dca rend en ch tems omapt areas tans 10

GES eae ae pst rae eee, a a epee 14-20, 59

I Aa 0 a ss Botts bn aonb ppatatae a a a aia 9

I Se sirens cess ano seine dishinin in desescabaaues 71

I iad csc ii taah nds pied inn bipaneh artcthehspiiesiaiieinistie 61

SE SINE PRISER IIND (5 a on np as cerie mcceues xshenlion sind ecetaaomelacians 31

Powers, Walter O., Testimony of_........_-_- 22-23, 25-26

EEE ESSERE EN Ee SOR RT Ba 58

I Sak a areas ican cen stn nebebedptatancuriantinih 62

EE SE ana eae ee as en 1

Supreme Lodge, Act Incorporating_............__-- 11-12

IY IRINA tc, ass anintsnddepnesansielinindasasevictaababorel 20-21

TABLE OF CASES.

A

Alkine Grocery Co. v. Richesin, 91 Fed. 79, 83_.------

American Mutual Life Ins. Co. v. Mason, 159 Ind. 15,

16, 16 WN. BE. GBB... noo nnn oon sa ee 50

Alerding v. Allison, 170 Ind. 252, 258, 83 N. E. 1006,

ge ae 3 eee 42, 52

Andrews Bros. Co. v. Youngstown Coke Co., 86 Fed.

586, 606, 80 CCA 208... ....22200-2256--222- 8

B

Bacon v. Robertson, 18 How. 480 15 L. ed. 499_------ 41, 44

Ballard v. Franklin Life Ins. Co., 81 Ind, 239_-------- 52

Bank v. Wheeler, 28 Conn. 439, 73 Am. Dec, 684_----- 50

Barras v. Bidwell, 3 Woods 7, Fed. Cas. No. 1039_--. 50

Bates v. Bodie, 245 U. S. 520, 526, 62 L. ed. 444___42, 44, 68

Bauer v. Sampson Lodge Knights of Pythias, 102 Ind.

a ee manna 31, 38, 55

Beard v. Federy, 70 U.S. 478.....----------------- 33

Beck v. Devereux, 9 Neb. 109, 2 N. W. 365...------- 46

Bell County, etc., School v. Pineville Graded School,

19 Ky. Law Rep. 789, 42 S. W. 92_------------- 42, 67

Benes v. Supreme Lodge Knights and Ladies of Honor,

ie BS £8 es 8) 32

Bernheimer v. Converse, 206 U. S. 516, 51 Lied. 1163. 54

Board of Commissioners of Lake County v. Platt, 79

Fed. 567, 25 CCA 87_........---------------- 43, 68

Boston, etc., R. Co. v. Hurd, 108 Fed. 116, 47 CCA 615,

G6 LRA 198... nccencccceccccsseen---- 44

Bradley v. Dels Lbr. Co., 105 Wis. 245, 252, 81 N. W.

BOG ne ncnecccccccecccecnccccccccscncenss 33

ii

a

a Pa GIA NE AEE

iii

PAGE

venizer v. Supreme Council Royal Arcanum, 141 N.

C. 409, 6 LRANS 235, 53 S. E. 835------------ 36

urgess v. Gray, 57 U. S. 48----------------------- 33

Cc

‘annon v. Castleman, 162 Ind. 6-8, 69 N. E. Meanad 43, 52

hristmas v. Russell, 5 Wall. 290, 18 L. ed. 475------- 51

hoouteau v. U. S., 34 U. S. 187------------------ 34

incinnati, ete., R. Co. v. Wynne, 14 Ind. 325-------- 49

ark v. Mutual Reserve Fund Life Association, 14

App. Cas. (D. C.) 154, 43 LRA 390_------------ 35, 36

ockburn v. Thompson, 16 Ves. 321, 326, 328, 33 E.

ee eee 41,44

vlunbus v. Webster Mfg. Co., 84 Fed. 592, 28 CCA

225, 48 LRA 195_..---.----------------------- 44

ommonwealth v. Massachusetts Mutual Ins. Co., 112

Mane 996 onc ccceencnncncnncenacconsecas=] 39

onden v. Mutual Reserve Fund Life Association, 89

Md. 99, 44 LRA 149, 73 Am. St. 169, 42 Atl. 944__35, 36

mner v. Supreme Commandery Golden Cross, 117

Tenn. 549, 97 S. W. 306_-.-------------------- 39

onnoyer v. Schaeffer, 89 U.S. 254----------------- 33

otter v. Boston, ote., St. R. Co., 190 Mass. 302, 76 N.

= ae ee 44

onverse v. Ayer, 197 Mass. 443, 84 N. E. 98.------- 53

onverse v. Hamilton, 224 U. S. 243, 56 L. ed. 749_.--51, 54

rescent City, etc., Co. v. Butcher's Union, ete., 120 U.

S. 141, 157, 30 L. ed. 614, 617--.--------------- 49

rouse v. Holman, 19 Ind. 30, 36_....-------------- 52

htry v. Supreme Lodge Knights of Pythias, 48

ee nen 31

imock v. Revere Copper Co., 117 U. S. 559, 566, 29

eee 42, 48, 45

PAG

Dornes v. Supreme Lodge Knights of Pythias, 75 Miss.

466, 23 So. 191_----------------------------- Bi

Dowell v. Applegate, 152 U. S. 327, 345, 38 L. ed. 463 42,4

Duvall v. Synod of Kansas, 222 Fed. 669, 138 CCA 3

oie ada aesanneeeoenes 41,4

Dupasseur v. Rochereau, 21 Wall. 130, 135, 22 L.ed. &

G08. G00 . nnn ene eemenecassuennens

Eberhard v. Northwestern Mutual Life Ins. Co., 210

Wik OO nnn ccd cnentnennbusnecetucen

Ebert v. Mutual Reserve Fund Life Association, 81

Minn. 116, 83 N. W. 506, 834, 84 N. W. 457------

Elwood v. Beymer, 100 Ind. 504_-_-----------------

Embry v. Palmer, 107 U.S. 3, 27 L.ed. 346-----~-----

Equity Rule 38, U.S. Sup. Ct. 1912, 226 U.S. 659, 57 "3

De Oe TOD cnceuniinn ---------------------- 41,4

Fauntleroy v. Lum, 210 U.S. 230, 52 L. ed. 1080...... 50,71

Fletcher v. Ferrel, 9 Dana (Ky.) 377, 35 Am. Dee. 148 j

Fidler v. Gilchrist, 60 Ind. App. 368, 109 N. E. 796_--

Finley v. Cathcart, 149 Ind. 470, 477, 48 N. E. 586, 49

Oe gd canddunsdedacionsananamanke

First National Bank v. City of Covington, 129 Fed.

TOR GON qo occe vide encwascnnnnenensnnensans

Fischli v. Fischli, 1 «wf. 360, 12 Am. Dec. 251_---- 42,

1 Foster, Federal Praw ice (6th Ed.), § 114--------- 41,!

Franke v. Franke, 15 Ind. App. 529, 549__-----~-----

French v. Fyan, 93 U. S. 169, 23 L. ed. 812_-------

Fullenwider v. Supreme Council Royal League, 180

Ill. 621, 54 N. E. 485, 72 Am. St. 239_----------- 38,

F aks —— - . P snini ee ee ipl bn a it Rt 2 Ril th CAL AR Neale

MORRIS io ts tires ee rai nterht we W HL RA pane Soe coh

ieee eaaogal

v

G

PAGE

Gaines v. Supreme Council Royal Arcanum, 140 Fec.

UE. cdc hank eae an kamagra gn 36

Gilmore v. Knights of Columbus, 77 Conn. 58, 58 Atl.

223, 107 Am. St. 17, 1 Am. & Eng. Ann. Cas.

sk BURR sisi chcmc dees ts we svcd oo ca os ed op te le ian ee es eh wn haem ne a 39

~ Glencoe Granite Co. v. City Trust, etc., Co., 118 Fed.

| 383, 55 CCA 212 (certiorari denied, 187 U. S.

z RE gy A RE ee erence er Pore ae 48

= Goss v. Carter, 156 Fed. 746, 84 CCA 402__________-_ 54

»Grand Island, etc., R. Co. v. Baker, 6 Wyo. 394, 71 Am.

Rg Re OO eee ae 46

“Gregory v. Molesworth, 3 Atkins 626, 26 E.R.1160__ 43

Griffin v. Wallace, 66 Ind. 410, 447................. 43

)Grosvenor v. United Society of Believers, 118 Mass.

TE Or aaah whsaind Bohan caudconnceeneenan 31

H

FHadacheck v. Chicago, ete., R. Co., 74 Neb. 385, 104

ee AE aE i a Ek arn Se 49

ampton v. McConnel, 3 Wheat. 234, 4 L. ed. 378, note

OR | EE At ae Be See ae 49, 71

ancock National Bank v. Farnum, 176 U. 8. 640, 45

IAN cea a a 48, 49

arnon v. Auditor, 123 Ill. 132, 5 Am. St. 506, 13 N.

I I a 45

arn 0, Horets, 86 Bark. GB... ...ocncacccwueccessnes 42

Harshman v. Knox County, 122 U. S. 306,, 317, 30 L.

att Ne eceuee 42, 45

artford Life Ins. Co. v. Barber, 245 U. S. 146, 62 L.

ESE eer ee eG nee 38

artford Life Ins. Co. v. Ibs, 237 U. S. 662, 59 L. ed.

aren, tae 2OTGA. THB... cnc cnns 37, 38, 41, 45, 65, 66

semen sapien taht sin keene nai ianentainmen ieemeianimaeaenaiamn ee . ‘ pauses Sa

vi

13 Harvard Law Review 67 (Historical Survey of

Prof. Dicey) -------------------------------

Haydel v. Dufresne, 58 U. S. 23--------------------

Henderson v. Henderson, 3 Hare 100, 67 E. R. ) a

Hilgerson v. Hicks, 201 Ill. 374, 66 N. E. BP ntiietas

Hoefgen v. Harness, 148 Ind. 224, 229, 47 N. E. 470--

Holt County v. National Life Ins. Co., 80 Fed. 686, 25 ©

od oni ag akon 43,6

Holt v. Supreme Lodge Knights of Pythias, 235 Fed. ,

885. 149 CCA 197, 248 U. S. 588, 63 L. ed. 434-40,

Howard v. Mutual Reserve Fund Life Association, 125 |

N.C. 49, 45 LRA 853, 34 S. E. 199__----------- 35,0

Howarth v. Lombard, 175 Mass. 570, 56 N. E. 888, 49

SEE SS Se Sabie eo ee aR

I

Indiana, ete., R. Co. v. Allen, 113 Ind. 581, 587-------

Irvine v. Baker, 225 Fed. 834_~_------------- ere cael

J

Johnson v. Libby, 111 Me. 204, 88 Atl. 647, Ann. Cases

OE gna nmindinainemebee tin minal ;

Johnson v. Payne, 11 Neb. 269, 9 N. W. 81----------- :

Jordan v. Van Epps, 85 N. Y. 427, 436..------------ !

K

Kenney v. Supreme Lodge of the World, Loyal Order

of Moose, 252 U.S. 411, 64 L. ed. 638, 10 ALR 716

Kent v. Quicksilver Mining Company, 76 N. Y. 169--

King v. Cochrane, 76 Vt. 141, 56 Atl. 667, 104 Am. St.

922

rere ARAL SNe esavazionds Seared Sekt

vii

Kloke v. Gardels, 52 Neb. 117, 71 N. W. 955-_--. .---- 43

Knotts v. Clark Construction Co., 131 N. E. (Ind.) 921 52

Kocher v. Supreme Council Catholic Benevolent Le-

gion, 65 N. J. L. 649, 48 Atl. 544, 86 Am. St. 687,

Oe NE Conc ckaenakobencaeecammmuanees 82

L

Laker v. Royal Fraternal Union, 95 Mo. App. 353, 74

i | aap esse eee ee eee 82

ii ee BEG 8). 0h, OO. can cna eon emcee 34

Looney v. Eastern Texas R. Co., 247 U.S. 214, 62 L.

i a i ies paces lig etre meant nie an esa Mati 41, 45

Lovell v. St. Louis Mut. Life Ins. Co., 111 U.S. 264, 28

ae ee gd hg on wy wince ein ca ae 41

M

Mandeville v. Riggs, 2 Pet. 482...................- 41, 44

Marshall v. Stewart, 80 Ind. 189_...-._----------- 52

Martin v. Abbott, 1 Neb. (Unof.) 59,95 N. W. 356__-_ 43

Mashlonpah v. Mayhew, 138 Wis. 561, 119 N. W. 826 = 46

Maynard v. Waidlich, 156 Ind. 562, 573, 60 N. E. 348_ 52

Mayor of Davenport v. United States, ex rel., 76 U.S.

et a se evi abgieicamnchinewian 46

Mazzariello v. Doherty, 204 Fed. 245, 122 CCA 513___44, 69

Melntire v. Williamson, 63 Kan. 279, 65 Pac. 244____- 43

Metcalf v. City of Watertown, 153 U. S. 671, 38 L. ed.

eR ie eee a a eka ana aan ok ddan hominem 48

Miller v. National Council Knights and Ladies of Se-

curtiy, GO Kans. 234, 76 Pac. $80............... 39

Mills v. Durgee, 7 Cranch 481, 3 L. ed. 411, note top

a a a a td case enlace 50

Mitchell v. First National Bank of Chicago, 180 U.S.

RE I, UR sa sickens wie potersow and 42, 44, 69

RIES

viii

Modern Woodmen of America v. Tevis, 117 Fed. 369_-

Morris v. Burgess, 116 N. C. 42, 21S. E. 26_--------

Mutual Assurance Society v. Korn, 7 Cranch 396, 3 L.

a ne i sseceenae ac mnon pane aa

National Circle, Daughters of Isabella v. National Or-

der Daughters of Isabella, 270 Fed. 725_--------

Nauyalis v. Philadelphia, etc., Co., 270 Fed. 93, — CCA

Neuman v. Supreme Lodge Knights of Pythias, 110

Miss. 371, 70 So. 241, LRA 1916C, 1051--------

New Dunderberg Mining Co. v. Old, 79 Fed. 598, 25

ca ateaeeanemeameaal

Noble v. Union River Logging R. Co., 147 U. S. 165

172

Northern Assurance Company v. Grand View Build-

ing Assn., 203 U. S. 106, 51 L. ed. 109_-------

Norton v. Catholic Order of Foresters, 138 Ia. 464, 114

N. W. 893, 24 LRANS 1080..................-

Note, 31 LRANS 416-417_......------------------

Old Dominion Copper, ete., Co. v. Bigelow, 203 Mass.

159, 40 LRANS 314, 89 N. E. 193--------------

P

People v. Brotherhood of Painters, Decorators and Pa-

perhangers of America, 218 N. Y. 115, 112 N. E.

908.) cis cence enue en es mien emaianan

We. B1E ncnncitincenctccinccancncsensedesecs=

PAGE

ry feiss: oa P . Dre Rihtae Cue . “6 cate So Wn Rid el wa Sng ip ie te SNR iBone incite Se ae

PS sat oma,

ix

PAGE

People v. St. George's Society, 28 Mich. 261--~------ 55

Pfister v. Gerwig, 122 Ind. 567-_-------------------- 32

Pierce v. Equitable Life Assurance Society, 145 Mass.

56, 1 Am. &. 498,12 N. EB. 800... 00.00.-- 35

Pittsburgh, ete., R. Co. v. Long Island Loan, ete., Co.,

iy fie oe i A SS eee een 49

R

Ralls County v. United States, ex rel., 105 U. S. 733

Ae Mss & aininte nate aimed mesma aims 46

Reynolds v. Mandel, 175 Il. 615, 51 N. E. 649_-__---- 43

Reynolds v. Supreme Council Royal Arcanum, 192

Mass. 150, 78 N. E. 129, 7 LRANS 1154__------ 39

- Richardson v. Jones, 58 Ind. 240, 248___------------ 52

_ Richardson v. Opelt, 60 Neb. 180, 82 N. W. 377_-_-_--- 46

— Royal Fraternal Union v. Lunday, 51 Tex. Civ. App.

a ER A ARR Seer aey em eapee name re 35, 36

Ruckman v. Union Railway Co., 45 Or. 578, 78 Pac.

Pr ie are 42

Ryan v. Rhodes, 167 Ind. 121, 126, 76 N. E. 249, 78

Be ls Od bitchin ih nnchcd lamin pimp eeiaaanidagensea 52

3 Ss

_ Saunders v. Robinson, 144 Mass. 306, 10 N. E.815--- 37

_ Selig v. Hamilton, 234 U. S. 652, 58 L. ed. 1518___--- 54

| Sharon v. Hill, 26 Fed. 337, 391_.-.---------------- 50

| Shepperd v. Bankers Union of the World, 77 Neb. 85,

I SR i in ob mista chabeins 40

; Shipman v. Protected Home Circle, 174 N. Y. 398, 409 39

Singer v. Hutchinson, 183 Ill. 606, 56 N. E. 388, 75

pgs a AE ot ipa ae eee EE Re yc a 43

x

PAGE

Slater v. Skeirving, 51 Neb. 108, 70 N. W. 492, 66 Am.

St. 444 ......-...........--2--2--5--2------ 42

Smith v. Mutual Life Ins. Co., 14 Allen 336_--------- 33 |

Smith v. Swormstedt, 16 How. 288, 14 L. ed. 942__--- 41, 44

Smyth v. Supreme Lodge Knights of Pythias, 198 Fed.

hee es I Ee eG aap th th ie an gs 62 |

Smyth v. Supreme Lodge Knights of Pythias, 220 Fed.

Be ea nee 62

Sovereign Camp Woodmen of the World v. Hall, 104

Ark. 538, 148 S. W. 526, 41 LRANS 517-_------- 31

Spargo v. Converse, 191 Fed. 823, 112 CCA 337__---- 5

Sperry, ete., Co. v. Blue, 202 Fed. 82, 120 CCA 1_----44, 69 |

State v. Buffalo County, 6 Neb. 461_--------------- 42 |

State v. Denton, 229 Mo. 187, 138 Am. St. 417, 129 |

“tO Ee UA ee ES ae 36 |

State v. Shain, 245 Mo. 78, 149 S. W. 479___--------- 36 |

Straus v. American Publishers Assn., 201 Fed. 306, |

OM a i cin ete 44

St. Louis, etc., Co. v. Kemp, 104 U. S. 636, 26 L. ed. 875 |

Supreme Council Royal Arcanum v. Green, 237 U.S. |

531, LRA 1916A 771, 59 L. ed. 1089____------ |

36, 37, 38, 41, 45, 65 |

Supreme Lodge Knights of Pythias v. Knight, 117 Ind. |

ae Pet NR eG le ee BY ROOTS 31, 32, 38, 39

|

Supreme Lodge Knights of Pythias v. Kutscher, 179

eS 8 eR RR ee ee ee 32

Supreme Lodge Knights of Pythias v. LaMalta, 95

em bh tS. reer |

Supreme Lodge Knights of Pythias v. Mims, 167 S. W.

Pe i eS Bio ren ctticniindcincnn 62

Supreme Lodge Knights of Pythias v. Mims, 241 U. S.

. Jy 2... eee ee 39, 62, 76, 83

PAGE

" Supreme Lodge Knights of Pythias v. Stein, 75 Miss.

= 107, 21 So. 559, 37 LRA 775------------------- 31

Supreme Tribe of Ben Hur v. Cauble, 255 U. S. 356, 65

gh yD GRE essa oe eee OOO ea ee 41, 45

Suydam v. Barber, 18 N. Y. 468, 471, 75 Am. Dec. 256 50

=

Talbert v. Modern Woodmen of America, 83 Wash.

SE Biba cttdinnaninn asinine 35

Taylor v. Mutual Reserve Fund Life Association, 97

Va. 60, 45 LRA 621, 33 S. E. 385_----------- 35, 36

Thibert v. Supreme Lodge Knights of Honor, 78 Minn.

a 448, 81 N. W. 220, 79 Am. St. 412,47 LRA 136__ = 32

- Thomas v. Musical Mutual Protective Union, 121 N.

"y +A 8 Fe SEF Sen 55

Tice v. Supreme Lodge Knights of Pythias, 204 Mo.

Re Be i Mk Ceci wrrnininicd ne ennenannmnnen 37, 82

U

Union, etc., Bank v. Memphis, 189 U. S. 71, 47 L. ed.

EIN ee Nee eS ORR nae Pe ee 48

Union Pacific R. Co. v. Wyler, 158 U. S. 285, 39 L. ed

BE ice Alesis Saskia tetucieoa enlace ageneenanlbapenmenienndadee 44

United States v. Arredondo, 31 U. S. 691, 729, 8 L

Be BN no hens cennencsneneeennetimecaemet 33, 74

S United States, ex rel. v. City of New Orleans, 98 U.

We OO, | hicnccinceecensrntneanencnsneareses 46

5 United States, ex rel. v. County Court of Knox County,

ee as Oe Os BO Ba C6. BORE. .. nck dneiiicnonse 46

United States v. Haytien Republic, 154 U. S. 118, 129,

OS ee ce aalbaimnnion 42, 45

xii

28 U.S. Statutes at Large, pp. 96, 97--------------

U.S. Comp. Statutes 1916, § 905, R. S. U.S., § 1519_-

$905 R. S. U.S., § 1519, U. S. Comp. Statutes 1916._ 4

WwW

Watson v. National Life, ete., Co., 162 Fed. 7, 12, 88

OO no cen ceennonennl 41, 4

Walker v. Walker, 150 Ind. 317-325, 50 N. E. 68_---- i

Werlein v. City of New Orleans, 177 U. 8. 390, 44 L.

PO |, Earp aE eT rt

Westerman v. Supreme Lodge Knights of Pythias, 196

Mo. 670, 94 S. W. 470, 5 LRANS 1114_--------- 37,7

Wilcox v. Cassick, 2 Mich. 168_-------------------- b

Wilson v. Buell, 117 Ind. 315, 317, 20 N. E. 231------ 5

Wineland v. Knights of Maccabees, 148 Mich. 608_--- 3

Woolery v. Grayson, 110 Ind. 149, 10 N. ge Sa.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1923.

SUPREME LODGE KNIGHTS OF PYTHIAS,

Plaintiff in Error,

v. Lato. 214.

GEORGE O. MEYER,

Defendant in Error.

;

:

IN ERROR TO THE SUPREME COURT OF THE STATE OF

NEBRASKA.

BRIEF OF PLAINTIFF IN ERROR.

STATEMENT OF THE CASE.

This was an action by the beneficiary upon a benefit cer-

- tificate issued by the plaintiff in error. As alleged in the

complaint, said certificate provided, among other things,

for the payment of insurance to the defendant in error upon

the death of the member. Said certificate was issued sub-

ject to the charter, and the laws, rules and regulations of

the society governing the Insurance Department, “now in

PN A og ad mY

2

force, and as the same may be hereafter changed, altere)

added to, amended or repealed.” (Tr., p. 3, Par. 2.)

Another provision of said certificate required said

ber to pay the assessments, or dues, monthly, during

life of said certificate. (Tr., p. 4, Par. 1.)

And “failure to make any such payment on or before

20th day of the month for which the same is due shall, ipe

facto, from and after such date, forfeit this certificate!

(Tr., p. 4, Par. 1.) ui

The application of said member for insurance, was mar

a part of the contract and is set out in plaintiff's complaix :

and one of the provisions thereof, is “I further forsee

and agree that if my said application for membership i

accepted, constituting parts 1 and 2 thereof, that me

application, the benefit certificate or certificates that may®

issued thereon, the charter, the constitution and statu

of said Supreme Lodge now in force with any and i

amendments thereto hereafter enacted by the said Supren_

Lodge, and all the rules and regulations of the Board ©

Control of said Insurance Department as the same ne

exists or may from time to time be adopted shall constite

the contract of insurance between the undersigned the :

Supreme Lodge, and I further agree that as a member

said insurance department, if accepted I will be go

and conform to, and my obligations, and rights and

of my beneficiaries shall be governed and controlled by !

said contracts.” (Tr., p. 7, Par. 5.)

To this complaint the plaintiff in error filed its a

answer which among other things, alleged that the plai

in error was created by an Act of Congress and that!

powers to transact business, execute contracts and

* ;

change or raise the rates of insurance was derived from

such Act of Congress, and that the claim of said plaintiff

required the court to give a construction to said act which

construction constituted a federal question upon which the

courts of the United States constituted the final authority.

(Tr., p. 17, Par. 1.)

Said amended answer further alleged that said member

“failed, neglected and refused to pay his assessments and

dues required to be paid under said certificate, No. 4651,

from January, 1911, on to the time of his death, and that by

reason of such failure, neglect and refusal the said cer-

tificate of membership and all the rights of said Louis J.

Meyer became and were forfeited and the said plaintiff, by

reason of such failure, neglect and refusal has no right of

recovery for any sum whatever in this action.” (Tr., p. 18,

Par. 4.)

The amended answer further alleged that pursuant to

said Act of Congress creating the plaintiff in error, it prom-

ulgated and made an increase of rates of insurance, and the

amount required to be paid by said member and all others,

was increased; that said increased rates became effective

January 1, 1911; that the said member had full knowledge

of said increase; that said increase was just, reasonable and

necessary and that the said plaintiff in error had the author-

ity and power to enact and pass said increase in rates and

that said laws so increasing the rates were binding upon

said member and that notwithstanding the duty of said

member to pay said increased rates, he purposely failed,

neglected and refused to pay said dues from said date to

the time of his death, and that a forfeiture of all his rights

4

by reason thereof occurred and existed and has ever since

existed.” (Tr., p. 18, Par. 5.)

The amended answer further alleged that one, Holt, and

others, before the bringing of this action had brought and

maintained a class suit in the District Court of the United

States for the District of Indiana, against the plaintiff in

error in order to determine the validity of the raise in rates

which said members refused to pay and that the said United

States Court finally decided and decreed that the plaintiff

in error had the right, power and authority so to change

and increase its said rates, and that its said action in that

behalf was reasonable, proper and necessary; that said

defendant had a representative form of government at the

time it increased said rate of insurance; that the said Holt

was a member of said organization in the same class with

the said Louis J. Meyer and that said District Court had full

power and jurisdiction of the matters involved in said suit.

And that said decree “is final, conclusive and res judicata

of the questions, matters and things therein decided and

is decisive of the rights of said Louis J. Meyer and the

rights of the plaintiff herein to recover in this action, and

holding, adjudicating, determining and finally deciding that

no right of recovery, under the facts of this case existed,

and by reason of said decision and the determination of said

questions by said court, the said plaintiff is now barred and

estopped from again litigating said questions or denyng the

conclusiveness of said decision in said case.” (Tr., p. 19,

Par. 6.)

The amended answer further alleges that the Supreme

Court of the United States in an appeal taken by the plain-

tiff in error in a case of Mims against the plaintiff in error

Pied atte Cpe hai ee Me

eae? —_—

5

affirmed by the Court of Civil Appeals of the state of Texas,

had construed the statute creating the plaintiff in error

herein and had decided in said case that the plaintiff in

error had the right and the power to increase its rates under

and by virtue of the same Supreme Statute which is in-

volved in the present case, and that said decision so constru-

ing said statute is binding and obligatory upon the courts

of the several states by reason of the fact that the act creat-

ing the plaintiff in error is a federal statute. (Tr., p. 20,

Par. 7.) |

The amended answer further alleges that said Louis J.

|

|

|

|

Meyer in his application and in his certificate also agreed

to abide by all the rules and regulations then enacted and

all to be subsequently enacted governing said insurance,

and that the subsequent statute raising the rates was proper

and just to all members and that his beneficiary is now

estopped from denying or controverting the right of the

plaintiff in error to raise the rates of insurance in con-

troversy herein. (Tr., p. 21, Par. 8.)

The amended answer further alleged that the plaintiff

in error was first organized under the laws of the District

of Columbia in 1870, for a period of twenty years; that its

charter expired in 1890; that from 1890 to 1894 it continued

transacting its customary business as a de facto corpora- |

tion ; that in 1894 a federal statute was enacted creating the |

plaintiff in error and that it has since continued to transact

all of its business under and by virtue of said Act of

Congress.

|

It further alleges that the Insurance Department was

created in 1877 that it continued to write insurance from

that time on; that the plaintiff’s decedent was a member of

the Insurance Department and that Joseph Holt and all

others who were named as plaintiffs in the case of Holt et al,

against Supreme Lodge as above set forth were members

of said class in said Insurance Department; that in 1910

the plaintiff in error “ascertained that the rates theretofore

fixed were inadequate and would not produce funds suff.

cient to mature the certificates outstanding; that there was

an increasing deficit due from each holder of a certificate

because the dues were less than cost of insurance; that said

Supreme Lodge was through necessity required to take

action for the relief of said Department, that said Supreme

Lodge did enact and promulgate a statute fixing a schedule

of rates being the same rates now in force; that the enact-

ment of said statute and the promulgation of said rates

caused more or less dissatisfaction among the members of

said Department of defendant and that, because thereof,

Joseph Holt, Victor Mauberret, Ross Carlin and 17 others,

all citizens and residents of the state of Louisiana “on behalf

of themselves and all others similarly situated,” on Janv-

ary 25, 1911, filed their bill in equity in the United States

District Court for the District of Indiana, alleging that said

statute was invalid, wrongful and not binding upon them or

anyone holding a certificate similar to theirs, and prayed

that the said court grant a writ of injunction restraining

the defendant from putting into effect said statute increas-

ing said rates and requiring the defendant to accept the

old and prior rates; that the defendant duly answered said

bill, denying said statutes was invalid but asserted that it

was valid and necessary to the further conduct of said de

fendant.” (Tr., p. 21, Par. 9.) .

Kf

_ That said cause was submitted for trial and the court

found that the defendant therein was a fraternal bene-

ficiary society conducted without profit, possessing a lodge

8) stem and ritualistic form of work and had a representa-

tive form of government; that the increase of rates was

: uly and legally made. That the said Joseph Holt and all

thers were in the same class with the plaintiff’s decedent

‘and held certificates similar in all respects to the one held

f by plaintiff’s decedent and sued upon in this case. (Tr., p.

2, Par. 9.)

It was further alleged that an appeal was taken from

the decree and judgment of the United States District Court

o the Circuit Court of Appeals for the Seventh Circuit and

that said judgment was duly affirmed and that the plaintiffs

therein duly filed their appeal from the judgment of affirm-

: nce of the Circuit Court of Appeals, and that said appeal

Was dismissed by the Supreme Court of the United States

4 nd that said judgment and decree of the District Court of

t e United States has been in full force and effect since

‘its rendition.

i The amended answer further alleges that the said judg-

‘ment and decree of the district court of the United States

a nd of the Circuit Court of Appeals in said cause are en-

titled to full faith and credit in the courts of the State of

Nebraska and that said judgment and decree ought to

“estop the plaintiff from alleging or asserting that the statute

of 1910 raising the rates is invalid or unenforceable against

he plaintiff, and that said plaintiff is estopped by reason

hereof from alleging or asserting that the defendant does

hot have and maintain a representative form of government

8

and that the said judgments should be and are binding and

conclusive on all courts, state as well as federal and that

failure so to consider and determine constitutes a failure

to give full faith and credit to the records and judgments

of said court, as required by Section 905 Revised Stat-

utes of the United States, and also is in violation of

Article 4, Section 1, of the Federal constitution requiring

full faith and credit to be given to the public records ani

judicial proceedings of every other state. |

The amended answer further alleged that in 1892, 1961,

1909 and 1910, extra assessments were made against the

plaintiff’s decedent and in 1894 and 1901 increases in rate

were established and promulgated by the defendant and sai

increases were duly paid by plaintiff’s decedent; that the

manner of selecting the Supreme Lodge of the defendant

has been prior to and was subsequently to said times the

same as in the year 1910 when the increase in question was

enacted; that by reason of said facts the plaintiff ought to

be estopped from asserting that the defendant in 1910 did

not have a representative form of government.

The plaintiff replied to said amended answer by alleg-

ing that no act of Congress was involved in this action;

that the certificate of insurance was not conditional ant

was not subject to a change by said defendant and further

denied that the said Louis Meyer failed or refused to pa)

his assessments after January 1, 1911, or at any other time

and that the defendant was not vested with power or auth

ority to make any increase in the rates of insurance whith

would affect the certificate sued upon and further deniei

that any change of the rate of insurance was made affect

ing the certificate of plaintiff’s decedent. (Tr., p. 25.)

9

Said reply further alleged that on a prior appeal of this

cause the Supreme Court of Nebraska had held that the

plaintiff in error did not have a representative form of

government, and that it was without any power to change

its rates by reason of said fact, and that the pretended

rates sought to be made effective January 1, 1911, were

void, and therefore, said certificate did not become for-

feited but remained in force and effect.

JUDGMENT.

: The finding was for the plaintiff. (Tr., pp. 26-27.) <A

- motion for a new trial was duly filed. (Tr., pp. 28-29.)

' Said motion alleged that the finding of the court was not

- sustained by sufficient evidence and that it was contrary

to law.

Also that the court erred in refusing to give credit to

' the judgment and proceedings in the Holt case. That the

Court erred in holding that said decisions of federal courts

- were not final and conclusive as to the validity of the stat-

- utes raising the rates; that the court erred in holding that

- its failure to give full faith and credit to the judgment in

the Holt Case was in violation of Article 4, Section 1, of

_ the Federal Constitution ; that the court erred in failing to

give effect to said judgment and in holding that the failure

_ to give effect to said judgment did not constitute a viola-

' tion of Section 905 Revised Statutes of the United States;

that the Court erred in refusing to sustain the increase of

rates and in so doing denied the authority of the defendant

} under the Act of Congress creating the defendant, and that

_ the Court erred in holding that the judgment and decree of

“ oh eet CNR

10

the Federal Court was not binding upon the courts of the :

State of Nebraska. (Tr., pp. 28-29.)

Said motion was overruled and an exception reserved}

EVIDENCE.

The evidence consisted mostly of stipulations. Two wit)

nesses testified: Mr. W. O. Powers, General Secretary, ani!

George A. Bangs, a member of the Board of Control.

It was stipulated by the parties that the Supreme Lodg i

Knights of Pythias is a fraternal order maintaining an In|

surance department, having the principal place of busines q

at Indianapolis, Indiana, and authorized to transact bus: ]

ness in Nebraska during the period covered by the pleading 3

in the case; that on June 11, 1885, Louis J. Meyer wasij_

member of the subordinate lodge of the defendant and way

the holder of a certificate of insurance as heretofore de)

scribed in plaintiff’s complaint, on June 27, 1910, he peti!

tioned for and secured a change of beneficiary in said cert

tificate. Said certificate is set out in transcript on pp. 3 3

43 and contains the provisions heretofore set out in th}

abstract of plaintiff’s complaint. 3

It was further stipulated that said insurance was dul 3

paid up to January 1, 1911. (Tr., p. 33, ll. 4-10.)

It was further stipulated that the said decedent fron}

and after January 1, 1911, up to the time of his death ter

dered to the defendant, Section Secretary all dues, assess}

ments and charges at the same rate he was paying durim E

1910, and that said tenders were refused by the defendant

(Tr., p. 33, Par. 1.)

ee

11

The reason for the refusal to accept the said tendered

dues and assessments was that the amounts so tendered

were insufficient under the increased rates which became

effective January 1, 1911, and the defendant forfeited said

insurance on the books of the society, and said forfeiture

remained so until said member’s death. (Tr., p. 34.)

It was further stipulated that Louis J. Meyer died April

11, 1916, and that notice of his said death was duly given

to the defendant but liability was denied. (Tr., p. 34.)

It was further stipulated that in 1885 the Supreme

Lodge Knights of Pythias was a corporation organized and

doing business under the laws of the United States for the

District of Columbia; that it was organized August 5,

1870, and continued as such until 1890; that it continued

its business as a de facto corporation until 1894; that on

June 29, 1894, the Supreme Lodge Knights of Pythias was

created by a special statute of the United States under

which it has existed and operated ever since.

Said act appears in 28 U. S. Statutes at Large, 96-97,

which act is as follows:

“An Act to Incorporate the Supreme Lodge of

the Knights of Pythias. Be it enacted by the Sen-

ate and House of Representatives of the United

States of America, in Congress Assembled:

That George B. Shaw, of the City of Eau Claire,

State of Wisconsin; William W. Blackwell, of the

City of Henderson, State of Kentucky; Walter B.

Richie, of the City of Lima, State of Ohio; Robert

L. S. White, of the City of Nashville, State of Ten-

nessee; Philip T. Colgrove, of the City of Hastings,

State of Michigan, and Tracy P. Bangs, of the City

of Grand Forks, State of North Dakota, officers and

pa

12

members of the Supreme Lodge Knights of Pythias,

and their successors, be and they are hereby incor-

porated and made a body politic and corporate in

the District of Columbia, by the name of ‘The Su-

preme Lodge Knights of Pythias,’ and by that name

it may sue and be sued, plead and be impleaded, in

any court of law or equity, and may have and use a

common seal, and change the same at pleasure, and

be entitled to use and exercise all the powers, rights

and privileges incidental to fraternal and benevolent

corporations within the District of Columbia.

Section 2. That the said corporation shall have

the power to take and hold real and personal estate,

not exceeding in value one hundred thousand dol-

lars, which shall not be divided among the members

of the corporation, but shall descend to their suc-

eessors for the promotion of the fraternal and benev-

olent purposes of said corporation.

Section 3. That all claims, accounts, debts, things

in action or other matters of business of whatever

nature now existing for or against the present Su-

preme Lodge Knights of Pythias mentioned in sec-

tion 1 of this act, shall survive and succeed to and

against the body corporate and politic hereby cre- —

ated; provided that nothing contained herein shall ©

be construed to extend the operation of any law

which provides for the extinguishing of claims or

contract by limitations of time.

Section 4. 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.

Section 5. That said corporation shall not en-

gage in any business for gain; the purposes of said

corporation being fraternal and benevolent.

Section 6, That Congress may at any time

amend, alter or repeal this act.

Approved June 29, 1894.”

(28 U. S. Statutes at Large, 96 and 97.)

OF SS a re es bone

ott Ae Pg ate of)

be eee ee Ce

Za

ea RS SVE RS AA FLITE

YAR Teel get Ree ROAR SAR NSO PNY BEEN DC ERS Pet aw a

13

It was further stipulated that the Supreme Statutes of

1906, 1908, 1910, 1912, 1914 and 1916 be admitted in evi-

dence with the agreement that either party could select

such portions thereof as were deemed important in the

hearing of the case. (Tr., p. 34.)

It was further stipulated that the Supreme Lodge of

1910 was composed of 163 members; that nine thereof

were Past Supreme Chancellors and eight, Supreme officers

of the deefndant, that ninety-eight were holders of cer-

tificates in the Insurance Department and of said total 146

were delegates elected by the various grand lodges; that

all of said members participated in the enactment of the

statutes increasing the rates which became effective Janu-

ary 1, 1911; that the Supreme Lodge during the period cov-

ered by the pleadings in this case was constituted in accord-

ance with the Supreme constitution as it existed in 1910

and that all legislation and statutes were enacted in sub-

stantially the same manner; that except the laws and stat-

utes enacted in 1910 there is no question or issue as to the

validity of laws contained in the Supreme Constituton.

(Tr., p. 35, Par. 1.)

It was further stipulated that the legislation of 1910,

increasing the rates, constituted a grievance to many mem-

bers of the Insurance Department; that Joseph Holt and

nineteen others, members of the Insurance Department

and holders of certificates in class 4 thereof, similar to the

certificate held by plaintiff’s decedent,

“on behalf of themselves and all other persons sim-

ilarly situated”

filed suit in the District Court of the United States for the

District of Indiana against this defendant, for the purpose

cen Ae aE oe canis Schell MON Ti ia hk ae cai Mee Ge

RS

RESALE ATI LE ID ILS ES

of declaring invalid said statutes increasing the rates; that

after a trial judgment was rendered in favor of the de-

fendant; that an appeal was taken from said judgment to

the Circuit Court of Appeals for the Seventh Circuit, which

court affirmed the judgment of the District Court ; 235 Fed.

885 (Tr., p. 35, Par. 2).

That the complainants appealed from said judgment of

the Circuit Court of Appeals to the Supreme Court of the

United States and that the complainants dismissed said ap-

peal October 21,1918. (248 U. S. 588.)

14

THE HOLT CASE.

The judgment in the Holt case pleaded as res judicata

in this case as to the validity of the Supreme Statutes of

the order increasing the rates, was a suit filed in the Dis-

trict Court of the United States for the District of Indiana.

The substantial allegations of the complaint (Tr., pp. 53-

72) so far as is deemed material here to the defense, al-

leged that the Supreme Lodge Knights of Pythias is a fra-

ternal association maintaining an Insurance Department;

that it is composed of various grand and subordinate lodges

and that the complainants are members of the subordinate

lodges of the defendant; that the members of the Insurance

Department were divided into classes and the complainants |

were members of Class 4 thereof. That they bring their

bill of complaint “on behalf of themselves and all other

persons similarly situated; that they are in good standing

in their local lodge and have paid their dues and assess-

ments in accordance wth the laws of the order. That the

assessments were payable monthly in advance. That they

15

duly tendered the dues and assessments for the month of

January, 1911, and that said tenders were refused in ac-

cordance with said statutes increasing the rates and that

the defendant refused to accept the amounts so tendered

being the old rates.” (Tr., pp. 53-58.)

They further allege that said increased rates were in

violation of their certificates and impaired the obligation

‘of their contracts with the defendant and destructive of

their rights and of the obligations of the defendant.

It was further alleged that said increase of rates would

deprive the complainants of all their rights in and to par-

ticipation of the trust fund already paid in and held by

said defendant.

It was further alleged that members of said Fourth

Class were about to institute suits in various parts of the

_ United States against the defendant on account of the al-

: leged unlawful increase of rates, which would entail large

expense against the trust funds for the defense of said

- suits. And that the defendant would be seriously inter-

_ fered with by reason of the multiplicity of actions about to

_ be brought and that it would be to the advantage of the de-

- fendant and all members of the Fourth class for this court

to assume jurisdiction of said controversy.

To this bill of complaint the defendant filed its amended

" answer. (Tr., pp. 96-120.)

Said amended answer alleged that the defendant is a

_ fraternal beneficiary society created by act of Congress that

it has established throughout the United States Grand

Lodges in the several states and territories and also sub-

ordinate lodges responsible to said grand lodges, all of

' which are controlled and governed by the Supreme Lodge.

Mea Dat NE, Spe Vat ee tai, — a tiacint il

16

That the rates existing prior to January 1, 1911, were

grossly inadequate for the protection of the certificate

holders and that the receipts were less than the amount

necessary to meet the current losses, and_ wholly

insufficient to meet the necessities of the Insurance De

partment.

That in 1901, the Supreme Lodge enacted a statute

raising the rates to be paid by the members of the Fourth

Class; that said rates so established in 1901 were inade

quate and insufficient and that subsequent to 1907 the mor-

tuary fund was constantly and rapidly diminished and that

the rates in force failed to produce a sufficient sum to meet

the necessities of said Insurance Department. That all

certificates issued by said Department contained the pro

vision that “In consideration of the payment hereafter to

said endowment rank (now Insurance Department) of all

assessments as required and the full compliance with al

laws governing this rank now in force, or that hereafter

may be enacted,” said Supreme Lodge will pay to the bene

ficiary the face of the certificate. (Tr., p. 100.)

Said amended answer further alleged that each of said

complainants failed and refused to pay the increased rate:

established by the Supreme Lodge at its session in 1910

and that by reason thereof each of said members becam

forfeited and ceased to have any interest or claim as mem

bers of said Insurance Department. (Tr., p. 103.)

Said amended answer further alleged that said statute

increasing the rates did not violate any law of the defené

ant nor any contract existing between it and the complait-

ant or any duty to the complainants or any of them but

avers that it adopted the only course possible for the pre

—

17

tection of their rights, and that without such increase the

mortuary fund would have become wholly insolvent and

permanently wrecked. (Tr., pp. 105-106.)

The defendant herein in its cross bill in said Holt case

alleged that theretofore in the District Court of the United

States for the District of Indiana, Fritz Heimsoth and oth-

ers on behalf of themselves and all others similarly situ-

ated had brought a suit in which was drawn in question the

validity of the Supreme statute increasing the rates which

suit had been prosecuted to final judgment, which judgment

was in favor of the validity of said Supreme Statute. (Tr.,

pp. 125-204.)

The record of said Holt case further shows a reference

| to the Master in Chancery and the filing of the Master's

report. (Tr., pp. 207-208.)

Finding No. 3 of said report is in part as follows:

“That said original corporation was during its

entire existence and said defendant is and has been

since its incorporation a fraternal beneficiary so-

ciety, that neither the defendant nor its said prede-

cessor was organized or was ever conducted for

profit ; that each of said corporations during tthe en-

tire period of their existence possessed a lodige sys-

tem and a ritualistic form of work and had a rep-

resentative form of government.” (Tr., p. 210,

Finding 3.)

Finding 27 of said Master's report is as follows:

“That the legislation of the defendant witth ref-

erence to the creation of the Fifth Class, the trans-

fer of members from the Fourth to the Fifth class,

the rerating of the Fourth Class, which became ef-

fective January 1, 1911, and the use of the expense

fund of the Insurance Department for the joint ex-

PARR iy REET er FONE IS st LRAT Ble AAEM Rh ROAR AA esinissts call wie

18

penses of the Fourth and Fifth Classes was all duly

and legally adopted by the said defendant in pursu-

ance to the constitution and laws of said defendant

and in accordance with the mode therein prescribed

for the adoption of amendments and the enactment

of new legislation.” (Tr., p. 243, Finding 27.)

Said record further shows the conclusion of law by said |

Mastery in Chancery, as follows:

“The equities of this suit are not with the com —

plainants and the bill of complaint should be dis

missed at the complainant’s costs.

Accordingly a decree dismissing the bill of com- |

plaint at complainant’s costs is recommended.

Respectfully submitted,

EDWARD DANIELS,

May 24, 1913. Master in Chancery.”

(P. 244, Par. 1.)

Said record further shows the complainant’s exceptions

to said Master’s report (Tr., pp. 244-245).

Said Fourth exception to said Master’s report is as —

follows: 3

“to the 27th finding of fact, in this, that the Master

erroneously found therein that the legislation of the

defendant with reference to the creation of the fittu

class, the transfer of members from the fourth to

the fifth class, the rerating of the fourth class,

which became effective January 1, 1911, and the use

of the expense fund of the Insurance Department

for the joint expense of the Fourth and Fifth Classes

was all duly and legally adopted by the defendant

in pursuance to the constitution and laws of the

defendant, and in accordance with the mode therein

prescribed for the adoption of amendments and the

19

enactment of new legislation; whereas the evidence

in said cause and the findings of fact contained in

said Master’s report show that said legislation was

i adopted in contravention of defendant’s constitu-

| tion of 1884 and 1886, and in violation of its repre-

sentation, express declarations of trust and con-

tracts with its fourth class members.”

(Tr., p. 246, Par. 1.)

Said record further shows a stipulation entered into be-

tween the parties in the said Holt case, the fourteenth of

which is in part as follows:

“That the suit instituted by these complainants

against the defendant Supreme Lodge Knights of

Pythias involved additional questions of law and

fact different from those involved in the action in-

stituted by the said Fritz Heimsoth, in that in this

) cause of action the complainants contest the right

| of the defendant to rerate the members of said

Fourth Class of the Insurance Department accord-

ing to a system adopted by said Supreme Lodge

Knights of Pythias which issues of law and fact re-

| lating to the right of the defendant to rerate the

members of the Fourth Class were in no wise in-

volved in the action instituted by Fritz Heimsoth

against said Supreme Lodge.”

(Tr., p. 249, Stipulation 14.)

att erties

Said record further shows judgment in said Holt case

as follows:

“Come now the parties by their respective solic-

itors and thereupon the defendant having heard the

argument of counsel upon the exceptions to the Mas-

ter’s report herein, and duly considered the same

and being sufficiently advised in the premises over-

= — — - - :

eee ee oe ee

20

rules said exceptions and approves and confirms said

report.

It is thereupon ordered, adjudged and decreed

by the court that the bill of complaint herein be and

the same is hereby dismissed for want of equity,

and it is further ordered, adjudged and decreed that

the complainants do pay to said defendant its costs

herein expended, taxed at $—————..”

(Tr., p. 250, Par. 3.)

Said record further shows an appeal from said decision,

and also the decision of the Circuit Court of Appeals for

the Seventh Circuit affirming said judgment of the District

Court. (Tr., p. 251-254.)

The following sections of the Supreme Constitution

among others were introduced in evidence :

“PREAMBLE.

The Supreme Lodge Knights of Pythias, a cor-

poration existing by virtue of the act of Congress

approved June 29, 1894, is the source of all authority

in the order of Knights of Pythias and does hereby

ordain and establish this Supreme Constitution.”

“RESERVE POWERS.

The Supreme Lodge Knights of Pythias hereby

reserves to itself all powers which are not herein

delegated.”

“ARTICLE TWO.

The Supreme constitution and the laws and rit-

uals enacted by the Supreme Lodge in accordance

therewith shall be the supreme law of the order of

Knights of Pythias.

Section 482. To the end that every certificate in

the Fourth Class of the Insurance Department shall

on maturity be paid in full accorcing to the tenor

21

thereof the Supreme Lodge enacts and declares

es 2 F

(b) Every member of the Fourth Class of the

Insurance Department at the time when this statute

takes effect and who continues his membership un-

til Dec. 31, 1910, shall pay a monthly payment for

each month thereafter beginning with the month of

January A. D. 1911, monthly payments in accord-

ance with his attained age and occupation and the

amount of a benefit provided for in his certificate,

on January 1, A. D. 1911, as fixed by the table here-

in, unless and until otherwise provided by enact-

ments of the Supreme Lodge.” * * * (Tr., p.

284, Section 482.)

“Sec. 495. The right to change, increase, or ad-

just the schedule of rates in the Fourth and Fifth

Classes, respectively, or any of them, is expressly

reserved to the Supreme Lodge, as is also the right

to apply any such changes increased or adjusted

schedule of rates to all the members’ certificates.

This right of readjustment includes the right to ad-

vance members without reference to the plan or

class of which they are members to their attained

age at any time, and apply new rates applicable

thereto when deemed necessary by the Supreme

Lodge to carry out the purposes of the Insurance

Department. (Tr., p. 290, Section 495.)

“Section 519. The regular monthly payments

and assessments of all members of the Insurance

Department shall be due and payable to their re-

spective Section Secretaries without notice in ad-

vance, on the first day of each and every month, and

the failure to make such payment on or before the

exact day of each month shall cause from and after

such date a forfeiture of the certificate of member-

ship and all right, title and interest such member or

his beneficiaries may have in and to the same and

membership shall thereby cease ipso facto * * *,

In case of forfeiture under the above section, mem-

bership may be regained only in the manner pro-

vided by law. (Tr., p. 291, Section 519.)

DUNEDIN BES Ss S hb iS NEM ERAN ie AAAS Eile RIAL WER ALR SE LETRA IA

22

TESTIMONY.

The defendant, to sustain the issues on its part, intro-

duced the witness, WALTER O. POWERS, who testified as

follows:

Have been General Secretary of the Supreme Lodge

Knights of Pythias, Insurance Department, since Novem-

ber, 1910. Had charge of the books and the General office

of the Insurance Department. Was acquainted with the

financial condition of the Department prior to 1910. The

Fourth Class on October 31, 1910 had 11,392 members and

the mortuary fund contained $675,800.85. The Fourth

Class members were received between 1884 and 1910. The

Fourth Class decreased from 1906 to 1910, the rates in

force from September 1901 to January 1911 were 85% of

the National Fraternal Congress Table. This was not suffi- |

cient to mature the certificates. The amount due from Mr. |

Meyer after January 1, 1911 was $26.30 per month. (Tr.

p. 296.) Computing the payments made by Mr. Meyer |

from the time he became a member, with interest at 34%, ©

charging him with actual cost of insurance accumulated at 2

the same rate, the mortuary contribution in comparison

with actual cost of insurance furnished without considering ~

any reserve or other factor and there was a deficit due from |

him on such basis of $1403.86. (Tr. p. 296-297.) This |

represents a deficit or protection secured by him at that

much less than the actual cost. (Tr., p. 297.) There was

a special assessment called July 15, 1892. The rates were

increased 5c per month for each $1,000 of insurance March ©

1, 1894. A special assessment, in addition to the twelve was |

created in 1901. (Tr., p. 297.) The increase in 1894 was ©

23

made because the mortuary contributions were not sufficient

to meet the maturing claims. (Tr., p. 298.) In the rerat-

ing of 1901 the payments were based upon the age of entry

into the Insurance Department, and not upon the attained

) age, but in 1910 the rerating was based upon the American

_ Experience Table of Mortality with an interest assumption

of 34% and at the attained age. (Tr., p. 298-299.) Under

the statute of 1911, there is an annual valuation and

| accounting at the end of each year and if condition justify,

the payment of one or more monthly dues will be waived.

_ (Tr., p. 299.) The membership of the fourth class is about

: 1,000. The insurance about $1,800,000. The mortuary

fund about $625,000. This will mature all certificates in

that class. The rerating was done by Mr. S. H. Wolf, our

consulting actuary of New York. (Tr., p. 300.) No new

members were admitted to the Fourth Class after 1910.

Mr. Meyer after September 1, 1901, paid $5.70 per month.

From 1885 to 1894, $3.30 a month; from 1894 to 1901, $3.40

per month. These were the total payments. His certificate

was $2,000. The deficit on Mr. Meyers’ certificate was

$1,403.86. (Tr:, p. 301.) Im 1910 an investigation showed

a mortuary fund of about $1,189,000 where it should have

been about $30,000,000. This led to the increase of rates

in 1910. Provision was made for admitting members of

the Fourth Class into the Fifth Class at their attained age

but without medical examination. (Tr., p. 303.) There

were about 55,000 members of the Fourth Class transferred

to the Fifth Class. There was a great increase in lapsation

of the Fourth Class members between 1906 and 1910. (Tr.,

p. 304.)

24

Mr. GEORGE A. BANGs testified as follows:

I am a member of the Board of Control and have bee

for the past 11 years. Also served from 1902 until 1904

From 1904 to 1906, was chairman of Special Committe

created by Supreme Lodge at the 1904 Conference for pur.

pose of investigating conditions of the Insurance Depart.

ment. (Tr., p. 305.) I worked with the actuaries in mak-

ing the investigation, assisted them in ascertaining the

facts, met with the committee every three months and with

the Board of Control during the two-year period. The

Fourth Class at that time showed actual deficit of about

thirty milllion dollars. That was the amount required ti

be on hand in cash and invested at 314% in order to mature

the certificates outstanding. There were several hundrei

thousand dollars death claims which had accumulated. ( Tr,

306.) We were confronted with problem of rerating

Fourth Class so that it would pay its obligations. Ther

were but fifteen or twenty members in classes outside d

the Fourth. We created the Fifth Class and began educat

ing members of the Fourth Class to the desirability o

permanent safe insurance. Probably three-fourths of the

members voluntarily transferred to the new class. Thi

began in 1907-1910. We were confronted with the necessity

of rerating the Fourth Class to prevent insolvency. Adopt

ed the American Experience Table of Mortality, the samt

as in the Fifth Class. (Tr., 307.) A slight difference was

made in favor of older members in the expense loading

Since 1910 claims have been paid promptly as they matured.

Have an annual accounting. If the earnings for the yea!

are sufficient we waive one or more payments. (Tr., 308)

Our accounting in 1904 showed death losses about the samt

25

- as American Experience Table of Mortality and exceeded

_ the National Fraternal Congress by a material percentage

_ which was the basis of the 1901 rates. All of the mortuary

} funds on hand in 1906 were given to Class Four. (Tr.,

: 309.) After the creation of Class Five there were many

; withdrawals from the Fourth Class. There was no increase

in rates in the Fourth Class from 1906 up to 1910. It

ef became necessary to levy special assessments in 1909-1910.

: Enacted the rerating statute for Class Four in 1910, becom-

_ ing effective January 1, 1911. (Tr., 310.) The rates fixed

- for Class Four were not in any manner affected by the

: transfer of members to class Five. The rates were fixed

3 upon the attained age of each member and have nothing to

_ do with other people. There was no mortuary fund in com-

parison with the risk. In 1906 there was a thirty million

' dollar deficit. There was a list of outstanding obligations

» for $125,000,000 and assets of promises. The difference

between them showed about $30,000,000. Rates are based

> upon expectancy of death. (Tr., 311.) The rates were

- fixed in order to meet outstanding policies and liabilities.

~ Rates are fixed upon a mortality table. This table assumes

from experience that at age 65 a certain number of men

(- will die; at 66, a larger number will die; at 67 a still larger

number will die. The rates were fixed so that it would

~ mature all certificates except those withdrawn. There was

no way to tell how many would withdraw. (Tr., 312.)

W. O. Powers being recalled, testified:

The mortuary fund of the Fourth Class always remained

to the credit of the members of that class. It was never

_ changed to the Fifth Class. (Tr., 313.) There was never

26

any change made in rates for the Fifth Class after its crea.

tion. Members of the Fourth Class in transferring to the

Fifth Class were not required to pass medical examination,

They were given the option of eight or ten different forms

of certificate. (Tr., 314.) The lapsation of a policy would

not constitute a benefit to the society. The reason is that :

those who lapse are usually profitable and desirable risks— —

men in good health. The payments made by Mr. Meyer had

already been used in payment of death losses. There was

no reserve in the Fourth Class. (Tr., 315.) If all Fourth

Class certificates had lapsed it would have ended that class,

and the society would have the money. There has been}

practically no lapsation in Class Four since 1911.

ASSIGNMENTS OF ERRORS.

To the decision of the Supreme Court of the State of

Nebraska the plaintiff in error has assigned errors 4

follows:

“The Supreme Lodge Knights of Pythias in cor-

nection with its petition for a writ of error hereit

makes the following assignment of errors which

said Supreme Lodge Knights of Pythias avers o-

curred in the final order and judgment herein, dated {

the 5th day of October, 1922, and in overruling peti-

tion for a rehearing November 20, 1922.

First. The Supreme Court of the State of Ne

braska erred in holding that the action of Supreme

Lodge Knights of Pythias, as created by the act of

the United States Congress, on June 29, 1894, 2

U. S. Statutes at Large, pp. 96, 97, in increasing the

rates on its members in the insurance department, it

1910, effective January 1, 1911, was and is invalid

and void, and not binding on the members thereof

who were and are citizens of the State of Nebraska

ee EE Ae oe pl ARNE we fae Sead met EES Sl 2 OR Se Te

SPF A AMES Ei OER OE OTIRION EW ae DIOS, To ATOM ETHER ie RS EMRE eM We

27

Second. The Supreme Court of the State of Ne-

braska erred in holding that no legislation of said

Supreme Lodge Knights of Pythias, affecting those

of its members holding insurance certificates, is

valid and effective unless the membership of said

Supreme Lodge shall be composed entirely of mem-

bers holding insurance certificates, and shall also be

biennially elective by the members holding such in-

surance certificates, whereas, the federal statute cre-

ating said corporation (28 U. S. Statutes at Large,

pp. 96, 97) makes no such restriction, and specially

creates the ‘officers and members of the Supreme

Lodge Knights of Pythias, and their successors,’ as

a body corporate, giving certain enumerated powers

thereto, one of which is to issue insurance certifi-

cates to those of its membership desiring same.

Third. The Supreme Court of the State of Ne-

braska erred in holding that the power to strike

down the statutes enacted by said Supreme Lodge

Knights of Pythias, inhered in the States, after the

validity of said questioned statutes had been finally

decided and held valid in two decisions of the Hon-

orable, the Supreme Court of the United States.

Fourth. The Supreme Court of the State of Ne-

braska erred in refusing to give effect to the judg-

ment and decree of the Honorable, the United States

District Court for the District of Indiana, in the

case of Joseph Holt, et al. v. Supreme Lodge Knights

of Pythias, wherein several members of said order,

who held insurance certificates therein, and who

were similarly situate with the plaintiff herein in

all respects and who brought said suit in ther own

behalf and in behalf of all others similarly situated,

for the express object and purpose of having said

statutes increasing the rates, which are the same

statutes involved in this action set aside and held

invalid and void, and to enjoin said Supreme Lodge

Knights of Pythias from enforcing same, and which

judgment and decree was appealed from, and

affirmed by the Honorable Circuit Court of Appeals

for the Seventh Circuit and by said Circuit Court of

fpr prea oa

EIT LIE, OLIN ARAL LAIN EIA NA, 0 Ne Sac ot Tigi wile ey hats ined) bata ate

Appeals for the Seventh Circuit affirmed, which

judgments and decrees are now in full force and

effect.

Fifth. The Supreme Court of the State of Ne-

braska erred in holding that the plaintiff in this

action was not bound by the judgment and decree

of the District Court of the United States for the

District of Indiana in the case of Joseph Holt, et al.

v. Supreme Lodge Knights of Pythias, which suit

was brought and maintained by said Joseph Holt

and others, on behalf of themselves and of all others

similarly situate, and wherein the validity of the

supreme statutes of said Supreme Lodge Knights of

Pythias, was affirmed and set at rest, the plaintiff

herein, being similarly situate with the plaintiffs in

said Holt case, * * * and the same being a

right guaranteed to the plaintiff in error under and

by virtue of Article 4, Section 1, of the Federal

Constitution, guaranteeing full faith and credit by

one state to the judicial proceedings of every other

state.

Sixth. The Supreme Court of the State of Ne-

braska erred in holding that the plaintiff in this

action was not bound by the judgment and decree

of the District Court of the United States for the

District of Indiara in the case of Joseph Holt et al.

v. Supreme Lodge Knights of Pythias, which suit

was brought and maintained by said Joseph Holt

and others, on behalf of themselves and of all others

similarly situate, and wherein the validity of the

supreme statutes of said Supreme Lodge Knights of

Pythias, was affirmed and set at rest, the plaintiff

herein, being similarly situate with the plaintiffs in

said Holt case, and the same being a right guaran-

teed to the plaintiff in error by virtue of Section 905

R. S. U.S., Section 1519, U. S. Comp. Stat. 1916, pro-

viding that the records and judicial proceedings of

any state or territory, or of any such country, shall

have such faith and credit given to them in every

court within the United States as they may have by

%,

pes:

fy cee

29

law or usage in the courts of the State from which

they are taken.

Seventh. The Supreme Court of the State of

Nebraska erred in holding that the plaintiff, being

the defendant in error herein, is not estopped by

virtue of his membership in said Supreme Lodge

Knights of Pythias so created by federal statute, 28

U. S. Statutes at Large, pp. 96, 97, from again rais-

ing the question of the validity of the rates enacted

by said Supreme Lodge Knights of Pythias in 1910,

for the reason that Joseph Holt and others in their

own behalf, and in behalf of all others similarly

situate, including: the defendant in errors assured,

brought and maintained a suit for the purpose of

declaring void the same statutes involved in this

action, and wherein a judgment and a decree of the

United States District Court for the District of In-

diana was rendered that said statutes were valid

and obligatory.

Eighth. The Supreme Court of the State of Ne-

braska erred in holding that the Supreme Lodge

Knights of Pythias did not have and maintain, at

the time of the enactment of the statutes in question,

increasing the rates, a representative form of gov-

ernment, whereas it had and maintained at said time

and ever, the same form of government which it

had at its creation by federal statute, 28 U.S. Stat-

ute at Large, pp. 96, 97.

Ninth. The Supreme Court of the State of Ne-

braska erred in holding that the Supreme Lodge

Knights of Pythias did not have and maintain at the

time of the enactment of the statutes in question,

increasing the rates, a representative form of gov-

ernment, whereas it was alleged in the answer and

shown by the evidence that said question was ex-

pressly decided adversely by the judgment and de-

cree o' the United States District Court for the Dis-

trict of Indiana, in the case of Joseph Holt and oth-

ers against Supreme Lodge Knights of Pythias,

wherein Joseph Holt and others sued in their own

behalf and in behalf of all others similarly situate,

toy ers et

including defendant in error’s assured, to set aside

said statutes increasing the rates, as invalid and

void.

The Supreme Court of the State of Nebraska

which is the highest court in said State in which a

decision in this action could be had where was

drawn in question the rights of the plaintiff in error

under the federal act of 1894, 28 U. S. Statutes at

Large, pp. 96, 97, creating the plaintiff in error,

and the rights of plaintiff in error under Section

905 R. S. U. S., and under Article 4, section 1, of

the federal constitution, and the question of estoppel

of the defendant in error under the federal statute

of 1894, 28 U. S. Statutes at Large, pp. 96, 97, and

the question of the validity of the legislation of

said plaintiff in error under the federal statute cre-

ating it, as affecting the members in the State of

Nebraska.

The Supreme Lodge Knights of Pythias prays

that a writ of error from the Supreme Court of the

United States may issue to the Supreme Court of

the State of Nebraska; and further prays that the

Supreme Court of the United States will reverse the

said final order and judgment of the Supreme Court

of the State of Nebraska, and that the Supreme

Lodge Knights of Pythias may be restored to all

things and rights which it has lost by reason of the

said final order and judgment; and that it may have

such other and further relief as may be proper and

just.”

——

31

POINTS AND AUTHORITIES.

FIRST ASSIGNMENT OF ERRORS.

The first error complained of is as follows: (Tr., p. 332.)

“The Supreme Court of the State of Nebraska

erred in holding that the action of the Supreme

Lodge Knights of Pythias, as created by the act of

the United States Congress on June 29, 1894, (28

U.S. Statutes At Large, pp. 96, 97) in increasing the

rates on its members in the Insurance Department,

in 1910, effective January 1, 1911, was and is invalid

and void, and not binding upon the members thereof

who were and are citizens of the state of Nebraska.”

Point One.

1. The By-Laws of a Mutual Association are said to be

a law unto the members.

Grosvenor v. United Society of Believers, 118

Mass. 78, 90;

Sovereign Camp Woodmen of the World v. Hall,

104 Ark. 538, 148 S. W. 526, 41 LRANS 517;

Supreme Lodge Knights of Pythias v. Knight, 117

. Ind. 489;

Bauer v. Sampson Lodge Knights of Pythias, 102

Ind. 262;

Supreme Lodge Knights of Pythias v. Stein, 75

Miss. 107, 21 So. 559, 37 LRA 775;

Supreme Lodge Knights of Pythias v. LaMalta, 95

Tenn. 157, 30 LRA 838;

Daughtry v. Supreme Lodge Knights of Pythias,

48 La. Ann. 1203;

32

Supreme Lodge Knights of Pythias v. Kutscher,

179 Ill. 340, 53 N. E. 620;

Thibert v. Supreme Lodge Knights of Honor, 78

Minn. 448, 81 N. W. 220, 79 Am. St. 412, 47

LRA 136;

Kocher v. Supreme Council Catholic Benevolent

Legion, 65 N. J. L. 649, 48 Atl. 544, 86 Am. St.

687, 52 LRA 861;

Benes v. Supreme Lodge Knights and Ladies of

Honor, 281 Ill. 134, 83 N. E. 127;

Pfister v. Gerwig, 122 Ind. 567.

Point Two.

“The Federal Statute creating the Supreme

Lodge Knights of Pythias provided that certain

persons [naming them], officers and members of the

Supreme Lodge Knights of Pythias, and their sut-

cessors, be and they are hereby incorporated and

made a body politic and corporate * * * entitle

to use and exercise all the powers, rights and priv

ileges incident to fraternal and benevolent corpora

tions within the District of Columbia. * * * That

said corporation shall have a constitution and shal

have power to amend the same at pleasure.”

Under this statute the successors of said named officers

and others constituting the Supreme Lodge, elected ani

holding office in accordance with the constitution of sail

order, had the right to enact all legislation governing sail

order.

28 U. S. Statutes at Large, pp. 96, 97;

Supreme Lodge Knights of Pythias v. Knight, 1)

Ind. 489, 20 N. E. 479, 3 LRA 409;

Dornes v. Supreme Lodge Knights of Pythias, 1

Miss. 466, 23 So. 191.

33

Point Three.

“It is a universal principle, that, where power

or jurisdiction is delegated to any public officer or

tribunal over a subject-matter, and its exercise is

confided to his or their discreton, the acts so done

are binding and valid as to the subject matter; and

individual rights will not be disturbed collaterally,

for anything done in the exercise of that discretion,

within the authority and power conferred. The only

questions which can arise between an individual

claiming a right under the acts done, and the public,

or any person denying its validity, are, power in the

officer, and fraud in the party. All other questions

are settled by the decision made or the act done by

the tribunal or officer; whether executive (1 Cranch

170-1), legislative (4 Wheat. 423 ; 2 Pet. 412; 4 Ibid.

563), judicial (11 Mass. 227; 11 S. & R. 429 adopted

in 2 Pet. 167-8), or special (20 Johns. 739-40; 2

Dow. P. C. 521, &c.), unless an appeal is provided

for, or other revision, by some appellate or super-

visory tribunal, is prescribed by law. The principles

of these cases are too important not to be referred

to, and though time does not admit of their extrac-

tion, and embodying in our opinion, we have no hesi-

tation in declaring, that they meet with our entire

concurrence, so far as applicable to this case.”

United States v. Arredondo, 31 U. S. 691, 729,

8 L. ed. 547;

New Dunderberg Mining Co. v. Old, 79 Fed. 598,

25 CCA 116;

Bradley v. Dels Lbr. Co., 105 Wis. 245, 252, 81

N. W. 396;

Beard v. Federy, 70 U. S. 478;

And to the same effect see:

Connoyer v. Schaeffer, 89 U.S. 254;

Burgess v. Gray, 57 U.S. 48;

RE Met cwery oy

Lee v. Johnson, 116 U. S. 48;

Chouteau v. U. S., 34 U. S. 137;

Haydel v. Dufresne, 58 U.S. 23;

Noble v. Union River Logging R. Co., 147 U.S.

165, 172.

Poiat Four.

It is a well settled principle that the courts of a foreign

state have no visitorial powers over a fraternal corporation,

such power belonging exclusively to the state creating such

corporation.

Eberhard v. Northwestern Mutual Life Ins. Co,

210 Fed. 520.

SECOND ASSIGNMENT OF ERRORS.

The second error complained of is as follows:

The Supreme Court of the State of Nebraska

erred in holding that no legislation of said Supreme

Lodge Knights of Pythias affecting those of its mem-

bers holding insurance certificates, is valid and ef-

fective unless the membership of said Supreme

Lodge shall be composed entirely of members hold-

ing insurance certificates and shall always be bien-

nally elective by the members holding such insurance

certificates, whereas, the Federal Statute creating

such corporation (28 U. S. Statutes at Large, pp.

96, 97), makes no such restriction and expressly

creates the officers and members of the Supreme

Lodge Knights of Pythias and their successors, “as

a body corporate,” giving certain enumerated pow-

ers thereto, one of which is to issue insurance cer-

tificates to those of its members desiring same.”

(Tr., p. 333, par. 2.)

35

Point Five.

The courts of one state will not undertake to supervise

the rates of insurance fixed by a foreign corporation and

will not enjoin the collection of such rate.

Clark v. Mutual Reserve Fund Life Association,

14 App. Cas. (D. C.) 154, 48 LRA 390;

Conden v. Mutual Reserve Fund Life Association,

89 Md. 99, 44 LRA 149, 73 Am. St. 169, 42

Atl. 944; ,

Pierce v. Equitable Life Assurance Society, 145

Mass. 56, 1 Am. St. 433, 12 N. E. 858;

Smith v. Mutual Life Ins. Co., 14 Allen 336;

Ebert v. Mutual Reserve Fund Life Association,

81 Minn. 116, 83 N. W. 506, 834, 84 N. W. 457;

People v. Brotherhood of Painters, Decorators and

Paperhangers of America, 218 N. Y. 115, 112

N. E. 752;

Howard v. Mutual Reserve Fund Life Association,

125 N. C. 49, 45 LRA 853, 34 S. E. 199;

Royal Fraternal Union v. Lunday, 51 Tex. Civ.

App. 6387, 113 S. W. 185;

Taylor v. Mutual Reserve Fund Life Association,

97 Va. 60, 45 LRA 621, 33 S. E. 385;

Talbert v. Modern Woodmen of America, 83 Wash.

287, 145 Pac. 183.

Point Six.

The levying of assessments upon its members by a mu-

tual insurance company or by a fraternal society is a matter

relating to the internal affairs of such corporation and the

AOE APAAP, apne a OAS NO ab eipeah

36

courts of another state have no jurisdiction to strike down

such assessments.

Clark v. Mutual Reserve Fund Life Association, 14

App. Cas. (D. C.) 154, 43 LRA 390;

Condon v. Mutual Reserve Fund Life Association,

89 Md. 92, 93, 73 Am. St. 169, 44 LRA 149;

State v. Denton, 229 Mb. 187, 188 Am. St. 417, 129

S. W. 709.

Brenizer v. Supreme Council Royal Arcanum, 141

N. C. 409, 6 LRANS 235, 53 S. E. 835;

Howard v. Mutual Reserve Fund Life Association,

125 N. C. 49, 45 LRA 853, 34S. E. 199;

Royal Fraternal Union v. Lunday, 51 Tex. Civ.

App. 637, 113 S. W. 185;

Taylor v. Mutual Reserve Fund Life Association,

97 Va. 60, 45 LRA 621, 33 S. E. 385;

State v. Shain, 245 Mo. 78, 149 S. W. 479.

Point Seven.

Especially is this true where the courts of the domi-

ciliary state have construed the by-laws and charter of such

corporation and have declared such assessments valid.

Supreme Council Royal Arcanum v. Green, 237 U.

S. 531, LRA 1916A 771, 59 L. ed. 1089;

(Reversing 206 N. Y. 591, 100 N. E. 411.)

Gaines v. Supreme Council Royal Arcanum, 140

Fed. 978;

(Injunction against increase of rates denied by

Federal Court in Tennessee, defendant being a

Massachusetts Corporation.)

37

Supreme Council Royal Arcanum v. Brashears, 39

Md. 624, 73 Am. St. 244, 43 Atl. 866;

Hartford Life Ins. Co. v. Ibs, 237 U. S. 662, 59 L.

ed. 1165, LRA 1916A, 765.

Point Eight.

The Supreme Lodge Knights of Pythias now has and

maintains a representative form of government. Its gov-

ernment is exactly the same as at the beginning. It has

never been changed and the fact that others besides those

holding certificates of insurance may be eligible not only to

vote for, but to serve as supreme representatives to the Su-

preme Lodge does not deprive it of its representative form

of government.

13 Harvard Law Review 67 (Historical Survey by

Prof. Dicey) ;

Westerman v. Supreme Lodge Knights of Pythias,

196 Mo. 670, 94S. W. 470, 5 LRANS 1114;

Tice v. Supreme Lodge Knights of Pythias, 204

Mo. 349, 100 S. W. 519;

Saunders v. Robinson, 144 Mass. 306, 10 N. E. 815.

THIRD ASSIGNMENT OF ERRORS.

The third assignment of errors is as follows:

“The Supreme Court of the State of Nebraska

erred in holding that the power to strike down the

statutes enacted by said Supreme Lodge Knights of

Pythias inhered in said state of Nebraska, after

the validity of said questioned statute had been

finally decided, and held valid in two decisions of

the Honorable, the Supreme Court of the United

States.

LO IER LDN LB IR LI LE A AI TE ADORE AAI a

38

Point Nine.

Where the highest court of the jurisdiction creating the

corporation has declared its charter powers, such decision

will be followed by the courts of other states in which such

corporation may have members.

Supreme Council Royal Arcanum v. Green, 237 U.

S. 531, 59 L. ed. 1089, LRA 1916A, 771;

Hartford Life Ins. Co. v. Ibs, 23% U. S. 662, 59 L.

ed. 1165, LRA 1916A, 765;

Hartford Life Ins. Co. v. Barber, 245 U. S. 146,

62 L. ed. 208.

Point Ten.

The contract of membership in a fraternal beneficiary

society is made with reference to, and includes the consti-

tution and by-laws or Supreme Statutes of the order, of

which every member is bound to take notice, whether es-

pecially referred to in the contract or not, and whether or

not such constitution and by-law is known to the member.

Bauer v. Sampson Lodge Knights of Pythias, 102

Ind. 262, 267;

Supreme Lodge Knights of Pythias v. Knight, 117

Ind. 489, 3 LRA 409;

Supreme Lodge Knights of Pythias v. La Malta, 95

Tenn. 157, 30 LRA 838;

Mutual Assurance Society v. Korn, 7 Cranch 396,

3 L. ed. 383;

Fullenwider v. Supreme Council Royal League, 180

Ill. 621, 625;

39

Commonwealth v. Massachusetts Mutual Ins. Co.,

112 Mass. 116;

Modern Woodmen of America v. Tevis, 117 Fed.

369;

Shipman v. Protected Home Circle, 174 N. Y. 398,

409.

Point Eleven.

The right of a fraternal beneficiary society to readjust

and to increase its rates, where desirable, or necessary, is

inherent in the very nature of such society.

Supreme Lodge Knights of Pythias v. Mims, 241

U. S. 574, 60 L. ed. 1179;

Supreme Lodge Knights of Pythias v. Smyth, 245

U. S. 594, 62 L. ed. 492;

Fullenwider v. Supreme Council Royal League, 180

Ill. 621, 54 N. E. 485, 72 Am. St. 239;

Note, 31 LRANS 416-417;

Wineland v. Knights of Maccabees, 148 Mich. 608;

Reynolds v. Supreme Council Royal Arcanum, 192

Mass. 150, 78 N. E. 129, 7 LRANS 1154;

Miller v. National Council Knights and Ladies of

Security, 69 Kans. 234, 76 Pac. 830;

Supreme Lodge Knights of Pythias v. Knight, 117

Ind. 489, 3 LRA 409;

Conner v. Supreme Commandery Golden Cross,

117 Tenn. 549, 97 S. W. 306;

Gilmore v. Knights of Columbus, 77 Conn. 58, 58

Atl. 223, 107 Am. St. 17, 1 Am. & Eng. Ann.

Cas. 715;

‘. GRAN eR, DB Se ASRS SAAS eee ped eb tt? ON AAT LATER

40

Shepperd v. Bankers Union of the World, 77 Neb.

85, 108 N. W. 188;

Norton v. Catholic Order of Foresters, 138 Ia. 464,

114 N. W. 893, 24 LRANS 1030.

FouRTH ASSIGNMENT OF ERRORS.

The Supreme Court of the State of Nebraska erred in

refusing to give effect to the judgment and decree of the

Honorable, The United States District Court for the Dis-

trict of Indiana in the case of Joseph Holt et al. v. Supreme

Lodge Knights of Pythias, wherein several members of said

order who held insurance certificates therein, and who were

similarly situated with the plaintiff herein, in all respects,

and who brought said suit in their own behalf and in behalf

of all others similarly situated, for the express object and

purpose of having said statutes increasing the rates, which

are the same statutes involved in this action, set aside and

held invalid and void, and to enjoin said Supreme Lodge

Knights of Pythias from enforcing same, and which judg-

ment and decree was appealed from, and affirmed, by the

Honorable Circuit Court of Appeals for the Seventh Circuit

which judgments and decrees are now in full force and

effect (235 Fed. 885, 149 CCA 197, 248 U. S. 588, 63

L. ed. 434).

Point Twelve.

Where a class suit is brought by the plaintiff, or plain-

tiffs on his, or their own behalf and on behalf of all others

similarly situate, all persons standing in such relation are

considered as parties to the suit and are conclusively bound

by the judgment and decree therein.

ARE NS ARI,

41

Mandeville v. Riggs, 2 Pet. 482;

Smith v. Swormstedt, 16 How. 288, 14 L. ed. 942

(Methodist Book Concern Case) ,

Bacon v. Robertson, 18 How. 480, 15 L. ed. 499;

Cockburn v. Thompson, 16 Ves. 321, 326, 328, 33

E R. 1005;

Hartford Life Ins. Co. v. Ibs, 237 U.S. 662, 59 L.

ed. 1165, LRA 1916A, 765; ;

Duvall v. Synod of Kansas, 222 Fed. 669, 1388 CCA

217;

Watson v. National Life, etc., Co., 162 Fed. 7, 12,

88 CCA 380;

Lovell v. St. Louis Mut. Life Ins. Co., 111 U.S. 264,

28 L. ed. 423;

Supreme Tribe of Ben Hur v. Cauble, 255 U. S.

356, 65 L. ed. 673;

Supreme Council Royal Arcanum v. Green, 237 U.

S. 531, 59 L. ed. 1089, LRA 1916A, 771;

Looney v. Eastern Texas R. Co., 247 U.S. 214, 62

L. ed. 1084;

Equity Rule 38, U. S. Supreme Court 1912, 226 U.

S. 659, 57 L. ed. 1643;

1 Foster, Federal Practice (6th Ed.), § 114.

Point Thirteen.

Such judgment or decree is res judicata in all subsequent

suits by or between said society and all members thereof and

their beneficiaries as to all matters actually litigated within

the issues or which might properly have been litigated with-

in said issues.

Fischli v. Fischli, 1 Blackf. 360, 12 Am. Dec. 251;

Alerding v. Allison, 170 Ind. 252, 258, 127 Am. St.

363 note;

State v. Buffalo County, 6 Neb. 461;

Slater v. Skeirving, 51 Neb. 108, 70 N. W. 492, 66

Am. St. 444;

Harris v. Harris, 36 Barb. 88;

Ruckman v. Union Railway Co., 45 Or. 578, 78 Pac.

748, 69 LRA 480;

Bates v. Bodie, 245 U.S. 520, 526, 62 L. ed. 444;

Mitchell v. First National Bank of Chicago, 180 U.

S. 471, 45 L. ed. 627;

Dowell v. Applegate, 152 U. S. 327, 345, 38 L. ed.

463 ;

United States v. Haytien Republic, 154 U.S. 118,

129, 38 L. ed. 930;

Dimock v. Revere Copper Co., 117 U. S. 559, 566,

29 L. ed. 994;

Harshman v. Knox County, 122 U. S. 306, 317, 30

L. ed. 1152.

Point Fourteen.

A new ground of invalidity, or the omission thereof,

which would have given the plaintiffs a valid cause of ac-

tion, or any omitted facts which would have made out the

plaintiff’s case in such suit, does not render the judgment

less conclusive or less binding.

Bell County, etc., School v. Pineville Graded School,

19 Ky. Law Rep. 789, 42 S. W. 92 (a statute

held valid. Presumed to be based upon all pos-

sible objections to validity) ;

_ 2a

43

Jordan v. Van Epps, 85 N. Y. 427, 436 (defendant

failed to set up all her claims of title) ;

Cannon v. Castleman, 162 Ind. 6 (failed to allege

fraud in contract) ;

Martin v. Abbott, 1 Neb. (Unof.) 54, 95 N. W. 356;

Singer v. Hutchinson, 183 Ill. 606, 56 N. E. 388, 75

Am. St. 133 (failure to set up all defenses) ;

| Hilgerson v. Hicks, 201 Ill. 374, 66 N. E. 360;

Holt County v. National Life Ins. Co., 80 Fed. 686,

25 CCA 469;

Board of Commissioners of Lake County v. Platt,

79 Fed. 567, 25 CCA 87;

Dimock v. Revere Copper Co., 117 U. 8S. 559, 29 L.

ed. 994;

Andrews Bros. Co. v. Youngstown Coke Co., 86

Fed. 585, 596, 30 CCA 293;

Reynolds v. Mandel, 175 Ill. 615, 51 N. E. 649;

Melntire v. Williamson, 63 Kan. 279, 65 Pac. 244;

Kloke v. Gardels, 52 Neb. 117, 71 N. W. 955.

Point Fifteen.

When a question is necessarily decided in effect, though

not in express terms, between the parties to a suit, they

can not raise the same question in any other suit or in any

other forum.

Gregory v. Molesworth, 3 Atkins 626, 26 E. R.

1160;

Henderson v. Henderson, 3 Hare 100, 67 E. R. 3138;

Franke v. Franke, 15 Ind. App. 529, 549;

Griffin v. Wallace, 66 Ind. 410, 417;

SOE SR

44

Bates v. Bodie, 245 U.S. 520, 526, 62 L. ed. 444;

National Circle, Daughters of Isabella v. National

Order Daughters of Isabella, 270 Fed. 723;

Straus v. American Publishers Assn., 201 Fed.

306, 119 CCA 544;

Sperry, etc., Co. v. Blue, 202 Fed. 82 120 CCA 1;

Mitchell v. First National Bank of Chicago, 180 U.

S. 471, 45 L. ed. 627;

Mazzariello v. Doherty, 204 Fed. 245, 122 CCA 513;

Union Pacific R. Co. v. Wyler, 158 U. S. 285, 39

L. ed. 983;

Boston, etc., R. Co. v. Hurd, 108 Fed. 116, 47 CCA

615, 56 LRA 192;

Cotter v. Boston, etc., St. R. Co., 190 Mass. 302,

76 N. E. 910;

Columbus v. Webster Mfg. Co., 84 Fed. 592, 28

CCA 225, 43 LRA 195.

Point Sixteen.

Where a class suit is brought by the plaintiff on his own

behalf, and on behalf of all others similarly situate, all per-

sons standing in such relation are considered as parties to

the suit and are bound by the judgment or decree therein.

1 Foster, Federal Practice (6th ed.), § 114;

Smith v. Swormstedt, 16 How. 288, 14 L. ed. 942

(Methodist Book Concern Case) ;

Mandeville v. Riggs, 2 Pet. 482;

Cockburn v. Thompson, 16 Ves. 321, 326, 328, 33

E. R. 1005;

Bacon v. Robertson, 18 How. 480, 15 L. ed. 499;

45

Hartford Life Ins. Co. v. Ibs, 237 U. S. 662, 59 L.

ed. 1165, LRA 1916A, 765;

Duvall v. Synod of Kanses, 222 Fed. 669, 188 CCA

217;

Watson v. National Life, ete., Co., 162 Fed. 12, 88

CCA 380;

Harmon v. Auditor, 123 ll. 132, 5 Am. St. 506, 13

N. E. 161, 164 (bond holders) ;

Supreme Tribe of Ben Hur v. Cauble, 255 U. S.

356, 65 L. ed. 673;

Equity Rule 38, U. S. Sup. Ct. 1912, 226 U. S. 659,

57 L. ed. 1643;

Supreme Council Royal Arcanum v. Green, 237 U.

S. 531, 59 L. ed. 1089, LRA 1916A, 771 (re-

versing 206 N. Y. 591, 100 N. E. 411);

Looney v. East Texas R. Co., 247 U. S. 214, 62 L.

ed. 1084.

Point Seventeen.

A judgment or decree constitutes a conclusive estoppel,

until set aside, between the parties and their privies, as to

all matters litigated, or which might have been litigated

under the issues.

Dowell v. Applegate, 152 U. S. 327, 345, 38 L. ed.

463 ;

United States v. Haytien Republic, 154 U. S. 118,

129, 38 L. ed. 930;

Dimock v. Revere Copper Co., 117 U. S. 566, 29 L.

ed. 994;

Harshman v. Knox County, 122 U. S. 306, 317, 30

L. ed. 1152.

46

Point Eighteen.

A plaintiff can not split a cause of action so as to litigate

part of it in one suit and part in another ; so the plaintiffs in

the Holt case were required to present all objections to the

validity of the statutes raising the rates, in their complaint

or be barred thereafter from asserting them.

People v. Detroit, etc., R. Co., 157 Mich. 144, 121

N. W. 814;

Richardson v. Opelt, 60 Neb. 180, 82 N. W. 377;

Johnson v. Payne, 11 Neb. 269, 9 N. W. 81;

Beck v. Devereux, 9 Neb. 109, 2 N. W. 365;

United States, ex rel. v. City of New Orleans, 98

U. S. 381;

United States, ex rel. v. County Court of Knoz

County, 122 U. S. 306, 30 L. ed. 1152;

Ralls County v. United States, ex rel., 105 U.S.

733, 26 L. ed. 1220;

Mayor of Davenport v. United States, ex rel., 76 U.

S. 409, 19 L. ed. 704;

Grand Island, etc., R. Co. v. Baker, 6 Wyo. 394, 71

Am. St. 943, 34 LRA 835, 841;

Mashlonpah v. Mayhew, 138 Wis. 561, 119 N. W.

826;

Nauyalis v. Philadelphia, etc., Co., 270 Fed. 93, —

CCA —;

Werlein v. City of New Orleans, 177 U. S. 390, 44

L. ed. 817.

47

FIFTH ASSIGNMENT OF ERRORS.

The Fifth assognment of errors is as follows, to-wit:

The Supreme Court of the State of Nebraska erred in

holding that the plaintiff in this action was not bound by

the judgment and decree of the District Court of the United

States for the District of Indiana in the case of Joseph Holt

et al., v. Supreme Lodge Knights of Pythias, which suit was

brought and maintained by said Joseph Holt and others,

on behalf of themselves and of all others similarly situate,

and wherein the validity of the supreme statutes of said

Supreme Lodge Knights of Pythias, was affirmed and set at

rest, the plaintiff herein, being similarly situate with the

plaintiffs in said Holt case * * * and the same being

a right guaranteed to the plaintiff in error under and by

virtue of Article 4, Section 1, of the Federal Constitution,

guaranteeing full faith and credit by one state to the judi-

cial proceedings of every other state.

(Tr., p. 333, par. 4.)

Point Nineteen.

Article 4, Section 1, of the Federal Constitution is in

part as follows:

“Full faith and credit shall be given in each

state to the public acts, records and judicial proceed-

ings of every other state. And the Congress may by

general laws prescribe the manner in which such

acts, records and proceedings shall be proved, and

the effect thereof.”

48

Point Twenty.

The judgments of the Federal Courts in the various

states have the same binding effect upon the parties and

their privies, as the judgments of the State courts.

Metcalf v. City of Watertown, 153 U. S. 671, 38

L. ed. 861;

Union, etc., Bank v. Memphis, 189 U. S. 71, 47 L.

ed. 712;

Hancock National Bank v. Farnum, 176 U. S. 640,

45 L. ed. 619;

First National Bank v. City of Covington, 129 Fed.

792, 804;

Old Dominion Copper, ete., Co. v. Bigelow, 208

Mass. 159, 40 LRANS 314, 89 N. E. 193;

Northern Assurance Company v. Grand View

Building Assn., 203 U. S. 106, 51 L. ed. 109;

Glencove Granite Co. v. City Trust, etc., Co., 118

Fed. 383, 55 CCA 212 (certiorari denied, 187

U. S. 649, 47 L. ed. 348) ;

Alkine Grocery Co. v. Richesin, 91 Fed. 79, 83.

Point Twenty-one.

A judgment of the Federal Court in a state is entitled

to the same credit in another state as the judgment of the

State Court of equal rank of the state wherein the federal

judgment was rendered.

Metcalf v. City of Watertown, 153 U. S. 671, 38

L. ed. 861;

Union, etc., Bank v. Memphis, 189 U. S. 71, 47 L.

ed. 712;

49

Hancock National Bank v. Farnum, 176 U. S. 640,

44 L. ed. 619;

Woolery v. Grayson, 110 Ind. 149, 10 N. E. 935 .

Cincinnati, etc., R. Co. v. Wynne, 14 Ind. 385;

Fidler v. Gilchrist, 60 Ind. App. 363, 109 N. E. 796;

Crescent City, etc., Co. v. Butcher’s Union, etc.,

120 U. S. 141, 157, 30 L. ed. 614, 617;

Dupasseur v. Rochereau, 21 Wall. 130, 135, 22 L.

ed. 588, 590 (state law) ;

Embry v. Palmer, 107 U.S. 3, 27 L. ed. 346;

Pittsburg, etc., R. Co. v. Long Island Loan, ete.,

Co., 172 U.S. 493, 43 L. ed. 528.

Point Twenty-two. 2

The Supreme Court of the United Stated has the exclu-

sive final jurisdiction to determine whether the proper

effect has been given by the courts of one state to the judg-

ments of courts in other states.

Hadacheck v. Chicago, etc., R. Co., 74 Neb. 385,

104 N. W. 878.

Point Twenty-three.

Under the Federal Constitution a judgment rendered by

the courts in one state must be given the same implication

and force in all other states which it has in the courts of the

state where rendered, and whatever pleas could be made

thereto in the courts of such state, and no others, can be

made to it in the foreign court.

Hampton v. McConnel, 3 Wheat. 234, 4 L. ed. 378,

note top page 804;

50

Mills v. Durgee, 7 Cranch 481, 3 L. ed. 411, note

top page 576;

American Mutual Life Ins. Co. v. Mason, 159 Ind.

15, 16, 18 N. E. 525;

Suydam v. Barber, 18 N. Y. 468, 471, 75 Am. Dec.

256;

Barras v. Bidwell, 3 Woods 7, Fed. Cas. No. 1039;

Wilcox v. Cassick, 2 Mich. 168;

Fletcher v. Ferrel, 9 Dana (Ky.) 377, 35 Am. Dec.

148;

Bank v. Wheeler, 28 Conn. 439, 73 Am. Dec. 684;

Fauntleroy v. Lum, 210 U. S. 230, 52 L. ed. 1039;

Sharon v. Hill, 26 Fed. 337, 391;

Morris v. Burgess, 116 N. C. 42, 21 S. E. 26.

THE SIXTH ASSIGNMENT OF ERROR.

The sixth assignment of error is as follows:

The Supreme Court of the State of Nebraska erred in

holding that the plaintiff in this action was not bound by

the judgment and decree of the District Court of the United

States for the District of Indiana in the case of Joseph Holt,

et al. v. Supreme Lodge Knights of Pythias, which suit was

brought and maintained by said Joseph Holt and others, on

behalf of themselves and of all others similarly situate, and

wherein the validity of the supreme statutes of said Su-

preme Lodge Knights of Pythias, was affirmed and set at

rest, the plaintiff herein being similarly situate with the

plaintiffs in said Holt case, and the same being a right guar-

anteed to the plaintiff in error by virtue of § 905 R.S. U.S.

§ 1519 U. S. Comp. Stat. 1916, providing that the records

and judicial proceedings of any state or territory or of any

—

51

such country, shall have such faith and credit given to them

in every court within the United States as they may have

by law or usage in the courts of the State from which they

are taken. (Tr., p. 334.)

Point Twenty-four.

The force and validity of a judgment of another state

must be determined by the law of the state rendering the

same.

Section 905 R. S. U. S., § 1519, U. S. Comp. Statutes

1916, among other things provides that the records and ju-

_ dicial proceedings in one state “shall have such faith and

credit given to them in every court within the United States

as they have by law or usage in the courts of the State from

whence the said records are or shall be taken.”

Christmas v. Russell, 5 Wall. 290, 18 L. ed. 475.

(An action in Mississippi Federal Court on a

Kentucky judgment enforcing a Mississippi

contract. Held, that the Mississippi state stat-

ute prohibiting Mississippi state courts from

taking jurisdiction and enforcing judgments

taken in other states where Mississippi would

not render such judgments in her own courts,

is void.)

Converse v. Hamilton, 224 U. S. 248, 56 L. ed. 749.

(Wisconsin Court declines to permit suit on

judgment of Minnesota Court enforcing double

liability of stockholders on the ground that

Wisconsin did not enforce such liability against

her own people. Held, Wisconsin decision

must be reversed.)

52

Point Twenty-five.

A final judgment or decree in the state of Indiana con-

clusively settles all questions within the issues in a cause,

and also all other questions involved in the subject-matter of

the litigation which might have been properly litigated in

the action.

Fischli v. Fischli (1825), 1 Blkf. 360, 12 Am. Dec.

251;

Crouse v. Holman, 19 Ind. 30, 36;

Richardson v. Jones, 58 Ind. 240 243;

Marshall v. Stewart, 80 Ind. 189;

Ballard v. Franklin Life Ins. Co., 81 Ind. 239;

Elwood v. Beymer, 100 Ind. 504;

Indiana, etc., R. Co. v. Allen, 113 Ind. 581, 587;

Wilson v. Buell, 117 Ind. 315, 317, 20 N. E. 231;

Hoefgen v. Harness, 148 Ind. 224, 229, 47 N. E.

470;

Finley v. Cathcart, 149 Ind. 470, 477, 48 N. E. 586,

49 N. E. 381;

Walker v. Walker, 150 Ind. 317-325, 50 N. E. 68;

Maynard v. Waidlich, 156 Ind. 562, 573, 60 N. E.

348 ;

Skelton v. Sharp, 161 Ind. 384-386, 67 N. E. 535;

Cannon v. Castleman, 162 Ind. 6-8, 69 N. E. 455;

Ryan v. Rhodes, 167 Ind. 121, 126, 76 N. E. 249,

78 N. E. 330;

Alerding v. Allison, 170 Ind. 252, 258, 83 N. E.

1006, 127 Am. St. 363;

Knotts v. Clark Construction Co., 131 N. E. (Ind.)

921.

53

THE SEVENTH ASSIGNMENT OF ERRORS.

The seventh assignment of errors is as follows:

The Supreme Court of the State of Nebraska erred in

holding that the plaintiff, being the defendant in error here-

in, is not estopped by virtue of his membership in said Su-

preme Lodge Knights of Pythias as created by federal stat-

ute, 28 U. S. Stat. at Large, pp. 96, 97, from again raising

the question of the validity of the rates enacted by said Su-

preme Lodge Knights of Pythias in 1910, for the reason that

Joseph Holt and others in their own behalf, and in behalf

of all others similarly situate, including the defendant in

error’s assured, brought and maintained a suit for the pur-

pose of declaring void the same statutes involved in this

action, and wherein a judgment and a decree of the United

States District Court for the District of Indiana was ren-

dered that said statutes were valid and omer (Tr,

p. 334, par. 2.)

Point Twenty-six.

Apart from the fact that a stockholder is conclusively

presumed to be represented in and to be a party to a class

suit, a judgment duly rendered by a court of competent

jurisdiction which is binding upon the corporation, is

equally binding upon the stockholders of such corporation,

and they are estopped after litigation by their company

from again raising the same question in a suit by themselves

against the same corporation.

Converse v. Ayer, 197 Mass. 443, 84 N. E. 98;

Howarth v. Lombard, 175 Mass. 570, 56 N. E. 888,

49 LRA 301;

oma te we ren — .

54

King v. Cochrane, 76 Vt. 141, 56 Atl. 667, 104 Am.

St. 922;

Selig v. Hamilton, 234 U.S. 652, 58 L. ed. 1518;

Converse v. Hamilton, 224 U. S. 248, 56 L. ed. 749;

Bernheimer v. Converse, 206 U. S. 516, 51 L. ed.

1163 ;

Irvine v. Baker, 225 Fed. 834;

Spargo v. Converse, 191 Fed. 823, 112 CCA 337;

Goss v. Carter, 156 Fed. 746, 84 CCA 402;

Johnson v. Libby, 111 Me. 204, 88 Atl. 647, Ann.

Cases 1916-C 681.

(The above cases were for the recovery of stockholders’

liability, they are strictly analogous to the case at bar for

the reason that in this case the society had increased its

rates so as to mature its obligations and the present suit was

brought to restrain the society from enforcing the increased

liability.)

THE EIGHTH ASSIGNMENT OF ERRORS.

The eighth assignment of errors is as follows:

The Supreme Court of the State of Nebraska erred in

holding that the Supreme Lodge Knights of Pythias did not

have and maintain, at the time of the enactment of the stat-

utes in question, increasing the rates, a representative form

of government, whereas it had and maintained at said time

and ever, the same form of government which it had at its

creation by federal statute, 28 U. S. Statute at Large, pp.

96, 97.

= e

e

were

55

Point Twenty-seven.

Where a corporation is created with a certain form of

government and it continues to exercise its duties in strict

accordance with the form designated and prescribed by said

statute creating it, neither its members, nor their privies,

have the right to attack such form of government in an ac-

tion for benefits.

Thomas v. Musical Mutual Protective Union, 121

N. Y. 45, 24 N. E. 24,8 L. R. A. 175;

Bauer v. Sampson Lodge Knights of Pythias, 102

Ind. 262;

People v. St. George’s Society, 28 Mich. 261;

Kent v. Quicksilver Mining Company, 78 N. Y. 159.

THE NINTH ASSIGNMENT OF ERRORS.

The ninth assignment of errors is as follows:

The Supreme Court of the State of Nebraska erred in

holding that the Supreme Lodge Knights of Pythias did not

have and maintain at the time of the enactment of the stat-

utes in question, increasing the rates, a representative form

of government, whereas it was alleged in the answer and

shown by the evidence that said question was expressly de-

cided adversely by the judgment and decree of the United

States District Court for the District of Indiana, in the case

of Joseph Holt and others against Supreme Lodge Knighis

of Pythias, wherein Joseph Holt and others sued in their

own behalf and in behalf of all others similarly situate, in-

cluding defendant in error’s assured, to set aside said stat-

"utes increasing the rates, as invalid and void. (Tr., p. 334,

par. 4.)

=~

56

Point Twenty-eight.

The question whether the Supreme Lodge Knights of

Pythias maintained a representative form of government at

the time of the increase of rates involved in this cause was

directly involved in the issues in the Holt case and in the

special findings in said cause. It was expressly found that

the plaintiff in error did have and maintain a representa-

tive form of government at said time and at all other times

and the said special findings were specially approved by the

court; and judgment was rendered thereon for the plaintiff

in error.

The defendant in error herein is therefore concluded by

said judgment in said Holt case from litigating said ques-

tion of representative form of government over again in

this or any other cause of action.

(See authorities heretofore cited under points

13-18, pages 41-46.)

57

BRIEF OF ARGUMENT.

By this action defendant in error seeks to recover upon

a benefit certificate issued by the plaintiff in error to her

decedent, designating the defendant in error as his bene-

ficiary. The decedent paid his dues regularly until January

1, 1911, at which time the newly enacted increased rates

took effect. He refused to pay the increased rate but con-

tinued to tender the old rate to the date of his death. The

real question at issue is the validity of the increased rates.

At his death, proper proofs were submitted and liability

denied, and this action was begun. At the first trial of the

cause the court found in favor of the plaintiff in error. The

judgment following said decision was reversed by the Su-

preme Court of Nebraska on the ground that the plaintiff in

error did not have nor maintain a representative form of

government and therefore the statutes increasing the rates

were void. A second trial of said cause resulted in a deci-

sion in favor of the defendant in error and the judgment

rendered thereon was affirmed by the Supreme Court upon

the same ground, that is, that the plaintiff in error did not

have nor maintain a representative form of government and

therefore the increase of rates was void.

PLAINTIFF IN ERROR CREATED BY FEDERAL STATUTES.

The plaintiff in error was created by a special act of Con-

gress (28 U. S. Stat. at Large, pp. 96-97) (Tr., pp. 50-51).

The entire rights and charter powers of this society are con-

tained within the terms of said federal statute. A reference

thereto will show that certain individuals, naming them, to-

on

ar ”

FOLSOM 2 <.Oreanen

gether with the officers and members of the Supreme Lodge,

and “their successors, be and they are hereby incorporated

and made a body politic and corporate.” The stipulation in

evidence in this case shows that the Supreme Lodge of said

corporation has remained the same from the day of its in-

corporation to the present time and the method of selecting

the members thereof has remained the same from that day

until now.

It is evident, therefore, that if the plaintiff in error’s

supreme statute of 1910, increasing the rates—the one in

question here—was not duly enacted, then there are no laws

nor regulations of any kind which have been duly enacted

and the corporation has been transacting its business since

1894 under a set of Supreme Statutes and laws which are

wholly void. The only workable principle of law which

could be applicable under such circumstances would be that

of estoppel. Estoppel as against the corporation, but not in

its favor. In other words, the members of the corporation

and third persons may, at their pleasure, enforce claims and

liabilities against said corporation, but it may not bring any

action and may not defend against any that are brought,

by reason of the supposed fact that it has not had nor main-

tained a representative form of government sufficient to

make its action valid.

RATE LITIGATION.

The increase of rates, the validity of which constitutes

the sole question in this case, has been the subject of more

or less litigation since its enactment. A short history of

this litigation will be useful in the disposition of this case.

Immedately after January 1, 1911, the date when said in-

pena t

crease went into effect, many actions were brought in vari-

ous states of the Union. There were more than 100 filed in

the State of Texas alone. Many were filed in the State of

Mississippi, some in Tennessee, some in Nebraska, some in

Missouri, some in New York, some in Indiana, and some in

a few other states.

THe Hout CASE.

On January 25, 1911, a suit was filed in the District

Court of the United States for the District of Indiana, by

Joseph Holt and nineteen others, citizens of the State of

Louisiana, “on behalf of themselves and all other persons

similarly situate,” against the plaintiff in error for the ex-

press purpose of having said rates adjudged invalid and for

an injunction to restrain the officers of the insurance de-

partment from putting into execution the said increase of

rates, and also asking for the appointment of a receiver to

take charge of the assets of said corporation and to admin-

ister the same. These plaintiffs were members of the fourth

class, which was the same class to which the decedent be-

longed on whose certificate this action is based. The plain-

tiffs therein, and the decedent herein, were all members of

the fourth class holding certificates in identical words with

the exception of names and dates. An amended answer was

filed in this case and also a cross-complaint was filed by the

plaintiff in error. The plaintiff in said case filed a reply and

in the course of this litigation which was heard by the Mas-

ter in Chancery one of the principal questions to be decided

and which was actually decided, was the validity of the stat-

utes increasing the rates. The validity of the same statutes

is the sole question involved in this case. The Master in

Chancery reported his special finding of facts (Tr., pp. 208-

—_—

60

244). The third finding, in part, is as follows (Tr., p. 210,

point three) :

“That said original corporation was during its

entire existence and said defendant [plaintiff in

error] is and has been since its incorporation a fra-

ternal beneficiary society; that neither the defend-

ant nor its said predecessor was organized or was

ever conducted for profit; that each of said corpora-

tions during the entire period of their existence re-

spectively possessed a lodge system and a ritualistic

form of work and had a representative form of

government.”

Finding No. 27, is as follows (Tr., p. 243, point 27) :

“That the legislation of the defendant [plaintiff

in error] with reference to the creation of the fifth

class, the transfer of members from the fourth

class, the rerating of the fourth class, which became

effective January 1, 1911, and the use of the expense

fund of the Insurance Department for the joint ex-

penses of the fourth and fifth classes was all duly

and legally adopted by the said defendant in pur-

suance to the constitution and laws of said defendant

and in accordance with the mode therein prescribed

for the adoption of amendments and the enactment

of new legislation.”

The Master stated conclusions of law in favor of the de-

fendant [plaintiff in error].

The complainants filed their exceptions to the Master’s

report. The fourth exception so filed by said complainants

was in part as follows (p. 246, Par. 4):

“To the 27th finding of fact, in this, that the

Master erroneously found therein that the legisla-

61

tion of the defendant with reference to the * * *

rerating of the fourth class, which became effective

Jan. 1, 1911” * * * wag all duly and legally

adopted by the defendant in pursuance to the con-

stitution and laws of the defendant, and in accord-

ance with the mode therein prescribed for the adop-

tion of amendments and the enactment of new legis-

lation.”

Said exception, and the argument of counsel thereon

were duly heard by the judge of said Federal District Court

and said exceptions were overruled and the report con-

firmed. A decree dismissing said bill of complaint for want

of equity was entered (Tr., p. 250, Par. 3).

An appeal was duly prayed and perfected from said de-

cree and the same was heard by the Circuit Court of appeals

for the Seventh Circuit and by said court decided on July

18, 1916. The judgment of the District Court was affirmed.

Said decision is found in Tr., pp. 251-254. See Holt v. Su-

preme Lodge Knights of Pythias, 235 Fed. 885, 149 CCA

197,

An appeal was perfected thereafter to the Supreme

Court of the United States but said appeal was dismissed.

Holt v. Supreme Lodge Knights of Pythias, 248 U.S. 588.

MIMS CASE.

One of the multitude of cases filed in the State courts of

Texas after a hearing in the trial court was decided in favor

of the plaintiff. An appeal was perfected to the Court of

Civil Appeals of said State which court held that the legis-

lation increasing the rates, here in question, was invalid and

void. The said Court of Civil Appeals affirmed the judg-

ment of the trial court. See:

Supreme Lodge Knights of Pythias v. Mims, 1678,

W. (Tex. Civ. App. 835).

A writ of error was duly prayed and granted to the Su-

preme Court of the United States. This was the first of all

of the cases to be heard by this Honorable Court. The judg-

ment of said Court of Civil Appeals was reversed. Supreme

Lodge Knights of Pythias v. Mims, 241 U. S. 574, 60 L. ed.

1179.

SMYTH CASE.

One Smyth brought his action against the plaintiff in

error in the United States District Court for the Western

District of New York. It was held by said court that the

legislation increasing the rates here in question was invalid

on the ground that it constituted a breach of plaintiff’s con-

tract. See Smyth v. Supreme Lodge Knights of Pythias, 1%

Fed. 967.

An appeal therefrom was duly perfected by the Supreme

Lodge which appeal was heard and decided by the Circuit

Court of Appeals for the second circuit and the judgment

of the district court was affirmed. See Smyth v. Supreme

Lodge Knights of Pythias, 220 Fed. 438, 137 CCA 32.

An appeal was duly perfected from the judgment of the

said Circuit Court of Appeals to this Court. This Court, on

the authority of the Mims case, reversed the judgment of

said Circuit Court of Appeals.

Supreme Lodge Knights of Pythias v. Smyth, 24

U. S. 594, 62 L. ed. 492.

63

It was held by this court, in said Mims case, that the

legislation increasing the rates was legally enacted; that

such increase was within the charter rights of the corpora-

tion, and withal, that it was the duty of the Supreme Lodge

to establish and maintain rates sufficient to protect and ma-

ture all of the benefit certificates outstanding and to pre-

serve and protect the life of the society so that it might

properly fulfill its charter duty of furnishing to such mem-

bers as might desire safe insurance payable to their desig-

nated beneficiaries.

The Supreme Court of the State of Mississippi, in a case

appealed thereto, held that the corporation was acting with-

in its charter power in increasing the rates and that all

members were bound by said increased rates.

Neuman v. Supreme Lodge Knights of Pythias,

110 Miss. 371, 70 So. 241, LRA 1916C, 1051.

A similar case was decided by the Supreme Court of

Tennessee but is unreported. In none of these cases was

the question of res judicata raised or insisted upon,

In the present case, however, the plaintiff in error has

specially set up the defense of res judicata and is maintain-

ing that the question of the validity of the legislation in-

creasing the rates has been judicially determined in such a

manner that all members of the fourth class are bound

thereby. The Holt case was in all respects a class suit,

brought by a large number of fourth class members on

their own behalf and on behalf of all others similarly situ-

ate, which included the holders of all the certificates in-

volved in this litigation. There should be an end to litiga-

tion sometime. There can be no question but that the entire

64

subject of the validity of these statutes and of this increase

of rates was exhaustively examined and judicially deter-

mined by the Federal District Court for the District of In-

diana, and the decree entered in that case is bindirg upon all

members throughout the membership of the order.

The Honorable Supreme Court of the State of Nebraska

held that the Supreme Lodge of said order was not consti-

tuted in accordance with the statute of Nebraska requiring

fraternal orders to have and maintain a representative form

of government. It is proper to state that the learned Chief

Justice and one of the Associate J ustices dissented from the

decision in this case. The question presents itself whether

the federal constitution guaranteeing full faith and credit

to the judicial acts of the courts of other states, is applicable

to a case like this. We have seen that the question of repre-

sentative form of government was specifically litigated in

the Holt Case and it was especially decided that the plaintiff

in error did have and maintain at all times a representative

form of government. It would seem that this question hav-

ing been determined in a class suit, the same should be con-

sidered as forever settled, not only because the defendant

in error’s decedent herein, must be considered a party plain-

tiff in that suit, but also because the federal constitution

provides for the full faith and credit to be given to said

decision in all other states. This is not a proceeding by the

state of Nebraska but is a private litigation based upon a

contract executed by the plaintiff in error, and it is simply

and solely a question between the insurer and the insured’s

beneficiary. It has been held many times that where 4

judgment is rendered in one state, said judgment is en-

forceable in any other state under and by virtue of the Fed-

65

eral Constitution. It is immaterial whether the cause of

action upon which this judgment was rendered was cogniz-

able by other states or not. The courts of one state can not

gc into the merits of a cause of action where a judgment has

been duly rendered by the courts of another state on said

cause. It is necessary in order to obtain relief in such case,

to set aside the judgment already rendered.

CONSTITUTIONAL AND STATUTORY REQUIREMENTS.

Article four, section one, of the Federal Constitution re-

quires that full faith and credit shall be given in each state

to the judicial proceedings of every other state; and Con-

gress is given the power to prescribe the effect of such judi-

cial proceedings.

Carrying out this latter provision, Congress, in 1790, en-

acted substantially what is now § 905, R. S. U.S., § 1519 U.

8. Comp. Statutes 1916. This statute provides in part that

“said records and judicial proceedings, so authenticated

shall have such faith and credit given to them in every court

within the United States as they have by law or usage in

the courts of the state from which they are taken. It was

early held that judgments of federal courts, rendered in the

various states, come within the purview of this section and

also of article four, section one, of the constitution. (See

authorities heretofore cited under Points 21, 22 at page 48,

49 of this brief.) Under the recent decisions of this court in

the cases of Supreme Council Royal Arcanum v. Green, 237

U. S. 581, LRA 1916A, 771, 59 L. ed. 1089, and Hartford

Life Ins. Co. v. Ibs, 287 U. S. 662, 59 L. ed. 1165, LRA

1916A, 765, the plaintiff in error was entitled to prove that

the issue involved in this case had been determined, settled

66

and adjudicated in the District Court of the United States

for the District of Indiana.

The rights of the plaintiff in error were not merely to be

permitted to introduce in evidence the said decree together

with the proceedings, for such a right would have no legal

compulsion; but the plaintiff in error was entitled not only

to introduce the said proceedings and decree but to have

them applied to the facts in this case and if they showed

an adjudication of any of the questions involved in this ac-

tion, then such question must be eliminated from further

consideration in this case, and the decision of the Federal

Court given full force and effect.

Hartford Life Ins. Co. v. Ibs, 237 U. S. 662, 59 L.

ed. 1165, LRA 1916A, 765.

In this case the proceedings were stipulated showing the

entire proceedings in the Federal Court, and that amongst

the questions involved was the question of the representa-

tive form of government of the plaintiff in error and also

‘the validity of the statutes increasing the rates of insurance.

The records show conclusively that these questions were

both determined in that suit in favor of the plaintiff in er-

ror. An appeal from that judgment resulted in its affirm-

ance, and an appeal from such judgment of affirmance was

dismissed in this Court.

It must be considered that the words “representative

form of government” have the same meaning in Indiana as

in Nebraska. An adjudication in Indiana that a corpora-

tion has and maintains a representative form of govern-

ment is conclusive as between the parties all over the United

States and having had their day in Court upon this ques-

67

tion, the membership of this order are concluded by the de-

cree entered. If this were not so the entire question of the

validity of the legislation increasing the rates would be

open for consideration perpetually, and the society would be

harassed by such a multiplicity of suits that their defense

would bankrupt the society.

It may be argued that in the Holt case the plaintiff did

not allege in their bill of complaint that the legislation in-

creasing the rates was not enacted in conformity with all

of the various provisions of the several states in respect to

fraternal societies. It is an elementary principle of law that

where legislation, be it federal, state, municipal or of a pri-

vate corporation, is challenged in the courts on the ground

of its alleged invalidity, the plaintiffs must allege every rea-

son or ground therefor, or the judgment will forever con-

clude them not only upon the ground specifically alleged but

on others as well. Plaintiff can not split a cause of action

and try it in piecemeal. This is well shown in the case of

Bell County, etc., School v. Pineville Graded Schools, 19 Ky.

Law Rep. 789, 42 S. W. 92, wherein it was held that, having

attacked the validity of the statute, all objections must be

alleged or they will be concluded by the judgment.

In the case of Holt County v. National Life Insurance

Co., 80 Fed. 686, 25 CCA 469, the plaintiff sought to man-

date certain officers to levy a tax for the payment of a judg-

ment. The rate was fixed and the order made. Subse-

quently suits were brought by taxpayers to restrain the of-

; ficers from collecting such taxes on the ground that the levy

_ Was in excess of the statutory rate. The Court held, how-

ever, that such a violation constituted a defense to the orig-

inal action, and therefore, that the parties were concluded

a

68

by the rate fixed. This was a decision by the federal court

of the district of Nebraska.

To the same effect is the Board of Commissioners of

Lake County v. Platt, 79 Fed. 567, 25 CCA 87. An action

had been brought against the Board of Commissioners and

a judgment by default entered. The board issued bonds to

pay such judgment. The plaintiff had purchased some of

these bonds. The county refused to pay the coupons. Plain-

tiff brought an action on the coupons. The county pleaded

that the bonds and the debt for which they were given were

invalid because in excess of the constitutional limit of in-

debtedness for the county. It was further alleged that such

defense was not made nor adjudicated when the judgment

was rendered. The Federal Court, however, held that this

question was foreclosed by the judgment rendered as con-

clusively as though such defense had been especially made.

This rule is well illustrated by the case of Bates v. Bodie,

245 U. S. 520, 62 L. ed. 444. The plaintiff had procured 4

judgment for divorce and alimony in the state court of Ar.

kansas. Subsequently, an action was brought in Nebraska

for alimony from certain Nebraska lands owned by defend-

ant, the complaint in Nebraska alleging that the Arkansas

decree did not take into consideration such Nebraska lands.

An appeal was taken to the Nebraska Supreme Court

which held that the plaintiff might proceed against the lands

in the State of Nebraska, but this decision was reversed by

this Honorable Court, on the ground that the Nebraska Su:

reme Court had not given full faith and credit to the Ar

kansas judgment. It was said that “our rule is that an &

toppel by judgment is not only as to every matter which wat

_ offered and received to sustain or defeat the claim or de

as.

69

mand but as to any other admissible matter which might

have been offered for that purpose.”

A suit was brought by a foreign corporation against a

tax commissioner to restrain, on certain grounds, the impo-

sition of a license tax. There was a plea that the plaintiff

had theretofore sued in the state court, alleging different

grounds, to restrain the levy of such tax and that the de-

fendant had obtained a judgment. The Federal Court held

that the matter was res judicata and that it was wholly

immaterial that new grounds were alleged in the federal

court.

Sperry, etc., Co. v. Blue, 202 Fed. 82, 120 CCA 1.

An action was brought by a bank on paper executed by

a wife in Connecticut and delivered by her husband at Chi-

cago. Pending an action in the Federal Court at Chicago

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