Court Opinion

ID: 8032028
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:16:34.808794+00
Date Added: 2024-06-11T16:37:00.104317
License: Public Domain

The following opinion on motion for rehearing was filed December 4, 1920. Rehearing denied.
Dean, J.
The defendant made an application for a rehearing, which must be denied. The former opinion, Meyer v. Supreme Lodge, Knights of Pythias, is reported, ante, p. 505. The question of the defendant’s mere right to increase its rates is not the. question that is involved here. The sole question before us is whether defendant had “a representative form of government” within the meaning of section 1, ch. 47, Laws 1897, cited in the former opinion; that being the law in force in this state when in August, 1910, the rates complained of by plaintiff were increased by defendant. The 1897 act was' in force when the policy in question was issued to Meyer, under date of May 11, 1910. Putting the question in *512another form: Was the governing body of defendant, when it increased the rates, representative in form within the meaning, of the act as construed by our decisions that are cited in the former opinion,? Lange v. Royal-Highlanders, 75 Neb. 188, 196, 10 L. R. A. n. s. 666, 121 Am. St. Rep. 786; Briggs v. Royal Highlanders, 84 Neb. 834 (on motion for rehearing), 85 Neb. 830. If defendant was not working under a representative form of government in August, 1910, it follows that under section 8, ch. 47, Laws 1897, the society cannot in this state compel defendant to pay the increased rate. Section 8 of the 1897 act provides: “All such societies (fraternal 'beneficiary) organized under the laws of this state or any other state, territory, or province, and now doing business in this state, may continue such business provided they hereafter comply with the provisions of this act. ’ ’
Holt v. Supreme Lodge, Knights of Pythias, 235 Fed. 885, 149 C. C. A. 197, relied on by defendant, does not seem to support the argument advanced. But it is significant that the Holt case affirmatively declares that the present charter of the defendant corporation was granted by an act of congress in 1894 that authorized amendments at will, and that the act expressly provides that such amendments shall not conflict -with federal or state laws. 28 U. S. St. at Large, ch. 119, sec. 4, p. 97, is the act under which defendant was reincorporated. It provides: “That said corporation shall have a constitution, and shall have power to amend the same at pleasure: Provided, that such constitution or amendments thereof do not conflict with the laws of the United States or of any state.” Will it be contended that a society so chartered may with impunity violate the settled policy of a state as declared by its court in the construction of its laws?
The facts in the Holt case seem to come under section 5043, Burns ’ Statutes of Indiana, Rev. 1914, which defines a fraternal beneficiary association. The act reads: *513“Any association shall he deemed to have, a representative form of government when it shall provide in its constitution and laws for a supreme legislative or governing body, composed of representatives elected either by the members or by delegates elected by the members through a delegate convention system, together with such other members as may be prescribed by its. constitution and laws: Provided, that the elective representatives shall constitute a majority in number and have not less than a majority of the votes.” It will be noted that the Indiana act expressly provides for other than elective representatives. The Nebraska act in question does not so provide. Section 5, article 8 of the constitution of the defendant society, provides that the supreme lodge may be composed of persons who are “elected or appointed.” The weak point, the vitally defective point, is that there is provision for appointive delegates or members.
The policy of Nebraska respecting fraternal beneficiary associations under the 1897 act is aptly stated in Briggs v. Royal Highlanders, 84 Neb. 834. Syllabus 3 reads: “Where, under the provisions of the constitution and by-laws of a fraternal beneficiary association, the delegates to the governing body thereof, regularly elected by the members of said association, cannot of themselves, and without the participation of members of committees appointed from members outside of such delegates, legally and of right adopt, alter, or amend the edicts and laws of such association and absolutely control the government of the same, such governing body is not a representative body, and an association so constituted and governed cannot be said to have a representative form of government.” To the same effect is State v. Bankers Union, 71 Neb. 622.
Defendant cites Supreme Lodge, Knights of Pythias, v. Mims, 241 U. S. 574. That case, like the Holt case, construes an act that limits and qualifies the term *514“representative form of government.” Chapter 7, art. 4829, Tex. Civ. St. 1914. It seems that all of the cases cited by defendant have to do with statutes differing materially from the Nebraska act of 1897.
A federal question is not involved here. In view of the act of incorporation, it plainly appears that the congress intended that defendant corporation should not be permitted to violate the law or the policy of a state as its laws are construed by the courts of the respective states. Murdock v. City of Memphis, 20 Wall. (U. S.) 590.
Chapter 47, Laws 1897, does not seem to conflict with the full faith and credit clause of the federal Constitution as argued by defendant. Supreme Council, Royal Arcanum v. Green, 237 U. S. 531, 35 Sup. Ct. Rep. 724; Hartford Life Ins. Co. v. Barber, 245 U. S. 146, 38 Sup. Ct. Rep. 54. “Corporations are not citizens within the meaning of the first of these clauses. They are creatures of local law, and have not even an absolute right of recognition in other states, but depend for that and for the enforcement of their contracts upon the assent of those states, which may be given accordingly on such ‘terms as they please,” Paul v. Virginia, 8 Wall. (U. S.) 168.
It is to be borne in mind that chapter 47, Laws 1897, remained unchanged and unamended until 191.3, when the Nebraska legislature qualified and defined the expression'“representative form of government,” so that the law now in some material respects conforms to the acts of some other states. But the present act, as amended, of course can have no bearing on the present case. The sole question here is whether the body that raised the rates was a representative body as defined by our former decisions where substantially the same state of facts were involved.
We adhere to our former decision. • The application for rehearing is
Denied.