Huntington v. Supreme Commandery , 261 Pa. 168 ( 1918 )

Opinion by

Mr. Chief Justice Brown,

In 1893 the Supreme Council of the Home Circle, a Massachusetts corporation, hereafter called the Home Circle, issued a beneficiary certificate to George P. Huntington, which provided for the payment of $2,000 to the appellee, his widow, upon “satisfactory evidence” of his death. In April, 1906, when the certificate was in full force, the Home Circle entered into an agreement with the Supreme Commandery, United Order of the Golden Cross of the World, a Tennessee corporation, hereafter called the Golden Cross, for the consolidation of the two orders by merging the entire membership of the former into the latter. In November of the same year a bill in equity was filed by a number of the members of the Golden Cross, in the chancery court of Knox County, Tennessee, against the said order and the Home Circle, alleging that the Golden Cross had no right, under its charter or the laws of the State of Tennessee, to form the said merger or consolidation, and the prayer was for a decree declaring the agreement of merger null and void and ordering it to be cancelled and set aside. Tbe decree asked for was made and affirmed by the Supreme Court of tbe state in November, 1908: Knapp et al. v. Golden Cross; 121 Tenn. 212. Tbe Home Circle was, not served with process in tbe proceeding and did not appear. Notice was given to it by publication, in accordance with tbe Tennessee statute, and tbe decree entered against it was taken pro confesso. From August 1,1906, to December, 1908, Huntington, wbo bad been received as a member of tbe Golden Cross, paid, at tbe order’s office in Philadelphia, all premiums or assessments due. After tbe Supreme Court of Tennessee bad affirmed tbe decree of tbe chancery court, tbe Golden Cross notified him that it would receive no more premiums or assessments from him, and tbe last premium or assessment was returned to him by tbe local treasurer. He died May 29, 1911, and proof of bis death was sent to and received by tbe appellant. Payment on tbe beneficiary certificate was refused, and this action Avas brought May 28, 1913. Tbe defenses made were that, as tbe agreement of merger between tbe two orders bad been declared null and void by tbe Supreme Court of Tennessee, tbe appellee bad no claim against tbe appellant, and tbe action bad not been instituted until after tbe expiration of tbe period within Avbicb, according to a by-law of tbe Home Circle, it ought to have been brought. A verdict for tbe plaintiff, followed by judgment on it, was directed by tbe trial judge, Avbo did not pass upon tbe second defense set up, but held that tbe proceeding in tbe Tennessee court did not affect tbe right of tbe appellee to recover, because her husband bad not been made a party thereto, and tbe Home Circle bad not been served with process and bad not appeared. Tbe foregoing are all tbe facts material to a consideration of tbe two questions raised by counsel for tbe appellant in bis statement of tbe questions involved. No other question raised in bis brief will be considered: Bethlehem Steel Company v. Topliss, 249 Pa. 417.

The proceeding instituted against the Golden Cross and Home Circle in the Tennessee court was against them both in personam. Due legal service was had on the former, but the latter never was served and did not appear. The purpose of the bill was to deprive it and its members of rights which they claimed under the agreement of consolidation with the Golden Cross, but there could, not be such deprivation, to be given effect by the courts of other states, in the absence of legal service upon the Home Circle or its voluntary appearance as a defendant: D’Arcy v. Ketchum, 11 Howard 165; Hart v. Sansom, 110 U. S. 151. “Substituted service by publication, or in any other authorized form, may be sufficient to inform parties of the object of proceedings taken where property is once brought under the control of the court by seizure or some equivalent act. The law assumes that property is always in the possession of its owner, in person or by agent; and it proceeds upon the theory that its seizure will inform him, not only that it is taken into the custody of the court, but that he must look to any proceedings authorized by law upon such seizure for its condemnation and sale. Such service may also be sufficient in cases where the object of the action is to reach and dispose of property in the State, or of some interest therein, by enforcing a contract or a lien respecting the same, or to.partition it among different owners, or, when the public is a party, to condemn and appropriate it for a public purpose. In other words, such service may answer in all actions which are substantially proceedings in rem. But where the entire object of the action is to determine the personal rights and obligations of the defendants, that is, where the suit is merely in personam, constructive sérvice in this form upon a nonresident is ineffectual for any purpose. Process from the tribunals of one state cannot run into another state, and summon parties there domiciled to leave its territory and respond to proceedings against them. Publication of process or notice within the state where the tribunal sits cannot create any greater obligation upon the nonresident to appear. Process sent to him out of the state, and process published within it, are equally unavailing in proceedings to establish his personal liability”: Pennoyer v. Neff, 95 U. S. 714. “It is an elementary principle of jurisprudence, that a court of justice cannot acquire jurisdiction over the person of one who has no residence within its territorial jurisdiction, except by actual service of notice within the jurisdiction upon him or upon some one authorized to accept service in his behalf, or by his waiver, by general appearance or otherwise, of the want of due service. Whatever effect a constructive service may be allowed in the courts of the same government, it cannot be recognized as valid by the courts of any other government”: Goldey v. Morning News, 156 U. S. 518.

The precise question now under consideration was decided adversely to this appellant by the Supreme Court of Massachusetts in Timberlake v. Golden Cross, 208 Mass. 411. The situation of the plaintiffs there was exactly thát of the plaintiff here, and in holding that they could recover, the court said: “The plaintiffs were not parties or privies to the action brought by Knápp and others against the defendant in Tennessee, and are in no way bound by the decision made therein: Rothrock v. Dwelling House Ins. Co., 161 Mass. 423; Pennoyer v. Neff, 95 U. S. 714.” But it is urged that this is in.conflict with what was held in Supreme Council, Royal Arcanum v. Green, 237 U. S. 531. There is no conflict between the two cases. The Royal Arcanum, a beneficial association, of which Green was a member, had, under its by-laws, changed the rates of assessments. The order was a Massachusetts corporation, and some of its members filed a bill in that state to vacate the raised rates. The Massachusetts court held that they were proper. Subsequently Green instituted a proceeding In New York state, upon the same ground and upon the same facts, and" what was decided by the Supreme Court of the United States was that the judgment in Massachusetts was binding on Green, for the reason that a fraternal and beneficial association is, for the purpose of controversies as to assessments, the representative of all its members. It was so held because the rights of members of a corporation of a fraternal or beneficial character have their source in the constitution and by-laws pf the corporation, which are to be construed under the law of ■ the state incorporating the order. In Knapp et al. v. Golden Cross, the Supreme Court of Tennessee undertook to pass upon the validity of a contract between two corporations, one of which had not been served and had not appeared, and set aside the contract, annulling all rights of appellee’s husband under it, though he had never even been named as a party to the. proceeding. This was damnatus inauditus. Whether the appellee would be bound by the decree of the Tennessee court if the Home Circle had appeared, and therefore ought to- be regarded as representing her husband, is a question we need not decide, for it never appeared in pursuance of legal process or otherwise.

When appellee’s husband was received by the Golden Cross as one of its members under the agreement of consolidation, it did not issue a new certificate to him. It merely assumed the liability of the Home Circle, with a slight modification, which is of no importance in this issue. A by-law of the Home Circle, adopted June 13, . 1898, provides that “no action at law or in equity in any court, shall be brought or maintained in any cause or claim arising o-ut of any membership, benefit certificate, or death of a member, unless such action is brought within one year from the time when such right of action accrues.” This action is based upon the certificate issued by the Home Circle and the agreement of consolidation, and the contention of the appellant is that there can be no recovery because it was not brought until two years, less one day, after the death of the holder of the certificate. Even if the appellee was bound by the said bylaw, passed five years subsequently to the issuing of the certificate to her husband, its requirement is that an action on the certificate must be brought within one year from the time the right to bring it had accrued. There was no right to bring, it until proof of her husband’s death had been furnished to the defendant, for the payment of $2,000 to her was to be made “upon satisfactory evidence” of his death. The certificate and the by-laws of the Home Circle are silent as to when proof of death was to be furnished. A by-law of the Golden Cross provides that “no action at law or in equity shall be brought or maintained in any court, for any cause or any claim arising out of membership in the order, or upon any benefit certificate, unless the same is commenced within two years from the time when such right of action accrues. Said right of action accrues when official notice of death is received by the supreme keeper of the records.” Notice of the death of Huntington was sent to and received by the appellant within two years, and as this action was brought within, the same period, the second defense cannot prevail. In support of it Ulman v. Golden Cross, this defendant, 220 Mass. 422, is cited. What was there decided is entirely consistent with our own view. Proof of the death of the holder of the beneficiary certificate was furnished to the Golden Cross April 11, 1908, and a cause of action then accrued, but suit was not brought until June 27,1911, — more than three years thereafter — and it was, of course, held that the disregard of the by-law of the Home Circle barred a recovery.

The assignments of error are overruled and the judgment is affirmed.