author: LAMM, J.

text:
    LEE S. BURRIDGE v. NEW YORK LIFE INSURANCE COMPANY, Appellant.
    Division One,
    April 1, 1908.
    1. LIFE INSURANCE: Extended Insurance: Net Value: Things Deducted. The sum that may be applied to the purchase of temporary or extended insurance upon default in premium-payment and the death of the insured, on policies issued prior to the act of 1903, is three-fourths of the net value of the policy, less, not all indebtedness, but “any notes or other evidences of indebtedness to the company, given on account of past premium payments on said policy” — not less such notes as may be given to secure a loan.
    2. -: -: -: -: Statute of 1903: Not Retrospective. The statute of 1903, providing that there shall be deducted from the net value not only “any notes given on account of past premium payments on said policy issued to the insured,” but also “any other evidence of indebtedness to the company,” such as a note for a loan, is not retroactive, and does not apply to a policy issued in 1894 to an insured who died in 1901, and does not authorize the deduction of the amount of a loan on the policy from three-fourths of its net value, in arriving at the time for which the policy may be extended, or in determining whether or not the policy could be legally can-celled and forfeited on the failure to pay premiums and the interest on the loan on the policy as security.
    3 -: -: Loan: Independent Contract. Where the loan and pledge were contemplated by the policy, they do not constitute a contract distinct and independent from the policy.

      4. -: -: -: To Pay Premiums: Proof: Presumptions. Where the policy contains a provision that makes it a condition precedent to the granting of a loan that five annual premiums must be paid before any loan will be made, and the loan was made about the time the sixth annual premium became due, it will be presumed, in the absence of evidence to the contrary, that the loan was not used to pay past premiums, to the company, and the burden of showing it was so used is on the company.
    75. -: -: -: -: -: Statements by Deceased. Statements by a witness that he heard the insured say that the loan went to pay premiums, made after the loan agreement was consummated, is of no probative force in establishing that they were so used.
    6. -: -: -: Cancellation and Fon-eiture. Neither at the time the policy is drawn and issued, nor by any supplemental subsequent contract in legal effect an amendment to the policy, such as a loan contract and pledge, is it permissible to whittle away the non-forfeiture statute requiring the net value of the defaulted policy to be applied to extended insurance. [Following Smith v. Mutual Benefit Life Insurance Co., 173 Mo. 329.]
    7. -: -: -: -: Settlement: Estoppel. Any attempted cancellation of the policy on failure to pay the premiums and interest due on a loan, to secure which the policy had been pledged, in accordance with the loan contract, and a sending of the balance due, in the estimation of the company, to the insured and the beneficiary, do not work a cancellation of the policy or prevent the application of the net value to extended insurance, if neither the insured nor the beneficiary ever received that balance or agreed to accept it. The fact that the check representing the balance was mailed to the insured at his business office and was received there and remained there for one year after it was mailed and six months after his death, if he in fact never received it, does not establish a surrender of the policy “for a consideration adequate in the-judgment of the legal holder thereof.” The word “judgment” used in the statute implies conscious consent, and there can bo no consent without the meeting of minds.
    8. -: -: Constitutional Statute. The non-forfeiture insurance statute is not unconstitutional as an impairment of the right of contract. When a foreign insurance company comes into this State to do business, it impliedly accepts the statute, and is bound by its burdens — burdens which it accepted when it received a license to write insurance in this State.

      Appeal from St. Louis City Circuit Court. — Ron. Moses N. Sale, Judge.
    Affirmed.

      Judson & Green for appellant; James R. McIntosh of counsel.
    (1) The assignment and delivery of the policy to the company was a pledge of the reserve value of the policy for payment of the loan, under a distinct and separate contract of pledge, valid and enforcible both under the laws of New York and Missouri, and the non-forfeiture provisions of the Missouri statutes are inapplicable. Secs. 7880-7882, R. S. 1899', recognizing and authorizing loans by insurance companies upon securities of policies; sec. 16, ch. 690, Laws of New York, 1892. (2) The case of Smith v. Mutual Benefit Life Ins. Co., 172 Mo. 329, which was the sole basis of the order for new trial, does not control this case, as that case must be limited to its special facts, and is clearly distinguished from the case at bar. Laws 1903, p. 208; Mutual Reserve Life Ins. Co. v. Roth. 122 Fed. 853. The Smith case is distinguished from the case at bar by the following facts: 1. There is here an independent contract of commercial pledge -distinct from the policy. 2. The entire loan was made for the purpose of payment of premiums. 3. There was an actual settlement and payment to the insured constituting a surrender of the policy. (3) This case falls within the express exception to the non-forfeiture statute, as the policy was surrendered to the company for a consideration adequate in the judgment of the holder. R. S. 1899, sec. 7900: (4) The plaintiff is estopped from maintaining this action. The retention •of the check with knowledge of the fact that it was for the balance of the surrender value of the policy, was a waiver of any other payment, and an acceptance of the account. Story on Contracts, sec. 1004; 29 Am. and Eng. Ency. Law (2 Ed.), 1108; Williams v. Railroad, 153 Mo. 519.. (5) The physical or mental condition of the insured is immaterial. Wheeler v. Ins. Co., 882 N. T. 545; Klein v. Ins. Co., 104 U. S. 89; Ins. Co. v. Daily, 33 Kan. 606; Hawkshaw v. Supreme Lodge, 29 Fed. 223; Gaterman v. Ins. Co., 1 Mo. App. 300; 25 Cyc., 844. (6) The non-forfeiture provisions of the Missouri statutes do not prohibit loans of insurance companies to their policy holders secured by the reserve value of their policies, and no such prohibition can be implied therefrom. Statham v. Ins. Co., 93 U. S. 24; Smith v. Ins. Co., 64 Mo. 330; Relfe v. Ins. Co., 78 Mo. 594; Rumbold v. Penn. Mut. Life, 70 Mo. App. 715; Boettgen v. Iron Co., 136 Mo. 531; R. S. 1899, sec. 7880. (7) The non-forfeiture statutes must be read not only in connection with the other sections of the non-forfeiture act, but with the entire chapter on life insurance, and the legislative intent must be derived from the entire act.' A fortiori, must this be done to avoid a construction which involves unjust and absurd- consequences, making the statute so construed.unconstitutional. Kane v. Railroad, 112 Mo. 34; Bingham v. Birmingham, 103 Mo. 345; Chouteau v. Railroad, 122 Mo. 375; Lamar Water & Elec. Light Co. v. Lamar, 128 Mo. 188, 140 Mo. 145. (8) If the statute relied on could be construed as making the policy loan agreement in this case void and unenforcible, the statute so construed would be unconstitutional both under the State and Federal Constitutions. Art. 2, sec. 4, Const, of Mo.; Const, of IT. S., amd. 14; Const, of U. S., art. 1, sec. 10; State v. Loomis, 115 Mo. 307.

      Jones, Jones, Hooker S Dams for respondent; Wellman, Gooch & Smyth of counsel.
    (1) Under the undisputed facts the plaintiff was entitled to judgment. It was error to grant a non-suit, and the error was properly corrected by setting aside the nonsuit. R, S. 1899, sec. 7897; Smith v. Insurance Co., 173 Mo. 333. (2) The company could not rightfully deduct the amount of the loan to the insured from three-fourths of the net value of the policy because the loan was not made “on account of past premium payments on the policy.” No such showing-was pleaded or proven by defendant, upon whom the burden of proof rested, .and the physical facts preclude the possibility of any such showing. Smith v. Insurance Co., 173 Mo. 333. (3) The loan agreement was part of the contract of insurance. Lewis v. Ins. Co., 187 U. S. 335.
   LAMM, J.

— Defendant is a life insurance company incorporated in the State of New York. At the times in hand John II. Reifsnyder was a resident and citizen of Missouri and so was his wife, Frances A. On February 20, 1894, defendant, as insurer, issued to John H. Reifsnyder, as the insured, a policy for five thousand dollars, naming his said wife as beneficiary. Her right was absolute, i. e., the policy itself contained no provision permitting the insured to change the beneficiary. The application for it was made to défendant’s St. Louis agent. The policy was delivered by him in St. Louis and the case proceeds on the theory that defendant was transacting a life insurance business in the State of Missouri under its laws in that behalf made and provided, that the policy is a Missouri contract, and, hence, the lex loci contractus governs. Reifsnyder died November 3, 1901. It stands admitted that payment of the policy was demanded, was refused, that defendant denied liability and that by so doing it waived notice of proofs of death. Frances A. Reifsnyder on the 5th day of May, 1903, made a formal written assignment of her right, title and interest in the policy and of her right, claim, action and demands thereon to the plaintiff, who sues.

At the close of a trial before the Hon. Moses N. Sale, presiding judge of Division Two of the St. Louis Circuit Court, and a jury, a peremptory instruction was given for defendant. Thereat plaintiff excepted and asked a nonsuit with leave. One going, he presented in due season his motion to set it aside. This motion was allowed. Thereat defendant in turn excepted and appeals from the order granting a, new trial.

The suit was for the policy face less a certain policy loan made the insured. The recovery sought was thereby put below our jurisdiction. Jurisdiction, however, is conceded here because by answer there are lodged in the case constitutional questions.

No question is made on the pleadings and it will do to say on that behalf that they were sufficient to raise all questions made by learned counsel.

The controversy turns on a policy loan, a default in a premium payment, a default in paying the interest on the loan and an alleged surrender and cancellation of the policy under the terms of an alleged policy pledge made as collateral security for said loan. In a nutshell defendant’s contention is that the policy with all its accumulations was pledged to it by the insured and the beneficiary to secure a policy loan; that under the terms of that pledge a default was made and the policy was cancelled to pay the loan, and surrendered. On the other hand, plaintiff (conceding the loan and default) contends that under, the non-forfeiting clauses of the statutes of Missouri, them in force, the policy was alive at Reifsnyder’s death and that defendant must pay the face of the policy less the loan.

In the determination of the case, the following record facts, agreements and statutes are involved, viz.:

Sec. 5856 (R. S. 1889): “No policies of insurance on life hereafter issued by any life-insurance company authorized to do business in this State, on and after the first day of August, A. D. 1879, shall, after the payment upon it of two full annual premiums, be forfeited or become void by reason of the nonpayment of premium thereon, but it shall be subject to the following rules of commutation, to-wit: The net value of the policy, when , the premium becomes due and is not paid, shall be computed upon the American experience table of mortality, with four and one-half per cent interest per annum, and after deducting from three-fourths of such net value any notes or other indebtedness to the company, given on account of past premium payments on said policy issued to the insured, which indebtedness shall then be canceled, the balance shall be taken as a net single premium for temporary insurance for the full amount written in the policy, and the term for which such temporary insurance shall be in force shall be determined by the age of the person whose life is insured at the time of default of premium and the assumption of mortality and interest aforesaid.”

This statute in the Revision of 1899 is, so far as this controversy is concerned, substantially the same. It reads:

Sec. 7897 (R. S. 1899): “No policies of insurance on life hereafter issued by any life insurance company authorized to do business in this State, on and after the first day of August, A. D. 1879', shall, after payment upon it of three annual' payments, be forfeited or become void, by reason of non-payment of premiums thereof, but it shall be subject to the following rules of commutation, to-wit: The net value of the policy, when the premium becomes due, and is not paid, shall be computed upon the actuaries’ or combined experience table of mortality, with four per cent interest per annum, and after deducting from three-fourths of such net value any notes or other evidence of indebtedness to the company, given on account of past premium payments on said policies, issued to the insured, which indebtedness shall be then canceled, the balance shall be taken as a net single premium for temporary insurance for the full amount written in the policy; and the term for which said temporary insurance shall be in force shall be determined by the age of the person whose life is insured at the time of default of premium, and the assumption of mortality and interest aforesaid.”

During the Forty-second General Assembly (Laws 1903, p. 208), section 7897, supra, was amended as follows :

.“Section 1. That section 7897, article 2, chapter 119, of the Revised Statutes of Missouri of 1899, be and the same is hereby amended by striking out the words ‘any notes or other evidence of indebtedness to the company, given on account of past premium payments on said policies, issued to the insured, which indebtedness shall be then canceled,’ in the tenth, eleventh and twelfth lines, and inserting in lieu thereof the words ‘any notes given on account of past premium payments on said policy issued to the insured, and any other evidence of indebtedness to the company, which notes and indebtedness shall be then canceled,’ so that said section, when amended, will read as follows:” [Here follows section 7897 as amended, q. v.]

Section 7899 (R. S. 1899), provides that: “If the death of the insured occur within the term of temporary insurance covered by the value of the policy as determined in section 7897, and if no condition of the insurance other than the payment of premiums shall have been violated by the insured, the company shall be bound to pay the amount of the policy, the same as if there had been no default in the payment of premium, anything in the policy to the contrary notwithstanding. ” [Here follow provisos not material here.]

Section 7900 (R. S. 1899), points out certain eases to which the foregoing statutes shall not be applicable. The mateiial one here is this: “If the policy shall he surrendered to the company for a consideration adequate in the judgment of the legal holder thereof, then, . . . this article shall not be applicable.”

So much for the statutes.

The policy contained the following loan provision :

“The company will make advances as loans upon this policy at the fifth or any subsequent anniversary of the insurance, within the Accumulation Period, under the following conditions:

“First. That premiums are paid in full to the time when the loan is made, including the premium for the entire insurance year then beginning.

“Second. That the aggregate amount of loans outstanding from the sixth to the tenth years, inclusive, shall not exceed $1,400'; from the eleventh to the fifteenth years, inclusive, shall not exceed $3,180; and from the sixteenth to the twentieth years, inclusive, shall not exceed $3,475.

“Third. That the policy shall be duly assigned to the company as collateral security for the loans, and deposited at the Home Office.

Fourth. That interest at the rate of five per cent per annum shall be paid upon all such loans at the anniversary of the insurance next succeeding, and annually thereafter until the loans are paid off.

“Fifth. That the loans shall be for such time as consider it, but he was not to be controlled by it, nor the borrower may elect, not longer, however, than to the end of the Accumulation Period.

“(Any indebtedness to the Company, including any balance of the current year’s premium remaining unpaid, will be deducted in any settlement of this policy or of any benefit thereunder.)”

After the policy had been in force for five years and six annual premiums had been paid by the insured there were borrowed from the company, in pursuance of the aforesaid policy provision, fourteen hundred dollars, evidenced by the following “policy loan agreement” (omitting signatures):

“An agreement made this 27th day of February, 1899, between the New York-Life Insurance Company, party of the first part, and Frances A. Reifsnyder and John H. Reifsnyder, party of the second part,'

“Whereas, said party of the first part has this day loaned to said party of the second part the sum of fourteen hundred dollars the receipt of which is hereby acknowledged, upon the pledge of Policy No. 591,221, and its accumulations, issued by said party of the first part on the life of John H. Reifsnyder.

“And whereas said party of the second part hereby pledges to and has deposited with said party of the first part, as collateral security for the repayment of said loan with interest, said policy and its accumulations ;

“Now this agreement witnesseth that said parties, in consideration of the premises and of the mutual covenants hereinafter mentioned, hereby mutually covenant and agree as follows:

“1. That interest in advance at the rate of five per cent per annum shall be paid upon said loan from the date of said loan to the next anniversary of said policy, to-wit, the 14th day of February, 1900, and annually in advance thereafter, at the Home Office of said party of the first part.

“Note. Interest is payable in advance, but in case said loan is repaid or said policy cancelled under section 4, interest will be charged only to the date of repayment or of cancellation, and any excess paid will be refunded. The date of cancellation will be the day after the month of grace expires. In case of the death of the insured interest will be charged only to the date of the approval of death, and any excess paid will be refunded.

“2. That said party of the second part shall be at liberty to repay said loan with accrued interest, at any time.

“3. That the repayment of said loan, with accrued interest, shall, without further action, cancel and annul this agreement, and that thereupon the company will return said policy, duly released, to said party of the second part.

“4. That in the event of default in payment of said interest or of any premium on said policy, for one month after they shall respectively become due, said party of the first part, which is hereby irrevocably appointed attorney for that purpose, is hereby authorized at its option to cancel said policy and its accumulations, for the customary cash surrender value then allowed by said party of the first part for the surrender of policies of this class, said party of the first part in that case being liable to said party of the second part for the return of the balance only of said cash surrender value, after deducting said loan and accrued interest.

“5.' That in the settlement of any claim or any benefit under said policy before said loan with accrued interest shall have been fully paid, said party of the first part shall be liable to said party of the second part for the return of the balance only of the proceeds of said policy after deducting said loan and accrued interest and any-other indebtedness.

“6. That any notice under this agreement may he given either personally or by mailing it at the post-office addressed to the office or last known place of residence of said party of the second part, and that any notice so mailed shall be deemed to have beea served oa the day following the day it was deposited at said post-office.

“7. That all the conditions, limitations and requirements of said policy, except as herein expressly modified, remain in full force.

‘•‘In witness whereof, the parties hereto have hereunto set their hands and seals the day and year first above written, in duplicate.”

The policy premium-payment date was fixed at February 14th, in each year. The insured also paid his premium and interest for 1900 (making seven annual premium payments) but defaulted in paying both interest and premium on February 14, 1901, and this default continued until his death.

There is evidence that for a year prior to his death the insured was non-compos, was watched as one who had lost his mental reckoning and attended to no business. It seems that within the time allowed by the policy, to-wit, on the 4th day of June, 1901, he made (or was caused to make) an application to the company for the reinstatement of his policy, his brother living in the East furnishing the 'money. But a medical examination determined he was not an insurable risk at that time and thereupon the application was refused. On the heels of this refusal, defendant company undertook, by its check, to return the money advanced for the reinstatement, to-wit, $512.75 —said money having apparently laid in defendant’s St. Louis office pending the result of the application. There are certain facts relating to the alleged return of this money and certain contentions made with reference to the same that do not affect the legal propositions in the ease or touch the merits, as ‘we see it; since it is not contended the policy was “reinstated’' and purged of the default.

After the fact was ascertained that Reifsnyder was not an insurable risk at the time of his application for reinstatement, to-wit, on June 18, 1901, defendant company foreclosed its lien as pledgee of the policy which it then held and indorsed on the policy a memorandum of its surrender and cancellation for non-payment of the February, 1901, premium and interest. By its actuaries and other experts it undertook to determine the customary cash surrender value of the policy at that time, and did determine it at $1,649.42. It then deducted its loan and accrued interest from the aforesaid cash surrender value and found a balance of $243.59 in its hands due on the policy after cancellation as aforesaid. Thereupon on the 21st day of June, 1901, it drew its check for said sum, payable to the order of the insured and the beneficiary, and put the same in the mails accompanied by a letter addressed to John H. Reifsnyder, Room 406 Security Building, St. Louis, Missouri. At that time John H. Reifsnyder was at Pottstown, Pennsylvania, with his brother where he remained to within a month of his death. The letter containing that check apparently never reached him as addressee. The check itself apparently never came into his hands nor into the hands of the beneficiary, and was never cashed. Mr. Reifsnyder had been secretary of an annuity company having its office in Room 406, Security Building, St. Louis, Missouri, and usually got his mail there. For a year he had not been performing the duties of secretary on account of his mental affliction. At a certain time one Seeor, his brother-in-law, was appointed' his administrator. One year after the check was dated and six months after Reifsnyder’s death it came into the possession of Mr. Secor from one Mesmer who, it seems, was an officer of said annuity company .and officed at Room 406, Security Building. Mr. Secor delivered it to Mr. Jones, plaintiff’s attorney, and lie tendered it at the trial to defendant, unindorsed and uncashed. Mesmer was not called as a witness by either party, and how he got possession of this check is dark. If speculation he indulged it presumably came into his hands in handling Mr. Reif snyder’s mail delivered at the office of the annuity company.

It is stipulated that the reserve or net value of the policy in suit, on the 14th day of February, 1901, according to the American Experience Tables of Mortality, was such a sum that if three-fourths of it be applied as a net single premium to the purchase of extended insurance it would, at the then age of the insured, extend the policy for the full amount written in it for a period far beyond Reif snyder’s death.

Any other facts necessary to the determination of material contentions in the case will appear in the opinion.

On this record did the court err in setting aside the nonsuit?

I. In this court, on March 20, 1903, there was. handed down a decision in Smith v. Mutual Benefit Life Insurance Co., 173 Mo. 329. That case was considered first in Division and then in Bane. What was decided by it was decided after mature deliberation in the light of able briefs and argument. It hinged on the interpretation to be given to that clause of section 7897, supra, pointing out the rule for getting at the net value sum to be applied to the purchase of temporary or extended insurance on default in the fourth or any subsequent annual premium payment. Attending to that section as it read when the policy issued and when the insured died, it will be observed that the net value of the policy is to be' computed. Then from three-fourths of such net value there is to be taken away — what.? All indebtedness? Not at all. There shall be taken away “any notes or other evidence of indebtedness to the company, given on account of past premium payments on said policies.” The residue, if any, then goes automatically to the purchase of temporary or extended insurance. In the Smith case there was a loan made on the strength of the reserve value of the policy. Part of the loan was on account of past premium payments, but part of it was for a present cash loan at large. If the whole of the loan was to be deducted from the net value, then there was no purchasing power left to the net value, and ergo, no extended insurance in the Smith case. But, on the other hand, if only that part of the loan made oh account of past premium payments was to.be deducted from the net valúe before the purchase of extended insurance then there was a residuum left to be applied under the statute to the purchase of such extended insurance, and, in tha,t event, the policy was alive and the company liable. In that case, therefore, the scope and meaning of that clause of our non-forfeiting insurance statute was held in judgment in the stiffest sense and this court decided that the statute was mandatory; that the character of the indebtedness to be deducted from the net value before applying the residue to the purchase of temporary or extended insurance must be looked to and was limited by the clear words of the statute “to notes or other evidences of indebtedness to the company, given on account of past premium payments” on the policy issued to the insured; and did not include notes and evidences of indebtedness arising in other ways. It is not apparent, assuming the statute be constitutional, how, giving heed to the hornbook maxim, expressio unius, etc., any other conclusion could have been arrived at in reason. It was held furthermore, in effect, that such provisions of law evidenced a sound and just governmental policy, and wrote into every policy of life insurance, coming within its purview, a mandate, not to he abrogated in whole, or hedged about or lopped off in detail, by policy provisions, nor to be contracted away otherwise than as prescribed by statute.

Seven days after the decision in the Smith case, • and presumably on account of it, the Forty-second General Assembly, then in session, amended section 7897, supra (Laws 1903, p. 208, supra). The significance of the amendment can be seen at a glance in section 1 of that act hereinbefore set forth. It struck from the body of the law the statutory restriction upon the character of the notes and other evidence of indebtedness to be deducted from the net value before applying it to the purchase of temporary insurance and in it wrote in lieu thereof a broader provision, to-wit, a clause providing that there should be deducted from this net value not only “any notes given on account of past premium payments on said policy issued to the insured,” but, also, “miy other evidence of indebtedness to the company.”

It becomes plain, then, that if the policy in suit had been issued and the loan made under the provisions of the amendment of 1903, the case would present a boneless contention. But the Act of 1903 was not retrospective under settled rules of law. It did not hark back to cover outstanding policies and policy loans — the general rule being that legislative acts must be construed as prospective in intention and application and not retrospective unless their language calls for retroactive operation. [Haarstick v. Gabriel, 200 Mo. l. c. 244, et seq.; Manwaring v. Missouri Lumber & Mining Co., Ibid, l. c. 731, et seq., and cases cited. See, also, sec. 15 of art. 2, Constitution.]

In fairness to appellant’s learned counsel it should be said they do not contend the Act of 1903 was retroactive. As we grasp it, their contention is that the clause stricken out by the 1903 amendment was bad law, that, contra, the amendment is good law and puts the policy of our insurance laws in tune with the State and Federal Constitutions, and the general right of freedom of contract. This case may proceed, then, on the assumption that the amendment, of 1903 was not retroactive and therefore as a legislative utterance it in no wise controls the issues at bar.

II. Plaintiff stands upon the Smith case. Defendant concedes, arguendo, that the case at bar is not without similarity to the Smith ease, but counsel say there are differences distinguishing it, in that: (1) “There is here an independent contract of commercial pledge distinct from the policy. (2) The entire loan was made for the purpose of payment of premiums. (3) There was .an actual settlement and payment to the insured constituting a surrender of the policy.”

Is there substance in' these contentions? We think not; because:

(a) The loan and pledge contract in the case at bar is in no fair sense a contract distinct and independent from the policy. To the contrary, such loan and pledge was contemplated by the policy itself. It involved the policy, it may be likened unto an egg laid in the policy and subsequently hatched — i. e., was made in pursuance of its terms. But were it conceded by way of argument that either the loan or the policy pledge were an independent contract distinct from the policy, yet neither the one nor the other were more “independent” in principle than in the Smith case. The case in hand, therefore, in the particulars now up for consideration should be controlled by that case, if it is to be followed.

(b) But it is asserted that the entire loan in the case at bar was made for the purpose of payment of premiums and that this ear-marks the case and distinguislies it from the Smith case. If this were true then under the rationale of that case plaintiff could not recover in this; for in that event on the wording of the statute as there interpreted the whole of the loan would he deducted from the net value before any of such net value should go to the purchase of extended insurance, and if application be made here on this basis plaintiff must be cast.

This contention seeks the uncovering of further facts. It will be observed that by the policy loan provision it is made a condition precedent to the granting of any loan whatever that the fifth, or some subsequent, anniversary of the insurance should happen before a loan can be made, and that premiums are to be paid in full to the time of the loan, including the premium for the entire insurance year then beginning. It will be observed that the whole policy plan contemplates the payment of premiums in cash when due. In this condition of things (given a policy loan, as here) a violent presumption at once arises, in the absence of evidence to the contrary, that as each annual premium fell due the insured paid it in cash and the insurer received it up to and inclusive of the fifth ánniversary premium. If, now, this presumption is to be rebutted and overcome defendant has the laboring oar — the burden of proof is on its shoulders. How did it carry this burden? Well or ill? Manifestly, not well. And this is so because, as said by Lord Mansfield in Blatch v. Archer (Cowper 63, 65): “All evidence is to be weighed according to the proof which it was in the power of one side to have produced and in the power of the other side to have' contradicted. ” Applying that rule here, it becomes -plain that if there were any notes or evidences of indebtedness to the company given by the insured or the insured and the beneficiary “on account of past premium payments,” the evidence of such fact was peculiarly within the knowledge and keeping of defendant company, and the failure to produce that evidence would seem fatal to defendant’s claim. If there were any such loans or evidences of indebtedness it was .an affirmative fact to be proved affirmatively by the best evidence of which the case was susceptible. • The burden did not rest upon the plaintiff to disprove but on defendant to prove. When Secor was on the stand on cross-examination he testified by questions and answers as follows (referring to his gathering up papers belonging to Mr. Reif snyder after his death):

“Q. Did you get any papers connected with the New York Life Insurance Company? A. No, sir.

“Q. Or with the policy? A. No, sir.

“Q. Did you ever find a copy of the loan agreement made with the company? A. No, sir.-

“Q. You knew that there-was one? A. No, sir.

“Q. You knew there was a loan made on the policy? A. I knew he made a loan and that the money went to pay premiums. All that money that he got went to pay premiums.

“Q. Did he tell you he defaulted on the premium of February 14, 1901? A. No, sir.”

Again on re-examination he testified in relation to his knowledge of that matter, as follows:

“Q. Now, with respect to the making of this' $1,400 loan, you were not a party to that, and knew nothing about the facts yourself at all, do you? A. No, sir, I didn’t know it was made until afterwards.

“Q. You don’t know how that $1,400 was paid to Doctor Reif snyder, or where, do. you? A. Only what' was talked of afterwards. He said it all went for premiums is all I know.

“Q. Whatever you know about that is what some one else has told you? A.- That’s right.”

Such is the evidence on which defendant relies.

It is apparent from the foregoing that not a shred of probative proof appears upon which defendant can base its contention that the policy loan in this instance was given on account of premium payments on the policy in suit. Mr. Secor testifies to nothing of his own knowledge. At most what he said was but the echo of what was told him by the insured after the event. The rights vested in the beneficiary under the oldJine policy in suit do not hang dangling on the thin and precarious thread of such an admission as that. The answers of Mr. Secor are not closely responsive to the questions, and even if it were conceded they were responsive and that the testimony was competent yet it does not disclose ivhat premiums the loan went to pay. Did he refer to past premiums on the policy in suit or to premiums on other policies? Had the insured borrowed the money from other sources to pay-these premiums and -did he repay such outside loans when the policy loan was made? If so, that would in a way explain what Secor meant. We think it clear that this bit of cloudy evidence, cropping out incidentally in cross-examination, should not be allowed any probative force, in the absence of the production of conclusive evidence that must have been in the possession of defendant — if any existed — to the effect that it had been carrying the past premiums payments of the insured in the way of notes or other evidences of indebtedness. The point is ruled against defendant.

(c) Finally it is urged by counsel that “there was an actual settlement and payment to the insured constituting a surrender of the policy.” This contention is said to arise from the fact that at a certain time in June, 1901, the defendant company foreclosed its lien as pledgee of the policy and applied the bulk of its surrender value to the payment of the debt for which the policy and its accumulations stood as security, and sent the residue of such surrender value to the beneficiary and the insured by its check of June 21, 1901, for $243.59. Counsel not only say that defendant had the clear commercial right to take the policy pledge, make the pledge agreement and to enforce that agreement according to its terms, notwithstanding our insurance law, but in the evolution of their argument they further set up the claim that under section 7900, defendant had the right to take a surrender of the policy “for a consideration adequate in the judgment of the legal holder thereof,” and that what was done in this instance amounts to a compliance with that statute and is protected by its terms.

'If our statute is unconstitutional, if the Smith case is illy-considered law, then the first branch of defendant’s contention is sound, otherwise not. But we remain satisfied with the reasoning and conclusion in the Smith case. We hold now, as we held then, that neither at the policy date nor by any supplemental subsequent contract, in legal effect an amendment to the policy, was it permissible to whittle away the mandate of the non-forfeiting statute requiring the net value of the defaulted policy to- be applied to extended insurance. If the deductions made from that net value are notes coming within the statutory description, it is well enough, but if they fall within the interdiction of the statute it is bad. It matters not whether the mischief be done when the policy was executed and springs from its own loins by use of a policy term forbidden by law, or whether it sprang up afterwards by indirection; because it ought not to be held that “one can do in a circle what he cannot do on a straight line.”

The remaining question is whether what defendant did in sending a check to the beneficiary and the insured for the remainder of the surrender value of the policy, after subtracting the loan and interest, amounts to a compliance with section 7900. That section plainly contemplates that the relation of insurer and insured may be brought to an end if the insurer complies with its provisions, and the policy is surrendered “for a consideration adequate in the judgment of the holder.” In this case we need not decide what would have been the result if the insured and the beneficiary, with full notice of all the facts, had accepted the check for the balance of the surrender value, had cashed it and appropriated its proceeds to their own use; because no such case is here. The evidence indicates that neither the one nor the other received the check, and it conclusively shows it was never cashed or appropriated. In this condition of things we cannot hold that the policy was surrendered to the company by that transaction, “for a consideration adequate in the judgment of the legal holder thereof.” “Judgment,” as the word is used in the statute, implies deliberate action on knowledge of the fact, implies conscious consent. . Here there was neither. Men’s minds must meet in such contracts of surrender as contemplated by that section. Here there was no meeting of mind, and no estoppel; for estoppel proceeds on knowledge. An inference of acquiescence some times arises by retaining” a check or an account rendered. But, manifestly, no such inference could' arise in this case. Here the check was not retained, for it was never in fact received by the insured or the beneficiary. No man may retain, unless he receives. Nor would it seem reasonable to draw such inference of acquiescence if the cheek had been received by the insured, he being non compos. A policy of insurance may be forfeited by default in premium payment made by one non compos. [Klein v. Ins. Co., 104 U. S. 88.] In such case others might pay the premiums and prevent the default, but that principle does not apply here. [1 Am. and Eng. Ency. Law (2 Ed.), 452.] The point is ruled against the defendant.

III. . But defendant’s learned counsel contend in effect that if we should hold the case at bar is controlled by the Smith case, then there is left to them the proposition that our statute as interpreted by that case is unconstitutional as an impairment of the right of contract. They put their finger on certain provisions in both the Federal and State Constitutions (to-wit, the 14th Amendment to the- Constitution of the United States and section 4, article 2 of the Constitution of Missouri), which they say present an impassible' barrier to the passage of such a law. We are not impressed with the soundness of this proposition. The defendant company had no right to do business in Missouri except by the permission of the laws of this commonwealth and under such constitutional conditions as those laws imposed. Knowing the law, it applied for and received permission to come into Missouri and make insurance contracts. When the contract in suit was entered into in 1894 there was a limitation put upon the right to make it. By that limitation, defendant could only write insurance contracts of a certain character, to-wit, policies not subject to forfeiture on certain contingencies and subject to have their net value computed and that net value applied to the purchase of temporary insurance after deducting loans of a specified character and no other. That statute was impliedly accepted by defendant when it accepted its license to do business. The defendant was not bound to come into the State of Missouri and write contracts of insurance attended with results indicated by the statute under consideration. That is not the question. Defendant did come in and did write insurance under the law. [Whitfield v. Ins. Co., 205 U. S. l. c. 495.] It took its right to write insurance cum onere — the bitter with the sweet. [New York Life Ins. Co. v. Cravens, 178 U. S. 389, s. c., 148 Mo. 583; Security Mutual Life Ins. Co. v. Prewitt, 202 U. S. 246; Waters-Pierce Oil Co. v. State of Texas, 177 U. S. 28; Daggs v. Orient Ins. Co., 136 Mo. 382, s. c., 172 U. S. l. c. 566; State ex inf. v. Standard Oil Co., 194 Mo. l. c. 148, 149.] We rule the point against the defendant.

Other points are discussed by counsel, but are not deemed material to the issues of the case in its present form.

The premises considered, we conclude the court, nisi, did right in setting aside the nonsuit and reinstating the case for another trial.

. The judgment is, accordingly, affirmed.

All concur.


source: Caselaw Access Project

author: VATU A N'T, P. J.

license: Public Domain

text:
    THE STATE ex rel. HADLEY, Attorney-General, Appellant, v. KANSAS CITY LIVE STOCK EXCHANGE et al. and TRADERS LIVE STOCK EXCHANGE et al.
    Division One,
    April 1, 1908.
    1. COMBINATION: Boycott: Restraint Through Fear: Demurrer. In a suit brought at the relation of the Attorney-General against a Live Stock Exchange and its members and the Traders Ek- ■ change and its members, it appears that the defendants composing the. Stock Exchange, are chiefly commission merchants • engaged in receiving shipments of live stock to be by them sold or otherwise disposed of as the shippers may direct, while the defendants composing the Traders Exchange are buyers of and speculators in such stock, and together they handle nearly all the live stock business in the market, and the complaint charges that the Traders Exchange has taken such action as tends to exclude all persons from buying and selling live stock coming to that market except members of that exchange and to limit competition in such trade to such members; but there is no allegation that the Stock Exchange or its members have wilfully done anything, or purpose to do anything, to so exclude others who may desire to do business with them, or to limit competition in trade, but the allegation is that the defendants composing the" Traders Exchange have'boycotted'and are threatening to boycott the members of the Stock Exchange if they do live stock business with any persons not members of •the Traders Exchange, and the inference to be drawn is that if the members of the Stock Exchange were left free to act they would not do any of the things called unlawful in the petition. Held, that it is no defense for the Stock Exchange and its members to say that they were constrained to do an unlawful act for fear of losing the trade of a larger trader or group of traders, but when they are called into a court of equity to show cause why they should not be enjoined for yielding to such constraint, and it appears that the influence which is pressing them is unlawful and is within the power of the court to prevent it, equity will not leave them under the unlawful restraint and at the same time enjoin them from yielding to it, but will remove the cause, and, therefore, if the members of the Stock Exchange are refusing and unwilling to do business with any other persons than the Traders Exchange, and if the acts of the Traders Exchange amount to an unlawful influence or constraint, the court will enjoin the Traders Exchange from boycotting the members of the other exchange, and hence the demurrer of the members of the Stock Exchange was properly sustained.
    2. -: -: Voluntary Association: Individuals. A mere voluntary association, for instance, the Traders Live Stock Exchange, a voluntary association of buyers of stock, can neither sue nor be sued, but a suit to break up an unlawful combination carried on by means of the association may be brought against the individuals and corporations that compose the association, ' and the name “Traders Uve Stock Exchange” may be used to distinguish these defendants in their associated capacity.
    2. -: -: - — : Partners: Conspirators. The members of a voluntary association of traders, formed for the purpose of maintaining a boycott against competing traders, are not partners in the sense of the commercial law, but where a large body of men combine for a particular unlawful purpose and agree inter sese to adopt a uniform course of conduct, and the body or a considerable number of them pursue the course agreed upon, they are co-conspirators — aiders, instigators and abettors of the acts done — and are therefore responsible, not only each for his own act, but-each for the act of each other and for all.
    4. -: Free Right to Trade. Primarily it is a sound proposition that any man has the right to refuse to deal with another for any reason that seems good to him, and is not required to give a reason for his refusal; and.what he has a right himself to do, he may agree with another or others to do. But that principle has a limitation in its application. Men cannot enter into a compact or combination that results in the elimination of competition and the exclusion of other traders from a public market, and the statute forbids such a combination. It is directed against a combination to do a forbidden thing, and assumes that each individual will do on his own account what he has agreed with those in the combination to do, and that in this way the unlawful result — the combination in restraint of trade, a boycott to shut out competition — will be accomplished.
    5. -: Petition: Demurrer. A petition charging facts which show that the defendants, who are members of the Traders Live Stock Exchange of Kansas City, a voluntary association, have, in effect, by a compact, rules and combined effort, excluded from the stock yards all dealers in live stock except themselves, and by boycotting and threats of boycotting have intimidated commission merchants and other exchanges from dealing with any other traders except themselves, and by those means have obtained control of a public market, states a cause of action, and as a demurrer thereto admits all facts well pleaded it should be overruled.
    6. -: Exchange: Fee. The law makes no objection to the demanding by a voluntary association (a traders’ exchange) of a fee of admission of whatever sum, but it does object to the requiring of a person going into a public market that he shall become a member of a voluntary association and enter the market and continue therein only on the terms prescribed by such association. The public market cannot be blocked to any man merely because he is not a member.
    7. -: -: Moral Advantages: Coercion. There may be advantages, moral and material, not only in facilitating business but also in advancing the standard of business integrity, derived from an exchange composed of traders in a public market, yet the law is satisfied with the standard of honesty and business integrity which it has itself erected, and it recognizes the right of no man or set of men to erect for another any other standard and to coerce him to measure his conduct by it.
    8. -: Exclusion from Market. A voluntary association of . traders cannot exclude from the public market all persons except those in the combination for no other reason than that they are not in the combination. That is a very different thing from excluding from membership in the association a member for dishonest conduct — a thing that is not forbidden.
    Appeal from Jackson Circuit Court. — Eon. W. B. Teasdale, Judge.

      Reversed and remanded.

      Herbert S. Hadley, Attorney-General, and John Kermish, Assistant Attorney-General, for appellant.
    (1) Sections 8978 and 8979 are properly within the exercise of the police power of the State, and are not in violation of the State or Federal Constitution. State ex rel. v. Firemen’s Fund Ins. Co., 152 Mo. 1; Finch v. Granite Co., 187 Mo. 244; State ex rel. v. Standard Oil Co., 194 Mo. 124; Walsh v. Master Plumbers Asso., 97 Mo. App. 280; State ex rel. v. Brew-ing Co., 104 Tenn. 715; Waters-Pierce Oil Co. v. State of Texas, 19 Tex. Civ. App. 1. (2) The circuit court had jurisdiction to restrain and enjoin violations of the law concerning pools, trusts, conspiracies and unlawful combinations. Sec. 8979', R. S. 1899; Walsh v. Assn, of Master Plumbers, 97 Mo. App. 280; .U. S. v. Trans-Missouri Freight Assn., 166 U. S. 290; U. S. v. Northern Securities Co., 198 U. S. 197; U. S. v. Elliott, 64 Fed. 27; U. S. v. Coal Dealers Assn., 85 Fed. 252. The suit was properly instituted against the defendants as voluntary associations and against the' officers and members thereof. Froelich v. Musicians Mut. Ben. Assn., 93 Mo. App. 383; Walsh v. Master Plumbers Assn., 97 Mo. App. 280; U. S. v. Coal Dealers Assn., 85 Fed. 252; U. S. v. Trans-Missouri Freight Assn., 166 U. S. 290; Hunt v. Riverside Co-operative-Assn., 140 Mich. 538. (3) The demurrer admits every allegation of the petition. Goodson v. Goodson, 140 Mo. 206; Shields v. Johnson, 144 Mo. 76; Hogan v. St. Louis, 176 Mo. 149; Dodson v. Lomax, 113 Mo. 555. (4) If the plaintiff was entitled to any relief upon the facts stated in the petition, the demurrer should have been overruled. Ulrici v. Papin, 11 Mo. 31; Tanner v. Railroad, 180 Mo. 1; 16 Cyc., 278. (5) The petition properly charges the Traders Live Stock Exchange, its officers and members, with a violation of section 8978, and also with the violation of section 8966,. Revised Statutes 1899, and is amply sufficient to en-: title the State to the relief prayed for. State ex rel: v. Firemen’s Fund Ins. Co., 152 Mo. 1; State ex inf. v. Armour Packing Co., 173 Mo. 356; State ex inf. v. Continental Tobacco Co., 177 Mo. 13; State ex inf. v. Standard Oil Co., 194 Mo. 124; Finck v. Granite Co., 187 Mo. 244; National Lead Co. v. Grote Paint Co., 80 Mo. App. 247; Froelich v. Musicians Mut. Ben. Assn., 93 Mo. App. 383; Walsh v. Association of Master Plumbers, 97 Mo. 280; Heim Brewing Co. v. Belinder, 97 Mo. App. 64; Addyston Pipe Line Co. v. U. S., 85 Fed. 764; C. W. & C. Coal .Co. v. People, 214 111. 21; U. S. v. Coal Dealers Assn., 85 Fed. 252; U. S. v. Joint Traffic Assn., 171 U. S. 505; U. S. v. Swiff Packing Co., 196 H. S. 375; Ex parte Pierce, 155 Fed. 663.

      Kimbrough Stone and Frank Hagerman for respondent Kansas City Live Stock Exchange.
    No cause of action was stated against the members of the Live Stock Exchange. (1) The petition is solely for injunctive relief. There is no allegation that the members of the Live Stock Exchange threaten to do any wrong, or that any one is in danger from any acts of theirs in the future. The sum total of the offending is that they, in the past, by a boycott on the Traders Exchange, have in some instances been intimidated from buying from or selling to some persons who were not members thereof. Southard v. Morris Canal, etc., Co., 1 N. J. Eq. 518; 10 Ency. PI. & Pr., 948; 16 Am. and Eng. Ency. Law (2 Ed.), 362; 1 High on Injunctions (3 Ed.), sec. 23; Verdin v. St. Louis, 131 Mo. 26; Owen v. Ford, 49' Mo. 436; Carlin v. Wolff, 154 Mo. 543; State ex rel. v. Wood, 155 Mo. 446; Lester R. E. Co. v. St. Louis, 169 Mo. 234. (2) The mere fact that the members of the Live Stock Exchange have been, at times, intimidated from dealing with certain persons, in nowise shows them to he parties to the combination sought to be enjoined.

      R. E. Ball for respondent Traders Live Stock Exchange.
    (1) The exchanges, as such, are not parties to the action. Blakeley v. Benneke, 59 Mo. 193; Perris v. Thaw, 72 Mo. 446; Heath v. Goslin, 80 Mo. 310; Insurance Co. v. Burkett, 72 Mo. App. 1. (2) The members are not partners, and no act of one could bind the others except where expressly authorized. Mo. Bottlers’ Assn. v. Fennerty, 81 Mo. App. 525; Maclay v. Freeman, 48 Mo. 234; Campbell v. Dent, 54 Mo. 325; Deyerle v. Hunt, 50 Mo. App. 541; Ashby v. Shaw, 80 Mo. 76. (3) The. bill must therefore be considered with sole reference to the alleged conduct of business by each of the individual defendants. 25 Am. and Eng. Ency. Law, 1132, par. 5; Maxwell & C'o. v. Edens, 65 Mo. App. 439. (4) Eliminating mere conclusions of law and regarding only substantive facts pleaded, there is no case against defendants or any of them. In re Greene, 52 Fed. 104; Storey v. Ins. Co., 61 Mo. App. 534; Bank v. Mulhall, 8 Mo. App. 558; Dannan v. Coleman, 8 Mo. App. 595; Mullanphy v. Phillipson, 1 Mo. 188; Weimer v. Shelton, 7 Mo. 237; Manker v. Faulkhaber, 94 Mo. 430; Sidway v. Mo. Land & live Stock Co., 163 Mo. 342; Nagel v. Railroad, 167 Mo. 89; Mallinckrodt Chemical Wks. v. Nemnich, 169 Mo. 388; State ex inf. v. Railroad, 182 Mo. 284. (5) The rules of the exchange do not constitute a combination in restraint of trade or a pool, trust, monoply or conspiracy to restrain trade or control prices, or supply of live stock. Anderson v. United States, 171 U. S. 604; Gladish v. K. C. Live Stock Exch., 113 Mo. App. 726; Arthur v. Oakes, 63 Fed. 317. (6) The rules and obedience to them having been held by the Supreme Court not to have the effect and tendency attributed to tliem by the mere assertion of the pleader, that holding should be conclusive. Holmes v. Cleveland, 93 Fed. 100; Simons Co. v. Knox, 39 Fed. 702; Klobb v. Swan, 68 Md. 516; McIntosh v. Pittsburg, 112 Fed. 705; Harmon v. Auditor, 123 111. 132; Stalcupp v. Tacoma, 13 Wash. 141. (7) The Missouri statute is misconstrued by the relator in his pleading and brief. It does not apply to the facts stated. State ex rel. v. Associated Press, 159 Mo. 410; 26 Am. and Eng. Ency. Law (2 Ed.), 658, 652; R, S. 1899, sec. 8978; State v. Schuchman, 135 Mo. 116. (8) If the relator is justified as a matter of statutory interpretation in separating the concluding sentence from the remainder of section 8978, and is correct in the broad claim that the Legislature has undertaken to make it a crime for two or more persons to refuse to deal for a particular reason, then the Legislature has transcended its constitutional authority, and its act, if enforced, would deprive defendants of liberty and property and would so far violate the Constitution of the State and of the United States. Am. Live Stock Com. Co. v. Chicago láve Stock Exchange, 143 111. 210; State v. Goodwill, 33 W. Ya. 179 (approved 129 Mo. 173, State v. Julow); In re Jacobs, 98 N. Y. 98 (approved 129 Mo. 177, State v. Julow); People v. Fillson, 109 N. Y. 389; State v. Julow, 129 Mo. 163; State ex rel. v. Associated Press, 159 Mo. 410; Marx & Haas v. Watson, 168 Mo. 133.
   VATU A N'T, P. J.

— In January,. 1905, the Attorney-General instituted this suit in the circuit court of Jackson county against the defendants, alleging that they had formed a pool or combination to control and limit the trade in live stock on the market of Kansas City and to limit competition in that trade, in violation of sections 8978 and 8979, Revised Statutes 1899, and of the common law, and praying an injunction to restrain them from further practice of the alleged unlawful conduct. The defendants, are nominated in the petition as the .Kansas City Live Stock Exchange, a voluntary association, and the individuals and corporations composing that association, and also the Traders Live Stock Exchange, likewise a voluntary association, and the individuals and corporations composing that association. The appearance of all the defendants was entered by their respective counsel. On the filing of the petition a temporary injunction was issued. An amended petition was filed in April, 1905. Each group of defendants, that is, those composing the Kansas City Live Stock Exchange and those composing the Traders Live Stock Exchange, filed a demurrer to the amended petition; the court sustained the. demurrers, whereupon, the Attorney-General declining to plead further, final judgment for defendants was rendered, and this .appeal was taken.

The only question is, does the amended petition state facts sufficient to show that defendants have committed or are in the attitude of committing acts that constitute a violation of the laws of this State commonly called the anti-trust law or laws forbidding acts in restraint of trade?

I. There are two groups of defendants named in the petition; one is composed of those who constitute what is called the Kansas City Live Stock Exchange, the other of those who constitute what is designated as the Traders Live Stock Exchange. The difference, if any, in the character of business done by the defendants composing one of these exchanges, and that of those composing the other, is not very clearly set out in the amended petition and perhaps is not very important, but we gather from the briefs the idea that the defendants composing the Kansas City Live Stock Exchange are engaged chiefly as commission merchants, to receive shipments of live, stock for that market consigned to be by them sold .or. otherwise disposed of as. directed by the shippers, whilst the defendants composing the Traders Live Stock Exchange are buyeis and speculators in such live stock. At all events the members of the two exchanges do a large business with each other, and, in accordance with the averments of the petition, they together handle practically all the live stock business in that market. The gravamen of the complaint is the members of the Traders Exchange have taken such action as tends to exclude all persons from buying and selling live stock coming to that market except members of that exchange and to limit competition in such trade to those members. We will notice more particularly presently what the amended petition charges on that point. But there is no allegation that the defendants composing the Kansas City Live-'Stock Exchange have wilfully done any thing, or purpose to do anything, to so exclude others who may ■ desire to do business with them, or to limit competition in the trade, but the allegation is that defendants composing the Traders Exchange have boycotted and are threatening to boycott the members of the other exchange if they do any live stock business with any persons not members of the. Traders Exchange, and the inference to be drawn is that if the members of the Kansas City Live Stock Exchange have done any of the acts complained of they have done so only by fear of the boycott. It may fairly be inferred from the amended petition that if the members of the Kansas City Live Stock Exchange were left free to act they would not do any of the things called in the petition unlawful.

When a defendant is called into court to answer the consequence of his unlawful conduct whereby a plaintiff has been made to suffer, it is no defense for bim to say that he was constrained to do the unlawful act for fear of losing the custom of a large trader or group of traders, but when he is called into a court of equity to show cause why he should not be enjoined from yielding to such constraint, and it appears that the influence which is pressing him is an unlawful influence and it is within the power of the court to prevent it, equity will not leave him under the unlawful constraint and at the same time enjoin him from yielding to it, but it will exert its power to remove the cause and then there will be no occasion for an injunction.

Therefore, if the defendants composing the Kansas City Live Stock Exchange are refusing and unwilling to do business with any other persons than members of the Traders Exchange for fear of the boycott, and if the acts of the members of the Traders Exchange amount to an unlawful influence or constraint, the right thing for the court to do is to enjoin the members of the Traders Exchange from boycotting the members of the other exchange, and that will end the trouble. Under this view of the law the demurrer of the members of the Kansas City Live Stock Exchange should be sustained.

II. In support of the demurrer in behalf of the Traders Live Stock Exchange, the point is made that it is a mere voluntary association and therefore it has no legal entity, it can neither sue nor be sued. The association as such has no legal entity and therefore can neither sue nor be sued, but in the case at bar the defendants are the individuals and corporations that compose the Exchange and the name “Traders Live Stock Exchange” merely serves to distinguish those defendants in their associated capacity.

The point is also advanced that the association is not a partnership and the members are not partners in trade. That too is true to a certain extent. The association, as its purposes are defined, lacks the essential elements of a copartnership, it is not a combination of skill and capital embarked in a definite business for mutual profit, one member cannot act for the whole so as to hind all in a contract. And from this premise it is argued that no member is affected by any act of another member or of all the other members combined; he is responsible only for his own acts. That argument cannot, with safety, be carried to the extent that it is here sought to carry it. Granting that the members of the association are not partners in the sense of the commercial law and that one member cannot, in that sense, bind the association, still where a large body of men combine for a particular purpose and agree inter sese to adopt a uniform course of conduct, a course of conduct that if pursued by one individual would perhaps be of little consequence, yet if pursued by a large number would be of great consequence for good or evil, and therefore where, in pursurance of that agreement, the body of men so combined or a considerable number of them, though acting separately in each transaction, pursue the course of conduct agreed on, the law will presume that the acts committed were the result of the agreement and will hold all those who entered into the combination and agreement as instigators, aiders and abettors of the acts and therefore responsible, not only each for his own act but each for the acts of each other and for all. If this were not the law, how could a conspirator ever be held for the act of his co-conspirators ?

Let the case at bar serve as an illustration; if the members of the Traders Live Stock Exchange have entered into such a combination and agreement between themselves as binds each individual and all the individual members, then, if each acting separately on his own account so far as the buying and the selling is concerned, but acting under restraint of the agreement so far as to refuse to deal with any one not a member of the association, and if by that line of conduct the live stock market is closed to all except members of the association, how could those who have accomplished that purpose, or who are persisting in that course, be held accountable for what they have done or be restrained from continuing in that course if' each individual is to be adjudged by his act alone without regard to the influence of the agreement they all made to effect that purpose? We do not- understand any of the cases cited by counsel for respondent as holding contrary to the views above expressed.

III. It is said in the argument in support of the demurrer that any man has the right to refuse to deal with another for any reason that seems good to him, and he is not required to give a reason; and, advancing a step further in that line of. argument, it is. said that what he has a right himself to do he may agree with another or others to do.

Primarily that proposition.is sound but even that principle may be carried too far. One man may be as exclusive in his individual dealings as possible, yet not appreciably affect the general market. Unless one happens to possess unusual strength he cannot, by himself, affect what in the language of the exchange is called “corner the market.” So if a buyer and speculator in the live stock market in Kansas City should refuse to buy from or sell to men composing a certain class of traders, his action would not be such an interference with the rights of the prescribed class as would materially shut them out from the market, and perhaps he might make a limited compact with others of his way of thinking that would not be such a material interference with the freedom of the market as to bring him and his associates within the limits denounced by the statute, but that would depend on the extent to which the compact goes; carried to a certain degree it might not limit competition in the market but carriéd further it might. The statute is not directed against individual action; it is directed against combination. But the argument is that here we have a case where there is no combined action, because each member acts for himself, that the association, as such, neither buys nor sells, nor refuses to buy from or sell to persons of the proscribed class. The statute is directed against the combination to do the forbidden act, and it has in mind that each individual will do on his own account what he has agreed with those in the combination to do and thus the unlawful result will be accomplished.

It is the combination or agreement that results in restraint of trade that the statute denounces, whether the result is accomplished by the act of each individual on his own account doing as he agreed to do, or by the joint action of all. The result may be the same whether each individual acting for himself pursues the course marked out by the combination or whether they all join in a united transaction. It is the combination to accomplish that result that the statute is aimed to prevent.

The learned counsel for respondents refer to Anderson v. United States, 171 U. S. 604, as authority in support of the demurrer. That case has points of close resemblance to this and also points of wide difference.

That was a suit in a Federal court in Kansas City against these defendants as members composing the Traders Live Stock Exchange, charging them with being a combination in violation of the act of Congress entitled, “An Act to protect trade and commerce against unlawful restraints and monopolies,” Approved July 2, 1900'. The most marked point of difference between that case and this is that the decision in that case rested on a finding of the fact from the evidence that the defendants were not guilty of the acts charged, whereas here we have a demurrer to the petition which admits all the facts well pleaded.

The record in that case contained the preamble to the articles of association of the Traders live Stock Exchange in which it was stated that its object was “to promote and protect all interests connected with the buying and selling of live stock at the Kansas City stock yards, and to cultivate courteous and manly conduct towards each other and give dignity and responsibility to yard traders” and, to that purpose, certain rules were adopted, among which were rules X, XI, and XII, which, together with rule VIII which does not appear in that record, are quoted in the amended petition in the case at bar and which we will presently more particularly note. It is sufficient for the present to say that the rules forbade the members dealing with any yard traders except themselves or with any person or concern who did so. The court in that case holds the purposes of the Exchange as set out in the preamble to be praiseworthy and finds nothing in the rules derogatory of that purpose. At page 613 the court said: “There is no evidence that these defendants have in any manner other than by the rules above mentioned hindered or impeded others in shipping, trading or selling their stock, or that they have in any way interfered with the freedom of access to the stock yards of any and all traders and purchasers, or hindered their obtaining the same facilities which were therein afforded by the stock yards company to the defendants as members of the exchange, and we think the evidence does not tend to show that the above results have flowed from the adoption and enforcement of the rules and regulations referred to.”

At page 617 the court said: “The rule has no direct tendency to diminish or in any way impede or restrain, interstate commerce in the cattle dealt in by the defendants. There is no tendency as a result of the'rule, directly or indirectly, to restrict the competition among defendants for the class of cattle dealt in by them. Those who are selling the cattle have the market composed of defendants, and also composed of the representative buyers of all the packing houses at Kansas City, and also the various commission merchants who are constantly buying on orders and of those who • are buying on their own account. This malees a large competition wholly outside of the defendants. The owner of cattle for sale is, therefore, furnished with a market at which the competition of buyers has a broad effect. All yard traders have the opportunity of becoming members of the exchange, and to thus obtain all the advantages thereof. The design of the defendants evidently is to bring all the yard traders into the association as members, so that they may become subject to its jurisdiction and be compelled by its rules and regulations to transact business in the honest and straightforward manner provided for by them. If while enforcing the rules those members who use improper methods or who fail to conduct their business transactions fairly and honestly are disciplined and expelled, and thereby the number of members is reduced,” etc., it does not amount to an unlawful restraint of interstate commerce.

We have thus quoted largely from the opinion in that case because learned counsel rely on it with confidence, but we do not consider it as justifying or excusing what the amended petition in the case at bar charges these defendants with having done and with still doing and which by their demurrer they admit they have done and are doing.

The petition in this case was filed after the decision in that case had been rendered and the Attorney-General doubtless had the opinion before him, at all events he has charged in this petition that these defendants have done and are doing acts that limit competition and restrain trade such as the court in the case above mentioned said the evidence failed to show they were thus guilty óf. The memberships of the two exchanges are set forth in the amended petition showing a large number of each and the statement is that the magnitude of their business is such that jointly they control all the live stock business that is transacted at the Kansas City stock yards. That is a statement of a fact on which if defendants so desired they might join issue. And in that connection the petition states that the Traders Exchange has adopted the following rules:

“Rule VIII. Membership in this exchange shall be one thousand dollars ($1,000), upon payment of which the secretary shall issue a certificate of membership, which shall be transferable.

“Rule X. This exchange will not recognize any yard trader, unless he is a member of the Traders Live Stock Exchange.

“Rule XI. When there are two or more parties trading together as partners they shall each and all of them be members of this exchange.

“Rule XII. No member of this exchange shall employ any person to buy or sell cattle, unless such person hold a certificate of membership in this exchange. ’ ’

And the amended petition states that in conformity to the requirements of those rules the members of the Traders Exchange refuse to have any dealing in the buying or selling of live stock with the persons or corporations in that business who are not members of the exchange, for the reason only that they were not members, and that by threats of boycott they have so intimidated the members of the Kansas City Live Stock Exchange that they will not buy from or sell live stock to persons or corporations who are not members of the Traders Exchange. Then the petition states a number of specific transactions in which the Traders Exchange by boycotting and threats of boycotting intimidated other live stock dealers from trading with persons and corporations not members of the Traders Exchange, because not members, and by this course of conduct the defendants, the members of the Traders Live Stock Exchange, have obtained control of the market and of the price of live stock therein and have limited competition therein. If these statements are not true the defendants should deny them and let .the evidence answer.

If they are true the defendants composing the Traders Live Stock Exchange have been and are violating the anti-trust laws of this State because they have in effect excluded from the market all yard traders except themselves, the effect of which is to limit competition in the trade and give them control of the market.

It is said that any yard trader may become a member of the Exchange and that therefore if anyone is shut out from the market it is only because he does not choose to enter. Perhaps it is true that anyone may become a member, although the amended petition which is our only source of information does not say so, but if so, he is admitted to what ought to be an open free market only through a door that is guarded by the Traders Exchange and only on terms prescribed, the first of which is the payment of $1,000 entrance fee. Moderate as that fee may be, in consideration of the advantages to be obtained, it is nevertheless a condition not imposed by law and, in a sense, it is a price to be paid for that which the law gives him without price. The initiation fee to some business exchanges that have come under our notice is several times $1,000 and, as no one has a right to membership in a voluntary association except, on the terms prescribed by the association, there is nothing to prevent or forbid the members of the Traders Exchange increasing the amount of the fee to any sum. The law makes no objection to the demanding by a voluntary association of a fee of admission of any sum whatever, but the law does object to the requiring of a person going into a public market that he should become a member of a voluntary association and enter the market or continue therein only on the terms prescribed by such association.

We fully appreciate what is said of the advantages, moral and material, derived from exchanges of the kind in question. When properly conducted, they not only facilitate business, but tend also to advance the standard of business integrity; .still men must be free to go into them or not as they see fit, and they must not block the way of any one to a public market merely because he is not a member of the exchange. Conceding the wholesome moral influence of exchanges of this kind, still the law is satisfied with the standard of honesty and business integrity which it has itself erected and it recognizes the right of no man or set of men to erect for another any other standard and coerce him to measure his conduct by it.

The law recognizes the right of such voluntary association to expel a member for dishonest conduct and refuse thereafter to have any business transaction with him, as was the case in Mo. Bottlers Assn. v. Fennerty, 81 Mo. App. 525, and Gladish v. K. C. Live Stock Ex., 113 Mo. App. 726, but that is very different from the case now before us. To exclude one man or several men for good cause is not to be considered along with the act of excluding all persons except those in the combination for no other reason than that they are not in the combination.

The statements in the amended petition are sufficient if true to entitle the Attorney-General to the relief he asks as against the defendants composing the Traders Live Stock Exchange, therefore, the demurrer filed by them should be overruled, but the demurrer filed by the defendants composing the Kansas City Live Stock Exchange should be sustained.

The judgment is reversed and the cause remanded to be proceeded with according to the views herein expressed.

All concur.