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Statement of the Case.
desire to have the matter as to who was owner of the policies settled so that it might make payment with safety. To reach this result it was alleged that an unsuccessful effort was made to have the parties agree to appear in a suit where as to both of them, the Company admitting liability, their rights might have been determined; and that failing in this respect and being advised that under the law of Georgia where the assignment to Hilsman was made, it was legal and therefore his claim was valid, as the most expeditious way of clearing up the matter the Company paid Hilsman and took from him an indemnity bond. While admitting that before the assignment and at the time of its delivery Hilsman had no interest whatever in the life of Cohen, it was nevertheless averred that the assignment of the policies was valid and authorized under the laws of the States of Georgia and New York. Averring moreover that all the acts of the Company in the premises had been in good faith and arose not from any desire to deny liability but simply from an honest purpose to have it determined who owned the claims under the policy, it was asserted that there could be in no event any liability for interest by way of damages and for the attorney's fees as prayed.
By leave the plaintiff amended his petition "in replication and answer to the answer of the defendant, Manhattan Life Insurance Cc.," and asserted among other things that the assignments of the policies alleged in the answer were void upon two distinct grounds: (1) Because "under and by virtue of the laws of the State of Texas, the State of New York and the State of Georgia, and each of them, an assignment of a life insurance policy to a person without insurable interest in the life of the insured, is invalid and not binding upon the assignor or his representative." (2) Because "said alleged assignments of the policies of insurance sued upon herein are invalid and not binding upon it and were without legal consideration un
Statement of the Case.
der the laws of the State of Texas, the State of New York, and the State of Georgia, for this, that at the time that said assignments and each of them were made, executed and delivered, that the said Jacob Cohen, J. H. Hilsman and his said agent, were engaged in speculative transactions and that said assignments and each of them, were made as a part of and in connection with the said transactions, in what is commonly called 'cotton futures,' the money being paid to and received and used by, the said Jacob Cohen to speculate in future prices of cotton without its being contemplated that there would be actual delivery thereof, or bargain and sale; the said Hilsman and his agent being interested in the transaction and the purpose of the transaction being at and before the time known to and by all the parties which said purpose was carried into effect through the said agency J. H. Hilsman and J. H. Hilsman, he being engaged at that time in the brokerage business; all of which said facts were well known to the defendant Insurance Company at and before the time that it paid the said policies to the said Hilsman, as in its said answer alleged and set forth."
For the purpose of the trial by the court without a jury a written statement of facts was agreed to by both parties in the form of petitioner's case, the case of the defendant company and the reply of the petitioner. The statement of the plaintiff admitted the issue of the policies, the lending of the money by the Company and the pledging of the policies to secure it, the transfer or assignment by Cohen for the consideration we have stated and under the circumstances which we have detailed, the gambling nature of the transaction being expressly stated in accordance with the averment of the answer of the Company and with the allegation of the amended pleading of the plaintiff, the death of Cohen, the claim of both parties on the insurance company, the effort of the Company to secure a suit to which both the claimants should be parties in order to
Argument for Plaintiffs in Error.
234 U. S.
relieve it from responsibility, its failure to secure that result and its payment to Hilsman of the amount upon the giving by him of indemnity, all substantially as alleged in the pleadings we have stated. The agreed facts contained this statement:
"It was not the purpose of the Insurance Company to contest or delay payment, and the payment to Hilsman was made under the circumstances above set out. It is not the purpose of this agreement to determine how far, if at all, the facts in respect to notice and good faith are material issues in this case, that being deemed a question of law, nor is this agreement to be construed as admitting as a matter of law that Hilsman had any right to said policies or their proceeds, or that said payment, or any part thereof, was rightfully made to him. It is, however, agreed as a fact that Hilsman has not been repaid said sum of $460.00, and the Insurance Company has not been repaid the amount of said loan, except as above stated, and that nothing has yet been paid to the plaintiff."
The Company as part of its case introduced certain statutes of the State of Georgia and decisions of the court of last resort of that State interpreting the same for the purpose of showing that Cohen had a right to sell and Hilsman to purchase in Georgia the insurance policies, although Hilsman had no insurable interest in Cohen's life. In rebuttal the plaintiff introduced certain decisions of the court of last resort of Georgia deemed to establish the contrary result and also offered statutes of that State dealing with gambling transactions and the right to sue concerning the same. The trial court found the facts substantially as embodied in the statements referred to.
Mr. William J. Moroney for plaintiffs in error:
The Texas statute, as construed and applied in this case by the state court, is repugnant to the Fourteenth Amendment.
Argument for Plaintiffs in Error.
The judgment of the state court denied full faith and credit to the statutes of Georgia that were pleaded and proved in defense of this suit, in violation of the full faith and credit provision of the Constitution of the United States.
234 U. S.
In support of these contentions, see Rev. Stat. Texas, Art. 3071; Civil Code Georgia, §§ 2114, 2116, 3077; Atchison T. & S. F. Ry. Co. v. Sowers, 213 U. S. 55; Atlantic Coast Line Ry. Co. v. Wharton, 207 U. S. 328; Attorney General v. Lowrey, 199 U. S. 639; Bacon v. Texas, 163 U. S. 216; Beer v. Landman, 88 Texas, 450; Bolin v. St. Louis Ry. Co., 61 S. W. Rep. 444; Bridge Proprietors v. Hoboken Co., 1 Wall. 116; Cawthorne v. Perry, 76 Texas, 338; Cheeves v. Andres, 87 Texas, 287; Clark v. San Francisco, 124 U. S. 639; Collins v. Texas, 223 U. S. 288; Dartmouth College Case, 4 Wheat. 518; El Paso Ry. Co. v. Gutierrez, 215 U. S. 87; Estay v. Luther, 142 S. W. Rep. 649; Farmers' Ins. Co. v. Dobney, 188 U. S. 301; Fidelity Life Ins. Co. v. Mettler, 185 U. S. 308; Fidelity Life Ins. Co. v. Zapp, 160 S. W. Rep. 139; Furman v. Nichol, 8 Wall. 44; Ex parte Garland, 4 Wall. 333; Grigsby v. Russell, 222 U. S. 149; Gulf, C. & S. Fe Ry. Co. v. Dennis, 224 U. S. 503; Gulf, C. & S. Fe Ry. Co. v. Ellis, 165 U. S. 150; Illies v. Fitzgerald, 11 Texas, 429; Iowa Life Ins. Co. v. Lewis, 187 U. S. 264; Ludy v. Larson, 37 L. R. A. (N. S.) 907; Martin v. West, 224 U. S. 191; Murdock v. Memphis, 20 Wall. 590; Northwestern Life Ins. Co. v. McCue, 223 U. S. 234; Pacific Life Ins. Co. v. Williams, 79 Texas, 633; St. Louis Ry. Co. v. Wynne, 224 U. S. 354; Schofield v. Turner, 75 Texas, 324; Southwestern Ins. Co. v. Woods Nat'l Bank, 107 S. W. Rep. 114; Stanley v. Schwalby, 162 U. S. 255; Tilt v. Kelsey, 207 U. S. 42; Vandalia Ry. Co. v. Indiano, 207 U. S. 359; Washington Life Ins. Co. v. Gooding, 49 S. W. Rep. 123; Wilson v. Black Bird Creek Co., 2 Pet. 245; Yazoo &c. Co. v. Jackson Vinegar Co., 226 U. S. 217.
VOL. CCXXXIV -9
Argument for Defendant in Error.
Mr. Wilmer S. Hunt, Mr. Sterling Myer and Mr. C. A. Teagle for defendant in error:
The Supreme Court will not consider questions not raised and passed on in the court below, nor consider other Federal questions than the one raised.
The assignment of the insurance policies was a Texas contract.
If the contract was a Georgia contract, yet if invalid under the laws of Texas, the law of comity between States does not require its enforcement by the Texas courts.
The contract of assignment was even void under the laws of Georgia.
Article 3071, Texas Rev. Stat., is constitutional.
There was no right of the insurance company to recover the $460.00 paid to Cohen by Hilsman.
A general assignment raising a Federal question will not be considered.
On error from a state court, the Supreme Court will only consider the Federal question which gives it jurisdiction.
In support of these contentions, see Acts Texas Legislature 1907, p. 172; 24 Am. & Eng. Ency. of Law, 1052; Armstrong v. Toler, 11 Wheat. 258; Arnott v. Coal Co., 23 Am. Rep. (N. Y.) 190; Association v. Mettler, 189 U. S. 150; Atlantic Coast Line v. Wharton, 207 U. S. 328; Beardsley v. Beardsley, 138 U. S. 262; Beer v. Landaman, 88 Texas, 450; Bigelow v. Benedict, 70 N. Y. 206; Cameron v. Barcus, 71 S. W. Rep. 423; Capitol City Dairy Co. v. Ohio, 183 U. S. 238; Cheeves v. Anders, 87 Texas, 291; Clark v. McDade, 165 U. S. 170; Cothran v. Telegraph Co., 83 Georgia, 25; Dewey v. Des Moines, 175 U. S. 193; Dugger v. Ins. Co., 81 S. W. Rep. 335; Embree v. McLean Co., 11 Tex. Civ. App. 493; Falkner v. Hyman, 142 Massachusetts, 53; Farmers Ins. Co. v. Dabney, 189 U. S. 301; Fletcher v. Williams, 66 S. W. Rep. 861; Fowler v. Bell, 90 Texas, 150; Furman v. Nichols, 8 Wall. 75; Georgia Code,