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Zalatuka v. Metropolitan Life Ins. Co.

April 8, 1937

ZALATUKA
v.
METROPOLITAN LIFE INS. CO.



Appeal from the District Court of the United States for the Eastern District of Wisconsin.

Author: Evans

Before EVANS and SPARKS, Circuit Judges, and BRIGGLE, District Judge.

EVANS, Circuit Judge.

Appellant, a resident of Wisconsin, sued appellee, a New York life insurance company which is licensed to do business in Wisconsin, on the double indemnity provision of a policy wherein her husband was the insured. He died January 27, 1927, and suit was commenced in August, 1935, and removed to the Federal court, September 27, 1935. The insurer demurred to the complaint on the ground that the suit was not begun within the six year limitation provided by Wisconsin Statutes 330.19.*fn1 The trial court sustained the demurrer and dismissed the complaint on the ground that the company was entitled to the benefit of the six year statute of limitations. It rejected the appellant's contention that the six year statute of limitations was defeated or made nonapplicable by a so-called out of state proviso, which is reproduced in the margin.*fn2

The Wisconsin Supreme Court has interpreted section 330.30 to apply to foreign corporations, although licensed to do business in the state. Travelers' Ins. Co. v. Fricke, 99 Wis. 367, 74 N.W. 372, 78 N.W. 407, 41 L.R.A. 557; State v. National Accident Soc., 103 Wis. 208, 79 N.W. 220; Bode v. Flynn, 213 Wis. 509, 252 N.W. 284, 94 A.L.R. 480.

The District Judge conceived the interpretation of the statute of limitations to involve a question of denial of equal protection of the laws to the foreign corporation, under the Fourteenth Amendment to the Federal Constitution, and therefore determined that the state supreme court's construction was not binding on the Federal court and so proceeded to construe the statute in the light of the Fourteenth Amendment. He determined that the proviso rendering inapplicable the six year limitation to persons without the state did not govern the instant situation because, as he viewed the facts, the company was not a "person out of the state." He said:

"I adopt the view that foreign corporations * * * like the defendant in this case, when present as persons within a state and obediently to its laws are 'to be dealt with pro hac vice as * * * domestic corporations,' and 'may not with reason be held to be absent * * *.' Their foreign origin and status no longer really and substantially differentiates them from domestic corporations, and is not germane to classifying them as 'absent' or 'out of the state,' within the meaning of limitations laws."

Without elaborating our views, we state our conclusions which are:

The construction of the Wisconsin statute by the Wisconsin Supreme Court is binding on this court. Coombes v. Getz, 285 U.S. 434, 52 S. Ct. 435, 76 L. Ed. 866; Hicklin v. Coney, 290 U.S. 169, 54 S. Ct. 142, 78 L. Ed. 247; Chase Nat. Bank v. Norwalk, 291 U.S. 431, 54 S. Ct. 475, 78 L. Ed. 894; Burns Mortg. Co. v. Fried, 292 U.S. 487, 54 S. Ct. 813, 79 L. Ed. 1380, 92 A.L.R. 1193; Marine Nat. Exchange Bank v. Kalt-Zimmers Mfg. Co., 293 U.S. 357, 55 S. Ct. 226, 79 L. Ed. 427; Georgia Ry. Co. v. Decatur, 295 U.S. 165, 55 S. Ct. 701, 79 L. Ed. 1365; People of State of Illinois ex rel. Cusick v. Whipp (C.C.A.) 73 F.2d 254; In re Martin (C.C.A.) 75 F.2d 618; Sterling v. Constantin, 287 U.S. 378, 53 S. Ct. 190, 77 L. Ed. 375; U.S. v. Meyering (C.C.A.) 66 F.2d 347, 351; Gresham v. Leslie (C.C.A.) 50 F.2d 900.

The Wisconsin Supreme Court has construed the above quoted section 330.30 to apply to foreign insurance companies licensed to do business in Wisconsin. State v. Nat. Accident Soc. of N.Y., 103 Wis. 208, 79 N.W. 220; Travelers' Ins. Co. v. Fricke, 99 Wis. 367, 74 N.W. 372, 78 N.W. 407, 41 L.R.A. 557.

Whether the Wisconsin statute as thus construed by the Wisconsin Supreme Court conflicts with the Federal Constitution raises a question for our determination when properly presented. The decision of the Wisconsin Supreme Court on such question is not condlusive. Coolidge v. Long, 282 U.S. 582, 51 S. Ct. 306, 75 L. Ed. 562; Oklahoma City v. Dolese (C.C.A.) 48 F.2d 734; U.S. v. Meyering (C.C.A.) 66 F.2d 347; American Bank & Trust Co. v. Hon (C.C.A.) 48 F.2d 588; Lacoste v. Dept. of Conservation, 263 U.S. 545, 44 S. Ct. 186, 68 L. Ed. 437; Northern Cent. R. Co. v. Maryland, 187 U.S. 258, 23 S. Ct. 62, 47 L. Ed. 167; Citizens' Sav. Bank v. Owensboro, 173 U.S. 636, 19 S. Ct. 530, 43 L. Ed. 840; People of State of New York v. Gilchrist, 262 U.S. 94, 43 S. Ct. 501, 67 L. Ed. 883; Yick Wo v. Hopkins, 118 U.S. 356, 6 S. Ct. 1064, 30 L. Ed. 220.

Whether section 330.30 as construed by the Wisconsin Supreme Court conflicts with the Federal Constitution turns on the state legislature's power to deny a six year statute of limitation to a foreign corporation licensed to do business in the state of Wisconsin when such statute is recognized as a bar to the prosecution of an action against a domestic corporation.

Is such a distinction a denial of equal protection?

Our inquiry is narrowed by the decision of the court in Metropolitan Casualty Insurance Co. v. Brownell, 294 U.S. 580, 55 S. Ct. 538, 540, 79 L. Ed. 1070. We are required to apply that decision to the slightly different facts of the instant case. In ...


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