U.S. Supreme Court LYON v. MUTUAL BENEFIT HEALTH & ACCIDENT ASS'N, 305 U.S. 484 (1939)

[Page 305 U.S. 484, 486]

the conclusion of plaintiff's evidence, defendant declined to offer any evidence and did no more than move for a peremptory instruction. Defendant's motion was based upon the contentions that (1) the policy was not in effect when insured was killed because defendant had exercised an option granted it by the policy to reject the quarterly premium due July 1, 1934; (2) that the 'premium receipts themselves show that the policy terminated on the first day of July, 1934, prior to the time this loss occurred.' Defendant's motion for peremptory instruction was denied, defendant excepted, and the court directed the jury to return a verdict for plaintiff. Defendant's exception was noted, the jury rendered verdict for plaintiff, and the court entered judgment upon the verdict.

The Court of Appeals reversed,1 holding that the policy was term insurance and reserved to defendant the right to reject any quarterly premium on the due date, that defendant had properly exercised its option in rejecting the quarterly premium due July 1, 1934, and that the policy was, therefore, terminated prior to insured's death. The court further held that no competent evidence had sustained plaintiff's allegations that the required premiums had been paid. We granted certiorari. [Footnote 2]

[Page 305 U.S. 484, 490]

pointed out which would make such relevant evidence incompetent. [Footnote 6] The $74 payment for the first year, together with quarterly payments undisputedly made through April 1, 1934, carried the policy to January 1, 1935. We, therefore, find it unnecessary to consider whether the six days' delay in paying the July 1, 1934 premium was excused by reason of attendant circumstances.

Second. The Conformity Act requires that 'The practice, pleadings, and forms and modes of proceeding in civil causes ... in the district courts, shall conform, as near as may be, to the practice, pleadings, and forms and modes of proceeding existing at the time in like causes in the courts of record of the State within which such district courts are held, any rule of court to the contrary notwithstanding.' [Footnote 7]

[Page 305 U.S. 484, 491]

instruction by appellant and the giving of the peremptory instruction by the court for the adverse party was tantamount to submitting the case to the court sitting as a jury, and the court's finding became a verdict as much so as if it had been rendered by a jury upon the issues and evidence . ... So the question presented by this record is not whether there was sufficient evidence in the record to warrant the court in sending the case to the jury upon the issue of whether or not the undertaking was collateral, but the

Here, there was ample evidence upon to support the finding of the court that the undertaking was original?'

This rule of procedure closely approaches that frequently approved by this Court on the same subject, to the effect that "Where both parties request a peremptory instruction and do nothing more they thereby assume the facts to be undisputed and, in effect, submit to the trial judge the determination of the inferences proper to be drawn therefrom.' And upon review a finding of fact by the trial court under such circumstances must stand if the record discloses substantial evidence to support it.' [Footnote 8]

[Page 305 U.S. 484, 492]

While litigants in Federal courts cannot-by rules of procedure-be deprived of fundamental rights guaranteed by the Constitution and laws of the United States, the local Arkansas rule followed by the District Court does not result in such deprivation. In effect, that local rule is practically identical with the Federal rule which treats a request by both parties for peremptory instructions without more as a submission of issues of fact to the court. It is essential that the right to trial by jury be scrupulously safeguarded, and a State rule of procedure entrenching upon this right would not require observance by Federal courts. [Footnote 9] However, this Arkansas procedural rule-so closely approximating the Federal rule-does not amount to a prohibited invasion of Federal rights. Since the District Court followed the Arkansas procedural rule, and the verdict and judgment were supported by competent and substantial evidence, it follows that the Court of Appeals erroneously reversed the District Court's judgment. The judgment of the Court of Appeals is, therefore, reversed and that of the District Court is affirmed.

Mr. Justice ROBERTS did not participate in the consideration or decision of this case.

Mr. Justice BUTLER, dissenting.

Mr. Justice McREYNOLDS and I are unable to accept the opinion or to agree with the judgment of the court just announced.

We are of opinion that the judgment of the Circuit Court of Appeals should be reversed, and that, for the reasons given in the separate opinion of Circuit Judge Stone, 8 Cir., 95 F.2d 528, 534, the case should be remanded to the district court for proceedings in accordance with that opinion. Footnotes

Footnote 1 8 Cir., 95 F.2d 528.

Footnote 2 305 U.S. 583, 59 S.Ct. 81, 83 L.Ed. --, cf. Ruhlin v. New York Life Ins. Co., 304 U.S. 202, 206, 58 S.Ct. 860, 861.

Footnote 3 Washington Fidelity Nat. Ins. Co. v. Anderson, 187 Ark. 974, 976, 63 S.W.2d 535; National Equity Life Ins. Co. v. Parker, 190 Ark. 642, 644, 80 S.W.2d 630; cf. Splawn v. Martin, 17 Ark. 146, 153.

Footnote 4 See 28 U.S.C. Sec . 724, 28 U.S.C.A. 724.

Cf. D'Wolf v. Rabaud et al., 1 Pet. 476, 502; Wilcox et al. v. Hunt et al., 13 Pet. 378, 379; Nashua Savings Bank v. Anglo-American Land Co., 189 U.S. 221, 228, 23 S.Ct. 517; cf. Erie R. Co. v. Tompkins, , 58 S.Ct. 817, 114 A.L. R. 1487.

Footnote 5 Cf. Erie R. Co. v. Tompkins, supra.

Footnote 6 Cf. Splawn v. Martin, supra; Vaugine et al. v. Taylor et al., 18 Ark. 65, 79; Borden et al. v. Peay, Receiver, 20 Ark. 293, 306; Hill v. First Nat. Bank of Malvern, 129 Ark. 265, 269, 195 S.W. 678; Lay, Administrator v. Gaines, 130 Ark. 167, 170, 196 S.W. 919.

Footnote 7 28 U.S.C. Sec . 724, 28 U.S.C.A. 724.

Footnote 8 Williams v. Vreeland, 250 U.S. 295, 298, 39 S.Ct. 438, 439, 3 A.L.R. 1038; Aetna Ins. Co. v. Kennedy, 301 U.S. 389, 393, 57 S.Ct. 809, 811.

Footnote 9 Cf. Davis v. Wechsler, , 44 S.Ct. 13.