Court Opinion

ID: 7942516
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:16:31.318212+00
Date Added: 2024-06-11T16:33:47.148158
License: Public Domain

Hooker, J.
(dissenting). The bill of complaint in this cause shows that the policy of insurance of which cancellation is sought came into the possession of the defendant, and was sued upon under circumstances which made such suit and a claim of liability fraudulent. The suit was afterwards removed to the federal court, and, after taking proofs, the plaintiff submitted to a voluntary nonsuit. Subsequently a second suit was begun in the Wayne» circuit court. If the bill states the truth, a paper invalid, for want of delivery, and not a perfect instrument for want of revenue stamps, was, without right, given the' appearance of a contract binding upon the complainant by procuring the revenue stamps to be affixed by a federal official. Had the defendant done this with knowledge of the facts, no one would doubt that it was a fraudulent act. We do not know that it was not so done. It is none the less fraudulent in law if she did it in good faith. The jurisdiction of a court of equity to cancel the policy under the circumstances is, in niy opinion, as clear as in the other. The cancellation of instruments is not limited to-cases of actual fraud, if it is limited to cases of fraud, which I am not prepared to hold.
But the bill charges actual fraud. As said in complainant’s reply brief:
*215“Complainant’s bill is not filed against tbe deceased, nor against his estate. We do not claim, nor is it necessary for us to claim, that the deceased, Mr. Amos, was guilty of any fraud. We do not think he was. It is the defendant in this case who is guilty of an act of fraud in asserting title to an insurance policy which she must necessarily know was not a valid one, which was never delivered to her, upon which she knew, before she commenced her last case, that the premiums had never been paid, and the policy had never been delivered. It is as much an actual fraud on her part to claim this policy, to have it surreptitiously and improperly stamped, to bring suit upon it, as if she had casually found the policy in the office of the company at Milwaukee, which had not been paid for nor delivered, and she had asserted title to it. That is the act of fraud, and fraud is a conclusion of law in this case, of which the defendant in this case was guilty.”
This question must turn on the sufficiency of the bill, arising, as it does, upon demurrer. The bill shows that the policy never was delivered, and that no premium was paid, that it was procured by the deceased for the purpose of examination merely, and that he had no authority to affix the revenue stamps, and claim it to be a valid policy, without accepting it and paying the premium. For him to have affixed the stamp under other circumstances, and then claimed it to be a valid contract, would have been a fraud, and clearly within the jurisdiction of chancery relief, under its jurisdiction relating to cancellation. This he never did. The bill shows that this policy was presented to the collector of internal revenue, who affixed and canceled the stamps, under section 13 of the revenue act of 1898 (Act June 13, 1898, chap. 448, 30 Stat. 454,2 Supp. Rev. Stat. p. 786 [U. S. Comp. Stat. 1901, p. 2296]), thereby giving the instrument the appearance of a valid contract, which in fact it was not. This could be lawfully done upon a showing that the omission to stamp was by reason of accident, mistake, inadvertence, or urgent necessity, which could not have been the fact if the allegations of the bill are true. Not only was the contract in*216valid for want of delivery, but it would have been invalid under the act cited (section 13) had it been delivered without stamping, and it was a fraud upon the complainant to procure such cancellation, and to give it the appearance of a contract, when it was one never made. Under such allegations chancery has jurisdiction, and it does not depend upon what the proofs may show. The bill states a case of fraud, and jurisdiction must depend upon that. This question arises upon demurfer, whereby the allegations of the bill are admitted. Edwards v. Michigan Tontine Investment Co., 132 Mich. 1 (92 N. W. 491). It is possible that a hearing upon the merits may show these allegations to be unsupported by the evidence, as was the final result in John Hancock Mut. Life-Ins. Co. v. Dick, 114 Mich. 337 (72 N. W. 179, 43 L. R. A. 566).1
If there is jurisdiction in equity on the ground of cancellation, it is not limited to cases where a defense might not be made in a court of law. The case is substantially on all fours with the case of John Hancock Mut. Life-Ins. Co. v. Dick, supra. In England the authorities are uniform that, in cases of fraud, the jurisdiction of equity is not dependent upon the want or inadequacy of a legal remedy. London, etc., Ins. Co. v. Seymour, L. R. 17 Eq. Cas. 85; Hoare v. Bremridge, L. R. 14 Eq. Cas. 522; Bartlett v. Salmon, 6 De Gex, M. & G. 33; Jennings v. Broughton, 5 De Gex, M. & G. 126. In Massachusetts the courts have adopted the English rule, in consequence of a change whereby the statute has conferred full equity jurisdiction, under which its courts previously held otherwise. Holden v. Hoyt, 134 Mass. 181; Billings v. Mann, 156 Mass. 203 (30 N. E. 1136); Nathan v. Nathan, 166 Mass. 294 (44 N. E. 221); Stratton v. Hernon, 154 Mass. 310 (28 N. E. 269); Hurd v. Turner, 156 Mass. 205, note (30 N. E. 1137); Emerson v. Atkinson, 159 Mass. 361 (34 N. E. 516). The following cases, among others, sustain the jurisdiction in this country: Domingo v. Getman, 9 Cal. 97; Buxton v. Broadway, 45 Conn. 540; *217Ferguson v. Fisk, 28 Conn. 501; Porter v. Jones, 6 Cold. 313; Town of Glastenbury v. McDonald’s Adm’r, 44 Vt. 450.
The remedy is a concurrent one, and to hold that it depends upon the inadequacy of the legal remedy is to abridge the equity jurisdiction, which our Constitution and laws guarantee as unqualifiedly and effectively as they do legal remedies and the right to trial by jury, as we held in John Hancock Mut. Life-Ins. Co. v. Dick, supra. The court should as carefully guard and protect this jurisdiction as any other. Edsell v. Briggs, 20 Mich. 433; Edwards v. Michigan Tontine Investment Co., 132 Mich. 1 (92 N. W. 491), and cases cited; Brown v. Kalamazoo Circuit Judge, 75 Mich. 274 (42 N. W. 827, 5 L. R. A. 226, 13 Am. St. Rep. 438). See, also, the following cases: Wheeler v. Bank, Har. Ch. 449, 456;
Wales v. Newbould, 9 Mich. 45; Wright v. Hake, 38 Mich. 525; Wyckoff v. Sewing-Machine Co., 43 Mich. 309, 312 (5 N. W. 405); Tompkins v. Hollister, 60 Mich. 470 (27 N. W. 651); U. S. Life-Ins. Co. v. Cable, 98 Fed. 761, 39 C. C. A. 264. In Tompkins v. Hollister, Morse, J., said:
“And it makes no difference that she [the complainant] may have an adequate remedy at law. Equity has concurrent jurisdiction in cases of fraud, and she can enforce her rights in this suit. Adams, Eq. 176; Willard, Eq. Jur. 145.”
In Brown v. Kalamazoo Circuit Judge, supra, Campbell, J., said:
“The right to have equity controversies dealt with by •equitable methods is as sacred as the right of trial by jury.”
And again:
“ The cognizance of equitable questions belongs to the judiciary as a part of the judicial power, and, under our Constitution, must remain vested where it always has been vested heretofore.”
Sherman v. Stove Co., 85 Mich. 169, 176 (48 N. W. *218537); Chicago, etc., R. Co. v. Miller, 91 Mich. 166 (51 N. W. 981); Warren v. Holbrook, 95 Mich. 185 (54 N. W. 712, 35 Am. St. Rep. 554); Cogswell v. Mitts, 90 Mich. 353 (51 N. W. 514); Fitzmaurice v. Mosier, 116 Ind. 363 (16 N. E. 175, 19 N. E. 180, 9 Am. St. Rep. 854); Fuller v. Percival, 126 Mass. 381; Hardy v. Brier, 91 Ind. 91; Huston v. Schindler, 46 Ind. 38; Huston v. Roosa, 43 Ind. 517; Garrett v. Railroad Co., Freem. Ch. (Miss.) 70; Merritt v. Ehrman, 116 Ala. 278 (22 South. 514); Glass v. Haygood, 133 Ala. 489 (31 South. 973);, Bishop v. Thompson, 196 Ill. 206 (63 N. E. 684); Clay v. Hammond, 199 Ill. 370 (65 N. E. 352, 93 Am. St. Rep.. 146).
The decree should be reversed, with leave to defendant to answer within 30 days after the entry of this order.