Bankers Life Co. v. Bennett

• Decision Date: 23 October 1935
• Docket Number: 43155.
• Citation: 263 N.W. 44,220 Iowa 922
• Parties: BANKERS LIFE CO. v. BENNETT.
• Court: Iowa Supreme Court

263 N.W. 44

220 Iowa 922

BANKERS LIFE CO. v. BENNETT.

No. 43155.

Supreme Court of Iowa.

October 23, 1935

Appeal from District Court, Woodbury County; A. O. Wakefield, Judge.

An action in equity to cancel an insurance policy on the ground that it was procured by fraud. The district court transferred the cause to law, and from this ruling the plaintiff appeals.

Affirmed.

R. B Alberson and E. M. Nourse, both of Des Moines, and Shull & Stillwill, of Sioux City, for appellant.

George Gorder and Kindig, Faville & Mathews, all of Sioux City, for appellee.

ALBERT, Justice.

The petition and amendment of the plaintiff are in the form for an action to cancel a policy of insurance on the ground that it was procured by false and fraudulent representations. The policy bore date of April 20, 1932, and, among other things it is alleged in plaintiff's petition that the policyholder committed suicide on the 26th day of February 1934. The defendant filed an answer to plaintiff's petition, in which she made numerous admissions and denials and alleged that she was entitled to recover on the policy the full amount thereof in the sum of $6,000. As a part of said answer, the defendant further says that there are no equities with the plaintiff, and that if the plaintiff has a remedy or has a full and complete remedy at law on the defense of said policy, this action should be transferred to the law docket. Wherefore, the defendant prays for judgment on the policy, and that the cause be transferred to the law calendar for trial. This answer was filed on the 17th day of July, 1934. On March 11, 1935, the cause was assigned for trial on April 2, 1935, as an equity cause. On the 27th day of March, 1935, the defendant filed a motion to transfer the cause from the equity calendar to the law calendar. This motion covered numerous grounds, and was submitted to the court, and on April 3, 1935, the court ruled on the defendant's motion of March 27, 1935, and overruled the same. On April 11 following, there was a motion filed to set aside the last above ruling, which was submitted to the court, and on May 9, 1935, the ruling formerly made overruling the motion to transfer the cause was withdrawn and set aside, and defendant's motion to transfer the case to the law calendar was sustained. From this last ruling, appeal is taken.

There are some fundamental propositions that are quite well settled. Where an action is properly brought in equity, the defendant has no right to a trial by jury of the law issues presented by an answer. Crissman v. McDuff, 114 Iowa, 83, 86 N.W. 50; Gatch v. Garretson, 100 Iowa, 252, 69 N.W. 550; Wilkinson v. Pritchard, 93 Iowa, 308, 61 N.W. 965; Frost v. Clark, 82 Iowa, 298, 48 N.W. 82; Ryman v. Lynch, 76 Iowa, 587, 41 N.W. 320.Our last expression on this doctrine is in the case of Kimmel Investment Corporation v. Renwick, 261 N.W. 775, 776, where we said: " The case was on the equity side of the docket, and where a cause of action is properly commenced in equity the court will retain jurisdiction and determine the legal issues presented." Citing Williamsburg Sav. Bank v. Donohoe, 203 Iowa, 257, 212 N.W. 555.

The question, therefore, which seems to be the crux of this case is whether or not the plaintiff's cause of action was properly brought in equity.

It appears from the fact situation in this case that the policy was properly issued on the 20th day of April, 1932, and that on the 26th day of February, 1934, the insured committed suicide. This action was commenced on the 27th day of March, 1934. The question, therefore, is whether or not, after the death of the insured, an action in equity such as is here sought will lie.

In 9 C. J. p. 1173, § 30, it is said: " In most jurisdictions where the question has arisen it is held that after a loss on a policy of insurance has occurred, a court of equity will not cancel a policy of insurance because of fraud in its procurement in the absence of some special circumstances rendering the cancellation of the policy necessary for the protection of the insurer, the view being taken that the remedy at law is full, adequate, and complete."

Numerous cases are cited supporting this text, and among them the case of Biermann v. Guaranty Mutual Life Ins. Co., 142 Iowa, 341, 120 N.W. 963, 964, where we said: " Generally speaking, equity has no jurisdiction where there is an adequate remedy at law. 16 Cyc. 30. Of course, there is a certain field in which law and equity are said to have concurrent jurisdiction, and this jurisdiction includes a class of cases growing out of alleged accident, mistake, or fraud. But even in this common field courts of equity, though recognizing the existence of their jurisdiction, are generally reluctant to exercise it where the remedy at law appears to be adequate and complete. Gorman v. Low, 2 Edw. Ch. (N.Y.) 324; Robinson v. Chesseldine, 5 Ill. [4 Scam.] 332; Hales v. Holland, 92 Ill. 494; Knight v. Hardeman, 17 Ga. 253. This court has held that equity will not entertain an action to rescind a contract for mistake, unless it appears that an injury will result for which the aggrieved party will have no adequate remedy at law. Morse v. Beale, 68 Iowa, 463, 27 N.W. 461. So, too, where a court of law has already obtained jurisdiction of a controversy involving an alleged fraud, equity will not interfere. Nash v. McCathern, 183 Mass. 345, 67 N.E. 323; Eaton v. Trowbridge, 38 Mich. 454; Sweeny v. Williams, 36 N.J.Eq. 627. To sustain the position of the appellant herein would be to sanction a practice by which the plaintiff in every action upon an insurance policy, or, indeed, upon every simple matter of contract, may be deprived of his constitutional right to have his cause submitted to a jury. The attempt so to do is by no means without precedent in this state. In the early case of Smith v. Short, 11 Iowa, 523, Short brought an action at law to recover the price of certain land sold by him to Smith. The latter then sued out an injunction to enjoin the proceeding at law on the ground that the contract had been procured by fraud, and that Short had no title to the land he pretended to sell. In holding that the injunction was improperly issued, this court said: ‘ For aught that is shown, every matter stated in the bill can be made as fully available in answer and defense to the action at law as by an appeal to equity. Under such circumstances, the parties should be left to their legal...