Biermann v. Guar. Mut. Life Ins. Co.

• Decision Date: 04 May 1909
• Parties: BIERMANN v. GUARANTY MUT. LIFE INS. CO.
• Court: Iowa Supreme Court

142 Iowa 341

120 N.W. 963

BIERMANN

v.GUARANTY MUT. LIFE INS. CO.

Supreme Court of Iowa.

May 4, 1909.

Appeal from District Court, Marshall County; J. M. Parker, Judge.

Action at law upon a policy of life insurance. Judgment for plaintiff, and defendant appeals. Affirmed.Carroll Bros. and C. H. Van Law, for appellant.

W. T. Bennett and J. J. Wilson, for appellee.

WEAVER, J.

On February 14, 1907, the defendant issued a policy in the amount of $2,000 upon the life of Gustav Biermann, payable at his death to his wife, Carolina Biermann, who is plaintiff herein. The premium for the first year's insurance, $84.66, was duly paid, and on May 4, 1907, Biermann died. Proofs of death were made by the widow and delivered to the defendant, but payment was refused. Action being brought to recover upon the policy, the defendant contested the same on the alleged grounds: (1) That the deceased in his application falsely warranted that he was not in the habit of using intoxicating liquors to excess, was not then interested in the sale of intoxicating liquors, and that he was then in good sound condition of health, when, in fact, he was addicted to the intemperate use of intoxicating liquors, the holder of stock in certain liquor saloons in Marshalltown, and was not in sound health. (2) Defendant further pleaded that, by false statement and deceit, said deceased imposed upon its medical examiner, and thus fraudulently secured from him a favorable report upon the application on the strength of which report the policy was issued. After the action had been pending some time, the defendant filed a cross-petition, in which it restated at length the alleged false warranties made by the plaintiff in applying for the policy, and his alleged fraud in securing a favorable report from the medical examiner, and prayed for a rescission and cancellation of the policy, and at the same time tendered a return of the premium received from the deceased. This cross-petition being denied by the plaintiff, the defendant moved that the issue thus joined be tried in equity before trial of the law issues. The motion was denied, and the cause tried to a jury which returned a verdict for plaintiff. The principal grounds assigned why a new trial should be granted are considered in the following paragraphs:

1. Error is assigned upon the refusal of the court to separate the issues, and try the matters alleged in the cross-petition as in equity, before proceeding with the main action. It would hardly seem necessary to go into extended argument to demonstrate the unsoundness of this claim. The defendant had been brought into a court of law to answer to an action upon its contract. If that contract had been procured by fraud or false representations, such fact was a full, complete, and perfect defense to the action, and, if that defense was made good, the policy would be deprived of all vitality as fully as could have been accomplished by a decree in equity formally canceling it. The appropriate law issue for that purpose had already been joined, and was waiting trial before the cross-bill was filed. 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. 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 remedies and defenses.” Practically the same question was raised in Smith v. Griswold, 95 Iowa, 684, 64 N. W. 624. There an action at law was brought upon a duebill and upon cross-petition to reform the instrument a motion to transfer the issue to equity for trial to the court was overruled. Affirming this ruling, the opinion says: “The sufficiency of the facts pleaded as a defense was not questioned, and, if they were established, the law forum gave the same relief as was sought in equity. The facts which would reform the instrument would defeat a recovery on it. Under such circumstances equity has no jurisdiction. This is elementary.” Further discussion of this branch of the case is unnecessary. The court did not err in overruling the defendant's motion. Indeed, it might well have sustained the plaintiff's motion to strike the cross-bill as it is a mere repetition of matters already pleaded in defense, and, as we have seen, the prayer for equitable relief was of no avail to defeat or interfere with the trial of the issues already joined.

2. The sufficiency...