Mechanics' Ins. Co. of Philadelphia v. C.A. Hoover Distilling Co.
| Decision Date | 09 September 1909 |
| Docket Number | 3,040. |
| Citation | 173 F. 888 |
| Parties | MECHANICS' INS. CO. OF PHILADELPHIA et al. v. C.A. HOOVER DISTILLING CO. et al. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Charles B. Obermeyer (A. C. Parker, N. T. Guernsey, and W. E. Miller on the brief), for appellants.
James A. Devitt and John F. Lacey (W. R. Lacey, W. C. Burrell, and William McNett on the brief), for appellee Hoover Distilling Co.
H. H Sheriff, for appellees Insurance Companies.
Before SANBORN, Circuit Judge, and CARLAND and POLLOCK, District judges.
The C.A. Hoover Distilling Company, an Iowa corporation doing business at Oskaloosa, in said state, on May 15, 1908 suffered a loss of property by fire. On the property destroyed were insurance policies of the amount of $85,500, distributed among different insurance companies as follows: No. of Amount of Policy. Name of Company. Policy. 608206 Mechanics' Insurance Company of Philadelphia $3,000 00
1272 St. Paul Fire & Marine Insurance Company
of St. Paul 5,000 00
2505 Phenix Insurance Company of Brooklyn, N.Y. 3,000
2551 ' ' ' ' ' ' 3,000 00
104 Royal Insurance Company of Liverpool 5,000 00
1390 German American Insurance Company of N.Y. 5,000 00
1378 ' ' ' ' ' ' 2,500 00
1557 The Insurance Company of North America
of Philadelphia 4,000 00
5237659 North British & Mercantile Insurance Company
of London and Edinburgh 3,000 00
5239476 North British & Mercantile Insurance Company
of London and Edinburgh 2,500 00
2360 Aetna Insurance Company of Hartford 3,000 00
2383 ' ' ' ' ' 2,500 00
26105 Milwaukee Mechanics' Insurance of Milwaukee 2,000 00
1675 Commercial Insurance Company of Buffalo, N.Y. 2,000 00 2990150 The London Assurance Corporation, United States
On August 25th the Distilling Company commenced actions at law in the district court of Iowa, in and for Mahaska county, against each of said insurance companies to recover the loss caused by said fire. Subsequently the defendants in each of said actions at law, where the amount in controversy was sufficient, removed said actions to the United States Circuit Court for the Southern District of Iowa. The removal proceedings brought 15 actions to the United States Circuit Court and left 4 actions pending in the state district court. October 15, 1908, the 15 insurance companies which had removed the cases against them filed a bill in equity in said United States Circuit Court against the Distilling Company and the four insurance companies who did not remove their cases from the state court, wherein complainants prayed that the Distilling Company be enjoined from prosecuting any of said actions at law either in the state or federal court; that the court ascertain what, if any, sum is due from any of the insurance companies to the Distilling Company on the policies of insurance issued by them; and that it be decreed accordingly, but, if no sum should be found due, that said policies be decreed to be delivered up and canceled. The bill stated the foregoing facts, and also alleged that each of the policies issued to the Distilling Company by the insurance companies contained the following provision:
'This company shall not be liable under this policy for a greater proportion of any loss on the described property, or for loss by and expense of removal from premises endangered by fire, than the amount hereby insured shall bear to the whole amount of valid and collectible insurance covering such property.'
The Distilling Company demurred to the bill for want of equity, and for the reason that complainants had an adequate remedy at law. The Circuit Court sustained the demurrer and dismissed the bill, but continued a temporary injunction pending an appeal to this court. There are many legal conclusions and matters of argument stated in the bill, but the facts upon which the jurisdiction of the United States Circuit Court as a court of equity must depend have all been stated. If the bill in this case states a cause of action cognizable in equity, it is plain that the days of jury trial in insurance litigation are numbered, as there are extremely few insurance losses not covered by at least two or more policies in different insurance companies. In view of the great number of actions to recover losses upon policies of insurance heretofore triable at law, any decision which would strike down this jurisdiction and transfer the whole litigation to courts of equity ought to be founded upon the soundest reason and declared only after careful consideration.
If we understand counsel for complainants their position is this: First. As each insurance company agrees to pay such a proportion of the total loss as the amount of its policy bears to the total amount of valid insurance on the property damaged or destroyed, the insurance policies become interdependent contracts, necessitating an accounting, so to speak, between the insurers and insured, in order to ascertain the amount due on each policy. Second. That by all insurance companies joining in the bill as complainants a multiplicity of suits will be saved.
In order to fully appreciate the position of complainants in the present action, it will be helpful to view their position standing alone. Thus viewed, each insurance company has a valid contract or contracts with the Distilling Company, upon each of which, according to the allegations of the bill, the Distilling Company may maintain an action at law for damages against each insurance company. There are no facts stated in the bill that show that any insurance company, standing alone, has any cause of action whatever, either legal or equitable, against the Distilling Company. The different insurance companies having no cause of action individually, so far as appears, against the Distilling Company, we are led next to inquire as to what cause of action of equitable cognizance in favor of complainants and against the Distilling Company has been created by joining in the bill filed in this cause, as appears from the allegations thereof.
We think it clearly appears that complainants have no more cause of action cognizable in equity in combination than if each stood alone. The method adopted by the parties to the insurance contracts for ascertaining the amount payable thereunder in case of loss does not make the contracts interdependent. No one insurance company has any interest in what any other insurance company shall pay under its policy. It is only interested in what it shall pay, and as a consequence in the value of the property destroyed. So far as the allegations of the bill are concerned, there is not a disputed question between any of the insurers and the insured, except as to the value of the property destroyed; and it is asked that a court of equity take jurisdiction of the case for the purpose of ascertaining this value, for the reason that different juries in actions at law might return different verdicts as to the value of this property, and thus the amount to be paid by one insurance company might be greater or less than that of some other company. If the peculiar and special duty of juries to pass upon property values in matters at law may be taken away and given to a chancellor, merely because different juries may render different verdicts upon like or similar facts, then trial by jury in civil actions no longer exists. The idea of handling these cases through a master in chancery, when the only question at issue is the value of the property destroyed, because there is no adequate remedy at law, shocks the legal mind.
But it is also urged that complainants have a right to file this bill in equity in order to save a multiplicity of suits. The phrase 'multiplicity of suits,' in connection with the jurisdiction of courts of equity, has often been carelessly used, but, it seems, never more so than in this proceeding. Each of these complainants were sued by the Distilling Company at law. In order to save the Distilling Company from prosecuting 19 different suits at law, complainants urge that they may bring this action in equity. There are two reasons why the rule in regard to saving a multiplicity of suits as applied to matters of equity jurisdiction may not be invoked in this proceeding:
First. There can be no claim that any complainant is saved from a multiplicity of suits by the maintenance of this action in equity. The Distilling Company is not in court asking it to take jurisdiction of its suits against the insurance companies in order to save it, the Distilling Company, from a multiplicity of suits against it or by it. It does not rest with the complainants to urge as a foundation for their suit that the defendant, the Distilling Company, may thereby be saved a multiplicity of suits. Equitable Life Assurance Society of the United States, Petitioner, v. Brown, 213 U.S. 25, 29 Sup.Ct. 404, 53 L.Ed. 682.
Second. The complainants, in our opinion, present no cause of action either legal or equitable, against the Distilling Company by the allegations of their bill. The prevention of a multiplicity of suits is not, considered by itself alone, an independent source of...
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