Home Ins. Co. v. Stanchfield.

quired by the policy are furnished. The other is, "that no suit or action of any kind against said company, for the recovery of any claim upon, under, or by virtue of this policy, shall be sustainable in any court of law or chancery, unless such suit or action shall be commenced within the term of twelve months next after any loss or damage shall occur," &c.

It may be here remarked that it is settled law that a condition in a policy requiring any action to be brought within a limited and specified time is valid and binding. Ripley v. Ætna Ins. Co., 30 N. Y. 136; Roach v. New York Ins. Co., Id. 546; Carter v. Insurance Co., 12 Iowa, 287; Gray v. Hartford Ins. Co., 1 Blatchf. 280.

It is our opinion that the present bill sets forth no sufficient grounds for equitable interference; and we now proceed to state the reasons on which this opinion rests.

No principle is more familiar than the one that where the law affords a full, complete, and adequate remedy, equity will not interfere. "Chancery," says Lord BACON, "is ordained to supply the law, not to subvert the law." 4 Bac. Works, 488. In other words, the parties must litigate in the law courts, unless there are good or legal reasons for invoking the aid of equity. This principle or rule must have full effect given to it in the courts of the Union, for it is recog nized by the constitution and by the judiciary act.

The constitution declares that "in suits at common law... the right of trial by jury shall be preserved." Const. Amendt. Art. VII.

And the judiciary act, in terms, provides that "suits in equity shall not be sustained in either of the courts of the United States in any case where plain, adequate and complete remedy can be had at law.” 1 Stat. at L. 82, § 10.

In the case before us, no reason is set forth in the

Home Ins. Co. v. Stanchfield.

bill showing that the insurance company needs the aid of a court of equity to relieve itself of liability on the policy. Before the bill was filed the loss had happened. By the terms of the policy the assured is bound to sue within a year, or be forever barred. The bill alleges that he is about to bring an action on the policy. If the facts averred in the bill are true, they constitute a complete defense to such an action, and nothing is set forth showing that any obstacles stand in the way of making this defense at law. If no loss had happened, and especially if the policy were one having many years to run, such as life policies, there would seem to be a necessity to sustain a resort to equity to cancel the contract, where it had been procured by fraud. But such is not the case now before the court. There are, however, other and perhaps more satisfactory grounds for not entertaining the present bill. The bill is one to have a contract made between the parties decreed to be delivered up to be canceled. This cannot be done without wholly taking the matter out of the law courts, and cutting off all actions in those courts. If this bill is not sustained, the parties are simply left to their legal rights and remedies. If no hardship, no injustice, will result, and no necessity appears for not leaving the parties to their rights and remedies at law, equity will leave them there. Now, it is well settled, to use the language of Mr. Justice STORY, that an application to equity, to have "instruments canceled or delivered up, is not, strictly speaking, a matter of right,.. . . . . . but of sound discretion, to be exercised by the court, either in granting or refusing the relief prayed, according to its own notion of what is reasonable and proper under all the circumstances of the particular case. 2 Story Eq. Jur. § 693.

Chancellor KENT, in holding that a court of equity had full power to order instruments to be delivered up, whether void or not at law, and even if void on

Home Ins. Co. v. Stanchfield.

their face, after reviewing some of the leading English cases, says: "But, while I assert the authority of the court to sustain such bills, I am not to be understood as encouraging applications where the fitness of the exercise of the power of the court is not pretty strongly displayed. Perhaps," he adds, "the cases may all be reconciled on the general principle, that the exercise of this power is to be regulated by sound discretion, as the circumstances of the individual case may dictate; and that the resort to equity, to be sustained, must be expedient, either because the instrument is liable to abuse from its negotiable nature, or because the defense, not arising on its face, may be difficult, or uncertain at law, or from some other special circumstances peculiar to the case, and rendering a resort here highly proper, and clear of all suspicion of any design to promote expense and litigation." Hamilton v. Cummings, 1 Johns. Ch. 517, 523, referred to by MARSHALL, Ch. J., in Pearsall v. Elliott, 6 Pet. 95.

Applying these principles to the present case, we do not deny that equity has jurisdiction, by reason of the fraud alleged, to entertain the suit, but are of opinion that it is inexpedient to exercise it under the case made by the bill. To leave the parties to their remedy at law seems to be a more reasonable and proper exercise of the discretion which the court has in bills to cancel contracts, than to retain the bill and exercise the authority asked. Because,

1. The company has a full, plain, and perfect de fense to the policy at law, and no reason is shown why a resort to equity is either necessary, expedient, or

proper.

2. Action at law on the policy must (as we have seen) be brought in a short, limited time after the loss. In the present case, only about seven months remained to the assured, and the bill alleges that he was about to bring suit; the purpose of the present bill is, there

Home Ins. Co. v. Stanchfield.

fore, manifest, viz: to force the assured to litigate in equity instead of at law, thereby depriving the party of the right to a trial by jury.

3. If the bill be entertained because the insurance company has the right to resort to equity, then all similar bills must likewise be entertained in equity, and this gives the companies the advantage of a choice of forum. If the company prefers to litigate in equity, it will file its bill before the preliminary proofs are furnished, and thus compel the assured to settle the controversy in that court. If, on the other hand, the company prefers to litigate at law, it will simply omit to file a bill, and await the action of the assured, who, unless there is some special ground for going into equity, must be content with his legal remedies.

4. The effect of sustaining the present resort to equity, would be to transfer the great bulk of all litigation arising out of losses under policies, from the courts of law into the courts of equity. The business of insurance is now almost wholly carried on by companies of large capital, and these are, in most instances, foreign corporations. From the supposed sympathy of jurors in favor of the assured as against the insurance company, and from the supposed even-handed impartiality of the judge, it is not difficult to see that companies, having the choice of courts, would prefer the equitable to the legal forum in almost all cases. And the court must say that it is the result of its experience, in the trial of insurance cases, that the fears which the companies entertain as to the sympathy of the jurors in favor of the assured, have, by far, too much foundation. But the remedy lies in the more liberal exercise by the common law courts of the duty to grant new trials where verdicts are clearly wrong, and not in an extension of equity cognizance over controversies and issues in their nature essentially legal.

Having discussed the case on principle, it is due to

Home Ins. Co. v. Stanchfield.

its intrinsic importance, as well as to the importance which counsel attach to it, and the care with which they have prepared their arguments, that we should also examine it in the light of authority. All the cases referred to by counsel and others, have been examined. Many of them are meagrely reported, and very unsatisfactory, and some of them conflicting. The result of the examination is the belief that the weight of modern judicial opinion is in favor of rather than against the views above expressed.

It may be admitted that the early English cases below mentioned would favor the retention of the present bill, for equity seems then to have exercised a very free jurisdiction, and to have canceled policies with a liberal hand, even where there was a complete remedy or defense at law. Referring to this, Sir JAMES MANSFIELD, Ch. J., in a case before him, said: "Courts of equity formerly exercised an odd jurisdiction on this subject" (Cousins v. Nantes, 3 Taunt. 517); “alluding perhaps," says Mr. PHILLIPS, who quotes the passage, "to cases of interference by equity courts where there was an adequate remedy at law." 2 Phill. Ins. pl. 1933.

But at the present day insurance contracts are regarded by the courts as standing upon the same footing with other contracts, and there must be some good reason for a resort to equity with respect to them, else the parties, both insurer and insured, must remain satisfied with their legal remedies.

The true doctrine is stated by Mr. PHILLIPS (2 Phill. Ins. pl. 1933). He says: "Courts of law have the usual jurisdiction upon policies of insurance." After noticing the former course of the equity courts, he adds: "The limits of the jurisdiction in law and equity in respect to policies are now as well settled as in respect to any other species of contracts, the general jurisdiction being in the courts of law, with exceptions