# Reply Brief for Respondent — Di Giovanni v. Camden

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief for Respondent
- **Published:** January 1, 1935
- **Citation:** 296 U.S. 64

## Text

Supreme Court of the United States

OCTOBER TERM, 1935.

PETE DI GIOVANNI AND MARY DI GIOVANNI,
PETITIONERS,

VS.

CAMDEN FIRE INSURANCE ASSOCIATION, A
CORPORATION, RESPONDENT.

RESPONDENT'S REPLY BRIEF.

J

Fenton Hume,
Kansas City, Missouri,
7 Attorney for Respondent.
Water A. Raymonp and 15

Hume & Raymonp,
Kansas City, Missouri,

Of Counsel.

—

©. . Wed. c., @ WEST OTH ST.. KANSAS CITY. MO.

Z CC

Brief Summary of Argument

Point I. The primary object sought in respondent's
bill is cancellation of these two polieies of insur-
ance. This is a matter of original equity juris-
diction and can be defeated only by showing that
there is, an adequate remedy at law ..........

Point II. Unless relief is granted here in equity,
two suits at law will be required to settle the is-
sues. It will be less expensive and more conveni-
ent to both parties to try the issues of plaintiff’s
bill in one action in the federal court ........

Point III. Respondent properly joined the policy
for $3,000.00 and the policy for $1,500.00 in one
bill in equity. The arnt amount was,
therefore, involved areas l

A. Respondent’s bill * 4 conspiracy.
This constitutes an exception to the general
rule. It entitles respondent to have the sums
of the two policies aggregated for the pur-
pose of determining jurisdiction ..........

B. Respondent had the right to maintain one
action in equity in the federal court for can- .
cellation of both policies. There was, there-
fore, involved the aggregate of these two pol-
icies or $4,500.00 and more than the nne
7 jurisdictional amount

Point IV. Respondent has no „ remedy on the law
side of the federal court which is the test as to
whether there is an adequate rémedy at law pre-
venting the exercise of equitable jurisdiction by 4
federal court. :

Vr a Iwpex

Seriatim Answer to Petitioners’ Points—

Point A. The circuit court of appeals properly
overruled petitioners’ motion to complete the rec-
ord ..

Point B. The circuit court of appeals properly
held that complainant could maintain its bill in
equity because it had no adequate . at law

in the federal court ............ ae

Point C. The circuit court of 1 3

held there was equitable jurisdiction for cancella-
tion reenforeed by the ability to avoid a threat-
ened multiplicity of e

Point D. The bill alleged the face value of the two

policies was $3,000.00 and $1,500.00 respectively.

The bill alleged petitioners were claiming the

total loss and demanding the full face value of the

| policies. The jurisdictional amount was, there-
eee dees e eee ese

Point E. The circuit court of appeals properly
held the twd claims arising under the two policies
of insurance could be tied together for the ‘pur-
pose of ascertaining the amount involved for juris-
re ee eee eee eee ee

Argument )

Point I. The primary object sought in respondent’s
bill is the cancellation of these two policies of
insurance. This is a matter of original equity
jurisdiction and can be defeated only by showing
that there is an adequate remedy at law ....

Point II. Unless relief is granted here in equity
two suits at law will be required to settle the is-
sues. It will be less expensive and more con-
venient to both parties to try the issues of N
tiff’s bill in one action in the federal court .

Point III. Respondent properly joined the *
for 83,000.00 and the policy for $1,500.00 in one

10

11

12

16

Inns
dill in equity. thé neee w amount was
therefore involved sews

A. Respondent's bill charges a conspiracy.
is constitutes an exception to the general

rule and entitles respondeng to have the sums
of the two policies aggrega for the pur-
pose of determining jurisdiction .......:.

B. Respondent had the ri ho maintain one
action in equity — = ral court for the

cancellation of „Policies. There was,
therefore, X | — of these two
policies for $4,500.00 and more than the
- requisite jurisdictional amount .

Point IV. Respondent o remedy on the law
side of the federal ee, phic is the test of
whether there is an adéq remedy af law pre-

. venting the exercise of . jurisdietion by a
federal court en e l dew

Seriatim Answer to Petitioners’ Peinte—

Point A. The circuit court of appeals properly
overruled petitioners’ motion to n the
eee est eee soe esse

Point B. The circuit court of * properly
held that complainant could maintain its bill in
equity because it had no Nr remedy at ew
1. a See Pepe

Point C. The .cireuit court of appeals properly
held there was equitable jurisdiction for can-
cellation reinforced by the ability to avoid a
threatened multiplicity of suits

24

34

Point D. The bill alleged the face value af the two
policies was $3,000.00 and $1,500.00 respectively.
The bill alleged petitioners were claiming a
total loss and demanding the full face value of
‘the policies. The jurisdictional amount .

cdherefore, involved .........:....... pededeosen ä

55

Iv INDEX

Point E. The circuit court of appeals properly
held the two claims arising under the two
policies of insurance could be tied together for
the purpose of ascertaining the amount involved
for jurisdictional purposes 60

* —
Allore vs. Jewell, 94 U. S. 506, 511, 24 L, Ra. 260,
r reer ap BEA: 2,13

American Mills 22 vs. American Sutety Co.,
260 U. S. 360, 364, 43 S. Ct. 149, 1511 7,39

American Mutual Liability Insurance 1 vs.
McDonaugh, 61 F. (2d) 558, 563 (U. S. C. C. A. 7th)
(Certiorari denied 288 U. S. 602) 8, 45

Baltimore & Ohio Southwestern Railroad Company vs.
United States, 220 U. S. 94, 106, 31 S. Ct. 368, 371 4, 27

Banker vs. Ford Motor Company, 69 Fed. (2a) 665,

665 (C. C. A. 3rd) . 5 2 ,
Berber vs. Barber, 21 ee 591, 16 i. Ea. 226, ;
FP 8 5, 832

Barry vs. Edmunds, € 8. Ct. 501, 116 U. S. 550, 559 . .10, 57
Beacher vs. Pan-American Life Insurance Company, 73

Fed. (2d) 263, 264 (C. C. A. 5) Ra ae 11, 59
Bodkin vs. Edwards, 256 U. . 221; 223, 41 S. Ct.
D ᷣͤ ... alawustccecasenel 52

Bowley vs. Chicago 4 N. W. Ry. Co., 68 Fed. » (38)
527

— vs. — — Company,
287 U. 8. 415, 418, 53 S. Ct. 198, 19 . 6, 35

Cable vs. United States Life Insurance 19
Artner. Nn ei 43

City Bank Farmers Trost Company va. Schnader, 291
U. S. 24, 29, 54 8. Ct. 259, 261 5, 8, 34, 4

- Lypex Vv

City of Dothan, Ala., vs: First National Bank of Do-

than, @1 Fed. (2d) 685, U 4,27
City of Walla Walla vs. n 172 U. S. 1, 12, 19 8.
Ct. 77, 82 . „
Dawson vs. be Distillers * 1 Com- g
pany, 255 U. S. 288, 296, 41 S. Ct. 272, 275 8, 46
Davis vs. Wakelee, 156 U. S. 680, 688, 5 S. Ct. 555,
— ̃ •· dees kbs ͤͤ 5, 31
First State Bank vs. r R. I. & p. R. Oo, 63
Fed. (2d) 585, 590, 591 (C. C. A. Sth) 1
Fish vs. Kennamer, 37 Fed. (2d) 243, 247 (C. C.
// ²ĩ˙iꝛà A ⅛ »ʃ— .-. ·•mm ·¶ sees: 5, 30
Fulbright vs. Phoenix Insurance Company, 329 Mo.
207, 44 S. W. (2d) 115 8 55
Grand Chute vs. Winnegar, 15 Wall. (U. 8.) 373,
D ̃ ’ mA. 3 10, 56

Geneva Furniture Manufacturing Company vs. 8.
Karpen and Bros., 238 U. S. 254, 35 S. Ct.

WOT nc cdcuawstencevevsecstes 4, 28
Hale vs. Allinson, 188 U. 8. 56, 72, 77, 23 8. Ct.

,, ̃˙ . 3,17
Healy vs. 1 292 U. 8. 263, 271. 54 8. Ct.

700, 704 7, 10, 36, 58
Henrietta Mills vs. " Batherford Counts, 281 U. 8.

121, 126, 50 8. Ct. 270, 277ĩ⁊ã27 0 eee, 5, 8, 32, 45
Herrel vs. St. Louis-San Francisco Ry. Co., 324 Mo.

38, 23 S. W. (2d) 102 (en banc) - 55
Hunt vs. New York Cotton Exchange, 205 J. 8.

322, 333, 27 8. Ct. 529, 532 10, 58
Julian vs. Central Trust Company, 193 U. S. 93,

112, 24 8. Ct. 399, 407 ' 7, 87
Keaton vs. Little, 34 Fed. (2d) 396, 398 (C. C. A.

r eee ese

Kimel vs. Missouri State Life Insurance Company,
71 Fed. (2d) 921, 924 (C. C. A. 10) 4, 27

oe | _ Iypex

Leavenworth Savings and Trust Company vs. New- |
- man, 23 Fed. (2d) 835, 838 (C. C. A. 8) 2 . 2

Liberty Oil. Company vs. Condon National Bank,

260 U. S. 235, 242, 43 S. Ct. 118, 111. 7538
Looney vs. Eastern Texas R. Co., 247 U. 8. 2h, |
r 7, 38

Louisville, N. A. & C. Ry. Co. vs. Louisville Trust
— Company, 174 U. S. 552, 567, 19 8. Ct. 817,

. ff ̃ĩͤꝝ vv. ̃ĩͤ ee ae eae: 2, 12
Lynch vs. United States, 292 U. 8. 571, 588, 54 8.

CCC 6, 35
McDaniel vs. Traylor, 196 U. S. 415, 427, 25 8.

Ct. 369, 37 F 24
Me Daniel vs. Traylor, 212 U. 8. 428 433, 29 S. Ct.

r 4
Metropolitan Life Insurance Company ys. Dunne,

2 Fed. Supp. 165, 166 (D. C. S. D. N. V.)) 4, 27
Merriam vs. Saalfield, 241 U. S. 22, 28, 38 S. Ct. 477 52
New York Dock Company vs. * 274 U. 8. 117,

r duensceasesdens ees > 6, 35
New York Life Insurance Company vs. Jones, 2 Fed.

Supp. I. e. 600, (D. C. N. E. D. N. C. 4, 26
New York Life Insurance Company vs. Miller, (C.

R ⅛ ũ ‚ 2,12
Oelriche vs. Williams, 15 Wall. 211, 228, 21 L. Ed.

% Y ⁵˙ſ!yĩ ĩ ĩ ĩ˙% (»» 2, 15
Pennsylvania vs. West Virginia, 262 U. S. 553, 593,

III 7, 40

f Providers’ = Life Insurance ey of Phila-
L delphia 70 Fed. (2d) 863, I. c. 864

(C. 0 “4th = Baye F nnen 4.24
rut in he W. * & R. Co. vs. Ryan, 181 U. S. 409,

* eee . 10, 59

Rich va. Braxton, 138 U. & 373, 405, 15 S. Ct

1000! 1 900 eee — —— 44 2, 13
( ˙ ˙ñU b ˙ wm ⁰wr •⁰⁰ !.

—

Inpex | vn

Risty vs. Chicago, R. I. & P. Ry. Co., 270 U. 8
378, 388, 46 S. Ct. 236, 240 ........ 5, 8, 9, 33, 44, 46

Schunk vs. Moline, Milburn & Stoddard. Company,
13 S. Ct. 416, 147 U. S. 500, 504 ... . 10, 56

Shane vs. West Coast Life Insurance Company, 73
eee eee 2, 12

Smyth vs. Ames, 169 U. S. 466, 516, 18 S. Ct. 418, 422
/d een 2, 5, 8, 15, 33, 44

Sdwereign Camp, W. O. W., vs. O’Neill, 266 U. S.
Ss & YF SR e. ess eee 4,21

Standard Oil Company of New Mexico vs. Standard
Oil Company of California, 56 Fed. (2d) 973, 976
r W—»»W»»˙˙ . 8, 41

State of Alabama vs. State of Arizona, mi U. S. 286,

— be eee 9
State of Kansas vs. State of Colorado, 185 U. 8. 125,
, ˙ V. 2, 7, 40
Stifel's Union Brewing Co. vs. Saxy, 273 Mo. 159,
W e eee. ueeeneese 54
Swift & Co. vs. United States, 276 U. 8. 311, 326,
D AAA — * 7541
Terrace vs. Thompson, 263 U. S. 197, 214, 44 8. Ct.
n r 5 2.8519

Tyler vs. Savage, 143 U. S. 79, 95, 12 S. Ct. 340, 345. 2. 13
2 Pac. Ry: Co. vs. Chicago, R. I. & P. a Co., 163

U. S. 564, 600, 16 S. Ct. 1173, 1187 2,14
Vicksburg Water Works Company vs. Wan 185
U. S. 65, 82, -22 8. Ct. 585, 592 ........ 8, 41

Watson vs. Sutherland, 5 Wall. 74, 18 L. Ed. 580, 582 2, 14

Wells Fargo and Company vs. Taylor, 254 U. 8. 175,
188, 41 8. Ct. 98, 9 7, 38

wg vs. Rymer, 18 S. Ct. 295, 169 U. S. 115, 128 10
Ww

t vs. Insurance Company, 19 Fed. (2d) 117 (C.
A. 8) 376 U. 8. 602 . PES ae 7,36

vi IxDRx

Srarurxs
Federal Equity Rule 2 1 4, 28
36 Statute 1163, 28 U. S. C. A., Section 34 38
36 Statute 1162, 28 U. S. C. A., Section 379 ‘
CCT
36 Statute 1163 (Judicial Code, Section 267) 7, 8, 45
Section 3 9 § 2s De Pee W, 29, 42
Text Books mS
21 C. J., Section 50, page 77 . 50

Supreme Court of the United States

OCTOBER TERM, 1935.

No. 28.

*

PETE DI GIOVANNI AND MARY DI GIOVANNI, -
PETITIONERS,

VS.

CAMDEN FIRE INSURANCE ASSOCIATION, A
CORPORATION, RESPONDENT.

- STATEMENT.

‘Petitioners’ statement js complete and we make no
objection thereto. However, we respectfully suggest that
the opinion of the. circuit court of appeals presents a
somewhat clearer and more concise statement of the
facts (Tr. pp. 12 to 14) also 75 Fed. (2d) 808.

ap

BRIEF SUMMARY OF ARGUMENT.

POINT I.

The — Object Sought in Respondent’s Bill Is Can-
cellation of These Two Policies of Insurance. This Is a
Matter of Original Equity Jurisdiction and Can Be
Defeated Only by Showing That There Is an Adequate
Remedy at Law. :

Cancellation is. a remedy available only in equity.
There being stated in the bill a cause of action for can-
cellation, this case comes within the equity jurisdiction
of the gourt. New York. Life Insurance Company v.
Miller, (C. C. A. 8) 73 Fed. (2d) 350; Shane v. West Coast

Life Insurance Company, 73 Fed. (2d) 681, 683 (C.
C. A. 10); Louisville N., A. d C. Ry. Co. v. Louisville
Trust Company, 174 U. S. 552, 567, 19 S. Ct. 817, 822; Rich
v. Braxton, 158 U. S. 375, 405, 15 8. Ct. 1006, 1017;
Allore v. Jewell, 94 U. S. 506, 511, 24 L. Ed. 260, 264;
Tyler v. Savage, 143 U. S. 79, 95, 12 S. Ct. 340, 345;
Union Pac. Ry. Company v. Chicago, R. I. & P. Ry. Co.,
163 U. S. 564, 600, 16 S. Ct. 1173, 1187; Watson v. Suther-
land, 5 Wall. 74, 18 L. Ed. 580, 582; Oelrichs v. Williams, 15
Wall. 211, 228, 21 L. Ed. 43, 44; State of Alabama v. State
of Arizona, 291 U. S. 286, 54 S. Ct. 399, 401; Smiyth v.
Ames, 169 U. S. 466, 516,°18 8. Ct. 418, 422.

POINT II.

Unless Relief Is Granted Here in Equity, Two Suits at
Law Will Be Required to Settle the Issues. It Will Be
Less Expensive and More Convenient to Both Parties
e Bill in One Action in
the Federal Court.

Since petitioner, Mary Di Giovanni, is interested only
jn the policy on the real property, the two policies could

3 Sf

not be legally combined in one suit in the state court.
Section 866, R. S. Mo., 1929. The balance of convenience’
is in favor of one action in the federal court. That is the
final test of equity jurisdiction; Hale v. Allison, 118 U. S.
56, 72, 77, 23 S. Ct. 244, 250, 252; First State Bank v.
Chicago, R. I. & P. Ry. Co., 63 Fed. (2d) 585, 590, 591 (C.

C. A. 8); Terrace v. Thompson, 263 U. S. 197, 214, 44 8.
Ot. 15, 17. ? |

POINT III.

Respondent Properly Joined the Policy for $3,000.00 and
the Policy for $1,500.00 in One Bill in Equity. The
Jurisdictional Amount Was, Therefore, Involved.

(A) RESPONDENT'S BILL CHARGES A CONSPIRACY. THIS
CONSTITUTES AN EXCEPTION TO THE GENERAL RULE. IT
POLICIES AGGREGATED FOR THE PURPOSE OF DETERMIN. |
ING JURISDICTION. .

The bill alleges these two policies were procured
by petitioners at the same time; that these policies were
procured at the time when petitioners also procured four
other policies on the building and one other policy on
the contents; that all of said policies were procured
as a part of a general scheme and plan to overinsure
the property, burn it, and collect from the insurance
companies; that pursuant thereto, petitioners did burn
the property, file proofs of loss claiming a. total loss
and are demanding the full face of the policies and
threatening to sue in the state court unless the insur-
ance companies pay in full. By means of this con-
spiracy petitioners have tied these claims together ‘so
that they should be aggregated in determining the

4

jurisdictional amount. Sovereign Camp, W. O. W., v. 0’-
Neill, 266 U. S. 292, 295, 45 S. Ot. 49, I. e. 50; McDaniel
v. Traylor, 196 U. S. 415, 427, 25 S. Ct. 369, 373; Me.
Daniel v. Traylor, 212 U. S. 428, 432, 29 S. Ct. 343, 345.

' (B) RESPONDENT HAD THE RIGHT TO MAINTAIN ONE

Both policies are alleged to have been procured at
the same time and as a part of the same conspiracy to
defraud. The alleged damage under each policy oc-
curred at the same time and in the same fire. Petitioner,
Pete Di Giovanni, is interested in both policies. Most
of the issues are the same as to both policies. Both
policies were, therefore, properly joined in one bill for
cancellation and the aggregate amount brings the case
within the jurisdietion of the federal court. Providers’
Mutual Life Insurance Company of Philadelphia v. Par-
sons, 70 Fed. (2d) 863, 864, certiorari denied by this court
55 8. Ct. 95; New York Life Insurance Company v.
Jones, 2 Fed. Supp. 600 (D. C. N. E. D. N. C.); Equity
Rule 26 (28 U. 8. C. A., Section 723); Kimel v. Missouri
State Life Insurance Company, 71 Fed. (2d) 921, 924 (C.
C. A. 10); Baltimore and Ohio Southwestern Railway
Company v. United States, 220 U. S. 94, 106, 31 S. Ct.
368, 371; Metropolitan Life Insurance Company v. Dunne,
2 Fed. Supp. 165, 166 (D. C. S. D. New York); City of
Dothan, Alabama, v. First National Bank of Dothan, 61
Fed. (2d) 685 (C. C. A. 5); Geneva Furniture. Company v.
S. Karpen d Bros., 238 U. S. 254, 35 S. Ct. 788. =

5

- POINT IV.

Respondent Has No Remedy on the Law Side of the Fed-
eral Court Which Is the Test As to Whether There Is an
Adequate Remedy at Law Preventing the Exercise of
Equitable Jurisdiction by a Federal Court.

The case being one of original equity o jurisdiction,
the requisite jurisdictional. amount being involved (Point
III a, b) equity jurisdiction can be defeated only by
there being a clear and adequate remedy at law.

Both policies cannot legally be joined in one action
in the state court since petitioner, Mary Di Giovanni, is
not interested in the policy on the personal property and
the state statutes provide actions may be joined only
where ali the parties arg interested in all the causes of
action joined. Section „R. S. Mo., 1929.

Since separate actions would have to be filed in the
state court the jurisdictional amount would not be in-
volved therein to permit removal to the Federal District
Court. There is, therefore, no possible remedy on the
law side of the federal court which is the test of whether
“there is an adequate remedy at law. Leavenworth Sav-.
ings and Trust Co. v. Newman, 23 Fed. (2d) 835 (C. C. A.
8); Fish v. Kennamer, 37 Fed. (2d) 243, 247 (C. C. A. 10) ;
Brown v. Guarantee Trust and Safe-Depositt Company,
128 If. S. 403, 412, 9 8. Ct. 127, 130; Davis v. Wakelee, 156
U. &. 680, 688, 15 S. Ct. 555, 558; Barber v. Barber, 21 How, .
591, 16 L. Ed. 226, 229; Henrietta Mills v. Rutherford
County, 281 U. S. 121, 126, 50 S. Ct. 270, 272; Smyth v.
Ames, 169 U. S. 466, 516, 18 S. Ct. 418, 422; Risty v.
Chicago, N. J. & P. R. R. Co., 270 U. S. 378, 388, 46 S. Ct.
236, 240; City Bank Farmers Trust Company v. Schnader,
291 U. 8. 24, 29, 54 S. Ct. 259, 261.

SERIATIM ANSWER TO PETITIONERS’ POINTS.
(Following Order in Petitioners’ Brief.)
POINT A.

,

*
—

The Circuit Court of Appeals Properly Overruled Peti-
tioners’ Motion to Complete the Record.

This motion was not filed until after the opinion
was handed down by the circuit court of appeals and
was raised only in connection with petitioners’ motion
for rehearing. We believe it was raised too late. Burnet
v. Commonwealth Improvement Company, 287 V. S. 415,
418, 53 8. Ct. 198, 199; Lynch v. United States, 292 U. 8.

571, 588; 54 S. Ct. 840, 847; New York Dock Company v.

Pozman, 274 U. S. 117, 123, 47 S. Ct. 482, 485.

(a)

There is no danger of all installment policies aggre-
gating a total in excess of $3,000.00 being drawn into
the federal court by this decision. Contingent foture
installments may not be aggregated. Wright v. Ipsur-
ance Company, 19 Fed. (2d) 117, (C, C. A. 5) 276 U. 8.
602; Healy v. Ratia, 292 U. 8. 263, 271, 54 8. Ct. 700, 704.

The injunction here sought is not to, restrain ac-
tions already pending in the state court but to protect
the jurisdiction of the federal equity court properly in-

ro

voked by respondent. In such situation the federal
courts never hesitate to issué the tnjuhction for the pro-
tection of their own jarisdiction. Julian v. Central Trust
Company, 193 U. 8. 93, 112, 24 S. Ct. 399, 407; Wells Fargo
and Company v. Taylor, 254 U. S. 175, 183, 41 S. Ct. 93,
96; Looney v. Eastern Texas R. Co., 247 U. S. 214, 218, 38
S. Ct. 460, 462. 7

The circuit court of appeals’ opinion herein does not
interfere with petitioner’s right of a trial by a jury.
Before the adoption of the Federal Constitution there was
no right of a trial by jury in an equitable action for
cancellation. Here, if cancellation is not decreed, peti-
tioners will have a right to a jury trial on the law issues.
Liberty Oil Co. v. Condon National’ Bank, 260 U. S. 235,
242, 43 S. Ct. 118, 121; American Mills Company v. Amer-
ican Surety Company, 260 U. S. 360, 364, 43 8. Ct. 149,
151; Bankers v. Ford Motor Company, 69 Federal (2d)
665 (C. C. A. 3rd.).

(b) |

Respondent's bill in equity charges petitioners have
filed proofs of loss claiming a total loss and demanding
the full face of the policies. It further alleges that

petitioners are threatening zo sue in the state court to

recover on said policies and will do so unless restrained
by the federal equity court. The allegations on demurrer
stand admitted and are sufficient fo show a threatened
injury. State of Kansas v. State of Colorado, 185 U. &.
125, 145, 22 S. Ct. 552, 559; Pennsylvania v. West Virginia,
262 U. S. 553, 593, 43 8. Ct. 658, 663; 36 Stat. 1162, 28
U. S. C. A., Section 379; Swift and Company v. United

* an

States, 276 U. S. 311, 326, 48 §. Ct. 311, 315; New Mesico v.
Standard Oil Company, 56 Fed. (2d) 973, 976 (C. C. A.
10); Vicksburg Waterworks Company v. Vicksburg, 185

V. 8. 65, 82, 22 8. Ct. 585, 592; Section 865, R. S. Mo., 1929.

(e)
These suits could not legally. be joined in the state
court, each being less than the jurisdictional amount. There

could be no removal to the federal court. There is, there- -

fore, no remedy at law on the law side of the federal
court which is the test of there being an adequate remedy

at law. City Bank Farmers Trust Company v. Schnader, °

291 U. S. 24, 29, 54 8. Ct. 259, 261; Risty v. Chicago, R. J.
4 P. Ry. Co., 270 U. S. 378, 388, 46 S. Ct. 236, 240; Smyth
v. Ames, 169. U. S. 466, 516, 18 S. Ct. 418; American Mutual
Liability Insurance Company v. McDonaugh, 61 Fed. (2d)
558, 563 (C. C. A. 7th) (certiorari denied 288 U. S.
602). ' ‘we

(d)

1 Statute 82 (Section 267, Judicial Code) 36 Statute
‘1163, provide. no suit in equity may be maintained in

a federal court where there is an adequate remedy at
law refers to adequate remedy at law in the federal court.
Henrietta Mills v. Rutherford County, 281 U. S. 121, 126,
50 8. Ct. 270, 272.

*

2

would not be as satisfactory, complete, prompt, and

‘efficient to attain the ends of justice as the remedy, in

equity. Keaton v. Little, 34 Fed. (2d) 396, 398 (C. C. A.

10); Dawson v. Kentucky Distillers and Warehouse .

X

* 4% | 6
9 9 N . a
Company, 255 U. S. 288, 296, 41 8. Ct. 272, 275; Risty

v. Chicago, R. 1. & P. Ry. Co., 270 U. S. 378, 388, 46 8. Ct.

236, 240.
| (e) ,
There is no reason to classify bills for cancellation
within the exception where equity jurisdiction is denied

in order to prevent interference with the enforcement of

state revenue acts, state judgment, and other internal
affairs of state government which involve interference
with such state government. There is here involved no
interference with state government.

(f)

We have already pointed out that this action is
primarily for the cancellation of these policies of in-
surance. It is not a bill of peace and partakes only
slightly of the characteristics of such a bill in that the

supplemental relief asked in addition to cancellation in- -
volves an injunction against prosecuting claims in the

state court.

POINT d.

The Circuit Court of Appeals Properly Held There Was
Equitable Jurisdiction for Cancellation Reenforced by
the Ability to Avoid a Threatened Multiplicity of Suits.

>
(a ;
We have just pointed out this is primarily a bill
for cancellation and not a bill of peace. Furthermore,
exceptions have been noted to the requirement that there
must be a trial and judgment at law before a bill of peace

R 10
can. be maintained. This should come within the ex-
ception since respondent had to sue before a law action
was instituted in the state court or it cduld never secure
an injunction in the federal court restraining proeeedings
in the state court. 36 Stat. 1162, 28 U. S. C. A., Section
379. |

POINT D.

The Bill Alleged the Face Value of the. Two Policies

Was $3,000.00 and $1,500.00 Respectively. The Bill
Alleged Petitioners Were Claiming the Total Loss and
Demanding the Full Face Value of the Policies. The
Jurisdictional Amount Was, Therefore, Involved.

The bill alleges petitieners are demanding the full
face of the policies. These allegations must be accepted
as true. Grand Chute v. Winegar, 15 Wall. (U. S. 373,
376). | 7 |
The fact on a trial respondent might set up and suc-
cessfully sustain the defense that it is liable only for
one-fifth of the total fire does not make that the amount
involved since it does not appear to a legal certainty” -
that petitioners may not succeed in recovering the full
face of the policies as they seek to do. Schunk v. Moline,
Milburn d Stoddard Company, 147 U. S. 500, 504, 13 S. Ct.
416; Barry v. Edmunds, 6 S. Ct. 501, 116 U. S. 550, 559.
Furthermore, the burden is on the defendant to
prove less than the jurisdictional amount is involved.
Heally v. Ratta, 293 U. S. 263, 271, 54 S. Ct. 700, 704;
Hunt v. New York Cotton Exchange, 205 U. S. 322, 333 8.
Ct, 529, 532; Wetmore v. Rymer, 18 8. Ct. 295, 169 U. 8.
115, 128; Put-in-Bay W. L. R. Company v. Ryan, 181 U.

C LN SY Re a

4

1

9

8. 400, 431, 21 S. Ct. 709, 717; Beacher v. Pan American
Life Insurance Company, 73 Fed. (2d) 263, 264 (C. C. A.

öth). —

POINT N. .
The t Court of Appeals Properly Held the Two

*

Claims Arising under the Two Policies of Insurance
ould Be Together for the Purpose of Ascertain-
ing the Amount Involved for Jurisdictional Purposes.
(a and bp) ‘
The issues under this heading have been discussed
by us under Point III, a and b, to which we refer this
court.

a

*

POINT I.

‘The Primary Object Sought in Respondent's Bill Is the
Cancellation of These Two Policies of Insurance. This
Is a Matter of Original Equity Jurisdiction and Can Be

Defeated * — Showing That There Is an Adequate
Remedy At Law
In the opinion of the eireuit court of appeals herein
(Tr. p. 16) the court cites the case of New York Life In
surance Company v. Miller, (C. C. A. 8) 73 Fed. (2d)
350, as sustaining the proposition that the right to
maintain an equitable action to rescind or cancel a con-
tract of insurance, because of false representation made
by the imsured to induce its execution, where there is no
adequate remedy at law, is well 2 (Citing many
cases,)’’

In the case of Shane v. West Coast Life Insurance
Company, 73 Fed. (2d) 681, the Circuit Court of Ap-
peals for the 10th Circuit ruled the same way citing
numerous authorities. at page *

In the case of Louisville, V. & 4 C. Ry. Co. v.
Lewisville Trust Company, 174 U. S. 552, 567, 19 S. Ct.
817, this court said, I. c. 822:

The demurrers to the bill for want of equity
were rightly overruled, and were not insisted on in
this court. The object of the -bill was that the

guaranty upon a great number of negotiable bonds,
which might otherwise pass into the hands of bona

13

fide purchasers, might be cancelled, and suits upon
the guaranty restrained, because of facts not ap-
pearing upon its face. The relief sought could only
be had in a court of equity. Peirsoll v. Elliott, 6
Pet. 95, 98; Grand Chute v. Winegar, 15 Wall. 373,
376; Robb v. Vos, 155 U. S. 13, 15 Sup. Ct. 4;
Springport v. Bank, 75 N. Y. 397; Fuller v.
Percival, 126 Mass. 381.“ 7

To the same effect see Rich v. Braxton, 158 U. 8.
375, 405, 15 S. Ct. 1006, I. c. 1017. =

In the case of Allore v. Jewell, 94 U. S. 506, 511, 24

I. Ed. 260, this court said, I. e. 264: ©

„ef these deeds were obtained by the exercise

of undue influence over a man whose mind had
ceased to be the safe guide of his actions, it is
against conscience for him who has obtained them
to derive any advantage from them. It is the

peculiar province of a court of conscience to set

them aside. That a court of equity will interpose
in such a case, is among its best settled principles.’
Harding v. Handy, 11 Wheat. 125.7“

| Further, the petition. reveals other grounds of
‘equitable jurisdiction, to-wit: fraud, ‘injunction and
avoidance of a multiplicity of suits. These elements are
fundamental grounds for equitable relief. In the case
of Tyler v. Savage, 143 U. S. 79, 95, 12 8. Ct. 340, this

court in holding equity had jurisdiction where similar

equitable relief was asked, said, I. c. 345:

„Thus there were in the case, as ingredients to

support the jurisdiction of equity, discovery, account,
fraud, misrepresentation, and concealment. Story,

Eq. Jur., Sections. 64k, 67, 184, 191, Jones v. Bolles, ö

9 Wall. 364, 369.“

*

14
To obtain justice and do equity, this court has
persistently refused to permit equitable remedies to be-
come cireumscribed and limited. The rule is well stated
by this court in the case of Union Pac. Ry. Co. v. Chi-

cago, R. I. & P. Ry. Co., 163 U. S. 564, 600, 16 S. Ct. 1173,
‘as follows, I. c. 1187: . (

— It must not be forgotten that, in the increasing
. complexities of modern business relations, equitable
remedies have necessarily and steadily been. ex-
panded, and no inflexible rule has been permitted to
circumscribe them. As has been well said equity
has contrived its remedies ‘so that they ‘shall cor-
respond both to the primary right of the insured
party, and to the wrong by which that right has been
violated,’ and ‘has always preserved the elements of
flexibility and expansiveness, so that. new ones may
be invented, or old ones modified, in order, to meet
the requirements of every case, or to satisfy the
needs of a progressive social condition, in which new
primary rights and duties are constantly arising,
and new kinds of wrongs are ** committed.’
Pom., Eq. Jur., Section 111.’’

In the case of Watson v. Sutherland, 5 Wall. 74, 18

L. Ea. 580, this court in upholding the issuance of an

injunction to prevent the levies of execution on a number

of judgments on property of an innocent third person
said, I. c. 582:

„The absence of a plain and adequate remedy

at law affords the only test of equity jurisdiction,

and the application of this principle to a particular

case must depend altogether upon the * as NN
disclosed in the pleadings.

The primary object of. respondent's bill in equity is

to obtain cancellation of these two policies of insurance.

15

Such a decree would not only destroy the policies them-
selves as evidence, but would also establish their in“
validity so that no future action could be maintained upon
claimed contracts of insurance arising out of the trans-
actions here in issue. Aside from the other equitable
grounds of relief which we have mentioned, cancellation
alone is sufficient to establish the jurisdiction of the
federal equity court. We believe this case comes squarely
within the law as declared by this court in the case of
Oclrichs v. Williams, 15 Wall. 211, 228, 21 L. Ed. 43,
where this court said, I. c. 44: |
The direct proceeding in equity wh save time,
expense and a multitude of suits, and settle the
rights of all concerned in one litigation. Besides,
there is an element of trust in the case, which,
wherever it exists always confers jurisdiction in
equity.“ i

In the case of Smyth v. Ames, 169 U. S. 466, 516, 18
S, Ct. 418, this court said, I. c. 422:

„But if the case, in its essence, be one cogni-
. gable in equity, the plaintiff—the required value being
in dispute—may invoke the equity powers of the
proper cireuit court of the United States whenever
jurisdiction attaches by reason of diverse citizenship,
or upon any other ground of federal jurisdiction.
Payne v. Hook, 7 Wall. 425, 430; McConthay v.
- Wright, 121 U. S. 201, 205, 7 S. Ct. 940.”

In the case of State of Alabama v. State of Arizona,
291 U. S. 286, 290, 54 S. Ct. 399, this court said, I. c. 401;
„There is no test or rule of general applica-

tion by which to determine whether a complaint in
equity is multifarious. That question is to be de-

16

cided by the court in the exercise of sound discre-
tion having regard to the facts alleged, circumstances
disclosed, and the character of the relief sought.
Oliver v. Pratt, J How. 333, 411, 11 L. Ed. 622;
Nelson v. Hill, 5 How. 127, 132, 12 L. Ed. 81; Shields
v. Thomas, 18 How. 253, 259, 15 L. Ed. 368; Fitch
v. Creighton, 24 How. 159, 163, 164, 16 L. Ed. 596;
Brown v. Guarantee Trust d Safe-Deposit Co., 128
U. S. 403, 410, 9 8. Ct. 127, 32 L. Ed. 468.

Under the above authorities it seems clear to us
that the allegations of respondent’s bill bring this case
squarely within the original equity jurisdiction of the

_ federal court. The jurisdictional amount is involved
and there is no adequate remedy at law, as we will point
out hereinafter. (Points III and IV.) |

POINT II.

Unless Relief Is Granted Here in Equity Two Suits at Law
Will Be Required to Settle the Issues. It Will Be Less
Expensive and More Convenient to Both Parties to Try
the Issues of Plaintiff's Bill in One Action in the
Federal Court. _

In the case at bar it appears unless this court holds
there is federal jurisdiction of this bill in equity the re-
spondent will be vexed by two separate suits in the state
court on these policies of insurance. These two policies
were taken out at the same time and under the same cir-
cumstances rendering the main issues in the two separate

suits identical; the suit in equity will, therefore, avoid

a multiplicity of suits. We have already pointed out

that the nature of the allegations in respondent's bill

and the relief asked bring it within the original equity
’ jarisdiction of the court. It is more economical, con-

17

venient, prompt and effective to try this matter in one
suit in the United States District Court in the city where
the policy was taken out and the fire occurred and
where the witnesses live than to try two different suits
in jurisdictions chosen by petitioners which may be away
from the vicinity of the fire and the residences of the
witnesses. Petitioners will be subjected to trying the
equitable issues first even in the state court. The two
eases would no doubt be tried so close together that the
first would not become res adjudicata before the second
one was tried.

In the case of Hale v. Allinson, 188 U. S. 56, 23
Sup. Ct. Rep. 244, the court in laying down the test as
to when jurisdiction in equity should be exercised, de-
clared the law as foilows, I. c. 250 (188 U. S. L. c. 72):

„In any case where the facts. bring it within
the possible jurisdiction of the court, according to
the view taken by it in regard te such facts, the
decision must depend largely upon the question of
the reasonable convenience of the remedy, its ef-
fectiveness, and the inadequacy of the remedy at
law.“ ; 5
w ‘

I. e. 252 (188 U. S. I. e. 77):

„Cases in sufficient number have been cited to
show how divergent are the decisions on the question
of jurisdiction. It is easy to say it rests 2 the
prevention of a multiplicity of suits, but to sary
whether a particular case comes within the prin- .
ciple is sometimes a much more difficult task. Each
ease, if not brought directly within the principle
of some preceding case, must, as we think, be de-
cided upon its own merits and upon a survey of the
real and substantial convenience of all parties, the

*

adequacy of the legal ‘sited, Oe situations of the
different parties, the points to be contested and
the result which would follow if jurisdiction shovid
be assumed or denied; these varioug matters being
factors to be taken into consideration upon the
question of equitable jurisdiction on this ground, and
whether within reasonable and fair grounds the suit
is calculated to be in truth one which will practically
prevent a multiplicity of litigation, and will be an
actual convenience to all parties, and will not un-
reasonably overlook or obstruct the material interests
of any.“

In the case of First State Bank v. Chicago, N. 1. & F.
Ry. Co., 63 Fed. (2d) 585 (C. C. A. W the court said,
I. e. 590: J

„The avoidance of unnecessary suits should be
much desired by litigants and taxpayers. In
Munson Inland Lines, Inc., v. Insurance Co: of North
America, (D. C. N. v.) Fed. (2d) 269, 271, Judge
Woolsey clearly exp such desire, ‘that the
avoidance of multiplicity of suits by every device,
which is jurisdictionally possible and practically con-
venient, should be encouraged, and should be one of
the main objectives of procedural administration,
and of decisions by courts in practice cases. And
the same judge in Irving Trust Co. v. Marine Mid-
land Trust Co. of New York, (D. C. N. Y.) 47 Fed.
(2d) 907, 908, states t ‘multiplicity of suits in-
volving issues which:can be conveniently tried to-
gether, is something that equity holds in alhorrence.’’

IL. e. 591:

‘‘Surely a suit could be brought in equity under
these circumstances to cancel void ‘instruments so
that in this case there is a well-recognized ground of
equity jurisdiction outside of multiplicity of suits.
The relief sought against all the defendants was the
same, to-wit, the cancellation of dee bills of lading.

19

The defenses which could be interposed were the same,
the legal questions were the same. The operation of
the acts of defendants upon plaintiff were identical in
their effect upon plaintiff's richts.

In the case of .City of Walla Walla v. Walla Walla
Water Company, 172 U. S. 1, 19 8. Ct. Rep. 77, the court ©
had before it an action to restret the city from violat-
ing its covenant not to erect a competing waterworks, to
the plaintiff. A demurrer to the bill ‘was filed below
and overruled. In affirming such action by holding
case cognizable in equity, this court said, I. c. 82 (

U. S. I. c. 12):

„This court has repeatedly declared in affirm-
ance of the generally accepted proposition that the
remedy at law, in order to exclude a concurrent
remedy in equity, must be as complete, as practical,
and as efficient to the ends of justice and its prompt
admission, as the remedy in equity. Boyce v. Grundy,
3 Pet. 210, 215; Ius. Co. v. Bailey, 13 Wall. 621;
Kilbourne v. Sunderland, 130 U. S. 505, 514,

Ct. 594; Tyler v. Savage, 143 U. S. 79, 95, 12 Sup.
Ct. 340.“ N

It is our contention that the legal remedy in a state
court—there being. no legal remedy in the federal court—
is not an adequgte legal remedy within the decisions of
this court aside from the fact that the legal remedy to
defeat federal equity jurisdiction must be a legal remedy
on the law side of the federal court. We submit the situa-
tion here does not measure up to the test set by this
court in the case of Terrace v. Thompson, 263 U. S. 197,
214, 44 8. Ct. 15, where this court said, I c. 17: |

“But the legal remedy must be as complete,
practical and efficient as that which equity could *

*

8

ford. Boise Artesian Water Co. v. Boise City, 213
S. 276, 281, 29 Sup. Ct. 426, 53 L. Ed. 796; Walla
alla v. Walla Walia Water Co., 172 U. S. 1, 11, 12,

19 Sup, Ct. 77, 2 Ed. 341.“

89

POINT III.

_ Respondent Propeffy Joined the Policy for $3,000.00 and
the Policy for $1,500.00 in One Bill in Equity. The
Jurisdictional Amount Was Therefore Involved. :

(A) RESPONDENT'S BRILL CHARGES A CONSPIRACY. THIS “
CONSTITUTES AN EXCEPTION TO THE GENERAL RULE AND
ENTITLES .RESPONDENT TO VE THE SUMS OF THE TWO
POLICIES AGGREGATED THE PURPOSE OF DETERMIN-

ING JURISDICTION.

We direct attention to the allegations of the petition |
on pages 3 and 4 of the transcript wherein respondent
charges that these and certain other policies issued by
Une other companies were procured by petitioners as a part of
a general scheme and plan to defraud insurance com-
panies by over-insuring the property and setting the same
on fire. It is charged that the policies were procured ©
from respondent under the representation no other in-
surance would be taken on the property. (Tr. p. 3.) It
further charges, that petitioners set fire to this property;
that petitioners have filed proofs of loss claiming a total
loss of the property and demanding the full face of these
policies. It is further charged that unless relief is granted
in this action, petitioners will file two suits at law in
the state court, ‘‘as a means of consummating the said
fraudulent purpose, scheme, and plan of the said re-
spondents (Tr. p. 4,)’’ These allegations clearly
charge conspiracy on the part of the defendants. The cir-
cuit court of appeals so Held (Tr. p. 15) and petitioners

. 1

do not here claim otherwise. By means of this con-
spiracy, the petitioners have tied these claims together
so that respondent is entitled to have the sums of the two
policies aggregated for the purpose of determining the
issue of jurisdiction.’ Where there is ‘a charge of con-
spiracy, as here, the case falls within a well-recognized
exception to the general rule that different contracts may
not ordinarily be aggregated in determining jurisdiction.

In the case of Sovereign Camp, W. O. W., v. O'Neil,
266 U. S. 292, 45 S. Ct. Rep. 49, the situation was very
similar to the one at bar. A suit was brought in equity
by the sovereign’ camp against twenty-five of its mem-
bers, charging them with entering into a conspiracy to
have themselves décted Aelegates to a session of the
Sovereign Camp, where it was. decided they had not been
legally elected and were not entitled to sit as delegates.
It was further alleged that, pursuant to said agreement,
these twenty-five defendants had instituted twenty-five
different suits in a local court of Texas to recover amounts
ranging from $987.00 to $1,170.00 as per diem and mileage
for attendance at the Sovereign Camp. The bill then
prayed for an injunction against the prosecution of these
suits. Defendants moved to dismiss on the ground the
jurisdictional amount was not involved to give jurisdiction
based solely on the diversity of citizenship. In deny-

ing such motion, this court, speaking through Mr. Jus- ~

tice Sanford, said, I. c. 50 (266 U. Shi 295) :

Exception to this general rule was, however,
recognized in Me Daniel v. Traylor, 196 U. S. 415,
427, 25 8. Ct. 369, 49 L. Ed. 533. There the heirs
Hiram Evans an intestate, brought suit in

—

*

22 .
the circuit court against several defendants to en-
join the enforcement of claims that had been al-
lowed as liens upon his real estate by. orders of a
“probate court. Each claim was less thou the req-
uisite jurisdictional amount, but thei: aggregate
exceeded that sum. The bill alleged that these
claims were not debts of the intestate, bat that the
defendants had conspifed and confederated with the
administrator: to secure their payment out ‘of the
estate, and that the orders allowing them had been
procured as the result of the conspiracy .and The
fraud practiced in pursuance thereof. This court
reversed a decree of the circuit court dismissing the
dill, on demurrer, for want of jurisdiction, and held
that, on the face of the bill, the value of the mat-
ter in dispute was ‘the aggregate amount of ‘the
claims fraudulently procured by the defendants act-
ing in combination to be allgwed in the probate court
as claims against the esta. In the opinion, after
_ referring to the class of cases to which Walter v.
Northwestern N. Co. belonged, the court said:

The case before us, however, is presented
by the bill in an entirely different aspect. The
case may be regarded as exceptional in its
facts, and may be disposed of without affect-
ing former decisions. There is no dispute as
to the amount of any particular claim. So fa
as the bill is concerned, if any one of the
specified claims is good against the Estate of
Hiram Evans, then all are good. * * The
matter in ‘dispute is whether the landes I
enn be sold to pay all the claims, m the ag-
gregate, which the defendants, by combination
and conspiracy, procured the probate court to
-allow against the Estate of Hiram Evans. The
essence of the suit is the alleged fraudulent
combination and conspiracy to fasten upon fhat
estate “a liability for debts of John Evans,
_ which were held by the defendants and which
they, acting in combination, procured, in co-

*

23

operation with.James Evans, to be allowed as
claims: against the Estate of Hiram Evans. By
reason of that combination, resulting in the al-
lowance of all those claims in the prolgte court,
as expenses of administering the Estate of
Hiram Evans, the defendants have so tied their
respective claims together as to make them, so,
far as the plaintiffs and the relief sought by
them are concerned, One claim. The validity
of all the claims depenidd pon the same facts.
The lien on the lands is asserted by each
deferidant has its origin as well in the combination

to ahich all were parties, as in the orders of the
probate court, which, in furtherance of that
combination, Were procured by their joint ac-
tion.“

And in McDaniél 8 raylor, 212 U, S. 428, 433,
29 8. Ct. 343, 344 (53 L. Ed. 584) —on a second
appeal in affirming a decree of the eireuit court,
made on return of the case, again dismissing the
suit for want of jurisdiction, upon a finding that the
allegation that the defendants had conspired in pro-
- curing the allowance of the claims had not been
established, it was said:

As we have already seen, it was fraudu-
lent combination and conspiracy which united
the claims and made the aggregate of the claims
the matter in dispute. By reason of that com-
bination, we decided the claims were ‘‘so tied“
together as to make them ‘‘so far ‘as the plain-
tiffs and the relief sought were concerned, one
claim.’’ ’ 8

We find that under the allegations of the pres-
ent bill the case comes fairly within the reason of
the exception recognized in the McDaniel cases. It..

is not only alleged that the defendants’, claims are

without foundation, but that they originated and
are being prosecuted in the state court in pursuance
of an agreement and conspiracy to embarrass and

1 ‘

~ . 0 —

attempt to ruin the society. There is no dispute

as to the amount of any particular claim; and the
validity of all of them depends upon the same is-
sue. A conspiracy to prosecute, by concert of ac-
tion, numerous baseless claims against the same
person for the wrongful purpose of harassing and
ruining him partakes of the nature of a fraudulent
conspiracy; and in a suit to enjoin them from be-
ing separately prosecuted, it must likewise’ be
deemed to tie together such several claims as one
claim for jurisdictional purposes, making their ag-
gregate amount the value of the matter in contro-
versy. We conclude, therefore, that, on the face
of the bill, the district court had jurisdiction of the
suit by reason of the diversity of een and

the amount in ‘controversy. *
See, also, McDaniel v. Traylor, 196 U. S. 415, 427, Pat
8. Ct. 369, J. c. 373, and the ‘same case on its second ap-

. INVOLVED THE
$4,500.00 AND MORE THAN THE REQUISITE JURRMPICTIONAL

pearance in this court 212 U. 8. 428, 433, 29 8. Ct. 343,
345. |

14
5
3
8
8
5
:

Even in the absence of allegations of conspiracy

_which are here present, we ‘believe réspondent had the
right to join these two policies in one bill for cancella-
tion in equity. If that is true, then the jurisdictional
amount is here involved. In the case of Providers. Mu-
tual Life Insurance Company of Philadelphia v. Parsons,
70 Fed. (2d) 863, the Circuit Court of Appeals for the
Fourth Circuit (certiorari denied by this court, 55 8. Ct.

95)

said, I. c. 684:

by several district courts: New York Life Insurance
Co. v. Jones, 2 Fed. Supp. 600 (D. C. W. D. N. C.);
Mutual Life Insurance Company v. Rose, 294 Fed.
122 (D. C. K. D. Ky.), reversed on other grounds
(C. C. A.) 19 Fed. (2d) 280; Metropolitan Life In-
surance Company v. Dunne, 2 Fed. Supp. 165 (D. C.
E, D. N. v.). Compare «New York. Life Insurance
Company v. Marshall, (D. C.) 21 Fed. (2d) 172; Id.
(C. C. A.) 23 Fed. (2d) 225; Columbian Natianal

_ Life Insurance Company v. Harrison, 12 Fed. (2d)
986 (C. C. A. 6). The object of the statutory limita-
tion as to amount is intended merely to. prevent in-
voking federal jurisdiction where the amount in con.
troversy is not substantial. While it has been held
that separate claims of two or more plaintiffs, each
less than the jurisdictional amount, may not com-
bined to confér jurisdiction (Lion Bonding and

. Surety Company v. Karate, 262 U. S. 77, 86, 43 8.
Ct. 480, 67 L. Ed. 871), nevertheless, a single plain-_
tiff having several glaims, each less than the juris-
dictional amount, may properly combine them for
the. purpose of establishing the requisite amount in
cantroversy where they can properly be joined in
one suit or action, Hughes, Fed. Practice, Vol. I.
Sections 412, 485; Yates v. M hyel Coke Co., 221 Fed.
603, 606 (C. C. A. 6); Haftford Fire Insurance Com-
pany v. Erie Railway Gompany, (C. C.) 172 Fed. 7
899; Massachusetts Pr ive Ass'n v. Kittles, 2"
Fed. (2d) 211 (C. C. A. P); Baltimore & O. S. W. R.
Co. v. United. States, U. S. 94, 31 S. Ct. 368, 55

L. Ed. 384. There is no objection to joining in one
@quity suit both policies for purposes of cancella-

tion, as this is entirely permissible - under Equity
Rule 26 (28 U. S. C. C. A., Section 723).”’

In the case of New York Life Insurance Company ö
v. Jones, 2 Fed. Supp. 600, the District Court for the
_ Northeastern District of North Carolina said, I. c. 600:

„Equity Rule 26 (28 U. S. C. A., Section 723)
provides: The plaintiff may join in one bill as
many causes of action, cognizable in equity, as he
may have against the defendant.’ *

28 U. S. C. A., Section 41 (1), confers jurisdic-
tion on the United States District Court where there
is diversity of citizenship if the matter in contro-
versy exceeds, exclusive of interest and costs, the
sum or value of $3,000.00. This provision applies to
actions at law and suits in equity. Cyc. ef Fed.
Pro., Section 56; Farmers’ d Merchants’ Bank of
Richmond, (D. C. N. C.) 274 Fed. 235. The author-
‘ities hold that the amount in dispute is the sum of the
claims in all the counts upon eanses of action
properly joined. Stanley v. Board of 8 ors. of
Albany y, (C. C. N. V.) 15 Fed. A83, affirmed .
121 U. S. 535, 7°S. Ct. 1234, 30 L. Ed. 1800; Hartford
Fire Insurance Company v. Erie, (C. G.) 172 Fed.

In B. & O. Southwestern Railroad Company v.
United States, 220 U. S. 94, 31 S. Ct. 368, 55 L. Ed.
384, eleven actions at law were instituted to recover
penalties, but the cases were consolidated by the
trial court. Jurisdietion whe challenged because the
amount involved in each case was only $1,000.00;
when consolidated the amount was -$5,500.00, and
the court held it had jurisdiction. Heffner v. Gwynne-

27

Treadwell Cotton Co., (C. C. A.) 160 Fed. 635;
Schunk v. Moline, Milburn d Stoddard Co., 147 U. S.
500, 13 8. Ct. * 37 L. Ed. 255; Yates v. Whyel
Coke Co., (C. C. A. 6th) 221. Fed. 603; Edwards v.
Bates County, 163 U. 8. 269, 16 8. Ct. 967, 41 L. Ed.
155.“

— Vv
In the case of ‘Kimel v. Missouri State Life n.
Company, 71 Fed. (2d) 921, the United States | Cirouit ‘
Court of Appeals for the ** Circuit in a law action
said, I. c. 924:

„Where t plaintiff has several demands
against the defendant which he may join in one
action, the aggregate of those demands exclusive of
interests and costs is the amount in controversy.’’

8. In the case of Baltimore d Ohio Southwestern Rail-
road Company v. United States, 220 U. 8. * 106, 31
8. Ot. 368, this court said, I. c. 371:

„The point is made in the brief “Sat this court
has no jurisdiction, because the amo involved in
the cases embraced in these writs of erior was only .
$1,000.00. The court, whether properly, consolidated ©
all the cases (Rev. Stat., Section 921, U. S. Comp.
Stat., 1901, p. 685) and, as consolidated, the amount
of the possible penalties sued for in the eleven actions
was fifty-five hundred dollars.’’

See, also, Metropolitan Life * Company
v. Dune, 2 Fed. Supp. 165, 166 ™ C. S. D.
New York).

We have found only two cases which at first blush
seem to hold contrary to the above. In the case of City
of Dothan, Ala, v. First National Bank of Dothan, 61

+.

oun y ' 28
Fed. (2d) 685, the Cireuit Court of Appeals for the 5th -

Cirrouit held that the second equitable action, involving

only a thousand dollars, could not be joined to another

action already pending in a federal equity cob because,

it was a separate action and did not involve the jariedic-

tional amount. We believe that decision is based un the
fact the two actions were unrelated and, theféfore, not

properly joined. The court decided the second action, l.

c. 686, as “a liability wholly different from that asserted
against the original defendant,”’ and l. o. 687, ‘The
separate and distinct equitable cause of action asserted

by the amendment, ete.“

The other case to which we refer is the decision of

this court in the case of Geneva Furniture Manufacturing
Company v. S. Karpen d Bros., 238 U. S. 254, 35 S. Ct.
788, where this court held that part of the suit was

brought under the patent law and therefore properly in
the federal court. The court then held that the remainder

of the action did not arise under the patent law. The

court held simply that the court could not take jurisdie-

tion of the second suit against the defendant without its

consent save in a district of its residence or that of a

plaintiff. (Jud. Code, Section 51.) There i is no such issue

here and since the cancellation of both policies and an in-

: junction against suits thereon in the statetourt are mat-

ters of original equity jurisdiction which may properly be

joined under Equity Rule 26, we submit, aside. from

the allegation of conspiracy, the jurisdictional amount is

here involved.

2 POINT IV, +.

Respondent Has No Remedy on the Law Side of the Fed-
eral Court Which Is the Test of Whether There Is an
Adequate Remedy t Law Preventing the Exercise of
* Jurisdiction by a ‘Federal Court.
In the case at bar, actions at law on these two policies

_ could not be joined in one suit. The statutes of Missouri

provide. All parties must interested in all causes of

action joined at law. Sec. , R. S. Mo., 1929 (set out

in full under Point C (b)-infra). . °

Here petitioner, Mary Di Giovanni, has no interest
in any recovery under the policy insuring the personal
property. Under the Missouri statutes actions may be
joined only where all parties are interested in. All the
actions. so joined. Since that situation does not here
exist, two suits would necessarily have to be brought in
the state court, neither of which would be removable to.
the federal court. There is a common point of litiga-
tion in the two suits since the issues in both are identical
except as to the measure of damages and the issue of
whether petitioner, Mary Di Giovanni, participated i in the
fraudulent consp! and. thereby i is debarred of recovery.

Although the ctions cannot be joined at law they can

be joined in equity in this court. = '

In the case af Leavenworth Savings and Trust Com-

pany v. Newman, 23 Fed. (2d) 835,. the Circuit Court of
Appeals for thé Eighth ‘Circuit had before it an appeal
from the Distric{ Court kor the Western District of Mis-

souri. Suit had been instituted in equity against stock-
holders of the ‘mortgagor company on guaranty agreements

30

with a prayer for an accounting and for the determina-
tion of liability of each of the defendants. This court
dismissed the bill. In reversing the court with instruc- «
tions to reinstate the bill, the United States Circuit Court
of Appeals held each guaranty agreement was part of
the same transaction and the matter was properly brought
in equity. In so holding, the court said, I. e. 838:

In the case at bar, some of the numerous ques-
tions involved are of equitable cognizance; many of
them are common to all of the defendants. Each de-
fendant is further interested in the amount .recovered
from each of the codefendants. The remedy at law
available to plaintiff is not as prompt, practical and

efficient to attain the en wrstice as a sn. in
equity. On the face of bill, at least, the con-
’ venience of both plainttff and defendants will be. best

subserved by a single suit in equity. Under such cir-¥
cumstances the’ avoidance ef a multiplicity of suits
is a sufficient and valid reason for joining the defend-
ants in a single equitable suit. Hayden v. Thompson,
71 Fed. 60 (C. C. A. 8); Wyman v. Bowman, 127 Fed.
257 (C. C. A. 8); Lake Charles Rice Milling Co. v.
Pacific Rice Growers’ Ass’n, (C. C. A.) 295 Fed.
246.’

An the case of Fish v. Kengamer, 37 Fed. (2d) 243, the
United States Circuit Court of Appeals for the 10th Cir-
cuit in an ejectment action where numerous claimants
were permitted to intervene, said |. c. 247:

It has been held, by the Supreme Court of the
United States, to be impracticable to lay down any
‘fixed, unbending rule as to what constitutes multi-
fariousness or misjoinder of causes of action. Oliver
v. Peath, 3 How. 411 (11 L. Ed. 622); Gaines v.
Chew, 2 How. 619 (11 L. Ed. 402); Barney v.
Latham (103 U. 8. 205, 26 Ed. 514), October Term,
1880-1 >. > Md

*

*

31

In the case’ of Brown v. Guarantee Trust d Safe-

Deposit Company, 128 U. S. 403, 412, 9 S. Ct. 127, this!
court said, I. e. 130:

„The case against one defendant may be so en-

tire as to be incapable of being prosecuted in sev- -

eral suits; and yet some other defendant may be a
necessary party to some portion only of the case

* stated. In the latter case, the objection of multi-

fariousness cannot be allowed to prevail. Attorney-
General v. Poole, 4 Mylne & C. 17, 31; Turner v.
Robinson, 1 Sim. & S. 313; Attorney-General v.

Cradock, 3 Mylne & C. 85. It is not indispensable

that all the parties should have an interest in all the
matters contained in the suit; it will be sufficient if

each party has an interest in some ‘material matters

in the suit, and they are connected with the others.

Addison v. Walker, 4 Younge & C. 442; Parr v. At-

torney-General, 8 Clark & F. 435; Worthy v. John-
son, 8 Ga. 238.“ N

In the state law “court respondent would have to

‘establish the participation of petitioner, Mary°di Giovanni,

as well as Pete di. Giovanni in order to maintain its

defense. f ' s „„

The remedy in a state court is, therefore, wholly in-
adequate wifMin the ruling of this court in the case of
Davis v. Wakelee, 156. U. S. 680,.688, 15 S. Ct. 555, where
this court said, I. c. 558: 1

In the uncertainty which appears to exist in.

that state as to whether a complaint setting forth all
the facts would or would not be demurrable, we

think it may be frly said that the remedy at iaw
is not so plain or clear as to oust a court of equity
of jurisdiction. It is a settled principle of equity
jurisprudence that, if the remedy at law be doubtful,

al

32

a court of equity will not decline cagnizance of the
suit. Boyce’s Ex’rs v. Grundy, 3 Pet. 210; Watson

v. Sutherland, 5 Wall. 74, 79; Rathbone v. Warren,.

10 Johns. 587; King v. Baldwin, 17 Johns. 384; In-
surance Co. v. Fisk, 1. Paige 90; Teague v. Russell,
2 Stew. (Ala.) 420; Southhampton Dock Co. v. South-
hampton Harbour ck @ier Board, L. R. 11, Eq. 254;
Weymouth v. Boyer, 1 Ves. Jr. 416. “Where equity
can give relief, plaintiff ought not to be compelled
to speculate upon the chance of his obtaining relief
at law. ;

There is no possible way for respondent to get into
the law side of the federal court. There is, therefore,
no legal remedy on the law side of the federal court ©
which is the test of an adequate remedy at law defeat-
ing federal equity. jurisdiction. In the case of Barber v.
Barber, 21 Howard 591, 16 L. Ed. 226, this court said,
1. e. 229: N

„There is no objection to equity jurisdiction

in the courts of the United States that there is a

remedy under the local law. For the equity juris-

diction of the federal courts is the same in all of
the. states, and is not affected by. the existence or

nonexistence of an equity 9 in the state
tribunals.’ ’’

In the case of Henrietta Mills v. Rutherford County,
281 U. S. 121, 126, 50 S. Ct. 270, this court-in an opinion by
Mr. Chief Justice Hughes, refused to exercise equitable.
jurisdiction in a case brought under a state statute of N
a remedial character attempting to enlarge the equity
jurisdiction of the federal court. In so ruling, however,
the court said, I. c. 272: |
„The act of Congress with respect to the ex-
‘istence of such a remedy has reference to the ade-

5

33
quacy of the remedy on the law side of the federal
courts (Smyth v. Ames, 169 U. S. 466, 516, 18 S. Ct.
418, 42 L. Ed: 819; Chicago, B. & Q. Railway Com-

pan v. Osborne, 265 U. S. 14, 16, 44 S. Ct. 431, 68
L. Ed. 878; Risty v. Chicago, R. I. d P. Ry. Company,
270 U. S. 378, 388, 46 t. 236, 70 L. Ed. 641)

* one

In the case of Smyth v. Ames, 169 U. S. 466, 18 Sup.
Ct. Rep. 418, this court, speaking through Mr. Justice
_ Harlan, declared the law as follows, I. c. 422 (169 U. 8.
“L c. 516): |

„The adequacy or inadequacy of a remedy at
law for the protection of the rights of one entitled
upon any ground to invoke the powers of a federal
court, is not to be conclusively determined by the
‘statutes of the particular state in which suit may
be brought. One who is entitled to sue in a federal
circuit court may invoke its jurisdiction in equity
whenever the established principles and rules of

. equity permit such a suit in that court; and he can-
not be deprived of that right by reason of his being
allowed to sue at law in a state court on the same

cause of action.

In the case of Risty v. Chicago, R. I. & P. R. R. Co.,
270 U. S. 378, 46 Sup. Ot. Rep. 236, this court, speaking
through Mr. Justice Stone, declared the law as follows,
I. c. 240 (270 U. S. I. e. 388):

“ee * 5

the test of equity jurisdiction in a
federal court is the inadequacy of the remedy on the
law side of that court and not the madequacy of the
remedies afforded by the state courts. Smyth v.
Ames, 18 S. Ct. 418, 169 U. S. 466, 42 L. Ed. 819;
Chicago, B. d O. R. R. Co. v. Osborne: supra.’

There are a large number of decisions of the district
courts and various circuit courts of appeal declaring the

> *
same principle of law. We state this simply as bearing 3
on the large number of decisions following this court . g

in holding a legal remedy in the state court will not
defeat the equity jurisdiction of a federal district court.

~
In the case of City Bank Farmers Trust Company v. :
Schnader, 291 U. S. 24, 29, 54 S. Ct. 259, this court, said,
I. e. 261: none
As the statutory ‘remedy, if it be treated as an a
action at law, would lie only in the state court and is 1

not cognizable by the federal courts, either as- an
original action or by removability, its existence can-
not oust federal equity jurisdiction. Smyth v. Ames,
169 U. S. 466, 516, 18 S. Ct. 418, 42 L. Ed. 819; Chi-
cago, B. & O. R. R. Co. v. Osborne, 265 U. S. 14, 16,
44 8. Ct. 431, 68 L. Ed. 878; Risty v. Chicago, R. J.
é Pac. Ry. Co., 270 U. S. 378, 388, 46 S. Ct. 236, 70 L.
Ed. 641, Mathews v. Rodgers, supra, page 526 of —
‘U.S, @ 8. Ct. 217. ;

SERIATIM ANSWER TO PETITIONERS’ POINTS.
„(Following Order in Petitioners’ Brief.) |
. POINT A. e
The Circhit Court of Appeals Properly Overruled Peti-
, tioners’ Motion to Complete the Record.
It is naw contended that error was committed in
denying petitioners the right to have their motion to com-
plete the record sustained and the record completed by
adding thereto a provision of the policy insuring the real
estate providing that the liability thereof should be pro-
portionate to the total amount of insurance on said real
estate.

35

—

In the first place, we do not believe petitioners prop-
erly preserved this point in the lower cdurts. They filed
no such motion in the district court. They filed no such
motion in the United States Circuit Court of Appeals
until after an opinion had been handed down against them,
when in connection with their motion for rehearing they
filed such motion. (Tr. p. 19.) Coming so late it was
not the duty of the United States Cireuit Court of A’p-
peals to pass on the merits of this motion. Such mat-
ters must be timely raised or the point is not entitled to
consideration here. In phe case of Burnet v. Common
Wealth Improvement Company, 287 U. S. 415, 418, 53 8.

Ct. 198, this court said (I. e. 199): ee

„The board of tax appeals expressed no opinion
concerning the commissioner’s method of reckoning—
it was not requested so to do. There the respondent
relied entirely upon the second point. The circuit
court of appeals ruled only on the same point. In
such circumstanées we do not undertake to determine
what was not considered below.“

The rule thet point will not be considered by this
court on certiorari unless timely and properly raised be-
low is well established. Lynch v. United States, 292 U. 8.
571, 588, 54 S. Ct. 840, I. e. 847; New York Dock Company
v. Poenan, 274 U. S. 117, 123, 47 S. Ct. 482, 485.

POINT B.

The Circuit Court of Appeals Properly Held That Com-
plainant Could Maintain Its Bill in Equity Because It
Had No Adequate Remedy at Law in the Federal Court.

(a)

Petitioners ‘erroneously contend that if the circuit
court of appeals is right in holding these two policies can

36

be aggregated, in an action brought thereon in the equity
side of the federal court on the ground there is no
legal remedy on the law side of that court—separate
suits at law in a state court not being removable—that
every state court uit for small installments due on
policies whose face amount exceeds $3,000.00 would be
removable. ! ae

Petitioners cite the case of. Wright v. Insurance
Company, 19 Fed. (2d) 117 (C. C. A. 5), 276 U. S. 602,
‘as bearing out their contention that if the decision of
the circuit court of appeals in this case is permitted
to stand all insurance policies may be, removed where
future installments will amount to over $3,000.00. That .
ease is directly against petitioners’ contention. There it
is held that the court does not have jurisdiction where
the installments due amount to only $420.00 although
the liability as to future installments in the aggregate
amount to more than 83,000.00.

Further, in the case of Healy v. Ratta, 292 U. 8.
263, 272, 54 S. Ct. 700, I. c. 704, this court held future in-
stallments of taxes could not be added to those already
due to make up the jurisdietional amount where it was
contingent whether the future illegal taxes would be
collected. Future installments, on insurance policies
would always be contingent and could not be added to
make up the jurisdictional amount.

Petitioners assert the above rule has no applica-
tion ta actions such as this is. They label this action
a bill quia timet or bill of peace. They cite no authorities
80 holding and we have found none which establish —

—— 1

such exception. Furthermore, this is a bill in equity 0
for cancellation and it partakes only slightly of the
characteristics of bills of peace or quia timet. |

Petitioners further urge that to apply this rule to
this case would run counter to 36 Stat. 162, 28 U. S. C.
A., Section 379, prohibiting federal courts from enjoining
proceedings already pending in state courts. As we have
pointed cat (Point I). this action is for cancellation. of
two policies of insurance and an injunction against the
prosecution of law actions on said policies. The matter
con squarely within the original equity jurisdiction
of the United States District Court and the jurisdictional —
amount is involved. (Points I and III.)

The jurisdiction of the district court to grant the
injunction prayed is based on the protection of its own -
original jurisdiction. This has always been cheld not to
come within the provisions of the statute against in-
junctions just referred to.

In the case of Julian v. Central Trust Company,
193 U. S. 93, 112, 24 8. Ct. 399, this court said, I. e.
407 :

In such cases, where the federal court acts in
aid of its own jurisdiction and to render its decree
effectual, it may, notwithstanding Section 720, Rev.
Stat. (U. S. Comp. Stat., 1901, p. 581), restrain all
proceedings in a state court which. would have the
effect of defeating or impairing its jurisdiction.
Sharon v. Terry, 13 Sawy. 387, 1 L. R. A. 572, 36
Fed. 337, per Mr. Justice Field; French v. Hay, 22

) Wall. 290, 22 L. Ed. 857; Dietech v. Huide- Roper,
0 103 U. S. 494, 26 L. Ed. 497.“

In the case of Wells Fargo and Company v. Taylor,
254 U. S. 175, 183, 41 S. Ct. 93, this court said, I. c.
96:

„In recognition of this it has come to be segled
by repeated decisions and in actual practice that,
„where the elements of federal and equity jurisdiction
are present, the provision does not prevent the fed“
eral courts from enjoining the institution im the state
courts of proceedings to enforce local statutes which
are repugnant to the Constitution of the United
States (citing cases) or prevent them from maintain-
ing and protecting their own jurisdiction, properly ac- |
quired and still subsisting, by enjoining attempts to
- frystrate, defeat or impair it through proceedings
in the state courts (citing cases) or prevent them from
depriving a party by means of an injunction of the
benefit of a judgment obtained in a state court in.
circumstances where its enforcement would be con-
trary to recognized principles of equity and the stand-

ards of good conscience. (Citing cases.)

To the same effect holding the statute inapplicable
where the object is to protect the original jurisdiction
of the federal court, see Looney v. Eastern Texas R. Co.,
247 U. S. 214, 218, 38 S. Ct. 460, I. e. 402.

It is further contended that the ruling of the cir-
cuit court of appeals violates 36 Stat. 1163, 28 U. S. C.
A., Section 384, which provides for trial by jury. In
this, ye. believe petitioners are again in error. In the
caso Liberty Oil Company v. Condon National Bank,
U. S. 235, 242, 43 S. Ct. 118, this court in an opin-
on by Mr. Chief Justice Taft, after referrimy to the
Seventh Amendment to the Congtitution, preserving jury
trials in controversies exceeding $20.00, said, I. c. 121:

i ;

„Where an equitable defense is interposed to
a suit at law, the equitable issue raised should first
be. disposed of as iq a court of equity and then, if
an' issue at . it is triable to a jury.
Massie v. Stradford, 17 Ohio St. 596; Dodsworth v.

Hopple, 33 Ohio St. 16, 18; Taylor v. Brick Co., 66

Ohio St. 360, 366, 64 N. E. 428; Sutherland, Code Pl.

and Pr., Section 1157. The equitable défense makes
the issue equitable, and it is to be tried to the

judge as a chancellor. The right of trial by jury
is preserved exactly as it was at common law. The
same order is preserved as under the system of
separate courts. If a defendant at law had an

equitable defense, he resorted to a bill in equity to

enjoin the suit at law, until he could make his

equitable defense effective by a hearing before the
chancellor. The hearing on that bill was before the

chancellor, and not before a jury, and if the prayer

of the bill was granted, the injunction against the
suit at law was made perpetual, and no jury trial

ensued. If the injunction was denied, the suit at

law proceeded to verdict and judgment. This

was the practice in the courts of law and chancery

in England when. our Constitution and the Seventh

Amendment were adopted, and it is in “the light of

such practice that the Seventh Amehdment for. it is

construed. si

7

To the same effect see American Mills Company v.
American Suréty Co., 260 U. S. 360, 364, 43 S. Ct. 149,
151. Banker v. Ford Motor Company, 69 Fed. (2d) 665,
665 (U. S. C. C. A. 3rd).

(59

Petitioners contend complainant's bill in equity fails
to show reasonable grounds to apprehend that they will
bring two suits at law in the state courts on these two
policies and thereby harass and put respondent to ex-

| 40

pense. We first direct the court’s attention to respond-
ent’s petition (Tr. p. 3) where it is alleged that peti-
tioners procured the several policies involved as a part
of a general plan and scheme to defraud’this insurance

company and thereafter, in furtherance of the scheme,
| petitioners set fire to this property for the purpose of
collecting a large sum of money. Following that, the
petition alleges :

„That the said respondents have filed proof of

Ioss against all of said r a total.
loss, although said loss was not total, und that they

have threaténed to sue complainant upon the two
policies issued by complainant as hereinbefore set
forth, to recover the face amount of said policies. 0

These allegations must be taken as true. In the case
N of + State. of Kansas v. State of Colorado, 185 U. S. 125,
145, 22 S. cr 552, this court said, I. e. 559:

„The general rule is that the truth of material

and relevant matters set forth with requisite pre-
cision: are admitted by demurr er

*

— the case of Pennsylvania v. West Virginia, 262
v. S. 553, 593, 43 8. Ct. 658, 663, this court said:

„One does not have to await the consummation of
tendered injury to obtain preventative relief. If the
injury is certainly impending, that is enough.

We direct attention to the fact that under the stat-

ute (36 Stat. 1162, 28 U. 8. C. A., Section 379) which
petitioners eite at page 190 of their brief, the federal
court could not enjoin proceedings already pending in
the state court on these different policies. Petitioners

’ . 7

*

41

want to compel | respohdent to wait until petitioners
bring their suits in the state court and when it is too late

under the above statute for respondent to bring an action
in equity. As authority for our contention that. respond-
ent did not have to wait until such actions were instituted
in the state court and there was a legal certainty it would

be compelled to defend such actions, we direct attention

to the case of Swift & Co. v. United States, 276 U. 8.
311, 326, 48 S. Ct. 311, where the court said, I. c. 315:

( „The argument ignores the fact that a suit. for
an injunction deals priniarily, not with past viola-
tions but with threatened future ones; and that an
injunction may issue to prevent future. wrong, al-
though no right has yet been violated. Vicksburg
Waterworks Co. v. Vicksburg, 185 U. S. 65, 82, 22
S. Ct. 585, 46 L. Ed. 808; Pierce v. 1 of Sisters,
268 U. S. 510, 536, 45 S. Ct. 571, gum . 1070, 39
A. L. R. 468.“

See, also, Standard Oil * of New Meuico ¥.
Standard Oil Company of Cafpformia, 56 Fed. (2d) 973,
“ye (U. S. C. C. A. 10th),

In the éase of Vicksburg Water Works Company v.
Vicksburg, 185 Us. 65, 82, 22 S. Ct. 585, this court said,
I. e. 592: 0

„lt is further contended that the bill does 10
disclose any actual proceeding on the part of the
city to displace complainant’s rights under the cop-
tract, that mere apprehension that illegal action may
be taken by the city cannot be the basis of enjoining
such action, and that, therefore, the circuit court did
right in dismissing the bill. We cannot accede to
this contention. It is one often made in cases where

billa-in equity a are filed to prevent anticipated and

threatened action.. But it is one of the most valuable
features of equity jurisdiction, to anticipate and pre-
vent a threatened injury, where the damages would
be insufficient or irreparable. exercise of such
jurisdiction is for the benefit of both parties; in dis-
closing to the defendant that he is proceeding with- .
out warrant of law, and in protecting the complain-
ant from injuries which, if inflicted, would be wholl¥
destructive of his rights.“

Here the allegations show petitioners obtained these
two policies as part of a general plan and geheme to de-
fraud respondent apd other ¢nsurance companies; that,
thereafter, they caused the property to be set fire in
furtherance of such scheme; that, thereafter, they filed
proofs of loss with respondent and the other companies
claiming a total loss and demanding the full face value
of the policies. . The bill then alleges that petitioners are
threatening to institute actions at law in the state court

to recover. As pointed out this allegation should be |

taken as true here. Furthermore, the facts following this
conspiracy show there is danger of such action. To
bring the conspiracy to fruition it is necessary for peti-
tioners to collect. This can only be done by a suit since
respondent refuses to voluntarily submit to the payment
of its policies under the facts here. It cannot be seriously
contended that there is no danger ‘of more than
one suit being filed beeause under the, Missonri Code the
actions on these two policies have to be separately main-
tained since petitioners are not jointly interested in
both causes of action. Under the Missouri Code, actions
can be joined only where all parties are interested in
each arate cause of action or count there ——
(Sec. „R. S. Mo., 1929, supra.)

fe

— “

What is said with reference to an action for can-
Allation not being maintainable on matured notes, leases
and nonnegotiable instruments refers to the situation
where there is an adequate remedy. at law. If there is
only one instrument ivo and une suit threatened, the
remedy at law is adequate. Here, , there must
necessarily be tw * suits at law and tho Joe remédy is

not adequate as shown herein unger Paint #¥.

Where the requisite ount is involved and the
matter comes within the Sriginal equity jurisdiction of
the Federal District Court the jurisdiction of tha, court
may not be defeated by an actiom at law in the state
court. It may only be defeated "ye adequate rr

at law on the law side of the feder court.

The case of Cable v. Uniféd States Life Insurance.
Company, 191 U. S. 288, and cases AM that type are
clearly distinguishable. In thgt case, there existed an
adequate remedy at law on tle law side-ef the federal
court: The requisite amount was involved on the law
side to permit of removal of the cause to the law side
of that court. : : ; an

In the case at bar these two policies for 83,000.00
and $1,500.00, respectively, could not be joined at law by
respondent. There was, therefore, no way in which to
get respondent’s cause of action on the law side of the
federal court since there was no adequate remedy on tile
law side of the federal court and since the matter was
within the jurisdiction of the equity side of the federal

44

court, it follows that respondent was entitled to file its
‘suit directly in the equity side of the federal ‘court. The
circuit court of appeals in so holding followed numerous
decisions of this and other circuit courts of appeals.

In the case of City Bank Farmers Trust Company
v. Schnader, 291 U. 8.24, 29, 54 S. Ct. 259, this court
said, I. c. 261:

If the statutory remedy, if it be treated as an
action at law, would lie only in the state court and
is not cognizable by the federal-courts, either as an
original action or by removability, its existence can-
not oust federal jurisdiction. Smyth v. Ames, 169 U.
S. 466, 516, 18 S. Ct. 418, 42 L. Ed. 819; Chicago,
B. d O. R. R. Co. v. Osborne, 265 U. S. 14, 16, 44 8.
Ct. 431, 68 L. Ed. 878; Risty v. Chicago, R. I. 4 Pac.
Ny. Co. 270 U. S. 378, 388, 46 S. Ct. 236, 70 L. Ed.
641; Mathews v. Rodgers, supra, page 526 of 284 U.
8., 52 8. Ct. 217.”

In the case of Risty v. Chicago, R. I. & Pac. Ry. Com-
gang, 270 U. S. 378, 388, 46 8. Ct. 236, this court said, I.
C. 240: ö 9

„The remedy by appeal to the state court under
Section 8469 does not appear to be coextensive with.
the relief which equity may give.. In any event, it is
not one which may be availed of at law in the federal
courts, and the test of equity jurisdiction in a fed-
eral court is the inadequacy of the remedy on the law
side of chat court and not the inadequacy of the reme«:
affotded by the state courts. Smyth v. 1 18 S. Ct.
418, 169 U. S. 466, 42 L. Ed. 819; Chicago, B. & O. R.

>. = Co. v. Osborne, supra.

See, also, Smyth v. Ames, 169 U. S. 466, 18 S. Ct.
418, 69 Fed. (2d) 171, 176 (U. S. C. A. 8th) certiorari

45

denied, 292 U. 8. 632, 54 S. Ct. 641. American: Mutual
Liability Insurance Company y. McDonaugh, 61 Fed. (2d)
558, 563 (U. S. C. C. A. 7th) (certiorari denied 288 U. 8.
602), and numerous decisions of this and other courts
cited in the above cases. —

Respondents had no adequate remedy at law on the
law side of this court. There was no way in which they
could get this action into the law side of the federal
court. Suit could not be maintained at law on both pol-
icies in the state-court since not all the parties were in-
terested in béth actions. Petitioners had the right and
in conformity to the Missouri Code must file two suits
‘at law on these policies, neither of which would involve
the jurisdictional amount to permit removal to the law
side of the federal court. Since one suit in equity in the
federal court could be maintained on both policies as here-
tofore pointed out it follows the right to maintain such
suit cannot be defeated because of any supposed adequate
remedy at law in the state court. There is no adequate
remedy at law-in fact no remedy at law whatever on
the law side of the federal court. Hence, equity jurisdice-
tion here cannot be defeated on the ground of an adequate.
remedy at law as shown by the above authorities.

| | (d)

Petitioners cite 1 Stat. 82 (Section 267 of the Judicial
Code) 36 Stat. 1163, which provides that no suit in equity
may be maintained in the courts of the United States in
any case where ‘‘an adequate and complete remedy may be
had at law.’’ This section refers to an adequate remedy
at law in the federal court. In the case of Henrietta Mills

- 3

v. Rutherford County, 281 U. S. 121, 126, 50 S. Ct. 270,
this court in an opinion by Mr. Chief Justice Hughes re-
ferring to the section of the judiciary act with reference
to adequate remedy at law (281 U. S. 121, 123, 126, 50 S.
Ct. 270, 271) said, I. e. 272:

»The act of Congress with respect to the ex-
istence of such a remedy has reference to- the ade-
quacy of the remedy on the law side of the federal
courts (Smyth v. Ames, 169 U. S. 466, 516, 18 S. Ct.

418, 42 L. Ed. 819; Chicago, B. & O. Railroad Com-
pany v. Osborne, 265 U. S. 14, 16, 44 S. Ct. 431, 68
L. Ed. 878; Risty v. Chicago, R. I. & P. Railway
Company, 270 U. S. 378, 388, 46 S. Ct. 236, 70 L. Ed.
641) and in this case there would have been an
adequate remedy at law, not only in the state court,
but also in the federal court, if petitioners had been

able to show a violation of the Federal Constitution.
(Judicial Code, Section 24 (28 U. S. C. A., Section
41).) “ ; .

Furthermore, if it were material, it seems to us clear
enough that any remedy at law would not be ‘‘as certain,
complete, prompt and efficient to attain the ends of
justice as the remedy in equity.“ Keaton v. Little, 34
Fed. (2d) 396, 398 (U. S. C. C. A. 10th) see, also, Dawson.
v. Kentucky Distillers and Warehouse Company, 255 U.
S. 288, 296, 41 8. Ct. 272, 275 and Risty v. Chicago, R. J.
4 P. Ry. Co., 270 U. S. 378, 388, 46 S. Ct. 236, 240.
What is said by counsel for petitioners with reference
to nonremovable cases constituting a ground for federal
equity jurisdiction is extremely misleading. What this
court has held in the many cases cited by us under (c)

47

supra, is that where the matter is within the original
equity jufisdiction of a federal court and in equity the
jurisdictional amount is involved, then the federal equity
court clearly may take jurisdiction on the ground there
is no adequate remedy at law in the federal court. What
‘is said in the opinion of the circuit court of appeals here
‘and in the other cases cited has reference to a situation
where the matter is of equitable cognizance and the juris-
dictional amount is involved in equity.

The statute does not limit the jurisdiction of the
federal district court to cases where the jurisdictional
amount is involved both at law and i in equity. If the suit
is properly in equity as here and the jurisdictional
amount is involved in equity, as it is here, then the case
may not be thrown back into the state court merely
because the jurisdictional amount would not be involved
if complainant were attempting to maintain the action
at law. .

(e)

Petitioners urge that a bill for cancéllation of this
type should be added to the list of exceptions where
this court has declined jurisdiction on the ground there
were adequate femedies in the state law courts. An ex-

amination of those cases will show this case does not
conform to the type of cases grouped under the excep-
tions. The federal courts are very reluctant to inter-
tere with revenue acts of the state, rate enforcement
cases, state judgments, and habeas corpus proceedings,
where the state courts do have jurisdiction and have
exercised that jurisdiction. In other words, the federal

48

*

courts are en to interfere with the operation of
‘state governments. Bowley v. Chicago &é VN. W. Ry. Co.,
68 Fed. (2d) 527, 528 (certiorari denied), 54 S. Ct. 716.
They are not, however, reluctant. to protect their own
jurisdictions by injiinction or otherwise in cases like the
one at bar, which properly comes within the jurisdiction
of the federal court. Here the suit in equity in the federal
court was filed before any action was taken in the state
court. The matter was within the jurisdiction of the
federal court and as shown by the authorities (Point I)
the federal courts have not hesitated under such cireum-
stances to protect their own jurisdiction by appropriate
means. ‘There is no reason to add this case to the group
where the parties are relegated to their remedy in the
state court as this case has no characteristics in common

with the cases placed in such exception.

()

This ease does properly come within the equitable
jurisdiction of the federal court as heretofore pointed
out. (Point I.) We here desire to call attention to the
inconsistency of petitioners under Point E. Where it best
suits their purpose. they refer. to actions like ours as
„bills for cancellation,“ under this heading they refer to
it as a “bill quia timet.”” It is our contention ‘that
this action is a bill for cancellation and not a bill quia

timet although possibly having some of the character-

istics of such latter action. (See Point C(a).)

49
POINT C. :
The Circuit Court of Appeals Properly Held There Was

Equitable Jurisdiction for Cancellation Reinforced by
the Ability to Avoid a Threatened Multiplicity of Suits.

1 (a) 1

Petitioners seek to label this action a bill of peace
under this heading and charge that such an action
may not be maintained until respondent’s rights are
first established at law. At page 24 of their brief, the
page preceding the one to that where they contend this
is a bill of peace, petitioners classify this action as a
bill for cancellation and ask this court to catalogue bills
for cancellation under the exceptions to federal equitable
jurisdictions such as revenue enforcement’ cases, state
court judgments, etc. It is our position that this is
essentially a bill for cancellation with the incidental’
feature of an injunction supplementing the remedy by
cancellation.

As pointed out under (e) of Point C of this brief it
is apparent that petitioners cannot join both suits at law
but will have to maintain two law actions if they seek to
recover on both policies.

We contend this is not primarily a bill of peace and
that the rule requiring prior adjudication at law does
not apply to a case like this where the avoidance of.
multiplicity of suits is merely incidental and used only
to give protection after the court has decreed cancella-
tion.

Furthermore, even where the action is solely a bill
of peace and that is the only equity involved, the rule

50

requiring a prior adjudication has been greatly relaxed.

Petitioners cite 21 C. * Section 50, page 77. It is there
stated:

But relief has — been afforded with-
out awaiting a trial and judgment at law, partic-
ularly in the case of repeated prima facie trespasses,
waste or where a plaintiff’s title is admitted or not

converted. The rule has been’ said to be one of
expediency .an] policy rather than an essential condi-,

tion of equitable jurisdiction.’’

Here, if respondent had waited until there had been
an adjudication at law, it would have lost its right to
bring this bill in equity because 36 Statute 1162, 28 U. S.
C. A., Section 379, prohibits federal courts from enjoin-
ing proceedings already pending in state courts. This
situation should certainly come within the exception, even
if this were strictly a bill of peace, otherwise, respond-
ent’s right to equitable relief would be entirely destroyed.

(b)

Petitioner’s, contention there can be no multiplicity of
suits is entirely fallacious. It is at once apparent that
petitioners cannot join the two distinct claims. here in-
volved in one suit. Petitioner, Mary Di Giovanni, has no
interest in the suit to recover on the policy of insurance
on the personal property. Since not all the parties are
interested in the subject, matter of actions on the two
policies they cannot be joined in one suit even under
separate counts.

Sec. 765. Causes or Action Tnar May Be —
iv THE Petrtion.—The plaintiff may unite, in the
same petition several causes of action, whether they

—

A 51

be such as have been heretofore denominated legal

or equitable or both, where they all arise out of : First,

the same transaction or transactions connected with

the same subject of action; or, second, contract, ex-

press or implied; or, third, injuries, with or without

force, to person and property, or either; or, fourth,

injuries to character; or, fifth, claims to recover real

property, with or without damages for the withhold-

ing thereof, and the rents and profits of the same;

or, sixth, claims to recover personal property, with

or without damages, for the withholding thereof; or

seventh, claims by or against a party in some repre-
sentative or fiduciary capacity, by virtue of a contract,
, or by operation of law. But the causes of action so
united must all belong to one of these classes, and
must affect all the parties to the action, and not re-
quire different places of trial, and must be separately
stated, with the relief sought for each cause of action,
in such manner that they may be intelligibly dis-
tinguished. (R. S., 1919, Section 1221.) (Italics ours.)

*

There must, therefore, be two suits filed, if peti-
tioners seek to recover on both policies. It is suggested
that the defendant will have the same control over the
cases in the state court as the plaintiff. This is fallacious
on its face. The plaintiff has the right to institute these
actions. in any court having jurisdiction when it chooses
and in whatever order it chooses, In the regular course,

such actions are tried in the order in which plaintiff .
chooses to file them and the defendant has no choice in the
1 matter, but is at the merey of the plaintiff as to when,
wuhere and in what order the claims will be litigated.
aos It was also contended that if the suit on the building
policy in which both petitioners are involved were tried
‘ first, then the judgment in that suit would be res adjudi-
cata against Pete Di Giovanni. This statement is not en-

* oo

titled to be taken at face value. In the first place, peti-
tione? could file a motion for a new trial and subsequently
take an appeal in that case, thereby suspending said judg-
ment and preventing the same becoming a final judgment.
The defense of res adjudicata can be sustained only upon
proof of a final judgment.

5 In the case of Bodkin v. Edwards, 255 U. S. 221,
223, 41 Sup. Ct. Rep. 268, this court said, I. c. 268:

‘‘Bodkin then took a further appeal to, this
‘court, the decision of the circuit court of appeals
not being final under Section 128 of the Judicial
Code. (Comp. St. —

In the case of Merrion v. Saalfield, 36 Sup. Ct.
Rep. 477, 241 U. S. 22, this court declared the law as
follows, l. c. 28:

“But it is familiar law that only a final judg-
ment is res adjudicata as between the parties, and
it is evident that a decree-cannot be res adjudicata
as against a.third party participating in the de-
fense unless it is so far final as to be res adjudicata
against the defendant himself. Hence, if the. de-
cree of September 11th was not final as between ap-
pellant and Saalfield, it cannot be res adjudicata as
against Ogilvie; and thus the fundamental ground
for proceeding against the latter by supplemental
bill with substituted service of process disappears.
This sufficiently shows ‘the weakness of appellant’s
position, which, upon analysis, is found to be this:
that, upon the theory that Ogilvie would be es-
topped from a final decree if and when made, it
sought to bring him into the suit, before final de-
cree, as if he were already estopped. However
convenient this might be to a complainant in ap-
pellant’s position, it is inconsistent with elementary

principles.

53
As already stated, there is no certainty that the
building policy in which bo ‘petitioners, are interested
will be tried first. Petitiorlers have the sole power of

choice in this matter and can file the prop-
erty suit first and try the same first if they choose.

There is n of practice or procedure which enables
defen to govern the order in which the cases are
tried. urther, there is no rule of practice or pro-

cedure which entitles defendant to a hy in. the second
suit until the first suit can be a adjudicated and
the defense of res adjudicata_made available. The re-
sult, therefore, is that petitioners can force the defend-
ant to go to the trouble and expense of trying both
cases, even though defendant~isguccessful in the first.
If the cases are tried practically af the same time, peti-
tioners can also put the defendant to, the expense of an
appellate review of both cases, either as appellant or
appellee. Upon analysis, therefore, the defense of res
adjudicata is seen to be of no practical value in shield-
ing defendant from the necessity of * both
a actions.
. is further contended that it will be time —
to file.a bill in equity to prevent a multiplicity of suits
when it actually appears that there will be a multiplic-
ity. The fallacy of this argument is pointed out by
petitioners ‘themselves at pages 11 and 19 of their brief
where they cite 36 Stat. 1162, 28 U. S. C. A., Section
379, prohibiting federal courts from enjoining proceed- *
‘ings already pending in state courts. Petitioners would
compel us to delay this action until the statute pro-
hibits the district court from granting us the relief

~

54 om

sought. The mere statement of this proposition dem-
onstrates its unsoundness.

Under the law of Missouri, which governs here, as it
is probable the two actions at law will be instituted in that
state, defendant cannot avoid defending two suits at
law on these two policies unless petitioners choose to
maintain only one action at a time. The very purpose
of the equitable remedy is. to save a defendant from
this predicament.

(e)

Petitioners contend that if Pete Di Giovanni's suit
on the personal property policy is tried first and de-
feated, it will prevent the maintaining of a suit on the
real property policy by husband and wife as tenants
hy the entirety. In the first place, Pete Di Giovanni ‘can
file a motion for a new trial and appeal his case, thereby
suspending said judgment and preventing it becoming
a final judgment available as a defense under pleas
of res adjudicata until after defendant had been com-
pelled to’ stand trial in the second case on the real
property policy. Furthermore, the defense of res
adjudicata as to Pete. Di Giovanni would not be avail-
able against either him or his wife in an action main-
tained by them as tenants by the entirety. The case of
. Stifel’s Union Brewing Company v. Cary, 273 Mo. 159,
201 S. W. 67, declares the law of Missouri to be that
property held by the entirety is not subject to the debts
of either tenant by the entirety. This demoristrates the
separate nature of the titles of persons holding by the

entirety. As the interest of the wife in such case is
*

5S

not affected by a judgment against her husband then
it follows she would not be barred of her rights be-
cause a defense of res adjudicata would be good against

her husband alone. It is the law of Missouri that where
persons have a joint estate or joint interest in property,
a defense good as against one of them only is not avail-
able in a suit brought by them jointly. ‘n the case of
Herrell v. St. Louis-San Francisco Ry. Co., 324 Mo. 38,
23 S. W. (2d) 102, the Supreme Court of Missouri in
bané held the defense of contributory negligence ©
the father was not available in action brought by the
mother and father jointly for the death af their minor
son. The case of Fulbright v. Phoenix Insurance Com-
pany, 329 Mo. 207, 44 S. W. (2d) 115, simply holds
that a husband who obtains insurance representing him-
self as the owner in fee of the real estate insured has
misrepresented the title he cannot recover in a suit main-
tained by him alone where it appears he holds title with
his wife by the entiréty.

POINT. D.

The Bill Alleged the Face Value of the Two Policies
Was $3,000.00 and $1,500.00 Respectively. The Bill
Alleged Petitioners Were Claiming a Total Loss and
Demanding the Pull Face Value of the Policies. The
Jurisdictional Amount Was, Therefore,

Pétitioners seek to get before this court, by their
motion to complete the record, the provision of the real
estate insurance policy for $3,000.00 involved here to the
effect that liability under, that policy would be propor-
tionate to the total amount of insurance carried. As we

— — —

1

\

56

have already pointed out, no attempt was made to get
this provision in the record until after the opinian of
the circuit court of appeals was rendered against peti-
tioners. We believe the point was not properly Pre-

served and will not be considered by this court but even

it that provision were before this court there is no merit
in petitioners’ contention.

Respondent alleges petitioners are claiming a total
loss and are demanding the full face of the policy. These
allegations should be accepted as true as petitioners ad-
mit. Grand Chute v. Winmnegar, 15 Wall. (U. S.) 373,
376, 21 L. Ed. 174, cited by petitioners. (Br. p. 28.)

The fact that on a trial respondent might be able to
convince the jury that the property was not worth more
than $6,000.00 and might successfully maintain its de-
fense that it was only liable for a proportionate part
of the loss depending on the proportion of its coverage
to the total coverage does not eliminate the fact that the
amount in dispute is the full face of the policies or

$4,500.00. The possibility respondent might establish the
defenses mentioned does not. cut down the amount in-
volved. Respondent may not be forced out of the fed-
eral court on the theory less than the jurisdictional

amount is involved as long as it is exposed to the danger

. of a judgment greater than the jurisdictional amount un-
J less it is successful in maintaining defenses cutting the

amount down. In the case of Schunk v. Moline, Milburn
4 Stoddard Company, 13 S. Ct. 416, 147 U. S. 500, 504,
this court said:

* '

57 5

„Although there might be a perfect defense to

the suit for at least the amount not yet due, yet the
fact of a defense, and a good defense, too, would not
affect the question as to what was the amount in
dispute. Suppose an action were brought on a non-
negotiable note for $2,500.00, the consideration for
which was fully stated in the petition, and which was
a sale of lottery tickets, or any other matter dis-
tinctly prohibited by statute, can there be a doubt
that the circuit court would have jurisdiction? There
would be presented a claim to recover the $2,500.00;
and, whether that claim was sustainable or not, that
would be the real sum in dispute. In short, the fact
of a valid defense to a cause,of action, although
apparent on the face of the petition, does not dimin-
ish the amount that is claimed, nor determine what
is the matter in dispute; for who can say in advafice
that that defense will be presented by the defend-

ant, or, if presented, sustained by the court?’’

Furthermore, respondent alleges in its bill that the
face of the policies aggregated amounts to. $4,500.00,
that petitioners claim a total loss and are demanding the
full face value of the policies. (Tr. pp. 1-4.) The peti-
tion charges there is involved the sum of $4,500.00. This
court has repeatedly ruled as petitioners admit [(Peti-
tioners’ Brief pp. 30 and 31) that the amount claimed is
the amount in dispute unless it conclusively appears
from the face of the pleadings that a less amount is
involved.

In the case of Barry v. Edmunds, 6 Sup. Ct. Rep.
501, 116 U. S. 550, where this court said, I. c. 559:

„The order of the circuit court dismissing the
cause on this ground is reviewable by this court on
writ of error by the express words of the act. In
making such an order, therefore, the cirenit court

58 af ” —

exereises a legal and not a personal discretion, which
must be exerted in view of the facts sufficiently
proven, and controlled by fixed rules of law. It
might happen that the judge, on the trial or hearing

| of a cause, would receive impressions amounting to

a moral certainty that it does not really and sub-
stantially involve a dispute or controversy within
the jurisdiction of the court. But upon such a per-
sonal conviction, however strong, he would not be at
liberty to act, unless the facts on which the persua-
sion is based, when made distinctly to appear on the
record, create a legal certainty of the conclusion _
based on them. Nothing less than this is meant by
the statute when it provides that the failure of its
jurisdiction on this account ‘shall appear * the .
satisfaction of said circuit court.’ ’’

Furthermore, when the bill alleges on its face the
: jurisdictional ‘amount is involved the burden is on the
defendant to prove less than the jurisdictional amount
is involved. See Healy v. Ratta, 292 U. S. 263, 271, 54
S. Ct. 700, 704, Hunt v. New York Cotton Exchange, 205
U. S. 322, 333, 27 S. Ct. 529, 532. a

In the case of Wetmore v. Rymer, 18 Sup. Ct. Rep.
295, 169 U. S. 115, this court stated the law as follows,
I. e. 128:

„Applying the law as heretofore stated by this
court, in the cases cited, that a suit canhot be prop-
erly dismissed by a circuit court as not substantially
involving a controversy within its jurisdiction, unless
the facts, when made to appear on the record, create
a legal ceftainty of that conclusion, we conclude that,
in the present case, the want of jurisdiction was not
made clear, and that the evidence before that court
did not warrant the dismissal of the action for the
want of jurisdiction. .

*

59

4

The judgment of the circuit court dismissing the
action is accordingly reversed, and the cause is re-
manded with directions to restore the judgment on
the verdict.’’ :

In the case of Put-in-Bay F. L. & R. Co. v. Ryan,
181 U. S. 409, 431, 21 S. Ct. 709, this court said, I. c. 717:

{ „And it has been several times decided by this

court that a suit cannot properly be dismissed by a
circuit court as not involving a controversy of an
amount sufficient to come within its jurisdiction, un-
less the facts, when made to appear on the record,
create a legal certainty of that conclusion. Barry
v. Edmunds, 116 U. S. 550, 29 L. Ed. 729, 6 Sup. Ct.
Rep. 501; Wetmore v. Rymer, 169 U. 8. 115, 42 L.
Ed. 682, 18 Sup. Ct. Rep. 293.“ a

In the * of Beecher v. Pan-American Life Insur-
ance Company, 73 Fed. (2d) 263, the Circuit Court of
Appeals for the 5th Circuit said, I. e. 264:

„The court is not chargeable with error in
refusing to dismiss the suit as not involving a con-
troversy of an amount sufficient to come within its
jurisdiction, unless the facts, when made to appear
on the record, create a legal certainty. of that con-
clusion. Put-in-Bay Waterworks, etc., Co. v. Ryan,
181 U. S. 409, 431, 21 S. Ct. 709, 45 L. Ed. 927;
Wetmore v. Rymer, 169 U. S. 115, 122, 128, 18 8. Ct.
293, 42 L. Ed. 682. "4

Under the ruling of the above cases it seems ap-

parent petitioner’s contention is without merit. We

submit that it does not appear to a legal certainty on

this record that an amount less than the 83 —
amount is herein involved.

60

ö rolex R.

The Circuit Court of Appeals Properly Held the Two
Claims Arising under the Two Policies of Insurance
Could Be Tied Together for the Purpose of Ascertaining
the Amount Involved for Jurisdictional Purposes.

(a and b)

The issues under this heading have been discussed by
us under Point III, a and b, to which we refer this court.

For all the reasons suggested herein, we respectfully
submit that the opinion and decision of the circuit court
of appeals in this case was right and should be affirmed
by this court. / |

Respectfully submitted,
Fenton Hume,
Attorney for. Respondent.

Watrer A. Raymonp,
Hume & Raymonn,

Of Counsel.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0254%3A5. Public record. Not legal advice.