92

26

Opinion of the Court.

part of the proceedings in bankruptcy but concern controversies arising out of it. Taylor v. Voss, 271 U. S. 176, 182. They may be brought in the state courts as well as in the bankruptcy courts. Collett v. Adams, 249 U. S. 545, 549. The question whether remedy must be by action at law or may be pursued in equity notwithstanding objection by defendant depends upon the facts stated in the bill. And, in absence of a clear showing that a court of law lacks capacity to give the relief which the allegations show plaintiff entitled to have, a suit in equity cannot be maintained. Boyce's Executors v. Grundy, 3 Pet. 210, 215. Buzard v. Houston, 119 U. S. 347, 352. United States v. Bitter Root Co., 200 U. S. 451, 472. The facts here alleged give no support to plaintiff's assertion that it has no adequate remedy at law. The preferences sued for were money payments of ascertained and definite amounts. The bill discloses no facts that call for an accounting or other equitable relief. It is clear that there may be had at law "a remedy as practical and as efficient. to the ends of justice and its prompt administration, as the remedy in equity." Boyce's Executors v. Grundy, ubi supra. The contention that § 267 prohibits the maintenance of this suit in equity is sustained in principle by numerous decisions of this court. And upon the very question here presented the weight of judicial opinion in the lower federal courts and in the state courts is that suits such as this cannot be sustained in equity.

3

4

'Hipp v. Babin, 19 How. 271, 279. Parker v. Winnipiseogee Lake Co., 2 Black 545, 550 et seq. Kennedy v. Gibson, 8 Wall. 498, 505. Insurance Co. v. Bailey, 13 Wall. 616, 620-621. Grand Chute v. Winegar, 15 Wall. 373, 376. Lewis v. Cocks, 23 Wall. 466, 469. New York Guaranty Co. v. Memphis Water Co., 107 U. S. 205, 214. Buzard v. Houston, 119 U. S. 347, 352–353. Whitehead v. Shattuck, 138 U. S. 146, 150-151. United States v. Bitter Root Co., 200 U. S. 451, 472.

'Warmath v. O'Daniel (C. C. A.-6, 1908) v. Nemcof (E. D. Pa., 1910) 183 Fed. 656.

159 Fed. 87, 90. Sessler Grant v. National Bank

Plaintiff insists that defendants waived their right to have the suit transferred to the law side.

Rule 22 declares: "If at any time it appear that a suit commenced in equity should have been brought as an action on the law side of the court, it shall be forthwith transferred to the law side and be there proceeded with, with only such alteration in the pleadings as shall be essential." As plaintiff's bill shows that it had a plain, adequate and complete remedy at law, defendants were entitled upon proper application to have the suit transferred and trial by jury. Undoubtedly they might have waived that right. Reynes v. Dumont, 130 U. S. 354, 395. American Mills Co. v. American Surety Co., 260 U. S. 360, 363. But the record discloses no act or omission of theirs at all inconsistent with their denial by answer of the assertion in the bill that plaintiff had no remedy at law or to suggest that they were willing that the case should be

of Auburn (N. D. N. Y., 1912) 197 Fed. 581, 590. First State Bank v. Spencer (C. C. A.-8, 1915) 219 Fed. 503. Simpson v. Western Hardware & Metal Co. (W. D. Wash., 1915) 227 Fed. 304, 313. Edwards Co. v. La Dow (C. C. A.-6, 1916) 230 Fed. 378, 381. Turner v. Schaeffer (C. C. A.-6, 1918) 249 Fed. 654. Rosenthal v. Heller (M. D. Pa., 1920) 266 Fed. 563. Morris v. Neumann (C. C. A.–8, 1923) 293 Fed. 974, 978. Adams v. Jones (C. C. A.-5, 1926) 11 F. (2d) 759, certiorari denied, 271 U. S. 685. Lewinson v. Hobart Trust Co. (N. J., 1931) 49 F. (2d) 356. Gelinas v. Buffum (C. C. A.-9, 1931) 52 F. (2d) 598.

Contra: Pond v. New York National Exch. Bank (S. D. N. Y., 1903) 124 Fed. 992. Off v. Hakes (C. C. A.-7, 1905) 142 Fed. 364, 366. In re Plant (S. D. Ga., 1906) 148 Fed. 37. Parker v. Black (C. C. A.-2, 1907) 151 Fed. 18. Parker v. Sherman (C. C. A.-2, 1914) 212 Fed. 917, 918. Reed v. Guaranty Security Corp. (Mass., 1925) 291 Fed. 580.

4

McCormick v. Page (1901) 96 Ill. App. 447. Detroit Trust Co. v. Old National Bank (1908) 155 Mich. 61, 64; 118 N. W. 729. Boonville National Bank v. Blakey (1906) 166 Ind. 427, 442; 76 N. E. 529. Irons v. Bias (1920) 85 W. Va. 493; 102 S. E. 126. People's Bank v. McAleer (1920) 204 Ala. 101, 103; 85 So. 413.

tried in equity. Their application was noticed to be heard about a week before the case was reached for trial. It is not shown that they delayed the hearing of the motion. Presumably the matter was referred to the judge sitting in equity to serve the convenience of the court. The rule directs the transfer if "at any time" it shall appear that the suit should have been brought as an action at law. An application for transfer brought on for hearing before the commencement of the trial is not too late. Parkerson v. Borst, 251 Fed. 242, 245. Plaintiff's claim that defendants waived their right under the rule is without merit.

Reversed.

WASHINGTON FIDELITY NATIONAL INSURANCE CO. v. BURTON.

CERTIORARI TO THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA.

No. 22. Argued October 20, 1932.-Decided November 7, 1932.

Section 657 of the Code of the District of Columbia, as amended, provides that each life insurance company doing business in the District shall deliver with each policy issued by it a copy of the application made by the insured, so that the whole contract may appear in the said application and policy, "in default of which no defense shall be allowed to such policy on account of anything contained in, or omitted from, such application." Held: That where the policy declared that it constituted the entire agreement, the fact that no application was delivered with it did not preclude a defense based upon a provision of the policy avoiding it if the insured was not in sound health at the time of issue. P. 100. 56 F. (2d) 300, reversed.

CERTIORARI, 286 U. S. 536, to review the affirmance of a judgment in an action on a life insurance policy.

Mr. Gilbert L. Hall, with whom Messrs. Walter C. Clephane and J. Wilmer Latimer were on the brief, for petitioner.

170111-33- -7

Opinion of the Court.

287 U.S.

Mr. W. Gwynn Gardiner, with whom Mr. George A. Maddox was on the brief, for respondent.

Messrs. Benjamin S. Minor, H. Prescott Gatley, and Arthur P. Drury, by leave of Court, filed a brief as amici curiae.

MR. JUSTICE BUTLER delivered the opinion of the Court.

Respondent sued in the municipal court of the District of Columbia to recover the amount of an insurance policy issued by petitioner December 12, 1927, on the life of her husband, who died May 22, 1929. The policy was delivered to the insured and all premiums were paid in the District of Columbia where he lived. Adequate proof of death, plaintiff's demand for payment and defendant's refusal to pay were conceded. The policy contained these provisions: "This Policy constitutes the entire agreement between the Company and the Insured and the holder and owner hereof. . . . If the Insured . . . is not in sound health on the date hereof . . . the Company may declare this Policy void . . ." Section 657 of the District Code (Act of March 3, 1901, 31 Stat. 1294, as amended by Act of June 30, 1902, 32 Stat. 534) provides: "Each life insurance company, benefit order and association doing a life insurance business in the District of Columbia shall deliver with each policy issued by it a copy of the application made by the insured so that the whole contract may appear in said application and policy, in default of which no defense shall be allowed to such policy on account of anything contained in, or omitted from, such application." The company did not deliver with the policy or otherwise a copy of an application therefor. Indeed, there was no evidence that any had been made. Defendant offered evidence to show that, at the date of the issue of the policy, the insured was not in sound health. Plaintiff objected on the ground that no copy of the application

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Opinion of the Court.

was delivered with the policy. The court, relying on the statute, sustained the objection and refused to permit defendant to interpose that defense and gave judgment for plaintiff. The Court of Appeals affirmed. 56 F. (2d) 300.

The sole question is whether § 657 was rightly construed.

The Court of Appeals assumed as a matter of common knowledge that life insurance polices are issued on written applications and that in this case one had been made by the insured. Without deciding whether that assumption is warranted, we shall consider the case as if it were shown that the assured applied in writing for the insurance in question. In the absence of a statute forbidding it, contracts of insurance may be made orally. Relief Fire Ins. Co. v. Shaw, 94 U. S. 574. There is no such prohibition in the District of Columbia. In § 657 the word "policy" and the phrase "a copy of the application" plainly indicate that writings are meant (Trustees of the First Baptist Church v. Brooklyn Fire Ins. Co., 19 N. Y. 305, 308), and that the statute does not extend to oral applications. The construction generally put upon enactments like the one before us indicates that the principal if not the only purpose is that, if there be an application, a copy of it shall be attached to or otherwise delivered with the policy so that the documents showing the entire agreement shall be made available to the insured.* That serves to guard the insured against misunderstanding as to his contract and, in case of controversy with the company, to protect him against sur

*MacKinnon & Co. v. Mut. Fire Ins. Co., 89 Ia. 170; 56 N. W. 423. Rauen v. Insurance Co., 129 Ia. 725; 106 N. W. 198. Kirkpatrick v. Accident Co., 139 Ia. 370; 115 N. W. 1107. Lenox v. Insurance Co., 165 Pa. 575; 30 Atl. 940. Washington Fire Relief Assn. v. Albro, 130 Wash. 114; 226 Pac. 264. Metropolitan L. Ins. Co. v. Scott, 160 Miss. 537; 134 So. 159.