US SUPREME COURT DECISIONS

A fire insurance company sued two defendants in the federal district court for the cancellation of two policies, one issued to both defendants, insuring a building, the other issued to one of them insuring personal property in the building. The bill alleged that defendants procured the policies by misrepresentations; caused the property to be over-insured by the plaintiff and other insurers, and then caused it to be destroyed by fire, all in execution of a chanrobles.com-red

Page 296 U. S. 65

conspiracy. It alleged also that defendants were about to begin actions at law against plaintiff to recover the amounts of the policies, but did not show that, by agreement or by local law and procedure both actions could not be disposed of by a single trial in a state court. It was conceded that no action at law could be maintained on either or both of the policies in the federal court, because each was for less than the jurisdictional amount.

Held:

1. The alleged fraud and destruction of property are available as defenses to actions at law upon the policies. P. 296 U. S. 68.

2. The bill cannot stand as a bill quia timet, there being no danger that the defense at law may be lost or prejudiced. P. 296 U. S. 68.

3. Whether a suitor is entitled to equitable relief in the federal courts, other jurisdictional requirements being satisfied, is strictly not a question of jurisdiction in the sense of the power of a federal court to act. It is a question only of the merits; whether the case is one for the peculiar type of relief which a court of equity is competent to give. P. 296 U. S. 69.

4. If a plaintiff is entitled to be heard in the federal courts, he may resort to equity when the remedy at law there is inadequate, regardless of the adequacy of the legal remedy which the state courts may afford. P. 296 U. S. 69.

5. Want of the jurisdictional amount in controversy, which deprives a federal court of its authority to act at law, is not ground for invoking its equity powers. P. 296 U. S. 69.

6. Avoidance of the burden of numerous suits at law between the same or different parties, where the issues are substantially the same, is a recognized ground for equitable relief in the federal courts, but this remedy rests in sound discretion, and a theoretical inadequacy of legal remedy may be outweighed by other considerations. P. 296 U. S. 70.

7. Equity not infrequently withholds relief which it is accustomed to give where it would be burdensome to the defendant and of little advantage to the plaintiff. P. 296 U. S. 71.

8. The grounds for equitable relief to a single plaintiff which will deprive two or more defendants of their right to a jury trial must be real and substantial, and its necessity must affirmatively appear. P. 296 U. S. 72.

9. The policy of Congress to leave original jurisdiction over cases involving less than the jurisdictional amount exclusively to the state courts should be recognized by the federal courts in cases within their discretionary powers. P. 296 U. S. 73. chanrobles.com-red

Page 296 U. S. 66

10. The threatened injury to the plaintiff of having to defend two suits at law in this case is of too slight moment to justify an exercise of its discretion by the federal court, granting an equitable remedy which would entail denial of a jury trial to the defendants and withdraw from the jurisdiction of the state courts suits which could not otherwise be brought into the federal court. P. 296 U. S. 74.

75 F.2d 808 reversed.

Certiorari, 295 U.S. 728, to review the reversal of a decree of the District Court dismissing a bill to cancel policies of fire insurance.