Friday, December 6, 2013

American Life Insurance Co. v. Stewart case brief

American Life Insurance Co. v. Stewart case brief summary
300 U.S. 203 (1937)


CASE SYNOPSIS
Petitioner sought certiorari review of a judgment from the Circuit Court of Appeals for the Tenth Circuit, which reversed a decree for the cancellation and surrender of life insurance policies issued by petitioner insurer on the ground that petitioner had an adequate remedy at law against respondent beneficiaries.

CASE FACTS
After decedent insured's death, petitioner insurer brought an action for cancellation of life insurance policies on the ground of fraud in their procurement. Respondent beneficiaries moved to dismiss the bill for want of equity and brought an action at law to recover the insurance proceeds. Upon the trial of the suit in equity, the district court found there were fraudulent representations and decreed cancellation and surrender of the policies, the judgment of which the appellate court reversed after concluding that petitioner's bill in equity should have been dismissed because it had an adequate remedy at law.

DISCUSSION

  • On certiorari review, the United States Supreme Court held that the suit in equity did not have to be dismissed when respondents sued to recover on the policies at law. 
  • Although petitioner could have contested the policy as a defense to the action at law, petitioner had no remedy at law except at the pleasure of respondents.

CONCLUSION
The Supreme Court reversed the judgment that dismissed petitioner insurer's bill in equity where the bill in equity did not have to be dismissed when respondent beneficiaries brought an action at law to recover insurance proceeds, because petitioner had no remedy at law except upon the will of respondents. The Court remanded the action for a consideration of the merits.

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