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Law School Case Brief

Am. Life Ins. Co. v. Stewart - 300 U.S. 203, 57 S. Ct. 377 (1937)

Rule:

A remedy at law is not adequate if its adequacy depends upon the will of the opposing party.

Facts:

After decedent insured's death, American Life Insurance Co. (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 the Insurer's bill in equity should have been dismissed because it had an adequate remedy at law.

Issue:

Did the appellate court err in concluding that the Insurer's bill in equity should have been dismissed because it had an adequate remedy at law?

Answer:

Yes

Conclusion:

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

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