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into the circuit court for his use, the tax | the payment of the amount due, with interwhich was its true share of the public bur- est at the lawful rate, must be made, and den, the decree of the circuit court enjoining then the sale would be perpetually enjoined. the collection of the remainder is affirmed." In German Nat. Bank v. Kimball, 103 U. S. 732, 26 L. ed. 469, the general rule was held to be that the owner of taxable property seeking to enjoin the collection of a tax thereon, which he alleges to be in excess of what is lawful, must first pay or tender so much thereof as is justly due. Mr. Justice Miller, speaking for the court, said:

"The bill attempts to evade this rule by alleging that the tax is wholly void, and therefore none of it ought to be paid, and that by reason of the absence of all uniformity of values it is impossible for any person to compute or ascertain what the stockholders of the complainant bank ought to pay on the shares of the bank."

The State Railroad Tax Cases, 92 U. S. 575, 23 L. ed. 663, were then referred to by the court, and quotations therefrom made, and the principles therein announced were held to be sufficient to decide the case at bar, thus holding that the mere fact that a tax was void for some particular reason was not ground for the*interposition of a court of equity by injunction, where it could be seen there was an equitable obligation due from the taxpayer to pay a certain conceded amount, or an amount which could easily be ascertained, and which had not been paid.

These cases in this court are sufficient to show the propriety of the rule, and that it has been followed by us whenever the opportunity arose.

The same principle has been, however, decided by many of the state courts. In Smith v. Humphrey, 20 Mich. 398, 409, Mr. Justice Cooley, delivering the opinion of the court, Baid:

In Merrill v. Humphrey, 24 Mich. 170, it was held that a property owner seeking to enjoin the collection of a tax on the ground that the amount is excessive should show by his bill, as near as may be practicable, what amount is just and what is excessive, and he should pay to the proper officer the amount which he concedes to be properly "chargeable against himself. Mr. Justice Cooley, delivering the opinion of the court in that case, said (p. 175):

"We have already said that the complainant should be required to do equity as a condition of relief. What is just to the public cannot be done unless he pays within due time such proportion of the tax assessed upon him as he concedes to be fair; and we think this payment should be required by the injunction master to be made to the proper officer as a condition to the allowance of injunction. To this extent the case is within the principle of Conway v. Waverly Twp. Board, 15 Mich. 257, and Palmer v. Napoleon Tup. 16 Mich. 176, heretofore de cided by us, and of several Wisconsin cases," etc.

In Steuart v. Meyer, 54 Md. 454, where it appeared that the sale of certain property in the city of Baltimore for the nonpayment of taxes was illegal in not complying with the statute, it was held (p. 468) that the complainant, as a condition of obtaining a decree setting aside the sale, must pay to the party entitled to receive it the full amount of the taxes in arrear at the time of the sale by the collector, together with the interest accrued thereon to the time of the payment, and also all taxes that had subsequently ac crued due on the property, with interest.

In Alexander v. Merrick, 121 Ill. 606, 13 N. E. 190, it was held that, in accordance with the principle that a party seeking equity must do equity, a court of equity in setting aside a void tax sale as a cloud upon title would still require the complainant to refund the taxes paid by the holders of the

"He who comes into equity for relief must be willing to do equity; and there can be no ground upon which, in enjoining an excessive claim, the complainant can be discharged from that which is justly due. Story, Eq. Jur. § 64e, § 707; 1 Spence, Eq. Jur. 422. This is the rule even as between individuals; and there is at least equal rea-certificates of purchase on their purchase, son for applying it in behalf of the state when it is seeking to collect its revenues. We have had occasion to apply it heretofore in suits to enjoin taxes. Conway v. Waverly Twp. Board, 15 Mich. 257; Palmer v. Napoleon Tup. 16 Mich. 176. See also Hersey v. Milwaukee County, 16 Wis. 185, 82 Am. Dec. 713; Bond v. Kenosha, 17 Wis. 288.

This Michigan case was one on appeal from an absolute decree perpetually enjoining a sale for unpaid taxes because of a demand of interest by the proper authorities at a rate not allowed by law. The court held that it could not be sustained, and that

and also succeeding taxes to protect their purchase. In this case it was conceded that the tax sales were illegal and void, and that any deed issued by the county clerk, based upon such sales, would also be unlawful and void, but nevertheless would, on their face, appear to be valid official acts of the clerk, and would cause a cloud upon the title to the lands. At page 614 (N. E. p. 193), the court said:

"The complainant claims that the certifi cates of sale were clouds upon his title, and obstacles in the way of its beneficial enjoy. ment. IIe asks a court of equity to dissipate

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these clouds and remove these obstacles. He stated on the ground we have discussed, it who asks equity must do equity. The court below, by its decree, should have required the complainant to refund the taxes paid by Reed and Forsythe as a condition to granting the relief prayed for. That such a requirement is proper in cases of this kind has been repeatedly held by this court."

In Morrison v. Hershire, 32 Iowa, 271, 277, an assessment for local improvements, the court refused to interfere even if the assessments were, as to one of the fronts on the street, unauthorized, unless the party complainant paid or tendered the portion legally due. The court said:

"An elementry principle of equity is applicable to the objections here presented. It is not denied that under the rule of assessment as fixed by the council, if applied as contended for by plaintiffs, certain sums are due from the lot owners which are charges upon their lots. These sums the respective plaintiff's are bound by law and in equity to pay. Before plaintiffs can claim relief as to the sums which they insist are over-assessed upon their property, they must pay or offer to pay the sums lawfully and justly due according to their own theory of the assessment; for he who seeks equity must do equity; but this plaintiffs have not done." And on page 278:

"We understand that it is a settled rule in equity that where a party is in conscience bound to pay a certain sum of money which, together with an amount that he is not legally bound to pay, is brought as a legal claim against him, equity will not restrain the collection of the whole, unless he pay or offer to pay, by tender, the sum which he justly and legally owes."

The rule requiring payment of the sum equitably due cannot be too rigorously enforced in cases regarding payment of taxes. This rule does not assume the validity of the assessment for that sum, but it simply says that under the circumstances the taxpayer shall have no right to come into court and enjoin the payment of any tax when the amount which, equitably, he ought to pay is

easily and certainly determinable from the

conceded facts in the case.

is not to be inferred that we regard the other grounds untenable. We intimate no opinion in regard to them. To the end that complainant may, if it so elect, pay as provided in this opinion, and then commence further proceedings, the dismissal of the bill will be without prejudice, and as thus modified the decree of the Circuit Court is affirmed.

1.

2.

3.

Lack of an adequate remedy at law in the same jurisdiction cannot successfully be urged to sustain the equitable jurisdiction of a Federal court of a sult to cancel an insurance pol icy for fraud, when the insurance company, because of diversity of citizenship, might have removed the action brought on such policy in a state court to a Federal court, where the fraud could have been set up as a defense, although by exercising this right of removal the company might have subjected itself to a revocation of its license to do business in the state, or, at least, to litigation to prevent the state authorities from revoking it.

Equitable jurisdiction of a suit to cancel an insurance policy for fraud which the insurance company could set up as a defense to an action on the policy cannot be founded on the theory that the company would not have the same control of the case as a defendant that it would have as plaintiff.

The fact that the law is more favorable to insurance companies as administered in the Federal than in the state courts furnishes no reason for the assumption by a Federal court of equitable jurisdiction over a suit by an insurance company to cancel a policy for fraud, although diversity of citizenship exists. [No. 28.]

Argued October 16, 19, 1903. Decided No

ON WRIT

vember 30, 1903.

of Certiorari to the United States Circuit Court of Appeals for the In the case at bar because certain deduc- Seventh Circuit to review a judgment which tions were not made, although there was a affirmed a judgment of the Circuit Court for large sum assessable even if the deductions the Northern District of Illinois decreeing were allowed, the injunction granted has the cancelation of a policy of insurance for prevented the collection of any part of the the fraud of the agents of the insured. Reassessments, and for twelve years the stock-versed and remanded, with directions to disholders in these Lynchburg banks have paid miss the bill without prejudice. not one dollar of taxes by reason of their ownership of such shares. This is inequitable and unjust, and a court of equity should not be made the instrument by which such injustice is continued.

Although we reach the conclusion above

See same case below, 49 C. C. A. 216, 111 Fed. 19.

Statement by Mr. Justice Peckham: *This case comes here upon certiorari, ap

2. See Cancellation of Instruments, vol. 8, Cent. Dig. § 13.

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cisions of the Federal courts; and that under the facts and circumstances herein before set forth in this bill, your orator is without a due and proper remedy at law in respect to the claim of said administratrix under said policy of insurance, but is without any remedy at law whatever in this court."

To this bill the defendant interposed a demurrer, among other things, for want of equity, and that demurrer was sustained by the circuit court, but upon appeal to the circuit court of appeals for the seventh circuit the decree sustaining the demurrer was overruled, and the case remanded to the circuit court. 39 C. C. A. 264, 98 Fed. 761.

plied for by the petitioner, who was the ad- | panies; that your orator is entitled to an ministratrix of the estate of Herman D. application of the law according to the deCable, deceased. 186 U. S. 482, 47 L. ed. 1185, 23 Sup. Ct. Rep. 855. The suit was brought in the circuit court of the United States for the northern district of Illinois by complainant, the United States Life Insurance Company, of the city of New York and a citizen of that state, against Alice A. Cable, a citizen of the state of Illinois, to have a certain policy of insurance for $50,000, payable as therein stated, upon the life of the said Herman D. Cable, delivered up for cancelation, on the ground that the same had been procured by the fraud of the agents of the deceased. The bill averred that the complainant was an insurance company of New York, lawfully engaged in doing business throughout the United States, and particularly in Illinois, under a permit or li- | cense duly granted therefor; that it had issued its policy upon the life of Herman D. Cable, and that it was procured by the fraud and fraudulent representations of his agents, such fraud and fraudulent representations being set forth at length; also that defendant had commenced a suit in the state court of Illinois to recover upon the policy, which suit was instituted about one and a half hours prior to the filing of complainant's original bill. A supplemental and amended bill was filed, in which, among other things, it was alleged:

An answer was then put in by the administratrix of Cable's estate, denying any* fraud, and averring that she had, before the suit in the Federal court was commenced, herself commenced an action upon the policy in a proper state court of Illinois, and that it was her intention and desire to push such action to a speedy conclusion if permitted by the Federal court.

The suit herein was tried and a decree entered that the policy was procured on behalf of the deceased by constructive fraud, and that no actual fraud was intended or prac tised in the delivery of the same, and it was thereupon decreed that the policy should be delivered up and canceled. The defendant *"10. Your orator further avers that the appealed from such decree to the circuit Constitution and laws of the United States court of appeals, and the complainant took of America confer upon your orator the a cross appeal so as to bring up the findings right to remove into this court said action of fact as to the constructive fraud, so that, at law so begun against your orator; that, as counsel said, "the case might be heard on the other hand, the state of Illinois, by and considered in the circuit court of aplegislative enactment, has sought to pre-peals upon the whole evidence, regardless of vent the removal to this court by insurance the findings of the master and of the circuit companies of actions similar to said action so begun by said administratrix, and has practically destroyed such right or made its exercise impracticable, by providing, in substance, that an insurance company shall forfeit and lose its right to do business in the state of Illinois upon removing any such action into this court; that by removing said action to this court your orator might lose its right to transact business in the state of Illinois, and would certainly become involved in serious controversy with said state respecting the transaction of any subsequent business by your orator in said state; that the laws of said state upon certain questions of general insurance law, as interpreted by its highest legal tribunal, and applicable to Mr. Justice Peckham, after making the the facts in this case, are somewhat differ- foregoing statement of facts, delivered the ent from the laws of the United States as in- | opinion of the court: terpreted by the Federal courts, upon the same questions, and from the standpoint of the laws of the United States are unduly and erroneously adverse to insurance com

court." This was done for the reason that, in counsel's belief, the evidence showed a deliberate and intentional concealment on the part of Lord, the agent of the deceased, and therefore a plain fraud perpetrated by such agent. The circuit court of appeals affirmed the judgment [49 C. C. A. 216, 111 Fed. 19], and upon application this court granted the writ of certiorari as stated.

Messrs. W. S. Oppenheim and H. H. C. Miller for petitioner.

Messrs. William G. Beale, Buell MoKeever, Gilbert E. Porter, and Charles E. l'atterson for respondents.

It is contended upon the part of the administratrix of the estate of the assured, that the court below had no jurisdiction, on the ground that there existed a complete and

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adequate remedy (or defense) at law when | tion of its license to do business in the state, the company was sued upon the policy, and to be of any adequate avail. that the effect of allowing this jurisdiction in the circuit court is to improperly deprive the defendant herein of a trial by jury.

It is conceded by the plaintiff in error that no cause of action existed in favor of the complainant herein upon the law side of the Federal court, the contention being that the company could set up, as a defense to any action brought against it in the Federal court, those allegations of fraud which, being proved, would constitute a perfect and complete defense to any action upon the policy.

It is also argued upon the part of the company that the position of a defendant in an action is not so advantageous as that of a plaintiff, as the plaintiff has the conduct of a cause largely within his own control; and it is said that the law as administered in the state court is not so favorable to insurance companies as is the case in the Federal courts, and that the company had the right to an administration of the law by the Federal, instead of the state, court by reason of the diversity of citizenship.

These objections are to be considered. In Hurd's Revised Statutes of Illinois, chap. 73, title Insurance, in relation to foreign insurance companies, it is provided that any such company must first file a written application for a license, in which it shall state that it desires to transact the business of insurance, and that it will accept a license according to the laws of the state, "and that said license shall cease and terminate in case and whenever it shall remove or make application to remove into any United States courts any action or proceeding commenced in any of the state courts of this state, upon any claim or cause of

The company, however, avers that the administratrix has elected not to bring her action in the Federal court, although she might have done so on the ground of diversity of citizenship, but has, instead of so doing, brought it in the state court, and hence the company would have no opportunity of setting up its defense in a Federal court in an action brought on the policy, and it insists that on that account it has not that complete and adequate remedy or defense at law, in the same jurisdiction, which it contends is necessary in such case. It is true that the remedy or defense which will oust an equity court of jurisdic-action arising out of any business transaction must be as complete and as adequate, as sufficient and as final, as the remedy in equity, or else the latter court retains jurisdiction; and it must be a remedy which may be resorted to without impediment created otherwise than by the act of the party, and the remedy of defense must be capable of being asserted without rendering the party asserting it liable to the imposition of heavy penalties or forfeitures, arising other than by reason of its own act.

tion, in fact, done in this state," etc. The statute also provides that if any company thereafter removes or applies to remove into the United States court any action commenced in a state court of the kind above mentioned, "it is hereby made the imperative duty of the auditor of public accounts at once to revoke, cancel, and annul the license issued to such incorporated company, association, or partnership; and thereafter no such incorporated company, association, It is also urged, as an answer to the claim or partnership shall transact within this of the company as to jurisdiction, that even state any of the business for which it was though the remedy or defense at law must incorporated, until again duly licensed. In exist in the same (Federal) jurisdiction, yet case such revocation of license shall be made it is within the power of the company, if it because of the removal of or the attempt to see fit to do so, to remove the action in the remove any action from a state court of this state court to the Federal court, and thus state to any United States court, no renewal its defense at law, while adequate, would of such license shall be made within three also be within the same jurisdiction in years after such revocation." Provision is which its suit in equity was commenced. also made that, if the license is revoked, pub. It is further insisted by the administra-lication of the fact shall be made in the trix that it is unnecessary that an action at newspapers. law should have been commenced in the same jurisdiction, but it is sufficient that the defense would be available and complete if such an action should be commenced in a Federal court of law.

As to the removal of the action from the state to the Federal court, the company avers that, even assuming it had the right so to remove, yet it insists that such removal would be too hazardous to the company by subjecting it to a possible revoca

This court has held that, although there may be power in a Federal court of equity in a proper case to order the delivery up and cancelation of a policy of insurance obtained upon fraudulent representations and suppression of facts, yet it will not generally do so when those representations and sup pressions can be perfectly well established in a defense at law in a suit upon the policy, and it therefore affirmed a decree which dismissed, without prejudice, a bill filed for ob

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908.

taining the delivery up and cancelation of a | answered, however, that the action has not policy so issued, although the evidences of been commenced in the Federal court, but, the fraud were considerable, and a suit on on the contrary, the administratrix has comthe policy had been begun in an action at menced her action in the state court, and law after the bill in equity was filed. Pho- hence the defense, if made in the state court, nix Mut. L. Ins. Co. v. Bailey, 13 Wall. 616, is not in the same jurisdiction as that in 20 L. ed. 501. which the bill in this case was filed. But That was a suit by the company to obtain the company may bring its defense within the delivery up and cancelation of certain the same jurisdiction by removing the case policies of life insurance after the death of from the state to the Federal court, which the assured, on the ground that the policies it has the right to do on account of the dihad been procured by the defendant, the versity of citizenship of the parties thereto. widow of the deceased, by fraudulent sup- No stipulation or agreement, founded on a pression of material facts, and by the mis-state statute or otherwise, which the comrepresentation of others of the same class. The answer denied the allegations made. It was held that the company would have a perfect defense at law in an action by the holder upon the policy of insurance, and for that reason equity would refuse to take jurisdiction of an action to compel the delivery up and cancelation of the policy. The court said:

pany may have entered into, could prevent the removal of the case in the exercise of its constitutional right. This has been so held in Home Ins. Co. v. Morse, 20 Wall. 445, 22 L. ed. 365; and that case has been repeatedly approved. See Doyle v. Continental Ins. Co. 94 U. S. 535, 24 L. ed. 148; Barron v. Burnside, 121 U. S. 186, 30 L. ed. 915, 1 Inters. Com. Rep. 295, 7 Sup. Ct. Rep. 931.

In Doyle v. Continental Ins. Co. 94 U. S. 535, 24 L. ed. 148, it was held that a state had the right to impose conditions not in conflict with the Constitution nor the laws of the United States, to the transaction of business within its territory by a foreign-insurance company, and to exclude such com

"By the death of the cestui que vie the obligation to pay, as expressed in the policies, became fixed and absolute, subject only to the condition to give notice and furnish proof of that event within ninety days. No. tice having been given and the required proof furnished, the obligation to pay certainly became fixed by the terms of the pol-pany from its territory, or, having given a icies, and the sums insured became a purely legal demand, and if so, it is difficult to see what remedy more nearly perfect and complete the appellants can have than is afforded them by their right to make defense at law, which secures to them the right of trial by jury. Where a party, if his theory of the controversy is correct, has a good defense at law to a purely legal demand,' he should be left to that means of defense, as he has no occasion to resort to a court of equity for relief, unless he is prepared to allege and prove some special circumstances to show that he may suffer irreparable injury if he is denied a preventive remedy."

To the same effect are Home Ins. Co. v. Stanchfield, 1 Dill. 424, Fed. Cas. No. 6,660; Etna L. Ins. Co. v. Smith, 73 Fed. 318.

license, to revoke it, with or without cause; and it was further decided that an injunction to restrain a state officer from revoking and canceling a license to a foreign company to do business within the state, because the company has, contrary to the state statute, removed a case from the state to the Federal court, would not be granted, and it was remarked that, as the state had the right to exclude a foreign insurance company, the means by which she caused such exclusion, or the motives of her action, were not the subject of judicial inquiry. Whether this case has been shaken by the subsequent cases of Barron v. Burnside, 121 U. S. 186, 199, 30 L. ed. 915, 919, 1 Inters. Com. Rep. 295, 7 Sup. Ct. Rep. 931; Blake v. McClung, 172 U. S. 239, 254, 43 L. ed. 432, 437, 19 Sup. Ct. Rep. 165, and Dayton Coal & I. Co. v. Barton, 183 U. S. 23, 25, 46 L. ed. 61, 64, 22 Sup. Ct. Rep. 5, it is not material here to discuss. It has from an early day been held that a corporation created by one state could transact business in another state only with the consent, expressed or implied, of the latter state, and that such consent might be acWe start with the proposition that, to companied by such conditions as the latter any action brought upon the policy in a state might think fit to impose, provided Federal court, the company would have a they were not repugnant to the Constitution complete and adequate defense by proving or laws of the United States, or inconsistent the fraud as alleged in the bill herein. That with those rules of public law which secure shows a defense in the same jurisdiction re- the jurisdiction and authority of each state sorted to by the complainant herein. It is free from encroachment by all others, or

Complainant insists that in this case special circumstances are shown that it may Buffer irreparable injury if jurisdiction be denied. Those special circumstances have already been mentioned, and the question is whether they are sufficient to furnish ground for a Federal court of equity to take jurisdiction herein.

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