promissory note, for the mere purpose of preventing an anticipated erroneous judgment by a court of concurrent jurisdiction, in which the plaintiff's action at law upon the note is properly pending." But in another case it was said that, where the fraud was not actual, but constructive, and perhaps not sufficient to warrant a court of law in declaring a release void, the fact that defendant's account as executor was pending in the municipal court for settlement was no ground for demurrer to a bill in equity on the theory that adequate relief might be had in the municipal court.51

§ 649. Same; Insolvency of Defendant.-Where a clear case for rescission is made out, as, one based on fraud or false representations, the question of the solvency or insolvency of the defendant is of no consequence as affecting the right of the complainant to have the aid of a court of equity.52 But on the other hand, where the proper adjustment of the rights of the parties will involve the restoration of property or other consideration given, which could be. effected by a decree in equity, but the only relief available in a court of law would be a judgment for damages, which would be worthless because of the insolvency of the defendant, then the remedy at law cannot be said to be “adequate” in such sense as to oust the jurisdiction of equity over a case of which it would otherwise take cognizance.53 But where the performance of a contract is secured by a bond. with sufficient sureties, it will not be rescinded because of misrepresentations by the contractor as to his solvency.54

50 Quebec Bank v. Weyand, 30 Ohio St. 126.

51 Gorman v. McCabe, 24 R. I. 245, 52 Atl. 989.

52 Shahan v. Brown, 167 Ala. 534, 52 South. 737; Bell v. Weyman, 99 Ga. 273, 25 S. E. 636; Moore v. Cross (Tex. Civ. App.) 26 S. W. 122. 53 Smith v. Babcock, 2 Woodb. & M. 246, Fed. Cas. No. 13,009; Greenlee v. Gaines, 13 Ala. 198, 48 Am. Dec. 49; Griggs v. Woodruff, 14 Ala. 9; Parker v. Parker, 93 Ala. 80, 9 South. 426; Norton v. Jackson, 5 Cal. 262; Shopbell v. Boyd, 9 Cal. App. 136, 98 Pac. 69; Exchange Bank v. H. B. Claflin Co., 100 Ga. 640, 28 S. E. 439; Clark v. Cleghorn, 6 Ga. 220; Hieronymus v. Hicks, 3 J. J. Marsh. (Ky.) 701; Denton v. Scully, 26 Minn. 325, 4 N. W. 41; Matthews v. Crowder, 111 Tenn. 737, 69 S. W. 779; Hall v. Bank of Baldwin, 143 Wis. 303, 127 N. W. 969; Williams v. Stone, 6 Wyo. 405, 45 Pac. 1070. But see Hughes v. Ellis, 139 Ga. 406, 77 S. E. 584; Topping v. Parish, 96 Wis. 378, 71 N. W. 367.

54 Waco Tap R. Co. v. Shirley, 45 Tex. 355.

BLACK RESC.-94

And a court of equity will not rescind a contract for the sale of land where the vendor, although unable to make title, is perfectly solvent, and has been guilty of no fraud, on the ground that he is a resident of another state, at least when it is shown that he was such at the time of the contract and has so continued ever since.55

56

§ 650. Cancellation of Instruments.-When a substantial ground for equitable interposition exists, such as fraud, false representations, mistake, duress, or undue influence, and adequate relief cannot be had by resorting to such remedies as the law may afford, it is within the undoubted jurisdiction of a court of equity to aid the injured party by ordering the cancellation, or the surrender for cancellation, of a contract, note, deed, mortgage, or other written instrument. Thus, an action is properly brought in equity to cancel a note and mortgage alleged to have been discharged by a substituted note and mortgage.57 So, one who is entitled to corporate stock wrongfully transferred to another may maintain a bill in equity to have the wrongful certificate canceled, and a certificate issued to himself, if the loss of the stock cannot be adequately compensated in a common-law action.58 So, where notes were given as part of a scheme to defraud the public, the court may, upon an action being brought upon them by the payee, order their

55 Parks v. Brooks, 16 Ala. 529.

56 Luffboro v. Foster, 92 Ala. 477, 9 South. 281; Hafer v. Cole, 176 Ala. 242, 57 South. 757; Gewin v. Shields, 167 Ala. 593, 52 South. 887; Lewis v. Tobias, 10 Cal. 574; Boyes v. Green Mountain Falls Town & Imp. Co., 3 Colo. App. 295, 33 Pac. 77; Vaughn v. Georgia Co-operative Loan Co., 98 Ga. 288, 25 S. E. 441; Mustian v. Jones, 30 Ga. 951; Walker v. Hunter, 27 Ga. 336; Fitzkee v. Hoeflin, 187 Ill. App. 514; Roy v. Haviland, 12 Ind. 364; McKinley v. Britton, 55 Ind. App. 21, 103 N. E. 349; Turner v. Newman, 19 Ky. Law Rep. 231, 39 S. W. 504; Peters v. Berkemeier, 184 Mo. 393, 83 S. W. 747; Knikel v. Spitz, 74 N. J. Eq. 581, 70 Atl. 992; Crane v. Conklin, 1 N. J. Eq. 346, 22 Am. Dec. 519; Taylor v. Dinsmore, 68 Misc. Rep. 143, 124 N. Y. Supp. 936; Watson v. Borah, 37 Okl. 357, 132 Pac. 347; Garretson v. Witherspoon, 15 Okl. 473, 83 Pac. 415; Johnson v. Cooper, 2 Yerg. (Tenn.) 524, 24 Am. Dec. 502; Town of Corinth v. Locke, 62 Vt. 411, 20 Atl. 809; Bullitt v. Songster, 3 Munf. (Va.) 54. 57 Leigh v. Citizens' Sav. Bank, 31 Ky. Law Rep. 251, 102 S. W.

58 Walker v. Detroit Transit Ry. Co., 47 Mich. 338, 11 N. W. 187.

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61

cancellation.59 Some of the cases take the view that this jurisdiction of equity for the cancellation of instruments is exclusive, and may be exercised irrespective of any legal redress which the injured party might obtain in an action at law, either as plaintiff or defendant. But others maintain that equitable interference of this kind is not justified unless some special circumstance is shown to exist, establishing the necessity of a resort to equity to prevent an injury which might otherwise prove irreparable, and which equity alone is competent to prevent. And at any rate, the power should be exercised sparingly and only when shown to be plainly necessary. "Canceling an executed. contract is an exertion of the most extraordinary power of a court of equity. The power ought not to be exercised except in a clear case, and never for an alleged fraud unless the fraud is made clearly to appear; never for alleged false representations, unless their falsity is certainly proved, and unless the complainant has been deceived and injured by them." In some states, however, the jurisdiction in this respect has been somewhat broadened by statute, as, where it is provided that "a written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged and ordered to be delivered up or canceled," but that "an instrument, the invalidity of which is apparent upon its face or upon the face of another instrument which is necessary to the use of the former in evidence, is not to be deemed capable of causing injury within the provisions of the last section." 63 On the whole it may be said that,

62

59 Champion Funding & Foundry Co. v. Heskett, 125 Mo. App. 516, 102 S. W. 1050.

60 Fred Macey Co. v. Macey, 143 Mich. 138, 106 N. W. 722, 5 L. R. A. (N. S.) 1036; Carney v. Barnes, 56 W. Va. 581, 49 S. E. 423.

61 County of Ada v. Bullen Bridge Co., 5 Idaho, 79, 47 Pac. 818, 36 L. R. A. 367, 95 Am. St. Rep. 180; Balestier v. Mechanics' Nat. Bank, 15 N. Y. St. Rep. 46; Field v. Holbrook, 14 How. Prac. (N. Y.) 103.

62 Atlantic Delaine Co. v. James, 94 U. S. 207, 214, 24 L. Ed. 112.

63 Civ. Code Cal., §§ 3412, 3413; Rev. Civ. Code Mont., §§ 6115, 6116. And see Rev. Civ. Code N. Dak., § 6626; Rev. Civ. Code S. Dak., §§ 2356, 2357.

64

while equitable relief of this kind is unquestionably available to a party who cannot otherwise obtain adequate redress, it is not to be granted except in a case of plain necessity. Thus, where a contract concerning the sale of corporate stock has been fully executed, and the mere cancellation of the agreement will serve no useful purpose, equity will not interfere. Nor will it take jurisdiction to cancel a deed on the mere ground that it is uncertain.65 And the chancery court will not ordinarily entertain a bill to cancel a deed or other instrument affecting the title to land, where the complainant is not in possession, and therefore can obtain adequate relief in ejectment or other similar action. Yet if, in such a case, the successful assertion of the complainant's rights requires that a third person should be before the court and his rights or claims concluded, as, by the cancellation of a tripartite agreement, and he could not be joined as a defendant in any action at law which the complainant might bring, then a proceeding in equity may be maintained.67

66

§ 651. Same; Void Instruments.-If a deed, mortgage, or other written instrument is void on its face, equity will not ordinarily entertain a bill for its cancellation, since its invalidity could in that case be successfully asserted in any action at law upon it, and there is therefore no need to resort to the extraordinary jurisdiction of equity. But the fact that an instrument is void does not oust the jurisdic

64 George v. Ford, 36 App. D. C. 315.

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65 Hawthorne v. Jenkins, 182 Ala. 255, 62 South. 505, Ann. Cas. 1915D, 707.

66 Treadwell v. Torbert, 133 Ala. 504, 32 South. 126; Smith v. Roney, 182 Ala. 540, 62 South. 753; Appeal of Richard, 100 Pa. 51. But see Polk v. Pendleton, 31 Md. 118.

67 Metropolitan El. Ry. Co. v. Manhattan Ry. Co., 14 Abb. N. C. (N. Y.) 103.

68 Peirsoll v. Elliott, 6 Pet. 95, 8 L. Ed. 332; Oakland v. Carpentier, 21 Cal. 642; O'Connell v. Noonan, 1 App. D. C. 332; Briggs v. Johnson, 71 Me. 235; Boardman v. Jackson, 119 Mass. 161; Faris v. Moore, 256 Mo. 123, 165 S. W. 311; Venice v. Woodruff, 62 N. Y. 462, 20 Am. Rep. 495; Field v. Holbrook, 14 How. Prac. (N. Y.) 103; City Council v. Page, Speer, Eq. (S. C.) 159; S. L. Sheldon Co. v. Mayers, 81 Wis. 627, 51 N. W. 1082. Contra, see Hays v. Hays, 2 Ind. 28; Sessions v. Jones, 6 How. (Miss.) 123; Garrett v. Mississippi & A. R. Co., Freem. Ch. (Miss.) 70; Benzein v. Lenoir, 16 N. C. 225.

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tion of equity. And if the invalidity is not apparent on its face, but must be established by extrinsic evidence, and fraud is shown or other grounds of equitable cognizance, there is no such adequate remedy at law as should debar a court of equity from ordering the cancellation of the instrument. And there is a considerable body of authorities. favoring the rule that if the instrument in question casts a cloud upon the title of the complainant, or if a multiplicity of suits can be avoided by having recourse to equity, a bill will lie for its cancellation, irrespective of the question whether the invalidity of the instrument does or does not appear on its face. 70 But it is also said that the setting aside and cancellation of void instruments by courts of equity is a matter of discretion in the court, and not of ab. solute right in the parties seeking that relief."1

§ 652. Same; Contracts of Insurance.-Before a loss occurs under a policy of insurance, the company which issued it has no adequate remedy at law for fraud, false representations, or concealments which procured its issuance, and therefore a court of equity has jurisdiction of a suit to compel the surrender and cancellation of the policy.72 And where a court of equity has obtained jurisdiction of both the parties and the subject-matter, on a bill filed for this purpose, the policy being one of life insurance and the insured still living, it will not be deprived of its jurisdiction

69 Southern Ry. Co. v. North Carolina R. Co. (C. C.) 81 Fed. 595; Smith v. Roney, 182 Ala. 540, 62 South. 753; McCracken v. McBee, 96 Ark. 251, 131 S. W. 450; Gray v. Coan, 23 Iowa, 344; Fred Macey Co. v. Macey, 143 Mich. 138, 106 N. W. 722, 5 L. R. A. (N. S.) 1036; State v. Warner Valley Stock Co., 56 Or. 283, 106 Pac. 780, 108 Pac. 861; Keemle v. Conrad, 12 Phila. (Pa.) 524; Carney v. Barnes, 56 W. Va. 581, 49 S. E. 423.

70 Gewin v. Shields, 167 Ala. 593, 52 South. 887; Dart v. Orme, 41 Ga. 376; Moore v. Munn, 69 Ill. 591; Cawood v. Howard (Ky.) 113 S. W. 109; Stevens v. Ryerson, 6 N. J. Eq. 477; Hamilton v. Cummings, 1 Johns. Ch. (N. Y.) 517; Jones v. Perry, 10 Yerg. (Tenn.) 59, 30 Am. Dec. 430; Almony v. Hicks, 3 Head (Tenn.) 39; Johnson v. Cooper, 2 Yerg. (Tenn.) 524, 24 Am. Dec. 502; Morton v. Morris, 27 Tex. Civ. App. 262, 66 S. W. 94.

71 Hamilton v. Cummings, 1 Johns. Ch. (N. Y.) 517; Porter v. Jones, 6 Cold. (Tenn.) 313.

72 Riggs v. Union Life Ins. Co., 129 Fed. 207, 63 C. C. A. 365; Mutual Life Ins. Co. v. Blair (C. C.) 130 Fed. 971.