1. The Federal Declaratory Judgment Act deals with
"controversies" in the constitutional sense, and is procedural
only. P.
300 U. S.
239.
2. In the exercise of its control over practice and procedure of
the lower federal courts, Congress is not limited to traditional
forms or remedies, but may create and improve, as well as abolish
or restrict. P.
300 U. S.
240.
3. A controversy, in the constitutional sense and in the sense
of the Declaratory Judgment Act, must be justiciable -- it must be
definite and concrete, touching the legal relation of parties
having adverse legal interests -- it must be a real and substantial
controversy admitting of specific relief through a conclusive
decree, as distinguished from an opinion advising what the law
would be upon a hypothetical statement of facts. P.
300 U. S.
240.
4. There may be adjudication of the rights of parties without
award of process or payment of damages and where no allegation of
irreparable injury is made. P.
300 U. S.
241.
5. Where the holder of life insurance policies claims, under
disability benefit clauses, that, notwithstanding nonpayment of
premiums, the policies, by reason of his total and permanent
disability,
Page 300 U. S. 228
remain in force and entitle him to cash benefits, and makes
repeated and persistent demands upon the insurer accordingly,
whereas the insurer denies that such disability existed and insists
that the policies have lapsed because the premiums were not paid,
there is an "actual controversy" on which suit may be maintained by
the insurer against the insured under the Federal Declaratory
Judgment Act. P.
300 U. S.
242.
8 F.2d 695, reversed.
CERTIORARI, 299 U.S. 536.
This suit by the Insurance Company, under the Federal
Declaratory Judgment Act, was dismissed by the District Court upon
the ground that there was no justiciable controversy.
11 F. Supp.
1016. The decree was affirmed by the court below.
Page 300 U. S. 236
MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
The question presented is whether the District Court had
jurisdiction of this suit under the Federal Declaratory Judgment
Act. Act of June 14, 1934, 48 Stat. 955; Jud.Code, ยง 274D; 28
U.S.C. 400.
*
The question arises upon the plaintiff's complaint, which was
dismissed by the District Court upon the ground that it did not set
forth a "controversy" in the constitutional sense, and hence did
not come within the legitimate scope of the statute.
11 F. Supp.
1016. The decree of dismissal was affirmed by the Circuit Court
of Appeals. 84 F.2d 695. We granted certiorari. November 16,
1936.
Page 300 U. S. 237
From the complaint it appears that plaintiff is an insurance
company which had issued to the defendant, Edwin P. Haworth, five
policies of insurance upon his life, the defendant Cora M. Haworth
being named as beneficiary. The complaint set forth the terms of
the policies. They contained various provisions which, for the
present purpose, it is unnecessary fully to particularize. It is
sufficient to observe that they all provided for certain benefits
in the event that the insured became totally and permanently
disabled. In one policy, for $10,000, issued in 1911, the company
agreed, upon receiving the requisite proof of such disability and
without further payment of premiums, to pay the sum insured, and
dividend additions, in twenty annual instalments, or a life annuity
as specified, in full settlement. In four other policies issued in
1921, 1928 and 1929, respectively, for amounts aggregating $30,000,
plaintiff agreed upon proof of such disability to waive further
payment of premiums, promising in one of the policies to pay a
specified amount monthly and in the other three to continue the
life insurance in force. By these four policies, the benefits to be
payable at death, and the cash and loan values to be available,
were to be the same whether the premiums were paid or were waived
by reason of the described disability.
The complaint alleges that, in 1930 and 1931, the insured ceased
to pay premiums on the four policies last mentioned and claimed the
disability benefits as stipulated. He continued to pay premiums on
the first mentioned policy until 1934, and then claimed disability
benefits. These claims, which were repeatedly renewed, were
presented in the form of affidavits accompanied by certificates of
physicians. A typical written claim on the four policies is annexed
to the complaint. It states that, while these policies were in
force, the insured became
Page 300 U. S. 238
totally and permanently disabled by disease, and was "prevented
from performing any work or conducting any business for
compensation or profit"; that, on October 7, 1930, he had made and
delivered to the company a sworn statement
"for the purpose of asserting and claiming his right to have
these policies continued under the permanent and total disability
provision contained in each of them;"
that, more than six months before that date, he had become
totally and permanently disabled, and had furnished evidence of his
disability within the stated time; that the annual premiums payable
in the year 1930 or in subsequent years were waived by reason of
the disability, and that he was entitled to have the policies
continued in force without the payment of premiums so long as the
disability should continue.
With respect to the policy first mentioned, it appears that the
insured claimed that, prior to June 1, 1934, when he ceased to pay
premiums, he had become totally and permanently disabled; that he
was without obligation to pay further premiums, and was entitled to
the stipulated disability benefits including the continued life of
the policy.
Plaintiff alleges that consistently and at all times it has
refused to recognize these claims of the insured, and has insisted
that all the policies had lapsed according to their terms by reason
of the nonpayment of premiums, the insured not being totally and
permanently disabled at any of the times to which his claims
referred. Plaintiff further states that, taking loans into
consideration, four of the policies have no value, and the
remaining policy (the one first mentioned) has a value of only $45
as extended insurance. If, however, the insured has been totally
and permanently disabled as he claims, the five policies are in
full force, the plaintiff is now obliged to pay the accrued
instalments of cash disability benefits for which two of the
policies provide, and the insured
Page 300 U. S. 239
has the right to claim at any time cash surrender values
accumulating by reason of the provisions for waiver of premiums, or
at his death, Cora M. Haworth, as beneficiary, will be entitled to
receive the face of the policies less the loans thereon.
Plaintiff thus contends that there is an actual controversy with
defendants as to the existence of the total and permanent
disability of the insured and as to the continuance of the
obligations asserted despite the nonpayment of premiums. Defendants
have not instituted any action wherein the plaintiff would have an
opportunity to prove the absence of the alleged disability, and
plaintiff points to the danger that it may lose the benefit of
evidence through disappearance, illness or death of witnesses, and
meanwhile, in the absence of a judicial decision with respect to
the alleged disability, the plaintiff in relation to these policies
will be compelled to maintain reserves in excess of $20,000.
The complaint asks for a decree that the four policies be
declared to be null and void by reason of lapse for nonpayment of
premiums and that the obligation upon the remaining policy be held
to consist solely in the duty to pay the sum of $45 upon the death
of the insured, and for such further relief as the exigencies of
the case may require.
First. The Constitution limits the exercise of the
judicial power to "cases" and "controversies."
"The term 'controversies,' if distinguishable at all from
'cases,' is so in that it is less comprehensive than the latter,
and includes only suits of a civil nature."
Per Mr. Justice Field in
In re Pacific Railway Comm'n,
32 Fed. 241, 255, citing
Chisholm v.
Georgia, 2 Dall. 419,
2 U. S. 431,
2 U. S. 432.
See Muskrat v. United States, 219 U.
S. 346,
219 U. S. 356,
219 U. S. 357;
Old Colony Trust Co. v. Commissioner, 279 U.
S. 716,
279 U. S. 723,
279 U. S. 724.
The Declaratory Judgment Act of 1934, in its limitation to "cases
of actual controversy," manifestly
Page 300 U. S. 240
has regard to the constitutional provision, and is operative
only in respect to controversies which are such in the
constitutional sense. The word "actual" is one of emphasis, rather
than of definition. Thus, the operation of the Declaratory Judgment
Act is procedural only. In providing remedies and defining
procedure in relation to cases and controversies in the
constitutional sense, the Congress is acting within its delegated
power over the jurisdiction of the federal courts which the
Congress is authorized to establish.
Turner v.
Bank of North America, 4 Dall. 8,
4
U. S. 10;
Stevenson v. Fain, 195 U.
S. 165,
195 U. S. 167;
Kline v. Burke Construction Co., 260 U.
S. 226,
260 U. S. 234.
Exercising this control of practice and procedure, the Congress is
not confined to traditional forms or traditional remedies. The
judiciary clause of the Constitution
"did not crystallize into changeless form the procedure of 1789
as the only possible means for presenting a case or controversy
otherwise cognizable by the federal courts."
Nashville, C. & St.L. Ry. Co. v. Wallace,
288 U. S. 249,
288 U. S. 264.
In dealing with methods within its sphere of remedial action, the
Congress may create and improve, as well as abolish or restrict.
The Declaratory Judgment Act must be deemed to fall within this
ambit of congressional power so far as it authorizes relief which
is consonant with the exercise of the judicial function in the
determination of controversies to which, under the Constitution,
the judicial power extends.
A "controversy" in this sense must be one that is appropriate
for judicial determination.
Osborn v. United States
Bank, 9 Wheat. 738,
22 U. S. 819. A
justiciable controversy is thus distinguished from a difference or
dispute of a hypothetical or abstract character; from one that is
academic or moot.
United States v. Alaska S.S. Co.,
253 U. S. 113,
253 U. S. 116.
The controversy must be definite and concrete, touching the legal
relations of parties having
Page 300 U. S. 241
adverse legal interests.
South Spring Gold Co. v. Amador
Gold Co., 145 U. S. 300,
145 U. S. 301;
Fairchild v. Hughes, 258 U. S. 126,
258 U. S. 129;
Massachusetts v. Mellon, 262 U. S. 447,
262 U. S. 487,
262 U. S. 488.
It must be a real and substantial controversy admitting of specific
relief through a decree of a conclusive character, as distinguished
from an opinion advising what the law would be upon a hypothetical
state of facts.
See Muskrat v. United States, supra; Texas v.
Interstate Commerce Comm'n, 258 U. S. 158,
258 U. S. 162;
New Jersey v. Sargent, 269 U. S. 328,
269 U. S. 339,
269 U. S. 340;
Liberty Warehouse Co. v. Grannis, 273 U. S.
70;
New York v. Illinois, 274 U.
S. 488,
274 U. S. 490;
Willing v. Chicago Auditorium Assn., 277 U.
S. 274,
277 U. S. 289,
277 U. S. 290;
Arizona v. California, 283 U. S. 423,
283 U. S. 463,
464;
Alabama v. Arizona, 291 U. S. 286,
291 U. S. 291;
United States v. West Virginia, 295 U.
S. 463,
295 U. S. 474,
295 U. S. 475;
Ashwander v. Tennessee Valley Authority, 297 U.
S. 288,
297 U. S. 324.
Where there is such a concrete case admitting of an immediate and
definitive determination of the legal rights of the parties in an
adversary proceeding upon the facts alleged, the judicial function
may be appropriately exercised, although the adjudication of the
rights of the litigants may not require the award of process or the
payment of damages.
Nashville, C. & St.L. Ry. Co. v.
Wallace, supra, p.
288 U. S. 263;
Tutun v. United States, 270 U. S. 568,
270 U. S. 576,
270 U. S. 577;
Fidelity National Bank v. Swope, 274 U.
S. 123,
274 U. S. 132;
Old Colony Trust Co. v. Commissioner, supra, p.
279 U. S. 725.
And as it is not essential to the exercise of the judicial power
that an injunction be sought, allegations that irreparable injury
is threatened are not required.
Nashville, C. & St.L. Ry.
Co. v. Wallace, supra, p.
288 U. S.
264.
With these principles governing the application of the
Declaratory Judgment Act, we turn to the nature of the controversy,
the relation and interests of the parties, and the relief sought in
the instant case.
Page 300 U. S. 242
Second. There is here a dispute between parties who
face each other in an adversary proceeding. The dispute relates to
legal rights and obligations arising from the contracts of
insurance. The dispute is definite and concrete, not hypothetical
or abstract. Prior to this suit, the parties had taken adverse
positions with respect to their existing obligations. Their
contentions concerned the disability benefits which were to be
payable upon prescribed conditions. On the one side, the insured
claimed that he had become totally and permanently disabled, and
hence was relieved of the obligation to continue the payment of
premiums, and was entitled to the stipulated disability benefits
and to the continuance of the policies in force. The insured
presented this claim formally, as required by the policies. It was
a claim of a present, specific right. On the other side, the
company made an equally definite claim that the alleged basic fact
did not exist, that the insured was not totally and permanently
disabled and had not been relieved of the duty to continue the
payment of premiums, that, in consequence the policies had lapsed,
and that the company was thus freed from its obligation either to
pay disability benefits or to continue the insurance in force. Such
a dispute is manifestly susceptible of judicial determination. It
calls, not for an advisory opinion upon a hypothetical basis, but
for an adjudication of present right upon established facts.
That the dispute turns upon questions of fact does not withdraw
it, as the respondent seems to contend, from judicial cognizance.
The legal consequences flow from the facts, and it is the province
of the courts to ascertain and find the facts in order to determine
the legal consequences. That is everyday practice. Equally
unavailing is respondent's contention that the dispute relates to
the existence of a "mutable fact" and a "changeable condition --
the state of the insured's health." The insured
Page 300 U. S. 243
asserted a total and permanent disability occurring prior to
October, 1930, and continuing thereafter. Upon that ground, he
ceased to pay premiums. His condition at the time he stopped
payment, whether he was then totally and permanently disabled so
that the policies did not lapse, is not a "mutable," but a
definite, fact. It is a controlling fact which can be finally
determined, and which fixes rights and obligations under the
policies. If it were found that the insured was not totally and
permanently disabled when he ceased to pay premiums, and hence was
in default, the effect of that default and the consequent right of
the company to treat the policies as lapsed could be definitely and
finally adjudicated. If it were found that he was totally and
permanently disabled, as he claimed, the duty of the company to pay
the promised disability benefits and to maintain the policies in
force could likewise be adjudicated. There would be no difficulty,
in either event, in passing a conclusive decree applicable to the
facts found and to the obligations of the parties corresponding to
those facts. If the insured made good his claim, the decree
establishing his right to the disability benefits, and to the
continuance of the policies in force during the period of the
proved disability, would be nonetheless final and conclusive as to
the matters thus determined, even though a different situation
might later arise in the event of his recovery from that disability
and his failure after that recovery to comply with the requirements
of the policies. Such a contention would present a distinct subject
matter.
If the insured had brought suit to recover the disability
benefits currently payable under two of the policies, there would
have been no question that the controversy was of a justiciable
nature, whether or not the amount involved would have permitted its
determination in a federal court. Again, on repudiation by
Page 300 U. S. 244
the insurer of liability in such a case and insistence by the
insured that the repudiation was unjustified because of his
disability, the insured would have "such an interest in the
preservation of the contracts that he might maintain a suit in
equity to declare them still in being."
Burnet v. Wells,
289 U. S. 670,
289 U. S. 680;
Cohen v. N.Y. Mutual Life Ins. Co., 50 N.Y. 610, 624;
Fidelity National Bank v. Swope, supra. But the character
of the controversy and of the issue to be determined is essentially
the same whether it is presented by the insured or by the insurer.
Whether the District Court may entertain such a suit by the
insurer, when the controversy as here is between citizens of
different States or otherwise is within the range of the federal
judicial power, is for the Congress to determine. It is the nature
of the controversy, not the method of its presentation or the
particular party who presents it, that is determinative.
See
Gully v. Interstate Natural Gas Co., 82 F.2d 145, 149;
Travelers Insurance Co. v. Helmer, 15 F. Supp.
355, 356;
New York Life Insurance Co. v.
London, 15 F. Supp.
586, 589.
We have no occasion to deal with questions that may arise in the
progress of the cause, as the complaint has been dismissed
in
limine. Questions of burden of proof or mode of trial have not
been considered by the courts below, and are not before us.
Our conclusion is that the complaint presented a controversy to
which the judicial power extends, and that authority to hear and
determine it has been conferred upon the District Court by the
Declaratory Judgment Act. The decree is reversed, and the cause is
remanded for further proceedings in conformity with this
opinion.
Reversed.
* The Act provides:
"(1) In cases of actual controversy the courts of the United
States shall have power upon petition, declaration, complaint, or
other appropriate pleadings to declare rights and other legal
relations of any interested party petitioning for such declaration,
whether or not further relief is or could be prayed, and such
declaration shall have the force and effect of a final judgment or
decree and be reviewable as such."
"(2) Further relief based on a declaratory judgment or decree
may be granted whenever necessary or proper. The application shall
be by petition to a court having jurisdiction to grant the relief.
If the application be deemed sufficient, the court shall, on
reasonable notice, require any adverse party, whose rights have
been adjudicated by the declaration, to show cause why further
relief should not be granted forthwith."
"(3) When a declaration of right or the granting of further
relief based thereon shall involve the determination of issues of
fact triable by a jury, such issues may be submitted to a jury in
the form of interrogatories, with proper instructions by the court,
whether a general verdict be required or not."