Twist v. Prairie Oil & Gas Co.

delivered the opinion of the Court.

These cases are here on writ of certiorari to the United States Circuit Court of Appeals for the Eighth Circuit. 270 U. S. 639 , 640. That court had before it for review, on appeal and cross appeal, a- final decree in equity' of

The Company, the defendant below, removéd the case to the federal court for eastern Oklahoma on the ground of diversity of citizenship. In the federal court the joinder of an action at law with one in equity is not allowable. Hurt v. Hollingsworth, 100 U. S. 100 ; Cherokee Nation v. Southern Kansas Ry. Co., 135 U. S. 641 , 651. Unless the first cause of action stated in the bill could have been construed as asking an accounting incidental to the equitable relief asked, the pleading should have been recast so as to separate the action at law from the suit in equity and each case should have proceeded separately according to its nature. Compare Hatcher v. Hendrie & Bolthoff Mfg. & Supply Co., 133 Fed. 267 , 271; Knoxville v. Southern Paving Co., 220 Fed. 236 , 238. Neither party sought to have this done. The defendant caused the case to be docketed as a case in equity; and filed a single answer to both causes of action. Therein, it objected that the petition did not state facts sufficient in law or in equity, to .entitle the plaintiff to the relief prayed for, or.to any relief; and then, taking up the several allegations of the petition,’ admitted some, denied others, and set up new matter. The answer prays that, the petition be dismissed for want of equity; but also asks affirmative relief. It prays “ that the court, by its decree, declare and. determine that the defendant’s title to said oil and gas lease, as modified and extended, is good, valid and subsisting as against the claim of the plaintiff, and that its title thereto be quieted as against said claims.” A reply to the new matter was filed by plaintiffs.

The Court of Appeals held that it was without power to review the case as upon an appeal from an equity cause, or to consider any of the errors assigned. Because in its opinion there was a plain, adequate and complete remedy at law, it held that the case must be deemed to have been tried in the District Court as an action at law without a jury. And it applied the rule, that where an action at law is tried without' a jury and there has been

In federal courts, as in others, a plaintiff has a right to choose whether he will seek to enforce a legal or an equitable cause of action and whether he will seek legal or equitable relief. He makes his election and proceeds at law or in equity at his peril. See Perego v. Dodge, 163 U. S. 160 , 164. Formerly, if a plaintiff in a federal court sued in equity and the objection that there was a plain, adequate and complete remedy at law was sustained, the bill was necessarily dismissed. Curriden v. Middleton, 232 U. S. 633 . And ordinarily the dismissal was required to be without prejudice to an action at law, Horsburg v. Baker, 1 Pet. 232 , 237; Thompson v. Railroad Companies, 6 Wall. 134 , 139; Van Norden v. Morton, 99 U. S. 378 , 382; Rogers v. Durant, 106 U. S. 644 ; Scott v. Neely, 140 U. S. 106 , 117; Lacassagne v. Chapuis, 144 U. S. 119 , 126; though possibly such precaution was unnecessary. Ash Sheep Co. v. United States, 252 U. S. 159 , 170. Now, under the Act of March 3, 1915, c. 90, § 274 a, 38 Stat. 956 and Equity Rules 22 and 23, if the suit was improperly brought in equity, either the trial court or the appellate court may transfer the case to the law side. Compare Liberty Oil Co. v. Condon Bank, 260 U. S. 235 , 241-243; Pierce v. National Bank of Commerce, 268 Fed. 487 , 489; Equitable Trust Co. v. Denver & Rio Grande R. R. Co., 250 Fed. 327 , 340. The practice is the same in suits re

The parties cannot, of course, compel the trial court to hear in equity a suit which seeks a legal remedy for a legal cause of action. Lewis v. Cocks, 23 Wall. 446 . Nor can the task of reviewing such a case as if it were actually an equity cause be imposed upon the appellate court through consent of the parties. See Elkhart Carriage & Motor Car Co. v. Partin, 9 F. (2d) 393 . Either the trial court or the appellate may, of its own motion, take the objection that the case is not within the equity jurisdiction. Compare Reynes v. Dumont, 130 U. S. 354 , 395. But that objection, whether taken in the trial court or in the appellate court, does not go to the power of the court as a federal court.

The decree in the case at bar rests upon the second cause o-f action set forth in the bill and the answer thereto. We must disregard, as the lower court and the parties did, the first cause of action. The features of the second cause of action are all those of a bill to remove a cloud and to quiet title. The bill prays for a declaration of the rights of the respective parties; for the cancellation of an agreement; for an injunction against the assertion of certain rights; and for general relief. The answer embodied what is in effect a cross-bill. The relief sought by the bill and the cross-bill is of a character within the recognized sphere, of federal equity jurisdiction. See United States v. Wilson, 118 U. S. 86 . The recovery, as upon an accounting, of the agreed amount of the net profits was a normal incident of such a bill.

It is true that ordinarily one out of possession may not bring in a federal court a bill to quiet title, against one in possession, because there is a full, adequate and complete remedy at law and the defendant is entitled to a jury trial. See Whitehead v. Shattuck, 138 U. S. 146 ; Black v. Jackson, 177 U. S. 349 , 363-364; Lancaster v. Kathleen Oil Co., 241 U. S. 551 , 555. But the suit is of a class within the jurisdiction — that is the power — of a federal' court sitting in equity. There are cases in the federal courts in which suits in equity to quiet title brought by one out of possession against one in possession have been entertained, because of the special facts, or because of the particular -relief sought, or because the defendant waived the objection of lack of equity jurisdiction. Simmons Creek Coal Co. v. Doran, 142 U. S. 417 ; Schroeder v. Young, 161 U. S. 334 , 345. Compare Stewart v. Masterson, 131 U. S. 151 ; Duignan v. United States, ante, p. 195; Jones v. Prairie Oil & Gas Co., 273 U. S. 195 ; Kilgore v. Norman, 119 Fed. 1006 , aff’d 120 Fed. 1020 ; Big Six Co. v. Mitchell, 138 Fed. 279 ; Continental Trust Co. v. Tallassee, etc. Co., 222 Fed. 694 , 702. Such waiver is possible, because the objection that the bill does not make a case within the equity jurisdiction of a federal court goes not to the power of the court as a federal court, but to the merits. Blythe v. Hinckley, 173 U. S. 501 ; Pusey & Jones Co. v. Hanssen, 261 U. S. 491 ,

The Court of Appeals, being of opinion that the plaintiffs had not established a right to relief in equity, because there was a plain, adequate and complete remedy at law, might, on the undisputed facts, have reversed the decree oh that ground without considering the specific errors assigned; and, rightly or wrongly, it might have ordered the bill dismissed without prejudice to the remedy at law; or might conceivably have ordered the case transferred to the law docket; or might have considered the case on the merits as on an equity appeal, in the view that at such stage of the proceedings it was desirable to hold that the objection to the equity jurisdiction had been waived. Compare Southern Pacific Co. v. United States, 200 U. S. 341 . But it could not, while refusing to consider the errors assigned, retain the case and adjudicate the merits. This it did when it affirmed the decree. It was error to declare that this proceeding, which is a bill in equity in its nature as well as in its form, and which seeks relief that only a court of equity can give, Lancaster v. Kathleen Oil Co., 241 U. S. 551 , 555, shall be deemed an action at law, because the only remedy open to the plaintiffs was at law. Compare Spring Garden Insurance Co. v. Amusement Syndicate Co., 178 Fed. 519 , 530. The suit at bar is not like Elkhart Carriage & Motor Car Co. v. Partin, 9 F. (2d) 393 , an action at law masquerading as a suit in equity.

Because the Court of Appeals should have considered the errors assigned as in an equity cause, but did not, we reverse its judgment and remand the case to it for further proceedings in accordance with this opinion. See Liberty Oil Co. v. Condon National Bank, 260 U. S. 235 , 245.

Reversed.