The opinion of the court was delivered by: John E. Miller, District Judge.
Prior to the filing of the instant suit for a declaratory
judgment, the present defendant, H.H. Thompson, on January 12,
1954, filed his complaint against the present plaintiff, Allstate
Insurance Company, in the Circuit Court of Union County,
Arkansas, and service of summons was had upon Allstate on January
14, 1954. In that suit Thompson alleged that on October 25, 1952,
Allstate issued him an insurance policy covering medical payments
and damages to his automobile as a result of collision or upset;
that on October 31, 1953, while said policy was in full force and
effect, he was driving his automobile and was involved in an
accident; that his automobile was damaged and he was required to
incur medical expenses. Thompson prayed judgment against Allstate
for the total amount of $2,080.
On January 23, 1954, Allstate filed the instant suit against
H.H. Thompson, Herman G. Lowery, Mr. Thos. J. Woods, and Mrs.
Thos. J. Woods, seeking a declaratory judgment declaring the
policy issued to Thompson to be void because of an alleged false
answer made by Thompson in his application for insurance, said
false answer being relied upon by Allstate when it issued the
policy to Thompson.
More specifically, Allstate alleges that it is an Illinois
corporation; the defendants, H.H. Thompson and Herman G. Lowery,
are citizens and residents of Arkansas; and the defendants, Mr.
and Mrs. Thomas J. Woods, are citizens and residents of
Louisiana. The amount in controversy exceeds the sum of $3,000.
That on October 24, 1953, plaintiff received a signed
application from Henry H. Thompson for insurance on his 1952
Pontiac automobile, and that in said application Thompson had
answered "No" to the question, "Has any Insurer ever cancelled
any automobile insurance issued, or refused any automobile
insurance to the applicant or to any of his household?" On
October 25, 1953, having received said application and relying
upon the representations therein, plaintiff issued its policy No.
10 514 148 10 25 to Thompson.
Plaintiff alleges that Thompson's answer to the above-quoted
question was false and known to be false by him; that plaintiff
did not know the answer was false and would not have issued the
policy if it had been advised that said answer was false; that
Thompson had had an automobile liability policy cancelled by the
National Farmers Union Property & Casualty Co. of Denver,
Colorado, on March 16, 1953.
On October 31, 1953, Thompson, while driving said automobile,
was involved in a collision with a car driven by the defendant,
Thomas J. Woods; that the said collision occurred on United
States Highway 190 approximately two miles east of Lavonia,
Louisiana; that at the time of the accident Thompson had a
passenger in said car, namely, the defendant Herman G. Lowery,
and that Mrs. Thomas J. Woods was a passenger in her husband's
car; that Mr. and Mrs. Woods and Lowery were injured in said
Plaintiff further alleges that a controversy exists between it
and the defendants as to whether it had any liability under the
policy to any of the defendants; that it is necessary that
plaintiff obtain relief in the nature of a declaratory judgment
in order that the matter may be adjudicated with all possible
speed and in order to prevent a multiplicity of suits.
Plaintiff prays for relief in the nature of a declaratory
judgment (1) declaring the said policy void by reason of the
false answer of Thompson, (2) declaring that there is no
liability under said policy on the part of plaintiff to any of
the defendants, (3) enjoining the defendant, H.H. Thompson, from
further prosecuting the action brought by him in the Union
Circuit Court, and that said injunction continue until a hearing
and final determination of this cause, and (4) enjoining the
defendants, Herman G. Lowery, Mr. Thos. J. Woods, and Mrs. Thos.
J. Woods, temporarily during the pendency of this action, and
permanently after final determination of the issues herein, from
proceeding in any manner to attempt to recover any sum or sums
from plaintiff by reason of the issuance of the policy to
On January 30, 1954, the defendant, H.H. Thompson, filed his
separate answer and motion to dismiss in which he denied that the
amount in controversy exceeded the sum of $3,000, and denied that
the question heretofore set forth was propounded to him or that
he answered the same or that he signed an application with any
knowledge that any such question was contained therein; he
alleged that if such question appears in any application signed
by him, his signature was obtained by and through the fraud of
the agent of plaintiff. He denied that plaintiff relied upon the
alleged statement in his application.
Thompson alleged that he was not liable for any injuries
received by Lowery, since Lowery was his guest, and he denied
that either Mr. or Mrs. Wood or Lowery had made or would make any
demand upon plaintiff.
He alleged that on January 12, 1954, he filed suit against
plaintiff in the Union County Circuit Court; that said suit was
pending at the time of the institution of this action; that the
Union County Circuit Court had exclusive jurisdiction of the
matter and that plaintiff could answer in that suit and plead any
defense it might have, including the defense that the policy was
procured by fraud.
Thompson prayed that the complaint be dismissed, and that if it
were not dismissed, that he be granted a jury trial on all issues
On the record as it then stood, the Court on February 26, 1954,
wrote the attorneys for the respective parties a letter ...