Ritter v. Boston Underwriters Insurance

Hall, J. It is clear that, under certain circumstances, the loss covered by a policy of insurance is the subject of garnishment. Lovejoy v. Insurance Co., 11 Fed Rep. 62, and cases cited. The policy provided that “no suit shall be brought for the recovery of any claim under this policy unless such suit or action is commenced within twelve months next after the fire shall have occurred.” The garnishee makes the point that, “the mere service upon this appellant of a summons of garnishment does not constitute a suit against it upon or under the insurance policy.” In support of the point it is argued : “The garnishment is not a new suit, but an incident or auxiliary of the main suit, and a means of obtaining satisfaction of the debt against the defendant in the original suit by reaching defendant’s creditors.” Whether a garnishment be deemed a suit or not, wherever the loss under a policy of insurance is the subject of garnishment, it may, as a matter of course, be reached by that proceeding. The policy may provide, as a condition precedent to any recovery thereon, that any suit based on the policy shall be brought in any reasonable time after the loss, but such provision does not and cannot deprive a creditor of the assured of the right to proceed by garnishment against the debt due on account of the loss. But the proceeding must be instituted in the time provided in the policy for the bringing of suits. The general statute of limitations applies to proceedings by garnishment. Benton v. Lindell, 10 Mo. 557; Drake on Attachment, sect. 678. The plaintiff in the garnishment has no greater rights than the defendant. It is difficult to perceive in what manner this case can be affected by the character of this proceeding in the respect mentioned. What difference does it make whether the proceeding is or is not a suit % The garnishee, however, contends that the proceeding became a suit upon the policy when the plaintiff filed [147] liis denial of the garnishee’s answer, and that, because the denial was filed more than one year after the loss, the suit was too late. This contention is without merit. “If the proceeding is a law suit, it is such from its incipiency; and not merely from the time the plaintiff takes issue and traverses the answer.” Waples on Attach, and Garn. And if it be conceded that the proceeding is not a suit, the limitation fixed by the policy, like that fixed by the general statute, would cease to run, either upon the institution of the suit to which the proceeding is auxiliary, or of the proceeding itself. It would seem clear that the statute would run till, and be interrupted only by, the institution of the garnishment proceeding, because the garnishment, and not the main suit, is the proceeding against the debt owed by the garnishee. But, however this may be, the statute is certainly interrupted by the commencement of the garnishment. The garnishment is begun, not by the filing of the plaintiff’s denial of the garnishee’s answer, but by the service of the summons and notice of garnishment. But in many, in most respects, a garnishment is a suit. Waples on Garn. and Attach., pp. 341-345; Drake on Attach., sect. 452. “ It is, in effect, a suit by the defendant, in the plaintiff’s name, against the garnishee, without reference to the defendant’s concurrence, and, indeed, in opposition to his will. ’ ’ Drake on Attach., supra. A garnishment is not a suit in some respects, however, due to its auxiliary character. Thus, in Tinsley v. Savage, Garnishee, etc. (50 Mo. 141), it is held that a garnishment is not a suit in respect of the statute concerning the place where suits are to be brought. It is said by the court: “ Garnishment is one of the modes pointed out by the statute by which the writ (of execution) is executed, and it is not a new suit, but an incident, or an auxiliary, of the judgment, and a means of obtaining satisfaction of the same by reaching the defendant’s credits. The garnishee must make his answer in the court whence the execution issues, as it alone has [148] exclusive control over its process.” This language must, of course, be construed in the light of the facts of that case. And so, in this case, we must deem a garnishment not a suit in the meaning of Revised Statutes, section 3485, concerning the mode in which suits are instituted. The garnishment was begun within the time provided by the policy. It does not matter that the plaintiff filed his denial of the garnishee’s answer after that time. The issues were made up by the denial and the reply thereto, but the garnishment was begun long before. If the garnishee had filed no answer, but had made default, the plaintiff could not have filed a denial, and yet the plaintiff would have prevailed. Because, surely, the plaintiff’s right to a garnishment cannot be destroyed by the garnishee’s failure to answer the interrogatories filed. Besides, the statutes provide for judgment by default in such cases. Rev. Stat., sects. 2530 and 2531. A proceeding must be, indeed, instituted in which a default cannot be taken. And this is an additional reason for not holding that a garnishment is a suit, instituted by the plaintiff filing a denial of the garnishee’s answer, and is not a suit until then, because the garnishee, by failing to file an answer, could prevent the institution of a suit, and yet would suffer a default just as if there was a suit. In this state, “in order that an indebtedness may be liable to garnishment, it must be shown to be absolutely due as a money demand, unaffected by liens, or prior incumbrances,, or conditions of contracts.” Scales v. Southern Hotel Company, 37 Mo. 520; Heege v. Fruin, 18 Mo. App. 141. It may be considered a doubtful question whether a loss under a policy like the one in suit is subject to garnishment until after notice and proof of loss, in compliance with the conditions of the policy, or waiver of the same. Reason, as well as the weight of authority, seems to support the conclusion that the loss is not subject to the garnishment. Lovejoy v. Ins. Co., 11 Fed. Rep. 62, and cases cited. And such may be conceded to be the law. [149] under the view taken by us of this case, without a decision by us of the question. For the purposes of this case, we also yield to the garnishee’s contention that, “unless there is .some consideration for a waiver, or some valid modification of the agreement between the parties, which contains the condition, there can be no waiver of a condition precedent, except there be in the case an element of estoppel.” The assured gave no proofs of loss. But the garnishee, by act and word, waived the giving of such proofs, if the assured had known of such conduct, and had acted upon it. In other words, the garnishee had so acted that the assured, without giving proofs of loss, might have lawfully instituted a suit upon the policy. This the evidence clearly tended to show, but there was no evidence that the assured knew of such conduct on the part ofl the garnishee, and, hence, the counsel for the latter contends there was no waiver, because the waiver was based on the principle of estoppel, and without such knowledge, on the part of the assured, there could be no estoppel; that is, without such knowledge, the assured could not have been induced by it to take any course. But the conduct of the garnishee was well known by the plaintiff. The plaintiff has all the rights of the assured; the plaintiff stands in the shoes of the assured; against the plaintiff no defence can be maintained that could not be maintained against the assured. Hence, we think it immaterial whether the assured knew of the conduct of the garnishee or not. The question is, could the assured, had he known of such conduct, have claimed a waiver by reason thereof ? If, yes, then the garnishing creditor, who stood in the shoes of the assured, had the right to claim such waiver. Judgment affirmed. All concur.