Opinion
17858.
ARGUED MAY 12, 1952.
DECIDED JUNE 9, 1952.
Interpleader, etc. Before Judge Perryman. Warren Superior Court. February 23, 1952.
O. J. Tolnas, for plaintiff in error.
Lon L. Fleming, Randall Evans Jr., C. L. Pilcher, J. Cecil Davis and Cohen Cohen, contra.
1. There is no merit in any of the grounds of the motion to dismiss.
2. The judgment of the court below overruling the general demurrer to the petition was error.
No. 17858. ARGUED MAY 12, 1952 — DECIDED JUNE 9, 1952.
Northern Assurance Company, Ltd., filed this bill of interpleader against W. A. Reese, R. H. Hall, Wrens Grocery Company, Pearce-Young-Angel Company, and Preston M. Almand, as administrator of the estate of Mrs. W. A. Reese, deceased. The petition alleged in substance that on October 29, 1947, petitioner had issued a fire-insurance policy to Mrs. W. A. Reese, conditioned to insure against fire in an amount up to $3000 a described dwelling and personal property therein. The policy period was for three years. The petition further alleges that, after the policy had been issued, Mrs. W. A. Reese represented to petitioner that she had executed to R. H. Hall a security deed to the house insured under the above policy and the lot on which it was situated, to secure a principal indebtedness of $1000 and interest thereon at eight percent from the date of the deed; that on October 1, 1948, Mrs. W. A. Reese died, and on February 21, 1949, upon the representations of W. A. Reese to the agent of the petitioner that he was the sole heir at law of Mrs. W. A. Reese, and that there was no administration on the estate of the deceased and no need for administration, an endorsement was placed upon the policy which read as follows: "The assured under the above-named policy being deceased, the title of assured under the policy is hereby corrected to read: W. A. Reese." The house and contents were destroyed by fire on April 7, 1949.
It is alleged that on March 4, 1949, Pearce-Young-Angel Company filed suit on account against W. A. Reese, and on May 4, 1949, served summons of garnishment upon petitioner On May 6, 1949, Wrens Grocery Company filed suit on account against W. A. Reese, and on the same day, served summons of garnishment upon petitioner. On April 26, 1949, W. A. Reese filed a plea of bankruptcy in both of the above suits on account. On June 6, 1949, Preston M. Almand was appointed administrator of the estate of Mrs. W. A. Reese. The petition further alleges that, since the filing of its answers in garnishment, a proof of loss under the provisions of the policy has been filed by Preston M. Almand, as administrator of the estate of Mrs. W. A. Reese, and under said proof of loss, petitioner and said administrator have agreed that said loss amounts to $2800, and said administrator has requested that payment of same be made by petitioner to him.
It is further alleged: that, of the said $2800 agreed upon, R. H. Hall claims he is entitled to an amount sufficient to liquidate the principal, interest, and costs due and accrued on the note above referred to, and that Preston M. Almand, as administrator of the estate of Mrs. W. A. Reese, claims the balance; that petitioner is garnished by Wrens Grocery Company and Pearce-Young-Angel Company, both of which companies represent themselves as creditors of W. A. Reese; and that the claims of said parties are such as to render it doubtful and dangerous for petitioner to pay any of said claims without the direction of a court of equity; and petitioner alleges that, in order to avoid a multiplicity of suits, said claimants should be required to come into a court of equity and set up their claims and the facts upon which their claims are based by way of interpleader, so that the claims of said parties may be adjudicated in one action. It is alleged that the insurance company was not in collusion with any of the parties.
It is also alleged that, under the terms of the policy, petitioner has agreed to pay R. H. Hall such loss as he might sustain, within the terms of the policy, and that he is entitled to receive the full amount of principal, interest, and costs, due and accrued, on the indebtedness of Mrs. W. A. Reese; that petitioner has issued its check in the amount of $2800, payable to R. H. Hall and to J. Allen Poole, as Clerk of the Superior Court of Warren County, Georgia, and has delivered said check to J. Allen Poole.
The prayers of the petition are that defendants be required to interplead and set up their claims, and that petitioner be discharged from further liability under the policy.
Preston M. Almand, as administrator of the estate of Mrs. W. A. Reese, filed his demurrers, and at the same time filed his answer to the petition. The general demurrer was overruled. Special demurrers to certain paragraphs were overruled and to others, sustained. To the judgment overruling his demurrers, the administrator excepted.
By agreement of all parties, the claim of R. H. Hall was ordered paid out of the sum in the hands of the clerk of the court, and it was ordered that the policy be delivered by the administrator, who had it in his possession, to the clerk so that the draft could be cashed.
The judge of the court below then signed an order relating the facts and discharging Northern Assurance Company, Ltd. To this order the administrator excepted.
When the case was called for trial, Lon L. Fleming, as trustee in bankruptcy for W. A. Reese, filed his intervention, claiming that he was entitled to the proceeds of the insurance policy in dispute. The administrator demurred to the intervention and filed his answer. The general demurrer was overruled and the special demurrer was sustained. To the judgment overruling the general demurrer, the administrator excepted.
In the view we take of this case, it is sufficient to say that the facts appearing on the trial of the instant case were substantially as alleged in the petition. When the hearing was concluded, the judge of the trial court passed an order finding that the remainder of the fund deposited with the Clerk of the Superior Court of Warren County was the property of W. A. Reese, subject to certain costs and fees, and said funds were ordered and directed to be turned over to Lon L. Fleming, trustee in bankruptcy for W. A. Reese. To this ruling the administrator excepted.
1. The defendants in error have filed a motion to dismiss the bill of exceptions in this court, stating therein numerous grounds for dismissal. We think it sufficient to say that we have carefully considered each and every ground of this motion and find no merit in any of them.
2. In the instant case, there are four types of alleged claimants to the proceeds of the policy of fire insurance, and a fifth, who in an intervention claims the fund. First, there is the holder of a security deed to the property insured and destroyed by fire, who was protected by an endorsement on the policy. No one questions his right to recover his loss out of the proceeds of the policy, and his claim can not, therefore, be the basis of a bill of interpleader.
The next class of claimants is the creditors of W. A. Reese who served summons of garnishment upon the defendant in error. The claim of this class of claimants is based upon the right of W. A. Reese to the fund in question. If he has no right to the fund, they have no claim to it or any part of it. The action of garnishing creditors is not sufficient to authorize the garnishee to maintain a bill of interpleader. He has an adequate defense at law by simply setting out in his answer the facts as to how he came into possession of the fund or property in his possession. Connolly v. Thurber Whyland Co., 92 Ga. 651 ( 18 S.E. 1004).
This leaves as alleged claimants to the fund Preston M. Almand, as administrator of the estate of Mrs. W. A. Reese, and W. A. Reese, as sole heir at law of Mrs. W. A. Reese, and later, Lon L. Fleming, as trustee in bankruptcy for W. A. Reese. W. A. Reese has made no claim to the proceeds of the insurance policy. Under the allegations of the petition, he has filed no proof of loss or done anything to attempt to collect under the policy. However, since the claim of the garnishing creditors, and later the trustee in bankruptcy, is based upon the right of Reese to the fund, the question arises whether or not his alleged right to the fund is such as to render it doubtful or dangerous for the holder to act, or whether a bill of interpleader is authorized in any event in this case.
Code § 37-1503 provides: "Whenever a person shall be possessed of property or funds, or owe a debt or duty, to which more than one person shall lay claim of such a character as to render it doubtful or dangerous for the holder to act, he may apply to equity to compel the claimants to interplead." Before a claim will be held to be of such character as to render it doubtful or dangerous for the holder to act, there must be a close question of law or fact. Mandeville v. First National Bank, 206 Ga. 426 ( 57 S.E.2d 553), and cases there cited. "The following conditions are generally held to be necessary in order to entitle a person to a bill of interpleader, as distinguished from a bill in the nature of interpleader: (1) The same thing, debt, or duty must be claimed by both or all of the parties against whom the relief is demanded; (2) all their adverse titles or claims must be dependent, or be derived, from a common source; (3) the plaintiff must not have or claim any interest in the subject matter; (4) the plaintiff must have incurred no independent liability to either of the claimants, but must stand indifferent between them merely as a stakeholder." 30 Am. Jur. 218, § 8, quoted in Campbell v. Trust Company of Ga., 197 Ga. 37 ( 28 S.E.2d 471, 152 A.L.R. 1111).
Applying the rules above stated to the allegations of the petition in the instant case, we find that the allegations are not sufficient to entitle the defendant in error to maintain a bill of interpleader. The petition alleges that the policy of insurance was issued to Mrs. W. A. Reese; that Mrs. W. A. Reese borrowed $1000 from R. H. Hall, and gave her note and security deed to the property insured under the policy, and had an endorsement entered on the policy to insure R. H. Hall against any loss within the limits of the policy; that Mrs. W. A. Reese died; and that W. A. Reese represented to the company that he was the sole heir at law of Mrs. W. A. Reese, that she owed no debts, and that no administration on her estate was necessary. These allegations show beyond doubt that the insurance company knew that Mrs. W. A. Reese owed debts, and that it would be necessary to administer her estate. The very policy under which this action arose relates that Mrs. W. A. Reese had at least one debt that had not been paid, and it was apparent that administration of her estate would be necessary. There could be no doubt but that the administrator would be entitled to administer the estate of Mrs. W. A. Reese; and when the loss occurred under the policy of insurance, that he would be entitled to administer the proceeds. It is therefore apparent that the necessary element of reasonable doubt as to which claimant should prevail, rendering it doubtful or dangerous for the holder to act, is not present.
The petition shows that the insurance company recognized this. It is alleged that the administrator filed a proof of loss under the policy, and that the company reached an agreement with the administrator settling the amount of the loss at $2800. They have reached no agreement with W. A. Reese or anyone claiming under him.
The petition is defective for the further reason that it shows that the insurance company is not merely a disinterested stake-holder. The claimant on one side has agreed to a settlement of the liability of the company for $2800, a sum substantially smaller than the full liability to which the company could be subjected under the policy. They have reached no such agreement with the claimants on the other side. The insurance company is therefore interested in upholding the agreement which it has concluded with the administrator, and for this reason is not entitled to maintain a bill of interpleader. Campbell v. Trust Company of Ga., supra; Little Green v. Davis, 140 Ga. 212 ( 78 S.E. 842).
For the above reasons, the judgment of the court below overruling the general demurrer to the petition was error. Since the general demurrer should have been sustained, all that happened after the order on the general demurrer was nugatory.
Judgment reversed. All the Justices concur, except Atkinson, P.J., not participating.