Summary
In Ford v. Mutual Life Insurance Co. of New York, 194 Miss. 519, 527, 13 So.2d 45, we held that an "indebtedness" must be something owing in praesenti and must be of such nature that its payment could be enforced in a court of competent jurisdiction.
Summary of this case from Alta Woods Park v. Cent. Sur. Ins. Co.Opinion
No. 35310.
April 19, 1943. Suggestion of Error Overruled May 17, 1943.
1. ATTACHMENT.
Equity jurisdiction by attachment can be raised by motion separately filed (Code 1930, sec. 173).
2. GARNISHMENT.
Obligation of garnishee to defendant, which is made jurisdictional basis of attachment in chancery against nonresident defendant, must be an indebtedness owing in praesenti and must be such that, at time suit is filed, defendant could enforce debt against garnishee independently of complainant's suit against defendant.
3. GARNISHMENT.
It is general requisite of right to hold person as garnishee that, but for garnishment, defendant would have right of action against him for defendant's own use.
4. INSURANCE.
Generally, an advancement upon a life policy of accrued loan value or less is not such an obligation as will sustain a suit by insurer against insured borrower, since insured is entitled to loan value as a matter of contractual right.
5. GARNISHMENT.
Where insured had borrowed accrued loan value on life policy, so that insurer could not obtain judgment against insured for debt, there was no "indebtedness" so as to permit attachment of insurance company for indebtedness of insured (Code 1930, sec. 173).
6. GARNISHMENT.
Rights of plaintiff against garnishee are no greater than those of debtor.
7. GARNISHMENT.
In action against insurance company, where plaintiff garnished indebtedness of an insured, who had borrowed accrued loan value on a life policy, insured could have challenged jurisdiction of court as a protection to himself, but fact that he did not do so and paid interest on indebtedness into court did not change relation between parties so as to prevent insurance company from making such challenge.
8. GARNISHMENT.
In suit against nonresident but domesticated insurance company, where personal service had been effected, chancellor erred in dismissing bill at same time as he quashed attachment, notwithstanding that insurance company, by its motion to challenge jurisdiction of chancellor had appeared specially (Code 1930, sec. 173).
APPEAL from chancery court of Chickasaw county, HON. JAS. A. FINLEY, Chancellor.
Rush H. Knox, of Jackson, for appellant.
Section 375, Code of 1930, provides that when the process has been duly executed the defendant shall answer or demur on or before the monthly rule day next succeeding that to which such process is returnable, in default of which the bill may be taken pro confesso at any rule day thereafter or in term time.
Section 379, Code of 1930, provides that pleas in chancery are hereby abolished and every defense heretofore presentable by plea shall be made in the answer.
Under the positive provisions of these two sections the only thing that will prevent a decree pro confesso where process is duly executed is an answer or demurrer; the only way a plea may be made is by setting it up in the answer of the defendant. The statute makes no distinction among the various kinds of pleas, but embraces all kinds.
If one sort of plea can be made, as before the section was adopted, in the form of a motion, then any such plea could be so made and thereby the section would be entirely nullified. The two sections must be read together and constitute but one provision of the law of chancery procedure.
The plea in abatement challenging the jurisdiction of the chancery court in this cause was that in every sense of the word except in name only. It was sworn to. To avoid the force of the statute it was called by its author a "motion." It is the same old plea which the statute abolished, except as an integral part of an answer, by another name, to-wit, a motion.
For the above reasons in themselves I contend that the motion of appellant to strike said "motion" from the file should have been sustained and not overruled. Even though said "motion" of appellee was irregular and constituted no answer or demurrer to the bill, it had to be stricken from the file on proper motion before a decree pro confesso could be taken.
Griffith's Miss. Chancery Practice, Sec. 261.
Appellee was not in such relation to this case as authorized it to make a special appearance for the sole purpose of challenging the jurisdiction of the court "and for no other purpose whatsoever," as it undertook to do in its said "motion," for the very reason that it was from the very first in court for all purposes by personal service of process on it through the insurance commissioner of the state, which service has the effect of authorizing the rendition of a personal decree against such insurance company.
Aetna Ins. Co. v. Robertson, 126 Miss. 387, 88 So. 883; Clark v. Louisville N.R. Co., 158 Miss. 287, 130 So. 302.
Appellee did not occupy the position that apparently a nonresident defendant does who has been summoned by publication and appears specially and solely for the purpose of challenging the jurisdiction of the court.
Weaver Grocery Co. v. Cain Milling Co., 117 Miss. 781, 78 So. 769.
Appellee's plea in said "motion" that it is authorized to transact business in this state, where it has agents for service of process, and appellant, therefore, has a plain and adequate remedy at law, can avail it nothing. Notwithstanding such facts, it is subject to attachment in chancery in this state as a nonresident.
Aetna Ins. Co. v. Robertson, supra; Clark v. L. N.R. Co., supra; Southern Motor Express Co. v. McGee Truck Lines, Inc., 181 Miss. 223, 177 So. 653.
Appellee pleaded in its said "motion" that the debt its co-defendant owes it represented by the loan note against the policy is not a debt due and owing to it within contemplation of the statute providing for attachments in chancery; in other words, that the thing which is a debt in its favor is not a debt at all, either principal or interest, as against it in favor of appellant, but if it is such a debt, appellant cannot take advantage of it as such because the company required her to sign also the loan note as assignee.
A nonresident in an attachment suit in chancery pleading to the jurisdiction of the court will not be heard in such plea to allege non-ownership of the property levied on or to question the character of the indebtedness of its co-defendant to it.
Weaver Grocery Co. v. Cain Milling Co., supra; Barrett v. Carter, 69 Miss. 593, 13 So. 625.
The position appellee takes that such indebtedness of said Elliott Parker is not really a debt such as falls within the contemplation of the statutes on attachment in chancery is highly strained and technical. But even should it be held that the debt of Elliott Parker is not a debt within the contemplation of the statutes on attachment in chancery, as appellee contends and maintained in the court below, still the court should not have dismissed the bill.
Dollman v. Moore, 70 Miss. 267, 12 So. 23; Aldridge v. First Nat. Bank of Birmingham, 165 Miss. 1, 144 So. 469.
The court did not stop at quashing the writ and dismissing the bill, but actually ordered and directed the clerk to refund to appellee's co-defendant, Elliott Parker, the resident debtor of appellee, the $26.78 he admitted he owed as interest on appellee's loan to him, and that he had to pay now, and which he had paid into court with his answer. If the court was refusing jurisdiction of the cause, how could it order and direct anything to be done in it, especially by or to one not a party contestant?
When the court quashed the writ, it should have retained the bill for final determination under the general equity powers and applied this fund in its hands as a credit on any amount found to be due by appellee to appellant, as held in the case of Dollman v. Moore, supra.
The chancery court is not authorized to dismiss such suits but must either try or transfer them.
Barrett v. Carter, supra; Constitution of 1890, Sec. 162.
Wells, Wells, Lipscomb Newman, of Jackson, for appellee.
We submit that counsel for appellant err in their construction of Section 375 of the Code of 1930, to the effect that no pleading can be filed by a defendant to a bill of complaint, except a demurrer or an answer.
Section 389 of the Mississippi Code of 1930, which abolishes exceptions, expressly provides for motions in the place of exceptions under the former practice.
See Griffith's Miss. Chancery Practice, Secs. 370-375.
We are not citing said Section 389 as authority for the motion filed in the case at bar, but only to show that there are several other procedures open to defendants to a bill of complaint, other than answers or demurrers.
The action of the court below in entertaining and sustaining the motion of defendant, The Mutual Life Insurance Company of New York, is well established.
Griffith's Miss. Chancery Practice: p. 23, Sec. 22; Sec. 343; p. 349, Sec. 344; p. 413, Sec. 400; p. 419, Sec. 406; p. 516, Sec. 484.
The only jurisdiction, if any, of the chancery court was the statutory jurisdiction under Section 173 of the Mississippi Code of 1930. Thus, we see that the complainant in this instance is attempting to obtain chancery jurisdiction by attaching an alleged indebtedness due to defendant, The Mutual Life Insurance Company of New York, by Elliott Parker. The motion shows that Parker was advanced the sum of $535.63 against his own policy by The Mutual Life. According to the terms of the contract, he could require these advances at any time when the cash surrender value of the policy was a greater sum than the advance desired. Under the terms of the insurance policy and the terms of the loan, Parker was not required to pay the money back. As a matter of fact, he has not paid it back yet. Nor could The Mutual Life Insurance Company of New York force him to pay it back. Nor is he required to pay the interest on the advance. According to the contract, if he does not pay the interest, the principal amount of the advance will be increased in that amount. All that a policy loan consists of is a charge against the policy in the amount of the loan — a set-off — and Parker can pay it back, or not, as he likes. Therefore, it is seen that this is not an indebtedness and that Parker is not a debtor as is meant by the statute.
Love v. Fulton Iron Works, 162 Miss. 890, 140 So. 528; Kearney v. Kearney, 178 Miss. 766, 174 So. 59; Craig v. Gaddis, 171 Miss. 379, 157 So. 684; Southern Pacific R. Co. v. A.J. Lyon Co., 99 Miss. 186, 54 So. 728; Williams v. Union Central Life Ins. Co., 291 U.S. 170, 78 L.Ed. 711; Board of Assessors v. New York Life Ins. Co., 216 U.S. 517, 54 L.Ed. 597; In re Hirsch, 4 F. Supp. 708; Wagner v. Thieriot (N.Y.), 203 App. Div. 767; Rustin v. Aetna Life Ins. Co. of Hartford, Conn. (Neb.), 153 N.W. 548; Jansen v. Tyler et al. (Ore.), 49 P.2d 372; Baker v. General American Life Ins. Co. (Iowa), 268 N.W. 556; 26 C.J., Sec. 1; Black's Law Dictionary, "Debt," "Indebtedness," "Effects."
The lower court did not err in dismissing the suit and ordering refund by the clerk of the $26.78 paid into court by Elliott Parker, instead of transferring the case to the circuit court.
Advance Lumber Co. v. Laurel Nat. Bank, 86 Miss. 419, 38 So. 313; Werner Sawmill Co. v. Sheffield, 89 Miss. 12, 42 So. 876; Dollman v. Moore, 70 Miss. 267, 12 So. 23; Griffith's Miss. Chancery Practice, Sec. 484.
The effort of complainant to join her action for breach of written contract, evidenced by the policy of insurance, with an alleged tort, as set forth in the bill of complaint, cannot be sustained. Section 396 of the Mississippi Code of 1930 is broad in its scope but would not permit such joinder of tort and breach of contract in one bill of complaint. Such bill would be multifarious.
Guess v. Strahan, 106 Miss. 1, 63 So. 313; Nelms v. Brooks, 105 Miss. 74, 61 So. 985; Marquette Cement Co. v. Fidelity Deposit Co., 173 Miss. 164, 158 So. 924.
This appeal involves the questions: (1) Whether equity jurisdiction by attachment under Section 173, Code of 1930, can be raised by motion separately filed; and whether the chancellor was correct in (2) quashing the attachment and (3) dismissing the bill in this case.
Mrs. Ford, appellant, by her bill herein, seeks a personal decree against appellee, a nonresident but domesticated insurance corporation, for a total sum of $2,619.85, consisting, as she claims, of accrued disability payments due her as beneficiary in an insurance policy in said company, premiums paid by her while so disabled, and expenses and punitive damages occasioned by the wrongful refusal of appellee to pay her such disability benefits, and to attach and subject to the payment of her demands an indebtedness owing such nonresident by Mr. Elliott Parker, a resident of Chickasaw County, Mississippi, who was made a defendant to the bill.
Parker answered that he was indebted to the said insurance company in the sum of $535.63, principal, and $26.78, interest, by virtue of a loan he had obtained from appellee on a life insurance policy in his favor in said company, and paid the $26.78 into court.
The insurance company, by sworn motion separately filed, moved to quash the attachment and dismiss the bill on the grounds (a) that the obligation existing between Parker and the insurance company is not such an indebtedness as is contemplated by Section 173, and (b) Mrs. Ford is the holder as assignee of the Parker policy and jointly signed with Parker all of the papers to obtain the loan, and her liability is co-extensive with that of Parker's.
Mrs. Ford moved the court to strike that motion and for a decree pro confesso against appellee.
The chancellor denied the motion of Mrs. Ford and sustained that of the insurance company, quashed the attachment, dismissed the bill, and ordered the clerk to repay to Parker the $26.78. Mrs. Ford appeals.
Personal process was had on the insurance company by service upon the state insurance commissioner.
We will dispose of the questions in the order stated.
The motion will lie. Clark v. Louisville N.R. Co., 158 Miss. 287, 130 So. 302; First Nat. Bank of St. Louis v. Mississippi Cottonseed Products Co., 171 Miss. 282, 157 So. 349; Estes v. Bank of Walnut Grove, 172 Miss. 499, 159 So. 104; Alabama Power Co. et al. v. Jackson, 181 Miss. 691, 179 So. 571; Strickland et al. v. Humble Oil Refining Co. et al., 194 Miss. 194, 11 So.2d 820.
On the second proposition this court, in Travelers' Ins. Co. v. Inman, 157 Miss. 810, 126 So. 399, 401, 128 So. 877, said "The obligation of the garnishee-defendant to the principal defendant, which is made the jurisdictional basis of the attachment in chancery against the nonresident principal defendant, must be an indebtedness owing in praesenti by the said garnishee-defendant to the said nonresident principal defendant, and must be of such a nature that at the time the suit is filed the principal defendant could enforce the said debt against the said garnishee-defendant in a court of competent jurisdiction without regard to, and independently of, complainant's suit or cause of action against the said principal defendant. `It is a general requisite of the right to hold a person as garnishee that, but for the garnishment, defendant would have a right of action against him, for defendant's own use.'" See Howell v. Moss Point Furniture Co., 136 Miss. 399 at p. 408, 101 So. 559, at page 560; Russell v. Clingan, 33 Miss. 535; McNeill v. Roache, 49 Miss. 436; Dibrell v. Neely, 61 Miss. 218; Southern Pac. R. Co. v. A.J. Lyon Co., 99 Miss. 186, 54 So. 728, 34 L.R.A. (N.S.), 234, Ann. Cas. 1913d 800; Bean v. Bean, 166 Miss. 434, 147 So. 306; Craig v. Gaddis, 171 Miss. 379, 157 So. 684, 95 A.L.R. 1494.
The authorities also generally hold that an advancement upon a life insurance policy of the accrued loan value, or less, is not such an obligation as will sustain a suit by the insurance company against the insured-borrower. The insured is entitled to the loan value of the policy as a matter of contractual right; the insurer owes the insured the money and has no right to refuse to advance, or pay, it upon proper request by the insured. The company cannot sue because the defendant could plead and set off the amount as owing by the company to him. The policyholder can pay the debt or not as he desires. If he does not, the policy is forfeited and he is entitled to the excess cash value, if any, of the policy over the advancement to him. The unpaid interest is added to the principal. The Mutual Life Insurance Company could not have obtained a judgment against Parker in this case.
Williams v. Union Central Life Ins. Co., 291 U.S. 170, 54 S.Ct. 348, 78 L.Ed. 711, 92 A.L.R. 693; Board of Assessors v. New York Life Ins. Co., 216 U.S. 517, 30 S.Ct. 385, 54 L.Ed. 597; In re Hirsch (D.C.), 4 F. Supp. 708; Wagner v. Thieriot, 203 App. Div. 757, 197 N.Y.S. 560, affirmed 236 N.Y. 588, 142 N.E. 295; Rustin v. Ætna Life Ins. Co., 98 Neb. 426, 153 N.W. 548; Jansen v. Tyler et al., 151 Or. 268, 47 P.2d 969, 49 P.2d 372; Baker v. General American Life Ins. Co., 222 Iowa, 184, 268 N.W. 566. The rights of Mrs. Ford, in this respect, are, of course, no greater than those of the insurance company. This is not such an indebtedness as is contemplated by Section 173, Code of 1930.
The fact that Parker paid the interest into court could not change the relation between the parties. Love v. Fulton Iron Works, 162 Miss. 890, 140 So. 528. Parker could have challenged the jurisdiction of the court as a protection to himself. Kearney v. Kearney, 178 Miss. 766, 174 So. 59.
This renders it unnecessary for us to pass upon the effect upon this question of the execution by Mrs. Ford of the Parker papers.
But, on the third question, the chancellor should not have dismissed the bill. He should have proceeded to try the case. Although the insurance company, by its motion to challenge the jurisdiction of the court, had appeared specially, there had been personal service of process upon it, and, under Section 173, Code of 1930, "The court shall give a decree in personam against such non-resident . . . debtor if summons has been personally served upon him . . ." Murphy v. City of Meridian, 103 Miss. 110, 60 So. 48; Travelers' Ins. Co. v. Inman, supra; Branham v. Drew Grocery Co., 145 Miss. 627, 111 So. 155.
No motion was made to transfer the case to the law court. We are not passing on that situation. We decide the case as presented.
Reversed and remanded.