Graff v. Continental Auto Ins. Underwriters, Springfield, Ill.

• Citation: 35 S.W.2d 926,225 Mo.App. 85
• Parties: WALTER J. GRAFF, RESPONDENT, v. CONTINENTAL AUTO INSURANCE UNDERWRITERS, SPRINGFIELD, ILLINOIS, GARNISHEE OF EDMUND F. ROTERMUND
• Decision Date: 03 March 1931
• Court: Court of Appeal of Missouri (US)

35 S.W.2d 926

225 Mo.App. 85

WALTER J. GRAFF, RESPONDENT, v. CONTINENTAL AUTO INSURANCE UNDERWRITERS, SPRINGFIELD, ILLINOIS, GARNISHEE OF EDMUND F. ROTERMUND

Court of Appeals of Missouri, St. Louis

March 3, 1931

Appeal from the Circuit Court of the City of St. Louis.--Hon. Frank Landwehr, Judge.

AFFIRMED.

Judgment affirmed.

Jourdan & English and R. F. O'Bryen for appellant.

(1) One division of the Circuit Court of the city of St. Louis has no jurisdiction to receive and try a garnishment proceeding based upon a judgment rendered by another division; but a garnishment upon a judgment must be tried in that division of the court which rendered the original judgment, because: (a) Each division of the Circuit Court in the city of St. Louis is a separate and distinct court and a division to which a case is assigned acquires jurisdiction over that cause to the exclusion of all other divisions and courts. Voullaire v Voullaire, 45 Mo. 602; State ex rel v. Eggers, 162 Mo. 485, 487; Haehl v. Wabash Railway Co., 119 Mo. 325; Fenn v. Reber, 153 Mo.App. 219, 232. (b) A garnishment proceeding is merely ancillary to and a continuation of the original cause and must be filed in the division which rendered the original judgment. Tinsley v Savage, 50 Mo. 141; Chicago Herald Co. v Bryan, 195 Mo. 590; Owens v. McCleary, 273 S.W. 145; Brucker v. Georgia Casualty Co., 14 F.2d 688; State ex rel. v. Hughes, 135 Mo.App. 131; Revised Statutes 1919, Sec. 1597; State ex rel. v. Leahy, 193 Mo.App. 36. (2) A suit or other pleading founded on a written instrument should be dismissed if the instrument is not filed with the pleading or not alleged to be lost or destroyed. Revised Statutes 1919, Sec. 1270; McHoney v. German Ins. Co., 37 Mo.App. 218, 219; Dyer Admr. v. Murdock, 38 Mo. 224. (3) The court should have given the instructions of the garnishee in the nature of a demurrer to the evidence, because: (a) The plaintiff in a garnishment action has no right to recover against the garnishee unless the judgment defendant could recover in a suit brought by such defendant directly against the garnishee. Pickering v. Hartsock, 221 Mo.App. 868; Wolfley v. Wooten (International Life Ins. Co., Garnishee), 293 S.W. 73. (b) The policy of insurance made the basis of this claim against the garnishee was one of indemnity and not liability, containing a valid "no-action" clause, prohibiting recovery by the insured (judgment defendant) against the insurance company (garnishee), except after payment of the judgment, and such policy will not permit a recovery against the garnishee. Skaggs v. Gotham Mining & Milling Co., 208 Mo.App. 596; State ex rel. Auto Ins. Co. v. Trimble, 297 Mo. 659, 670. (c) The liability, if any, on the part of the garnishee to the judgment defendant was validly released before the garnishment proceedings. 28 Corpus Juris, 145; Pickering v. Hartsock, 221 Mo.App. 868; Laws of Mo. 1925, p. 274. (d) There was no evidence of insolvency on the part of the judgment defendant at the time of the cancellation, and solvent parties have the right to dispose of assets with or without consideration. Martin v. Fox, 40 Mo.App. 664. (4) Where a garnishment plaintiff claims a recovery against the garnishee upon a policy of indemnity or liability insurance issued to the judgment defendant, it is error to refuse garnishee's proffered instruction telling the jury that there is no liability if a valid release has been made between the judgment defendant and the garnishee. See cases cited under Point II. (5) Where an insurance company procures the release of an indemnity or liability policy from the judgment defendant by the payment to the judgment defendant of an amount less than the liability of the judgment defendant to the plaintiff and such release is declared fraudulent as against the judgment plaintiff, still credit must be allowed to the insurance company in garnishment proceedings for the amount paid on such judgment to the judgment defendant. Pickering v. Hartsock, 221 Mo.App. 877. (6) It was error for the court to admit oral testimony as to the prior negotations leading up to the signing of a stipulation reducing the amount of the judgment in this case because (a) Verbal negotiations are merged in a subsequently executed written contract. Morgan et al v. Porter, 103 Mo. 135; Douglass v. Hammel, 313 Mo. 514; Schaffner v. Moore Shoe Co., 3 S.W.2d 263; Elliott v. Winn, 305 Mo. 105; Koob v. Ousley, 240 S.W. 103. (b) The evidence tended to show a verbal contract to answer for the debt, default or miscarriage of another contrary to the provisions of the Statute of Frauds. Revised Statutes 1919, Sec. 2169. (c) The conversations purported to show a verbal contract made between the parties more than five years before the institution of the action and hence the verbal contract, if any, was barred by limitations. Revised Statutes 1919, sec. 1317.

Foristel, Mudd, Blair & Habenicht and James J. O'Donohoe for respondent.

(1) Judgment in the damage suit was rendered in the circuit court of the city of St. Louis and it remains there; execution was issued out of said court by the clerk thereof and made returnable in that same court. This proceeding, pursuant to the rules of court, was originally assigned to and docketed in Division No. 1 of said court; the pleadings were there substantially made up and the cause was there assigned to Division No. 7 for trial. Hence, the Judge of Division No. 7 had jurisdiction. The sundry divisions make the unit characterized, "circuit court of the city of St Louis." Standing alone, none of the divisions make a court. Goddard to Use v. Delaney, 181 Mo. 564; State ex rel. v. Allen, 235 Mo. 298; In re Ward Parkway, 188 Mo.App. 567; State v. Kowertz, 317 Mo. 426. (2) Section 1270, Revised Statutes 1919, does not apply in the instant case for reasons: (a) A policy of insurance is not an instrument (like a note) "executed by the other party." Kelly v. Thuey (en banc), 143 Mo. 422; Graves v. Ins. Co. (en banc), 279 Mo. 240. (b) The policy was in the possession and under the control of appellant and respondent alleged same. This is sufficient. Planing Mill v. Essex, 157 Mo.App. 18. (c) Appellant waived the right, if it had any, to complain of failure to file or allege loss or destruction of policy, because appellant filed neither a demurrer nor motion to dismiss and went to trial. (d) To be available as a defense such issue would have to be made upon the denial and reply. Section 1864, Revised Statutes 1919. (3) Regardless of the "no-action" clause the policy in question is one of liability and garnishment lies without payment of judgment. Wehrhahn v. Fort Dearborn Cas. Underwriters, 221 Mo.App. 230; Goerss v. Indemnity Company of America (Mo. App.), 3 S.W.2d 272 (writ of certiorari quashed en banc, 13 S.W.2d 1059); Jedlicka v. Missouri Mut. Cas. Co. (Mo. App.), 14 S.W.2d 535; Kurre v. American Indemnity Co. (Mo. App.), 17 S.W.2d 685. (4) The general rule is that a judgment creditor has no greater rights against a garnishee than the judgment debtor. However, where an alleged settlement between garnishee and the judgment debtor is fraudulent, the judgment creditor has greater rights against the garnishee than the judgment debtor. Leonard v. Martin, 192 Mo.App. 350, 355 (majority opinion approved (Mo.), 214 S.W. 968); Potter v. Trust Co., 170 Mo.App. 108, 120 (13 cases cited); McDaniel v. Bryan, 123 Mo.App. 640, (cases cited); Holmes Organ Co. v. Petitt, 34 Mo.App. 536, 545; 12 R. C. L. 607, Par. 36 (cases cited). (5) The alleged release and conveyance of the policy was made to hinder, delay and defraud respondent in the collection of his judgment and are, therefore, void and of no binding effect, regardless of whether or not the judgment debtor is insolvent. (Section 2276, Revised Statutes 1919; Snyder v. Free, 114 Mo. 360; Snell v. Harrison, 104 Mo. 158; Leeper v. Bates, 85 Mo. 224; Lynes v. Holt (Mo.), 1 S.W.2d 121; Phipps v. Markin, 227 S.W. (Mo. App.) 870; Farmers' Bank v. Handley (Mo.), 9 S.W.2d 880; 27 C. J. 462. (6) And since the alleged release and conveyance are void, appellant cannot be reimbursed for money, if any, it has paid therefor. "For the maxim is that 'He who hath committed iniquity shall not have equity.'" Allen v. Berry et al., 50 Mo. 90; McNichols v. Rubleman, 13 Mo.App. 515; Johnson v. Goldsby, 32 Mo.App. 560; Lampkin v. Bank, 98 Mo.App. 239. Inadequacy of consideration is a badge of fraud and if grossly so the Court will declare a conveyance or release void against creditors, "just as it would declare a bond conditioned to murder a man, or do any other unlawful act." Munford v. Sheldon (Mo.), 9 S.W.2d 907; Robinson's Exrs. v. Robards, 15 Mo. 459. (7) It was not error for the court to have admitted oral testimony as to prior negotiations leading up to the signing of the stipulation reducing the amount of the judgment, and the rule that written contracts merge prior negotiations has no application where such contracts do not purport to embrace the terms complete in themselves. Parol evidence is also admissible to explain ambiguities and to supply omitted parts. Norton v. Bohart, 105 Mo. 615; Grath v. Roofing Tile Co., 121 Mo.App. 245; Lehndorf v. Schields, 13 Mo.App. 486; Mosby v. Smith, 194 Mo.App. 20; Morris v. Martin, 208 Mo.App. 575; Bagnall v. Brewing Co., 203 Mo.App. 635; Proctor v. Home Trust Co., 221 Mo.App. 577; Greening v. Steele, 122 Mo. 287; Busch & Latta Painting Co. v. Woermann Construction Co., 310 Mo. 419. (8) The Statute of Frauds is not involved in this case for reasons, amongst which, are: (a) "If the Statute of Frauds is to be relied on it must be pleaded." Mills v. Connett, 229 S.W. (Mo. App.) 1103. (b) When one undertakes to pay the debt of another and the motive of the promise is that, by making such...