Isaac Van Dyke Co. v. Moll

• Decision Date: 03 January 1928
• Docket Number: No. 42.,42.
• Parties: ISAAC VAN DYKE CO. v. MOLL (LINCOLN NAT. LIFE INS. CO., Garnishee).
• Court: Michigan Supreme Court

241 Mich. 255

217 N.W. 29

ISAAC VAN DYKE CO.

v.MOLL (LINCOLN NAT. LIFE INS. CO., Garnishee).

No. 42.

Supreme Court of Michigan.

Jan. 3, 1928.

Error to Circuit Court, Ottawa County; Orien S. Cross, Judge.

Action by the Isaac Van Dyke Company against John P. Moll, defendant, and the Lincoln National Life Insurance Company, garnishee. Judgment for plaintiff, and defendant and garnishee bring error. Reversed and remanded, with directions.

Argued before SHARPE, C. J., and BIRD, FLANNIGAN, FELLOWS, WIEST, CLARK, and McDONALD, JJ. Robinsons & Parsons, of Holland, for appellant Moll.

R. F. Baird and Clyde J. Cover, both of Ft. Wayne, Ind., for appellant garnishee.

Jarrett N. Clark, of Zelland, for appellee.

SHARPE, C. J.

The question here presented is aptly stated by defendants' counsel as follows:

‘Under the garnishment law of Michigan, can the cash value of a life insurance policy be reached by a creditor of the insured, when the insured has not performed the acts made necessary by the policy to entitle him to maintain an action against the insurer for the same?’

The ‘acts' referred to are the election to take, the surrender of the policy, and demand for payment. The carefully prepared briefs which have been filed have greatly aided us in reaching a conclusion. It is conceded that the question is a new one in this state. It must be determined by the construction which shall be placed upon the provisions of our garnishment statute. They are found in 3 Comp. Laws 1915, and read as follows:

‘(13123) Sec. 2. From the time of the service of such writ, the garnishee shall be liable to the plaintiff to the amount of property, money, goods, chattels and effects under his control, belonging to the principal defendant, or of any debts due or to become due from such garnishee to the principal defendant, or of any judgment or decree in favor of the latter against the former, and for all property, personal and real, money, goods, evidences of debt or effects of the principal defendant which such garnishee defendant holds, by conveyance, transfer or title that is void as to creditors of the principal defendant, and for the value of all property, personal and real, money, goods, chattels, evidences of debt or effects of the principal defendant which such garnishee defendant received or held by a conveyance, transfer, or title that was void as to creditors of the principal defendant; and such garnishee defendant shall also be liable on any contingent right or claim against him in favor of the principal defendant.’

‘(13139) Sec. 18. When the garnishee shall be found indebted to the principal defendant, and the time of payment shall not have arrived, no judgment shall pass until after the time of maturity, which shall be named in the finding or verdict.’

These provisions render the garnishee liable to the amount of any money in its hands, or under its control, belonging to the principal defendant or any debt due, or to become due, to him from the garnishee. The general rule undoubtedly is that a debt which may be sued upon at the time of the service of the writ, or owing but not then due, is subject to garnishment. Nessen Lumber Co. v. Bennett Lumber Co., 223 Mich. 349, 193 N. W. 789. The question here presented is whether the defendant company was indebted to the defendant Moll in any sum for which an action might have been brought at the time of the service of the writ. The beneficiary named in the policy had died. It was payable in the event of his death to his estate.

While the policy must in form comply with the provisions of our statutes, it is nevertheless a contract entered into between the insurer and the insured. ‘The policy is the measure of the rights of everybody under it.’ Northwestern Mut. Life Ins. Co. v. McCue, 223 U. S. 234, 32 S. Ct. 220, 56 L. Ed. 419,38 L. R. A. (N. S.) 57.

The principal undertaking of the insurer is to pay a sum certain on the death of the insured. It had, however, from time to time received certain sums additional to the cost of what may be termed ‘straight life insurance,’ and such payments by the insured entitled him to certain options, plainly stated in the policy, which he might exercise in the manner provided therein. Each of these options is in the nature of an irrevocable offer made to him by the insurer, but in no way binding upon it until acceptance be had. Among them was the right to demand and receive the cash surrender value of the policy. To entitle the insured thereto, he must notify the company of his election to exercise his right of option (make demand therefor) and surrender his policy to the company.

There is a clear distinction between the necessity of demand for which...