Goza v. Provine , 140 Miss. 315 ( 1925 )

^* Headnote 1. 25 C.J., Section 127. Exemption of proceeds of life insurance after loss, from beneficiary's debts, see note in L.R.A. 1915A, 1201; 11 R.C.L. p. 529; 2 R.C.L. Supp. p. 1268. Appellant G.R. Goza sought to enforce the payment of a judgment held by him against appellee, Mrs. C.C. Provine, by garnishment served on Grenada Trust Banking Company. There was a contest growing out of the garnishment proceedings resulting in a judgment for appellee. The question tried was whether or not the funds in the custody of Grenada Trust Banking Company which were admitted to be the property of appellee were subject to the judgment against her on which the garnishment was issued. The facts, which are undisputed, out of which the question arises are substantially as follows: On May 24, 1922, appellee and her husband executed a note in favor of appellant in the sum of six hundred seventy-two dollars due January 10, 1923. Thereafter the husband died. At the time of his death nothing had been paid on the note. Subsequent to the death of the husband appellant duly probated the note against his estate. Nothing has been realized on the note from his estate. After the death of appellee's husband and the probation of the note by appellant against his estate, appellant sued appellee in the circuit court of Grenada county on said note. Process was issued, and personally served on appellee, and made returnable as provided by law. Appellee failing to appear and defend the action, judgment by default was taken against her for the amount of the note and interest and attorney's fee as provided in the note. On April 26, 1924, the judgment being still unsatisfied, appellant suggested in writing that Grenada Trust Banking Company was indebted to appellee, the judgment defendant, and that garnishment issue accordingly. Thereupon garnishment was issued and served on the banking company, which answered that it had on deposit the sum of four hundred fifty-seven dollars, the property of appellee, but asserted that it was exempt by law from the judgment, because the money so on deposit was the proceeds of a life insurance policy on the life of appellee's husband in which she was the beneficiary. Appellee also made claim to the funds so garnished on the same ground as that set up by the banking company. Issue was taken by appellant on the answer of appellee, which was tried on agreed facts, which were, in substance, that some time before the death of appellee's husband he took out a policy of insurance on his own life, naming appellee therein as beneficiary; that this policy was in force at the time of his death and the funds garnished on deposit in Grenada Trust Banking Company were part of the proceeds of this life insurance; that the note which was the foundation of the judgment against appellee was for borrowed money, all of which was received and went into the hands of her husband; that appellee simply signed the note with her husband in order to enable him to borrow the money for which the note was given to appellant. It was agreed further the total amount of this insurance was less than five thousand dollars.

Appellant's position is that, regardless of the source from which the garnished funds came, they were the property of appellee and liable to be taken by the judgment against her in favor of appellant.

Appellees position is that the foundation of the judgment against her on which the garnishment was issued was an indebtedness due by her husband; that in truth and in fact it was not her indebtedness but his; that under section 2140, Code of 1906 (Hemingway's Code, section 1813), therefore the funds were exempt. That statute provides in substance that the proceeds of a life insurance policy to an amount not exceeding ten thousand dollars, upon any one life shall inure to the party named as beneficiary, free from the debts of the person whose life was insured, even though the insured paid the premiums thereon. The proceeds of a life insurance policy, payable to the wife of the insured, are not upon his death assets of his estate, but belong to the wife. Jones v. Patty, 73 Miss. 179, 18 So. 794. A life insurance policy designating a beneficiary is the property of such beneficiary at the moment of its issuance. Jackson Bank v.Williams, 77 Miss. 398, 26 So. 965, 78 Am. St. Rep. 530.

The note was signed by both appellee and her husband as joint makers. Even though it be true as between appellee and her husband that she was a mere surety, that is not true as between appellee and the appellant, the payee in the note. As between appellant on the one hand and appellee and her husband on the other the latter were jointly and severally liable on the note, and under the law appellant had the right to proceed against either one or both of the joint makers until payment was made. Section 2683, Code of 1906 (section 2170, Hemingway's Code); section 2682, Code of 1906 (section 2169, Hemingway's Code);Scharff v. Noble, 67 Miss. 143, 6 So. 843.

The exemption of the proceeds of life insurance given by section 2140, Code of 1906 (section 1813, Hemingway's Code), is against the debts of the insured. It is true the note involved here was the debt of the insured. And, if it had been his debt alone, the proceeds of the policy would have been freed from liability for it. But the note and the judgment into which it was merged was the debt also of appellee, and it was her several, as well as her joint, liability with her husband. The case stands exactly as if the note had been signed by her alone. In other words, under this statute we hold that these garnished funds could not have been taken on a judgment against appellee's husband, but they can be taken on a judgment against her, even though the judgment against her was based on the same indebtedness as that of the judgment against her husband.

We do not deem the other questions argued of sufficient seriousness to call for a discussion by the court. We think it sufficient to say that the defects and irregularities, if any there were, in the judgment obtained by appellant against appellee were cured by the statute of jeofails; and, if there were irregularities in the garnishment proceedings, they were not vital.

Reversed, and judgment here for appellant.

Reversed.