Sexton v. Phoenix Ins. Co. 132 N. C. 1, 43 S. E. 479; Clay v. Allen, 63 Miss. 426; Glens Falls Ins. Co. v. Hite, 83 Ill. App. 549. See also Waples, Attachm. § 374; Drake, Attachm. 7th ed. § 549; 28 C. J. 164.

In Northwestern Ins. Co. v. Atkins, 3 Bush, 328, 96 Am. Dec. 239, and Phenix Ins. Co. v. Willis, 70 Tex. 12, 8 Am. St. Rep. 566, 6 S. W. 825, the precise point that the filing of proofs of loss was a condition precedent to the creation of the debt was made and overruled.

It appears from the finding that

I. In general, 1072.

the interest of the mortgagees has been made to appear, and, as the apportionment of the loss among the several defendants is a matter of arithmetic, the case is, as the trial court notes in its memorandum, ready for judgment, in case the plaintiff should prevail.

There is error, the judgment is set aside, and the cause remanded, with direction to enter judgment for the plaintiff in accordance with this opinion.

All concur.

II. Necessity of proofs of loss, 1073. III. Adjustment or liquidation of claim, 1075.

IV. Effect of option to restore, 1077.

The question as to jurisdiction in garnishment as affected by the situs of the debt involves considerations not distinctive to the subject under annotation, and is therefore excluded. The question as to garnishment as affected by the fact that the property covered by insurance was exempt is also beyond the scope of the annotation. See, for example, Wooster v. Page (1873) 54 N. H. 125, 20 Am. Rep. 128; West Florida Grocery Co. v. Teutonia F. Ins. Co. (1917) 74 Fla. 220, L.R.A.1918B, 968, 77 So. 209; Cameron v. Fay (1881) 55 Tex. 58; Chipman v. Carroll (1894) 53 Kan. 163, 25 L.R.A. 305, 35 Pac. 1109.

I. In general.

As stated in 12 R. C. L. 804, it may be said to be the general rule that a claim against a fire insurance company for a loss is subject to garnishment at the suit of creditors of the insured. It is so held in Reid v. Mercurio (1901) 91 Mo. App. 673, but in most of the other cases it is apparently assumed, the question being as to when the claim becomes subject to garnishment.

It was held in Canada Cotton Co. v.

Parmalee (1889) 13 Ont. Pr. Rep. 308, that money due or owing from an insurance company to the insured became garnishable by the insertion in an attachment statute, which previously embraced all debts owing or accruing from the garnishee to the judg ment debtor, of the words "and all claims and demands of the judgment debtor against the garnishee arising out of trust or contract, where such claims and demands could be made available under equitable execution," the court saying that such claim or demand arose out of a contract, and could be made available by appointing a receiver; that is, by equitable execution.

The withdrawal value of a premium under a provision of a perpetual fire insurance policy for return to the insured of a portion of the premium on the policy in case of cancelation thereof is not subject to garnishment by a creditor of the insured, where the insured has not asked for or desired return of the premium, and has not surrendered or offered to surrender the policy for cancelation, and the policy is still in effect. Association v. Laib (1893) 13 Pa. Co. Ct. Rep. 658.

A creditor of the owner of goods cannot garnishee the insurance company for a loss under a policy taken out by another in his own name and for his own benefit and at his own ex

pense, since creditors cannot reach by garnishment any assets which the debtor himself could not recover from the garnishee. Tim V. Franklin (1891) 87 Ga. 93, 13 S. W. 259.

And the claim of the insured for loss under a policy which makes the loss payable to a mortgagee as his interest may appear is not subject to garnishment by a creditor of the insured, where the amount of claim as adjusted does not exceed the amount due under the mortgage, and, therefore, leaves nothing due from the garnishee to the insured. Mansfield v. Stevens (1883) 31 Minn. 40, 16 N. W. 455.

Upon the attachment of a claim for loss under a fire insurance policy providing that the lapse of a specified length of time, unless a suit is brought upon the policy within such time, shall be conclusive evidence against the validity of any claim under the policy, the failure of the insured to bring an action within such time will not bar a recovery by the attaching creditor. Schroeder v. Keystone Ins. Co. (1856) 2 Phila. (Pa.) 286.

And the garnishment of an insurer cannot be defeated by its recognition of an execution, issued before the garnishment by the insured, upon a judgment obtained by him against the insurer, and by the subsequent discharge by the insurer of the execution by payment, where such execution could have been quashed by the insurer because issued within three months after judgment, in violation of a statute, applicable to the insurer, that prohibited execution from being issued against it within three months after judgment. Home Mut. Ins. Co. v. Gamble (1851) 14 Mo. 407.

II. Necessity of proofs of loss. There is a conflict of opinion between different jurisdictions as to the garnishment of fire insurers before proof of loss, which is largely due to the wording of the garnishment statutes of the different states.

Thus, that proof of loss has not been made as required by a fire insurance policy to make the loss payable, and as a condition precedent to the main38 A.L.R.-68.

tenance of an action therefor, is held not to prevent the garnishment of the insurer by a creditor of the insured, in FINCH V. GREAT AMERICAN INS. Co. (reported herewith) ante, 1068, Northwestern Ins. Co. v. Atkins (1867) 66 Ky. 328, 96 Am. Dec. 239, and Phenix Ins. Co. v. Willis (1888) 70 Tex. 12, 8 Am. St. Rep. 566, 6 S. W. 825.

And the fact that no proofs of loss have been served at the time of the service of the writ of garnishment does not make the claim of the insured uncertain and contingent so as not to be subject to garnishment, where there is no express stipulation in the policy making the service of proofs of loss a condition precedent to liability on the part of the insurance company. Hanover F. Ins. Co. v. Connor (1886) 20 Ill. App. 297.

It was held in the reported case (FINCH V. GREAT AMERICAN INS. Co.) that, from the date of the loss, there was a debt due from the insurer to the insured within the meaning of the garnishment statute, and the court construed the word "due" in the statute in the sense of owing, rather than in the more restricted sense of payable.

In the Atkins Case (1867) 66 Ky. 328, 96 Am. Dec. 239, supra, it was held that the garnishment could be maintained, although the insured did not subsequently file the required proofs of loss, as the creditor could himself do so.

And the court, in Reid v. Mercurio (1902) 91 Mo. App. 673, though holding the insurer not garnishable before the receipt of the requisite proofs of loss, recognized the privilege of the creditor of the insured to make proofs of loss himself, citing the preceding case, and stated that it would be sufficient if they were furnished before the answer of the garnishee was filed.

But that a fire insurance company cannot be subjected to garnishment until furnished with the requisite proofs of loss was held in Lovejoy v. Hartford F. Ins. Co. (1882) 11 Fed. 63; West Florida Grocery Co. v. Teutonia F. Ins. Co. (1917) 74 Fla. 220, L.R.A.1918B, 968, 77 So. 209; Davis v. Davis (1862) 49 Me. 282; Nickerson v.

Nickerson (1888) 80 Me. 100, 12 Atl. 880; Gies v. Bechtner (1867) 12 Minn. 279, Gil. 183; Reid v. Mercurio (1902) 91 Mo. App. 673; and Dowling v. Lancashire Ins. Co. (1894) 89 Wis. 96, 61 N. W. 76.

The decisions in the foregoing cases were based upon the ground that, before the receipt of the proofs of loss. the liability of the insurer was contingent; and it appears from the cases that the Maine and the Minnesota statutes provided that the debt, to be garnishable, must be due absolutely, and not upon any contingency.

In the Davis Case (1862) 49 Me. 282, supra, the court said that the contingency under the statute was not a mere uncertainty as to how the balance might stand between the insured and the insurer, but was such a contingency as might preclude the insured from any right to cause the insurer to settle, that the preliminary proof required by the policy was a condition precedent to the right of the insured to recover, that the liability of the insurer did not become absolute unless the preliminary proof as required was obtained, and that, if no proof was furnished, liability did. not attach, and therefore, before preliminary proof was furnished, it was doubtful if liability would ever attach.

And in Gies v. Bechtner (1867) 12 Minn. 279, 1 Gil. 183, supra, the court said that the provisions of the policy. as to notice and proof of loss had to be substantially complied with before the claim was payable; that they were conditions precedent to the right of the insured to maintain an action; that it was the fact that the event upon which the contract became absolute might not transpire which gave character to the contract and rendered it contingent; and that the insured might never comply with these conditions, and the claim, therefore, never become payable; but that, further, one of the stipulations, that fraud would cause a forfeiture of all claims under the policy, embraced the whole period from the making of the contract till the preliminary proofs were furnished, and, if it became operative in any case, extended to the payment and

defeated the right of action therefor, and that it was evident, therefore, that the payment was contingent, and not embraced within the statute.

The Canadian cases support the proposition that the claim of the insured against the insurer is not as yet subject to garnishment, where no proof of loss has been made as required by the policy, and no loss has been admitted by the insurance company. Hartt v. Edmonton Steam Laundry Co. (1909) 2 Alberta L. R. 130. In this case the statute provided that the garnishee order should bind "any debt due or accruing due from the garnishee to the defendant."

That a claim for a loss under a fire insurance policy containing a statutory condition that the loss should not be payable until a specified time after completion of the proofs of loss was not garnishable before the completion of the proofs of loss, where the statute made subject to garnishment, debts, obligations, and liabilities owing, payable, or accruing due, was held in Lake of Woods Mill. Co. v. Collin (1900) 13 Manitoba L. R. 154, and Brookler v. Security Nat. Ins. Co. (1915) 25 Manitoba L. R. 537, 23 D. L. R. 595.

Where the policy provided that the loss shall not be payable until the insured, if required, shall submit to an examination under oath by the insurance company as to the loss, and the insurance company was not satisfied with the proofs of loss received from the insured, and used due diligence to notify the insured to submit to an examination, but was unable to find him, and he never submitted to such examination, it was held in Harris v. Phoenix Ins. Co. (1868) 35 Conn. 310, that a garnishing creditor stood in the same position as the insured, and could not recover the amount of the loss of the insurance company.

It may, however, be shown by a garnishing creditor of the insured, as well as by the insured himself, that delivery of proof of loss was dispensed with or waived by the insurance company or its authorized agent, and whatever would constitute a waiver or be evidence tending to show a waiver,

in an action by the insured, obtains likewise with the same force and effect in favor of his creditor pursuing the company by garnishment. Reid v. Mercurio (1902) 91 Mo. App. 673.

And that waiver of proofs of loss by the insurer renders the claim for a loss subject to garnishment appears in Lovejoy v. Hartford F. Ins. Co. (1882) 11 Fed. 63; West Florida Grocery Co. v. Teutonia F. Ins. Co. (1917) 74 Fla. 220, L.R.A.1918B, 968, 77 So. 209; Nickerson v. Nickerson (1888) 80 Me. 100, 12 Atl. 880; Gies v. Bechtner (1867) 12 Minn. 279, Gil. 183; and Ritter v. Boston Underwriters Ins. Co. (1887) 28 Mo. App. 140.

The court, in Ritter v. Boston Underwriters Ins. Co. (Mo.) supra, said that it was a doubtful question whether a loss under a fire insurance policy was subject to garnishment until after notice and proof of loss, in compliance with the conditions of the policy, or waiver of the same (citing the case of Lovejoy v. Hartford F. Ins. Co. (Fed.) supra), and was apparently of the opinion that the loss in such case was not subject to garnishment, but expressly stated that it did not decide the question, because proofs of loss had been waived by the insurer.

In Nickerson v. Nickerson (1888) 80 Me. 100, 12 Atl. 880, where it was held that the mortgagee, upon the failure of the insured, could furnish the requisite proofs of loss, it is intimated by the court that the action of the insurance agent in writing down the details of the fire and loss given him by the mortgagee, and then saying to him that that was all that was required, would constitute a waiver on the part of the insurance company of the statutory requirement of proofs of loss.

But a waiver of proofs of loss by the insurance company is not shown by evidence that the insurance agent and the insured agreed upon the amount of the loss, where it appears that the agent filled out blank proofs of loss and tendered them to the insured, and requested him to sign and swear to them as provided in the policy, and he refused to do so upon the ground that the burned goods did not belong to

him especially, where the stipulation in the policy as to proofs of loss provided that they should state the interest of the insured and of all others in the property. Reid v. Mercurio (Mo.)

supra.

And it was unsuccessfully claimed in Lovejoy v. Hartford F. Ins. Co. (Fed.) supra, that the requirement of proofs of loss was waived by the insurance company, the only evidence thereof being the statement of the insured that, upon his application to the insurance agent for blank proofs of loss, the agent told him that he had better not make out any proofs of loss himself, but leave it to the adjusters.

III. Adjustment or liquidation of claim.

A claim under a fire insurance policy which has been adjusted as provided in the policy is subject to garnishment. Boyle v. Franklin F. Ins. Co. (1844) 7 Watts & S. (Pa.) 76.

But it was held in Simpson v. Chase (1891) 14 Ont. Pr. Rep. 280, that a claim under a fire insurance policy for a loss, although the amount thereof has been adjusted, is not a debt which is garnishable under a statute which makes subject to garnishment all debts owing to the debtor, whether due or not due. The court said that unliquidated damages are not the subject of attachment, and a claim for such damages cannot be attached until judgment, by which alone it becomes a debt, and that a verdict against an insurance company for unliquidated damages in an action upon the policy cannot be attached until it becomes a debt by a judgment.

And in Shorey v. Baker (1884) 1 Manitoba L. R. 282, one of the judges sustained an appeal from a garnishing order served upon the fire insurer on the day following the fire, upon the ground that the claim for such loss was not a debt subject to garnishment at the time of the service of the order.

Where the amount of a loss has been ascertained and voted to be paid by the insurance company, it assumes the character of a liquidated debt due from the company to the insured, which may be subject to garnishment.

Swamscot Mach. Co. v. Partridge (1852) 25 N. H. 369.

An insurer is subject to garnishment where the loss has been adjusted, and the money due paid into court to abide the result of litigation between those claiming it. Meridian Land & Industrial Co. v. Ormond (1903) 82 Miss. 758, 35 So. 179.

And where the insurance company, after having been served with summons of garnishment by a creditor of the insured, enters into an agreement of settlement with the insured and pays the amount agreed upon into court, such agreement and payment amount to an adjustment of the claim with the insured, and may amount to a waiver by the insurer of the conditions in the policy, if any, precedent to the right of the insured to recover under the policy, and the garnishing creditor may take advantage of such waiver, and, upon proof of the insured's actual loss under the policy, not exceeding the face value of the property and his own claim against the insured, recover against the garnishee. Callaway v. Globe & R. F. Ins. Co. (1920) 25 Ga. App. 649, 104 S. E. 15.

There is sufficient evidence to justify a recovery against the insurance company by a creditor of the insured, although the disclosures of the insurer absolutely denied the existence of any indebtedness by it to the insured, where it appears that the insurer made a settlement with the insured, and the adjuster of the company testified that the company admitted a partial liability on the policy. Grinnell v. Niagara F. Ins. Co. (1901) 127 Mich. 19, 86 N. W. 435.

While there is some conflict as to the right to garnish the insurer before the adjustment or liquidation of the claim, the majority of the cases appear to uphold such right.

Thus, a claim for a loss under a fire insurance policy, though not yet adjusted, was held subject to garnishment, in Knox v. Protection Ins. Co. (1833) 9 Conn. 430, 25 Am. Dec. 33; Hanover F. Ins. Co. v. Connor (1886) 20 Ill. App. 297; Crescent Ins. Co. v. Moore (1886) 63 Miss. 419; Sexton v.

Phoenix Ins. Co. (1903) 132 N. C. 1, 43 S. E. 479; Girard F. & M. Ins. Co. v. Field (1863) 45 Pa. 129.

In Glens Falls Ins. Co. v. Hite (1899) 83 Ill. App. 549, where it appeared that there was no appraisal of the loss and no adjustment thereof, because of the conduct of the insurance adjuster in accusing the insured of burning his own property, in denying any liability on the part of the insurance company, and in stating that it would not pay until compelled to do so by the court, it was held that the fact that the claim was not adjusted and was disputed by the insurance company did not prevent it from being subject to garnishment.

Tex.

And it was held in Gordon v. Litwood Oil & Supply Co. (1924) Civ. App. 261 S. W. 400, that, as soon as a loss occurred, the liability of the insurance company was absolute, and did not depend upon a contingency, and a writ of garnishment could be issued immediately, although it had not been determined how much the insurance company owed the insured, or whether it owed him anything.

But that an unadjusted claim for loss against a fire insurance company, being unliquidated, was not subject to garnishment, was held in McKean v. Turner (1864) 45 N. H. 203; Gove v. Varrell (1877) 58 N. H. 78; Bucklin v. Powell (1880) 60 N. H. 119; Shierman v. Harris (1915) 8 Sask. L. R. 165, 22 D. L. R. 694; and Randall v. Lithgow (1884) L. R. 12 Q. B. Div. (Eng.) 525.

And where the insurer simply admits the issuance of a policy and the happening of the loss, and that the insured may have a claim against it, but that the loss has not yet been adjusted, the court cannot order the garnishee to adjust the loss and deposit the money in court for the creditor of the insured, since such creditor can acquire no other or greater rights against the garnishee than the insured; and, although the garnishee be indebted to the insured, yet if there be anything to be done as a condition precedent to the insured's recovery of his debt in an action against the gar