#### Frels, Appellant, vs. Little Black Farmers’ Mutual Insurance Company, Respondent.

*February 3*

February *23, 1904.*

*Vire insurance: Assignment of policy after adjustment of loss: Rights of assignee: Garnishment: Failure of garnishee to disclose claims of third person: Contract limitation of actions: Waiver: Estoppel.*

1. After an adjustment of a fire loss, the assured assigned and transferred his interest in the policy by an instrument reciting that, for a valuable consideration, “the holder of the within policy . . . hereby sells, transfers and sets over, all his • interest in and to said policy . . . giving (the assignee) full power and authority to collect the same” as the insured could do himself, if he still owned the policy. *Held,*that right of the assignee to the proceeds of the adjusted loss was absolute as against his assignor.

2. In such case, the fact that no fund is shown to have been in the hands of the insurance company as due on the policy, or then enforceable by action, cannot stand in the way of an equitable transfer of the proceeds of the policy, if the claim is thereafter definitely established under the facts and circumstances as they existed when the assignment was made.

3. An insurance company, after it had adjusted the loss of P., was notified by F. that P. had assigned the policy to him. Thereafter the insurance company was summoned as garnishee of P., but failed to disclose the assignment or the claims thereunder of F., who was not a party to and did not appear in the’ garnishment action. *Held,*that a judgment against the insurance company in the garnishment action did not prevent F. from recovering from the insurance company the full proceeds of the policy.

4. In such case, it was the duty of the insurance company to bring the fact of such assignment to the attention of the court' by setting it up as a defense.

6. A policy of insurance contained this provision: “Any suit or action for the recovery of any claim by virtue of this policy, shall not be sustained in any court unless such suit or action be commenced within twdlve months after the loss occurred.” A loss under the policy having occurred, it was adjusted, and shortly thereafter plaintiff gave notice that he claimed the proceeds as ■assignee of the insured. The company never asserted any de*591fense against their liability, but tbeir correspondence showed that they stood ready to pay the loss hut for garnishment proceedings pending. In an action by such assignee, to recover the amount of such adjusted loss, brought more than one year after the loss, it was *held*that the insurance company was estopped from aserting any defense under the contract limitation above quoted.

Aubeai, from a judgment of the circuit court for Taylor county: B. E. Duhwiddie, Judge.

*Reversed.*

This is an action by the assignee of an insurance policy to recover the amount due for a loss under the policy. The facts stipulated and admitted by the pleadings, so far aá material, are: The policy was for $200, and ran from July 3, 1896, to July 3, 1901. It was issued to George M. Pulsipher, .and covered property, including his barn. On May 31, 1901, .the barn was totally destroyed. The insurance company and the assured adjusted the loss, pursuant to the agreement in the policy. After such adjustment the company issued the following order:

“Little Black, Wis., June 7th, 1901. “To Otto Schuster, Treas.:— •

“The fire of George Pulsipher’s barn has been adjusted by Pred Kaemmerer and Peter Wuest and he is entitled to one hundred seventy-five dollars, $175.00, which amount you will pay him on or before ninety days from date and oblige.

“Jorrar Kbaemeb., Prest.

“Peed Kaemmebeb, Sec., of the *Little Black Farmers’ Mutual Insurance Company.”*

This order was given to the treasurer of the company. On. the 18th of June the assured assigned and transferred his interest in the policy and what was due thereon by the following assignment:

“The holder of the within policy, for the consideration ■of the sum of. thirty-five (35) dollars and other valuable consideration hereby sells, transfers and sets over, all his interest in and to said policy, to *August*Freís, for his own use and benefit, giving him full power and authority to collect *592the same, as be could do himself, if be still was tbe owner of it.

“Dated, Medford, Wis., June 18th, 1901.

“G. M. PunsiPHEE.”

On tbe 20tb of June, appellant, tbe assignee, gave notice of tbis assignment to Fred ICaemmerer, ibe secretary of tbe company, by showing bim tbe written assignment. ' On the-21st of June appellant gave verbal notice of tbis assignment to Otto Schuster, tbe treasurer of tbe company, at wbicb time-Schuster informed bim that tbe garnishment summons attaching tbe proceeds on a claim against Pulsipher had been served on tbe company that day, and that tbe company refused payment to tbe assignee of tbe amount as adjusted, because such garnishment proceedings bad been commenced and. were then pending. On June 27th appellant, through bis attorney, notified tbe treasurer of tbe company in writing of tbe assignment, giving notice that, if tbe payment was refused, an action would be commenced against tbe company to enforce payment of tbe amount due bim as assignee under the policy. Tbe garnishment action was tried on Jiily 22, 1901. Tbe respondent insurance company appeared, but did not set up or bring to tbe court’s attention tbe assignment of the claim by tbe assured to appellant, either on tbe return day in tbe garnishment action nor at any other time before judgment therein; nor did it tender tbe defense to appellant, but made oral answer as follows upon tbe trial, as tbe justice’s docket entiles disclose.

“Anton Feddick v. George Pulsipher, Defendant, and *The Little Black Farmers' Insurance Company,*a corporation, and Otto Schuster, garnishee, Defendants.

“Otto Scbtfster, as treasurer of the *Little Black Farmers' Insurance*Company, and himself, having been summoned to-appear before me on tbe 1st day of July, 1901, at two o’clock p. m., and answer touching bis liability as garnishee of Geo. Pulsipher, against whom said plaintiff has commenced action before me, and said garnishee having appeared on the-*5931st day of July, 1901, at two o’clock p. m., I proceeded to examine said garnisb.ee touching the matters alleged in the affidavit of complaint. The said garnishee, being first duly sworn, makes answer as follows: ‘I am treasurer of the *Little Blade Farmers’ Insurcmce Company,*a Wisconsin corporation. The company owes Geo. Pulsipher one hundred seventy-five dollars on account of the burning of his barn. This money is owing to him. It is due about September 2, 1901. I do not owe Geo. Pulsipher anything personally. The committee examined the claim, and allowed the same, and the secretary notified me that the loss was $175.00, which I should pay to George Pulsipher. There is nothing more for the company to do in order for me to pay it over. This money is under my control.’ ”

Notice was served by the defendant to appeal this garnishment action. The justice made the return to the Taylor county circuit court, where the appeal was dismissed on June 25, 1902. On June 27, 1901, the treasurer of respondent was notified in writing of appellant’s claim under this assignment, and that it was made prior to the service of the garnishee summons. Appellant, as assignee of this claim, on June 30, 1902, repeated his demand for payment on the company, which was denied on July 3, 1902, by letter of the president of the company, stating that the assignment was without the consent of the company, and, further:'

“The treasurer of our company has orders from justice court to pay A. Feddick $138.00 out of this insurance money.. Now, this decision was confirmed by J. K. Parish, circuit judge, and as soon as the costs in this court are adjusted you are welcome to the balance of the money.^ Otto Schuster was. telling me that you want to sue the insurance company for the whole amount, but as long as the company was willing' to pay, but did not know to whom, I cannot see why you want to sue us.”

The present action was commenced on November 21, 1902.. The company alleges as defenses that it was not commenced within the twelve months next after the loss had occurred, as *594limited by the provision of the policy; and that it (the company) is discharged to the extent of the amount paid by it pursuant to the order of the justice in the action of Anton Feddick v. Geo. Pulsipher (the assured) and this respondent, as garnishee. The court awarded judgment in respondent’s favor upon the ground that the cause of action was barred because not brought within the period of limitation fixed by the policy, and for costs. This is an appeal from such judgment.

' Por the appellant there was a brief by *Textor & Ooolc*and *Herman*Leichb, and oral argument by *Mr. Leicht.*

For the respondent there was a brief by *Schweppe & TJrqu-*hart, and oral argument by *F. H. Schweppe.*

Siebeciíeb, J.

The first question presented upon the pleadings ..and admitted facts is whether appellant is the owner of the claim covered by the policy. It appears from the foregoing statement of facts that the acts of the parties to the assignment are not questioned. The assignment is in terms a transfer, for a valuable consideration, of all the assured’s interest in and to the policy, and clearly indicates an intention to pass all the assured’s interest in and arising out of it. Under these circumstances the right of appellant to the proceeds of the policy cannot be questioned as between him and the assignor. *Skobis v. Ferge,*102 Wis. 122, 78 N. W. 426 ; *Jones v. Mayor, etc.,*90 N. Y. 387; *Schilling v.*Mullen, *55*Minn. 122, 56 N. W. 586. The fact that no fund is shown to have been in the hands of the company as due on the policy, or then enforceable by action, cannot stand in the way of an equitable transfer of the proceeds of the policy, if the claim is thereafter definitely established under the facts and circumstances as they existed when the assignment was made. *Chapman v. Plummer,*36 Wis. 262, and cases cited. The assured relinquished all rights in and under the *595policy, and appellant asserted full and complete ownership to all the proceeds.

It is shown that appellant gave notice of the assignment to him by exhibiting on June 20 th the written assignment, indorsed on the policy, to Ered Kaemmerer, the secretary of the company; and that he gave verbal notice to Otto Schuster, the treasurer of the company, on the following day, and on the succeeding 27 th of June caused his attorney to notify the treasurer, in writing, of the assignment, and demanded payment of the sum due or to become due under the policy, and in default of payment gave notice that an action would be brought to enforce the claim. It is asserted, however, that the company is liable to appellant, as such assignee, for no more than the balance after deducting the amount paid by it to the justice in the garnishment action. Respondent was summoned as garnishee in the action in justice court against George M. Pulsipher, the assured, on the 21st day of June, 1901. It appeared by Otto Schuster, the treasurer, who made answer for it on July 1, 1901, touching its liability as such garnishee. It answered, admitting the loss resulting from the burning of Pulsipher’s barn, that the same had been duly adjusted at the sum of $175, and that this sum was owing to George M. Pulsipher and due him about September 2d, following. In its answer as garnishee it wholly omitted to state or bring to the attention of the court the fact that such claim under the policy had theretofore been duly assigned to appellant, nor did it tender him the defense in the garnishment action. The facts clearly establish that respondent had been fully informed and notified of the assignment of the claim to appellant when it was served, and before it answered in the garnishment action. It is also without dispute that appellant was no party to and in no way appeared in this action. Under these circumstances there is no basis for holding that the judgment in *596that action could in any way conclude appellant as a party claiming title to tbe proceeds of the policy. *Adams v. Filer,*7 Wis. 306; *Winner v. Hoyt,*68 Wis. 278, 32 N. W. 128; *Coleman v. Scott,*27 Neb. 77, 42 N. W. 896.

It is urged in respondent’s bebalf that it is relieved from paying any sum it paid into court under the order of the justice as.such garnishee upon the debt of George M. Pul-sipher, the original owner of the policy. This contention cannot prevail, since respondent wholly omitted to take the proper and necessary steps in that action to'so protect itself. It had full knowledge of the owner’s assignment of the policy and its proceeds to appellant, and his interest therein, before it answered in the garnishment action. This information cast upon it the duty of bringing it to the attention of the court by setting up this matter as a defense to the action. In *John R. Davis L. Co. v. First Nat. Bank,*84 Wis. 1, 54 N. W. 108, this court held:

> "Our statutes seem certainly to contemplate that the garnish ee shall set forth in his answer any claim which third persons, to his knowledge, may have upon the property in his hands (S. & B. Ann. Stats, secs. 3721-3723&; Id. sec. 2760, subd. 5) ; the policy being apparently to bring all the conflicting claims as well as the parties making such claims before the court in order that all questions as to the ownership of the specific property in question may be settled in one proceeding. . . . Fairness and good faith require that when the garnishee knows of an assignment and transfer of property in his hands he should disclose the fact in his answer.” *Adams v. Filer, supra; Coleman v. Scott, supra; Pierce v. C. & N. W. R. Co.*36 Wis. 283; *Wilson v.*Groelle, 83 Wis. 530, 53 N. W. 900.

The rights of the attaching creditor in the garnishment action could be no greater than the rights of the defendant (George M. Pulsipher) to- the property in the possession of or debts due or to become due from the garnishee. It follows that there was nothing due or to become due from respondent to George M. Pulsipher at the time of the commencement *597of tbe garnishment action, and that the company failed to take the necessary legal steps in the garnishment action to protect itself from liability to the assignee.

Eespondent’s counsel asserts that appellant’s attorney appeared in the garnishment action, and set up appellant’s claim, and that appellant’s right to this money must have been litigated.upon the trial-of that action. This, however, is disputed, and the record does not sustain the contention. We find nothing in the record to show that appellant appeared in the case by attorney or in his proper person. The record of the trial as returned by the justice contains nothing tending to show this fact, but discloses that appellant was no party to the action, and in no way appeared therein.

The question remains whether this action is barred by the limitation expressed in the policy providing:

> “Any suit or action, for the recovery of any claim by virtue of this policy, shall not be sustained-in any court . . . unless such suit or action be commenced within twelve months after the loss occurred.”

This condition in policies has been considered by the courts, and it is held may, like others inserted for the protection and benefit of the insurer, be waived. When the conduct and statements of those authorized to act for the company is such that a reasonably prudent man would anticipate that a claim will be paid, and that it will not be resisted under any condition of the policy, then the company will be estopped from claiming the benefit thereof. This is upon the equitable principle, enforced by the courts, that, if the company through those who are authorized to speak for it, either by words or conduct, has induced the assured to refrain from doing that which he otherwise would probably have done, in view of the conditions of the policy, then it will be estopped from asserting the forfeiture it has so induced, to the prejudice of the assured, who has given faith to such statements or reasonable inferences from such con*598duct. In the following cases this principle of estoppel is considered and approved: *Killips v. Putnam F. Ins. Co.*28 Wis. 472, and cases cited; *Kidder v. Knights Templars & M. L. I. Co.*94 Wis. 538, 69 N. W. 364; *Black v. Winne-shiek Ins. Co.*31 Wis. 74; *Redman v. Hartford F. Ins. Co.*47 Wis. 89, 1 N. W. 393; *Gans v. St. Paul F. & M. Ins. Co.*43 Wis. 108; *Two Rivers Mfg. Co. v.*Day, 102 Wis. 328, 78 N. W. 440; *Phenix Ins. Co. v. R. B. H. Lodge,*41 Neb. 21, 59 N. W. 752; *Ide v. Insurance Co.*2 Biss. 333, Fed. Cas. No. 7,001; *Insurance Co. v. Wilkinson,*13 Wall. 222; Joyce, Insurance, § 3207; May, Insurance, §§ 488-508. Do tlio facts furnish a basis for the application of this rule to the parties in this case? The officers of the company and the assured adjusted the loss on the seventh day after the fire, which occured on May 31st, and issued and delivered an order to the treasurer, directing him to pay it on or before ninety days. On the 21st of June following, after respondent had been informed by appellant that he owned the policy under the assignment and claimed the proceeds thereof, he was informed and notified by the treasurer of the company that garnishment proceedings had been commenced and were then pending, “and that for that reason payment was refused.” This clearly implied that the company made no objection to its liability under the policy, and that it stood ready to pay the loss whenever the garnishment action was terminated. That this was the only ground upon which the company refused to pay appellant the amount is confirmed by its subsequent conduct in justices’ court on July 1st, in admitting liability on the policy for the amount of the loss as adjusted, -without aserting any other defense; and also by the president’s letter written to appellant on July 3, 1902, declaring the company had been willing to pay this loss, but did. not know to whom. After the appeal in the garnishment action was finally dismissed in the circuit' court on June 25, 1902, more than a year after the loss occurred, *599respondent again demanded payment from the company on June 30th following, which was refused by the president’s letter (July 3d), asserting ignorance of the assignment, and offering payment of the balance due on the policy above the amount paid into justices’ court. These facts and circumstances clearly show that the company claimed no defense as against their liability, and stood ready to pay the loss but for the garnishment proceeding. These representations and conduct of its- officers were well calculated to lead appellant, as a reasonable man, into the belief that it would not insist upon the condition of the policy which limited the time for bringing an action on the policy to twelve months after loss. To now permit the company to set up this limitation would give it an advantage over appellant which would be against equity and good conscience, and it should not be permitted to ■ avail itself of such advantage. We must hold that respondent is estopped from asserting this defense, and that appellant is entitled to judgment upon the admitted facts of the case.

’ *By the Gowt.*— Judgment reversed, and the cause is remanded, with directions that the court award judgment to appellant for the sum of $175, with interest and costs.