The appellant partnership was awarded a money judgment against C. E. Shuptrine, the action being commenced by garnishment in which the appellee insurance company was made garnishee. The garnishee answered not indebted, and the answer was contested. Motion by plaintiffs to require oral answer was granted; but the order of the court seems not to have been carried into effect. The court, on hearing on evidence, discharged the garnishee. Shuptrine, having suffered a fire loss under a policy issued by the Liverpool London Globe Insurance Company, received from the company, through the hand of its local agent, Helmer, the following written instrument (presently unimportant features being omitted):
"New Orleans, La. Jan. 3, 1921.
"[Seal.] Loss No. 54907.
"If the receipt on the reverse side is properly signed by all parties at interest
"Pay to C. E. Shuptrine nineteen hundred seven and no/100 dollars, same being in full settlement, compromise and discharge of all claims and demands for loss or damage by fire, hail or windstorm on date indicated in receipt referred to.
"To Liverpool London Globe Insurance Company, Limited, New Orleans, La.
"R. H. Alcock, Manager."
Indorsed: "Paid, Whitney-Central Nat'l Bank, New Orleans, La., Jan. 7, 1921. Draft Clerk."
Reverse side:
"Received of the Liverpool London Globe Insurance Company, Ltd., nineteen hundred seven and no/100 dollars in full settlement, compromise and discharge of all claims and demands for loss occurring on the 18th day of December, 1921, to the property insured by its policy No. 842698 issued at its Selma, Ala., agency, and said policy is hereby reduced accordingly.
"C. E. Shuptrine, L. S."
This paper was delivered to Shuptrine at Selma, Ala., on January 5, 1921, and his signature made thereon as indicated. Helmer testified that on January 5, 1921, Shuptrine "by indorsement assigned the check (i. e. the instrument set out above) to the City National Bank of Selma, Ala., and turned it over to me to be delivered to the bank." Plaintiffs' objections, to be later considered, being overruled, Helmer further testified:
"There was no agreement with the company, but there was an understanding with the City National Bank, Mr. Shuptrine, and me, that when it came it was to be turned over by me for Mr. Shuptrine to the bank, and the bank was to pay me out of the draft a claim of about $250 which I had against Mr. Shuptrine, and retain the balance of the draft on account of a debt which the bank held against Mr. Shuptrine. This was done, and the whole transaction was completed in accordance with the understanding on the evening of the 5th of January, 1921, during banking hours, and before the garnishment was served. The draft was turned over to Mr. Shuptrine and accepted by him on the 5th of January in full settlement of the loss and all claims he held against the company under the insurance policy. All this was a personal agreement of mine and not an agreement made for the company. * * * I *Page 525 have no authority to accept drafts drawn on the company. I did not accept the draft in question; that is, the draft or check given Mr. Shuptrine."
On the morning of January 6, 1921, the plaintiffs (appellants) sued out the mentioned writ of garnishment against the insurance company, and it was then executed by service upon Helmer, the authorized agent, for that purpose, of the insurance company.
On January 7, 1921, the insurance company paid the sum called for in the instrument; the Whitney-Central National Bank at New Orleans indorsing the fact of payment on the instrument as appears ante.
W. H. Hackney, special agent for the insurance company, testified that when advised by Helmer of the circumstances stated he wired the insurance company at New Orleans "in an effort to stop payment of the draft in question, but was advised that the draft had already been paid that day." This was the entire evidence.
It is to be noted that the controversy is between the insurance company and the appellants, neither the Selma Bank nor Helmer being parties to the cause.
That the instrument sent by the insurance company, through its local agent at Selma, Ala., to Shuptrine, was not a "negotiable instrument," is a proposition not contested by the parties. While the instrument was not a "negotiable instrument," yet it was in nature similar to a draft drawn by the drawer, upon the drawer as drawee, in favor of a third person. It possessed some of the characteristics of a "draft" in which the drawer and drawee were the same person or entity. It was signed by the manager, the agent, of the drawer whose authority to do so is not questioned. It was made payable to C. E. Shuptrine upon the contingency that he should sign "the receipt on the reverse side" of the paper. The payee signed this "receipt." Thereupon the instrument became the unconditional promise of the insurance company to pay C. E. Shuptrine on demand the sum stated therein — so without necessity for acceptance by the drawer-drawee or other act or assurance thereby to constitute it a binding obligation between it and Shuptrine. In executing the "receipt on the reverse side," consistent with the only contingency imposed by the instrument, Shuptrine not only acknowledged the receipt by him of the sum stated, but he also gave the insurance company an unqualified acquittance to the extent that sum reduced the policy designated by number therein. His acceptance of the instrument and the execution of the "receipt" was with the express effect that "said policy is hereby reduced accordingly" (italics supplied). According to the terms of the instrument, including the "receipt" as thus executed, and the undisputed testimony of the witness Helmer that Shuptrine accepted the instrument "in full settlement" of his claim under the policy, the effect of the instrument's acceptance thus made and thus shown operated thereupon, on January 5, 1921, to satisfy the insured's demand for fire loss within the protection of the policy. Lee v. Green, 83 Ala. 491, 3 So. 785; Keel v. Larkin, 72 Ala. 493, 501, 502.
It is manifest that at the time the writ of garnishment was served on January 6, 1921, the insurance company was indebted through the assurance given by the instrument set out above. When delivered to Shuptrine by the company's agent at Selma, and the "receipt" was executed by Shuptrine, the instrument evidenced an indebtedness to him. It was his chose in action. The obligation of the garnishee to pay him continued unless legally assigned by him (Code, § 5158), the asserted satisfaction of the obligation not having been accomplished until subsequent to the service of the writ of garnishment. The relative rights of the plaintiffs and of the garnishee depend upon the status existing when the writ of garnishment was served. Feore v. Mississippi Transp. Co., 161 Ala. 567,49 So. 871, among others. Payment to the defendant in the main cause or to a third person after service of the writ will not avert the garnishee's liability otherwise shown. 20 Cyc. p. 986; Fowler v. Williamson, 52 Ala. 18, 19. This garnishee's answer denied any indebtedness, present or prospective, to Shuptrine. As disclosed above by the cross-examination of the witness Helmer, the insurance company's theory was that Shuptrine had assigned the obligation before the writ of garnishment was served, thereby extinguishing the relation of debtor and creditor between the garnishee and Shuptrine. Rowland v. Plummer, 50 Ala. 182, 194. It was held by this court, in the opinion of Brickell, C. J., in which Justice Judge concurred (constituting a quorum of the court) that the garnishee's proffered evidence of a transfer or assignment of an indebtedness shown to be due from the garnishee to the defendant in the main action was inadmissible on objection except, solely, in virtue of an answer by the garnishee suggesting that another or others claim the beneficial ownership of the debt by assignment or transfer from the garnishee's creditor, the defendant in the main action. This pronouncement was made in exposition of the provisions of section 2977 of the Code of 1867, and related sections. So far as presently important section 4328, and allied sections, of the Code of 1907, is the same in effect as its predecessor in the Code of 1867. The readoption of the statute brings it down to us impressed with the construction accorded it in the opinion of Brickell, C. J., cited ante. The basic conception of the procedure thus exacted, in appropriate circumstances, is that the defendant's creditor in attachment or garnishment has a right to contest the efficacy of the assignment with the assignee. So *Page 526 far as has been discovered, the view then expressed has not been qualified in any degree. That deliverance cannot be distinguished by reference to the fact that in the case then presented (Fowler v. Williamson, supra) the answer admitted an indebtedness. True the statute then as now, carried the qualification that its rule was applicable to cases where the answer admitted an indebtedness. Nevertheless the court pronounced, in Fowler v. Williamson, to the unmistakable effect stated. The court, at this time, does not feel warranted in denying controlling authority to that exposition of the statute.
The appellants interposed seasonable objection to the reception of the testimony by the witness Helmer (on cross-examination) designed to show the assignment or transfer of the instrument under the circumstances he was permitted to recite. This was error, the matter being outside of the issues resulting from the garnishee's answer of unqualified denial of indebtedness to defendant. In view of the trial to follow reversal and in response to argument in the brief for appellants, it is proper to observe that the efficacy vel non of the assignment of this chose in action to the City National Bank of Selma, Ala., the place of Shuptrine's residence, is to be determined by the law of the forum (Alabama) and not by the law of the state of Louisiana. 1 Wharton's Conflict of Laws (3d Ed.) § 363b.
For the error indicated, the judgment is reversed, and the cause is remanded.
Reversed and remanded.
ANDERSON, C. J., and SOMERVILLE and THOMAS, JJ., concur.
On Rehearing.