Opinion
No. 27200.
February 11, 1929.
1. EXEMPTIONS. Law exempting "proceeds of judgment for personal injury" held inapplicable as to recovery on disability provision of indemnity contract ( Hemingway's Code 1927, section 1895).
Hemingway's Code 1927, section 1895, exempting proceeds of judgment for personal injury from liabilities for debts of person injured, held inapplicable as to money recovered against insurance company on disability provision of indemnity contract; the words "proceeds of a judgment recovered on account of personal injury sustained," meaning damages recovered for some injury inflicted by, or received as a result of, the act or omission of some active agency other than disease or other natural bodily infirmity.
2. STATUTES. Generally, true sense in which words are used in statute is ascertained by taking them in ordinary and popular signification.
True sense in which words are used in statute is to be ascertained generally by taking them in their ordinary and popular signification, unless clearly necessary to enlarge or modify this in order to effect plain intent of Legislature.
3. EXEMPTIONS. Proceeds of judgment recovered under disability provision were not exempt from garnishment under law exempting proceeds of life policy ( Hemingway's Code 1927, section 1893).
Proceeds of judgment recovered under disability provision of insurance policy held not exempt from garnishment by virtue of Hemingway's Code 1927, section 1893, exempting the proceeds of a life insurance policy not exceeding five thousand dollars from liability for debts of decedent; the money recovered under ths disability provision being in no way the proceeds of a life insurance policy.
4. ATTORNEY AND CLIENT. Attorney has lien on client's funds for services rendered.
An attorney has a lien on funds of his client for services rendered in proceeding by which money was collected.
5. ATTORNEY AND CLIENT. Attorneys had paramount lien on amount recovered for client under disability provision of insurance policy pursuant to contingent fee contract.
Attorneys recovering money for client under disability provision of insurance policy pursuant to contract for contingent fee had a paramount lien on amount recovered to extent of fee, in absence of showing that contract was unreasonable or unconscionable.
APPEAL from circuit court of Bolivar county, Second district, HON. W.A. ALCORN, JR., Judge.
Somerville Somerville, for appellant.
The right of action on which Dumler recovered from the insurance company we maintain was not life insurance but was indemnity insurance. The designation of the plan of insurance is: "Ordinary life with total and permanent disability benefits, and double indemnity benefit." The provisions of the policy show that in addition to the life insurance there were many other provisions of indemnity, among them being the agreement to reimburse Dumler in case disease prevented him from working.
Appellee contends and the lower court held that this money should be exempt as the proceeds of a judgment for personal injury. The answers of the appellee simply claim the money as exempt without stating any facts or reasons why the same should be exempt and there is nowhere in the record, as we view it, anything to justify the conclusion that the money now in court is the proceeds of a judgment recovered on account of the personal injury sustained.
This money was recovered on a contract to indemnify Dumler because of his having failed, because of disease, to earn a living from January 23, 1922, to January 23, 1923. We are sure that the court agrees with us that the object and purpose of the exemption statute in question was to create a fund for people who had been injured and were therefore not capable of earning a livelihood. Tishomingo Sav. Inst. v. Young, 87 Miss. 473, 40 So. 9; 112 Am. St. Rep. 454, 6 Ann. Cas. 776, 3 L.R.A. (N.S.) 693; Yale v. McLaurin, 66 Miss. 461, 5 So. 689.
The statute closes by stating that the money shall be exempt from "the debts of the person injured." The fact that the statute refers to the person being injured, we maintain, shows that the legislature contemplated that class of cases where a person is injured, and that some other person's negligence caused the injury. In other words when one person is injured, in the eyes of the law, some other person did the injuring. The legislature was undertaking to cover the class of cases where a person was thus injured, and cases like the case at bar were not contemplated by the legislature.
Shands, Elmore Causey, for appellee.
Appellant contends that a lien was established on Dumler's right of action against the New York Life Insurance Company by the service of the writ of garnishment, and that, as more than four months elapsed from the time of the service of the writ of garnishment until the adjudication in bankruptcy, such lien was not discharged by the adjudication, contending in support of this that the recovery was not on the policy of life insurance, and therefore was not exempt at the time of the levy of the writ of garnishment.
Appellee contends that this recovery is on the policy of life insurance, that it is an incident growing out of such policy and is clearly exempted by sec. 1893, Hem. Code of 1927, being the same as sec. 2141, Code of 1906. We further contend that whether this be true or not, the money recovered on this judgment was recovered on a judgment for personal injuries, sustained, within the contemplation of sec. 1895, Hem. Code, being chap. 146 of the Laws of 1914, such act being adopted since the Code of 1906 and not appearing in the code.
It is the settled policy of this court that all exemption statutes are to be most liberally construed in favor of the exemptionist. Laurel v. Turner, 80 Miss. 534; Tishomingo Savings Institutions v. Young, 87 Miss. 473; Teague v. Weeks, 89 Miss. 360.
It is urged by the appellant that this is a recovery, not on a life policy, and that nothing is exempt under a life policy from the creditors except the amount which is to be paid in the event of the death of the insured, and that it is only exempt under sec. 1893, Code of 1927, to the heirs and legatees, and that no part of it can be claimed as exempt by the insured. This identical contention was made in Dreyfus v. Barton, 98 Miss. 758. In that case, there was a petition in bankruptcy filed, the bankrupt listing a life policy of the sum three thousand dollars, which was the maximum amount exempt under the earlier statutes, which amount has now been raised to five thousand dollars. At the time of the adjudication, this life policy had a cash surrender value of forty-two dollars. Shortly after the adjudication in bankruptcy, and before the trustee in bankruptcy had realized on the policy, the bankrupt died. The trustee in bankruptcy thereupon asserted claim to the full face of the policy, three thousand dollars. The heirs and distributees of the bankrupt asserted claim. The chancellor held that the trustee in bankruptcy was, by virtue of sec. 70(a) of the bankrupt act, entitled to the forty-two dollars, the cash surrender value, and that the heirs and distributees were entitled to the balance. There was appeal, and cross-appeal, and this court held that the cause should be affirmed on the direct appeal of the trustee in bankruptcy, and reversed as to the forty-two dollars.
The court makes it clear that not only is the amount of money realized from the life policy at the death exempt, but that during the life of the insured the policy and every right under the terms and provisions thereof are exempt to him up to the amount specified in the statute; at the time of the decision of the Dreyfus case, three thousand dollars; at the time of the accrual of this right of action, and at the time of the service of the writ of garnishment, five thousand dollars.
But counsel states that the petition filed in the bankrupt proceeding to release the policy from the trustee was based not on the ground that it was exempt, but that it was of no value. This question has also been expressly answered by our court in King v. Miles, 108 Miss. 732, in which the court expressly holds that a bankrupt does not waive his exemptions in insurance policies by listing them in his schedule of property, etc. See, also, Delta Ins. Realty Co. v. Benjamin, 122 Miss. 275.
Appellant says that the only kind of judgment for personal injuries to which this section applies is a judgment resulting from a tort; in other words, that to exempt the judgment, it must have resulted from a suit based upon some tort committed by the defendant against the plaintiff, which resulted in some injury to the body of the plaintiff. I see nothing in the statute which indicates such. If this had been the intention of the legislature, they could very easily have so stated it. They did not do so, and I think that we are entitled to take the language of the statute in its ordinary acceptation. Green v. Weller, 32 Miss. 650.
The general principle for the court to follow is to ascertain what the legislative purpose of the statute was, and the reasons impelling the passage of it; this to be ascertained from the language used, by considering the statute in connection with its context.
This section is an exemption section, so we must consider the purpose of all exemptions, which is to prevent a man from being rendered absolutely destitute, and those dependent upon him for support being deprived thereof. For a healthy man they exempt those things which are necessary for him to have to work with in order to produce a livelihood. Carpenter tools, etc., would not be of value to a man who was sick and unable to use them. Presumably, the judgment which he might recover, arising from physical inability to earn a livelihood is by act of the legislature made to take the place of such amounts as he would have earned for the support of himself and family, had he not been prevented from working, and is intended to supply the wants, which would otherwise have been supplied by his labor.
In its strict technical meaning, the phrase "personal injuries sustained" would apply to a recovery by a man against another man for alienation of the first man's wife's affections, and for many other kinds of injuries that would in no wise affect his earning capacity. So, I think, viewing it from its context, we are justified in reaching the conclusion that the legislature intended this recovery, which is on account of physical disability, to be freed from the claims of a creditor because a man's family is entitled to his earnings, and if they cannot have that, and some fund of money comes to him, which is in lieu of what he would have earned, had he been able, then, by virtue of the statute, this fund of money is to be exempt up to an amount not exceeding ten thousand dollars.
All of us in our everyday conversation understand personal injury to mean anything that impairs the physical health. The law by an action for damages provides for compensation, if this injury result from the wrongful act of another party. In the case at bar the appellee by contract with the New York Life Insurance Company provided for compensation for the loss resulting from his personal injury. This judgment is a recovering on that contract, and is compensation for the injury to the health of Dumler, and an injury to the health is an injury to the person.
Somerville Somerville and Howorth Howorth, in reply for appellant.
The case at bar is quite different from Dreyfus v. Barton, 98 Miss. 758. In the Dreyfus case the administrator had collected the proceeds of a life insurance policy on the life of a decedent and the administrator contended that this money should "inure to the heirs of legatees freed from all liability for the debts of a decedent." In the case at bar the insured himself in person is seeking to hold an annual income arising from an indemnity policy free from his own debts. See Goza v. Provine, 140 Miss. 315, 105 So. 534. We do not believe it necessary for the court to overrule the Dreyfus case in order to reverse the case at bar, but because of the importance of this question we cite the dissenting opinion in the Dreyfus case, supra. See, also, In Re Young, 208 Fed. 373; Ellison v. Straw, 97 N.W. 168; Tompkins v. Levy, 6 So. 346; Kimball v. Cunningham, 68 So. 309; Yale v. McLaurin, 66 Miss. 461, 5 So. 689.
On April 15, 1924, the appellant, Chattanooga Sewer Pipe Works, secured judgment against O'Neal, Dumler Miles, a partnership, and L.J. Dumler, as an individual, and this judgment was duly enrolled on the judgment roll of the Second judicial district of Bolivar county, Mississippi, on April 22, 1924. On January 17, 1924, the appellee L.J. Dumler filed a suit in the circuit court of the Second judicial district of Bolivar county against the New York Life Insurance Company on a policy of insurance, seeking to recover under the provisions of the policy for total disability of the appellee from January 19, 1922, to January 19, 1923, and this suit was pending at the time the appellant secured its judgment against the appellee, and at the time of the issuance of the writ of garnishment here involved. On September 22, 1924, based upon the enrolled judgment against the appellee, the appellant filed a suggestion for a writ of garnishment, and the writ was issued and served on the New York Life Insurance Company on September 25, 1924.
On January 28, 1925, four months and three days after the service of the writ of garnishment on the New York Life Insurance Company, the appellee Dumler and the other members of the firm of O'Neal, Dumler Miles filed joint and several petitions in bankruptcy, listing among its creditors the appellant, which then held a judgment against the firm and the appellee. The appellee was regularly adjudicated a bankrupt, and was afterwards granted a discharge. The policy of insurance upon which suit was then pending was not listed on the original schedules filed in the bankruptcy proceedings, but was listed on an amended schedule, and thereafter, upon a petition filed by the bankrupt, the reference in bankruptcy ordered the trustee to surrender the policy to the appellee, not upon any claim of exemption, but on the showing or ground that it then had no cash surrender value and was of no value to the estate.
The insurance company answered the writ of garnishment, and denied any liability or indebtedness to the appellee, but suggested that its liability to appellee on the insurance policy was then in litigation, and asked the court to suspend action until the final determination of such litigation. This was done, and, upon the final determination of the cause in favor of the appellee, the insurance company paid unto the court the amount that had been adjudicated to be due by it to the appellee, and asked that the appellant and the appellee Dumler be interpleaded to determine the rights of property in this money. The appellant and the appellee filed petitions asserting their respective claims to these funds; the appellant claiming under and by virtue of the lien of the garnishment writ, and appellee claiming that the money arising from the cause of action against the insurance company was exempt from all liability and debts against him, and that one-half of said money was subject to a superior lien to the garnishment, being the attorneys' fees for recovering from said insurance company the money under a contract of retainer made before the filing of the writ of garnishment.
The garnishment proceedings and the proceedings interpleading the respective claimants of the funds received from the insurance company were consolidated and heard before the court, without the intervention of a jury, upon an agreement of counsel as to the rendition, date, and amount of the judgment against appellee, and the adjudication and discharge of the appellee as a bankrupt. It was also agreed that the money in the hands of the court was the proceeds of a judgment against the New York Life Insurance Company in a suit on a policy of insurance in said company, and on the life of appellee, containing a clause to the effect that, if he became wholly disabled by bodily injury or disease, and was thereby prevented from engaging in any occupation whatever for remuneration or profit, then he should have cause of action against said company. It was also agreed that the record of the proceedings in bankruptcy and proceedings in the suit of appellee against the insurance company should be considered as introduced in evidence in this cause. It was further agreed that, at the time of the filing of the suit against the insurance company by the appellee, Dumler, it was agreed between the said Dumler and the attorneys filing said suit that the fee of said attorneys in said cause was to be one-half of all amounts recovered, and that said attorneys, Shands, Elmore Causey, were to receive one-half of all amounts recovered in said cause. Upon the hearing of the cause, the court below held that the funds in controversy were exempt from garnishment, and ordered that the writ of garnishment be dismissed and the money paid to the appellee L.J. Dumler, and from this judgment this appeal was prosecuted.
The appellee contends that the money here in controversy is the proceeds of a judgment for personal injury sustained by the appellee, and therefore inures to him free from all liability for his debts, under and by virtue of chapter 146, Laws of 1914 (section 1895, Hemingway's 1927 Code), which reads as follows:
"The proceeds of any judgment not exceeding ten thousand ($10,000) dollars recovered by any person on account of personal injuries sustained, shall inure to the party or parties in whose favor such judgment may be rendered, free from all liabilities for the debts of the person injured."
We do not think this statute has any application to the facts of this case. The recovery by appellee against the insurance company was upon an indemnity contract by which the insurance company agreed to pay annually to appellee one-tenth of the face of the policy if he became wholly disabled by bodily injury or disease so that he was permanently and continuously prevented from engaging in any occupation whatever for remuneration or profit. The proof upon which the recovery was based was to the effect that during the period for which recovery was had the appellee was suffering from a disease known as multiple neuritis, resulting in extreme nervousness and partial paralysis.
It is probably true, as contended by counsel for the appellee, that the words "personal injury sustained" in their broadest significance could be construed to cover damage to the body or person resulting from disease, or, in other words, that a diseased body is one that has sustained an injury, but we do not think these words, as used in this statute, were intended to convey such meaning, or that they should be construed to cover "an action on account of personal injuries sustained." "The true sense in which words are used in a statute, is to be ascertained generally by taking them in their ordinary and popular signification" ( Green v. Weller, 32 Miss. 650), and "words employed in a statute are to be taken in their ordinary and obvious signification, unless it is clearly necessary to enlarge or modify this in order to effect the plain intent of the legislature" ( Peeler v. Peeler, 68 Miss. 141, 8 So. 392), and we think the ordinary and popular understanding of the words, "proceeds of a judgment recovered on account of personal injury sustained," is damages recovered for some injury inflicted by, or received as a result of, the act or omission of some active agency other than disease or natural bodily infirmity, and that these words were not intended to cover, and should not be construed as covering, an action on a contract to indemnify the insured against disability resulting from disease.
The appellee next contends that the proceeds of this judgment against the insurance company are exempt under and by virtue of the provisions of chapter 186 of the Laws of 1922 (section 1893, Hemingway's 1927 Code), which reads as follows:
"The proceeds of a life insurance policy not exceeding five thousand dollars payable to the executor, or administrator of the insured, shall inure to the heirs or legatees, freed from all liability for the debts of the decedent, except premiums paid on the policy by any one other than the insured for debts due for expenses of last illness and for burial; but if the life of the deceased be insured for the benefit of his heirs or legatees at the time of his death otherwise, and they shall collect the same, the sum collected shall be deducted from the five thousand dollars and the excess of the latter only shall be exempt. But no fee shall be paid or allowed by the court to the executor or administrator for handling same."
In support of the view that this money is exempt under the provisions of this statute, the appellee relies upon the case of Dreyfus v. Barton, 98 Miss. 758, 54 So. 254 in which it was held that the object of this statute is to secure to the insured a policy not to exceed three (now five) thousand dollars from liability to any creditor or any debt, the court saying:
"This statute exempts the whole proceeds, or any part of it, whether the value accrues during the life or after the death of the insured. The cash surrender value of the policy is just as much `proceeds' of the policy, within the meaning of the statute, as would be the full amount after the death of the insured. In other words, when the person insured dies, the proceeds of the policy are exempt; while he lives, if the policy acquires a cash surrender value, this cash surrender value is `proceeds' within the meaning of the statute, and exempt so long as the value in either case does not exceed three thousand dollars. Any other construction of the statute would impair, if it did not destroy in some cases, the object of the statute."
We do not think that this case is controlling or decisive of the question presented by this record. In the Barton case, supra, the question decided was that the cash surrender value of a strictly life insurance policy was "proceeds" of the policy within the meaning of the statute, and was exempt during the life of the insured as well as after his death. To hold otherwise would permit the creditors of the insured to entirely destroy insurance taken for the protection of the family of the insured by subjecting the cash surrender value of the policy to liability for the debts of the insured.
In the case at bar, the money involved is in no proper sense the proceeds of a life insurance policy. It is true that it arises out of one of the provisions of a policy of insurance on the life of the appellee, but this provision is a contract of indemnity wholly separate from the contract to pay a fixed sum upon the death of the insured. The statute provides that the proceeds of a life insurance policy payable to the executor, or administrator, of the insured shall inure to the heirs or legatees freed from all liability for the debts of the decedent. In the contract of insurance upon which the appellee recovered, the life insurance is payable to the executor, administrator, or assigns of the decedent, while the disability benefit is payable to the insured. In this contract of insurance, a separate premium of thirty-eight dollars for the disability benefit is fixed and named. The life insurance went into effect upon the delivery of the policy, while the disability benefit was payable one year after the anniversary of the policy next succeeding the receipt of proof that the insured had become wholly disabled by bodily injury or disease so that he was permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit, and that such disability had existed for not less than sixty days. The indemnity benefit terminated when the insured reached the age of sixty years, while there was no such limitation on the life insurance. It was expressly provided that payments made under the disability contract should not alter or reduce the amount payable under the life insurance clause in any settlement of the policy. It thus appears that this contract of insurance contains two wholly separate contracts, one of life insurance, and the other a contract of indemnity against total and permanent physical disability, and that payments made under the latter contract in no wise affected the rights of the heirs and legatees of the insured, which are protected by the provisions of this statute. We therefore conclude that the proceeds of the judgment recovered by appellee under this disability benefit were not exempt from the garnishment, and that, since the writ of garnishment was levied more than four months prior to the date the appellee filed his petition in bankruptcy, the appellant is entitled to recover out of the funds paid into the court the full amount of its judgment, unless the funds so recovered from the insurance company are subject to a prior lien in favor of the attorneys for services rendered in the suit against the insurance company.
Upon the trial of this cause in the court below, it was agreed that, at the time of the filing of the suit against the insurance company by the appellee, he entered into a contract or agreement with his attorneys that they were to receive one-half of all amounts recovered as their compensation for services rendered in said cause. It has been uniformly held by this court that an attorney has a lien on the funds of his client for the services rendered in the proceeding by which the money was collected. Halsell v. Turner, 84 Miss. 432, 36 So. 531, and authorities there cited. In the case of Halsell v. Turner, supra, it was held that "the rule is the same whether there exists an express contract between attorney and client for a stated fee or whether there is only an implied contract to pay the reasonable value of services rendered." In the case at bar there was an express contract between the attorneys and the client which was made long prior to the levy of the writ of garnishment. The appellee had a right to make this contract for a contingent fee, and there is nothing in the record to show, and no attempt to show, that it was unreasonable or unconscionable, and we are therefore of the opinion that these attorneys have a paramount lien on the funds for one-half thereof.
The judgment of the court below will therefore be reversed, and a judgment will be entered here in favor of the appellant for one thousand six hundred sixty-eight dollars thirty-one cents, being one half of the amount paid into court by the insurance company.
Reversed, and judgment for appellant.