Woodward, J.
Dr. Charles Walters held a policy of in-surance, executed by the defendants, on a lot of medicines? .and the plaintiff held a policy of the same company on the office building in which the medicines were kept. Charles Walters assigned his policy to the plaintiff, on the 20th November, 1854. A loss took place before the assignment. The policy “agreed to make good unto the said assured, his ■executors, administrators, and assigns, all. such immediate ■loss,” &c. It also contained this provision: “Policies of insurance subscribed by this company, shall not be assignable without the consent of the company, expressed by in-[408]*408dorsement made thereon.” The plaintiff brings suit to recover fifty-five dollars, the balance due on the policy of Charles "Walters, and assigned to her.
The defendant pleads, first: A general denial of all the-allegations of the petition;' second, that there had been “ a settlement in full, by payment and receipt, given by plaintiff to defendant, in full of all claim or demand growing-out of said insurance mentioned in plaintiff’s petition. The-general denial of the petition, is allowable under the rules-of the first district,' and includes in this case, a denial of the indebtedness. Under this general denial, arose the question whether the policy was assignable after loss, and consequently, whether the plaintiff could maintain her action.. The court instructed the jury,, that the policy was not assignable, and that the plaintiff could not recover. To-this the plaintiff excepted, and this is the first question before us.
It would be impossible to hold the policy a negotiable instrument under the Code, section 950, by virtue of the words executors and assigns, inasmuch as it afterwards contains an. express prohibition of assignment. And it is not necessary to determine whether it would be assignable before loss, under sections 949 and 954 of the Code. But the question for determination is, whether the policy is assignable, after' loss. There are reasons of sufficient force, why insurers should prohibit the assignment of their contracts of insurance. The use to which the insured property may be likely to be put, has great weight, and even personal confidence, is of avail. Until a loss has occurred, the liability is contingent; there may never be a liability. But when the loss has happened,, reasons of the character of those above stated,, lose their force., The liability is fixed.. There is now a debt^ and no reason is perceived, why this, like any other debt, should not be assignable. Without any detriment to the insurer, the statute may be allowed to have its legitimate effect. By such a course, the insurer is not barred of any defence which he may have against the insured, but he may defend against the assignee as fully as he might against the: [409]*409insured; whilst if there is no defence, and the monej is due, there is no sufficient reason why the assignee should not recover it. The better view is, to regard the policy as assignable after the loss has happened. Code of Iowa, §§ 949* and 951. The like ruling has been made in New York, on a policy containing precisely similar provisions, in the case of Brichta v. New York La Fayette Insurance- Company, 2 Hall, 372.
Under that branch of defendant's answer, which alleges payment, and receipt given by plaintiff in full of all claim or demand growing out of said insurance mentioned in plain - tiff’s petition, the company gave in evidence a receipt of plaintiff on her own policy, on which also at the same time a loss occurred, and further put in evidence, Charles Walters’ receipt for the loss under his policy. But, on the other-hand, defendants certificate was put in evidence, showing-that they held fifty-five dollars of the amount receipted to them by Charles Walters, “subject to such garnishment,” and “to be applied as may be finally decided.” This latter takes away the pretence that they had paid. They also, showed by proper evidence, that on -the 7th December, 1854, and before defendants or their agents, Edwards & Turner, had notice of the assignment of Charles Walters’ policy to the plaintiff, one Curtis, and one Oswald & Co. severally recovered judgment against said Charles Walters, and against defendants as his garnishees. The plaintiff requested the court to instruct the jury, that the defendant could not give said judgment of garnishment in evidence under their answer; that they could not do this under a general denial of indebtedness, but that they must plead the matter. The court refused to give this instruction.
At this point of the cause and the' evidence, the defendant committed the error of a departure from the pleadings. This matter offered by the defendant was special matter, and very clearly could not be introduced under a general denial, nor under either part of his answek It was matter in avoidance, and not negativing the original indebtedness. Admitting that a rule of court is competent to, render a general de[410]*410nial, a sufficient denial of the averments of tbe petition, still it can extend no farther than as a denial of the petition, and cannot open the door to special defences, and matter in avoidance. In this, the court erred. Nearly all the instructions asked by both sides, related to this portion of the defence, and therefore, under the above views, the questions raised in them need not be discussed.
Another question has been fairly raised and presented, which may arise again, and it is therefore proper to be considered, although it is not necessary for the disposition of the cause as now before us. The policy was assigned on the 20th November, 1854. On the 7th December, 1854, Curtis & Oswald recovered their judgments against Charles Walters, defendant, and the insurance company, as garnishee. It does not appear when the garnishment was served on the defendants, and therefore, the date of the judgment must be taken; and as these suits were before a justice of the peace, the service may well enough have been after the assignment. This present suit was commenced on the 21st August, 1855. The defendant has not yet paid the money to Curtis & Oswald, the creditors in the garnishment.
■ The question is, whether the plaintiff, or the creditors by garnishment, have the prior or superior claim to this money in the hands of the garnishee, the plaintiff having given the company no notice of the assignment of the policy to her. The Code, section 949, makes a large class of instruments, under which this policy would probably fall, assignable, and gives the assignee a right of action in his own name, subject to any defence or set-off, legal or equitable, whieh the maker or debtor had against the assignor, before notice of his assignment. And by section 951, when by the terms of an instrument, its assignment is prohibited, the assignment is nevertheless valid, but the maker may set up any defence which he may have before the suit is commenced. This question has been looked at in different points of view, and the decisions are not reconcilable. Sometimes, it has presented itself under the imposing difficult}'- of the conflict of laws. Sometimes, the garnishment debtor has been received and treated [411]*411as a trustee. Again, the question has been treated as one of priority of lien only, as under attachment or judgment. Under these different positions, or viewing the subject, different decisions have been made.
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Woodward, J.
Dr. Charles Walters held a policy of in-surance, executed by the defendants, on a lot of medicines? .and the plaintiff held a policy of the same company on the office building in which the medicines were kept. Charles Walters assigned his policy to the plaintiff, on the 20th November, 1854. A loss took place before the assignment. The policy “agreed to make good unto the said assured, his ■executors, administrators, and assigns, all. such immediate ■loss,” &c. It also contained this provision: “Policies of insurance subscribed by this company, shall not be assignable without the consent of the company, expressed by in-[408]*408dorsement made thereon.” The plaintiff brings suit to recover fifty-five dollars, the balance due on the policy of Charles "Walters, and assigned to her.
The defendant pleads, first: A general denial of all the-allegations of the petition;' second, that there had been “ a settlement in full, by payment and receipt, given by plaintiff to defendant, in full of all claim or demand growing-out of said insurance mentioned in plaintiff’s petition. The-general denial of the petition, is allowable under the rules-of the first district,' and includes in this case, a denial of the indebtedness. Under this general denial, arose the question whether the policy was assignable after loss, and consequently, whether the plaintiff could maintain her action.. The court instructed the jury,, that the policy was not assignable, and that the plaintiff could not recover. To-this the plaintiff excepted, and this is the first question before us.
It would be impossible to hold the policy a negotiable instrument under the Code, section 950, by virtue of the words executors and assigns, inasmuch as it afterwards contains an. express prohibition of assignment. And it is not necessary to determine whether it would be assignable before loss, under sections 949 and 954 of the Code. But the question for determination is, whether the policy is assignable, after' loss. There are reasons of sufficient force, why insurers should prohibit the assignment of their contracts of insurance. The use to which the insured property may be likely to be put, has great weight, and even personal confidence, is of avail. Until a loss has occurred, the liability is contingent; there may never be a liability. But when the loss has happened,, reasons of the character of those above stated,, lose their force., The liability is fixed.. There is now a debt^ and no reason is perceived, why this, like any other debt, should not be assignable. Without any detriment to the insurer, the statute may be allowed to have its legitimate effect. By such a course, the insurer is not barred of any defence which he may have against the insured, but he may defend against the assignee as fully as he might against the: [409]*409insured; whilst if there is no defence, and the monej is due, there is no sufficient reason why the assignee should not recover it. The better view is, to regard the policy as assignable after the loss has happened. Code of Iowa, §§ 949* and 951. The like ruling has been made in New York, on a policy containing precisely similar provisions, in the case of Brichta v. New York La Fayette Insurance- Company, 2 Hall, 372.
Under that branch of defendant's answer, which alleges payment, and receipt given by plaintiff in full of all claim or demand growing out of said insurance mentioned in plain - tiff’s petition, the company gave in evidence a receipt of plaintiff on her own policy, on which also at the same time a loss occurred, and further put in evidence, Charles Walters’ receipt for the loss under his policy. But, on the other-hand, defendants certificate was put in evidence, showing-that they held fifty-five dollars of the amount receipted to them by Charles Walters, “subject to such garnishment,” and “to be applied as may be finally decided.” This latter takes away the pretence that they had paid. They also, showed by proper evidence, that on -the 7th December, 1854, and before defendants or their agents, Edwards & Turner, had notice of the assignment of Charles Walters’ policy to the plaintiff, one Curtis, and one Oswald & Co. severally recovered judgment against said Charles Walters, and against defendants as his garnishees. The plaintiff requested the court to instruct the jury, that the defendant could not give said judgment of garnishment in evidence under their answer; that they could not do this under a general denial of indebtedness, but that they must plead the matter. The court refused to give this instruction.
At this point of the cause and the' evidence, the defendant committed the error of a departure from the pleadings. This matter offered by the defendant was special matter, and very clearly could not be introduced under a general denial, nor under either part of his answek It was matter in avoidance, and not negativing the original indebtedness. Admitting that a rule of court is competent to, render a general de[410]*410nial, a sufficient denial of the averments of tbe petition, still it can extend no farther than as a denial of the petition, and cannot open the door to special defences, and matter in avoidance. In this, the court erred. Nearly all the instructions asked by both sides, related to this portion of the defence, and therefore, under the above views, the questions raised in them need not be discussed.
Another question has been fairly raised and presented, which may arise again, and it is therefore proper to be considered, although it is not necessary for the disposition of the cause as now before us. The policy was assigned on the 20th November, 1854. On the 7th December, 1854, Curtis & Oswald recovered their judgments against Charles Walters, defendant, and the insurance company, as garnishee. It does not appear when the garnishment was served on the defendants, and therefore, the date of the judgment must be taken; and as these suits were before a justice of the peace, the service may well enough have been after the assignment. This present suit was commenced on the 21st August, 1855. The defendant has not yet paid the money to Curtis & Oswald, the creditors in the garnishment.
■ The question is, whether the plaintiff, or the creditors by garnishment, have the prior or superior claim to this money in the hands of the garnishee, the plaintiff having given the company no notice of the assignment of the policy to her. The Code, section 949, makes a large class of instruments, under which this policy would probably fall, assignable, and gives the assignee a right of action in his own name, subject to any defence or set-off, legal or equitable, whieh the maker or debtor had against the assignor, before notice of his assignment. And by section 951, when by the terms of an instrument, its assignment is prohibited, the assignment is nevertheless valid, but the maker may set up any defence which he may have before the suit is commenced. This question has been looked at in different points of view, and the decisions are not reconcilable. Sometimes, it has presented itself under the imposing difficult}'- of the conflict of laws. Sometimes, the garnishment debtor has been received and treated [411]*411as a trustee. Again, the question has been treated as one of priority of lien only, as under attachment or judgment. Under these different positions, or viewing the subject, different decisions have been made. But it would seem as though there were some views of the proceeding and the party garnished, which ought to stand prominent in the consideration of the subject. Primarily, the garnishee is taken to be an innocent person, who is called into court as owing ' money to another, or as having property of that other in his hands, and in either case, without fault or blame. It is true that this process may be, and sometimes is, used as a powerful instrument for ferreting out fraud, or the concealment of property. But the proceeding is based upon the idea of innocence in the party summoned. He is supposed to stand indifferent as to who shall have the money or property. His answer is generally, the only evidence of his indebtedness or liability. By the statute of this state, an issue may be taken on his answer, but if such issue is not taken, the answer remains the sole test of his being indebted or holding property. His rights are to be carefully protected; he is to be charged only upon his contract or relation with his creditor, precisely as it exists between them; he is in no case to be placed in a situation where he will be compelled to pay the debt twice (Drake on Attachment, § 626); and, it is apprehended, that he is not to be unnecessarily exposed to litigation and expense. In view of these, and such considerations, it does seem that the garnishee should not be tried merely by the rules of prior liens, or of attachment or judgment liens, or of debtor’s assignments for their creditors, or of trustees even. Nor, perhaps, when all the parties are within our own jurisdiction, is his case to be wholly measured by the rules bearing upon cases within the conflict of laws.
The true rule in relation to one summoned as the debtor of the principal debtor, on an unnegotiable debt, is, that the assignee of the debt should give notice to the garnishee, of the assignment, in time to enable him to show such assignment in his answer,, or, at least, before judgment against [412]*412him. Having received, such notice, if he neglect to show it in defence, he cannot resist a subsequent claim of the as-signee ; and on the other hand, having shown such assignment, he cannot be charged as garnishee. This is the rule which has been applied to debtors by instruments which were held not assignable in law, but only in equity, so as to enable .the assignee to sue in the name of the assignor. And what different rule should be applied to assignees, under the above sections of the Code ? In the one case, the debtor is entitled to every defence, existing before the assignment; and in the other, to all existing before suit brought; and it is immaterial under which of these sections this case is classed. This subject is fully explained, and the rule enforced, in Drake on Attachment, §§ 569 el seq., 614 et seq., and 626, and the context; and see Story on Conflict of Laws, §396 (new ed.), and p. 328, 230, former edition; Wood v. Partridge, 11 Mass. 487; Hull v. Blake, 13 Mass. 153 ; Foster v. Sinkler, 4 Ib. 450; Dix v. Cobb, 4 Ib. 508; Jones v. Witter, 13 Ib. 304; Holmes v. Remsen, 4 Johns. Ch. 460; Muir v. Schenck, 3 Hill, 228; Clodfelter v. Cox, 1 Sneed. 330.
Under a law and system of garnishment, this is the only rule which will fully protect the rights of all parties, and save garnishees from being involved in suits and expenses, to which the honest ought not to be made subject; and this rule is intelligible, easy and practicable, determining the respective rights at an early period,,,instead of allowing the questions relating to them to extend indefinitely into an uncertain future. In the case at bar, it is not asserted that the plaintiff gave notice of the assignment to the company, before judgment was rendered against it. This judgment must be held as final. It would seem imjust to hold the garnishee still liable to the assignee, and compel him to go into chancery, or to resort to any other legal proceeding, to protect himself against, that judgment, in relation to which he has been in no fault. A notice from the assignee would have saved her debt, and at the same time protected the company.
The judgment must be reversed, and a procedendo issue.