Appeal from the Circuit Court of Cook county; the Hon. FRANK
H. BICEK, Judge, presiding. Judgment reversed.
MR. PRESIDING JUSTICE MCCORMICK DELIVERED THE OPINION OF THE COURT.
An action in garnishment was instituted against the defendant, Continental Casualty Company, a corporation, based upon a judgment recovered by the plaintiff against one Donald McCann. The defendant by its policy insured one William J. Kenealy, who was the owner of a motor scooter. By a special endorsement to the policy, the coverage was limited to the named insured and those relatives who were members of his household. One Donald McCann, not a relative and not a member of the household, while using the scooter with the permission of the minor son of Kenealy, injured Kenneth Osterman. Suit was brought by Osterman against Kenealy and McCann. The latter defaulted and a judgment was entered against him for $7,500. The suit in garnishment was tried before a jury. Evidence was heard and at the conclusion of the evidence the trial court directed a verdict against the garnishee and entered judgment on the verdict for $5,000, the limit of the coverage. From such judgment this appeal is taken.
The case was first appealed directly to the Supreme Court on the theory that a constitutional question was in issue. The Supreme Court, in McCann v. Continental Casualty Co., 4 Ill.2d 170, held that no question of constitutional construction was involved, and transferred the case to this court.
The defendant here contends that the trial court erroneously interpreted the statute and the policy of insurance, and that the evidence did not warrant a directed verdict.
Under the policy of insurance issued by the defendant to William J. Kenealy, the defendant agreed to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or as property damage caused by accidents arising out of the ownership, maintenance or use of a motor scooter owned by the insured. Attached to the policy was a rider, amending Article III, "Definition of Insured," and reading as follows:
"The unqualified word `insured' wherever used in Coverages A and B and in other parts of this policy, when applicable to such coverages, includes the named insured and, except where specifically stated to the contrary, also includes any relative of and a resident of the household of the named insured while using the vehicle described in the policy provided the actual use of the vehicle is with the permission of the named insured."
The motor scooter was bought for the use of John Kenealy, the minor son of the insured. There is evidence in the record that the insured told his son that it would be all right for his friends to drive the motor scooter if they were dependable. On June 23, 1949 John Kenealy gave Donald McCann permission to operate this scooter. While McCann was driving this scooter he injured Kenneth Osterman. There is no question that under the insurance provision of the amended policy, standing alone, there would have been no coverage under which the defendant insurance company could be held responsible.
The policy, however, contains certain provisions, among which is clause No. 8 as follows:
"Financial Responsibility Laws Coverages A and B:
"Such insurance as is afforded by this policy for bodily injury liability or property damage liability shall comply with the provisions of the motor vehicle financial responsibility law of any state or province which shall be applicable with respect to any such liability arising out of the ownership, maintenance or use of the automobile during the policy period, to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits of liability stated in this policy. The insured agrees to reimburse the company for any payment made by the company which it would not have been obligated to make under the terms of this policy except for the agreement contained in this paragraph."
Clause 23 of the policy reads: "Terms of this policy which are in conflict with the statutes of the State wherein this policy is issued are hereby amended to conform to such statutes."
There was in full force and effect in Illinois a Financial Responsibility Law (Ill. Rev. Stat. 1947, chap. 95 1/2, pars. 58(b) to 58(k) [Jones Ill. Stats. Ann. 85.064(2), 85.064(11)]). This statute provides that the Secretary of State shall suspend the operator's license and the registration certificate and license plates issued to the person named as judgment debtor, where such a judgment growing out of the operation of a motor vehicle is not satisfied within thirty days after its rendition, unless the party against whom the judgment is rendered shall satisfy the judgment and make proof of financial responsibility to respond in damages for any liability for bodily injuries, etc., thereafter incurred as a result of the ownership, maintenance, use and operation of the motor vehicle. It is further provided that proof of financial responsibility may be satisfied by a policy of insurance. Paragraph 58(k) further provides that a motor vehicle liability policy, as the term is used in the Act, "shall insure the person named therein and any other person using or responsible for the use of said motor vehicle or vehicles with the express or implied permission of said insured."
The plaintiff contends that the trial court properly incorporated paragraph 58(k) of the Financial Responsibility Act in the policy, in conformance with the provision of clause 8 of the policy.
At the beginning of this discussion it must be noted that there is no general statutory provision in Illinois making insurance compulsory in all cases. In the printed body of the policy, in paragraph III entitled "Definition of Insured," we find what is commonly known as an "omnibus" clause, which extends the insurance to any person using the automobile with permission of the insured. The rider heretofore referred to was substituted for such clause. A few states by statute require the inclusion of the "omnibus coverage" clause in every policy. Other states provide that an insurance policy used as proof in compliance with Financial Responsibility Laws must contain such a provision. The two types of statutes are quite different in purpose. The purpose of the first type is to protect the public against the negligent operation of an automobile by a person using such automobile with the permission and consent of the insured owner, but who would not otherwise be covered by the terms of the insurance policy. The primary purpose of the second type is to regulate the provisions of an insurance policy used, as proof of financial responsibility for the future, by the owner of a car who, by prior accident or otherwise, has fallen within the scope of the Financial Responsibility Statute. The fundamental basis for both types of statutes, as well as for other statutory enactments making insurance mandatory, is the protection of the general public as well as providing for assured compensation to persons injured through the ...