Before MAJOR, FINNEGAN and SWAIM, Circuit Judges.
Plaintiffs Hartford Accident and Indemnity Company and Hartford Fire Insurance Company, both corporations and each in the business of writing liability insurance, brought this action against Frank Jasinski, Mathew Pobog, Northwest National Bank of Chicago, a corporation (hereinafter referred to as the Bank), Edward Coyle and Great American Insurance Company, a corporation, under the Federal Declaratory Judgment Act, Title 28 U.S.C.A. § 2201, for judgment declaring null and void from its inception a combination automobile policy No. CH-486719, issued by plaintiffs to the defendant Jasinski, effective June 2, 1952, covering an automobile of which the defendant Pobog was the owner. As incidental relief, plaintiff Hartford Fire Insurance Company prayed that the defendant Bank be required to repay the sum of $405.00, which had been paid to it in accordance with the loss payable clause endorsement attached to said policy, as damages to the automobile, under the mistaken belief that it was owned by Jasinski.
Pobog while driving the automobile described in the policy collided with another motor vehicle driven and owned by the defendant Coyle, in which collision both automobiles were damaged and Coyle sustained personal injuries. Thereafter, Coyle commenced an action in the State Court of Illinois against Pobog and Jasinski, to recover damages both on account of his personal injuries and damages to his car. Coyle was made a party-defendant in the instant case on the premise that he would be entitled to have any judgment which he might obtain in the State Court paid by the plaintiff insurers in accordance with the terms of the policy which they had issued, and for the further reason that Pobog and Jasinski had demanded of plaintiffs that they furnish a defense to the action brought by Coyle in the State Court.During the course of the proceedings, Great American Insurance Company was dismissed as a party-defendant. Jurisdiction was asserted because of the admitted diversity of citizenship as between the plaintiffs and the defendants, and all defendants other than the Bank admit that the requisite amount was involved.
The complaint among other things alleged that Pobog, on or about May 1, 1952, purchased the insured car on a conditional sales contract which was turned over to and became the property of the Bank; that as required by said contract, insurance was procured from the Providence Washington Insurance Company, which issued its policy to Pobog, and that Providence subsequently cancelled said policy as of the date of issuance. Thereupon, so it was alleged, Pobog, Jasinski and the Bank represented to plaintiffs that Jasinski was the owner of the car, and as a result of such representations plaintiffs issued their automobile combination policy in suit, naming Jasinski as the insured, with a loss payable clause endorsement thereon naming the Bank as the lienholder, by which endorsement any loss or damage under the policy was payable in accordance with the Bank's interest. The complaint alleged that the representations made by Pobog, Jasinski and the Bank to plaintiffs that Jasinski was the owner of the automobile "were false, fraudulent and untrue and known to be false, fraudulent and untrue by the said defendants, and each of them, and were not known to be false, fraudulent and untrue by the plaintiffs, or either of them" at the time of the issuance of the policy, and that absent such false and fraudulent representations plaintiffs would not have issued their policy.
Numerous motions were filed, including that by the Bank, attacking the court's jurisdiction of the subject matter as to it, which were overruled. All defendants filed their individual answers to the complaint other than the defendant Great American Insurance Company and as to it, as we have noted, the complaint was dismissed. In addition, Pobog filed a counterclaim alleging that he had borrowed money from the Bank not only to purchase the car but also to buy insurance; that he had never represented to plaintiffs or anyone at any time that any person other than he had owned the car; that Harvey E. Bell who procured the policy was plaintiffs' agent; that Bell had full knowledge of Pobog's ownership, and that Bell's knowledge was imputable to plaintiffs. Alternatively, Pobog asserted that the Bank should be declared liable to him as an insurer in the event that it be determined that the Bank had misrepresented the ownership of the car. This alternative prayer by Pobog was stricken on the Bank's motion, on the ground that it raised questions not germane to the main issue.
The Bank, as well as Pobog and Jasinski, denied that they or any of them represented to plaintiffs that Jasinski was the owner of the car, and they each further denied that plaintiffs relied upon such representations by the defendants in the issuance of the policy. In addition, the Bank set forth two affirmative defenses: (1) that Bell who had written and countersigned the policy in suit was plaintiffs' agent and had known since May 1, 1952 (the date of the purchase of the car by Pobog) that Jasinski was a cosigner on the conditional sales contract and as such cosigner had an insurable interest in the automobile insured by the plaintiffs, and further, that Bell at all times had knowledge of the true status of the ownership of the car insured by plaintiffs and that they were thereby estopped to deny the validity of the contract (policy of insurance), and (2) that plaintiffs on or about May 15, 1953, adjusted and settled a claim for damages to the insured car in the amount of $405.00, and issued its draft payable to the Bank in said amount, all with the previous knowledge as to the true ownership of the car, and that as a result of such transaction plaintiffs were estopped from claiming as against the Bank that the policy was void and unenforceable.
Depositions of the defendant Pobog and Jasinski, of Harry P. Omundsen (loan officer of the Bank) and of Bell, who had procured and countersigned the policy, were taken. Interrogatories propounded by the Bank to plaintiffs and the answers thereto, as well as interrogatories propounded by plaintiffs to the Bank and the answers thereto, were also filed.
A motion for summary judgment was filed by Pobog, supported by a "certificate" of his attorney setting forth his version as to the facts shown by the pleadings, admissions, answers to interrogatories and depositions. Plaintiffs filed objections to the motion by Pobog for summary judgment. Thereafter, plaintiffs filed their motion for summary judgment and in support thereof adopted the depositions of Pobog, Jasinski, Bell and Omundsen, together with the exhibits thereto attached, the answers to the interrogatories by the various parties and the affidavits of two of their officials, Rutherford and Healy, together with a copy of the agency agreement entered into between plaintiffs and Bell. In connection therewith, plaintiffs tendered in open court the sum of $142.88, representing the premium received for the policy in controversy, to be returned to such of the defendants as the court might direct. A hearing was had upon the respective motions for summary judgment and, at the request of counsel for Pobog, Bell further testified before the court.
The court, upon submission of briefs by the respective parties, took the motions under advisement and, on February 18, 1955, entered its findings of fact, conclusions of law and judgment. It adjudged that the policy was null and void, and of no force and effect from the date of its inception, and that the defendants had no rights or benefits thereunder; that the Bank repay to the plaintiff Hartford Fire Insurance Company the sum of $405.00, which the said plaintiff paid to the Bank to cover the cost of repairs of the automobile described in the policy. Also, the defendants were enjoined from making or prosecuting any claim against the plaintiffs or either of them by reason of the issuance of said policy. The judgment further recited that the sum of $142.88, received by plaintiffs in payment of premium for the policy, had been included in the amount of the loan made by the Bank to Pobog, which said loan had been paid by Pobog in full, and that the amount of said premium tendered in court by plaintiffs be paid to Pobog. Thereafter, the Bank and Pobog filed motions to set aside or to alter or amend the said judgment, which motions were denied April 19, 1955.
From such judgment, as well as from the order denying motions to vacate and set aside the judgment, the defendant Bank appeals in No. 11503, the defendant Pobog in No. 11504, and the defendants Jasinski and Coyle in No. 11505. Separate briefs have been filed in this court by the Bank and Pobog, which Jasinski and Coyle have adopted.
The issues argued in this court, as might be expected of a situation so complicated in its nature, are numerous. The Bank in its brief enumerates the contested issues in substance as follows: (1) that summary judgment in favor of the plaintiffs was erroneous and contrary to the provisions of Rule 56(c) of the Rules of Civil Procedure, 28 U.S.C.A., because genuine issues as to material facts were involved; (2) that the court erred in finding and concluding that Bell was acting as agent for the Bank and not as agent for plaintiffs and that knowledge on his part as to the ownership of the car was not imputable to plaintiffs; (3) that the court erred in its refusal to enter summary judgment in favor of Pobog inasmuch as the plaintiffs conceded all of the material facts asserted in support of Pobog's motion for such a judgment; (4) that the court erred in finding that there was a misrepresentation by the defendants or any of them materially affecting the risk under the policy issued by plaintiffs, and (5) that the court erred in its denial of the Bank's motion to dismiss as to it for lack of jurisdiction. The contested issues as stated in Pobog's brief are substantially the same as those stated by the Bank insofar as they relate to him, that is, that there were controverted issues of material facts which preclude a summary judgment in favor of plaintiffs and that the uncontradicted facts were such as to require a summary judgment in favor of Pobog. In addition, Pobog contends that his alternative claim for relief against the Bank should have been entertained. Plaintiffs' brief contains no statement of contested issues. It is fair to state, however, that they take direct issue with every contention advanced by the defendants which would or might affect the propriety of the judgment under review.
There appears to be no dispute as to when a summary judgment may properly be entered under Rule 56 of the Federal Rules of Civil Procedure. We see no point, therefore, in discussing the numerous cases called to our attention on this phase of the case. As the rule states, such a judgment is proper only where "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law * * *." Hazeltine Research, Inc., v. General Electric Co., 7 Cir., 183 F.2d 3, 7; Mitchell v. Pilgrim Holiness Church Corp., 7 Cir., 210 F.2d 879, 881. The fact that opposing parties have moved for summary judgment is without significance. Begnaud v. White, 6 Cir., 170 F.2d 323, 327; F.A.R. Liquidating Corp. v. Brownell, 3 Cir., 209 F.2d 375, 380. Summary judgment proceedings cannot be invoked to deprive litigants of their right to trial by jury where there are genuine issues as to material facts to try. Preston v. Aetna Life Ins. Co., 7 Cir., 174 F.2d 10, 14.
In the beginning, we think it important to consider certain issues of law which vitally affect the decision of the District Court as embodied in its judgment. Referring to the time of the cancellation of Pobog's policy issued by the Providence Washington Insurance Company, the court found:
"Shortly thereafter, the defendant, Northwest National Bank of Chicago, again called its said broker, the said Harvey E. Bell, advised him that the said automobile had been or would be transferred to the defendant, Frank Jasinski, and ordered a new policy to be written, naming the defendant, Frank Jasinski, as insured therein, which said order, the said Harvey E. Bell placed with the plaintiffs, Hartford Accident and Indemnity Company, a corporation, and Hartford Fire Insurance Company, a corporation, in response to which said order the plaintiffs issued its policy No. CH486719, naming the defendant, Frank Jasinski, as the insured therein, and describing him therein, except with respect to bailment lease, conditional sale, mortgage or other incumbrance as the sole owner thereof, said policy also bearing a loss payable endorsement running to the defendant, Northwest National Bank of Chicago, and for which the plaintiffs were paid a premium in the sum of One hundred forty-two and 88/100 dollars ($142.88). The transfer, as represented by the defendant, Northwest National Bank of Chicago, was never effected, and the defendant, Frank Jasinski, never acquired any right, title or interest in or to the said automobile, of which facts the defendant, Northwest National Bank of Chicago, never advised the said Harvey E. Bell."
Also, the court concluded as a matter of law:
"The said Harvey E. Bell, in placing the order for the said policy No. CH486719 with the plaintiffs, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company, was acting solely as broker for and agent of the defendant, Northwest National Bank of Chicago, and not as agent for the plaintiffs under his agency agreement with the plaintiff, Hartford Accident and Indemnity Company."
We think there resides in the finding and conclusion thus quoted, particularly the latter, the heart of this controversy. Plaintiffs appear to regard lightly the importance of this conclusion and suggest that the appeal is from the judgment, not from the findings and conclusions. Even so, the judgment in favor of the plaintiffs ...