The opinion of the court was delivered by: Mercer, District Judge.
Plaintiff filed its complaint for declaratory judgment and
evidence has been heard. The evidence discloses that plaintiff
is a New Jersey corporation and defendants are residents of
the State of Illinois, and the amount in controversy is in
excess of Three Thousand Dollars.
The defendant, North Side Metal, Inc., purchased a 1955 Ford
Dump Truck on July 30, 1955 from Dana Huddleson Ford Company,
Champaign, Illinois, and owned said vehicle on January 3,
1957. Thereafter, on April 27, 1956, plaintiff issued its
policy of insurance to North Side Metal, Inc., for a period of
one year, the said policy being admitted into evidence as
Plaintiff's Exhibit A. This policy schedules the motor
vehicles insured under the terms of said policy but the 1955
Ford dump truck was not scheduled. Thereafter, on June 14,
1956, plaintiff issued its policy to Harry Brown and Ellis
Brown, doing business as North Side Metal Company, for a
period of one year, said policy being admitted into evidence
as Plaintiff's Exhibit D. This policy schedules certain
vehicles but the 1955 Ford dump truck was not scheduled.
On January 3, 1957, the defendant, Peter Peat, was employed
by North Side Metal, Inc., and while acting in the scope of
his employment was operating the 1955 Ford dump truck upon
Route 150, approximately twelve miles east of Peoria,
Illinois, about 7:30 o'clock A.M., when said motor vehicle
collided with a motor vehicle operated by the defendant, Karen
Lou Mulvaney, and occupied by Caroline N. Cady, deceased, and
Florence M. Harding, deceased. As a result of said collision
the defendant, Karen Lou Mulvaney, was injured and she and the
defendant administrators have made claims for the personal
injuries and wrongful deaths.
The defendants contend that it had relied upon plaintiff
company and its agents, in consideration of defendants'
payment of premiums and promise to pay any premiums which
might be required to be paid, to insure defendants as against
any bodily injury liability, or property damage liability, or
any other liability which might arise. Defendants further
contend that defendants were covered as to all the vehicles
owned by the defendants and that the policy (Exhibit D) was,
in fact, the type of policy known and designated as a "fleet"
policy covering any and all vehicles owned by the defendant,
North Side Metal, Inc.
The principal question to be determined therefore, is
whether or not the policy issued June 14, 1956, being Exhibit
D, was a fleet policy. This policy is designated as a
comprehensive automobile policy. A schedule of automobiles is
attached to the policy listing four vehicles, none of which is
the 1955 Ford dump truck involved in the accident. Attached to
the policy is a change of automobile endorsement dated
December 21, 1956 wherein a 1957 Ford Fairlane is added and a
1955 Ford Fairlane, one of the four vehicles listed in the
original schedule, is eliminated. Coverages A and B of the
insuring agreements provide for bodily injury liability and
property damage liability "caused by accident and arising out
of the ownership, maintenance, or use of any automobile."
Paragraph 2 of Conditions provides as follows:
"The Company shall be permitted to inspect the
insured automobiles and to examine and audit the
insureds' books and records at any time during
the policy period and any extension thereof and
with three years after the final termination of
this policy, as far as they relate to the premium
bases or the subject matter of this insurance."
The above-quoted Coverages A and B and Paragraph 2 of
Conditions are quoted for the reason that defendants rely on
the language contained therein as establishing proof that the
policy is a "fleet" policy.
The evidence discloses that the plaintiff company started to
do business with defendant on June 14, 1951 when the first
policy, similar to the one in question herein, was issued.
Renewals were made each year. The 1955 Ford dump truck was
purchased July 30, 1955, approximately eleven and one-half
months prior to the renewal date of June 14, 1956.
There is considerable conflict in the testimony on the
question of verbal notice given by defendants to the local
agents of the plaintiff. Campbell Evans was the local agent of
plaintiff company, doing business in Champaign, Illinois. He
handled the business in connection with the comprehensive
liability policy referred to as the fleet policy, Exhibit
D.H.R. Breese & Company, also a Champaign, Illinois agent of
the plaintiff company, handled the business in connection with
the policy, Exhibit A. Defendants testified that oral notice
was given to Evans that the 1955 Ford dump truck was to be
included in the fleet policy. This is denied by Evans. In
resolving the question of the credibility of the conflicting
testimony, the Court is impressed with evidence introduced as
Plaintiff's Exhibits B, C, H, and I. These exhibits disclose
that on October 23, 1956, approximately two months before the
accident above referred to, North Side Metal Co., Inc., by
Ellis Brown, Manager, wrote a letter to Evans and a letter to
Breese & Company, the letters being identical and reading as
"We are preparing an insurance register and in
order to complete this we would appreciate your
sending us a list of policies currently in force,
giving the policy number, company, dates,
premium, property covered and loss clause if
known, and what, if any balance may be due."
"They will be up for renewal June 14, 1957. If
any of the above four items are not to be on the
policy please advise and we will have them taken
off, and likewise if there is any other vehicle