Appeal from the Superior Court of Cook county; the Hon. NORMAN
C. BARRY, Judge, presiding. Judgment reversed, and cause remanded
PRESIDING JUSTICE FRIEND DELIVERED THE OPINION OF THE COURT.
Plaintiff filed its complaint for a declaratory judgment seeking an adjudication that an automobile liability policy issued by it to the defendant George M. Hoffman, as owner of a 1950 Buick automobile, does not cover liability on his part for an accident occurring while he was on active duty as a member of the Illinois National Guard operating a two and one-half ton truck belonging to the Guard and in convoy from Camp Ripley, Minnesota, to the home armory in Chicago, Illinois. Plaintiff also contended that if coverage was afforded, Hoffman had forfeited his right thereto by failing to give written notice of the accident as soon as practicable, under the terms of the policy. The case was tried by the court without a jury and resulted in a judgment denying the relief sought and holding that Hoffman's liability is covered by the policy, that plaintiff is obliged to assume Hoffman's defense in a case brought against him by the defendants Edward and Francis Grochowski, and to pay any judgment that may be rendered against him, within the limits of the policy.
There is substantially no dispute as to the salient facts. On June 22, 1955 plaintiff issued to Hoffman its automobile liability insurance policy No. 2 606 388, effective from that date for a period of one year; it described the insured as the owner of a 1950 Buick automobile. Hoffman had for five and one-half years been employed by Wallace Auto Service. He is also a member of the Illinois National Guard. From the affidavit attached to his answer, it appears that he had enlisted in the National Guard in August 1953 and was assigned to Headquarters Company, 2nd Battalion, 131st Infantry, of which he is still a member. His duties with the National Guard required attendance at meetings one night a week and a two-week encampment period during the summer; during this period he was compensated for his services by the Department of Finance of the State of Illinois.
On July 23, 1955 Hoffman had completed his two weeks of active service at Camp Ripley, Minnesota, and was returning to Chicago. He had the rating of vehicle driver and was operating a two and one-half ton G.M.C. truck belonging to the National Guard. At a point north of Evansville, Wisconsin, the truck he was operating became involved in an accident in which the Grochowskis were allegedly injured. According to Hoffman, he reported the accident the same day to the investigating officer of the convoy, Lieutenant Eyres, and to his superior officer as soon as he reached the home armory. The accident was not reported to plaintiff until almost two years later.
In mid-December 1955, Hoffman was served with a summons in the case of Edward and Francis Grochowski v. Major General Leo M. Boyle, Illinois National Guard, G.W. Achterberg, and Hoffman, case No. 55-S-18 652, in the Superior Court of Cook County. He turned the summons over to Captain Lutchstrum, his Headquarters Commander (2nd Battalion, 131st Infantry, Illinois National Guard). In that case Latham Castle, Attorney General, who is charged by statute with the duty of representing national guardsmen in actions arising out of accidents occurring while they are on active duty (Ill. Rev. Stat. 1957, ch. 129, Sec. 271) filed an appearance and a motion to dismiss the case on behalf of Hoffman. On trial Hoffman testified that he had received a letter of inquiry from the State Military-Naval Department as to whether he had any insurance, and that he took the matter up with Lieutenant Matsie, who advised him to return the letter with the statement that he had none. Plaintiff was first notified of the accident by a letter from Latham Castle, dated May 29, 1957. Upon receipt of this letter it served Hoffman with a notice of reservation of rights, dated June 7, 1957. Its investigators also interviewed him, and on August 21, 1957 Hoffman was notified that plaintiff disclaimed any and all liability to him and others under the policy, and also so advised the Attorney General. The instant suit for declaratory relief was filed by the insurance company on October 7, 1957.
The issues presented are: (1) whether the alleged liability of the defendant, Hoffman, is within the coverage afforded by the policy; and (2) whether the insured has complied with the conditions of the policy requiring notice. The pertinent provision of the policy provides: "This Policy Does Not Apply under: . . . 2. Coverages A, B and C (1) to any non-owned automobile (a) while used in the business or occupation of the named insured or spouse, except a private passenger automobile operated or occupied by the named insured, spouse or servant, . . ." Obviously, the two and one-half ton military truck being operated by Hoffman at the time of the accident was a non-owned automobile, since it was admittedly the property of the Illinois National Guard; nor can it be said to have been a private passenger automobile within the provisions of the policy. The principal question presented is whether liability arising out of its operation and use by Hoffman in the discharge of his duties as a guardsman was excluded by the foregoing provision. On this point the Attorney General, representing Hoffman, and private counsel on behalf of the Grochowskis, in separate briefs, take the common ground that service with the Illinois National Guard did not constitute a business or occupation of the defendant Hoffman within the meaning of the policy, and that for that reason liability on his part, if any, was within the coverage. The trial judge sustained this contention. Specifically, the argument of counsel and the finding of the court seem to be that Hoffman's employment as a mechanic by Wallace Auto Service was the only business or occupation in which he could be engaged. It does not appear from the terms of the policy or from the evidence that any such limitation was contemplated by either Hoffman or plaintiff. The court found that at the time of the accident Hoffman was not engaged in any "business or occupation of his own." Neither of these terms is restrictive in its meaning nor made so by any provisions of the policy. Plaintiff argues that at the time of the occurrence the business of Hoffman and the one in which he was engaged was that of operating a military truck; that he was serving as an enlisted man in the National Guard, and for the two-week period of his active service he was not engaged in any other business or occupation. One of the duties required of him by the Guard was to drive a truck, and he was so engaged at the time of the accident. It was his business, as well as that of his superiors of the unit to which he was attached, to see that the truck and the equipment or personnel which it was carrying were returned to the home armory in Chicago.
It is not uncommon for an insured to have a business in addition to his regular and customary occupation which he may pursue primarily or even wholly for purposes other than pecuniary gain; but such collateral business would nonetheless constitute a business or an occupation while so pursued. Since the policy contains no restrictive provisions as to the business or profession of the insured, it would seem that coverage or noncoverage is to be determined by the terms and provisions of the policy and not by reference to the particular business or occupation of the insured described in the policy.
The question under discussion is a novel one in the courts of this State. Although not pertinent on the facts, there are cases in other States in which the general connotation of the word "business" has been considered. In Dickey v. General Acc. Fire & Life Assur. Corporation, 328 Pa. 541, 195 A. 875, the court observed that the "`business' of the assured, as intended in the policy, was anything in which he desired to concern himself."
The facts in Merchants Mutual Casualty Co. v. Capobianco, 100 N.H. 223, 123 A.2d 159, are analogous to those in the case at bar. An action was there brought for declaratory judgment to determine plaintiff's obligation under an automobile policy issued to defendant as the owner of a Buick automobile. Capobianco was employed at the State Military Reservation by the United States Property and Finance Office in a civilian capacity as a general mechanic. Some 500 military vehicles of various kinds were normally stored and maintained subject to requisition for use off the reservation by National Guard units throughout the State. These vehicles were in defendant's charge for maintenance and storage. They were operated by truck drivers employed at the reservation. Capobianco was not classified as a truck driver, and it was not a part of his regular duty to drive these trucks on the highway. At the time of the accident all the truck drivers employed at the reservation were at summer camp with the National Guard. A hurricane caused a power failure at the Concord Hospital. A captain in charge at the military reservation ordered Capobianco to transport a generator to the hospital. On the way he was involved in an accident with an automobile operated by one Warren. The policy issued by plaintiff to Capobianco provided "that `use of other automobiles' coverage shall not apply `to any automobile while used in the business or occupation of the named insured.'" The trial court concluded that the emergency was not work in which the insured was usually and regularly engaged, and accordingly entered judgment for defendant. In reversing this judgment, the reviewing court said: "The policy is to be given the meaning which a reasonable person in the position of the insured would give to it. Farm Bureau Mutual Automobile Ins. Co. v. Manson, 94 N.H. 389, 392, 54 A.2d 580. The duties of an occupation are not ordinarily thought of as being limited to the performance of those acts regularly and usually required by the work but are generally understood to include those additional acts the need for the performance of which arises only infrequently but which are none the less a part of the occupation. . . . Thus, even a classified truck driver operating the truck on the day of the accident would have been performing work other than that in which he was regularly or usually engaged. The important fact is that `at the time of the accident, Capobianco was driving the army truck . . . in compliance with an order of his superior,' an authorized order which he had a duty to obey, and was receiving his regular pay for so doing. Under these circumstances no reasonable person in Capobianco's position would consider that such use of the truck was not a part of his occupation." See also Leonard v. Maryland Casualty Co., 158 Kan. 263, 146 P.2d 378, and Dickey v. General Acc. Fire & Life Assur. Corporation, referred to above.
Cases cited by the Attorney General on behalf of Hoffman are not helpful. The early case of Dunne v. People, 94 Ill. 120, merely upholds the constitutionality of the statute establishing the National Guard. Hays v. Illinois Terminal Transp. Co., 363 Ill. 397, and Goldstein v. State, 281 N.Y. 396, 24 N.E.2d 97, hold that a guardsman on active duty is not an employee of the State as the term "employee" is used in the respective Workmen's Compensation Acts statutes which are not here involved. In Down v. Comstock, 318 Ill. 445, the court held that the word "business" has been often used with reference to the execution of a will, and that the use of that term in an instruction would not be misunderstood by the jury, even though the testator's principal occupation had been that of farming. Union Mutual Accident Ass'n v. Frohard, 134 Ill. 228, involved a life insurance policy. The by-laws of the insurer classified various occupations according to their respective hazards, and the amount of coverage was made dependent upon those classifications. Accordingly, a change from one occupation to a more hazardous one reduced the coverage. Neither the policy nor the factual situation in that case is in anywise similar to those in the case at bar.
On oral argument plaintiff's counsel called our attention to Voelker v. Travelers Indemnity Co. (United States District Court for the Northern District of Illinois, 14 Automobile Cases 2nd 375). That case is precisely in point. As in the instant proceeding, a National Guard unit was returning to Chicago from its summer encampment in Minnesota. Voelker, a member of the unit, was operating a two and one-half ton truck in the returning convoy, and while so engaged was involved in an accident in Minnesota with a civilian automobile whose injured passenger brought suit in Minnesota against Voelker to recover damages. Voelker in turn brought a declaratory action in the Superior Court of Cook County, which was removed to the District Court for the Northern District of Illinois on the ground of diversity of citizenship, to construe the policy issued by defendant to him as the owner of a Pontiac automobile. As here, the policy provided that it did not apply "to any automobile while used in a business or occupation of such named insured or spouse, . . ." Plaintiff moved for a summary judgment; on hearing, the motion was denied by Judge Knoch, and the suit dismissed. Judgment was affirmed by the United States Court of Appeals in 260 F.2d 275. Judge Major, speaking for the court, said that, while the question of defendant's freedom from liability under the exclusion clauses was not free from doubt, "we are of the view that the trial court reached the right conclusion. . . . It is grossly unreasonable to think that either the insurer or the insured, upon issuance of the policy covering the latter's private passenger automobile and incidentally making such coverage applicable `to any other automobile,' contemplated that the coverage extended to the insured while driving a truck as a member of the National Guard. Such coverage would have greatly increased the hazard against which the insured was protected, and as a matter of common knowledge would likewise have greatly increased the premium for such coverage. . . . What constitutes `regular use' depends upon the circumstances of the case. Certainly the truck driven by plaintiff at the time of the collision was in the `regular use' of the National Guard. . . . It is also our view that the truck was being `used in a business . . . of such named insured.' It was being used in the business of the National Guard, of which plaintiff was a member. In discharging his obligation to the National Guard, we think that in driving the truck he was not only engaged in its business but in his own business as well. . . . Neither do we think that the fact that plaintiff had other employment upon which he depended for his livelihood detracts from the view that he was also engaged in a business as a member of the National Guard. A person during the same period can be engaged in more than one business. Such was plaintiff's situation."
We have reached the conclusion that plaintiff's contentions are sound and supported by the authorities presented, that Hoffman's liability, if any, to the Grochowskis is excluded from the coverage provided by the policy, and that plaintiff owes him no duty under the policy in question.
The remaining contention is whether, if Hoffman had had a right to coverage, it was forfeited by breach of the condition requiring written notice of the accident to be given by or for him to plaintiff as soon as practicable. The contention of the Attorney General seems to be that because Hoffman was of the opinion that the policy did not cover his liability for the accident an opinion concurred in by his superior officer his supposed mistake as to coverage was an excusable one for the reason that Hoffman's construction of the policy was identical with plaintiff's. We regard this contention as fallacious; but on the basis of this position the Attorney General urges that it "was not `practicable' for the defendant to give notice to the plaintiff under a policy that the plaintiff itself reads as not covering the accident." The requirements of the policy as to notice and the question as to whether the policy affords coverage are separate and distinct matters. Failure of the insured to comply with provisions with respect to notice justifies a disclaimer of liability on the part of the insurer, even though the insured would have been entitled to the protection had he complied with the notice provisions. It is admitted that plaintiff had no notice of the accident until some twenty-three months had elapsed. There is no evidence that during that period plaintiff had any knowledge of the accident or gave any consideration to the matter of coverage until it had disclaimed because of failure on the part of insured to comply with the policy condition as to notice. We think that the Attorney General is therefore not in a position to urge plaintiff's conclusion that he had no coverage as an excuse for the long delay in giving notice. Hoffman was fully cognizant of the fact of the accident, reported it to the investigating officer of the convoy, and again to his superior officer on arriving at the home armory in Chicago the evening of the day it occurred. He was served with a summons in the Grochowski case the following December and turned it over to his headquarters commander, but at no time did he report the accident to plaintiff. The obvious conclusion justified by the record is that it would have been practicable for Hoffman to give notice on the day following the accident.
The Attorney General contends that the delay in receiving notice was not prejudicial; he argues that officers of the National Guard, as well as his own office, investigated the occurrence, and he has put himself on record as being willing to turn over to the plaintiff the results of these investigations. In our opinion, this offer does not operate as a substitute for timely notice. Plaintiff has a right to make its own investigation to determine the question of liability, the nature and extent of the injuries sustained by the Grochowskis, the location of the witnesses who might have had firsthand knowledge of the facts and other matters bearing on the defense of the claim. It is common knowledge that insurance companies have a staff of skilled investigators, and without timely notice of the accident the insurer is irreparably handicapped in making its investigation.
We are of the opinion that the court erred in denying the relief sought by plaintiff, and in holding that Hoffman's liability is covered by the policy and that plaintiff is obliged to assume Hoffman's defense in the suit brought by the Grochowskis. Judgment is therefore reversed, and the cause remanded with directions to enter a judgment in accordance with the prayer of plaintiff's complaint.
Judgment reversed, and cause remanded with ...