The opinion of the court was delivered by: Platt, Chief Judge.
This is a garnishment proceeding against State Farm Mutual
Insurance Company. Maxine J. Pawlik, the plaintiff and garnisher,
now known as Maxine J. Shearin, obtained a verdict of $18,500
against William R. Nichols, and a verdict of $2,000 against
Lawrence Nichols. Both verdicts were returned on October 22 and
judgment was entered on the verdicts for the full amount on
October 23, 1958. Originally this was a personal injury action
against the defendant, William R. Nichols, for injuries resulting
from a vehicle collision which occurred on November 22, 1956.
Nichols was driving a Ford 1 1/2 ton truck which collided with
the automobile in which the plaintiff was riding. The truck was
owned by Kenneth Hodge, who was also a defendant in the action.
Joined with this action was a suit under the Dram Shop Act of
Illinois against Lawrence Nichols, (no relation to William R.
Nichols) who allegedly sold liquor to William R. Nichols, causing
him to become intoxicated. On February 17, 1959, on motion of
plaintiff and defendant, Lawrence Nichols, judgment against
Lawrence Nichols was set aside and a new trial granted. This
action was then dismissed against Lawrence Nichols pursuant to
On the date of the collision there was in effect an automobile
liability insurance policy issued by State Farm to Kenneth Hodge
on his truck. Hodge employed the defendant, Nichols, as a farm
hand. The policy contained the usual permissive user clause.
Hodge was dismissed at the close of the plaintiff's evidence in
the original action because Nichols was not driving the truck at
the time of the collision within the scope of his employment but
was on a mission of his own.
In reply to the interrogatories in the garnishment action State
Farm made the following answer:
"Because of lack of cooperation on the part of said
William R. Nichols, as required by said policy. We
are not willing to pay anything towards said
The policy provided as follows:
In the collision between the truck driven by Nichols and the
automobile in which the plaintiff was riding one occupant of the
automobile received injuries from which he died, and State Farm
settled this claim for $4,000. Another occupant of the same car
suffered personal injuries as a result of the collision and State
Farm paid in settlement of this claim $3,960.
Nichols gave a complete statement of the description of the
occurrence to the Attorney at Danville, Illinois, who represented
State Farm shortly after the collision. In this statement Nichols
said he was not intoxicated and related facts which indicated he
was not negligent in the manner in which he drove the truck at
the time of the collision. Thereafter, Nichols was indicted by
the grand jury of the Circuit Court of Vermilion County,
Illinois, and charged with reckless homicide. State Farm arranged
bond for Nichols. Nichols had been staying at Cissna Park,
Illinois, but after informing the Danville Attorney for State
Farm of his address where he could be reached he went to his home
in Big Stone Gap, Virginia. He returned to Danville, Illinois, at
his own expense when the homicide case was set for trial in
Danville in the Circuit Court of Vermilion County, Illinois, but
the cause was continued. He again returned at his own expense for
the second setting, at which time the case was tried and Nichols
In May, 1957, before the instant personal injury case was filed
on September 6, 1957, in this court, Kenneth Davenport and
another representative of State Farm located Nichols at Valley
Lake, Virginia, after stopping at his father's home where Nichols
was staying. Davenport informed Nichols that should a civil suit
be started against him that he should contact him at Bristol,
Virginia, and the Company would arrange for his expenses to
attend the trial. Nichols was served with summons in the
plaintiff's personal injury action on September 7, 1957, in
Danville, Illinois, while he was on trial in the criminal action.
On June 2, 1958, Nichols was married. Nichols had a seventh
grade education, and was a man of no financial means.
On September 20, 1957, Mr. Kurtock, Superintendent of Claims
for State Farm Mutual, sent a registered letter to Mr. Nichols,
Rural Route 2, Box 180, Milford, Illinois, informing Mr. Nichols
that its Danville Attorney would represent him in the law suit
against him by Miss Pawlik. He also requested that he comply with
the requests of this Attorney and should co-operate in "the
handling of this litigation." The letter also informed Mr.
Nichols that the claim in the suit was in excess of the
protection afforded by the policy, and that it was agreeable with
the company for him to procure his own attorney, at his own
expense, in addition to the attorney that the State Farm would
employ and compensate. The receipt on this registered letter was
returned signed, "William R. Nichols, Mrs. Ray Akers, September
24, 1957." Mrs. Akers was Nichols' sister, and her husband was in
the truck with Nichols at the time of the collision. There was no
proof that Nichols received this letter.
The personal injury action was set for trial in this court on
August 19, 1958. On August 21, 1958, the Danville Attorney for
State Farm sent a letter to both Kenneth Hodge at Wellington,
Illinois, and to William R. Nichols, P.O. Box 65, Big Stone Gap,
Virginia, informing them that the case was set for trial on
Monday, October 20, 1958, at 9:30 a.m. D.S.T., and to "Save this
time." Enclosed with the letter was a copy of the court's notice
of the trial date. In this letter Nichols was also informed "we
will be in touch with you before trial time."
On the morning of the trial October 20, 1958, Nichols was not
present in court. The Danville Attorney for State Farm
representing him appeared in court and the following colloquy
"The Court: On what grounds?
"Mr. Stifler: And we say that immediately upon
receipt of notice of setting we sent notice to the
defendant, William R. Nichols at Big Stone Gap,
Virginia. That was in August, 1958, and that on
October 2nd, 1958 we sent to Mr. Nichols, William R.
Nichols notice of the setting and asking that he be
in our office at eight o'clock this morning ready for
trial which was to be held at 9:30 this morning.
"Now Mr. Nichols hasn't shown up by eleven o'clock
in the morning. Therefore, we ask that the cause be
continued to give us a chance to have him present.
"The Court: Is there any objection by any of the
"Mr. Zimmerly: We object, your Honor, on the basis
that we have subpoenaed our witnesses for the
plaintiff. Included among those we have down here a
witness from Chicago, a specialist whose practice is
such that he can't come down tomorrow, and we
therefore object and ask that the case be heard at
"The Court: Mr. Stifler, would you consent to the
one witness — your other witnesses will be here
"Mr. Zimmerly: So far as I know.
"The Court: Would you consent to pick the jury and
examine this one witness?
"Mr. Stifler: That would be out of order, ...