Appeal from the Circuit Court of Cook County; the HON. ROBERT
E. ENGLISH, Judge, presiding. Reversed and remanded.
MR. JUSTICE MCCORMICK DELIVERED THE OPINION OF THE COURT.
Inez Summerville (hereafter referred to as the plaintiff) had a judgment for $25,000 entered in her favor in the Circuit Court of Cook County against Matthew L. Rodgers (hereafter referred to as the defendant). The action was predicated upon injuries received by the plaintiff when she was struck by an automobile driven by the defendant. The judgment was entered after an ex parte hearing following the default of the defendant. The plaintiff thereupon instituted garnishment proceedings against Regal Mutual Insurance Company (hereafter referred to as Regal), which company had issued a policy of insurance to the defendant covering the car involved in the accident for the period commencing June 1, 1956 and expiring September 1, 1956. Regal defended on the ground that the policy had been canceled on July 3, 1956. The accident upon which the judgment was based occurred August 25, 1956. The trial court entered judgment in favor of, and discharged, Regal as garnishee.
The arrangements made concerning the policy of insurance between the defendant and Regal were odd and unusual. Regal was an automobile insurance company subsequently taken over by Puritan Insurance Company. Max L. Michaels was a general agent for Regal. Northwest Insurance Brokers, Inc. (hereafter referred to as Northwest) is a brokerage firm writing all types of insurance. Clark Acceptance Company (hereafter referred to as Clark) is a finance company owned by the son of the president of Northwest. Both Northwest and Clark operated at all times from the same locations and their employees were in some instances jointly employed by the two organizations.
On June 1, 1956 defendant had allegedly signed an agreement with Northwest. In that agreement it is stated that defendant applies to Northwest for certain insurance coverage, to-wit, a policy of "Automobile Liability and Property Damage" insurance covering a certain automobile, which policy was to be written for a period of one year by Regal, together with an "Industrial Life" policy and a "Personal Accident" policy, both of which were to be issued by the Pilgrim National Life Insurance Company, and a "Service Plan" to be issued by Northwest. It was further stated that the auto liability and property damage insurance to be issued by Regal was to bear date of June 1, 1956, and under "Payment Schedule" the total cost of the "Plan" was set at $116.00, payable one special payment of $30.00 and six payments of $14.35 to be paid monthly. No date of the first payment is set out in the application. This agreement further provided that defendant agreed to deliver, and did pledge and assign, all of the described insurance policies to Northwest or its assigns together with all rights thereunder, including all unearned or return premiums at any time payable to defendant under the said policies.
Northwest subsequently requested Michaels, an agent of Regal, for a policy to be issued through Regal to defendant, and accordingly Regal issued its "combination automobile policy" bearing date of June 1, 1956 to defendant covering a 1950 Plymouth 2-door sedan for the period from June 1, 1956 to September 1, 1956. Under the policy of insurance Regal agreed to pay on behalf of the insured all sums of money which the insured should be legally obligated to pay as damages because of bodily injuries sustained by any person caused by accident or arising out of the ownership, maintenance and use of the said automobile.
After judgment had been entered against the defendant the plaintiff instituted garnishment proceedings against Regal. Service was had on September 6, 1957. Regal answered, admitting that prior to August 25, 1956 it had issued a policy of insurance to the defendant covering the car in question for the period commencing June 1, 1956 and expiring September 1, 1956. In answer to interrogatories Regal admitted that it had issued a policy of insurance covering the car in question for the term June 1, 1956 to September 1, 1956, but alleged that the policy was canceled effective July 3, 1956, and that no notice of the cancellation was given to the defendant since the policy was returned by defendant's agent to Regal for cancellation. In response to a request for admission of facts, Regal did not deny that the car involved in the accident was operated by the defendant, and admitted that the defendant is the person to whom the policy was issued by Regal though the policy was not physically delivered to him.
A hearing was had on the action in garnishment. In that hearing there was evidence that the policy of insurance had been issued by Regal on a 60-day credit. Northwest entered into an agreement with Clark under which Clark undertook to finance the defendant's indebtedness to Northwest, and Clark agreed to make payment to Regal as it became necessary and in turn collected from the defendant. The agreement between defendant and Northwest was assigned by the latter to Clark. The insurance policy was retained either by Northwest or by Clark as security.
We have before us both an abstract and additional abstract, together with the record. Plaintiff was injured on August 25, 1956. The evidence in this case in many instances is contradictory and obscure. From it it may be gathered that Regal on September 2, 1956 was sent an accident report from the defendant and a letter dated September 21, 1956, in which Michaels enclosed a letter from the attorney representing the plaintiff together with an attorney's lien. No premium payments were ever made by the defendant. An employee of Clark and Northwest testified that certain notices regarding the premium payments were sent to the defendant and that on June 28, 1956 an employee of Clark mailed to Michaels the policy requesting that the same be canceled. Michaels sent the policy to Regal on July 3, 1956 with a request it be canceled as of that date, and according to the records of Regal the policy was canceled on July 3, 1956.
The chief clerk for the Prudence Mutual Insurance Company, which company had charge of the books and records of Regal, testified that the original policy is in jacket form which provides the standard form of the insurance agreement, and that the part which was introduced in evidence is "the declaration showing the name of the insurer, coverage, automobile insurance and the total premium charged. Now, the other part is the insured's agreement, which is the jacket form, which fits on this and which is a standard form of the policy, which I do not have. I do have a copy of it." He then stated he did not know where the balance of the policy that was issued to Matthew Rodgers in 1956 is. The plaintiff then introduced a copy of the "jacket."
There is also in the record as an exhibit a letter from Michaels to Regal, dated July 3, 1956, which contained the statement: "We are herewith enclosing the above captioned policy for flat cancellation." There is also testimony in the record that it was the custom of Regal when an insurance policy was turned in for cancellation and canceled, to destroy the jacket part of the policy and preserve only the declaration. There is also in the record a letter from Regal, dated November 16, 1956, addressed to the attorney for the plaintiff, which states that the defendant's policy was canceled effective July 3, 1956.
At the close of the hearing the court on April 7, 1956 found the issues in favor of Regal and against the plaintiff, entered judgment accordingly, and ordered Regal discharged as garnishee. This appeal was taken from that judgment order.
The plaintiff contends that the defense of cancellation of the duly issued policy of insurance is an affirmative defense which must be proved by clear, competent and unequivocal evidence; that the evidence on that point is uncertain and questionable, and fails to sustain the required burden of proof; that there is no competent evidence in the record to establish that the document which purportedly authorized the cancellation by Clark was in fact signed by the defendant; and that the policy was not canceled in accordance with its written terms.
Regal's contention is that the defendant's policy of insurance was effectively canceled by the defendant's duly authorized and designated agent on July 3, 1956, and that the policy of insurance was not in effect on the date of ...