Appeal from the Circuit Court of Iroquois County; the Hon.
DAVID E. ORAM, Judge, presiding. Judgment reversed.
Appellant, The Travelers Indemnity Company, issued its family automobile policy of insurance, covering a Ford Automobile and insuring the liability of Mason L. Harms for bodily injuries sustained by any person and for property damage arising out of the ownership, maintenance or use of said automobile. The policy period was from June 23, 1959 to June 23, 1960. The bodily injury liability was limited to $10,000 for each person. On October 25, 1959, the insured, Harms, was involved in an automobile collision with Ralph E. ZumBahlen, who brought an action in the Circuit Court of Iroquois County against Harms, and on June 26, 1961 recovered a $62,500 judgment against him.
On September 20, 1961, the instant garnishment action was commenced by ZumBahlen filing his affidavit alleging that appellant was indebted to Harms and praying that it be summoned as garnishee. The answer of the garnishee denied it was indebted to Harms in any amount and alleged that the policy issued by it to Harms had been cancelled by it prior to October 25, 1959. The issues raised by the affidavit and answer were submitted to a jury resulting in a verdict and judgment for the plaintiff for $10,000. The post-trial motion of the Indemnity Company was denied and it appeals.
The record discloses that the insurance policy in question was issued by appellant to Harms. It is dated July 27, 1959 and recites that it became effective on June 23, 1959 and expired on June 23, 1960. The total premium is stated to be $138.20. Mr. Harms testified he made a down payment and was to pay the balance by the month but missed a payment either in August or September. The policy gives the name and address of the insured as: "Mason L. Harms, P.O. Box 534, Mike Tarroffs Apt. #4, Rantoul, Illinois" and contains this provision: "Cancellation: This policy may be cancelled by the insured named in Item I of the declarations by mailing to the company written notice stating when thereafter the cancellation shall be effective. This policy may be cancelled by the company by mailing to the insured named in Item I, of the declarations at the address shown in this policy written notice stating when, not less than ten (10) days thereafter, such cancellation shall be effective. The mailing of notice as aforesaid, shall be sufficient proof of notice. The effective date and hour of cancellation stated in the notice shall become the end of the policy period. Delivery of such written notice either by such insured or by the company shall be equivalent to mailing. If such insured cancels, earned premium shall be computed in accordance with the customary short rate table and procedure. If the company cancels, earned premium shall be computed pro rata. Premium adjustment may be made either at the time cancellation is effected, or as soon as practicable after cancellation becomes effective, but payment or tender of unearned premium is not a condition of cancellation."
Upon the hearing plaintiff's Exhibit No. 3, identified by Harms, was offered and admitted in evidence, and is as follows:
"NOTICE OF CANCELLATION THE TRAVELERS Hartford, Connecticut Office: Peoria, Illinois
Please take notice that the Policy or Policies designated below, heretofore issued to you, are canceled in accordance with their terms, such cancellation to become effective on the date stated below at the hour on which the Policy or Policies became effective.
The provisions of the Policy or Policies respecting premium adjustment upon cancellation are applicable.
This notice is given only by the Company or Companies which issued the Policy or Policies designated below.
Extension Effective Policy No. KMP-6675327 Certificate No. Date of Cancellation 10-20-59
This Notice is to: THE TRAVELERS INSURANCE COMPANY /s/ J. Montgomery, Secretary Compensation and Liability Dept.
Mason L. Harms P.O. Box 534, Mike Tarroffs Apt. #4 Rantoul, Illinois
THE TRAVELERS INDEMNITY COMPANY, for Itself and as Successor to THE TRAVELERS FIRE INSURANCE COMPANY, by Merger /s/ J. Montgomery, Secretary Casualty Underwriting Dept."
Mervin W. Weeks testified that he was manager, and in charge of the Peoria office of appellant, having the responsibility of determining the desirability of business for appellant and when "we shall end our relationship with the business." Referring to the foregoing exhibit No. 3, the notice of cancellation, he said: "It was in my possession on October 9, 1959. I mailed it to the name and address indicated thereon. This cancellation notice is prepared by one of the female clerks in the office. I examine it for accuracy, check the name and address, the effective date of cancellation and then I place it in an envelope and personally deposit it in the United States Mail. I check every one for postage and accuracy. I placed it in the Commercial National Bank Building Box on October 9, 1959 at approximately 4:35 p.m. in the ordinary course of business. I keep a record which is Defendant's Exhibit No. 2. I can identify the handwriting on Defendant's Exhibit No. 2 as my own. It truly and correctly portrays what it purports to portray. I placed Plaintiff's Exhibit No. 3 in the envelope. I then made sure that the name and address showed clearly through the window. I then sealed it and checked it for postage and put it in my own desk preparing to mailing it that night. I keep my desk locked at all times when I am away from it. The cancellation notices are always placed in my own desk and kept under lock and key when I am away from it. I detach the sealed envelopes and leave the office and deposit them in the United States Mailbox. I did so in this case. I handle ten cancellation notices on the average a week. I mailed, Plaintiff's Exhibit 3 to the address on the policy after comparing it with our records. The effective date of cancellation is October 20, 1959. The reason for cancellation was nonpayment of premium budget. The cancellation was ordered ...