Appeal from the Circuit Court of Coles County; the Hon. JACOB
BERKOWITZ, Judge, presiding. Affirmed.
Rehearing denied August 16, 1965.
The Circuit Court of Coles County, Illinois, in a suit for reformation of a public liability insurance policy, brought by Floyd Brosam and Orean Brosam, partners, against Employer's Mutual Casualty Company, entered a decree the effect of which was to reform the insurance policy to extend the liability coverage for property damage to horses in the care, custody and control of the insured partners for breeding purposes. The Circuit Court also entered judgment in favor of the plaintiff partners and against the defendant insurance company in the amount of $2,525.60, being the amount of a judgment that had been rendered against the partners for damages for the death of a stallion resulting from alleged negligence of the partners while the stallion was in their care, custody, and control for breeding purposes. The Circuit Court denied a claim of the plaintiff for $1,000 legal expenses in defending the negligence suit and a claim of $500 for alleged vexatious delay provided by Ill Rev Stats 1963, chap 73, sec 767.
Both parties appeal from the decree and judgments of the Circuit Court.
The written insurance policy was delivered to the plaintiff after the incident which gives rise to this action. Such policy, which defendant claims is controlling of the issues in this case, contained exclusion of liability for damage to property rented to the insured, or in the care, custody or control of the insured.
Defendant, in seeking to reverse the decree of reformation of the policy and the money judgment contends (1) that the judgment creditor in the negligence suit against the partners is the sole real party in interest and is a necessary party to the suit, (2) that the statute of frauds presents a defense to the action, (3) that parol evidence is inadmissible to vary the terms of the written insurance policy as delivered, (4) that the plaintiffs accepted the terms of the written insurance policy as delivered, (5) that the evidence upon which reform of the insurance policy was based consisted of declarations of an insurance solicitor whose authority was not established by the evidence and certain letters and correspondence which were not properly authenticated.
The defendant's motion to dismiss the Fourth Amended Complaint is based upon section 48 of chapter 110, Ill Rev Stats, 1963, and alleges that the complaint shows on its face that plaintiffs have no interest in the cause of action and that only the judgment creditor has any interest in the cause of action. The trial court properly denied the motion. The cases cited, Holowaty for Use of Cherka v. Prudential Ins. Co. of America, 282 Ill. App. 584 at 588; Hays v. Country Mut. Ins. Co., 28 Ill.2d 601, 192 N.E.2d 855, illustrate the fact that a garnishment proceeding is sometimes a proper remedy for a person who may be entitle to the proceeds of another's insurance. The question here presented is not discussed in either of those cases. At common law in Illinois, it was well established that if a proper party brought suit he need name no use party or real party in interest and that naming such party was surplusage. Lee v. Pennington, 7 Ill. App. 247 on 252; Schiff v. Supreme Lodge Order of Mut. Protection, 64 Ill. App. 341 on 343; Brownell Improvement Co. v. Critchfield for Use of Mexican Asphalt Paving Co., 96 Ill. App. 84 on 90; Continental Cas. Co. v. Maxwell, 127 Ill. App. 19 on 23; Cuna v. Supreme Tribe of Ben Hur, 157 Ill. App. 138 on 144; Smith v. Vandalia R. Co., 188 Ill. App. 426 on 429; People v. Egan, 239 Ill. App. 61 on 67; Grove v. Board of Sup'rs of Platt County, 246 Ill. App. 241 on 246; Stefanich v. Richard, 314 Ill. App. 183 on 186, 41 N.E.2d 104; Chadsey v. Lewis, 1 Gilm 6 Ill. 153, 159; Atkins v. Moore for Use of Cool, 82 Ill. 240, 241; Schott v. Youree, 142 Ill. 233, 241, 31 N.E. 591; Tedrick v. Wells, 152 Ill. 214 on 217, 38 N.E. 625; Knight v. Griffey, 161 Ill. 85, 87, 43 N.E. 727.
Illinois does not have a "real party in interest statute." Smith-Hurd, Ill Ann Stats, chap 110, sec 22, "Historical and Practice Notes," second paragraph; also "Law Review Commentaries" quoting William L. Eagleton, June 1936, 3 Univ of Chicago Law Review 597, 603 as follows: "The Illinois Civil Practice Act is almost unique in omitting the `real party in interest' provision." Section 1000 of the Insurance Code, Ill Rev Stats, 1959, chap 73, par 1000, attempts by regulation of the policies of casualty companies to provide for direct suit in case of insolvency of the insured.
Even where a right of subrogation may exist, the person having an interest in the suit (here the contract of insurance) may bring the suit in his own name. Osgood v. Chicago & N.W. Ry. Co., 253 Ill. App. 465 on 466; Ebel v. Collins, 47 Ill. App.2d 327, 198 N.E.2d 552 on 555.
Additionally, the facts stated in the motion to dismiss are not correct. It does not appear on the face of the complaint that the judgment creditor is the only one having any interest in the insurance. The complaint very clearly alleges that the defense of the suit by the now judgment creditor was tendered to the insurance company, that the defense was refused and the plaintiff was damaged thereby to the extent of $1,000 costs of defending the suit. The complaint also prays damages of $500 for vexatious delay in payment under section 767 of chapter 73, Ill Rev Stats, 1963.
If there is a provision in the liability policy of the defendant allowing direct suit by the judgment creditor, the fact does not appear in the motion to dismiss or anywhere in the record, so far as we are advised. In its brief defendant says that its obligation under Coverage C of the policy is "to pay on behalf of the named insured all sums which the insured shall become legally obligated to pay."
This point could well have been raised by a motion to make judgment creditor a party. This was not done. A motion to dismiss the suit was filed and was properly denied.
The proceeding to reform the insurance policy was properly the burden of the insured and not the burden of the judgment creditor. This is an equity proceeding. In our opinion the judgment creditor would have been a proper party. The defendant should have a right to require that payment of the judgment in favor of Neal Strole against the plaintiffs would be a satisfaction of so much of the judgment in this case as is based upon the earlier judgment. Balch v. English, 247 Ill. App. 429 on 435. See also London & Lancashire Indemnity Co. of America v. Tindall, 377 Ill. 308 on 315, 36 N.E.2d 334.
Not having sought to bring the judgment creditor in by motion to add him as a party, the defendant may still, if a difficulty arises, require the satisfaction of all claims arising out of the transaction with one payment.
The defendant contends that the suit is a suit to charge the defendant with the debt, default or miscarriage of another and that the Statute of Frauds, chap 59, sec 1, Ill Rev Stats, 1959, requires the promise in reference thereto to be in writing. If the Circuit Court was correct in the decree reforming the policy then there would ...