Appeal from the Circuit Court of Lake County, Nineteenth
Judicial Circuit; the Hon. THOMAS R. DORAN, Judge, presiding.
MR. JUSTICE DAVIS DELIVERED THE OPINION OF THE COURT.
The narrow issue presented by this appeal is whether the plaintiffs, judgment creditors of Catarino Villareal, an uninsured motorist and tort-feasor in the accident in question, can recover from Coronet Insurance Company (Coronet) their insurer by garnishment proceedings, the amount of the judgments rendered in their favor and against Villareal.
On April 9, 1963, Adams Mutual Insurance Company issued its combination Automobile Policy with a Family Protection Endorsement to the plaintiff Joseph Baron, whose wife Virginia Baron was an additional insured thereunder. The garnishee defendant, Coronet, assumed Adams Mutual Insurance Company's liability under the policy. Under the Family Protection Endorsement, Coronet, subject to certain conditions, agreed to pay all sums which the insured should be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury.
Under the Insuring Agreements of the policy, with reference to "Damages for Bodily Injury caused by Uninsured Automobiles," Coronet agreed:
"To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called `bodily injury,' sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile; provided, for the purposes of the endorsement, determination as to whether the insured or such representative is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and the company or, if they fail to agree and the insured so demands, by arbitration." (Emphasis Ours.)
The endorsement under the heading of "Conditions," provided:
"6. Arbitration: If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this endorsement, then, upon written demand of such person, the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this endorsement."
"9. Action Against Company. No action shall lie against the company unless, as a condition precedent thereto, the insured or his legal representative has fully complied with all the terms of this endorsement."
Under the entitlement "Exclusions," it is provided:
"This endorsement does not apply: . . .
"(b) to bodily injury to an insured, or care or loss of services recoverable by an insured, with respect to which such insured, his legal representative or any person entitled to payment under this endorsement shall, without written consent of the company, make any settlement with or prosecute to judgment any action against any person or organization who may be legally liable therefor; . . ."
On September 3, 1963, Joseph Baron and Virginia Baron, his wife, filed a complaint against Catarino Villareal, defendant, charging that he negligently, while under the influence of intoxicating liquor, drove his car into the rear end of the plaintiffs' car, and that as a result thereof, the plaintiffs sustained permanent injuries and damages to their automobile. The defendant filed an answer to said complaint and, upon trial, two separate verdicts were rendered by a jury whereby each plaintiff was awarded damages in the sum of $2,500. On May 10, 1966, judgments were entered on these verdicts, and such judgments are the basis for the garnishment action against Coronet.
On January 19, 1967, the attorney for the plaintiffs filed an affidavit in the original negligence action for the ...