APPEAL from the Circuit Court of Cook County; the Hon. DANIEL
J. WHITE, Judge, presiding.
MR. JUSTICE SCHWARTZ DELIVERED THE OPINION OF THE COURT:
Plaintiff filed suit for the recovery of commissions allegedly due him pursuant to a brokerage contract with defendant. Defendant's motion to dismiss the complaint was denied and in due course issue was joined on the plaintiff's complaint, defendant's answer and affirmative defense and plaintiff's reply thereto. The case came on for trial and at the conclusion of defendant's opening statement the court entered judgment for plaintiff on the pleadings. The defendant has appealed, contending the court erred in denying the motion to dismiss the complaint or in the alternative that it was error for the court to enter judgment for the plaintiff without allowing defendant an opportunity to submit evidence on the matters set forth in the answer and affirmative defense. The facts follow.
On December 3, 1962, the plaintiff, acting in his capacity as soliciting agent for defendant, submitted the application of one Milton Silverstein for a life insurance policy in the sum of $50,000. The application, signed by both Silverstein and the plaintiff, contained the following questions and answers:
"a. Has any company declined to issue or reinstate or renew, rated or modified, postponed or cancelled, any life or accident and sickness Insurance on your life?
b. Will Insurance in any company be discontinued if the Insurance applied for is issued?
c. Is any application for Insurance on your life pending in any other company?
Defendant alleges that plaintiff made the foregoing answers knowing that an application by Silverstein for life insurance was then pending with the Equitable Life Assurance Society and that prior to the issuance of defendant's policy, plaintiff knew that Equitable had refused to insure Silverstein on the ground of ill health. Notwithstanding that knowledge the plaintiff did not disclose that information to the defendant.
On December 22, 1962, defendant issued a life insurance policy for $50,000 as applied for by Silverstein. On June 30, 1963, Silverstein died and an investigation by defendant revealed the false statements contained in the application. A claim on the Silverstein policy was settled by defendant for $27,000. Defendant then made demand on plaintiff for a refund of $2270.80, the amount of the commission paid to plaintiff on that policy. Defendant based its right to a refund of commission on the brokerage contract, which provided in pertinent part as follows:
"1. Commissions shall be payable hereunder only in accordance with the rules and regulations of the Company.
4. If the Company shall return the premiums on a policy for any cause, you shall repay to the Company on demand, the amount of commissions received on the premiums so returned."
Rule 8 of the Agent's Manual of Instructions, incorporated by reference in the contract, provided:
"8. The agent, upon demand, shall pay the Company any commission or other compensation paid to or retained by the ...