APPEAL from the Circuit Court of Stephenson County; the Hon.
WESLEY A. EBERLE, Judge, presiding.
MR. JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:
Rehearing denied March 25, 1975.
This is an appeal from a judgment entered by the Circuit Court of Stephenson County whereby it was declared that the plaintiffs, Thomas A. Kimes and Marion H. Kimes, were entitled to certain net proceeds from life insurance policies of Mike Rogers, the deceased husband of Shirley A. Rogers, the defendant.
The factual situation which led to litigation in the trial court and further resulted in this appeal is as follows. Plaintiff Thomas A. Kimes for many years prior to September, 1969, was president of the H.A. Hillmer Company, an Illinois corporation. The outstanding stock of the corporation was owned by the plaintiffs, Thomas A. and Marion H. Kimes. A series of documents dated September 13, 1969, were executed by the plaintiffs and a Mike Rogers on November 19, 1969, and all of the documents related to the purchase by Rogers of the outstanding stock of the corporation. The documents executed were an agreement for the sale and purchase of the stock, a nonnegotiable installment note for $23,381.36 payable to Thomas A. Kimes, a nonnegotiable installment note for $17,089.16 payable to Marion H. Kimes, and a pledge agreement. In addition to these documents there was further executed on the same date a nonnegotiable installment note in the sum of $11,775 payable to Thomas A. Kimes by the H.A. Hillmer Company.
It should be further noted that in 1971 a note in the sum of $30,000 payable to Thomas A. Kimes was executed by Mike Rogers and that an additional agreement (referred to as the 1971 agreement) was entered into by the Kimes and Mike Rogers.
Prior to entering into any of the transactions pertaining to the purchase of the stock of the Hillmer Company, three policies of insurance were owned by Mike Rogers. Two policies were issued by the Minnesota Mutual Life Insurance Co. and one by Travelers Life Insurance Co. The insured under these policies was Mike Rogers, and the named beneficiary was his wife, the defendant Shirley A. Rogers.
Subsequent to the execution of the documents with the Kimes, assignments of the policies were made by Mike Rogers. The assignment of the Minnesota Mutual policies were in favor of Thomas A. Kimes and Marion H. Kimes "as his, their, or its interest may appear." The Travelers policy was assigned "to Thomas A. Kimes and Marion Kimes, as respective interest may appear as creditors, balance, if any, to Shirley A. Rogers, wife."
Mike Rogers died on April 13, 1972, and at the time of his death was not in default on any of the notes executed by him to the Kimes; however, his unpaid obligation to them was in excess of $60,000. Total insurance payable under the three policies of insurance carried by Mike Rogers was in the sum of $42,479.66.
Subsequent to the death of Mike Rogers, a controversy arose between the Kimes and Mrs. Rogers as to who was entitled to the life insurance proceeds. It is the Kimes' contention that the insurance proceeds were intended to secure the entire unpaid balance of the indebtedness represented by the notes executed by Mike Rogers. Conversely it is the contention of the defendant, Shirley Rogers, that the notes executed by her husband do not provide for acceleration upon the event of the death of the promissor and that therefore the Kimes are entitled only to an amount of the insurance proceeds equal to the sum of any installments of principal and accrued interest delinquent as of the date of the death of her husband.
The contentions of the plaintiffs, Kimes, and the defendant, Shirley Rogers, present the paramount issue to be determined by this court; however, as we analyze the question presented we find that the issue is actually a narrower one, to-wit, whether the agreement entered into by the parties is ambiguous.
• 1 It is a settled principle of law that if an agreement is plain and unambiguous there is no need for judicial construction. (See 17 Am.Jur.2d Contracts § 241 (1964).) The defendant, Shirley Rogers, argues that the word "due" can be interpreted in more than one way, and hence the agreement between the parties is ambiguous and judicial construction is required. This agreement is indeed a tenuous one and if accepted might well give rise to a situation where virtually all agreements could arguably be termed ambiguous, since it is universally acknowledged by lexicographers that the English language is fraught with words susceptible of dual meanings. We cannot accept the proposition that the possible dual interpretation of a word used in a contract results in the agreement being ambiguous per se.
We acknowledge that the word "due" is capable of different interpretations, but is its use in the instant case such as to make an agreement ambiguous? In order to determine this question, we must of necessity direct our attention to its usage in the documents executed by the Kimes and Mike Rogers.
In the pledge agreement executed by Mike Rogers in 1969 we find the following provision:
"[Paragraph 1(c)] To carry life insurance on his life at all times in an amount not less than the aggregate unpaid balance on the notes due Pledgees. Each policy shall be endorsed to be payable to Pledgees to ...