APPEAL from the Circuit Court of La Salle County; the Hon.
LEONARD HOFFMAN, Judge, presiding.
MR. JUSTICE BARRY DELIVERED THE OPINION OF THE COURT:
This is a garnishment proceeding by plaintiffs to collect on judgments recovered for personal injuries they sustained on October 15, 1967, when their automobile collided with a 1965 Volkswagen operated by the judgment debtor, Margaret Saleda, now Margaret Carr. The cause was tried by plaintiffs upon the theory that Mrs. Carr was a minor of 17 years at the time she purchased the Volkswagen from Edward Walters on October 14, 1967; that Walters had a policy of liability insurance covering that vehicle with garnishee-defendant, Allstate Insurance Company (hereinafter "Allstate") which was in effect for the period commencing March 1967 and expiring March 1968; that Mrs. Carr, after attaining her majority on November 4, 1967, effectively rescinded that sales transaction on August 6, 1968; that by such rescission, the sales transaction was voided ab initio so as to make Mrs. Carr an additional insured as a permissive user of Walters' Allstate-insured vehicle on the date of the accident; and finally, that Allstate is accordingly liable for the satisfaction of their judgments. Plaintiffs also claimed that there was an oral agreement made on October 14, 1967, between Mrs. Carr and Allstate's agent, Al Robinson, whereby Allstate undertook to provide her with public liability coverage. Allstate defended on the theory that there was no oral agreement for insurance, that Mrs. Carr's purported rescission was not made within a reasonable time to be effective, and that even if the rescission was effective, the policy conditions of coverage in Walters' policy were breached in any event by Mrs. Carr's failure to give Allstate written notice of the particulars of the accident as soon as practicable, and to immediately forward the summons and complaint, or for failure of cooperation. Judgment was entered on a general verdict finding the issues in favor of Allstate. Plaintiffs appeal the judgment in favor of garnishee-appellee and both plaintiffs and Allstate appeal from orders denying their respective post-trial motions.
The testimony at the trial was largely undisputed and needs to be presented for an understanding of the issues.
Under date of March 17, 1967, renewal certificates of insurance were issued by Allstate to Edward Walters extending public liability coverage under its policy no. 02016471 for a period expiring March 17, 1968, for two "owned automobiles" described in the certificates. One of these was the 1965 Volkswagen upon which there existed a lien in favor of The Sheridan State Bank which held the certificate of title. This policy, in describing the coverage extended to "owned automobiles" of the named insured stated that the phrase means any automobile described in the certificates and any automobile of which the named insured shall acquire ownership in "replacement" of one described in the certificates. The conditions also provide at paragraph 1 that coverage applies in respect to an automobile described in the certificates only while it is owned by the named insured. Persons insured, in addition to the named insured, included, under the omnibus clause, others persons while using an "owned automobile" with permission of the named insured. It was also stated in the policy to be a condition of coverage that:
"In the event of accident, occurrence or loss, written notice containing all particulars shall be given by or for the insured to Allstate as soon as practicable * * *. If claim is made or suit is brought against the insured, he shall immediately forward to Allstate every demand, notice or summons received by him or his representative. * * * [T]he insured shall cooperate with Allstate disclosing all pertinent facts known or available to him, and upon Allstate's request shall attend hearings and trials, and shall assist in effecting settlements * * * and in the conduct of suits."
In late September, 1967, Walters decided to replace his '65 Volkswagen by the purchase of a new one. Margaret Carr testified that she learned of Walters' interest in selling the vehicle from his daughter, Rita, who was a co-worker of hers. She stated that she later telephoned Walters about buying his '65 model and that they agreed upon a price of $850 of which $40 was paid in cash. Mrs. Carr was to arrange her own financing for the balance.
Margaret Carr was an unmarried minor of 17 years at the time, approaching her majority on November 4. She was employed at Sears in Ottawa where Allstate maintained a booth for the sale of insurance by its agent, Al Robinson, who was also employed there by Allstate Enterprises, Inc., a finance company. Her mother and stepfather, Ellen and Carl Dimmick, applied to Robinson for a purchase money loan for Margaret which he approved, on the parents' signatures only to a note and a chattel mortgage. According to Robinson, he explained to the borrowers in the presence of Margaret that he could not "write insurance" for Margaret because of her minority and because her parents were not Allstate insureds, and that she should apply to her parents' carrier for coverage. Margaret testified that she expected title to be registered in the Dimmicks although she also testified to an understanding that she would make the payments.
On October 13 or 14, 1967, Walters received a check made by Allstate Enterprises, Inc., for the balance of $810 showing Carl Dimmick, as buyer. On October 14, he drove to The Sheridan State Bank, cashed the check, discharged the lien on the Volkswagen, received the title certificate, executed an assignment of title on the reverse side to Margaret Saleda before a notary under date of October 14, and as Margaret had directed, parked the auto in a lot near Sears, removed the license plates, and according to his testimony, delivered the keys and title papers to Al Robinson at the Allstate booth. On the same day, he went to Joliet and purchased a 1968 Volkswagen as a replacement auto and affixed the license plates he had removed from the older model. He reported this purchase to Allstate about one week later, and under date of October 20, 1967, Al Robinson for Allstate executed a form acknowledging Walters' replacement of autos, and an endorsement for his policy was then issued showing the change effective from October 21, 1967.
Margaret Carr testified that she received the keys to the 1965 Volkswagen on October 14, from Robinson, but not the assignment of title. This was apparently left with Robinson and was completed by Allstate Enterprises, Inc., to show notation of its lien. An application for change of title was later executed by her mother and stepfather under date of November 20, 1967, after Margaret had obtained her majority but while she was hospitalized, and was delivered by them to Robinson who mailed it. Margaret mailed her own application for license plates, however, on October 14 when she took her car from the lot. On October 15, while driving the auto with a friend as a passenger, she became involved in the collision with plaintiffs. Her friend was killed in this collision and Margaret herself sustained serious injuries requiring hospitalization until December 6, 1967. Plaintiff's complaint for damages was filed on November 28, 1967, and summons was served upon Mrs. Carr in early December while she was in the hospital.
After her release from the hospital, Mrs. Carr retained an attorney in January 1968 to defend her against plaintiffs' claims, and discussed with him the facts of the case and the answer he prepared on her behalf. Her attorney testified that under date of August 6, 1968, he mailed a letter to Walters, which the latter acknowledged receiving, stating:
"Margaret Saleda of Ottawa * * * purchased a Volkswagen from you on October 14, 1967. At the time of transfer, however, she was a minor and was incapable of entering a contract for the purchase of an automobile. It is now her decision to recind the purchase * * *."
No other demand was made of Walters. The price was never refunded nor possession of the auto tendered, and there is no evidence that title papers were ever reassigned or tendered.
Robert Dertina, a claims representative for Allstate, testified that Allstate received its first notice of the loss from a telephone call on November 11, 1968, and that Walters had been made a party to a lawsuit. There is no indication in the excerpts as to what information he received in this communication, or from whom it came. Although Robinson, as an Allstate agent, was aware of Margaret Carr's minority on October 14, knew of the accident on October 15, and was undoubtedly aware of her disability on November 20 when he received the application for title signed by the Dimmicks, Dertina testified that Allstate received its first notice that coverage was being requested for Mrs. Carr in May 1969. Although the jury might have inferred that Allstate, in connection with its defense of Walters in November 1968, received notice then through him of Margaret Carr's August 6 letter of recission, there was no direct evidence to that effect.
There was considerable testimony in respect to Mrs. Carr's physical and emotional condition after her discharge from the hospital on December 6. She had a steel rod in her left arm and leg, wore a cast on the arm for about a year and got around with a walker until about the time she went back to work at Sears. She described her emotional state as unstable, and her father, John Saleda, indicated that she was depressed at times. She became engaged to marry in March 1968, returned to work at Sears in April, and was married on July 6, 1968. ...