APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR
L. DUNNE, Judge, presiding.
MR. PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:
This is an appeal from the judgment following a bench trial denying plaintiff, a judgment creditor, relief under an automobile insurance policy issued by State Farm Automobile Insurance Company (garnishee) to defendant, the judgment debtor.
Initially, plaintiff filed a complaint seeking damages because of alleged negligence of defendant when the vehicle he was driving collided with the rear of plaintiff's automobile. Defendant was personally served with summons but failed to appear, and a default judgment in the amount of $5,500 was entered against him. Subsequently, an affidavit for garnishment was filed by plaintiff, seeking to reach a policy of insurance issued by garnishee on defendant's automobile. Summary judgment was granted in favor of plaintiff, which was reversed on appeal in Mollihan v. Stephany (1975), 35 Ill. App.3d 101, 340 N.E.2d 627. Thereafter, a trial of the issues was had, resulting in a judgment for garnishee.
In this appeal, plaintiff contends (1) the provisions of the safety responsibility act (Ill. Rev. Stat. 1969, ch. 95 1/2, par. 7A-101 et seq.) are applicable and preclude the garnishee from rescinding its policy based upon alleged misrepresentations by its insured; (2) the application for insurance was not made a part of the policy and, as a result, the alleged misrepresentation in it was not available as a defense to garnishee; and (3) the failure of the trial court to find that garnishee waived and abandoned its decision to rescind the policy was against the manifest weight of the evidence.
It appears that defendant submitted an application for automobile insurance on December 4, 1970, to Otto Scheiner, an agent of garnishee in Evergreen Park, a suburb of Chicago. The application contained a question which defendant answered negatively asking whether a license to drive had been suspended, revoked or refused for the named insured or any member of his household for the prior three years. In fact, there had been a conviction in 1969 of defendant's wife for driving under the influence of intoxicating liquors, resulting in the revocation of her license. Scheiner stated that the conviction was unknown to him and, because there otherwise appeared to be nothing objectionable in the application, he accepted it thereby placing into effect or "binding" the insurance as of the application date. In the usual course of business, he forwarded the application that same day to garnishee's home office in Bloomington, Illinois.
Six days later, on December 10, the collison between the two cars of plaintiff and defendant occurred, and the following day garnishee received notice of the collision. Thereafter, William Wisnasky, a claims superintendent for garnishee, paid defendant for the damage to his car on December 23, 1970, after he had verified through an information storage computer (ROMAC) that defendant's policy was in full force. Prior thereto, he had obtained an estimate of the damage to defendant's car and had received information concerning the special damages claimed by plaintiff.
Robert L. Smith, garnishee's automobile underwriting supervisor in the Bloomington office, testified his office received defendant's application for insurance on December 7 and that, as a normal underwriting procedure abstracts of driving records are requested of the Secretary of State which, when received on December 16, disclosed the revocation in 1969 of the driver's license of defendant's wife. An office date stamp indicated that the application was not in the underwriting file on December 18 but that sometime after that date Smith examined the application and noted that the question concerning driver's license revocations was answered negatively. He considered this to be a material misrepresentation and, on December 23, 1970, he started the process of rescission which resulted in the letter of December 28, informing defendant that the policy was being rescinded as of its issuing date because of the application misrepresentation as to his wife's license revocation. Smith further testified that after such a letter is mailed, the file is then processed through the accounting department into the computer which, in this case, occurred on December 28.
Thereafter, on October 12, 1973, defendant was served with an alias summons in the case of Mollihan v. Stephany and, on November 20, he delivered the summons and complaint to Scheiner who, on the same date, delivered them to garnishee's claims office. Twenty-two days later, on December 12, 1973, Wisnasky, claims superintendent of garnishee, sent a registered letter to defendant which enclosed the summons and complaint and stated that, as he had been previously notified, his policy had been rescinded and that it was his personal responsibility to defend the lawsuit. The next day, Wisnasky personally delivered a copy of the letter to defendant's wife. Wisnasky stated that the delay from November 20 until the December 12 letter was sent to defendant resulted because it took from one to two weeks for the claims office to receive the file from the underwriting office in Bloomington.
Defendant testified that when he received the summons and complaint from garnishee he saw a lawyer who charged a fee and said he would take care of defendant. Defendant did not remember whether he left the complaint or summons with the lawyer. In any event, defendant did not go to court at any time in 1973.
The lawyer with whom defendant discussed the matter testified that when defendant came to see him he brought the summons and complaint, together with a note that the matter had been set before Judge Iseberg on December 18 in the Civic Center. Although he was to represent defendant, he did not attend any of the hearings or pretrials but did have conversations with Wisnasky, who told him that the policy had been rescinded.
A default order was entered on January 31, 1974, and the ex parte judgment was entered against defendant on February 5, 1974.
Plaintiff first contends the Illinois safety responsibility act (the Act) (Ill. Rev. Stat. 1969, ch. 95 1/2, par. 7A-101 et seq.) precludes garnishee from rescinding its policy because of a misrepresentation by its insured.
Pertinent parts of the Act here are: section 7A-304 (Ill. Rev. Stat. 1969, ch. 95 1/2, par. 7A-304), which requires proof of financial responsibility after a driver's license is revoked by the Secretary of State; section 7A-314 (Ill. Rev. Stat. 1969, ch. 95 1/2, par. 7A-314), which provides three methods of giving proof of financial responsibility when it is required the first of which is "[a] certificate of insurance as provided in Section 7A-315 * * * of this Act"; and section 7A-315 (Ill. Rev. Stat. 1969, ch. 95 1/2, par. 7A-315) then provides that proof of financial responsibility may be made by filing with the Secretary of State the written certificate of an insurance carrier "certifying that it has issued to or for the benefit of the person furnishing such proof and named as the ...