estate in Buckingham. Jefferson claims that it did not receive price of
the existence of the second message until many months after the January
8, 1982, fire.
On December 30, 1981, Jefferson executed to Jenco a change of
endorsement, which increased the insurance coverage under his policy with
Jefferson in exchange for additional premiums. James Confer, an insurance
agent, procured the change of endorsement for Jenco through
Glenn-Rousseau Co., which is the successor in interest to the Modern
American Insurance Agency ("Modern"). Jenco asserts that while the
insurance policy was in effect, fire damaged his property, He adds that
he subsequently notified Jefferson of the loss and provided it with proof
of loss, but that Jefferson has refused to pay him pursuant to the
In considering motions for summary judgment, we emphasize that the
"party moving for summary judgment has the burden of clearly establishing
the non-existence of any genuine issue of fact that is material to a
judgment in his or her favor." Cedillo v. International Association of
Bridge & Structural Iron Workers, Local Union No. 1, 603 F.2d 7, 10 (7th
Cir. 1979); any doubts as to the existence of material issues of fact
must be resolved against the moving party. Moutoux v. Gulling Auto
Electric, Inc., 295 F.2d 573, 576 (7th Cir. 1961). The non-moving party
is entitled to all reasonable inferences that can be made in its favor
from the evidence presented, United States v. Diebold, Inc., 369 U.S. 654,
655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). In the present matter,
Jenco has chosen not to respond to defendants' motions.
Cupac's Motion for Summary Judgment
Jenco and Cupac entered into an agreement which provided that Cupac
would finance the insurance premium due Jefferson. Modern applied for
this premium finance agreement as Jenco's agent. The signature "P. Jenco"
appears on the premium finance agreement; Jenco's complaint asserts that
the premium finance agreement lacked a properly executed power of
attorney enabling Cupac to cancel his insurance contract with Jefferson,
and that any signature on the agreement is not his.*fn3 Cupac thus
lacked the power to cancel the insurance on Jenco's behalf. Jenco also
claims that Cupac did not provide him with ten days written notice of
Cupac's intent to cancel the insurance policy pursuant to Ill.Rev.Stat.
ch. 73 ¶ 1065.68.*fn4
In its motion for summary judgment, Cupac points to deposition
testimony by Jenco that he received a notice of acceptance from Cupac,
which was dated May 18, 1981. The notice of acceptance provided that:
[y]our copy of the Premium Finance Agreement shows the
date each payment is due and payments must be made
promptly. Failure to make payment when due shall be
considered as a direction to cancel your policy(ies)
as provided in the Agreement. . . .
Jenco also testified that in December of 1981, he received a notice from
Cupac that his insurance policy with Jefferson would be cancelled if
Cupac did not receive payment within ten days. The notice was dated
December 15, 1981. Finally, Jenco testified that before the fire, he
received a copy of a notice of cancellation of the insurance policy dated
December 30, 1981. As a result, Cupac maintains that Jenco is bound by
the cancellation provisions in the premium finance agreement,
notwithstanding his claim that the signature "P. Jenco" is not his.
Moreover, Cupac asserts that the notice of intent to cancel it sent to
Jenco fully complies with Ill.Rev.Stat. ch. 73 ¶ 1065.68.
An examination of the statutory notice requirement contained in
Ill.Rev.Stat. ch. 73 ¶ 1065.68, see note 4 supra, indicates that
Cupac has complied with the statute. Cupac sent a written notice of
intent to cancel to Jenco on December 15, 1981, and did not request
cancellation of the policy until December 30, 1981. Cupac is therefore
entitled to summary judgment with respect to this aspect of Count II.
Cupac's other argument focuses upon the relationship between it, Jenco
and Modem. According to Cupac, Modern had the apparent authority to enter
into the premium finance agreement on behalf of Jenco, its principal;
Jenco is therefore bound by the cancellation provisions of that
agreement. Additionally, Jenco's six monthly payments to Cupac after
receipt of the notice of acceptance allegedly constitute ratification of
the terms of his agreement with Cupac.
Authority may be actual or apparent, actual being either express or
implied. Chalet Ford, Inc. v. Red Top Parking, Inc., 62 Ill. App.3d 270,
273, 19 Ill.Dec. 573, 575, 379 N.E.2d 88, 90 (1st Dist. 1978). A party
alleging authority must prove its source unless the act of the agent has
been ratified; authority will not be presumed. Wing v. Lederer,
77 Ill. App.2d 413, 222 N.E.2d 535 (2d Dist. 1966). A principal is bound
not only for the precise act which he expressly authorized the agent to
do, but also for whatever is necessary to the performance of the act.
St. Ann's Home for the Aged v. Daniels, 95 Ill. App.3d 576, 579, 51
Ill.Dec. 64, 67, 420 N.E.2d 478, 481 (1st Dist. 1981). Ratification,
moreover, may be express or implied, and occurs where "the principal,
with knowledge of the material facts of the unauthorized transaction,
takes a position inconsistent with nonaffirmation of the transaction."
Karetzkis v. Cosmopolitan National Bank, 37 Ill. App.2d 484, 490,
186 N.E.2d 72, 75 (1st Dist. 1962).
Jenco's six payments to Cupac after receipt of notice of Cupac's
acceptance of the agreement are inconsistent with nonaffirmation of the
premium finance agreement entered into by Modern on his behalf. When the
principal accepts the benefits of the transaction (as Jenco did by
accepting financing his insurance premiums), ratification has been
found. Karetzkis v. Cosmopolitan National Bank, 37 Ill. App.2d 484,
490-91, 186 N.E.2d 72, 75 (1st Dist. 1962). Jenco therefore ratified the
agreement. Thus, even if we assume that it was Modern who signed Jenco's
name to the premium finance agreement, and that Modern acted outside of
its authority in so doing, Jenco's ratification of the agreement is
equivalent to an original authorization, and it confirms that which may
have been unauthorized, Jenco's entry into the finance agreement with
Cupac. Schoenberger v. Chicago Transit Authority, 84 Ill. App.3d 1132,
1139, 39 Ill.Dec. 941, 947, 405 N.E.2d 1076, 1082 (1st Dist. 1980).
Jenco cannot, therefore, avoid the force of the cancellation provisions
in his agreement with Cupac. Accordingly, Cupac is entitled to summary
Jefferson's Motion for Summary Judgment
Jefferson has also moved for summary judgment against Jenco, claiming
that Cupac cancelled the insurance policy at issue prior to the fire. We
have held that Cupac had the power to cancel Jenco's insurance policy
with Jefferson. Whether the policy was in fact cancelled, however, is a
different matter. Jenco authorized Cupac to cancel the policy in the
event that Jenco
failed to make the required monthly payments. Cupac requested
cancellation of the policy on December 30, 1981, to be effective on
January 3, 1982. Jefferson thus claims that it cancelled the insurance
policy on January 3, 1982, pursuant to Cupac's request, and that no
coverage was in effect on January 8, 1982.
Cancellation of art insurance policy by an insured or his agent must be
performed in accordance with the terms of the policy. Kanter v.
Trucheart, 100 Ill. App.2d 316, 321, 241 N.E.2d 521, 524 (1st Dist.
1968); Kerr v. Pusateri, 64 Ill. App.2d 172, 175-76, 212 N.E.2d 263, 265
(1st Dist. 1965). According to the policy, it
may be cancelled by the named insured by surrender
thereof to the Company or any of its authorized agents
or by mailing to the Company written notice stating
when thereafter the cancellation shall be effective.
This policy may be cancelled by the company by mailing
to the named insured at the mailing address shown in
the Declarations, written notice stating when not less
than ten days thereafter such cancellation shall be
effective. The mailing of notice as aforesaid shall be
sufficient proof of notice. The time of surrender or
the effective date and hour of cancellation stated in
the notice shall become the end of the policy period.
Delivery of such written notice either by the named
insured or by the Company shall be equivalent to
A material factual issue exists as to whether Cupac complied with the
above terms. There is no evidence in the record that Cupac sent Jefferson
written notice requesting cancellation of the policy. Notwithstanding
Jefferson's assertion that Cupac "requested" cancellation, the sole
evidence relating to this point is. a cancellation notice which Cupac
sent to Jenco, which is dated December 30, 1981. the court held in Kerr
v. Pusateri, Id., without strict compliance with cancellation
provisions, there can be no valid cancellation by the insurer or the
insured. Absent clear evidence of compliance with the policy's
cancellation clause, summary judgment for Jefferson must be denied.
Jefferson's Motion for Summary Judgment on its Cross-Claim
In its cross-claim for declaratory judgment against Herscher, Jefferson
contends that when it issued an insurance policy to Jenco on April 28,
1981, Herscher was listed as mortgagee on the policy. Jefferson concedes
that it is liable to Herscher for indebtedness pursuant to the Jenco's
first mortgage, which is also dated April 28, 1981, and which secures a
$66,800 note with two tracts of land in Buckingham. Jefferson, however,
argues that it is not liable to Herscher for indebtedness pursuant to a
second mortgage of July 10, 1981, entered into between Herscher as
trustee of the above real property and Herscher as a bank. According to
Jefferson: it did not receive notice of the second mortgage until "many
months" after the January 8, 1982, fire; it was never designated as a
second mortgagee on the insurance policy between it and Jenco; and,
finally at the time the policy was issued, only the first mortgage was in