*1 and as Father and Gothberg, Sr., Individually Charles Minor, Gothberg, Natural Guardian Leroy Alfred In Lundberg, Judgment Creditor, O. and as Father Natural Guardian dividually Credi Minor, Judgment Eloise Elaine Lundberg, Nemerovski, Leo tor, Plaintiffs-Appellees, d/b/a Defendant- Agency, Illinois State Auto Insurance Appellant. No. 49,834.
Gen. Division. First First District, April 26, 1965. *2 Chicago (John F. Mc- Arnstein, Adsit Kahn, & counsel), appel- for D. Cummins,
Clure and John lant.
Philip J. of Chi- Martineau, Brennan and Robert Gr. appellees. counsel), cago (Philip Brennan, Gr. opinion of MR. JUSTICE MURPHY delivered the court. appeals from
Defendant, broker, a licensed insurance nonjury judgment against him in a entered $20,000 perform having con- his trial. failed to Defendant, covering liability procure public tract place of stand in the *3 was held to Jackson, Ronald judgments insurer to be liable on the intended and by plaintiffs, against the ex- to secured Jackson, coverage of ordered. tent duty, (1) he had no as Defendant asserts Jack- to insurance law, matter of obtain resulted which the date of occurrence son before (2) subject judgments against Jackson, and in the parties plaintiffs, being the contract to against have no cause of action insurance, any, of this contract. breach, for a Jackson, minor, 10, 1956, December On telephoned Auto Insur- office of Illinois State by operated proprietorship Agency, a sole ance response the call, In Nemerovski. Leo defendant, on home December visited Jackson’s Albert Levenstein step- presence of his Jackson, In Mrs. 1956. Levenstein insurance and discussed Jackson mother, agreed upon, pay- coverage. an and ititial Terms were by A to Levenstein. made Jackson of was ment $10 Agency,” receipt Insurance Auto the “Illinois of State signed by Levenstein, December and 11, 1956, dated agent, given then told as Levenstein was to Jackson. response inquiry, to their mother, Jackson his go he returned into effect when would face of the hour.” On the office “within an receipt given stamped, “The Insur- to Jackson was Applied This Is ance For You Have For Which Which Payment A A Is Not Until On Account Effective. Policy Issued Delivered.” Binder Or Is And Written days a form letter Jackson received later,
Several Insurance on State Auto the letterhead the “Illinois opened signed Agency,” “Leo Nemerovski.” It pleasure that we welcome “It is with sincere with, large growing family protected you into our policyholders. Our Mr. Levenstein has and satisfied your insurance has been ordered as informed us that required 1956. down The you leaving paid was a towards which $35.40 paid by De- must be ... balance of $25.40 [W]hen cember .... the final you.” your policy has made will be mailed to been stamped for $10 The notice that was on stamped heading letter. Under the was also on the “Important,” printed: “If for some reason was you impossible payments make it find please immediately our so office time, help you will understand and be able to that we your your problem, thereby continue protection.” (Emphasis supplied.) Mrs. and after Jackson,
The letter first read *4 telephoned with the Illinois her, discussion Jackson Agency. speak Leven- He asked to State Auto told answered the and was a woman who stein, phone in In re- the office. that Levenstein was sponse he told her that he assistance, her offer of to quite letter” understand the “didn’t 1956; that I led me was “that letter believe insured and that after I read it didn’t understand X Indicating whether I was or not.” that she had Jack- nothing file in son’s front of she “You have her, said, worry about. You have insurance as of December application 12th because the left for the here on December 14th.” Jackson then asked “if she please repeat my could that to mother because the car my was in father’s name couldn’t drive it until yes, she knew that I was insured. she would said, She repeat my step- it. I then handed the spoke mother, and she into it.” began Jackson then drive the automobile and on December 23,1956, was involved in an automobile colli- sion in the State of Minnesota. On December 26, 1956, Jackson went to defendant’s office and asked if his yet,” report had “come in he wanted to an as A accident. woman in the office told him, “Well, your your is dated after the accident —if insurance wasn’t in so therefore it wasn’t effect, cov- and Jackson left ered,” the office. payments agreed
Jackson continued to make the as with Levenstein on December and Prudence 11, 1956, Casualty Company policy covering Mutual issued a January Jackson, effective 15,1957. separate
Plaintiffs filed two actions Minnesota against they judg- on which obtained default Jackson, April plaintiffs in 1959. ments On sued de- 21, 1960, fendant Nemerovski and Prudence Mutual to recover policy, they claim the limits should have procured for Jackson Be- been before the occurrence. plaintiffs, fore trial and on motion of Prudence Mutual party proceed- dismissed defendant. The trial was as judgment against Nemerovski, ed entered policy ultimately against him for the limits of the is- by Prudence Mutual. sued to Jackson (1) acceptance Initially, contends defendant application insur- of Ronald Jackson’s *5 acceptance”; (2) anee was “conditional legal duty until insurance was under no to premium; paid required Ronald initial Jackson (3) competent that the there no evidence to show was prior starting effective date of the insurance would he receipt payment. to the full down meeting As 11, to the with Levenstein on December Mr. 1956, Jackson “I asked Levenstein how testified, required much of a down make the was to I and he said He also said that effective, $10. policy. payments would make have three on the gave gave receipt. gave him After he and he me a $10 receipt, my
me the him mother asked when the go got he would into effect. He said the minute put hack to the office and it on file the would go into effect. He said he intended to return the office within an hour.” Jackson further testified telephone as to his call December 1956, and his 12, visit to defendant’s office December 26,1956.
Mrs. Jackson testified that on December 11, 1956, they Levenstein came their went home and into the living “my room. Present were son com- Ronald and a panion by Billy the name of Joe There was a Stroud. regarding types conversation different of automobile application insurance. An for automobile insurance my gave was made son him a out, toward the insurance. I Mr. asked Levenstein when become would as the car effective, my in husband’s name and we let wouldn’t he drive it until was covered insurance. He told me that Ronald would be covered as as he soon returned application his office and filed his in about an Mrs. hour.” Jackson further testified about the part of the letter of December and her myself conversation. “I identified and told party plaintiff’s the other that we had received ex- [letter 1956] hibit 1 of December that neither my I nor son conld understand it. read the letter *6 We placing policy thanking for and then there was us the stamp it, a at we understand the bottom and don’t [Ronald Jackson] I cov- wanted to if he was know fully . . me he was ered or not. . She assured applied policy for and covered because the had been the 14th December, mailed out of their office on of open 1956.” Mrs. Levenstein in Also, Jackson identified court. sole
Defendant Nemerovski testified that he was the Agency. He owner of the Illinois Auto Insurance State represent was a licensed to sell insurance and broker, During persons procuring in the the of insurance. period February through from he November 1956 personally employed employees. no The total female premium policy amount received for the of insurance of this amount, issued to Ronald Jackson was Of $101.40. rep- represented premium and balance the the $64.08 charge financing a the of resented service for person applies premiums. an uninsured the “When general policy custom is to issue the insurance, for the application insurance, of even as of the date might policy though issued a or not be for week policy a insurance or- more thereafter. When agent through an or anoth- broker, a whether dered directly company, from the the issued er broker, ordering agent broker or is delivered to company particular and not the insured.” policy issued to The Prudence Mutual Jackson “was company but to from to me delivered C. Wa- to me. I as the broker. He later delivered it did ters, to Ronald but I have Jackson, not deliver my payment by files. . . . Ron- it in The retained ald insur- for his Jackson down towards A1Mr. Levenstein on December ance was received to me. He was the broker and forwarded him I furnished with forms business. who solicited issue he received that he was to when payment.” paid for his services on a Levenstein was commission basis. Nemerovski testified that
On cross-examination, financing customary policy, to hold the when “it is delinquency original policy in we so that case of possession have it in return for cancellation. our company The insurance not the me, insured, looked to premium. company in- for the The insurance was not policy. The in fact that terested I financed day following would be dated the day applica- on which ordered it. I did not send the company tion of Ronald Jackson to the insurance until January I received the sometime when balance *7 payment. agree- his in line with the down That was say agreement,’ ment. I I When ‘that was don’t know what conversation was between Ronald Jack- system A1 son and but Levenstein; that was making application I had. The reason in- for no for type applied coverage surance for payment Jackson until the down had been received is policy, as follows: we order a we are liable for When premium. money, If I order a with no or paid, awith few and the balance is not then dollars, pay I has to be cancelled and would have to premium. for the If I had earned received the down payment I 12, on December would have or- dered the at that time.” Albert Levenstein testified that he called on Jackson at home his on December 10th 11th the afternoon. meeting only myself “At this Mr. Jackson and were present. There was no one else. Our discussion took place living in the room of Mr. Jackson’s home. ... I coverages him showed what the were that were afford- injury person, $10,000 for to one ed, $20,000 there people were two or more involved in the accident and damage property may gone to others. I $5,000
379 explanation. normally into a much more detailed We do. I him it Then told what would to obtain cost this payment insurance and the breakdown of the sched- required ule. said I that $35.40 would be the down payment. Mr. Jackson related that he did not have the only full but $35.40, $10, and asked me whether this would insure him. I said that this not. I would took stipulation from him with the was a deposit against the down and that there was proce- no afforded with the The normal $10. any application dure on I that wrote be the would full paid. any down be ... must not have did conversation with Mrs. Jackson.” On cross-examina- anything tion, testified, he “I did not have to do di- rectly sending plaintiff’s [letter Exhibit 12,1956].”
Defendant cites Snow v.
352 Ill
Schulman,
(1933),
The accept indicates Levenstein’s 11, 1956, procure insurance was ance of the contract qualified. (Chamblin Ins. Co., New Life York (1937).) App and his Jackson Ill NE2d 538, 11 they wanted insurance mother made it clear later. Levenstein told and not 11, 1956, on December go an hour. into effect within them the would receipt, top is inserted At the of the $10 “12/11/56” printed The of contract.” words “Date under the apply pre receipt “to on further is states (s) charges (s) in accordance with contract mium and wel The letter of December 12, 1956, dated-.” large family growing and comed Jackson “into our policyholders,” protected satisfied and warned “please payments him if not make the he could immediately will un our office so we your problem, help you able to derstand and be protection.” your thereby continue insurance (Emphasis supplied.) further stated that The letter “your December 12, insurance has been ordered as of language 1956.” From of these documents, of both man would conclude reasonable we believe that coverage. that he had existent acceptance argues that his However, qualified insurance be- the contract stamped notice, cause of the both stated that insurance was not effec- letter, tive “until written binder or is issued and de- (Emphasis supplied.) livered.” purport stamp ambigu think the is We ambiguity heightened state ous, and that the be delivered, ment in the letter that the will to the insured when the final has mailed, average present here, been made. Under facts person seeking coverage, diffi would have understanding stamp. culty the effect of this Neither *9 attempted Jackson nor Ms mother understood it, procure by immediately telephoning a clarification applied defendant’s office. The rule to be here is that provision ambiguous, “where a is the contract is con against strued the drafter of the instrument.” Mar App2d etti v. 42 190 Midland Nat. Ins. Ill Co., 17, 28, (1963). NE2d 597 by procedure
The evidence of
followed
definitely
Jackson and
Ms
ascertain
mother,
coverage
begin,
date on
com
which insurance
would
petent extrinsic evidence to demonstrate that defend
ant contracted to
commenc
“prior
ing
payment.”
to the
of the full down
(Ouska
App
(1937).)
Ill
v.
“ [A]nyone . . . who answers call presumed speak place at business is company respect general to the business *10 by company; con- a business carried snob that installing telephone by be used in the to cern, impliedly invites the transaction its affairs, public of communica- make use of that means to thereby agency for the made an tion which is persons dealing business, transaction of its right telephone by to assume that it have the company answering the is the one the authority transact the business clothed with to conducted.” competent evidence believe this conversation
We ap- stamp construing to the be considered peared on both the and letter. pro elements of to
The essential a contract present are record. suffi cure insurance in this “It is parties proposes if a contract cient to one of such party agrees insure, other be insured subject, period, rate of the amount and the pre understood and the insurance are ascertained or paid (Cottingham v. National if demanded.” mium NE 290 Ill 124 822 Ins. Co., Mut. Church “preliminary (1919).) con It is also the rule that proved parol may as well as tracts to insure be competent there evidence evidence,” and is written here understood the implied parties may “from which it coverage, period the amount of policy, insurance.” Pimentil v. rate of Milo or the App2d Ill NE2d 608 201, 203, 204, Brooke, Inc., (1956). finding was correct in hold trial court
We procure unconditionally undertook to liability public for effective Jackson, 12,1956. on December damages for the breach of
The measure procure insurance is be determined a contract to pro- policy which the failed to broker terms cure. It is said in Johnson v. Illini Mut. Ins. Co., App2d Ill (1958): NE2d 634 216, 151 neglects
“If a broker insurance or obligated does follow instructions when so to materially do, or obtained void through defective the broker’s or if fault, principal damage by any suffers reason of mistake or act of omission or commission of the broker, principal the broker is liable to his loss may thereby.” he have sustained undisputed *11 January It is that on without 14, 1957, negotiations policy, further as to the of the terms policy defendant ordered a for Jackson which was by Casualty Company, issued Prudence Mutual effec January (plaintiff’s produced tive 1957 15, Exhibit 3, by defendant). exception inception With of the liability this date, determined the of defendant to the same extent as the insurer would have been li able had the issued of as 1956. 12, Cottingham v. Nat. Church Ins. 290 Ill Co., 26, 33, NE 822.
We consider next defendant’s contention
as a
that,
plaintiffs
standing
matter of
law,
no
sue
to
de
directly
agreement
fendant
for breach of his
argues
Jackson. Defendant
there is no statute in
applicable
Illinois,
to
defendant,
authorizes a
right
recovery against
by
plaintiffs,
of
him these
and
provi
there is no
of insurance which contains a
permitting
argues
sion
this action.' Defendant further
acting solely
agent
that he was
son
as the
of Ronald Jack
(Moone
App
v. Commercial
Ins.
Cas.
350 Ill
Co.,
(1953));
princi
328,
In defendant contends substance, party plaintiffs third bene under the cannot recover ficiary was not made the contract doctrine because only they anything, are their and, direct benefit, argues ap Defendant for the incidental beneficiaries. plication & Pirie of the rule stated Carson Scott (1931): NE 498 Co. v. 346 Ill 257, 258, 178 Parrett, third “The is whether test the benefit person him is direct to or but an incidental bene- arising If fit from the contract. direct he to him may has no if incidental he sue on the contract; right recovery thereon. . . . right party
“. . . The rule third is, upon by a contract rests benefited to sue thereon liability liability promisor, and affirmatively appear language of must from the interpreted properly con- when instrument liability appearing ex- strued. tended so can *12 The not enlarged ground, on the that the alone, parties jus- situation and of circumstances liability.” tify or demand further or other peculiar significance of of automobile Because pol- liability provisions well as insurance as by parties eventually icy contemplated and issued, theory. agree do not with defendant’s We believe we plaintiffs directly. can The that these sue defendant party plaintiffs beneficiaries can considered third be procure insurance entered into be- of the contract to they suf- had a defendant, is, tween Jackson bring directly fieient interest in a such contract to suit entering pro- breach. In for its into contract to cure it ais fair and reasonable inference insurance, contemplating pos- that Jackson and his mother were injury parties, sible to unidentified third and the in- surance was for the direct benefit third might parties injured through who Jackson’s negligence. Because Jackson, as the insured, was directly coverage, to be benefited the insurance preclude the fact that others were in- does also directly tended to be benefited. public, subjected possible general injury
The through negligent operation Jackson’s of motor ve possessed more than a mere “incidental” hicle, bene procure public liability fit from contract to insur party ance. It real effect, a in interest was, to this procuring public contract. The ty of automobile liabili type contemplated insurance of the has connotations extending general public beyond above and private parties. contracting interests of the two Supreme As was said our Court in v. Iowa Simmon (1954): Mut. Cas. 3 Ill2d Co., 318, 322, NE2d important “Automobile has taken an position longer in the modern world. It is no private merely parties. contract between two The greater part litigation in our trial courts is arising property concerned claims out of personal injury damage, by op- or death caused legislatures eration of motor vehicles. The of all recognized our States hazards and perils daily encountered as en- a result have pieces legislation acted various aimed at the injured party. protection Respon- Financial Judgment sibility Unsatisfied acts, acts, Fund other similar laws are direct of this results con- general promoted by cern. That welfare is
386 such, can be little doubted. Government laws in- general public understandable an have the injured persons Many problem. terest in the be- accidents would from automobile disabled public charges it not for financial were come assistance received from com-
the insurance
panies.” (Emphasis supplied.)
identity
plaintiffs’
may not have been
fact
The
to
insurance
at the
the contract
known
time
assuming
prevent
from
the
them
was made does
generally:
party
See
status of third
Selby
beneficiaries.
the insurance legal representative thereof who judgment . . . shall thereafter has secured such the extent to recover under this entitled policy.” If this the insurance afforded plaintiffs, collision, in effect at the time of were judgment had a direct cause of creditors, would company. Holding against as action liability deter- of defendant is to be we that the do, contemplated policy, see the terms we mined plaintiffs right from to re- withhold no reason to directly from same extent cover they from the insurer could have recovered timely contemplated policy had been issued. *14 given, judgments
For reasons of the trial court are affirmed.
Affirmed.
KLUCZYNSKI, J., concurs. dissenting: P.
BURMAN, J., principal appeal The issue raised is whether agent an insurance should be held liable on his con- tract insurance to the same extent as an parole against insurer on the basis of evidence as exchanged parties. written documents between the From the documents involved the transaction in question, it is clear that Jackson, Ronald the would-be insured, would covered the automobile in- paid surance for which he had on account until a written binder or was issued and de- Language expressing livered. such a condition was stamped both on the face of the which Ronald received on first when the 1956', dis- place, again cussion took on the face the letter days which Ronald received several later. The condi- tion recited: Applied
The Insurance For "WhichYou Have For Payment This A Which Is On Account Ef- Is Not Policy fective Until A Written Binder Or Is Is- sued And Delivered it is clear from
Furthermore, the letter which delivery received that was in turn con- upon payment ditioned of the full amount of the down payment The letter stated $35.40. that: payment required
The down was $35.40 towards you paid leaving $10.00 balance paid which must be as follows: 31,1956 $25.40 Dec. By made has been final .... [W]hen you. be mailed to will yonr policy to- considered when provisions, these believe to obtain agent’s agreement conditioned gether, delivery Ronald on effective insurance turn was conditioned which in or policy, the binder down payment. full $35.40 *15 contained language that other do not believe about either any ambiguity in creates these documents the of about nature of the the effective date The nota- insurance. contract to procure the agent’s written under the printed which was tion “12/11/56” in not, does of on the words “Date Contract” insur- date of the the effective indicate my opinion, the date on which the rather indicates ance it policy; and which the was received on account made. lan- Other contract “family Ronald to the welcoming in the letter guage holders,” offering satisfied protected of and help premium pay- with assistance Ronald needed the in- date on which ment and the problems, stating in- indirectly and deals “ordered,” only surance was That policy. the effective date ferentially an ambiguity in create my opinion, does not, language di- quoted above which the in the face of language precedent states the conditions specifically rectly an effective policy. to obtaining clearly state In the written documents opinion, my full of $35.40 remittance of the down that the were conditions of binder or delivery his contract under obligation to the agent’s precedent and that insurance, of an effective policy to obtain In- the agreed parties. understood and this was covered the insurance knew he was not deed, he claims the full amount because until he remitted 389 upon receipt agent’s he of called the office insured. letter to find ont whether he was unambiguous, docu In the face of these written I do believe that the conversations between ments, not parties policy- concerning date effective establish a contract can considered order to unambiguously is from that is different which expressed object agreement. The in the written intention construction a contract ascertain is to language parties expressed in the which the ambiguity in the where no there is contract, only terms instrument criterion used, the itself is parties. Abingdon & Trust Bank of the intent of the Bulkeley, v. Ill 62 NE2d Lewis Co. v. 447; Corp., App2d 272; Ill NE2d Real Estate App2d Chicago Jones, v. 13 Ill Land Clearance Comm. Belanger Seay 800; Thomas, Inc., 142 NE2d & App2d Ill NE2d 418. 266, 171 prior to the accident Ronald It uncontroverted pay- pay full amount down did not of the $35.40 re- fact that he did ment which accounts policy. under Hence, ceive either a binder or a clear terms *16 agent’s agreement insur- obtain precedent his under duties conditions ance, the contract agent should not not met and the were under which, insurer an amount held liable as an for policy, $20,000. much do could total as as unconditionally accepted agent that believe only agreed large $10; he risk for a consideration of coverage only payment of $35.40, on obtain only was which Ronald remitted the appears agent It on account. making every an Ronald, to obtain effort agent boy eighteen-year-old had down who the turned previous meet the he did not occasion because on a agent agreed requisites. underwriting However, only explicit un- insurance for Ronald obtain derstanding pay the full down that Ronald effective insurance he would have policy. only upon These condi- of a hinder or expressed unambiguously in the written tions were particularly subsequent parole evidence, contract and concerning with an Ronald’s conversation agent’s person in the should not he office, unidentified alter clear conditions. heard to these judgment For I would reverse the reasons, these court. the trial Thomas, & as
Seay Inc., Agents LaSalle National as Bank, Trustee Trust Agreement Under Dated July 16, and Known as Trust No. Plaintiffs-Appellees, Kerr’s, a Delaware Inc., Corporation, Blum’s-Vogue, an Illinois Inc., Corporation, Defendants-Appellants. 50,105.
Gen. No.
First District, First Division.
April 26, 1965.
Rehearing May denied 20,1965.