author: Mr. Justice Lupe

text:
    H. F. Rodenkirk for use of Louis Deitenbach, Appellant, v. State Farm Mutual Automobile Insurance Company, Appellee.
    Gen. No. 42,622.

      Heard in the third division of this court for the first district at the April term, 1943.
    Opinion filed March 21, 1945.
    Released for publication April 10, 1945.
    W. A. Leopold and Friedberg & Bublick, all of Chicago, for appellant.
    Gardner, Carton & Douglas, of Chicago, for appellee ; Erwin W. Roemer and James A. Velde, both of Chicago, of counsel.
   Mr. Justice Lupe

delivered the opinion of the court.

This was an action in garnishment brought by Hilary F. Rodenkirk for the use of Louis Deitenbach, to recover from State Farm Mutual Automobile Insurance Company, a corporation, as garnishee, the amount of a judgment rendered in favor of LouisDeitenbach against Hilary F. Bodenkirk, in the superior court of Cook county. . The matter was heard upon the issues joined on interrogatories, the answers thereto, and the replication to the answers. On November 10, 1942, after hearing of evidence the court entered its order discharging the garnishee, and entered judgment thereon, from which judgment plaintiff brings this appeal.

The defendant Hilary F. Bodenkirk, as owner of a Chevrolet automobile, obtained an insurance policy from State Farm Mutual Automobile Insurance Company, a corporation, the garnishee, which provided protection from liability for accidents while driving his own car and, also, protection from liability while driving any other private passenger automobile, with certain exceptions, which will be hereinafter discussed.

On July 20, 1941, he, while driving a 1936 Dodge automobile owned by one John Meyer, caused personal injuries and damages to plaintiff. Plaintiff sued on May 20, 1942, and a judgment was entered against the defendant in the sum • of $10,000. An execution was issued and returned hy the sheriff “No property found and no part satisfied.” On June 7, 1942, an affidavit of garnishment was filed naming State Farm Mutual Automobile Insurance Company, a corporation, as garnishee. In answer to interrogatories filed inquiring of garnishee of his indebtedness to defendant and whether the garnishee had issued an insurance policy to defendant (a copy of which policy was attached to the interrogatories), and if said policy was in force on July 20, 1941,-garnishee denied indebtedness, admitted the issuance of the policy in question and that said policy was in force on July 20, 1941, but alleged further that the policy did not apply to the automobile which defendant Bodenkirk was operating on July 20, 1941, as said automobile had been furnished for defendant’s regular use, and for the regular use of a member of defendant’s, household. A replication was filed thereto, alleging that the garnishee had not truly discovered the credit due from it to defendant, and further alleged that the automobile involved in the accident had not been furnished for the regular use of defendant or of any member of his household.

At the time of the hearing in the garnishment proceedings, it was agreed that the sole question to be determined was: Was the automobile that Bodenkirk was operating at the time of the accident hired by him as a part of a frequent use of hired automobiles, or was the same furnished to him for his regular use or for the regular use of a member of his household? The trial court found the auto operated by defendant at the time of the occurrence was furnished to him for his regular use or for the regular use of a member of his household.

The policy in question contained the following clause:

IV". Drive Other Private Passenger Automobiles.

Such insurance as is afforded' by this policy for bodily injury liability and for property damage liability applies:.

(1) to the named insured, if an individual and the owner of the automobile classified as “pleasure and business” or if husband and wife either or both of whom own such automobile, and

(2) to the spouse of such individual if a resident of • the same household and to the employer of such named insured, as insured, with respect to the operation of any other private passenger automobile by such named insured or spouse or by a private chauffeur or domestic servant in the employ of such named insured or spouse and with respect to the presence of such named insured or spouse in any other private passenger automobile.

The provisions of this paragraph do not apply:

(a) To any automobile

(1) owned in full or in part by or registered in the name of the named insured or any member of the household thereof, other than a private chauffeur or domestic servant employed in connection therewith, or

(2) hired as part of a frequent use of hired automobiles by or furnished for regular use to the named insured, a member of the household thereof, or a private chauffeur or domestic servant employed in connection therewith; nor, with respect to such employer, to any automobile owned in full or in part by bim or . registered in his name or hired by him as part of a frequent use of hired automobiles;

(b) To any insured other than as defined in this paragraph ;

(c) Under the conditions stated in divisions (a), (b) and (c) of Paragraph III.

The questions thus presented for determination are: Do the provisions of clause IV, “Drive Other Private Passenger Automobiles,” give to Bodenkirk the right of recovery against garnishee under the terms of the policy, arid had the defendant or a member of his household been furnished the regular use of-the automobile which defendant had been operating at the time of the accident? If the automobile which Bodenkirk was operating at the time of the accident was hired by him as a part of a frequent use of hired automobiles, or was furnished to him for his regular use, or for the regular use of a'member of his household, plaintiff cannot recover — otherwise he should. To determine these questions it is necessary to examine the evidence.

Ñondas Bodenkirk testified she was 27 years of age and lived with her sister in Wilmette for the past seven years; that Hilary Bodenkirk is her father and resides in Des Plaines; and that she last lived with her father about eight years ago. She further testified that John Meyer, her fiance, before his entry into the Army on March 21, 1941, turned over to her his 1936 Dodge automobile; that at the time she received the car from him he told her “she could use the car”; that from March 21, 1941 up to the time the car ran out of oil and needed repairs, she alone used the car; that she brought the car to her father, who was in the garage or automobile body repair business, to repair the car. She, however, was unable to give the date or approximate date when she delivered the car to her father for repairs or state how long he had it, or the length of time the car was laid up. She further testified that there was one set of keys to the car and that she had them. She said she did not know at the time that her father had an accident with the car which occurred on July 20,1941, but found out soon afterward. She said she saw the car after the accident; that it could not run, and that it was damaged. That no one had the use of the car but herself and that from March 21,1941 to the present time no one drove it but herself; that during the time she was driving the car she bought gasoline for it, and that if she were home on a weekend (meaning at the home of her father) her father would get the oil for her because he could get it cheaper. On cross-examination she testified that when John Meyer was about to leave to go to the Army on March 21, 1941, he talked to her and her father; that John Meyer had been acquainted with her father for a number of years before that time; that Meyer said to her that he was “turning the automobile over for her use and for her father’s use also,” and that he said, “Here is the car Mickey. Ton take care of it and your dad will look after the car and take care of it for you if anything goes wrong with it. Tour dad will take care of all that stuff; you don’t have anything to worry about.” In answer to the question, “And" he told your dad he could have the use of the car too, didn’t he?” she replied, “Well, yes, he did.” She further testified that she had some of her clothing in her father’s home, that portion of her wearing apparel that she did not use during that time of the year; that she had often gone to the home of her father during the week-end. The question was asked the witness, “And you regarded your father’s and mother’s house as your home, didn’t you?” She answered, “Well, my home, well, I don’t know. It was in — I lived at Wilmette and my father’s house was my house too. I don’t know.” The witness testified that she was not present at the time of the accident on July 20, 1941, and that she did not know that her father had used the car or that he had finished repairing it; that her father was using the car for his own business at the time; that her father did not ask her permission to use it that day; that it was the understanding between herself, her father, and John Meyer, that her father was to keep the car in repair; that she never paid her father for labor repairing the car but paid for parts used in such repairs. She identified her signature on Garnishee’s Exhibit “1” marked for identification, and that said signature appeared on the first and second pages thereof.

Hilary F. Bodenkirk, called on behalf of plaintiff, testified that he resided at 738 Lee street, Des Plaines; that his daughter resided in Wilmette; that in response to a subpoena duces tecum he produced an insurance policy and receipts showing payment of the last premiums thereon; that he received the policy from the State Farm Mutual Automobile Insurance Company. He further testified that he owned a Chevrolet town sedan automobile on July 20,1941, and that he had owned it since 1938; that he was on July 20, 1941 doing automobile body and fender work and was also employed by the Des Plaines Motor Sales, located at 1500 Miller street, Des Plaines; that he did work in a separate shop ahont a block and a half from his home, and that he usually walked to work; that he is now with the Douglas Aircraft doing construction work; that he was involved in the accident on July 20, 1941, at which time he was driving a 1936 Dodge coupe owned by John Meyer, but he was unable to remember how long he had the car before the accident". He testified further that the car was brought to him by his daughter, Hondas, and needed repairs, that its bearings were out and certain body work had to be done on it, and the car was tied up for a couple of weeks. He testified he did not drive the ear during that time excepting in and out of the shop; that he probably drove the car before his daughter brought it to him for repairs, he would not know how often, but used it to move from Band Boad to Des Plaines in June or July 1941; that he could not say on how many other occasions he had driven the car but did not use it much; on July 20, 1941 the car was damaged due to the accident in which he was involved; that he made the necessary repairs on the car, and it was tied up for a couple of months; that after the car had been repaired his daughter got it; from that time to the present he probably used the car to go to work or something turned up, only a couple of blocks. On cross-examination he testified that he did not recall if his daughter had paid him for any of the parts that he had put into the car while repairing it; that she said, “Go and fix it up and whatever it costs, I will reimburse you.” He further testified that he did not know if the daughter had ever paid him any money for parts as it was a family matter and it was never checked that close; that he had known John Meyer seven or eight years and knew his family; that on July 20,1941, he was driving Johnny Meyer’s automobile, which was a 1936 Dodge coupe, on his own business or pleasure; that he did not ask anyone if he could use it. In answer to the question, “You had the automobile in your possession then?” he said “It was at my house. It was ready for use and in good mechanical condition.” He further testified that he had talked to John Meyer before he (John Meyer) went to the Army; that John Meyer advised him that he was going to leave the automobile with Hondas, the daughter of the witness, for her use; that it was an understanding that the witness could use it if he wanted to; and that Hondas told the witness that he could use it if he had any use of it, and that he did not recall Meyer telling him outright he could have any use of it, and that the only thing that Meyer said was, “Take care of the car while it is in my daughter’s possession.” The witness further testified he used the car in June 1941 to move from Rand Road to Des Plaines; that he could not say how many times he used the car. The witness further testified that he told Matt Lear at the time of the taking of the statement marked Garnishee’s Exhibit “2” for identification that John Meyer “had turned over the keys” to her (Hondas) but he said “that I could use the car also if I needed it and that I should take care of it if there was any trouble.”

John J. Meyer, a witness called on behalf of defendant garnishee, testified that he is 27 years of age and a corporal in the United States Army; that prior to his induction into the Army he lived in Wilmette; he entered the Army on March 21, 1941, and at that time he owned a Dodge coupe, 1936 model; that he knew Hondas Rodenkirk and her father Hilary F. Rodenkirk for about seven years; that he had a conversation with Hilary F. Rodenkirk and Hondas with reference to the use of his automobile; that, he had discussed it several times with Hondas and her parents; that about ten days before his leaving for the Army he talked to Hondas and her father about leaving his automobile and told them that they could use his car; that Mr. Rodenkirk was to keep it up and he could use the car as he saw fit; and that he left the car with them under those conditions; that someone connected with the State Farm Mutual Automobile Insurance Company (defendant garnishee) got in touch with him in Phoenix and that he came to Chicago to testify. That he first learned that his car was involved in an accident in September 1941.

Hilary F. Rodenkirk, a witness previously called by plaintiff, was recalled on behalf of defendant, and identified his signature on Garnishee’s Exhibits 2, 3, 4, 5 and 6. He testified that the statement Garnishee’s Exhibit 5 was written out in his presence by Mr. Lear and that the witness signed it.

Thereupon, Garnishee’s Exhibits 1, 2, 3, 4 and 5 were offered in evidence. Exhibit 1 was later withdrawn and Garnishee’s Exhibits 2, 3, 4 and 5 were received.

Plaintiff contends by virtue of the judgment entered against Hilary F. Rodenkirk and by the terms of coverage in the policy of insurance, the defendant garnishee became liable to the defendant, and he urges the evidence clearly shows that the automobile which was operated by Rodenkirk at the time of the accident was not a motor vehicle that Rodenkirk had hired as part of a frequent use of hired automobiles by, or furnished for regular use to the insured or a member of his household; that the automobile operated by Rodenkirk at the time of the accident was operated by him incidentally and therefore, plaintiff contends, he should recover. Plaintiff further urges that- the garnishee undertook to and did defend Rodenkirk in the original case of Deitenbach v. Rodenkirk, without adequate, proper or effective nonwaiver of rights, and that defendant garnishee is therefore estopped from denying liability under the policy.

Garnishee contends that it is not liable under the terms of the policy,' as the evidence shows the automobile driven by defendant Rodenkirk at the time of the accident had been furnished for his regular use and for the regular use of his daughter who is a member of his household, and it further contends that it is not estopped from denying liability under the terms of the policy.

In this garnishment proceeding plaintiff seeks to recover on behalf of defendant on defendant’s alleged cause of action against the insurance company, the garnishee. The plaintiff stands in the shoes of the defendant in the original ease and may recover only if the insured could have maintained an action against the insurance company. (Jones v. Manufacturer’s Casualty Ins. Co., 313 Ill. App. 386; Schneider v. Autoist Mut. Ins. Co., 346 Ill. 137.) If the defendant or a member of his household had been furnished the regular use of Meyer’s car, defendant was not covered by the policy at the time of the accident. If, however, the defendant or a member of his household had not been furnished the regular use of the Meyer car, plaintiff should recover. It was incumbent upon the plaintiff herein to prove by a preponderance of the evidence that neither the insured nor a member of his household was furnished the regular use of the car. The case of Soukup v. Halmel, 357 Ill. 576, was a garnishment proceeding wherein the plaintiff in a personal injury suit sought to recover from the insurer of defendant’s car. The insurance company denied that there was coverage, on the ground that the insured’s son, who was then operating the car, was acting without permission of the insured. It was contended by plaintiff that the burden of proof was on the insurance company, but the court said:

“The burden of proof rested upon plaintiff to establish that Anton (the assured’s son) was covered by the policy. That burden was not shifted by the affirmative allegation in the answer that he was not covered. The denial raised the issue as to whether he was covered, and not whether a liability existed under the policy because of an alleged breach.”

By the provisions of the insurance policy in question it specifically covered defendant’s 1938 Chevrolet automobile. Clause IV, the clause in question, provided in some instances that the insurance applied to the driving of other automobiles either by the named insured or by his spouse or employee.

The exclusion from coverage of other cars owned by the insured as well as cars owned by the members of his household, and the exclusion of cars furnished for regular use to the insured or a member of his household would seem to indicate the intention of the company to protect itself from a situation w'here an insured could pay for one policy and be covered by the insurance in driving any car that he decided to use whether owned by him or members of his family, or cars that had been furnished for his regular use; in other words, cars under his control that he could use at will and might use often. Without some such exclusion it is obvious that the company might lose premiums and also that the hazard under the insurance would be increased. It is evident that the purpose on the part of the company in extending the driver’s regular insurance without the payment of any additional premiums would apply to the occasional driving of cars other than his own, but would be inapplicable to an automobile furnished to the insured for his regular use.

The question then presents itself from the evidence: Was the Meyer automobile, which was being driven on July 20, 1941 by Hilary Rodenkirk, furnished to Rodenkirk for his regular use or the regular use of a member of his household. There can be little doubt that John Meyer turned his automobile over to Mondas Rodenkirk on March 21, 1941 and gave permission to her and her father Hilary Rodenkirk to use the car as they saw fit. This is borne out by the testimony of John Meyer who testified (Rec. 111) in answer to a question, “Well, I told them they could use my car, put it in charge of Miss Bodenkirk. Her dad was to keep it up and he could use the car as he saw fit.” Hondas Bodenkirk testified as to what was said at the time John Meyer turned the car over to her. In answer to the question:. “And he told your dad he could have the use of the car too, didn’t he?” she said, “Well, yes, he did.” H. F-. Bodenkirk (who is indicated by the record to have been interested in the result of this garnishment proceeding by reason of a judgment against him for ten thousand dollars), testified that he had often used the car in question; that it was the understanding that he could use it whenever he wanted to; that Meyer told him to keep the car in good shape; that witness told Matt Lear at the time witness signed the document Exhibit 2 that John Meyer turned over the car to his daughter, that he (Hilary Bodenkirk) could use the car as he saw fit, and should take care of it if there was any trouble. In G-arnishee’s Exhibits numbers 2 and 4, under date Hovember 8, 1941, upon which the witness (Bodenkirk) had identified his signature, he stated, “I had the regular use of the car that I was driving on July 20, 1941, in connection with my agreement with the owner to furnish grease, oil and keep it in repair.” And in G-arnishee’s Exhibit number 6 under date May 20, 1942, he stated, “The automobile that was driven at the time of the occurrence was not owned by me but it was furnished for my regular use.”

Plaintiff contends that the evidence shows only that Bodenkirk used the car on this one occasion and therefore plaintiff should recover. With that contention we cannot agree. The record shows that on many occasions since March 20, 1941, Bodenkirk used and operated the automobile in question. The matter for determination is not whether Bodenkirk used the automobile on one occasion but — Was he furnished the automobile for his regular use? If he was furnished the automobile for his regular use there could be no recovery under the policy.

This question presented is one of first impression in this state. The case of Farm Bureau Mut. Automobile Ins. Co. v. Boecher, reported in (Ohio App.) 48 N. E. (2d) 895, was one which involved the construction and application of a “drive other cars” clause similar to that of the policy here involved. Boecher, an employee of a motor company, while driving one of the company’s cars, was covered by his wife’s policy which contained a “drive other cars” clause. The car which Boecher was using at the time of the accident was one of a number of secondhand cars which was held by Boecher’s employer for sale. The practice of salesmen, of which Boecher was one, was to take any available car either for demonstration purposes or making trips to and from their homes. Boecher had an accident while driving a car to his home. This car was a secondhand car which he had never used before. The insurance company brought an action for a declaratory judgment that the policy did not cover the accident. The lower court held for defendant but upon appeal the judgment was reversed and judgment entered for the insurance company, on the ground that Boecher had the regular use of the car in question. The court there said that the term “furnished for regular use” was not restricted to the extended or frequent use of the specific automobile insured by the rider in the policy of insurance. At page 895, the court said:

“In our judgment, there is but one substantial question presented by this appeal, namely, whether or not under the Drive Other Private Passenger Automobile endorsement on the policy the automobile which defendant Jasper M. Boecher was driving at the time of the' collision, out of which the claim against the plaintiff company arose, ‘was furnished for regular use’ to Jasper M. Boecher.
“The situation presented is novel. The automobile which defendant Boecher was driving at the time of the collision wás owned by the Lynch Motor Car Company, the employer of Mr. Boecher. It was one of a number of cars owned by said Motor Car Company and held for sale as secondhand cars. Mr. Boecher and other salesmen for the company followed the practice of taking out any available car for the purpose of attempting to sell it. Iii following out this practice it is inferable that Boecher regularly, in the business of the company, used some automobile of said company which was held by them for sale. However, he had not operated the automobile which he was driving at the time of the collision, regularly. As a matter of fact he had not driven it at any time before the date of the collision.
“If the term ‘furnished for regular use’ as employed in the rider on the policy under consideration.must be restricted to the extended or frequent use of the specific automobile insured by the rider, then, obviously, the car which Boecher was driving at the time of the collision was not furnished for regular use within the terms of the policy. [We doubt if such restricted construction is appropriate under the peculiar facts of this case.] Upon the record it is undisputed that any automobile of the number of used cars regularly on hand for sale could have been used by Boecher for demonstration purposes, and likewise he was permitted to use any of these automobiles in making trips to and from his home at night, especially if he wanted to determine its running condition. He says he drove a car home ‘ quite often. ’ This use was so frequent as to be termed regular use. The automobile which he was operating at the time of the collision was in the same category as any and all of the other used automobiles, fie could have used it not only on the night he drove it to his home, but the next day or succeeding days, for demonstration purposes, or again and again to drive to his home. So that it must-be said that this automobile was within the terms of the policy furnished for regular use to Boecher. We believe this would be true as to any automobile in the group of used cars, whether or not it was the first time that he was driving it, because, although he might not customarily or frequently drive any specific car in the group, each and all of these cars were furnished to him for his regular use, either in the business during the day or if he desired to drive home at night.” (Italics ours.)

Could there be” any question that Rodenkirk, by virtue of his understanding with Meyer, could have used the car at any time, whenever he should desire? We think he could have used the car at any time after March 21, 1941, as Meyer, the owner of the car, told Rodenkirk that he was to keep "the car up and could use it as he saw fit. Meyer’s giving the car to Rodenkirk to use it as he saw fit would necessarily mean that the car was furnished to Rodenkirk for his regular use. The car was made available for the use of Rodenkirk, as was the car made available to the insured in the Boecher case above cited.

We have read the case of Lumbermens Mut. Casualty Co. v. Pulsifer, 41 F. Supp. 249, cited by plaintiff. The point at issue therein was whether or not Elton Pulsifer, whose car Louis Pulsifer, his father, the insured, was driving when the accident occurred, was a member of the household of his father as the term is used in the policy, and this is shown by the statement of the court of the matter in dispute, where the court said, at page 250:

“The dispute between the parties is settled by the answer to the question whether the son, Elton Pulsifer, whose car Louis Pulsifer, the insured, was driving when the accident occurred, March 13, 1941, was at that time a ‘member of the household’ of his father, Louis Pulsifer, as that term is v,sed in the policy. If he was, the insurance policy issued by the plaintiff does not cover the liability of Louis for the accident— otherwise it does.”

Counsel for plaintiff next contends the court erred in permitting defendant to impeach the testimony of defendant’s witness Hilary F. Bodenkirk. The witness was called for the sole purpose of identifying his signature on certain statements and other exhibits signed by him. Any statement signed, or any admission made, on behalf of a party to a suit, may be shown as admissions against interest. They may also be received in evidence for the purpose of impeaching the testimony of the witness. The record shows that Bodenkirk was first called as a witness on behalf of the plaintiff and testified with reference to the use of the Meyer automobile. Defendant garnishee called Bodenkirk for the purpose of identifying his signature on the various exhibits. Bodenkirk was called by defendant garnishee for the purpose of proving the authenticity of the statements which would impeach his testimony previously given on behalf of plaintiff. Surely the statements were not offered or tendered to impeach the testimony of Bodenkirk as a witness on behalf of defendant. As we understand the rule, a witness may be asked as to whether or not he made certain statements orally, or, if he had signed certain written statements, papers or documents, which would impeach the testimony which he had previously given on behalf of the opposite party, and when a proper foundation is laid, are admissible in evidence, and may be used for the purpose of impeaching the testimony of the witness who gave such statements. We find no merit in plaintiff’s contention.

’ Counsel for plaintiff maintains the insurer (garnishee) was estopped from denying liability under the policy. He bases this contention on the theory that the insurance company had retained an attorney to defend the original suit brought by Deitenbach against Rodenkirk, and that it made an investigation of the accident to determine the question of its liability. The record discloses that Mr. Charles Green, who had filed his appearance for and on behalf of the defendant, Rodenkirk, was not acting for and on behalf of the insurance company. Hilary Rodenkirk, the defendant, signed the notice and acknowledgment of nonwaiver of rights (Garnishee’s Exhibit number 3) on October 9, 1941. It was therein provided that it was understood between the State Farm Mutual Automobile Insurance Company and Rodenkirk that any action taken by the insurance company in investigating or attempting to adjust or defend any claim or in the handling of any litigation growing out of the accident involving Louis Deitenbach, which occurred on July 20, 1941, at Des Plaines, Illinois, shall not be construed as a waiver of the right of the insurance company to deny liability at any time under the policy which had been issued to Hilary Rodenkirk, and that it was further understood that the acknowledgment of the notice would be considered as a waiver of the rights under the policy. Garnishee’s exhibit number 4 under date November 8,1941, authorized said Charles E. Green to continue to defend the suit until Hilary F. Rodenkirk could make other arrangements. This direction was signed by Hilary F. Rodenkirk. Garnishee’s exhibit number 6 contains a direction and authorization to attorney Charles E. Green by Hilary F. Rodenkirk to Green, as his attorney and not as the attorney for the State Farm Mutual Automobile Insurance Company, agreeing that a judgment be entered against said Hilary F. Rodenkirk in the sum of $10,000 "in the event the wilful and wanton charges contained in Count 2 of the complaint be dismissed, and directs and authorizes said attorney, as his attorney, to consent that a judgment be entered in said court for said amount. Rodenkirk in said statement further stated that he understood the State Farm Mutual Automobile Insurance Company would not in any manner be compelled to pay or be liable for said judgment; that it was his wish that said judgment be entered to avoid the consequences of a possible verdict finding or judgment against him on the charges of wilful and wanton conduct as contained in Count 2 of the complaint. He then reaffirmed the statements contained in the notice and acknowledgment of nonwaiver of rights signed by him in Garnishee’s Exhibit 3. This direction and authorization was signed by Bodenkirk on May 20, 1942. The record clearly indicates that Attorney Green was acting for and on behalf of the defendant Bodenkirk in defending the personal injury action instituted by Deitenbach. Plaintiff’s contention that garnishee is estopped from denying liability is not well taken for the additional reason that plaintiff failed tó plead in his replication to the garnishee’s answer the matter of estoppel. The reply merely alleged that the garnishee’s answer had not truly discovered its indebtedness to the defendant, and that the automobile was not furnished for his regular use to the defendant or a member of his household and, therefore, plaintiff contended that the defendant was covered by the policy. There was no matter alleged in the reply filed by plaintiff that would indicate that the garnishee was estopped in any manner to raise the defens,e of noncoverage. Estoppel is an affirmative defense and must be pleaded. (See. 43 (4) Civil Practice Act, Ill. Rev. Stat. 1943, ch. 110, par. 167 [Jones Ill. Stats. Ann. 104.043, subpar. (4)].) The provisions of the Civil Practice Act apply to garnishment proceedings. (Ch. 62, par. 28, 1943 Ill. Rev. Stat.[Jones Ill. Stats. Ann. 109.311].)

Matters which must be affirmatively pleaded, such as estoppel, are waived when not alleged. The only.issue presented before the trial court was whether or not the defendant had hired the automobile as a frequent use of hired automobiles, or whether the automobile was furnished for the regular use of the defendant or a member of his household. The question of estoppel was not pleaded, argued or ruled upon by the trial court. It now comes too late. A point or theory not put in issue or raised in the trial court may not be urged in a court of review. (Consumers Petroleum Co. v. Flagler, 310 Ill. App. 241; People ex rel. Mitchell v. Engle, 313 Ill. 483.) Aside from the question of the right of plaintiff to present the question of estoppel for the first time in a court of review, the evidence clearly shows that Attorney Green was acting for and on behalf of defendant Rodenkirk in his defense of the action brought by Deitenbach, and was not acting for and on behalf of the insurance company. The insurance company is therefore not estopped to deny liability under the policy in question.

In view of the evidence, plaintiff would not be entitled to recover against the garnishee, as the evidence shows that John Meyer had furnished to defendant Rodenkirk for his regular use the automobile owned by him. Where an automobile is furnished to the insured for his regular use there can be no recovery under the terms of the policy in question. The trial court found that Nondas Rodenkirk was a member of the household of Hilary Rodenkirk. As the evidence is conflicting, in respect thereto, we feel that the finding of the court, who was in a much better position than we are to weigh the evidence, should not be disturbed. The findings of a trial court will be sustained unless wholly unsupported by the evidence. (Winnetka Park Dist. v. Hopkins, 371 Ill. 46; Marine Trust Co. of Buffalo v. Reynolds, 308 Ill. App. 595.)

For the reasons hereinabove given, we feel that the trial court, from the evidence in this case, was justified in discharging the garnishee.

The judgment of the superior court is therefore affirmed.

Judgment affirmed.

Burke, P. J., and Kiley, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Francis Corby, Appellee, v. Seventy-One Hundred Jeffery Avenue Building Corporation, Appellant.
    Gen. No. 42,649.

      Heard in the third division of this court for the first district at the April term, 1943.
    Opinion filed March 21, 1945.
    Rehearing denied April 10, 1945. Released for publication April 10; 1945.
    Rathje, Hinckley, Kulp & Sabel, of Chicago, for appellant; Joseph J. Sullivan, Jr., of Chicago, of counsel.
    Johnson & Wiles, of Chicago, for appellee; Walter E. Wiles and Frederick W. Eisenstein, both of Chicago, of counsel.
   Mr. Justice Lupe

delivered the opinion of the court.

This was a suit for damages for breach of a contract of employment for the management of a building owned by defendant corporation. Defendant filed a counterclaim for moneys admittedly held by plaintiff belonging to the defendant which plaintiff retained to apply on his claim for damages against the defendant. The cause was tried by the court without a jury, resulting in a finding and judgment for plaintiff in the sum of $7,250.57 and costs and a finding and judgment for costs for plaintiff against the defendant on defendant’s counterclaim. Defendant brings this appeal.

The property in question was located at 7100 Jeffery avenue, Chicago, Illinois, and was the subject of a reorganization proceeding in the United States district court for the northern district of Illinois, under section 77B of the Federal Bankruptcy Act. The building consisted of 8 stores, 10 offices and 64 apartments. A plan of reorganization was adopted on July 5, 1938 in the district court which provided amongst other things that a voting trust be created with three trustees, the trust res to be the common stock of the defendant corporation amounting to 2,115 shares. There were outstanding 2,800 shares of preferred stock of the corporation. Francis Corby, plaintiff, Charles S. Banks, and George D. Bockus were named by the court as trustees under the trust agreement. The district court on July 15, 1938 by its order confirmed the plan of reorganization and ordered, “the management and operation of the building of the debtor be under the direction and control of Francis Corby.” Pursuant to this order a contract of employment was entered into by plaintiff with defendant on December 15,1938, wherein the plaintiff was employed as manager arid rental agent of the property for. a. period commencing December 15, 1938, and expiring July 15, 1948, a copy of which contract is marked Exhibit A and attached to the complaint filed herein. Under the terms of the contract the plaintiff was given general supervision of the property and was authorized to procure ánd maintain adequate liability insurance covering all persons that may be employed in and about the property, and in addition thereto, plaintiff as manager was to perform such other services as are usually and customarily rendered by agents operating similar properties in the city of Chicago; that he was to devote so much of his time as may be necessary for the successful operation of the building. It further provided that the corporation would pay plaintiff as manager as and for compensation for his services 3% per cent of the gross cash receipts from the building, excluding, however, the rents obtained under the Walgreen drug store lease and from said lease he was to receive the sum of 1% per cent of the rents received. . He was charged with the duty of keeping books showing income and disbursements made by him and to render statements and monthly accounts to the corporation. The corporation was given the right to terminate the contract prior to its expiration upon the happening of: (1) the purchase by the corporation or the retirement of all its outstanding preferred stock; (2) should the corporation make a bona fide sale of its property prior to the 15th day of July 1948; (3) if the corporation be dissolved; and (4) in the event the manager shall not perform his duties as manager in a faithful, diligent and efficient manner. It was further provided by the contract that in the event the manager desired to resign from the management of the property he may terminate the agreement at any time upon giving 30 days ’ written notice to the corporation. Clause 8 of the contract provided that the contract would be terminated without any further action either on the part of the manager or on the part of the corporation on the day default occurred under the terms, provisions and conditions of a mortgage under date November 14, 1938 to the Equity Life Assurance Society of the United States, which was executed to secure the payment of the corporation’s note for the sum of $180,000.

On March 14, 1940, plaintiff ordered and placed fire and extended coverage insurance in the sum of $165,000 for the protection of the property in question. The new insurance was written in other companies than was the previous insurance and was for a term of five years, whereas the previous insurance was for the term of three years. The premium for the five-year term amounted to the sum of $4,580.40. The record shows on May 13, 1940, plaintiff paid on account of said insurance the. sum of $1,138.12, and on said date furnished to the treasurer of the corporation a statement showing the transaction and the payment made. On September 19, 1940, the defendant canceled and terminated plaintiff’s contract of employment. Defendant contends that the plaintiff’s contract of employment did not authorize him to insure defendant’s property or to determine the amount, term or company in which the insurance should be placed; that plaintiff’s contract with defendant only authorized plaintiff to procure and maintain adequate liability insurance covering employees, and therefore it was justified in terminating plaintiff’s contract.

The record shows that after the employment of plaintiff by the corporation, plaintiff addressed a letter, under date January 5, 1939, to Ms co trustees Charles S. Banks and George D. Bockus, suggesting to them that the three meet and discuss the general policy of carrying out the court’s wishes concerning the property, and informing them that he had received a report from John Naghten & Company, insurance engineers, in reference to coverage by insurance of the personal and real property of the building corporation and various other kinds of insurance; that he had obtained binders for certain insurance which was a temporary coverage until he had an opportunity to meet with his cotrustees to make a final decision in the matter. In pursuance to said letter, on January 12, 1939, a meeting was had of plaintiff, Banks, and Bockus, as cotrustees. Plaintiff testified that at this meeting he submitted the insurance survey to his co-trustees and that they agreed that he order various kinds of insurance including fire and extended coverage on the property of the company. This, however, was denied by Banks and Bockus. From the testimony of Banks it appears that he agreed that $200,000 fire insurance was the amount that should be placed on the property, and he testified further if he remembered correctly he thought that Corby had read the insurance survey to those present at the meeting. Bockus, however, testified that the question of fire insurance was not discussed and he had no recollection that the insurance survey had been submitted. On January 27,1939, plaintiff wrote Ms co trustees a letter (plaintiff’s Exhibit 6) wherein he reiterated the subject matter of the conference and listed the insurance coverage wMch he testified had been agreed upon by the three trustees in their conference of January 12, 1939. There appears in this list fire and extended coverage on the building in the amount of $200,000. The other form of insurance listed in plaintiff’s Exhibit 6, other than the fire and extended coverage, was procured from time to time by the plaintiff and the charge therefor is shown on the monthly statements rendered .to the corporation by the plaintiff, to which the record shows no objection on behalf of the officers of the corporation. When plaintiff became manager of the property it was covered by insurance amounting to $165,000, $115,000 of which would expire on May 13, 1940, and $50,000 on June 26, 1940. In February of 1939 Banks was made treasurer of the corporation and Bockus secretary. The record indicates that Mathilda Hackel was president of the corporation but that plaintiff dealt with Banks and Bockus as officers and trustees with reference to the operation of the property. On March 14,1940, plaintiff ordered $165,000 of fire and extended coverage insurance for the protection of the property. The new insurance was written in other companies and was for a term of five years, whereas the previous insurance was for a term of three years. The premium for the five-year term amounted to the sum of $4,580.40. On May 13, 1940, plaintiff paid on account of the premiums on $115,000 of said insurance the sum of $1,138.12 and furnished to the treasurer of defendant a statement showing the transaction and the payment made. On June 4, 1940, the directors of the corporation passed a resolution instructing the president to inform the plaintiff, “that he was without authority to have written the policies of fire insurance totaling $13 5,000; further that he was without authority to pay the premiums on the same; further that he was without authority to determine the period for which any fire insurance policy should be written; further that he be requested to immediately have changed the term period for the fire insurance policies totaling $115,000 heretofore written at his direction to three years instead of five years; and that he return to the treasurer of this corporation the premium difference at once; and further that he was without authority to have written on behalf of this company any insurance of any kind or character except liability insurance.” The resolution further provided, “that noncompliance with the foregoing by Mr. Francis Corby will be considered a breach of conditions and restrictions contained in his management contract. , . . . ” The record indicates that plaintiff received a copy of this resolution on or about June 15, 1940. On July 24, 1940, at the office of Walter W. Duft, the attorney for the company, a meeting was held, which was attended by Francis Corby, plaintiff, Charles S. Banks and George D. Bockus as trustees and officers of the' company. Plaintiff’s attorney, Walter E. Wiles and attorney Walter W. Duft were also present. At his conference the placing of the insurance by Corby, was discussed, and it appears that the real complaint was that the insurance had been placed for a longer term than three years and that Banks and Bockus contended by reason of the length of the term, to-wit, five years, the premium for the payment of said insurance would deplete the cash available and thereby prevent the payment of dividends by the corporation, which the defendant should pay on the preferred stock, under the plan of reorganization. Plaintiff agreed that if the treasurer, Charles S. Banks, would furnish to him a statement showing the amount to be paid for premiums on the insurance would interfere with the declaration and payment of dividends, he, Corby, would have the policies changed, reducing the term to three years. Banks testified that Corby did not make such a request at that time, but that he made the request at a later date. However, the record shows that Banks sent a statement directed to plaintiff’s attorney, Walter E. Wiles, wherein it is shown that on the basis of a five-year term after paying the premium thereon there remained only for the payment of dividends the sum of $1,481.52 and that, if the term of the fire insurance had been reduced to a three-year term, the treasurer would have available for the payment of dividends the sum of $3,119.62 plus whatever refund from the insurance companies which they had received as advanced payments on premiums on said insurance. The amount of dividends to be paid as per the provisions of the plan of reorganization amounted to $3,008.40.

The record shows that Corby caused to be changed, on September'6, 1940, the policies of insurance from a five-year to a three-year term.

Corby testified that his monthly statement to the corporation showed the credit of excess premium which had been returned by the insurance company to him after said change had been made.

On September 19, 1940, the board of directors of the defendant corporation, without notice to Corby, adopted a resolution, Defendant’s Exhibit 3, wherein 'it is stated that “by reason of failure of Francis Corby to comply with the resolution of the company dated June 4, 1940, and by his failure to comply with the terms and provisions of said management contract, the management contract is hereby canceled and terminated.” The resolution directed the president of the company to immediately notify plaintiff of the passage of the resolution and she was authorized to take such action as was necessary to carry out the terms of said resolution in order that the management contract of plaintiff and the defendant.corporation, dated December 15,1938, be canceled and terminated. It is apparent that the defendant .relied upon its right to cancel and terminate plaintiff’s contract because of plaintiff’s failure to comply with the resolution dated June 4, 1940. This is clearly shown by its resolution of September 19, 1940. In the resolution of June 4, 1940, plaintiff was requested to have changed the term period of the fire insurance policies totaling $115,000 from a term of five years to that of three years, and that he make return to the treasurer of the company of the premium difference. With this request the record shows that plaintiff complied. He ordered changed on September 6,1940, the policies in question and he showed in his statement to the company the amount of the returned premium which he had received and which he accounted for to the defendant company. Defendant, without inquiry as to whether or not said policies had been changed as was directed by the resolution of June 4, 1940, canceled plaintiff’s contract of employment because of Ms failure to comply therewith. Plaintiff was discharged on September 19,1940, whereas he had complied with defendant’s request on September 6, 1940. Surely there was no cause for cancellation or termination of plaintiff’s contract for failure of his complying with the resolution of June 4. The record indicates that plaintiff had agreed to reduce the terms of the insurance from a five-year to a three-year period upon receiving information from Banks showing that it was necessary to make the change in order to pay the dividends on the preferred stock of the company. This information was not furnished to plaintiff or his attorney until August 29, 1940, by Banks the treasurer of the company. Plaintiff complied in having the change made within seven days thereafter. We feel under the circumstances that plaintiff complied with the request of defendant and that the termination and cancellation of Ms contract was unwarranted. It is argued by defendant that plaintiff had no authority to order any insurance other than that which was provided for by the contract. With this contention we agree, but defendant by its action did not rely upon the lack of authority of the plaintiff in ordering the insurance; its complaint was of plaintiff’s action in-placing the insurance coverage for five years, and it ordered plaintiff to have the same reduced to a three-year term. By defendant’s resolution of June 4, 1940, it ratified the unauthorized act of the plaintiff in ordering said insurance, and it directed the plaintiff to have the term of said insurance changed from five to three years. By so doing we feel that the defendant waived the breach, if any existed, in placing the insurance.

It is next contended by the defendant that the plaintiff was prevented from writing insurance and receiving a commission thereon, by reason of his fiduciary relationship as trustee and that the writing of the insurance and receiving commissions by him justified defendant in discharging the plaintiff and cancelling his contract. It is the general rule that a trustee must account for all property which may come to him by dealing with the trust property, even for bonuses or gratuities given him by strangers for contracts made with them in relation to the trust property (1 Perry on Trusts, section 209). However, a trustee may in some instances, under certain circumstances, be entitled to make a personal gain for himself out of the trust property if the same is done by agreement or with the knowledge and consent of the cestui que trust. (Sherman v. White, 62 Ill. App. 271.) The trust agreement in the instant case, which was approved by the court, provides as follows, in article III, section 6:

‘ ‘ The Trustees may act as directors or officers of the corporation. Any firm of which any of them may be a member, or any of them acting as an individual, or any corporation of which any of them may be stockholders, directors, officers or employees, may contract with the corporation and be or become pecuniarily interested in a matter or transaction in which the corporation may be concerned in any way as fully as though such Trustee was not a Trustee hereunder, provided that if any Trustee shall be a member of any such firm or be a stockholder, director, officer or employee or own in excess of one per cent (1%) of the stock of any such corporation, such Trustee shall give written notice to the remaining Trustees five (5) days prior to the entering into of any such contract, matter or transaction by the corporation, of his interest in any such firm or corporation and the nature of the contract, matter or transaction. Such Trustee shall thereupon be released and discharged from any and all liability that may or might attach to him because of any such relationship.”

By virtue of this clause in the trust agreement, plaintiff was authorized to contract with the defendant and be or become pecuniarily interested in a matter or transaction in which the corporation may be concerned. The evidence shows that the statements sent by plaintiff to defendant marked defendant’s Exhibits 6, 7 and. 8 and bearing date March 14,1940, September 14,1940 and October 14, 1940, showed on their face that the insurance in question was placed by Francis Corby, the plaintiff, and the premiums were itemized for each policy. Defendant had notice and knowledge thereby that the plaintiff placed the insurance in question and under the contract it was immaterial whether or not he had any financial interest in the transaction and. it mattered not under the terms of the trust agreement if plaintiff had received any benefits therefrom, as the trust agreement permitted the plaintiff to do business with the defendant corporation and to receive profits from transactions he may have directly or indirectly with it. The record indicates no complaint was made by the defendant to the plaintiff that the plaintiff had received a commission for the placing of the insurance in question, and if such a complaint had been made by the defendant we feel, under the trust agreement, it would not have been well-founded.

It is next argued that plaintiff failed to give five days’ written notice as provided by section 6 of article III of the trust agreement to his cotrustees before the placing of said insurance by plaintiff. The record shows that no complaint had been made either by the trustees or the corporation or any of its officers that the five-day written notice had not been given it.The only complaint made at any time was that the term of the insurance was for a longer period than three years. One cannot rely upon some other ground for the purpose of cancelling a contract than the one on which the attempt is made to terminate or forfeit the same. In the case of Kuska v. Vankat, 341 Ill. 358, at page 3-62, the court said:

“It is a well settled rule that when one party to a contract refuses to perform and bases his refusal on one ground he waives all other grounds, or is estopped, when suit is brought, from setting up other grounds for his refusal.”

The record shows that Corby was acting for himself in the transaction and the defendant had knowledge thereof. Counsel for defendant cites two cases in support of his contention that the corporation was justified in discharging plaintiff, as plaintiff had violated his fiduciary relationship as trustee in the writing of the insurance and receiving commissions therefrom. The cases relied on are Sherman v. White, 62 Ill. App. 271, affirmed 168 Ill. 589, and Metcalf v. Metcalf, 286 Ill. App. 10. We have read these cases and agree with the law therein, applied to the facts in each of said cases. In the Sherman v.. White case we find no contract or trust agreement such as the one that we have in the instant case. It lays down the general proposition of law that a trustee holding trust property to be insured must account as trustee for such commissions even though the trust estate suffered no loss by the transaction. In the instant case the plaintiff was permitted to deal with the corporation and become pecuniarily interested in any matter or transaction in which the corporation may be concerned. In Metcalf v. Metcalf, supra, no right was given to the agent to contract with the beneficiary and thus it differs from the instant case. We agree with the law as laid down in the Metcalf v. Metcalf case under the facts in that case, where it is said by the court, at page 15:

< < ippg relation of principal and agent is one of trust and confidence and where such confidence is reposed and such relation exists it must be faithfully acted upon and preserved from any intermixture of imposition. . . . An agent cannot deal for his own advantage with the things purchased for his principal, or become a seller or buyer of them, because of his confidential relation and his duty to disclose to his principal every fact, circumstance or advantage in relation to the purchase which may come to his knowledge.”

In the Metcalf case the agent was not authorized to deal with his principal, which distinguishes it from the present case. We feel that the plaintiff under the trust agreement was authorized to contract with the defendant and permitted to become pecuniarily interested in the transaction, under the terms and provisions of the trust agreement.

Defendant contends that the court erred in assessing plaintiff’s damages and that if plaintiff was entitled to damages the same should be limited to such damages as may have accrued to the date of trial. He argues that any damages allowed beyond the date of trial would be speculative and uncertain. At the time of the hearing of this cause on December 31,1942, a judgment was entered in favor of plaintiff for damages from September 19, 1942 to July 15, 1948, the date of the expiration of the contract in question. We feel the court committed error in so doing. Under paragraph 8 of the contract of employment the corporation had the right to terminate the contract prior to the date of its expiration in the event (1) the corporation purchased or retired all of its outstanding preferred stock prior to that date; (2) the corporation should make a bona fide sale of its property prior to the 15th day of July 1948; (3) the corporation was dissolved or liquidated; and (4) the plaintiff failed to perform his duties as manager in a faithful, diligent and efficient manner. It also gave the plaintiff, if he so desired, the right to resign and to terminate the agreement upon the giving of 30 days’ written notice to the corporation. The contract further provided that it would be terminated without any further action upon the part of plaintiff or defendant on the day a default occurred under the terms, provisions and conditions of a mortgage given by the defendant to the Equitable Life Assurance Society, a corporation, to secure the payment of defendant’s note in the sum of $180,000. It plainly can be seen that any one of the many reasons mentioned for the termination of the contract could have taken place subsequent to the date of trial and prior to the expiration of the contract. The corporation had the right to terminate the contract at any time in the event it purchased or retired all of its outstanding preferred stock. This it could have done had it such capital in the future so to do. The corporation could have sold the property at a bona fide sale, and this is possible at any time prior to July 15, 1948, which would give rise to the termination of the contract of employment. The contract would have been terminated in the event the corporation was dissolved or liquidated. This could have taken place any time after the trial. Should there have been a default under the terms, provisions and conditions of the mortgage given to the Equitable Life Assurance Society, that would have terminated the contract. Other contingencies as set forth under clause 8 of the contract could have caused its termination.

Plaintiff’s contract of employment required his service as manager. He had a right, however, to delegate part of his duties to others, but the supervision and management under his contract rested with him. The contract was not assignable and was personal between him and his employer. Upon his death or if he became incapable of performing Ms duties as manager before the expiration of the term of his employment, the contract terminated.

We feel, under the facts and circumstances in this case, that the actual loss of plaintiff between the date of trial and the date of the expiration of the contract could not be definitely determined and from the very nature of things any amount allowed would be largely speculative.

We adopt the rule as laid down in the case of Mount Hope Cemetery Ass'n v. Weidenmann, 139 Ill. 67, limiting damages to the date of trial. The plaintiff has a right, if he so desires in the future to institute proceedings from time to time during the term of the contract for damages which he may have sustained, or he may wait until the expiration of the contract and recover for such damages, if any, as he may have sustained from December 31, 1942, to the date of the expiration of the contract.

The evidence shows that plaintiff in the management of defendant’s property employed as resident agent Swan-Lorish, Inc., real estate agents in Chicago, to collect the gross rent and remit the same to plaintiff. Under plaintiff’s contract with the defendant he was to receive 3% per cent of the gross rent excepting a certain lease to Walgreen and on that lease his commission was to be 1% per cent. The evidence shows that the average total commission under the contract, based upon gross rental for the 25-month period between September 1, 1940 and September 30, 1942, amounted to about $133.40 per month, of which amount SwanLorish, the resident agent, received an average monthly commission of $51.70 for its services, and the balance, amounting to $81.70 per month, belonged to plaintiff, making a total due plaintiff Corby on the day of trial of $2,042.50. In addition- thereto, Corby claimed that he was entitled to 3% per cent upon the moneys he received under a contract with the Meter Service Corporation, under which contract the Meter Service Corporation purchased electricity at a wholesale rate and sold the same to defendant’s tenants at a normal retail rate. Plaintiff’s commission therefrom would have amounted to $3.21 per month, or a gross total of $80.25 between the date of Corby’s discharge and the date- of trial. To this should be added the sum of $600, as trustee’s fees that Corby was entitled to receive for the two-year period, at the rate of $300 per year, making a grand total due plaintiff from defendant of $2,722.75. Corby, however, was withholding money that belonged to the defendant amounting to $1,373.42, as alleged in his complaint. This amount should be deducted from the $2,722.75, leaving a balance due Corby as of the date of trial of $1,349.33.

Judgment affirmed on plaintiff filing a remittitur in the sum of $5,901.24 within 10 days; otherwise judgment reversed and cause remanded to the superior court of Cook county with directions to proceed in a mánner not inconsistent with this opinion.

Judgment affirmed upon filing of a remittitur; otherwise reversed and remanded.

Burke, P. J., and Kiley, J., concur.