Johnson v. Illini Mut. Ins. Co.

• Decision Date: 08 July 1958
• Docket Number: Gen. No. 10131
• Citation: 18 Ill.App.2d 211,151 N.E.2d 634
• Parties: Edward JOHNSON, Plaintiff-Appellee, v. ILLINI MUTUAL INSURANCE COMPANY et al., Defendants. Andrew Hammond and Willie Prowell, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 634

151 N.E.2d 634

18 Ill.App.2d 211

Edward JOHNSON, Plaintiff-Appellee, v. ILLINI MUTUAL INSURANCE COMPANY et al., Defendants Andrew Hammond and Willie Prowell, Defendants-Appellants.

Gen. No. 10131.

Appellate Court of Illinois, Third District.

July 8, 1958.

Reno & O'Byrne, Donald M. Reno, Champaign, Maurion R. Richton, Chicago Heights, John A. Cook, Chicago, of counsel, for appellants.

John Alan Appleman, Urbana, for appellee.

ROETH, Presiding Justice.

This is an appeal from a default judgment. The contentions of the defendants-appellants necessitate an examination of the complaint and the proceedings following its filing.

On August 27, 1955, plaintiff-appellee filed suit against Illini Mutual Insurance Company, Walter O'Neil, and appellants Andrew Hammond and Willie Prowell. The record before us shows that Andrew Hammond and Willie Prowell were each personally served with summons on September 8, 1955. Walter O'Neil was served on September 2, 1955. Illini Mutual Insurance Company entered its appearance on September 19, 1955. On October 7, 1955, an order was entered by the Circuit Court ruling all defendants to plead by October 13, 1955. Illini Mutual Insurance Company and William O'Neil, appearing by counsel, filed their motion to strike on October 13, 1955. No appearance or pleading of any kind was filed by Andrew Hammond and Willie Prowell. On March 26, 1956, plaintiff dismissed the suit as to the defendant Walter O'Neil and March 27, 1956, dismissed the suit as to defendant Illini Mutual Insurance Company. The defendants Andrew Hammond and Willie Prowell were defaulted and the court proceeded to hear evidence solely on the question of damages and thereupon entered judgment against both defendants for $9,000. No question is here raised as to the amount of this judgment. Subsequently on January 10, 1957, Hammond and Prowell were each served with a citation to appear in the Circuit Court for discovery of assets.

On March 27, 1957, defendants Andrew Hammond and Willie Prowell filed their petition in this court, for leave to appeal from the judgment rendered against them on March 27, 1956, pursuant to the provisions of Section 76 of the Civil Practice Act. Illinois Revised Statutes 1955, Chapter 110, Section 76. On May 20, 1957, this court granted leave to appeal.

In Buck v. Citizens' Coal Mining Company, 254 Ill. 198, 98 N.E. 228, 230 it was said:

'A party who voluntarily submits to a default impliedly admits that the demand against him is just and that he has no defense. Lucas v. Spencer, 27 Ill. 15. That the declaration would have been obnoxious to demurrer if one had been interposed would not necessarily justify reversal of a judgment rendered by default. Alton Illuminating Co. v. Foulds, 190 Ill. 367, 60 N.E. 537. A default judgment will be reversed where the declaration states no cause of action, but a defective statement of a good cause of action is cured by verdict. Plaintiff in error, having submitted to a judgment by default, is not in a position to ask the benefit of technical refinement in construing the language of the declaration for the purpose of enabling it to escape the legal consequences of its own neglect.'

Thus we regard this appeal as presenting the sole question of whether the complaint states a good cause of action, even though defectively stated, against Hammond and Prowell.

The complaint is entitled 'Complaint for Reformation and for Relief in Equity and at Law'. It alleges that plaintiff was the owner of a building located at 1027 Greenwood Ave., East Chicago Heights, Illinois, together with a separate building at the rear thereof and of furnishings located in the front building; that on February 13, 1955, Illini Mutual issued to plaintiff three policies of insurance, upon a frame dwelling (front), a frame dwelling in the rear and the household contents in the front dwelling at the address of 1227 Greenwood Avenue instead of 1027 Greenwood Avenue; that the insurance was solicited by defendants Hammond and Prowell as brokers, and issued by defendant Walter O'Neil as agent for Illini Mutual Insurance Company; that 1227 Greenwood Avenue was a vacant lot and that through error, the Illini Mutual Insurance Company, its agent Walter O'Neil, and the brokers Hammond and Prowell misdescribed the address of the property owned by plaintiff as 1227 Greenwood Avenue, instead of 1027 Greenwood Avenue. There then follows these allegations which give rise to the controversy presented by this appeal namely:

'* * * that the policies and each of them contained a misdescription of the address as so stated and that the said policies and each of them should be reformed, if this court deem reformation necessary in granting relief; or, in the alternative, plaintiff states that if the plaintiff is deprived of any right which he may have as a result of the fire loss hereinafter described as a result of the error of the said brokers or either of them, or of the said agent, in misdescribing the said premises, then the plaintiff is entitled to recover against the said broker or agent for the breach of his duties in so misdescribing the premises * * *.' (Emphasis supplied.)

The complaint then alleges the premises were completely destroyed by fire on January 18, 1955; that the value of the buildings and contents was in excess of the policy coverage; that plaintiff has complied with all conditions precedent and that Illini Mutual Insurance Company has refused payment of the amount of insurance. The prayer for relief prays:

'(a) That this court hear the evidence and, upon such hearing, grant a reformation of the said insurance policies as to the premises described, and that the policies be so reformed as to show the address of the property insured as 1027 Greenwood Avenue, instead of 1227 Greenwood Avenue, in East Chicago Heights, Illinois;

'(b) That following the determination of the matter of reformation, that judgment be entered against the defendant Illini Mutual Insurance Company, in the total sum of Nine Thousand Dollars ($9,000.00) together with the penalties and attorneys' fees provided by Illinois Revised Statutes, Chapter 73, Sec. 767, or, in the alternative, that judgment be entered against the defendants Walter O'Neil, Andrew Hammond and Willie Prowell, or one or more of them, as shall be determined, in the amount of the total loss sustained by the plaintiff of Nine Thousand Dollars ($9,000.00).'

It is the contention of counsel for defendants that in order to recover against defendants, Hammond and Prowell, there must be a showing that plaintiff was unable to recover from his insurer because of the error of these defendants and that on the state of this record, i. e., the dismissal on plaintiff's motion of the insurer, there can be no such showing.

The law with respect to the liability of insurance brokers in a situation of this kind is well settled. If a broker neglects to procure insurance or does not follow instructions when obligated so to do, or if the policy obtained is void or materially defective through the broker's fault, or if the principal suffers damage by reason of any mistake or act of omission or commission of the broker, the broker is liable to his principal for any loss he may have sustained thereby. The Even L. Reed Manufacturing Company v. Wurts, 187 Ill.App. 378, Mosteiko v. National Inter Insurers Corporation of Chicago, Illinois, 229 Ill.App. 153; Progress Laundry Company v. Schweik, 332 Ill.App. 408, 75 N.E.2d 390; Johnston v. Otta, 340 Ill.App. 270, 91 N.E.2d 468. It could hardly be contended that the misdescription in the policy in the case at bar was not a material defect. It is such a meterial defect as would have afforded a basis for defense in a suit against the insurance company on the policy. Howard Foundry Company v. Hartford Fire Insurance Company, 7 Cir., 222 F.2d 767, (applying Illinois law); Niedringhaus v. Aetna Insurance Company, 235 Ill.App. 335.

In 44 C.J.S. Insurance § 172, at page 863 under the subtitle Actions it is noted:

'It is not necessary for the insured, in order to recover from the broker or agent, to show that he has sued the insurance company, it being sufficient to show that the policy is defective or invalid and that the company has refused to pay either in whole or in part'.

It is contended, however, that the plaintiff by his complaint has chosen to condition the liability of the defendants upon a finding of non-liability on the part of the insurance company and that the dismissal of the insurance company was a change of theory which required notice to the defendants before proceeding against them. Section 43 of the Civil Practice Act provides in part as follows:

'When a party is in doubt as to which of two or more statements of fact is true, he may, regardless of consistency, state them in the alternative or hypothetically in the same or different counts or defenses, whether legal or equitable. A bad alternative does not affect a good one.'

This section does not mean that the plaintiff must submit evidence and attempt to prove two inconsistent alternatives. He may choose which alternative he will prosecute or abandon. In the case at bar it is apparent that the plaintiff abandoned the alternative seeking to lay liability at the door step of the insurance company. He may have been convinced that he could not sustain his action against the company. To pursue the other of the two alternatives does not constitute a change of theory nor the asking of relief beyond that prayed for in the prayer. To place undue stress on the words 'if' and 'then' in that portion of the complaint hereinbefore set out, on order to change what is designed to be an alternative pleading into a conditional pleading, puts too strict a burden upon the plaintiff and is not consonant with the liberal construction of pleadings that the Civil Practice Act was designed to accomplish.

A default admits every material and traversable fact alleged in...