Jung v. Siegal

• Decision Date: 24 March 1942
• Docket Number: Gen. No. 42007.
• Citation: 314 Ill.App. 67,40 N.E.2d 840
• Court: United States Appellate Court of Illinois
• Parties: JUNG v. SIEGAL ET AL. (LONDON GUARANTEE & ACCIDENT CO., LIMITED, GARNISHEE).

314 Ill.App. 67

40 N.E.2d 840

JUNG

v.SIEGAL ET AL. (LONDON GUARANTEE & ACCIDENT CO., LIMITED, GARNISHEE).

Gen. No. 42007.

Appellate Court of Illinois, First District, Second Division.

March 24, 1942.

Appeal from Municipal Court of Chicago; Joseph J. Drucker, Judge.

Action by John Jung against Norman Siegal and others for damages arising out of an automobile collision. A judgment was entered against the named defendant in favor of the plaintiff. An execution was returned no property found, and the plaintiff brought garnishment proceedings against the London Guarantee & Accident Company, Limited, which had issued an automobile liability policy to the named defendant. From an adverse judgment, the London Guarantee & Accident Company, Limited, appeals.

Judgment affirmed.

John E. Wilson, of Chicago, for appellant.

Peden, Melaniphy, Ryan & Andreas, of Chicago (John C. Melaniphy and Gerald Ryan, both of Chicago, of counsel), for appellee.

SCANLAN, Presiding Justice.

A garnishment action based upon a tort judgment entered against Norman Siegal, defendant, in favor of John Jung, plaintiff, for $186.66 and costs. The garnishment action was tried by the court without a jury and the issues were found against the garnishee, London Guarantee & Accident Co., Limited, a corporation, and damages were assessed at $197.75. The garnishee defendant appeals from a judgment entered upon the finding.

The statement of claim alleges the facts in relation to the tort judgment; alleges that an execution was returned, “No property found,” and asks that summons issue against defendant garnishee and that the latter be required to answer in writing, under oath, certain interrogatories attached to the statement of claim. It is only necessary to refer to the fifth, as that interrogatory and defendant garnishee's answer to the same present the issue in the case. Interrogatory 5 reads as follows:

“Interrogatory 5. Has said corporation garnishee defendant now in its possession any property, goods, chattels, rights, credits or effects of any kind belonging to said defendant Norman Siegal or in which said defendant is interested, and if so, describe the same fully and particularly, giving amounts, items and values thereof. Especially, did you, the corporation garnishee defendant, issue to defendant Norman Siegal, on 1-12-40, your National Standard Automobile Liability Policy, No. K. D. 201934, covering 1939 Mercury coupe sedan, auto-motor No. 99A67289, which auto was involved in the collision on Jan. 28, 1940 with plaintiff's auto, out of which the judgment arose, and in which Policy you insured N.S. against property damage liability to extent of $5000.00.”

Defendant garnishee first answered the interrogatory as follows: “Issued, but never effective.” Upon motion of plaintiff the said answer was stricken upon the ground of insufficiency. The garnishee defendant then filed the following answer: “Answer: Policy was issued, but never effective, due to the fact that it was cancelled as of the date of issue, because of false warranties made to obtain the Policy, which would not have been issued if the false warranties had not been made; and for failure to pay the premium required under the terms and conditions of the Policy.”

Defendant garnishee contends: “I. Plaintiff in a garnishment proceeding has no greater rights against the garnishee defendant than are possessed by the original defendant. Plaintiff * * * can recover only such benefits as the insured might recover in an action upon a contract or policy of public liability insurance. II. The court erred in finding that the policy was in force and effect, and in failing to find that the policy was void ab initio. A. Where a policy is issued as result of false statements, the policy is void ab initio, and the defendant and his judgment creditor are bound by the terms and conditions of the policy. B. Where the policy is issued in consideration of the premium and the statement in the policy, the policy does not become effective until the premiums are paid.”

On January 12, 1940, defendant garnishee issued its automobile policy to Norman Siegal, defendant in the original action, for public liability and property damage, for one year. On January 28, 1940, defendant's car, covered by the policy, was involved in a collision with a car belonging to John Jung, plaintiff, and as a result of the collision the latter recovered a judgment against defendant, on April 7, 1941, for $186.66. An execution was returned on April 28, 1941, “No property found.” On March 14, 1940, forty-six days after the accident, garnishee defendant mailed to defendant Siegal the following letter:

“March 14, 1940

“Registered Mail

“Mr. Norman Siegal,

“Moto Scoot Manufacturing Co.

“7723 Essex Avenue

“Chicago, Illinois

“Dear Mr. Siegal:

“Relative to London Guarantee & Accident Co. policy KD-201934 issued for you effective as of January 12th, 1940 to expire January 12th, 1941, we find that there is a breach of warranty in the statements thereof and we therefore consider that the policy has been of no effect and has been null and void from its effective date.

“We also observe that the premium thereon has not been paid.

“Very truly yours,

“London Guarantee & Accident Co. Ltd.

“Conkling, Price and Webb,

“General Agents.

“By _________________________

“INZ :hb”

Garnishee defendant designates this letter “as a written notice of the cancellation of the policy.” It will be noted that the letter does not specify what statements constituted “a breach of warranty,” nor does defendant garnishee's answer to interrogatory 5 state what “false warranties” were made to obtain the policy. It was during the trial that the defendant garnishee first disclosed the ground upon which it based a right to cancel the policy. Strictly speaking, defendant Siegal made no representations nor warranties. A representation is a statement proffered by insured as a basis for the contract. A warranty consists of a statement by insured upon the literal truth of which the validity of the contract depends. A misrepresentation is a false representation of a material fact by one of the parties to the other tending directly to induce the other to enter into the...