Roon v. Van Schouwen

Mr. Justice Feinberg

delivered the opinion of the court.

This appeal is from a judgment in favor of the garnishee defendant. Plaintiff obtained a judgment in a personal injury action against defendant Van Sehouwen for alleged injuries, occurring on April 9, 1945. Defendant Van Sehouwen had an insurance policy with the garnishee. The garnishee defended upon the ground that the policy had been canceled and was not in force at the time of the accident. The only question presented upon this appeal is whether the garnishee had canceled the policy in accordance with the provision in the policy. The provision read:

“This policy may be cancelled at any time by the Insured by written notice to the Company at its home office at Chicago, Illinois, or may be cancelled by the Company by giving at least five (5) days notice, in writing, of such cancellation mailed to the insured at the address stated in the policy, which shall be sufficient notice.”

The cancellation notice relied upon, sent to the insured, was a letter dated March 1, 1945, which read:

“Be: Employers Liability Policy #2146

“We acknowledge receipt of the estimated advance premium due to renew the above policy. Ton did not file a labor record as required in the policy and this policy cannot be continued unless you do furnish us with the information on the amount of labor you employed during the past six months.

“We are enclosing a form to be used by you in reporting the labor used in the past six months. This is a simple form and should not be difficult at all for you to fill out and file. Please fill it out and return it to us at once.

“This policy will be cancelled on Mar. 16, 1945 unless you furnish us a report of the amount of labor employed by you during the past six months period. ’ ’

On April 6, 1945, defendant wrote to the insured as follows:

“Be: E. L. Policy # 2146

“In accordance with our letter dated March 1st, in which we advised you that unless you file a labor record the policy would be cancelled on April 1, 1945, we are cancelling this policy as of that date.

“If you desire to reinstate the policy at this time the Advance Cash Premium is $90.00. You will not need to pay another policy fee if this policy is reinstated within a year from the date of cancellation. After that date there will be a $5.00 policy fee charged. ’ ’

The evidence disclosed that the garnishee had upon its own records entered a cancellation of the policy as of April 1, 1945. This notice relied upon as effective cancellation of the policy is almost identical with that in Fisher for use of Kiniry v. Associated Underwriters, Inc., 294 Ill. App. 315, where this court (Third Division) held that it was not a proper notice of cancellation, was not a compliance with a provision of the policy, almost identical with that in the instant case, and that the garnishee was liable. We fully agree with the reasoning in the Fisher case, and we think it is controlling in this case.

In the Fisher case, supra, the notice stated that “unless Premium thereon shall be paid to us on or before 12 o’clock noon, of July 17, 1933, we shall cancel the Insurance nnder said Policy upon our books.” In the instant case the notice was identical except instead of premium it called for a report. In the Fisher case, there having been no compliance with the notice, the company on a subsequent day — namely, September 26, 1933 — notified the insured that the policy had been canceled as of July 17, 1933, for nonpayment of premium. The court in construing the notice said:

“It is quite evident that the company did not intend to cancel the policy if the premium was paid within the time specified, but if it was not paid, the company would then take further steps to effect a cancellation ‘on the books’. ...”

The court cites McNellis v. Aetna Ins. Co., 176 Ill. App. 575, in which it was held that such a notice is not in itself a cancellation, and states that there is no evidence in the record that any future action was taken of which Fisher had notice, except the letter dated September 26, 1933. Continuing, the court said:

“It is a doctrine in this State that where a question arises as to the legal construction to be placed upon the language of an insurance policy, the same should be strictly construed in favor of the insured. This doctrine would be particularly applicable in a case such as the one before us where it relates to the company having the right of cancellation, as forfeitures are not favored in the law.” (Citing Budelman v. American Ins. Co., 297 Ill. 222, 227.)

There were other questions in the Fisher case, but the court clearly stated:

“The main defense of the garnishee in this case appears to be the cancellation of the policy.”

The decision in that case clearly turned upon the question of whether the notice was legally effective as a notice of cancellation.

For the reasons indicated the judgment of the superior court is reversed and the cause remanded with directions to enter judgment for the plaintiff, against the garnishee, for the amount found to be due.

Reversed and remanded with directions.