{ "id": 2601895, "name": "Charles Gothberg, Sr., Individually and as Father and Natural Guardian of Leroy Gothberg, a Minor, Judgment Creditor, and O. Alfred Lundberg, Individually and as Father and Natural Guardian of Eloise Elaine Lundberg, a Minor, Judgment Creditor, Plaintiffs-Appellees, v. Leo Nemerovski, d/b/a Illinois State Auto Insurance Agency, Defendant-Appellant", "name_abbreviation": "Gothberg v. Nemerovski", "decision_date": "1965-04-26", "docket_number": "Gen. No. 49,834", "first_page": "372", "last_page": "391", "citations": [ { "type": "official", "cite": "58 Ill. App. 2d 372" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "219 NW 318", "category": "reporters:state_regional", "reporter": "N.W.", "year": 1928, "opinion_index": 0 }, { "cite": "205 Iowa 1264", "category": "reporters:state", "reporter": "Iowa", "case_ids": [ 8648829 ], "year": 1928, "opinion_index": 0, "case_paths": [ "/iowa/205/1264-01" ] }, { "cite": "27 F2d 859", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1735533 ], "year": 1928, "opinion_index": 0, "case_paths": [ "/f2d/27/0859-01" ] }, { "cite": "219 P 12", "category": "reporters:state_regional", "reporter": "P.", "year": 1923, "pin_cites": [ { "page": "14" } ], "opinion_index": 0 }, { "cite": "126 Wash 543", "category": "reporters:state", "reporter": "Wash.", "case_ids": [ 774512 ], "year": 1923, "opinion_index": 0, "case_paths": [ "/wash/126/0543-01" ] }, { "cite": "124 Mont 321", "category": "reporters:state", "reporter": "Mont.", "case_ids": [ 5144704 ], "weight": 2, "year": 1950, "opinion_index": 0, "case_paths": [ "/mont/124/0321-01" ] }, { "cite": "121 NE2d 509", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1954, "opinion_index": 0 }, { "cite": "3 Ill2d 318", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2697269 ], "year": 1954, "pin_cites": [ { "page": "322" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/3/0318-01" ] }, { "cite": "178 NE 498", "category": "reporters:state_regional", "reporter": "N.E.", "year": 1931, "opinion_index": 0 }, { "cite": "346 Ill 252", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5265823 ], "year": 1931, "pin_cites": [ { "page": "257, 258" } ], "opinion_index": 0, "case_paths": [ "/ill/346/0252-01" ] }, { "cite": "33 Ill App 503", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 4986116 ], "year": 1889, "opinion_index": 0, "case_paths": [ "/ill-app/33/0503-01" ] }, { "cite": "88 NE2d 477", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1949, "opinion_index": 0 }, { "cite": "404 Ill 136", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5306806 ], "year": 1949, "opinion_index": 0, "case_paths": [ "/ill/404/0136-01" ] }, { "cite": "112 NE2d 626", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1953, "opinion_index": 0 }, { "cite": "350 Ill App 328", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5108043, 5105878 ], "year": 1953, "pin_cites": [ { "page": "336" } ], "opinion_index": 0, "case_paths": [ "/ill-app/350/0328-02", "/ill-app/350/0328-01" ] }, { "cite": "151 NE2d 634", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1958, "opinion_index": 0 }, { "cite": "18 Ill App2d 211", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5188025 ], "year": 1958, "pin_cites": [ { "page": "216" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/18/0211-01" ] }, { "cite": "136 NE2d 608", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1956, "opinion_index": 0 }, { "cite": "11 Ill App2d 201", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5160287 ], "year": 1956, "pin_cites": [ { "page": "203, 204" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/11/0201-01" ] }, { "cite": "124 NE 822", "category": "reporters:state_regional", "reporter": "N.E.", "weight": 2, "year": 1919, "opinion_index": 0 }, { "cite": "290 Ill 26", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2420260 ], "weight": 2, "year": 1919, "pin_cites": [ { "page": "32" }, { "page": "33" } ], "opinion_index": 0, "case_paths": [ "/ill/290/0026-01" ] }, { "cite": "67 NE2d 298", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1946, "opinion_index": 0 }, { "cite": "329 Ill App 96", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5655121 ], "year": 1946, "pin_cites": [ { "page": "101" } ], "opinion_index": 0, "case_paths": [ "/ill-app/329/0096-01" ] }, { "cite": "9 NE2d 69", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1937, "opinion_index": 0 }, { "cite": "291 Ill App 6", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5621333 ], "year": 1937, "opinion_index": 0, "case_paths": [ "/ill-app/291/0006-01" ] }, { "cite": "190 NE2d 597", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1963, "opinion_index": 0 }, { "cite": "42 Ill App2d 17", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5249132 ], "year": 1963, "pin_cites": [ { "page": "28" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/42/0017-01" ] }, { "cite": "11 NE2d 836", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1937, "opinion_index": 0 }, { "cite": "292 Ill App 532", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3315187 ], "year": 1937, "pin_cites": [ { "page": "538" } ], "opinion_index": 0, "case_paths": [ "/ill-app/292/0532-01" ] }, { "cite": "49 NE2d 847", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1943, "opinion_index": 0 }, { "cite": "319 Ill App 587", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5650653 ], "year": 1943, "opinion_index": 0, "case_paths": [ "/ill-app/319/0587-01" ] }, { "cite": "185 NE 262", "category": "reporters:state_regional", "reporter": "N.E.", "year": 1933, "opinion_index": 0 }, { "cite": "352 Ill 63", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5295145 ], "year": 1933, "opinion_index": 0, "case_paths": [ "/ill/352/0063-01" ] }, { "cite": "171 NE2d 418", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 1 }, { "cite": "28 Ill App2d 266", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5217595 ], "opinion_index": 1, "case_paths": [ "/ill-app-2d/28/0266-01" ] }, { "cite": "142 NE2d 800", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 1 }, { "cite": "13 Ill App2d 554", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5169825 ], "opinion_index": 1, "case_paths": [ "/ill-app-2d/13/0554-01" ] }, { "cite": "127 NE2d 272", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 1 }, { "cite": "6 Ill App2d 240", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5138969 ], "opinion_index": 1, "case_paths": [ "/ill-app-2d/6/0240-01" ] }, { "cite": "62 NE2d 447", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 1 }, { "cite": "390 Ill 582", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2508533 ], "opinion_index": 1, "case_paths": [ "/ill/390/0582-01" ] } ], "analysis": { "cardinality": 1156, "char_count": 31294, "ocr_confidence": 0.519, "pagerank": { "raw": 9.577813225106941e-07, "percentile": 0.9812479414823027 }, "sha256": "95d81800fc57a9dac473f6a9a09d544cb26e7e1cf8d35058ff61654dc87a1b0e", "simhash": "1:bf57e5af1043c13d", "word_count": 5277 }, "last_updated": "2023-07-14T19:12:10.724902+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "KLUCZYNSKI, J., concurs." ], "parties": [ "Charles Gothberg, Sr., Individually and as Father and Natural Guardian of Leroy Gothberg, a Minor, Judgment Creditor, and O. Alfred Lundberg, Individually and as Father and Natural Guardian of Eloise Elaine Lundberg, a Minor, Judgment Creditor, Plaintiffs-Appellees, v. Leo Nemerovski, d/b/a Illinois State Auto Insurance Agency, Defendant-Appellant." ], "opinions": [ { "text": "MR. JUSTICE MURPHY\ndelivered the opinion of the court.\nDefendant, a licensed insurance broker, appeals from a $20,000 judgment entered against him in a nonjury trial. Defendant, having failed to perform his contract to procure public liability insurance covering Ronald Jackson, was held to stand in the place of the intended insurer and to be liable on judgments against Jackson, secured by the plaintiffs, to the extent of the coverage ordered.\nDefendant asserts (1) that he had no duty, as a matter of law, to obtain insurance coverage for Jackson before the date of the occurrence which resulted in the subject judgments against Jackson, and (2) plaintiffs, not being parties to the contract to procure insurance, have no cause of action against defendant for a breach, if any, of this contract.\nOn December 10, 1956, Ronald Jackson, a minor, telephoned the office of the Illinois State Auto Insurance Agency, a sole proprietorship operated by the defendant, Leo Nemerovski. In response to the call, Albert Levenstein visited Jackson\u2019s home on December 11, 1956. In the presence of Mrs. Jackson, his stepmother, Jackson and Levenstein discussed insurance coverage. Terms were agreed upon, and an ititial payment of $10 was made by Jackson to Levenstein. A receipt of the \u201cIllinois State Auto Insurance Agency,\u201d dated December 11, 1956, and signed by Levenstein, as agent, was given to Jackson. Levenstein then told Jackson and his mother, in response to their inquiry, that the policy would go into effect when he returned to the office \u201cwithin an hour.\u201d On the face of the receipt given to Jackson was stamped, \u201cThe Insurance For Which You Have Applied For Which This Is A Payment On Account Is Not Effective. Until A Written Binder Or Policy Is Issued And Delivered.\u201d\nSeveral days later, Jackson received a form letter on the letterhead of the \u201cIllinois State Auto Insurance Agency,\u201d signed by \u201cLeo Nemerovski.\u201d It opened with, \u201cIt is with sincere pleasure that we welcome you into our large and growing family of protected and satisfied policyholders. Our Mr. Levenstein has informed us that your insurance has been ordered as of December 12, 1956. The down payment required was $35.40 towards which you have paid $10 leaving a balance of $25.40 which must be paid ... by December 31, 1956 .... [W]hen the final payment has been made your policy will be mailed to you.\u201d The notice that was stamped on the receipt for $10 was also stamped on the letter. Under the heading of \u201cImportant,\u201d was printed: \u201cIf for some reason you find it impossible to make any of the payments on time, please telephone our office immediately so that we will understand and be able to help you with your problem, and thereby continue your insurance protection.\u201d (Emphasis supplied.)\nThe letter was first read by Mrs. Jackson, and after a discussion with her, Jackson telephoned the Illinois State Auto Agency. He asked to speak with Levenstein, and was told by a woman who answered the phone that Levenstein was not in the office. In response to her offer of assistance, he told her that he \u201cdidn\u2019t quite understand the letter\u201d of December 12, 1956; \u201cthat the letter led me to believe that I was insured and that after X read it I didn\u2019t understand whether I was or not.\u201d Indicating that she had Jackson\u2019s file in front of her, she said, \u201cYou have nothing to worry about. You have insurance as of December 12th because the application for the policy left here on December 14th.\u201d Jackson then asked \u201cif she could please repeat that to my mother because the car was in my father\u2019s name and I couldn\u2019t drive it until she knew that I was insured. She said, yes, she would repeat it. I then handed the telephone to my stepmother, and she spoke into it.\u201d\nJackson then began to drive the automobile and on December 23,1956, was involved in an automobile collision in the State of Minnesota. On December 26, 1956, Jackson went to defendant\u2019s office and asked if his policy had \u201ccome in yet,\u201d as he wanted to report an accident. A woman in the office told him, \u201cWell, if your \u2014 if the policy is dated after the accident your insurance wasn\u2019t in effect, so therefore it wasn\u2019t covered,\u201d and Jackson left the office.\nJackson continued to make the payments as agreed with Levenstein on December 11, 1956, and Prudence Mutual Casualty Company issued a policy covering Jackson, effective January 15,1957.\nPlaintiffs filed two separate actions in Minnesota against Jackson, on which they obtained default judgments in 1959. On April 21, 1960, plaintiffs sued defendant Nemerovski and Prudence Mutual to recover the limits of the policy, which they claim should have been procured for Jackson before the occurrence. Before trial and on motion of plaintiffs, Prudence Mutual was dismissed as a party defendant. The trial proceeded against Nemerovski, and judgment was entered against him for the limits of the policy ultimately issued to Jackson by Prudence Mutual.\nInitially, defendant contends (1) the acceptance by defendant of Ronald Jackson\u2019s application for insuranee was a \u201cconditional acceptance\u201d; (2) defendant was under no legal duty to procure insurance until Ronald Jackson paid the required initial premium; and (3) there was no competent evidence to show that the effective starting date of the insurance would he prior to the receipt of the full down payment.\nAs to the meeting with Levenstein on December 11, 1956, Jackson testified, \u201cI asked Mr. Levenstein how much of a down payment was required to make the policy effective, and he said $10. He also said that I would have three payments to make on the policy. I gave him the $10 and he gave me a receipt. After he gave me the receipt, my mother asked him when the policy would go into effect. He said the minute he got hack to the office and put it on file the policy would go into effect. He said that he intended to return to the office within an hour.\u201d Jackson further testified as to his telephone call of December 12, 1956, and his visit to defendant\u2019s office on December 26,1956.\nMrs. Jackson testified that on December 11, 1956, Levenstein came to their home and they went into the living room. Present were \u201cmy son Ronald and a companion by the name of Billy Joe Stroud. There was a conversation regarding different types of automobile insurance. An application for automobile insurance was made out, and my son gave him a payment of $10 toward the insurance. I asked Mr. Levenstein when this insurance would become effective, as the car was in my husband\u2019s name and we wouldn\u2019t let Ronald drive it until he was covered by insurance. He told me that Ronald would be covered as soon as he returned to his office and filed his application in about an hour.\u201d Mrs. Jackson further testified about the receipt of the letter of December 12, 1956, and her part in the telephone conversation. \u201cI identified myself and told the other party that we had received plaintiff\u2019s exhibit 1 [letter of December 12, 1956] and that neither I nor my son conld understand it. We read the letter thanking us for placing the policy and then there was a stamp at the bottom and we don\u2019t understand it, and I wanted to know if he [Ronald Jackson] was covered or not. . . . She assured me that he was fully covered because the policy had been applied for and was mailed out of their office on the 14th of December, 1956.\u201d Also, Mrs. Jackson identified Levenstein in open court.\nDefendant Nemerovski testified that he was the sole owner of the Illinois State Auto Insurance Agency. He was a broker, licensed to sell insurance and represent persons in the procuring of insurance. During the period from November 1956 through February 1957, he personally employed no female employees. The total amount of premium received for the policy of insurance issued to Ronald Jackson was $101.40. Of this amount, $64.08 represented the premium and the balance represented a service charge for financing the payment of the premiums. \u201cWhen an uninsured person applies for insurance, the general custom is to issue the policy as of the date of the application for insurance, even though the policy might not be issued for a week or more thereafter. When a policy of insurance is ordered by a broker, whether through an agent or another broker, or directly from the company, the issued policy is delivered to the ordering broker or agent of the particular company and not to the insured.\u201d\nThe Prudence Mutual policy issued to Jackson \u201cwas not delivered from the company to me but to C. Waters, as the broker. He later delivered it to me. I did not deliver that policy to Ronald Jackson, but I have retained it in my files. . . . The $10 payment by Ronald Jackson towards the down payment for his insurance was received by Mr. A1 Levenstein on December 12, 1956, and forwarded to me. He was the broker who solicited the business. I furnished him with forms of receipt that he was to issue when he received any payment.\u201d Levenstein was paid for his services on a commission basis.\nOn cross-examination, Nemerovski testified that when financing a policy, \u201cit is customary to hold the original policy so that in case of a delinquency we have it in our possession to return for cancellation. The insurance company looked to me, not the insured, for the premium. The insurance company was not interested in the fact that I financed the policy. The insurance policy would be dated the day following the day on which I ordered it. I did not send the application of Ronald Jackson to the insurance company until sometime in January when I received the balance of his down payment. That was in line with the agreement. When I say \u2018that was the agreement,\u2019 I don\u2019t know what the conversation was between Ronald Jackson and A1 Levenstein; but that was the system that I had. The reason for making no application for insurance coverage of the type applied for by Ronald Jackson until the down payment had been received is as follows: When we order a policy, we are liable for the premium. If I order a policy with no money, or with a few dollars, and the balance is not paid, then the policy has to be cancelled and I would have to pay for the earned premium. If I had received the down payment on December 12, 1956, I would have ordered the policy at that time.\u201d\nAlbert Levenstein testified that he called on Jackson at his home on December 10th or 11th in the afternoon. \u201cAt this meeting only Mr. Jackson and myself were present. There was no one else. Our discussion took place in the living room of Mr. Jackson\u2019s home. ... I showed him what the coverages were that were afforded, $10,000 for injury to one person, $20,000 if there were two or more people involved in the accident and $5,000 for property damage to others. I may have gone into a much more detailed explanation. We normally do. Then I told him what it would cost to obtain this insurance and the breakdown of the payment schedule. I said that $35.40 would be the required down payment. Mr. Jackson related that he did not have the full $35.40, but only $10, and asked me whether this would insure him. I said that this would not. I took the $10 from him with the stipulation that this was a deposit against the down payment and that there was no coverage afforded with the $10. The normal procedure on any application that I wrote would be the full down payment must be paid. ... I did not have any conversation with Mrs. Jackson.\u201d On cross-examination, he testified, \u201cI did not have anything to do directly with sending plaintiff\u2019s Exhibit 1 [letter of December 12,1956].\u201d\nDefendant cites Snow v. Schulman, 352 Ill 63, 185 NE 262 (1933), to show that \u201cto constitute a contract by offer and acceptance the acceptance must conform exactly to the offer . . . .\u201d Jennings v. Illinois Automobile Club, 319 Ill App 587, 49 NE2d 847 (1943), is cited to show that \u201c[I]t is an elementary rule that where an acceptance is qualified by a specific statement of the obligation to be assumed, there is either a contract in the terms of the acceptance or no contract at all.\u201d Prom these authorities, defendant argues that \u201cin the case at bar any contract to procure insurance was conditioned upon a written binder or policy being issued and delivered, or there was no contract. . . . both the receipt given to Ronald for his $10 and the letter to Ronald from Mr. Nemerovski contained the condition that the insurance was not effective until a written binder or policy was issued and delivered. No testimony by Ronald Jackson can alter the fact that the defendant\u2019s acceptance was qualified.\u201d\nThe weight of the evidence as to what occurred on December 11, 1956, indicates that Levenstein\u2019s acceptance of the contract to procure insurance was not qualified. (Chamblin v. New York Life Ins. Co., 292 Ill App 532, 538, 11 NE2d 836 (1937).) Jackson and his mother made it clear they wanted insurance coverage on December 11, 1956, and not later. Levenstein told them the policy would go into effect within an hour. At the top of the $10 receipt, \u201c12/11/56\u201d is inserted under the printed words \u201cDate of contract.\u201d The receipt further states the $10 is \u201cto apply on premium (s) and charges in accordance with contract (s) dated-.\u201d The letter of December 12, 1956, welcomed Jackson \u201cinto our large and growing family of protected and satisfied policyholders,\u201d and warned him if he could not make the payments to \u201cplease telephone our office immediately so that we will understand and be able to help you with your problem, and thereby continue your insurance protection.\u201d (Emphasis supplied.) The letter further stated that \u201cyour insurance has been ordered as of December 12, 1956.\u201d From the language of both of these documents, we believe that any reasonable man would conclude that he had existent coverage.\nHowever, defendant argues that his acceptance of the contract to procure insurance was qualified because of the notice, stamped on both the receipt and letter, which stated that the insurance was not effective \u201cuntil a written binder or policy is issued and delivered.\u201d (Emphasis supplied.)\nWe think the purport of the stamp is ambiguous, and that the ambiguity is heightened by the statement in the letter that the policy will be delivered, mailed, to the insured when the final payment has been made. Under the facts present here, the average person seeking insurance coverage, would have difficulty understanding the effect of this stamp. Neither Jackson nor Ms mother understood it, and attempted to procure a clarification by immediately telephoning defendant\u2019s office. The rule to be applied here is that \u201cwhere a provision is ambiguous, the contract is construed against the drafter of the instrument.\u201d Maretti v. Midland Nat. Ins. Co., 42 Ill App2d 17, 28, 190 NE2d 597 (1963).\nThe evidence of the procedure followed by Jackson and Ms mother, to definitely ascertain the date on which insurance coverage would begin, is competent extrinsic evidence to demonstrate that defendant contracted to procure insurance coverage commencing \u201cprior to the receipt of the full down payment.\u201d (Ouska v. Pearson, 291 Ill App 6, 9 NE2d 69 (1937).) Jackson telephoned defendant\u2019s office immediately, using the telephone number set forth on the letterhead. He asked to speak with Levenstein and was informed by the woman who answered the phone that he was not in the office. She asked if she could help, at which time both Jackson and his mother informed her of their concern about the effective date of Jackson\u2019s coverage, and she told them both that he had insurance \u201cas of December 12th.\u201d We note that although defendant testified that he did not have any female employees during the period in question, he did testify on cross-examination that there was a typist named Dorothy Eaton employed by \u201cWells Insurance Agency, Inc.,\u201d and that \u201cWells Insurance\u201d occupied the same quarters and used the same telephone number. Also, the letter of December 12, 1956, contains the initials \u201cLN:de\u201d after the signature of \u201cLeo Nemerovski.\u201d\nAs was said in Korch for use of Doody v. Indemnity Ins. Co., 329 Ill App 96, 101, 67 NE2d 298 (1946):\n\u201c . . . [A]nyone who answers a telephone call at a place of business is presumed to speak for the company in respect to the general business carried on by snob company; that a business concern, by installing a telephone to be used in the transaction of its affairs, impliedly invites the public to make use of that means of communication which is thereby made an agency for the transaction of its business, and persons dealing with it by telephone have the right to assume that the one answering the telephone of the company is clothed with authority to transact the business conducted.\u201d\nWe believe this conversation was competent evidence to be considered in construing the stamp which appeared on both the receipt and letter.\nThe essential elements of a contract to procure insurance are present in this record. \u201cIt is sufficient if one of the parties to such a contract proposes to be insured and the other party agrees to insure, and the subject, the period, the amount and the rate of insurance are ascertained or understood and the premium paid if demanded.\u201d (Cottingham v. National Mut. Church Ins. Co., 290 Ill 26, 32, 124 NE 822 (1919).) It is also the rule that \u201cpreliminary contracts to insure may be proved by parol as well as written evidence,\u201d and there is competent evidence here \u201cfrom which it may be implied that the parties understood the period of coverage, the amount of the policy, or the rate of insurance.\u201d Pimentil v. Milo Brooke, Inc., 11 Ill App2d 201, 203, 204, 136 NE2d 608 (1956).\nWe hold the trial court was correct in finding that defendant unconditionally undertook to procure public liability insurance for Ronald Jackson, effective on December 12,1956.\nThe measure of damages for the breach of a contract to procure insurance is to be determined by the terms of the policy which the broker failed to procure. It is said in Johnson v. Illini Mut. Ins. Co., 18 Ill App2d 211, 216, 151 NE2d 634 (1958):\n\u201cIf 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\u2019s 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.\u201d\nIt is undisputed that on January 14, 1957, without any further negotiations as to the terms of the policy, defendant ordered a policy for Jackson which was issued by Prudence Mutual Casualty Company, effective January 15, 1957 (plaintiff\u2019s Exhibit 3, produced by defendant). With the exception of the inception date, this policy determined the liability of defendant to the same extent as the insurer would have been liable had the policy issued as of December 12, 1956. Cottingham v. Nat. Church Ins. Co., 290 Ill 26, 33, 124 NE 822.\nWe consider next defendant\u2019s contention that, as a matter of law, plaintiffs have no standing to sue defendant directly for breach of his agreement with Jackson. Defendant argues there is no statute in Illinois, applicable to defendant, which authorizes a right of recovery against him by these plaintiffs, and there is no policy of insurance which contains a provision permitting this action.' Defendant further argues that he was acting solely as the agent of Ronald Jackson (Moone v. Commercial Cas. Ins. Co., 350 Ill App 328, 336, 112 NE2d 626 (1953)); and that \u201cthe principles of law applicable to principal and agent govern their respective rights and liabilities,\u201d (City of Chicago v. Barnett, 404 Ill 136, 88 NE2d 477 (1949)); \u201can agent is liable only to his principal for a mere breach of contract,\u201d (Baird & Bradley v. Shipman, 33 Ill App 503 (1889)); \u201can agent is not responsible to a third person for injury resulting from mere nonfeasance, meaning by that term the omission of the agent to perform a duty owed solely to his principal by reason of agency, . 3 C JS, Agency, \u00a7 223, p 134; 3 Am Jur2d, Agency, \u00a7 300, p 661.\nIn substance, defendant contends that the plaintiffs cannot recover under the third party beneficiary doctrine because the contract was not made for their direct benefit, and, if anything, they are only incidental beneficiaries. Defendant argues for the application of the rule stated in Carson Pirie Scott & Co. v. Parrett, 346 Ill 252, 257, 258, 178 NE 498 (1931):\n\u201cThe test is whether the benefit to the third person is direct to him or is but an incidental benefit to him arising from the contract. If direct he may sue on the contract; if incidental he has no right of recovery thereon. . . .\n\u201c. . . The rule is, that the right of a third party benefited by a contract to sue thereon rests upon the liability of the promisor, and this liability must affirmatively appear from the language of the instrument when properly interpreted and construed. The liability so appearing can not be extended or enlarged on the ground, alone, that the situation and circumstances of the parties justify or demand further or other liability.\u201d\nBecause of the peculiar significance of automobile liability insurance as well as the provisions of the policy contemplated by the parties and eventually issued, we do not agree with defendant\u2019s theory. We believe that these plaintiffs can sue defendant directly. The plaintiffs can be considered third party beneficiaries of the contract to procure insurance entered into between Jackson and defendant, that is, they had a suffieient interest in such a contract to bring suit directly for its breach. In entering into this contract to procure insurance, it is a fair and reasonable inference that Jackson and his mother were contemplating possible injury to unidentified third parties, and the insurance coverage was for the direct benefit of third parties who might be injured through Jackson\u2019s negligence. Because Jackson, as the insured, was to be directly benefited by the insurance coverage, does not preclude the fact that others were also intended to be directly benefited.\nThe general public, subjected to possible injury through Jackson\u2019s negligent operation of a motor vehicle, possessed more than a mere \u201cincidental\u201d benefit from the contract to procure public liability insurance. It was, in effect, a real party in interest to this contract. The procuring of automobile public liability insurance of the type contemplated has connotations extending to the general public above and beyond the private interests of the two contracting parties. As was said by our Supreme Court in Simmon v. Iowa Mut. Cas. Co., 3 Ill2d 318, 322, 121 NE2d 509 (1954):\n\u201cAutomobile insurance has taken an important position in the modern world. It is no longer a private contract merely between two parties. The greater part of litigation in our trial courts is concerned with claims arising out of property damage, personal injury or death caused by operation of motor vehicles. The legislatures of all our States have recognized the hazards and perils daily encountered and as a result have enacted various pieces of legislation aimed at the protection of the injured party. Financial Responsibility acts, Unsatisfied Judgment Fund acts, and other similar laws are direct results of this concern. That the general welfare is promoted by such, laws can be little doubted. Government and the general public have an understandable interest in the problem. Many persons injured and disabled from automobile accidents would become public charges were it not for financial assistance received from the insurance companies.\u201d (Emphasis supplied.)\nThe fact that plaintiffs\u2019 identity may not have been known at the time the contract to procure insurance was made does not prevent them from assuming the status of third party beneficiaries. See generally: Selby v. Victoria Mines, 124 Mont 321, 221 P2d 423 (1950); Finkelberg v. Continental Cas. Co., 126 Wash 543, 219 P 12, 14 (1923); Slavens v. Standard Acc. Ins. Co. of Detroit, 27 F2d 859 (1928); Durband v. Nicholson, 205 Iowa 1264, 219 NW 318 (1928).\nThe plaintiffs\u2019 direct interest in this contract to procure insurance is buttressed by the policy contemplated by the parties, and eventually issued. It contained a specific provision inuring to the benefit of persons like the plaintiffs, giving them a right to recover directly against the insurance company: \u201cAny person or organization or the legal representative thereof who has secured such judgment . . . shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy.\u201d If this policy were in effect at the time of the collision, the plaintiffs, judgment creditors, would have had a direct cause of action against the insurance company. Holding as we do, that the liability of defendant is to be determined by the terms of the contemplated policy, we see no reason to withhold from plaintiffs the right to recover directly from defendant to the same extent they could have recovered from the insurer if the contemplated policy had been timely issued.\nFor the reasons given, the judgments of the trial court are affirmed.\nAffirmed.\nKLUCZYNSKI, J., concurs.", "type": "majority", "author": "MR. JUSTICE MURPHY" }, { "text": "BURMAN, P. J.,\ndissenting:\nThe principal issue raised by this appeal is whether an insurance agent should be held liable on his contract to procure insurance to the same extent as an insurer on the basis of parole evidence as against the written documents exchanged between the parties.\nFrom the documents involved in the transaction in question, it is clear that Ronald Jackson, the would-be insured, would not be covered by the automobile insurance policy for which he had paid $10 on account until a written binder or policy was issued and delivered. Language expressing such a condition was stamped both on the face of the receipt which Ronald received on December 11, 1956', when the first discussion took place, and again on the face of the letter which Ronald received several days later. The condition recited:\nThe Insurance For \"Which You Have Applied For Which This Is A Payment On Account Is Not Effective Until A Written Binder Or Policy Is Issued And Delivered\nFurthermore, it is clear from the letter which Ronald received that delivery of the policy was in turn conditioned upon payment of the full amount of the down payment of $35.40. The letter stated that:\nThe down payment required was $35.40 towards which you have paid $10.00 leaving a balance which must be paid as follows:\nBy Dec. 31,1956 $25.40\n.... [W]hen the final payment has been made yonr policy will be mailed to you.\nI believe that these provisions, when considered together, conditioned the agent\u2019s agreement to obtain effective insurance coverage for Ronald on delivery of the binder or policy, which in turn was conditioned on full payment of the $35.40 down payment.\nI do not believe that any other language contained in these documents creates any ambiguity either about the effective date of the policy or about the nature of the agent\u2019s contract to procure insurance. The notation \u201c12/11/56\u201d which was written under the printed words \u201cDate of Contract\u201d on the receipt does not, in my opinion, indicate the effective date of the insurance policy; rather it indicates the date on which the payment on account was received and on which the contract to procure insurance was made. Other language in the letter welcoming Ronald to the \u201cfamily of protected and satisfied policy holders,\u201d offering assistance if Ronald needed help with premium payment problems, and stating the date on which the insurance was \u201cordered,\u201d deals only indirectly and inferentially with the effective date of the policy. That language does not, in my opinion, create an ambiguity in the face of the language quoted above which directly and specifically states the conditions precedent to obtaining an effective policy.\nIn my opinion, the written documents clearly state that the remittance of the full down payment of $35.40 and delivery of a binder or a policy were conditions precedent to the agent\u2019s obligation under his contract to obtain an effective policy of insurance, and that this was understood and agreed to by the parties. Indeed, Ronald knew he was not covered by the insurance until he remitted the full amount because he claims that he called the agent\u2019s office upon receipt of the letter to find ont whether he was insured.\nIn the face of these unambiguous, written documents, I do not believe that the conversations between the parties concerning the effective date of the policy-can be considered in order to establish a contract which is different from that which is unambiguously expressed in the written agreement. The object of construction of a contract is to ascertain the intention which the parties have expressed in the language of the contract, and where there is no ambiguity in the terms used, the instrument itself is the only criterion of the intent of the parties. Abingdon Bank & Trust Co. v. Bulkeley, 390 Ill 582, 62 NE2d 447; Lewis v. Real Estate Corp., 6 Ill App2d 240, 127 NE2d 272; Chicago Land Clearance Comm. v. Jones, 13 Ill App2d 554, 142 NE2d 800; Belanger v. Seay & Thomas, Inc., 28 Ill App2d 266, 171 NE2d 418.\nIt is uncontroverted that prior to the accident Ronald did not pay the full amount of the $35.40 down payment which accounts for the fact that he did not receive either a binder or a policy. Hence, under the clear terms of the agent\u2019s agreement to obtain insurance, the conditions precedent to his duties under the contract were not met and the agent should not be held liable as an insurer for an amount which, under the policy, could total as much as $20,000. I do not believe that the agent unconditionally accepted this large risk for a consideration of only $10; he agreed to obtain insurance coverage only on payment of $35.40, of which the $10 which Ronald remitted was only a payment on account. It appears that the agent was making every effort to obtain a policy for Ronald, an eighteen-year-old boy who the agent had turned down on a previous occasion because he did not meet the underwriting requisites. However, the agent agreed to obtain insurance for Ronald only on the explicit understanding that Ronald pay the full down payment and that he would have effective insurance coverage only upon receipt of a hinder or policy. These conditions were unambiguously expressed in the written contract and subsequent parole evidence, particularly concerning Ronald\u2019s telephone conversation with an unidentified person in the agent\u2019s office, should not he heard to alter these clear conditions.\nFor these reasons, I would reverse the judgment of the trial court.", "type": "dissent", "author": "BURMAN, P. J.," } ], "attorneys": [ "Kahn, Adsit & Arnstein, of Chicago (John F. McClure and John D. Cummins, of counsel), for appellant.", "Philip Gr. Brennan and Robert J. Martineau, of Chicago (Philip Gr. Brennan, of counsel), for appellees." ], "corrections": "", "head_matter": "Charles Gothberg, Sr., Individually and as Father and Natural Guardian of Leroy Gothberg, a Minor, Judgment Creditor, and O. Alfred Lundberg, Individually and as Father and Natural Guardian of Eloise Elaine Lundberg, a Minor, Judgment Creditor, Plaintiffs-Appellees, v. Leo Nemerovski, d/b/a Illinois State Auto Insurance Agency, Defendant-Appellant.\nGen. No. 49,834.\nFirst District, First Division.\nApril 26, 1965.\nKahn, Adsit & Arnstein, of Chicago (John F. McClure and John D. Cummins, of counsel), for appellant.\nPhilip Gr. Brennan and Robert J. Martineau, of Chicago (Philip Gr. Brennan, of counsel), for appellees." }, "file_name": "0372-01", "first_page_order": 382, "last_page_order": 401 }