Issue: Title to the Wellington Building was vested in the LaSalle National Bank as Trustee for Julius Mark and Ada Mark, who owned one-half interest, and Norbert Ross and Ilse Ross, who owned the remainder.

On November 30, 1967, an OLT policy was issued, effective as of November 8, 1967, to the LaSalle National Bank individually and as Trustee under Trust #31386, and the policy also covered all beneficiaries under the trust.

Where subsequent transfers of title were made without notice to the insurance company, could the insurance company be held liable to defend an action brought as a result of injuries sustained on the premises on February 2, 1969?

Judgment: The record showed that in March, 1968, the LaSalle National Bank as Trustee conveyed the Wellington property to the beneficiaries of the trust. Thereafter, the Marks conveyed their interest to their children, and subsequently a new trust was created with Chicago City Bank and Trust Company as Trustee. Finally, on September 9, 1968, Julius Mark and Ada Mark were the sole beneficiaries under the second trust.

No notice of the transfers of title was ever given to the insurance carrier, and no assignment was made of the policy.

On February 2, 1969;, Maria Lopez allegedly sustained an injury on the premises of the Wellington property, and filed suit for damages against Julius Mark and Ada Mark. Thereafter, Mr. and Mrs. Mark demanded that the insurance carrier defend the action, and the insurance company filed this suit to determine its liability.

The trial court found that Mr. and Mrs. Mark were covered under the policy, and the company appealed. The Appellate Court found that the accident was not within the coverage of the policy, even though Mr. and Mrs. Mark eventually became the sole beneficiaries under the second trust.

The higher court said that, in order to claim coverage under the policy, Mr. and Mrs. Mark had to be able to claim as beneficiaries under the LaSalle National Bank Trust No. 39386. While they might be the "real parties in interest," their rights under the insurance policy were relinquished when the property was conveyed out of the trust by the Trustee, without an assignment of the policy. They were not in the same position under the subsequent trust; therefore, the policy did not cover the accident on February 2, 1969.

The judgment of the lower court against the insurance company was reversed.

Founders Mutual Casualty Company, v. Julius Mark et al – Appellate Court of Illinois, 1st District – Fifth Division – August 3, 1973 – 302 North Eastern Reporter (2d) 142. (Rough Notes Magazine July 1974).