Colker v. Connecticut Fire Insurance Co.

• Decision Date: 04 February 1927
• Parties: Colker v. Connecticut Fire Insurance Company.
• Court: United States State Supreme Court — District of Kentucky

218 Ky. 124

Colker v. Connecticut Fire Insurance Company.

Court of Appeals of Kentucky.

Decided February 4, 1927.

1. Insurance — Maintenance by Tenant of Still Without Insured's Knowledge Held Not to Relieve Insurer from Liability; Provision for Avoiding Policy by Increased Hazard Not Being Applicable. — Where property owner, after taking out insurance, disconnected structure from remainder of chewing gum factory and leased it to

tenant for storage purposes, insurer held not released from liability for loss through fire by fact that tenant, without consent or knowledge of insured, operated still on premises; provision for avoiding policy because of increased hazard not relieving insurer from liability in such case.

2. Insurance — Insurer Held Not Relieved from Liability for Fire Loss, Under Provision that Premises should Only be Used as Gum Factory, Through Tenant's Maintenance of Still Without Knowledge of Insured. — Where tenant of insured, without his knowledge or consent, operated still on insured premises, insurer held not relieved from liability for loss through fire by provision granting permission to use premises for chewing gum factory; increase of hazard within knowledge or control of insured or in violation of standard policy warranty being required.

Appeal from Campbell Circuit Court.

HOWARD M. BENTON for appellant.

HORACE W. ROOT for appellee.

OPINION OF THE COURT BY JUDGE DIETZMAN.

Reversing.

The appellant, who was the owner of a building used by him as a chewing gum factory, insured it against loss by fire with the appellee in the sum of $3,000, represented by two policies, standard in form, one for $2,000, and the other for $1,000. At the time this insurance was effected, a corrugated iron structure, which then formed a part of the factory building, was used by the appellant as a place of storage. Thereafter he disconnected this corrugated iron structure from the main factory building, leaving a space of some 5 feet between them. He then leased the corrugated iron structure to a tenant for storage purposes. Later a fire destroyed all the buildings on the premises. Learning that at the time of the fire the appellant's tenant had erected and then operated a large moonshine still in the corrugated iron structure he had leased from the appellant, the appellee declined to pay any part of its policies above mentioned. Appellant thereupon brought this suit to recover on these policies. The appellee defended under two clauses of the policies, one of which reads:

"This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void . . . if the hazard be increased by any means within the control or knowledge of the insured;. . . or if any change, other than by death of an insured, take place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard) whether by legal process or judgment or by voluntary act of the insured or otherwise."

And the other of which reads:

"Permission granted for such use of the premises as is usual and incidental in the business, as conducted therein, of chewing gum factory, and when not in violation of any law, statute, or municipal restriction, to keep and use all articles and materials usual and incidental to said business, in such quantities as the exigencies of the business require."

Pausing, we may say that the words "chewing gum factory" in this clause appear only in the $1,000 policy, and do not appear in the $2,000 policy. With these clauses as a base, the appellee averred in its answer that the appellant either caused, suffered, or permitted the moonshine still mentioned to be used and operated in the building, or, if he did not so suffer or permit the...