Conley v. Queen Ins. Co. of America

• Decision Date: 04 December 1934
• Parties: Conley v. Queen Insurance Co. of America.
• Court: United States State Supreme Court — District of Kentucky

256 Ky. 602

Conley v. Queen Insurance Co. of America.

Court of Appeals of Kentucky. Criminal, Common Law, and Equity Division.

Decided December 4, 1934.

1. Insurance. — Vacancy clause is not waived where vacancy is known to insurer at time of issuance of fire policy, in absence of agreement or expectation that premises should remain vacant beyond vacancy period.

2. Insurance. — That insured when taking out fire policy and paying premium, and again when policy was delivered, informed agent that insured property was vacant and agent did not ask or require her to take out vacancy permit or inform her that unless she did so policy would be void, and that insurer retained premium, held not waiver of vacancy clause.

3. Insurance. — Burden to establish waiver of vacancy clause in fire policy was on insured.

Appeal from Kenton Circuit Court

J.E. PLUMMER for appellant.

HORACE W. ROOT for appellee.

OPINION OF THE COURT BY JUDGE RICHARDSON.

Affirming.

The construction and application of a vacancy clause contained in an insurance policy in the light of the developed facts are required by this appeal. It reads:

"Permission granted for the within described premises to be and remain vacant for a period not exceeding sixty (60) days at any one time, the term `vacant' being construed to mean an empty building devoid of personal habitation; or to be and remain unoccupied for a period not exceeding six (6) months at any one time, the term `unoccupied' being construed to mean a building that is entirely furnished, but with personal habitants temporarily absent. * * * If this form is attached to a fire policy, and premises are vacant for a period exceeding sixty (60) days or unoccupied for a period exceeding six (6) months, at any one time, this policy is void unless a special form of permission therefor is attached hereto."

The validity of the condition respecting the vacancy of property for a definite number of days is admitted in Thomas, Trustee, v. Hartford Fire Ins. Co., 56 S.W. 264, 21 Ky. Law Rep. 1139; Westchester Fire Ins. Co. v. Crume, 223 Ky. 707, 4 S.W. (2d) 716; Continental Ins. Co. of N.Y. v. Dunning, 249 Ky. 234, 60 S.W. (2d) 577. The condition is inserted in the policy for the benefit of the insurer and may be waived by it or its authorized agent, or it may become estopped to set up a breach, either by declarations, acts, or omissions, dispensing with the performance of, or compliance with, the condition, or by statements or acts which constitute a waiver of a forfeiture, incurred as the consequences of false statement or breach of condition, so as to estop it from setting up either as a defense to an action upon the policy.

"If, however, it is conditioned to be void if the premises be, or become vacant, or unoccupied, and so remain for a specified period, the issuance of a policy upon unoccupied premises is not a waiver of the condition, since by the term of the contract, the insured is bound to have them occupied within the specified period, unless the property be such the parties must have contemplated that it would not be ocupied for some time, as where the insurance is upon a building under course of construction, or where it is insured as vacant property, or so occupied as to breach the policy condition."

4 Couch on Insurance, sec. 9700 p. 3438; Thomas, Trustee, v. Hartford Fire Ins. Co., supra; Queen Ins. Co. of Liverpool, Eng. v. Kline & Sons, 32 S.W. 214, 17 Ky. Law Rep. 619; May v. Globe & R. Ins. Co., 23 Ga. App. 798, 99 S.E. 631; Conn. Fire Ins. Co. v. Tilley, 88 Va. 1024, 14 S.E. 851, 29 Am. St. Rep. 770; England v. Westchester Fire Ins. Co., 81 Wis. 583, 51 N.W. 954, 29 Am. St. Rep. 917; Dodge v. Grain S.M. Fire Ins. Ass'n, 176 Iowa, 316, 157 N.W. 955; Maxwell v. York Mut. Fire Ins. Co., 114 Me. 170, 95 A. 877.

There are cases holding that, if the property is insured with knowledge of the insurer or its agent at the time the policy was issued, it is vacant or unoccupied, the insurer cannot insist upon that condition of the policy to defeat payment after loss because the premises were vacant or unoccupied and so continued until the time of the loss, even though the policy should contain the condition that it should be void if it became vacant beyond a specified time. See Milwaukee Mechanics' Ins. Co. v. Brown, 3 Kan. App. 225, 44 P. 35. The court in this case quoted and adopted the reasons assigned in Devine v. Home Ins. Co., 32 Wis. 471. The Devine Case seems to have been overruled in England v. Westchester Fire Ins. Co., supra.

There are others holding that, where the premises are insured with the insurer's or its agent's knowledge that they are vacant or unoccupied, this will not waive a condition making the policy unenforceable, if the premises be, or become, vacant, or unoccupied, and so remain for a specified period. Addia v. Globe & R. Fire Ins. Co., 97 W. Va. 443, 125 S.E. 161; Home Ins. Co. v. Hardin, 162 Miss. 254, 139 So. 603; Bias v. Globe & Rutgers Fire Ins. Co., 85 W. Va. 134, 101 S.E. 247, 8 A.L. R. 373; Cooley's Briefs on Insurance (2d Ed.) page 2695; 14 R.C.L., page 1103; Home Ins. Co. v. Scales, 71 Miss. 975, 15 So. 134, 42 Am. St. Rep. 512; Servais v. Shelby Farmers' Mut. Fire Ins. Co., 194 Wis. 325, 216 N.W. 654, 655; Harper v. Stoddard County Mut. Fire Ins. Co. (Mo. App.) 51 S.W. (2d) 534; Republic Ins. Co. v. Dickson (Tex. Civ. App.) 69 S.W. (2d) 599; Thomas, Trustee, v. Hartford Fire Ins. Co., supra.

In those jurisdictions where the latter rule prevails, the holder of a fire policy containing the clause conditioned that it shall be void if the insured's premises "be and remain vacant for a period not exceeding a certain number of days" is chargeable with knowledge of, and bound by, the terms of the policy containing such clause. Harper v. Stoddard County Mut. Fire Ins. Co., supra.

The prevailing view is that the knowledge of the insurance company of the vacancy of the property at the time of the issuance of the policy is immaterial. Home Ins. Co. v. Hardin, supra; Cooley's Briefs on Insurance (2d Ed.) page 2695; 14 R.C.L. page 1103; Thomas, Trustee, v. Hartford Fire Ins. Co., supra. Of course, where the policy is issued on vacant or unoccupied property with that knowledge and upon an agreement or with the expectation on the part of the insurer and the insured that the property is to remain vacant, the clause against vacancy is deemed waived. Bakhaus v. Caledonian Ins. Co., 112 Md. 679, 77 A. 310; Addia v. Globe & R. Fire Ins. Co., and Thomas, Trustee, v. Hartford Fire Ins. Co., supra.

Where the property is vacant at the time...