Home Ins. Co. v. Cohen

• Decision Date: 18 May 1962
• Docket Number: FIDELITY-PHENIX
• Citation: 357 S.W.2d 674
• Parties: The HOME INSURANCE COMPANY, Appellant, v. Bernard COHEN et al., Appellees.FIRE INSURANCE CO. OF NEW YORK, Appellant, v. Bernard COHEN et al., Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 674

357 S.W.2d 674

The HOME INSURANCE COMPANY, Appellant, v. Bernard COHEN et al., Appellees.

FIDELITY-PHENIX FIRE INSURANCE CO. OF NEW YORK, Appellant, v. Bernard COHEN et al., Appellees.

Court of Appeals of Kentucky.

May 18, 1962.

James S. Welch, Percy Brown, Jr., Ogden, Brown, Robertson & Marshall, Louisville, for appellants.

Carl K. Helman, William S. Heidenberg, Louisville, for appellees.

BIRD, Judge.

Bernard Cohen and Rose Cohen operated a ready-to-wear mercantile establishment in Louisville, Kentucky.

On June 16, 1958, they suffered a substantial loss by fire which was partially covered by policies of insurance issued by The Home Insurance Company and the Fidelity-Phenix Fire Insurance Company.

Demand was made for payment under the provisions of the respective contracts. Each company denied liability. The Cohens sued and a jury found for the Cohens against each insurance company in the full amount of coverage. The companies have appealed.

Each of the policies contained the following provision:

'This entire policy shall be void if, whether before or after a loss, the insured has wilfully concealed or misrepresented any material fact or circumstance concerning the insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto.'

On appeal it is contended that the trial court erred in striking from the record the following paragraphs of the answer:

'7. Morton Cohen, the son of the plaintiffs, was the manager of the ladies' ready to wear store owned by plaintiffs and damaged by the fire here in suit, and, as such manager, was the agent of the plaintiffs with full power and authority to do all things necessary or desirable relating to the conduct of the business. On August 26, 1958, Morton Cohen stated under oath as follows:

"Q. What do you think caused this fire?

"A. Well, the only thing I can think is what they say, is the wiring.'

which statement by Morton Cohen was sworn to and was false and was known to Morton Cohen to be false and to pertain to a matter material to the insurance.

'8. By making the statement contained in paragraph 7 above Morton Cohen as agent of and standing in the place and stead of the plaintiffs wilfully concealed a fact material to this insurance, to wit: the fact that he, Morton Cohen, wilfully and maliciously caused the fire which damaged plaintiffs' property.'

It is likewise contended that the trial court erred in refusing to admit testimony that the fire in question was caused by the arson of Morton Cohen, the person mentioned in the foregoing paragraphs of the answer.

The companies claim that Morton Cohen wilfully burned the place at a time when he was manager of the store and that his false statements concerning the origin of the fire are, by reason of his managership and confidential relationship, imputed to the insured and that they are thereby precluded from recovery under the quoted provision of the policy.

It is not charged in the pleadings that the insured or either of them entered into a conspiracy to burn the store or that they or either of them had any knowledge concerning the origin of the fire at the time they made statements in the proof of loss that the cause of the fire was unknown to them.

We hold that a principal is not liable for the torts of an agent, unless the tort committed was under the instruction of the principal, or within the apparent authority of the agent. Any liability must rest under the doctrine of 'Respondeat Superior.' Wolford v. Scott Nickels Bus Co., Ky., 257 S.W.2d 594. See also Bray-Robinson Clothing Co. v. Higgins, 210 Ky. 432, 276 S.W. 129.

In order to impose liability upon the master for either a civil or criminal wrong, the proof must show that the act is one that the agent was employed to perform, or that it accrued substantially within the authorized time and space limits of the employment or that the offender was actuated at least in part by a purpose to serve the master. Brooks v. Gray-Von Allmen Sanitary Milk Co., 211 Ky. 462, 277 S.W. 816, 46 A.L.R. 1207; John v. Lococo, 256 Ky. 607, 76 S.W.2d 897; Moore v. Ford Motor Co., 265 Ky. 575, 97 S.W.2d 400; Fournier v. Churchill Downs-Latonia, Inc., 292 Ky. 215, 166 S.W.2d 38.

The facts stated in the stricken portion of the answer are insufficient to impute Morton Cohen's statements and knowledge to the insured. Whatever statements that may have been made by Morton Cohen concerning the origin of the fire could not under the facts alleged and the law thereunto pertaining be imputed to the insured, and the falsity of these statements, if they were false, will not bar a recovery by the insured as provided by the policy. It was not error to strike from the answer those allegations which charge the insured with false and fraudulent statements by imputation through Morton Cohen.

Though this part of the answer had been stricken and though there was no other pleading charging that the insured had sworn falsely as to their knowledge concerning the origin of the fire the insurers persisted in trying to prove the incendiary origin of the fire. The trial court would not permit the testimony to be introduced and, on the appeal, they insist that the trial court erred in so refusing.

They rely on Hyland v....