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Cerny Pickas & Co. v. C.r. Jahn Co.





Appeal by plaintiffs from the Superior Court of Cook county; the Hon. ALAN E. ASHCRAFT, Judge, presiding. Heard in the third division of this court for the first district at the October term, 1951. Reversed and remanded. Opinion filed June 18, 1952. Rehearing denied July 15, 1952. Released for publication July 17, 1952. MR. JUSTICE FEINBERG DELIVERED THE OPINION OF THE COURT.

Rehearing denied July 15, 1952

Plaintiff brought this tort action against defendant for damages, charging negligence resulting in the total loss by fire of certain premises and machinery therein contained, leased to defendant by plaintiff, and also charging that defendant caused the fire in question through the violation of certain ordinances of the City of Chicago.

The complaint, inter alia, charged that plaintiff was the owner of the premises described, improved with several buildings containing machinery and equipment, all leased to defendant and in the exclusive possession and control of defendant; that defendant constructed a certain toilet room in said premises, enclosed on all sides, approximately 20 feet long, 15 feet wide and 8 feet high; that defendant caused and permitted a fire to occur on said premises, resulting in the destruction of said buildings, equipment and machinery; that defendant unlawfully installed a domestic gas hot-water heater in violation of section 80-24.6 of the Municipal Code of Chicago; and that defendant unlawfully constructed the toilet room, using wooden joists, plywood sheeting and pine one by six sheeting, without covering same with incombustible material, in violation of section 61-70 of the Municipal Code of Chicago.

Plaintiff Orient Insurance Company claims part of said damages as subrogee under an insurance policy covering said premises issued to plaintiff to the extent of the amount of the settlement and payment to plaintiff, as therein alleged.

Defendant filed an answer admitting the leasing of the premises but denying that it was in exclusive control and possession; alleging that plaintiff occupied a portion of said premises on the date of the fire, and denying all of the allegations of negligence in the complaint or that it violated any of the ordinances alleged in the complaint. As a special defense it set up the lease covering the premises from plaintiff to defendant and attached said lease to its answer as an exhibit. It alleged that under the terms of said lease plaintiff wholly exempted and exonerated defendant from any liability to plaintiff for damage to the building, machinery or equipment occasioned by fire, whether such fire resulted wholly from accidental causes or was occasioned through the neglect of defendant, its agents or servants; that under the provisions of said lease it became the duty and legal obligation of plaintiff at all times during the period of said lease to provide sufficient fire-insurance coverage to fully and wholly reimburse itself as lessor for any loss or damage occasioned by fire; that plaintiff failed to notify or advise defendant that plaintiff had breached its covenant and had failed to procure sufficient fire-insurance coverage to fully and completely indemnify or reimburse said plaintiff in event of damage or destruction by fire. Plaintiff moved to strike the special defense set up under the lease, which motion was denied.

Plaintiff filed a reply to the answer admitting the terms of the lease and denying that defendant was led to believe plaintiff had procured sufficient insurance to indemnify itself, or that there were any representations made to defendant concerning it.

The cause was decided upon the pleadings. The court found that the lease in question as a matter of law exempted defendant from liability and entered judgment for defendant, from which judgment plaintiff appeals.

The pertinent provisions of the lease in the consideration of the questions presented are to be found in the following paragraphs of the lease:

"2. . . . Lessee will keep said premises, including all appurtenances, in good repair, . . . and upon the termination of this lease, in any way, will yield up said premises to Lessor in good condition and repair (loss by fire and ordinary wear excepted). . . .

"3. Lessee will not allow said premises to be used for any purpose that will increase the rate of insurance . . . and will not permit said premises to be used for any unlawful purpose . . . or increase the fire hazard of said building. . . .

"8. Lessor shall not be obliged to incur any expense for repairing any improvements upon said demised premises or connected therewith save as in this clause provided, and the Lessee at his own expense will keep all improvements otherwise in good repair (injury by fire, or other causes beyond Lessee's control excepted) as well as in a good tenantable and wholesome condition, and will comply with all local or general regulations, laws and ordinances applicable thereto. . . .

"14. Lessor shall pay for fire insurance on the building and equipment and machinery hereby leased, and Lessee agrees to pay for any increase in fire insurance premium on such insurance policies, due to any increase in the insurance rate due to the nature of Lessee's business, or the manner of its conduct of the business.

"16. Lessee agrees that at the expiration of this lease, said leased premises, machinery and equipment shall be returned in good condition, ordinary wear and tear excepted. Said Lessee shall have the right to install . . . additional toilet facilities. . . .

"18. . . . said Lessee shall restore said premises, at the expiration of this lease, to the same condition as at the time of entry into possession under ...

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