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First National Bank v. Home Ins. Co.

September 16, 1965

FIRST NATIONAL BANK IN CHICAGO HEIGHTS, PLAINTIFF-APPELLANT
v.
HOME INS. CO., ET AL., DEFENDANTS-APPELLEES



Hastings, Chief Judge, Duffy and Schnackenberg, Circuit Judges.

Author: Duffy

DUFFY, Circuit Judge.

Plaintiff brought this suit to recover under the terms of certain fire insurance policies issued by defendants, covering a building in Chicago Heights, Illinois, known as the Victoria Hotel building.

The District Court held that by agreement of the parties, the policies of insurance had been surrendered and accepted for cancellation, and were not in force and effect on March 10, 1961, the date of the fire.

The hotel building was a large four-story brick building. The first floor had been occupied by stores and the hotel lobby; the second and third floors were utilized for hotel rooms; the fourth floor was used for storage.

For a number of years prior to March 1960, the title to the property was held in the name of William H. Donovan as trustee for himself and for other members of his family.

About March 1, 1960, the property was purchased by Silvio E. Piacenti, William Piacenti, John Cifelli and their respective wives. Silvio Piacenti and William Piacenti were brothers. Silvio Piacenti and John Cifelli were law partners. Title was taken in the name of the First National Bank in Chicago Heights as trustee under the provisions of a trust agreement dated February 17, 1960, and known as Trust No. 57. William H. Donovan acted upon behalf of the sellers in closing the deal, and Silvio E. Piacenti acted upon behalf of the buyers.

At the time of the sale of the property by the Donovan interests to the Piacenti and Cifelli interests, the hotel had ceased to operate and the building was vacant except for the retail stores on the first floor which were occupied by various tenants including the Donovan Agency, Inc.

William H. Donovan was an officer and the principal owner of the Donovan Agency, Inc. This firm had, for many years, been an agent for the defendant insurance companies herein. Donovan Agency, Inc. also acted as manager of the hotel property before and after the sale on March 1, 1960 and until October of 1960. Furthermore, William H. Donovan, at all times material to this case, was a director of the First National Bank in Chicago Heights, the plaintiff herein.

At the time the Piacenti and Cifelli interests purchased the hotel property, it was publicly announced that it was the intention of the buyers to raze the old building and to erect a new and modern building in its place. A sign was erected on the hotel building informing the public of this contemplated action.

Subsequent to March 1, 1960, all of the remaining tenants were given notice by the new owners to vacate the property. On September 20, 1960, Silvio E. Piacenti addressed a letter to William H. Donovan, Donovan Agency, Inc., as follows:

"Dear Bill:

"This will confirm our recent conversation wherein I instructed you to cancel all of the outstanding fire insurance on our Victoria Hotel building for the reason that the City has condemned the building. It must soon be demolished and ...


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