The opinion of the court was delivered by: John E. Miller, District Judge.
This case was tried to the court without the intervention of a
jury on September 11, 1958, and the court, having considered all
of the pleadings, testimony, and exhibits thereto, now makes and
files its formal Findings of Fact and Conclusions of Law,
The plaintiffs were at the commencement of this action citizens
of Arkansas residing in the Harrison Division of the Western
District of Arkansas.
The defendant is a corporation organized under the laws of the
State of Missouri and authorized to do business in the State of
Arkansas as an insurance company.
The action was removed to this court on May 13, 1958, and the
amount in controversy, exclusive of interest and costs, is in
excess of $3,000.
On March 15, 1955, the defendant issued its fire insurance
policy covering property shown to be located at 212 Cherry Street
in Berryville, Arkansas, to Lloyd and Berry Jean Jennings.
Through endorsement the policy vested in the plaintiffs, who had
acquired the insured property. The policy was renewed on March
15, 1957, for an additional year. On December 3, 1957, while the
policy was in full force and effect, the property burned and was
totally destroyed. The policy contained the following provision:
"Conditions suspending or restricting insurance.
Unless otherwise provided in writing added hereto
this company shall not be liable for loss occurring
(a) while the hazard is increased by any means within
the control or knowledge of the insured. * * *."
It also contained a provision, set out under the title of "Waiver
provisions", that no permission or waiver affecting the policy
should be valid unless expressed in writing "added thereto."
The policy showed the insured building was to be used as a
poultry house, and it was so occupied until March 27, 1957.
Sometime prior to this date the plaintiffs had completed
negotiations with one John Holland to lease the premises to him
for use as a pallet manufacturing factory, beginning on March 27,
1957. On March 26, the day before the lessee was entitled to
possession, H.P. Jackson, one of the plaintiffs, went to the
defendant's agent, Eugene Pinkley, to pay the renewal premium and
advised him of the change to be made. Jackson knew that there
might be an increase in the premium. Pinkley, however, advised
Jackson that if anything came up at a later date, he, Pinkley,
would "take care of it." Under the terms of the lease Holland
took possession and engaged in a manufacturing business which
continued until the fire. This ...