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JACKSON v. M.F.A. MUTUAL INSURANCE COMPANY

December 1, 1958

H.P. JACKSON, BILLIE PHILLIPS AND CLAUDE PHILLIPS, PLAINTIFFS,
v.
M.F.A. MUTUAL INSURANCE COMPANY, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: John E. Miller, Chief Judge.

This is a suit on a policy of fire insurance originally tried to the court without a jury on September 11, 1958. On September 19, 1958, the court filed its written findings of fact and conclusions of law, Jackson v. M.F.A. Mutual Ins. Co., D.C.W.D. Ark., 165 F. Supp. 388, and in accordance therewith entered judgment on the same day in favor of the defendant and dismissed the plaintiffs' complaint. Within the time prescribed the plaintiffs filed their motion for a rehearing and partial new trial pursuant to Rule 59(a), F.R.Civ.P., 28 U.S.C.A., and on October 2, 1958, the court granted that motion and opened the judgment previously entered in order to reconsider its findings of fact and conclusions of law.

On November 24, 1958, a further hearing was held, and additional briefs have been submitted by the parties in support of their respective contentions. At the hearing the depositions of Russell Shaw, manager of the fire division of defendant, and Eugene Pinkley, the agent of defendant at all times material herein, taken by stipulation of the parties were introduced and further oral testimony taken. The defendant urged a number of objections to various questions and answers in the depositions so admitted, and it appears that many of those objections are well taken. However, the court does not find the testimony contained in the depositions relevant to its decision, and accordingly does not consider any of the testimony in the depositions in reaching its conclusion. It is, therefore, unnecessary to pass upon the objections.

For convenience some of the facts set forth in the original findings by the court in Jackson v. M.F.A. Mutual Ins. Co., supra, are summarized here together with additional facts established at the second hearing.

The plaintiffs were owners of certain real property in Berryville, Arkansas, which was destroyed by fire on December 3, 1957. Prior to that time they had acquired a policy of fire insurance with the defendant insurance company which was renewable on March 15, 1957. The renewal premium was not actually paid until March 26, 1957, but when paid the defendant issued its receipt for the premium and issued its renewal certificate on April 11, 1957, effective March 15, 1957, to March 15, 1958.

The policy provided that the insurance would be suspended "while the hazard is increased by any means within the control or knowledge of the insured." During the month of March 1957 the plaintiffs completed negotiations with one John Holland to lease the insured premises to him for use as a pallet manufacturer and Holland was to take possession on March 27, 1957. The building originally had been insured as a poultry house, and the change in occupancy increased the fire hazard of the premises.

On March 26, 1957, the plaintiff, H.P. Jackson, paid the renewal premium to Eugene Pinkley, the defendant's agent in Berryville, Arkansas. At that time he advised Pinkley of the change in occupancy which was to take place the following day. Jackson testified at the original hearing as follows:

    "Q. Was any statement or confession conveyed to Mr.
  Pinkley at that time? A. Yes, sir.
    "Q. What did you tell him? A. I told Mr. Pinkley
  that the property was being changed from a brooder
  house to a pallet manufacturing concern.
    "Q. What did Mr. Pinkley tell you? A. The
  conversation was — I told him from the
  standpoint of insurance and he told me if anything
  came up at a later date that he would take care of
  it.
    "Q. And you relied on what Mr. Pinkley told you? A.
  Yes, sir.
    "Q. Was a contract in effect at that time that you
  were leasing the place? A. Yes, sir.

"Q. Did you so inform the agent? A. Yes, sir.

    "Q. And he agreed to make any changes that became
  necessary? A. He told me he would take care of any
  changes that came up."

Although Pinkley denies making the statement attributed to him, he states that he remembers little of this conversation, but the court finds as a matter of fact that Pinkley made the statements as quoted by H.P. Jackson. Pinkley never at any time notified the defendant insurance company of the change in ...


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