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
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.
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
"Q. And you relied on what Mr. Pinkley told you? A.
"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 ...