In my humble opinion, logic and simple arithmetic require affirmance of the judgment of the lower court in this case.
Under the policy issued by it appellant agreed to insure the property of appellee for a term of five years. The total amount of the premium agreed on for this insurance was $449.95, payable in five equal annual installments of $89.99 each, the first of which was paid in cash by appellee, and the other four annual installments being evidenced by a promissory note, the first deferred installment being payable at the beginning of the second policy year, the next deferred installment being payable at the beginning of the third policy year, the next deferred installment being payable at the beginning of the fourth policy year, and the last deferred installment being payable at the beginning of the fifth policy year. This note provided that if appellee failed to pay any installment at maturity appellant might declare due and earned any installment subsequently maturing.
Appellee paid the cash installment and paid the installments due at the beginning of the second, third and fourth policy years, respectively. Although appellee failed to pay any one of the three deferred installments when they fell due — the first deferred installment was not paid until February 15, 1939, fourteen days after it matured, the second deferred installment was not paid until February 12, 1940, eleven days after it matured, and the third deferred installment was not paid until February 14, 1941, thirteen days after it matured — appellant accepted these installments without any question and the insurance was continued in effect. Appellee, on February 7, 1942, six days after maturity date of the fifth installment, mailed check to the company for this installment, and, in the meantime (February 5, 1942) the insured property was destroyed by a windstorm. Appellant having learned thereof, refused to accept appellee's check for the last installment, and declared the policy forfeited for nonpayment of premium.
Appellant's action in accepting the premium installments when tendered from eleven to fourteen days after *Page 999 they had fallen due and continuing the insurance in force by reason of such delayed payment had one of these two consequences:
First, the company, in accepting these installments after they fell due, treated the payment of the premium as reinstating the policy as of the date of the lapse, and, in such case, of course the reinstatement would be retroactive and it would follow that the insurance was in effect during the period of default; or,
Second, the company treated the insurance policy as being ipso facto canceled on the date of maturity of the premium and as being renewed and put in effect again by the payment of the premium. In this event of course it would follow that there was no insurance in force during the period of default, but, in such event, the date of the beginning and ending of the insurance term would necessarily be moved up to conform to the date of the reinstatement. In other words, under the stipulation in this case, appellee failed to pay the installment due on February 1, 1941, when it was due, and the policy therefore lapsed and appellee had no insurance whatever until appellant accepted his payment on February 14, 1941, and reinstated the policy. When appellee made this payment of $89.99 on February 14, 1941, he paid the required premium for insurance for one year, and this year did not expire until February 14, 1942, which was nine days after the loss occurred. To hold that by reason of appellee failing to pay his premium promptly the amount of his premium was automatically increased is to deny to the contract between the parties — the application and the policy — the commonsense construction that every contract ought to receive. Certainly there is no express language in either the application or the policy that would justify any such interpretation; and the language of the contract being that of the insurer it must be construed strictly against the insurer and liberally in favor of the insured. Arkansas Insurance Company v. McManus,86 Ark. 115, 110 S.W. 797; Industrial Mutual Indemnity Company v. Hawkins, 94 Ark. 417,127 S.W. 457, 29 L.R.A., N.S., 635, 21 Ann. Cas. 1029; Fidelity *Page 1000 Casualty Company v. Meyer, 106 Ark. 91, 152 S.W. 995, 44 L.R.A., N.S., 493; Aetna Life Insurance Company v. Spencer, 182 Ark. 496, 32 S.W.2d 310; National Union Fire Insurance Company v. Henry, 181 Ark. 637, 27 S.W.2d 786.
Under either view of the matter the insurance was in force at the time the loss occurred.
What appellant is seeking to do is to take the benefits of both of the two situations set out above without assuming the burden of either. This it should not be permitted to do.