dissenting. The majority opinion has decided this case for itself, overlooking the fact that this is an appeal from a circuit court. On appeal, chancery cases are tried de novo and the appellate court may enter the decree which it finds should have been rendered by the chancellor. Ferguson v. Green, 266 Ark. 556, 587 S.W. 2d 18 (1979). On appeal, circuit cases are not tried de novo and we review only the errors assigned and do not decide issues of fact. Fidelity & Deposit Co. v. Fairfield, 169 Ark. 997, 278 S.W. 658 (1925). Houston v. Adams, 239 Ark. 346, 389 S.W. 2d 872 (1965).
Contrary to the above rule, the majority opinion has decided that no contract of insurance was entered into between the parties because it finds that delivery of the renewal policy was an offer which was not accepted. This factual finding is made despite the fact that the trial court specifically stated that this issue had not been raised by the attorneys and that no offer and acceptance questions would be addressed by the court.
After holding that a case appealed from circuit court should be reversed, the court in St. Louis Southwestern Railway Co. v. Clemons, 242 Ark. 707, 415 S.W. 2d 332 (1967), said:
We come now to the question of whether this case should be dismissed or remanded. This court has long adhered to the rule so well reiterated in Fidelity Mutual Life Insurance Co. v. Beck, 84 Ark. 57, 104 S.W. 533 and 1102 (1907). The general rule is to remand common law cases for new trial. Only exceptional reasons justify a dismissal. One of the exceptions is an affirmative showing that there can be no recovery. Pennington v. Underwood, 56 Ark. 53,19 S.W. 108 (1892). There it was said that when a trial record discloses “a simple failure of proof, justice would demand that we remand the cause and allow plaintiff an opportunity to supply the defect.” To the same effect, see Hinton v. Bryant, 232 Ark. 688, 339 S.W. 2d 621 (1960).
This procedure should have been followed in this case. The result of what the majority has done is to take a circuit court case and decide for itself a fact which was not even presented to or decided by the circuit court. If this were an appeal from chancery court, this would be proper. It is not proper to do this in an appeal from a law court.
I believe the decision of the circuit court should have been affirmed but if the case is to be reversed for the reason stated in the majority opinion, it certainly should be remanded for a new trial.
James R. Cooper, Judge, dissenting. The majority in this case has found that the insurance policy on the boat owned by Pigeon Creek Corporation had expired December 23, 1976, and that there was no coverage by reason of the expiration as of the date of the loss on January 14, 1977. I cannot agree.
The facts are correctly stated in the majority opinion, and it is unquestioned that Mr. Fagan, President of Pigeon Creek Corporation, had not paid the premium for the renewal certificate prior to the date of the loss. The majority bases its holding on Preferred Risk Insurance Company v. Central Surety & Insurance Corporation, 191 F. Supp. 797 (W.D. Ark. 1961). The majority opinion quotes from that case and adopts as the law of this case that:
... The unsolicited delivery of a renewal policy prior to the expiration of the original policy, as in this case, is not an acceptance, but an offer, and no contract of renewal is created unless acceptance by the insured is expressly made or necessarily inferred. ...
In its opinion, the trial court specifically found as follows:
Expiration of policy — non-payment of premium: A previous policy was in force covering the boat in question. Abound the first of December a renewal certificate was issued by the defendant renewing the policy for one year. The premium was charged to the agent’s account and the agent billed the plaintiff. It appears well settled law that it is not necessary that the premium be paid for coverage to take effect, unless prepayment of premium was expressly provided as a condition precedent before coverage took effect. Such was not the circumstance in the case at bar.
It occurs to the Court that a renewal agreement is in one sense an entirely new contract. If this were the case, a proposition could be posed that, under these circumstances, there was merely an offer extended requiring an acceptance and that the offer was withdrawn. Since this issue has not been raised by the attorneys and since the renewal has been viewed as one continuous contract,, the Court will not address any offer and acceptance questions. [Emphasis supplied]
As is shown by this quotation, the Court found that the issue on which the majority bases its opinion was not raised at trial, nor was it considered by the trial court in reaching its decision. The Court specifically found that the parties viewed the “renewal as one continuous contract,” and I am unable to see how we can do otherwise.
In any event, the Preferred case can be distinguished, since, in that case, the insured had purchased another policy on the same property with the same coverage, and in that case the premium had not been paid by the insurance agent. In this case, the trial court, sitting without a jury, was required to rule as to whether the credit had been extended to Pigeon Creek Corporation. The Court did rule that the premium for the renewal was charged to the account of the insurance agent, who then billed Pigeon Creek Corporation. This could be nothing other than a finding of short credit extended to the Corporation by the agent. I believe that the case of American Employers’ Liability Insurance Company v. Fordyce, 62 Ark. 562, 36 S.W. 1051 (1896) correctly states the law in this case as follows:
... While the insurance company had the right to cancel the policy for the nonpayment of the premium, as per the contract between the parties, it had no power to make this cancellation relate back, and avoid the policy ab initio. ...
... Now, in the present case, while the premium had not in fact been paid, credit had been extended, and before any demand had been made for the payment of the premium, the liability accrued. The insurer also a short time thereafter cancelled the policy, thus electing not to insist upon the payment of the premium. ...
The only factual distinction here is that demand was made for the premium prior to the loss. The demand was made on January 12, 1977, and the loss occurred on January 14, 1977. No notice of cancellation was sent to the insured prior to the loss, and was only sent some 7 days following the loss.
The majority seeks to distinguish Fordyce on the ground that it involved a new policy and an initial premium. If the law is that in a case of a new policy and an initial premium, a short credit would allow the policy to be in force, how can it make any sense not to allow a short credit on a continuing contract, a renewal annually of an insurance contract, to cause the policy to remain in force?
The agent for Employers, Mr. Munsey, obviously believed that the policy was in full force and effect when he telephoned Mr. Fagan to request payment of the premium. He testified as follows:
Q. Would you relate for the Court what occurred in your conversation of January 12, 1977, with Mr. Fagan, please?
A. We had sent him this statement for renewal of premium and we had not received our money. So, I called Mr. Fagan on January 12, and asked him why he hadn’t paid his premium. He said, well, it’s no good because I have been using the boat commercially. I said, that’s absolutely correct, if you will return your certificate, I want to get it cancelled, so that it won’t be charged against me, and he says, I will send it to you. That’s the last I heard. I told him he didn’t have any coverage. [Emphasis supplied] T. 183.
Plaintiffs exhibit number 5 is a letter from Mr. Munsey to Mr. Fagan dated January 17, 1977, stating that he (Munsey) was returning the check Fagan had sent for the premium. In that letter, Mr. Munsey indicated that following the conversation with Fagan on January 15, 1977 (in which Fagan notified him that the boat had sunk), he called the home office of Employers and they cancelled the policy as of the renewal date of December 23, 1977.
Defendant’s exhibit number 7 is a cancellation certificate from Mutual Marine in New York, dated January 21, 1977, seven days following the loss. No notice was given prior to either notice of cancellation. Ten days notice prior to cancellation was required by the policy terms.
Mr. Fagan directly contradicted the testimony of Mr. Munsey as to the substance of the January 12, 1977 conversation. Fagan denied that he had told Munsey that the policy was no good. Fagan testified that he believed that he had coverage, except during the times the boat was being used commercially. He testified that this belief was founded on conversations he had with Munsey in April of 1976 when the policy was transferred to him. Munsey denied telling Fagan that the boat would be covered, even if used commercially, as long as the loss did not occur while it was being used commercially.
This case clearly involves the credibility of witnesses, and the question of whether there was substantial evidence to support the findings of the trial court. The majority has based its ruling on an issue which was not argued by the parties at trial, and which the trial court did not address. The Court, as previously noted, specifically found that the policy was renewed for one year, that the premium was charged to the agent’s account, that prepayment of premium was not a condition precedent to coverage, and that the renewal was viewed as one continuous contract. I believe that there is substantial evidence to support these findings of the trial court, and, since there is substantial evidence, we should affirm. Shuffield v. Hunter, 268 Ark. 1083, 597 S.W. 2d 852 (Ark. App. 1980).
The majority has not reached any of the other points raised by appellant and I will not do so here. However, after reviewing the other arguments, the briefs, and the record, I can find no basis for reversal and I would affirm the trial court in all respects.