Kinchen v. Lexington Insurance

PER CURIAM.

It now appears to the Court that the policy and certificates of Lexington and its associated insurance companies, must, in any event, have remained in force for the benefit of the mortgagee, Arkansas Oak Flooring Company at the time of the fire. The Lexington policy and the certificates were received by Arkansas Oak Flooring Company on Saturday, January 12, 1956. Some five or six days theretofore, the Kinchens had discontinued the watchman service, and we have held that Arkansas, through its employee Baird, was informed of such discontinuance. Arkansas cannot be charged with notice that the Lexington policy and the certificates required the use of a night watchman earlier than Saturday, January 12, and perhaps not before Monday, January 14. If on January 12 Arkansas had given notice to Lexington and its associated companies that the Kinchens did not have a night watchman, the policy and certificates could not have been cancelled as to Arkansas between that time and the destruction of the property by fire shortly after midnight on January 15. If Arkansas had given such notice, then under the terms of the mortgage clause1 the policy would have become null and void only upon Arkansas’ failure or refusal on demand to pay the premium for such increased hazard. That did not occur. Further, if Lexington and its associates had given Arkansas notice of cancellation as early as January 12, the policy and certificates would have continued in force for the benefit of Arkansas for ten days thereafter, or well beyond the date of the fire.

Arkansas had a reasonable time after discovering the requirement of watch service when it received the Lexington policy and certificates, in which either to cause the watch service to be resumed or to notify the insurance companies of its absence. With no express provisions in the policies or certificates defining such reasonable time, it would appear by analogy to the provisions quoted in footnote 1, supra, that Arkansas’ failure to notify the insurance companies within the short time before the fire occurred could not have resulted in termination of the insurance.

Rehearing in favor of Arkansas is therefore granted, and the judgment of *303the district court in favor of Arkansas is affirmed.

. In pertinent part:

“Provided, also that the mortgagee (or trustee) shah notify this Company of any change of ownership or occupancy or increase of hazard which shall come to the knowledge of said mortgagee (or trustee), and, unless permitted by this Policy, it shall be noted thereon and the mortgagee (or trustee) shall on demand pay the premium for such increased hazard for the term of the use thereof; otherwise this Policy shall be null and void.
“This Company reserves the right to cancel this Policy at any time as provided by its terms, but in such case this Policy shall continue in force for the benefit only of the mortgagee (or trustee) for ten days after notice to the mortgagee (or trustee) of such cancellation and shall then cease and this Company shall have the right on like notice to cancel this agreement.”