Court Opinion

ID: 6922882
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:07:56.333381+00
Date Added: 2024-06-11T16:06:51.007213
License: Public Domain

TUTTLE, Chief Judge
(dissenting).
With deference I must dissent from the order of the Court granting rehearing in favor of Arkansas Oak Flooring Company, mortgagee, and affirming the judgment in its favor by the trial court.
The trial court entered its judgment in favor of Arkansas Oak Flooring Company on the basis that, as mortgagee, it had received no notice of the abandonment of the watchman service by the assured. We have held in our original opinion, and have reaffirmed it here, that Arkansas received such notice on January 6 or 7. We held in our original opinion that, having received this notice and then on January 12 having received the insurance policy which contained a provision providing that “the mortgagee shall notify this company of any change of ownership or occupancy or increase of hazard which shall come to the knowledge of said mortgagee,” the failure of Arkansas Oak Flooring Company to comply with this requirement through the time on which the fire occurred on January 15, constituted such breach by it of its obligation under the standard mortgage clause as to deny it the right to recover.
The majority opinion, on rehearing, seeks to equate the obligations of the mortgagee to notify the company of any increase in hazard with another clause of the policy which gives the company the absolute right, without cause, to cancel the policy at any time, in which event it must give the mortgagee ten days’ notice within which it can protect itself by substituting other insurance. This is the second clause quoted in footnote 1 of the majority opinion on rehearing.
With all deference, I think these two clauses have no relation to each other. I think the first clause clearly provides that if the mortgagee, upon receiving knowledge of an increase in hazard, fails to notify the company of this increase in hazard then “otherwise this policy shall be null and void.” It seems to me that when the company, with knowledge that the watchman service was no longer being provided, received the policy on January 12, which clearly required watchman service, it was its clear duty to notify the insurance company of this change in increase in hazard.
I agree with the majority opinion that the mortgagee had a reasonable time in which to do this. , However, since the mortgagee had, upon a coincidence of its receipt of the policy and its knowledge of the existence of the increased hazard on January 12, all of the' knowledge necessary to require it to act, I do not see how it could be held as a matter of fact or as a matter of law that its failure through business hours of January 15 to make any move towards notifying the insurance company could satisfy the requirement that it act within a reasonable time. Nothing remained for it to do but simply to decide to do what the policy required of it. If, on the other hand, it should be conceded-that it was required to do nothing on • Saturday or Sunday, January 12 or 13, and it is clear that on Monday it sent the policy to its insurance adviser, who thereafter did nothing on Monday, the 14th or Tuesday, the 15th, I would determine as a matter of law that it did not comply with its obligation to notify the insurance company of the increased hazard within a reasonable time.
In any event, I think the equation of reasonable time permitted for notifying the insurance company with the ten days’ notice which the mortgagee becomes entitled to under the cancellation clause is clearly not warranted. The most that could be done at this stage of the proceeding, it seems to me, is that the case would be reversed to the trial court solely for the purpose of determining whether the failure of the mortgagee to attempt to give notice of any kind prior *304to the fire satisfied its requirement to give notice of the increased hazard within a reasonable time. This issue has not been passed upon by the trial court, and I do not see how this Court can determine the mortgagee’s failure even to start a proceeding to give notice until after the fire occurred satisfied the requirement of notice within a reasonable time. I therefore, respectfully dissent.