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German Ins. Co. v. Wright, 6 Kans. App. 611, 49 Pac. Rep. 704; Insurance Co. v. Scales, 101 Tenn. 628, 49 S. W. Rep. 743.

2. Alford v. Consolidated Ins. Co., 88 Minn. 478, 93 N. W. Rep. 517.

RULE 4. Effect of Death of Insured – Right to Maintain Action. Upon death of the insured the right to claim and recover the insurance on both real and personal property vests in his administrator or executor, as“ legal representative;' as to personal property the claim exists in his own right, and as to the real estate he may be regarded as the trustee of an express trust, collecting or suing therefor for benefit of the heirs, or others interested therein; and both rights may be enforced at same time or in same action.

Lawrence v. Niagara Ins. Co., 2 App. Div. 267, 37 N. Y. Supp. 811, affd. on opinion below, 154 N. Y. 752; Culbertson v. Cox, 29 Minn. 309, 11 Ins. L. J. 817. And see Lappin v. Charter Oak Ins. Co., 58 Barb. 325; Wyman v. Wyman, 26 N. Y. 253; Germania Ins. Co. v. Curran, 8 Kans. 9; Georgia Home Ins. Co. v. Kinnier, 28 Gratt. (Va.) 88; Forest City Ins. Co. v. Hardesty, 182 Ill. 39; Baldwin v. Pennsylvania Ins. Co., 206 Pa. St. 248, 55 Atl. Rep. 970.

While payment may be voluntarily made to a foreign administrator or executor deriving his authority from administration granted in another State (Schluter v. Bowery Sav. Bank N. Y. 125, 129), he cannot ordinarily as such maintain a suit or action in absence of some specific statutory authority, or ancillary letters of administration. And see Wolf v. Sun Ins. Co., 75 Ms. App. 306.


Mortgagor and Mortgagee. RULE 1. Interest of mortgagee or other third party as affected

by contract. 2. Effect of the mortgagee clause. 3. Effect of neglect or wrongdoing by mortgagee. 4. Scope and application of the words“ act or neglect

in mortgagee clause. 5. Limitation upon effect of mortgagee clause. 6. Effect of assignment by mortgagee. 7. Effect of payment of actual loss to mortgagee. 8. Effect of settlement with owner and mortgagor on

void policy. 9. Effect of insurance of interest of mortgagee. 10. Effect of making loss payable to mortgagee without

the mortgagee clause. 11. Settlement or adjustment as affecting mortgagee

Appraisal. 12. Settlement or adjustment with mortgagee. 13. Claim of mortgagee to whom loss made payable. 14. Company may interplead. 15. Effect of repairs by owner. 16. Lien of mortgagee upon insurance. 17. Mortgagee may claim waiver. 18. Provision requiring notice of change of title - Fore

closure. 19. Right to assignment of mortgage must be exercised

within reasonable time. 20. Special rule of construction in some of the States.


Interest of Mortgagee or Other Third Party as Affected by


If with the consent of the company, an interest under the policy shall exist in favor of a mortgagee or of any person or corporation, having an interest in the subject of insurance, other than the interest of the insured as described therein, the conditions “ hereinbefore" contained (i. e. in the policy) shall apply in the manner

expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached, or appended to the policy.

This rule is imposed by above terms in the standard form of policy prescribed in: New York,

North Carolina,

North Dakota,


Rhode Island,

New Jersey,

The standard form of policy prescribed in:


New Hampshire,

in terms prescribes as follows:

“If the policy shall be made payable to a mortgagee of the insured real estate, no act or default of any person other than such mortgagee or his agents, or those claiming under him, shall affect such murtgagee's riglat to recover in case of loss on such real estate; provided, tha the mortgagee shall, on demand, pay according to the established scale of rates for any increase of risk not paid for by the insured; and whenever the company shall be liable to a mortgagee for any sum for loss under the policy, for which no liability exists as to the mortgagor or owner, and the company shall elect by itself, or with others, to pay the mortgagee the full amount secured by such mortgage, then the niortgagee shall assign and transfer to the companies interested, upon such payment, the said mortgage, together with the note and debt thereby securri.

The South Dakota form provides: “If this policy shall be made pay. able to a mortgagee or trustee of the insured real estate, no act or default of any person other than such mortgagee or his agents, or those claiming urder him, shall affect such mortgagee's or trustee's rights to recover in case of loss on such real estate. Provided, that such mortgarpe or trustee shall, on demand, pay according to the customary scale of rates for any increase of risk not paid for by the insured. And in case this policy shall have been issued to the owner of the insured pronerty with the loss payable to a mortgagee, and the owner shall have done arv act voiding the poliev as herein provided or the policy shall have been canceled so that the company is not liable to him in any event, then the mortgagee, unon payment to him of the full amount secured by such mortgage, shall assign to the company or componies niaking sun payment the mortgage, together with the note or debt serured therehr."

In the States where ro standard form is prescribed and other than those above named, the New York standard form is in general usr.

* See note to “ Duty to Save and Preserve Property,” Rule 1, page 2.

RULE 2. Effect of the Mortgagee Clause. Where insurance is obtained by owner and a mortgagor, and in addition to making the loss payable to the mortgagee, there is inserted or added what is called themortgagee clause,” it operates as a distinct, separate, and independent insurance contract as between the mortgagee and the company, in protection of the mortgagee's interest;' not necessarily and wholly independent insurance of that interest, yet separate and distinct in protection of it.?

1. Pioneer Savings & Loan Co. r. Providence-Washington Ins. Co., 17 Wash. 175, 49 Pac. Rep. 231, 27 Ius. L. J. 144: Planters’ Ins. Assoc. v. Southern Savings Co., 68 Ark. 8, 56 S. W. Rep. 443; Lancashire Ins. Co. v. Boardman, 58 Kans. 339, 49 Pac. Rep. 92, 27 Ins. L. J. 470; Westchester Ins. Co. v. Coverdale, 48 Kans. 446, 29 Pac. Rep. 682; Ormsby v. Phænix Ins. Co., 5 S. D. 72, 24 Ins. L. J. 110; Hanover Ins. Co. r. Bohn, 48 Nebr. 743, 67 N. W. Rep. 774, 25 Ins. L. J. 681; Insurance Co. of N. A. v. International Trust Co., 71 Fed. Rep. 88, 36 U. S. App. 291, 17 C. C. A. 616; Palmer Savings Bank 1. Insurance Co. of N. A., 166 Mass. 189, 44 N. E. Rep. 211, 25 Ins. L. J. 739; Whiting v. Burkhardt, 178 Mass. 535, 60 N. E. Rep. 1; Hastings 1'. Westchester Ins. Co., 73 N. Y. 141; Hartford Ins. Co. v. Olcott, 97 I'l. 439; Meriden Savings Bank v. Home Mutual Ins. Co., 50 Conn. 396, 12 Ins. L. J. 620; Glens Falls Ins. Co. 1. Porter, 44 Fla. 568, 33 So. Rep. 473; Scottish Union & National Ins. Co. v. Field, 18 Colo. 68, 70 Pac. Rep. 149; Breeyear 1. Rockingham Ins. Co., 71 N. H. 445, 52 Atl. Rep. 860: Magoun v. Firemen's Fund Ins. Co., 86 Minn. 486, 91 N. W. Rep. 5; Smith r. Union Ins. Co., 25 R. I. 260, 55 Atl. Rep. 715; Phænix Assur. Co. 1. Hinds. 67 Kans. 595, 73 Pac. Rep. 893; Collinsville Savings Soc. v. Boston Ins. Co., Conn. 60 Atl. Rep. 647.

2. Glens Folls Ins. Co. 1. Porter, supra; Hare r. Headley, 54 N. J. Eq. 545, 35 Atl. Rep. 445. And see Rule 5 and “ Subrogation.”

For a form of mortgagee clause, see chapter twelfth.

RULE 3. Effect of Neglect or Wrongdoing by Mortgagee. The mortgagee clause protects the mortgagee against the acts or neglect of the owner and mortgagor, but not against his own neglect or wrongdoing. As to whether the stipulation in the mortgagee clause such

as giving notice of change in title, or increase of risk, etc., operate as conditions, violation of which produces a forfeiture of the insurance as to the mortgagee, or as covenants, the courts do not agree.

1. American Central Ins. Co. v. Cowan (Tex.), 34 S. W. Rep. 460; Genesee Falls Saving Assoc. v. U. S. Ins. Co., 16 App. Div. 587, 44 N. Y. Supp. 979; Mills National Bank v. Union Ins. Co., 88 Cal. 497, 26 Pac. Rep. 509.

2. Ormsby v. Phænix Ins. Co., 5 S. D. 72, 24 Ins. L. J. 110; Continental Ins. Co. v. Anderson, 107 Ga. 541, 33 S. E. Rep. 887, 28 Ins. L. J. 938; Cole v. Germania Ins. Co., 99 N. Y. 36, 14 Ins. L. J. 453.

3. Pioneer Savings & Loan Co. v. Providence-Washington Ins. Co., 17 Wash. 175, 49 Pac. Rep. 231, 27 Ins. L. J. 144; Phænix Ins. Co. v. Omaha Loan & Trust Co., 41 Nebr. 834, 60 N. W. Rep. 133, 24 Ins. L. J. 189.


Scope and Application of the Words “Act or Neglect " in Mort

gage Clause.

The “ act or neglect ” of the owner and mortgagor, stipulated usually in the mortgagee clause as not invalidating the policy as to the mortgagee, contemplates a case where the owner could act or could neglect, and not a case where policy was issued in name of an infant child three years old upon a misrepresentation as to the title.

Graham v. Fireman's Ins. Co., 87 N. Y. 69, 78.


Limitation upon Effect of Mortgagee Clause. While the “ mortgagee clause " operates as an independent contract, the policy nevertheless exists and continues in the interest of the insured and mort

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