Stockton v. Atlantic Fire Insurance

175 S.E. 695, 207 N.C. 43, 1934 N.C. LEXIS 375

Opinion

Stacy, C. J.

Under their plea of waiver it was competent for the plaintiffs to show that defendant’s agent had full knowledge of the encumbrance held by the Federal Land Bank at the time of the issuance of the policy in suit. Houck v. Ins. Co., 198 N. C., 303, 151 S. E., 628; Aldridge v. Ins. Co., 194 N. C., 683, 140 S. E., 706; Johnson v. Ins. Co., 172 N. C., 142, 90 S. E., 124.

The correctness of the judgment as it affects the owner, Mrs. Stockton, was conceded on the argument. Bank v. Ins. Co., 187 N. C., 97, 121 S. E., 37. But the case of D. C. Stockton, who claims under a separate contract of insurance, the Standard Mortgagee Clause, would seem to be one for tbe jury. Bank v. Ins. Co., supra; Mahler v. Ins. Co., 205 N. C., 692, 172 S. E., 204.

It is tbe generally accepted position tbat tbe New York Standard Mortgagee Clause, engrafted on a policy of fire insurance, operates as a distinct and independent contract of insurance for tbe separate benefit of tbe mortgagee, as bis interest may appear, to tbe extent, at least, of not being invalidated, pro ianto or otherwise, by any act or omission on tbe part of tbe owner or mortgagor, unknown to tbe mortgagee', and accordingly, as such, it affords protection against previous as well as subsequent acts of tbe assured. Bennett v. Ins. Co., 198 N. C., 174, 151 S. E., 98, 72 A. L. R., 275; Bank v. Bank, 197 N. C., 68, 147 S. E., 691.

Tbe fact tbat, prior to tbe issuance of tbe policy in suit, tbe mortgagee bad hypothecated bis note and mortgage as collateral security did not ipso facto render tbe Standard Mortgagee Clause void as to bis interest. There is nothing in tbe separate contract of insurance to this effect.

Reversed.