mortgagee clause in Pennsylvania

1941It received nothing of value from the plaintiff company, hence, in speaking of another portion of such a clause in a fire insurance policy, this court said in Knights of Joseph v. Insurance Company, 66 Pa. Superior Ct. 90 : ‘The mortgagee clause with the contract of insurance creates a new agreement between the company and the mortgagee.’ The plaintiff’s statement does not even aver that it was required to pay or did pay the premiums to the several companies which issued the policies and as a consequence it shows no possible support for any application of the doctrine of equitable subrogation.

1938Some of the provisions of the policy “are modified and under certain conditions omitted by the new agreement which springs from the mortgagee clause and the insurance policy”: Knights of Joseph Building & Loan Ass’n v. Mechanics’ Fire Insurance Co. of Philadelphia, supra, 66 Pa. Superior Ct. 90 , at page 96.

1984Appellant properly asserts “that a standard mortgagee clause in a fire insurance policy creates a separate, distinct and independent contract of insurance in favor of the mortgagee.” Guarantee Trust and Safe Deposit Co. v. Home Mutual Fire Insurance Co., 180 Pa.Super. 1, 4 , 117 A.2d 824 , 825 (1955).

1976Therefore, the record did not evidence any disputed issues which required further proceedings. 4 *297 Finally, appellant-mortgagee contends that it is not subject to the time limitation which is applicable to the owner-insured, because the mortgage clause provides that “ . . . this insurance, as to the interest of the mortgage . . . shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property . . . ” Appellant properly asserts “that a standard mortgagee clause in a fire insurance policy creates a separate, distinct and independent contract of insura

1948This contention is based upon the rule now well established in Pennsylvania that, “The so-called standard mortgage clause, . . . creates in favor of the mortgagee a contract of insurance separate, distinct and independent from that constituted between the mortgagor and the insuring company by the other provisions of the policy”: Overholt et ux. v. Reliance Insurance Co. et al., 319 Pa. 340, 344 ; see also cases cited by Chief Justice Maxey in support of this proposition.

1937Co. of Phila. et al., 319 Pa. 340 ; Willits v. Camden Fire Ins.

1938Trustee Building & Loan Ass’n v. Liverpool and London and Globe Insurance Co., Ltd., of London, supra. It does not include all the provisions of the policy, and contains many not included in it.

1937Co., Ltd., of London, 93 Pa. Superior Ct. 242 , at page 245.

1954In Wharen v. Markle Banking & Trust Company, 145 Pa. Superior Ct. 99 (1941), the contract with the mortgagee is referred to as a secondary con tract.

1941In Wharen v. Markle Banking & Trust Co. et al., 145 Pa. Superior Ct. 99 , it is stated that “. . . even under the standard clause, the weight of authority is to the effect that the provision for payment of premiums by the mortgagee is not an absolute promise on the mortgagee’s part to pay, but that such payment is merely a condition precedent to giving effect to the secondary contract between the insurer and the mortgagee.” This weight of authority is set forth in annotations to Farnsworth v. Riverton Wyoming Refining Co. et al., 47 A. L.

1938The policy, therefore, may be looked at for the purpose of showing what the mortgagee contract refers' to and establishes, which is quite different, however, from examining the policy for the purpose of defeating the ingrafted contract.” What the Court of Appeals of New *27 York held in Eddy v. London Assurance Corp., supra, 143 N. Y. 311 , at page 324, 38 N. E. 307 , at page 310, 25 L.

1937A. 686, 38 N. E. 307 , referring to the mortgagee clause, says: ‘The controlling idea was a separate insurance of the mortgagee, freed from the conditions attached to the insurance of the owner, and not to be impaired or weakened by any act or neglect of such owner.......By taking the insurance in the manner the mortgagee herein did, instead of taking out a separate policy, all the provisions in the policy which from their nature would properly apply to the case of an insurance of the mortgagee’s interest would be regarded as forming part of the contract with him, while those provisions which

1987William Penn Fire Insurance Company, 130 Pa. Super. 422, 426 , 197 A. 504 , 506: “It follows that the policies with the mortgagee clause attached created, in the instant case, two contracts with appellee, the one insuring the interest of the mortgagor owner, and the other protecting appellant’s interest as mortgagee; and the mortgagor owner, by act or failure to act, could not nullify or decrease the amount of protection which the policies afforded appellant.” The Court goes on to state: Where insurance of the mortgagee’s interest against loss by fire is obtained by use of the mortgagee clause

1987William Penn Fire Insurance Company, 130 Pa. Super. 422, 426 , 197 A. 504 , 506: “It follows that the policies with the mortgagee clause attached created, in the instant case, two contracts with appellee, the one insuring the interest of the mortgagor owner, and the other protecting appellant’s interest as mortgagee; and the mortgagor owner, by act or failure to act, could not nullify or decrease the amount of protection which the policies afforded appellant.” The Court goes on to state: Where insurance of the mortgagee’s interest against loss by fire is obtained by use of the mortgagee clause

1979A standard mortgagee clause does not merely designate a beneficiary, but also creates a separate contract of insurance between the mortgagee and the insurer: Aetna Insurance Co. v. Kennedy, 301 U.S. 389 , 57 S.Ct. 809 , 81 L.Ed 1177 (1937); Satchell, supra; see also, 11 Couch on Insurance 2d § 42:694; 5A Appleman, Ins.

1979A standard mortgagee clause does not merely designate a beneficiary, but also creates a separate contract of insurance between the mortgagee and the insurer: Aetna Insurance Co. v. Kennedy, 301 U.S. 389 , 57 S.Ct. 809 , 81 L.Ed 1177 (1937); Satchell, supra; see also, 11 Couch on Insurance 2d § 42:694; 5A Appleman, Ins.

1955Willits v. Camden Fire Insurance Ass’n, 124 Pa. Superior Ct. 563 , 189 A. 559 ; Overholt et ux. v. Reliance Ins.

1955Willits v. Camden Fire Insurance Ass’n, 124 Pa. Superior Ct. 563 , 189 A. 559 ; Overholt et ux. v. Reliance Ins.

1954Co., 28 Pa. Superior Ct. 341 (1905).

1939Co., 121 Pa. Superior Ct. 175 (1936), the Superior Court held that the standard mortgagee clause is not applicable to judgment or lien creditors, other than mortgagees, and that this is apparent from the language of the clause and from the provisions of The Insurance Company Law of May 17, 1921, P. L. 682, 737, 40 PS §658.

1938In the case of Chandler v. Chandler, 220 Pa. 311 , again the remedy sought was specific performance of an executory contract, and therefore could be no authority in the present case.” We believe that there is no merit in any of the assignments of error and that the decree of the court below is fully warranted under the undisputed facts.

1938Cf. American Building & Loan Association v. Farmers’ Insurance Co., 11 Wash. 619 , 40 Pac. 125 ; Richards on the Law of Insurance ,(4th Ed.) § 304. ......So in this case both the owner and the plaintiff as mortgagee, by becoming parties to their respective contracts of insurance with the defendant, have agreed to the time limitation clause affecting suits upon the policy.......It is broad in scope, and so far as the rights of the plaintiff mortgagee are concerned, it is not contingent upon nor does it relate itself to any personal default or omission by the owner”: Howe v. Mill Owners’ Mut.

1938Cf. American Building & Loan Association v. Farmers’ Insurance Co., 11 Wash. 619 , 40 Pac. 125 ; Richards on the Law of Insurance ,(4th Ed.) § 304. ......So in this case both the owner and the plaintiff as mortgagee, by becoming parties to their respective contracts of insurance with the defendant, have agreed to the time limitation clause affecting suits upon the policy.......It is broad in scope, and so far as the rights of the plaintiff mortgagee are concerned, it is not contingent upon nor does it relate itself to any personal default or omission by the owner”: Howe v. Mill Owners’ Mut.

1937L. 523, at page 525, 80 A. 462 , at page 463, 35 L.

1937It does not include all the provisions of the policy, and contains many provisions not included in it.” See, also, Reed v. Saint Paul *426 Fire & Marine Insurance Co., 67 Pa. Superior Ct. 110, 117 .

1937Co., 87 Pa. Superior Ct. 349 .

1931Co. v. Roberts, 31 Pa. 438 .

1931The mortgage, or trust deed in the nature of a mortgage, as *116 between tbe parties conveys title to tbe real estate so far as is necessary to enforce it as a security (Presbyterian Corp. v. Wallace, 3 Rawle 109 ; Bulger v. Wilderman & Pleet, 101 Pa. Superior Ct. 168, 173 ), and hence creates an interest in the land which is subject to insurance by a separate and independent contract, and it is to effect such insurance that the mortgagee clause is designed.

1931The mortgage, or trust deed in the nature of a mortgage, as *116 between tbe parties conveys title to tbe real estate so far as is necessary to enforce it as a security (Presbyterian Corp. v. Wallace, 3 Rawle 109 ; Bulger v. Wilderman & Pleet, 101 Pa. Superior Ct. 168, 173 ), and hence creates an interest in the land which is subject to insurance by a separate and independent contract, and it is to effect such insurance that the mortgagee clause is designed.

1905Co. v. Coverdale, 48 Kans. 446 (29 Pac.

1905Co., 73 N. Y. 141 ; Westchester Fire Ins.

1905Digest, p. 478, par. 121; Wilson v. Hakes, 36 Ill.

1857It is quite in point to notice that, in this class of cases, the wife’s title to dower is not so vested as to entitle her to interfere with any arrangement which her husband may think proper to make, by which he satisfies the encumbrance; and he may, for this purpose, release or convey his equity of redemption, and then no right of dower can arise: 6 Cowen 316; 19 Wend. 168 ; 8 Mass. 491 ; 10 Id. 364; 13 Id. 230; 4 Kent 45.