The sun. [volume] (New York [N.Y.]) 1833-1916, 1910-11-22
RIGHTS OF a .MORTG aGEE.

4 question never before passed upon
directly In this State has been decided by
tho Appellate Division OF the supreme
Court. First Department. In Hsilbrun 70
the German Alliance Insurance Company
| 81 New York. In which the court by divided
bench rules that the mortgage OF premises
in which there has been a fire loss may sse
to recover on a policy without first giving
the Insurance company proof OF loss and an
opportunity to arbitrate the claim.
| Justice Laughlin. who writes dissent
| ing opinion, says. 1t scarcely needs renec-
| tion TO realize tina, II mortgage may
| recover six years or more after the loss.
without notice OF the fre. proof OF the loss
or opportunity for arbitration. tho door
will he opened wide not only 10 fraudulent
| claims upon which the companies VIII be
victimized. for they will he helpless in many
instances to defend themselves against dis
! honest claims. but also tn collusion between
owners and mortgages
Jrstice Scott wrote he majority opinion.
| IN which Justices Mclaughlin and Clarke
and Presiding Justice Ingraham concurred.
The pla inttf's a-signor held n mortgage on
the insured building and there was attached
TO the policy "a mortgage clause. which. a.
the insurance company admitted. provided
that the loss or DANA 90 should he paid 20 the
mortgagee a. his interest might appear. ana
provided that the interest Of the mortgage
should not he invalidatsd by any act or
neglect of the mortgsgor or owner OF IN"
property described. The complaint in the
case merely alleged the fire and the amour:
Of loss and the proportion due from the
defendant. The complaint was silent a. 10
whether the insured the MORTGAGE or MS
assignee had served notice and proofs oi
loss and the defendant demurred on that
ground Tho lowe. court sustained the
demurrer. and IN. Appellate Division re-
verses the order.
Justice Scott said that the decision in the
lower court rested upon the proposition thai
'he plaintiffs assignor. although only
mortgage. must "a condition precedent
TO recovery allege 'hE' he or the morrgagor
had within the time pres cribed by the policy
given 20 the defendant notice Of the loss
and furuis ned proofs OF loss Whether there
was any such litigation IL the crucial ques-
ton involved in the case There are de-
| cisions both ways IN other States. The
court SAWS that the prov isions OF the mort
gage claus. OF the policy declaring that the
interest of the mortgage should not bs
| validated by any act or neglect OF the
| mortgagor or owner creates a new and dis
tinct contract which places the MORTGAGE
| upon anot her and different footing from that
of a mere assignee or appointee 10 receive
the loss. and renders him the holder of a dis
tinct interest separate from the owner
| Justice Scott saws
| The interest Of the owner and the mortgage
are regarded as distinct subjects OF Insurance
As said b. RapalIo 4 think that the In ten,
! Of the clause to make the policy operate as an
Insurance Of the mortgsxors and the MORTGAGES
separately. and to give the mortgages the same
benei' ~ ~ they had taken out separate policy
! free from the conditions imposed upon the owners
making the mortgages responsible only for their
own acts HAsiings ~ w-s,ch-St~r Fire Ins
Co. - y Y. nil Many Of these
| oblig lions thus imposed upon the owners relate
| 70 matters concerning which the MORTGAGE Is not
presumed to have knowledge. or with which. In
I the nature OF rhe case. he could not comply
This Includes the giving Of immediate notice of
/ tue loss. Of which the mortgage may he ignorant
for . long time. anu 'he furnishing of proofs of
loss. which tho mortgage may b. quite unable
! 10 do We are therefore OF the opinion that the
MORTGAGE under Obligation 20 furnish
proof % loss 70 give any other earlier otlce
Of loss than that involve In the commencement
| " this action.
| In his dissenting opinion Justice I.sughlin
THINKS that the prov isions with respect TO
notice OF fire. proof OF loss and arbitration
which apply 70 the insured be'' ONE part OF
| he contract with the mortgage and NAV
fairly he snid 20 be applicable To any claim
made against the company under the policy
| Justice IaughIin believes that the dss i-ion
OF the Court Of Appeals in Eddy Va. Iondon
| Assurance Corporation tI+3 y Y. SID sus-
tains these views. In tbs case Justice
Peckham wrote
ny taking the insurance In the manner the
MORTGAGE herein it'd. instead OF taking out .
separate policy. all the provisions OF the policy.
which from their nature would properly apply 10
, the Of an Insurance Of the MORTGAGE inter
est would be regarded as forming part Of the
| contract with him while thos. provisions which
anisg oniIe or impair the force Of the particular
and special provisions contained In the clause
providing for the insurance Of the MORTGAGE
must be regarded A. ineffective ana inspplic able