American Ice Co. v. Eastern Trust & Banking Co.

Citations

• 188 U.S. 626
• 23 S. Ct. 432
• 47 L. Ed. 623
• 1903 U.S. LEXIS 1306

Syllabus

<p>Although, as held .in Farmers' Loan & Trust Company v. Penn Plate Glass Company, 186 U. S. 434, a covenant in a mortgage to keep the property insured does not run with, the land so that an actual grantee taking subject to the mortgage comes under a primary obligation to insure, tlie case is different, under the peculiar language of the covenant contained in the mortgage herein, and where the mortgagor after failing to insure in accordance with the covenant transfers the property to a voluntary assignee. In such case the insurance taken out by the assignee, who stands in the shoes of the assignor, must be assumed to be taken out in fulfillment of the mortgagor’s covenant, and in the event of loss the amount collected under the policies inures to the benefit of the mortgagee, and cannot be retained by the assignee as representing his interest, or that of general unsecured credit-rs, in the equity of the property.</p>