Aetna Casualty & Surety Co. v. Hayland Farms Corp.

Order unanimously modified, on the law, and, as modified, affirmed, with costs to appellants, in accordance with the following memorandum: Appellants are holders of junior mortgages on a property insured by Aetna Casualty & Surety Company (Aetna) and covered by a first mortgage given originally to Manufacturers and Traders Trust Company (M & T). After a fire occurred in the premises, Aetna claimed that the fire was caused by arson and disputed liability for the loss under its policy. Pursuant to the provisions of the standard mortgage clause in the policy, Aetna paid off the principal balance…