First Alabama Bank of Gadsden, Etc. v. Aetna Insurance Company, a Corporation

GODBOLD, Circuit Judge:

First Alabama Bank, as loss payee under a mortgage clause of an Aetna policy of fire insurance, sued Aetna seeking recovery of $50,000. In a jury trial, at the close of the evidence, the district court granted a directed verdict for the Bank. We hold that the directed verdict should not have been granted and reverse.

I. The facts.

In January, 1973, the town of Vina, Alabama, issued $145,000 of warrants to finance construction of a manufacturing plant to be leased to United Homes. The warrants were secured by a mortgage on the plant, which was held by the Bank as trustee…