Peerless Insurance Company v. Bailey Mortgage Company, National Indemnity Company v. Richard M. Banks and Iona Coleman Banks

GRIFFIN B. BELL, Circuit Judge:

This appeal presents an unusual result on claims for fire damage to a residence in Vicksburg, Mississippi. The mortgagee who made a construction loan to the builder recovered the full amount of the damage on a policy issued by one insurance company. The occupants of the residence who had contracted to purchase it, and whose interest, as we shall see, was equitable at the most and of a disputed value, recovered the full amount of the damage on a fire policy issued to them by another insurance company.

The pertinent facts follow. Mrs. Laughlin was a house builder.…