Sander v. Hartford Fire Insurance Co.

CLEMENS, Senior Judge.

This case raises the issue of a fire insurer’s liability when the insured, without the insurer’s knowledge, has conveyed its interest to a third party and has become mortgagee by virtue of the third party’s purchase price mortgage.

This action was brought by original owners, and later mortgagees, Harry and Sandra Sanders and their wholly owned mortgagee Alamo Industries, Inc. They sued defendant Hartford Fire Insurance Co. which had insured the property for $10,000. During the policy term but without notifying Hartford, plaintiffs Sanders had conveyed the property to…