Charter Mortgage Co. v. Gray

Banke, Chief Judge.

The appellant mortgage company held a note and security deed on a house owned by the appellees, Mr. and Mrs. Gray. The house was severely damaged by a fire, and the proceeds of a fire insurance policy covering the structure were eventually sent to the mortgage company by the insurance company. Mr. Gray subsequently entered into a contract with a contractor to repair the house. However, the contractor failed to complete the repairs and has been sued by Mr. Gray in a separate action.

During the period in which the contractor was working on the house, the mortgage company made…