posted by Missy on .
Eagle Sales Company owns a warehouse, subject to a mortgage obtained from First National Bank. Separately, Eagle and First National obtain insurance policies from Good Hands Insurance Inc., to cover the warehouse. Later, Eagle sells the property to Interstate Distribution Corporation but keeps the insurance policy. First National agree to act as Interstate's mortgagee, and Interstate obtains an insurance policy from Good Hands to cover the property. A fire totally destroys the warehouse. Who can recover an amount for its loss?
I think that usually there can be only one policy of insurance on this building. The insurance company could never issue multiple policies because of the fear of then having something like this happening and they could be obligated to pay out money to multiple claimants for the same injury. Therefore to dis-regard an argument, first national and interstate could recover for the loss of the building.