Bell v. Scranton Trust Co.

Supreme Court of Pennsylvania March 18, 1918

Bell v. Scranton Trust Co., 261 Pa. 28 (Pa. 1918)

103 A. 1019; 1918 Pa. LEXIS 681

Brown, Moschzisker, Potter, Stewart, Walling

Opinion of the Court

Per Curiam,

The Rohr McHenry Distilling Company executed a *30mortgage to The Scranton Trust Company, as trustee, to secure the payment of an issue of bonds. The property of the distilling company was destroyed by fire, and this action was brought by a committee of the bondholders against the trust company for its failure to' enforce an alleged covenant of the distilling company in the mortgage as to fire insurance. The cause of action, as set forth in the statement of claim, is upon said alleged covenant, but judgment was refused by the court below for the reason that the covenant declared upon is not to be found in the mortgage. This is true, and it may be added that the following covenant appears in the same: “And it is further covenanted and agreed that trustee shall not, nor shall any future trustee or trustees incur any liability by reason of any loss arising from failure of the distilling company to keep the mortgaged premises and the bonded whiskey insured as herein provided.” The discharge of the rule for judgment is affirmed.

Reference

Full Case Name: Bell v. Scranton Trust Company
Cited By: 2 cases
Status: Published
Syllabus: Trusts and trustees — Corporate toan — Mortgage to trustee as security — Failure to insure premises — Destruction by fire — Liability of trustee — Contracts—Construction. Where a corporation executed a mortgage to a trust company to secure the payment of a bond issue, and thereafter the property of the corporation was destroyed by fire, and an action was brought by a committee of the bondholders of the corporation against the trust company for its failure to enforce an alleged covenant in the mortgage as to fire insurance, a rule for judgment was properly discharged, where it appeared that the covenant declared upon did not appear in the mortgage, and that the mortgage expressly provided “it is further covenanted and agreed that trustee phall not _......incur any liability by reason of any loss arising from failure of the (mortgagor) to keep the mortgaged premises......insured.”