ÿWPC0R U¹Œ9FDs| ¹Õ4y¦ËImí‹ïÖ@öæÒ§%óû Ü@¹±r"ëCT„7iéÂpE,«hÀ¡t•ý ]%ntG£ÎZÕ䉌ÿunסN7ã…µjΊî>s‚–î2æ7 Ì4Wɾ!%/C¬´ÚEwðÛ™º °hÖŸ,fBý·ª­{Äïuê+ùǯÖ%Åiù·J¢Š0\ªÎ\BçèG"Óžæú§]'·gsÏ>Ûþ¦Gúü ¬òjœ°‡L “™y Té8Ž¡R1HJ¯üWÇ®—Ö—/„²”Ìx¶›òµsˆÑ:+£5–|r³yE1ã¾Èœ”ªp±]&bCôÞ>Ù\'ªÂ¶Üp¶`ÒK KÜLÌ+©^H›Â5rjä5@h‡%ËI#”9 ׄ6ÄØkzÓ]„F¦2rÒ:nMùvßý‘íN[$Çib(§ÿ‰ T”)ª¬GØ™–;¦ >žãB ä:Êð.)£<7øÛàÍzYÑ}\3…¨{á…ƒ8\p¡êĹæ¦/uüž¢“¯B9foô=›ú›‘饘/4ã„k¶Ö‚¼%ýóRpÔPð”¼o WÈHrՊ˲‹¡IÑ–¤’îoó1“öº‰÷ØÈÅJd#!xUN™ %ç 0(íU@ U:U w 4“ § N¶ ^ ¸ Ä mÆ 1‡Ý 1ud 0cÙ 1‡< 1‡Ã 1‡J 1‡Ñ 1‡X Hß R'xy 0 Òñ 0 DÃU@U<G7ƒUNºUN BV 0Ds 1‡·K> 0w‰ 0Š 0 Š 0´* 72ÞÂ/ 0ÇÓ0]š10 ÷5 1‡'B 1‡®B 1‡5C 1‡¼C 1‡CD 1‡ÊDU:QE'‹E²F²F–ÊIÉ`Kï)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M)M 0DP D5\P\P\P\P\P AQ‘PÆâP 0D¨Q 0DìQ˜HP LaserJet 8000 DN PSØÚØÚÚØØÚ0(ÈhH  Z 6Times New Roman RegularX($¡¡ô\  `(Times NewRomanTT3cp¬ Z"Times Regular{Z='3|xzž1'L ÿU‹ÿÀÀÀ QcCEKQW]ckqAutoList1A.A.A.1.A.(1)A.A.##37=CIQYag­­1.a.i.(1)(a)(i)1)a)(;3£$´´Ô2#ÔÚ  Ú0Ú  Ú.Ô3  Ôà0  à(EhCEKQW]cioAutoList21.1.1.1.1.1.1.1.(ª½CEKQW]cioAutoList3A.A.A.A.A.A.A.A.(ehCEKQW]cioAutoList4a.a.a.a.a.a.a.a.(ʽCEKQW]cioAutoList5A.A.A.A.A.A.A.A.(…hCEKQW]cioAutoList61.1.1.1.1.1.1.1. €GRUNDYALTAMAONTPHILBINPIGUEMARCHETTI PLLCPoston S.W.NanceGrundyNatlNoleslienholdersLaurenziLawrenceburgsubrogationlienholderElsner CasAlvis AcciAss'ndisaffirmanceAm.JurF.D.I.C.GatlinCurleCrittendenDearingCOTTRELL 5opCANTRELLAm.Jur nÝ ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú9Ú  ÚóóÝ  ÝÔ_Ô€Ô€XÌ–XXXÌ–Ô€Oklahoma€courts€have€held€that€a€standard€or€union€clause€is€effective€to€protect€theÐ ° Ðinterest€of€the€mortgagee€even€though€the€policy€itself€was€void€òòab€initioóó€as€to€the€mortgagor.òò€Ð œì ÐGreat€American€Ins.€Co.€v.€Southwestern€Finance€Coóó.,€297€P.2d€403€(Okla.€1956);€€òòOklahomaÐ ˆØ ÐState€Union€of€Farmersðð€Educational€&€Cooperative€Union€v.€Folsomóó,€325€P.2d€1053€(Okla.Ð tÄ Ð1958).€€Similarly,€in€òòPittsburgh€National€Bank€v.€Motorists€Mutual€Ins.€Co.óó,€87€Ohio€App.3dÐ `° Ð82,€621€N.E.2d€875€(1993),€the€court€held€that€where€the€actions€of€the€insured€would€renderÐ L œ Ðthe€loss€Ñ @ ÑÑ @ Ñbeyond€the€scope€of€the€policy€coverage,€the€mortgagee€is€not€precluded€from€coverage,Ð 8 ˆ Ðabsent€such€a€limitation€in€the€loss€payable€clause.Ô€¼ëc»XXÌ–Ô(‚(2ˆ$¤¤Ý ƒ!ÝÝ  ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€X‡ XXXÔÔ€X‡ XXX‡ Ôà Ø àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó(ÊÚE Z‹(Times New Roman ô\  `$Times NewRoman -Ý ƒb¯"ÝÝ  ÝÔ_ÔÔ€4XÞƒXXXÔÔ€4®KX4XÞƒÔÓ  Óò òÔ Ad ÔFILEDÔ€4XÞƒX4®KÔÐ  ÐÌSeptember€17,€1999ÌÌCecil€Ô_ÔCrowsonÔ_Ô,€Jr.ÌAppellate€Court€ClerkÔdAxÔó ó'í€"  Z 6Times New Roman Regular(ÖÃ9 Z‹6Times New Roman Regular d(3¯$©©Ý ƒ!ÝÝ  Ý(ZùEGMSY_ekqAutoList13A.A.A.A.A.A.A.A. AÝ ƒ!¯)ÝÝ  ÝÔ_ÔReeves.60p€823/99€3:56(Oé;$µµà0  àÔ2#ÔÚ  ÚaÚ  Ú.Ô3  Ôà0` (#(#à(b·¤$¶¶à0  àà0` (#(#àÔ2#ÔÚ  ÚÚ  Ú.Ô3  Ôà0¸ ` (#` (#à(xir$··à0  àà0` (#(#àà0¸ ` (#` (#àÔ2#Ô(Ú  Ú0Ú  Ú)Ô3  Ôà0¸ (#¸ (#à(ŒÜ$¸¸à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àÔ2#Ô(Ú  ÚaÚ  Ú)Ô3  Ôà0h(#(#ài) ÷Ý ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú3Ú  ÚóóÝ  ÝÔ_ÔÔ‡XÌ–XXXÌ–Ô€€The€terms€of€the€policy€governing€cancellation€provide:Ð ° ÐÌà8 Ø àò òTERMINATIONó óÐˆØØ ü!Ø ü! ÐÌÓ€ (Qc03ÓÝ"‚3£"ÝÝ  Ýà Ø àÝ‚3£åÝÔ2QcÔÚ  ÚAÚ  Ú.Ô3  Ôà0 0 àÝ  Ýò òCancellationó ó.€€This€policy€may€be€canceled€during€the€policy€period€as€follows:݃3£åÝŒÐ`°0 T$0 T$ ÐŒÝ  ÝÓ  Ó***Ð P   ÐÓÓÓ€ /(”00ÓÝ"‚3£"ÝÝ  Ýà Ø àà 0 àÝ‚3£ÄÝÔ2”ÔÚ  Ú2Ú  Ú.Ô3  Ôà0 ˆ àÝ  ÝWe€may€cancel€by€mailing€to€the€named€insured€shown€in€theÐ < Œ ÐDeclarations€at€the€address€shown€in€this€policy:݃3£Ä ÝŒÐ( xˆT$ˆT$ ÐŒÝ  Ýà Ø àà 0 àÌà0 Ø àà 0 àà ˆ àa.€at€least€10€days€notice:Ð P Ø T$Ø T$ ÐÝ"‚'Ü"ÝÝ  ÝÝ‚'ÜœÝà0 Ø àà00 Ø T$Ø T$àà0ˆ0 T$0 T$àà0àˆT$ˆT$àÔ2”Ô(Ú  Ú1Ú  Ú)Ô3  Ôà08àT$àT$àÝ  Ýif€cancellation€is€for€nonpayment€of€premium;€or݃'ÜœÉÝŒÐì < 8T$8T$ ÐŒÝ  ÝÌÝ"‚'Ü"ÝÝ  ÝÝ‚'ÜçÝà0 Ø àà00 Ø T$Ø T$àà0ˆ0 T$0 T$àà0àˆT$ˆT$àÔ2”Ô(Ú  Ú2Ú  Ú)Ô3  Ôà08àT$àT$àÝ  Ýif€notice€is€mailed€during€the€first€60€days€this€policy€isÐ Ä  Ðin€effect€and€this€policy€is€not€a€renewal€or€continuationÐ °  Ðpolicy;€or݃'Üç݌Мì 8T$8T$ ÐŒÝ  Ý€Ìà Ø àà 0 àà ˆ àb.€at€least€20€days€notice€in€all€other€casesÐ tÄ ÐÓ  Óà @ à*à @` àà @¸ àà @ àà @h àà @À à*à @ àà @p àà @È àà @  àà @x à*Ð `° ÐÓ ÓØ! !ØÓ€ 3(õ£80/ÓÝ"‚3£"ÝÝ  Ýà0 Ø àà00 Ø T$Ø T$àÝ‚3£l ÝÔ2õ£ÔÚ  Ú3Ú  Ú.Ô3  Ôà0ˆ0 T$0 T$àÝ  ÝAfter€this€policy€is€in€effect€for€60€days,€or€if€this€is€a€renewal€orÐ Lœ Ðcontinuation€policy,€we€will€cancel€only:݃3£l ¹ ÝŒÐ8ˆˆT$ˆT$ ÐŒÝ  ÝÓ  Óà @ à*à @` àà @¸ àà @ àà @h àà @À à*à @ àà @p àà @È àà @  àà @x à*Ð $t ÐÓá ÓÓ€ (eh883Óà Ø àà 0 àà ˆ àc.€If€the€policy€was€obtained€through€material€misrepresentation.Ð ` ÐÓ  Óà @ à*à @` àà @¸ àà @ àà @h àà @À à*à @ àà @p àà @È àà @  àà @x à*Ð üL ÐÓ” ÓÓ€ "(Zù88ÓÝ"‚3£"ÝÝ  Ýà Ø àÝ‚3£ÍÝÔ2ZùÔÚ  ÚDÚ  Ú.Ô3  Ôà0 0 àÝ  Ýò òOther€Termination€Provisions.ó ó݃3£ÍÝŒÐè80 T$0 T$ ÐŒÝ  ÝÓ  Óà @ à*à @` àà @¸ àà @ àà @h àà @À à*à @ àà @p àà @È àà @  àà @x à*Ð Ø( ÐÓÅÓØ! !ØÓ€ 2(å£88"ÓÝ"‚3£"ÝÝ  Ýà Ø àà 0 àÝ‚3£ÝÔ2å£ÔÚ  Ú3Ú  Ú.Ô3  Ôà0 ˆ àÝ  ÝThe€effective€date€of€cancellation€stated€in€the€notice€shall€become€theÐ Ä Ðend€of€the€policy€period.݃3£d݌аˆT$ˆT$ ÐŒÝ  ÝÓ€ 0(µh882Ó ¸Ý ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú5Ú  ÚóóÝ  ÝÔ_ÔÔ‡XÌ–XXXÌ–Ô€€It€is€undisputed€that€the€insured€did€not€commit€any€of€the€acts€so€enumerated,€andÐ ° Ðthe€insurer€itself€characterizes€the€insuredððs€misrepresentations€as€fraudulent.Ô#†XÌ–XXXÌ–¹#Ô(ŸF$¹¹à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àÔ2#Ô(Ú  ÚÚ  Ú)Ô3  Ôà0Àh(#h(#à SÝ ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú1Ú  ÚóóÝ  ÝÔ_ÔÔ€XÌ–XXXÌ–ÔÔ€¼ëc»XXÌ–Ô€€Ô€XÌ–X»¼ëcÔA€statute€passed€after€òòLaurenzióó,€now€codified€at€Tenn.€Code€Ann.€ðð€56„7„804,Ð ° Ðprotects€the€interest€of€a€mortgagee€from€invalidation€of€a€fire€insurance€policy€on€realtyÐ Â Ðbecause€of€any€act€or€neglect€of€the€insured.€€The€standard€mortgage€clauses€in€that€type€ofÐ ®þ Ðpolicy€could€not€provide€less€protection€to€the€mortgagee€than€the€statute.€€Thus,€the€languageÐ šê Ðin€the€cases€involving€fire€insurance€on€real€property€may€indicate€that€the€insurer€cannot€limitÐ †Ö Ðthe€loss€payeeððs€interest€by€specifying€which€acts€of€the€insured€may€result€in€invalidation.€€TheÐ r  Ðstandard€mortgage€clause€language€required€by€Tenn.€Code€Ann.€ðð€56„7„804€is€not€required€inÐ ^ ® Ðother€types€of€insurance. & Ý ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú2Ú  ÚóóÝ  ÝÔ_ÔÔ€XÌ–XXXÌ–Ô€€òòNationwide€Mutual€Insurance€Co.€v.€Dempseyóó€involved€a€clause€almost€identical€toÐ ° Ðthe€one€in€this€case.€€That€provision€read:Ð œì ÐÌà8 Ø àà80 Ø ü!Ø ü!àLoss€or€damage€under€this€policy€shall€be€paid€as€interest€mayÐ tÄ Ðappear€to€you€and€the€loss€payee€shown€in€the€Declarations.€Ð `° ÐThis€insurance€covering€the€interest€of€the€loss€payee€shallÐ L œ Ðbecome€invalid€only€because€of€your€conversion€or€secretion€ofÐ 8 ˆ Ðyour€covered€auto.€€However,€we€reserve€the€right€to€cancel€theÐ $ t Ðpolicy€as€permitted€by€policy€terms€and€the€cancellation€shallÐ  ` Ðterminate€this€agreement€as€to€the€loss€payeeððs€interest.€€We€willÐ ü L  Ðgive€the€loss€payee€10€days€notice€of€cancellation.Ðè 8 0 ¤0 ¤ ÐÌòòDempsey,óó€495€S.E.2d€at€915.Ð À   Їà Ø àThe€court€discussed€the€two€types€of€mortgagee€(or€loss€payee)€clauses.€€ð ðThe€first,Ð ° Ðtypically€referred€to€as€a€ððstandard€or€union€mortgage€clause,ðð€stipulates€that€ððthe€interest€of€theÐ œì Ðmortgagee€in€the€proceeds€of€the€policy€shall€not€be€invalidated€by€any€act€or€neglect€of€theÐ ˆØ Ðmortgagor.ðð€€This€type€of€clause€acts€as€a€distinct€and€independent€contract€between€theÐ tÄ Ðinsurance€company€and€the€mortgagee€and€ððconfer[s]€greater€coverage€to€the€lienholder€thanÐ `° Ðthe€insured€has€in€the€underlying€policy.ðððð€òòId.óó€The€court€found€that€the€language,€ð ðinsuranceÐ L œ Ðcovering€the€interest€of€the€loss€payee€shall€become€invalid€only€because€of€your€conversionÐ 8 ˆ Ðor€secretion€of€your€covered€auto,ðð€clearly€extends€to€the€loss€payee€greater€coverage€than€thatÐ $ t Ðextended€to€the€insured€as€it€sets€only€two€instances€in€which€the€loss€payeeððs€insuranceÐ  ` Ðcoverage€will€become€invalid.€òòId.€óóat€916.Ð ü L  ÐÌà Ø àIn€òòPittsburgh€National€Bank€v.€Motorists€Mutual€Insurance€Co.óó,€87€Ohio€App.3d€82,Ð Ô$  Ð84,€621€N.E.2d€875,€876€(1993),€the€Ohio€Court€of€Appeals€held€that€the€following€language,Ð À  Ðwhich€echoes€the€language€of€the€policy€at€issue,€constituted€a€standard€loss€payable€clause:Ð ¬ü  ÐÌà8 Ø àà80 Ø ü!Ø ü!àLoss€or€damage€under€this€policy€shall€be€paid,€as€interest€mayÐ „Ô  Ðappear,€to€you€and€the€loss€payee€shown€in€the€Declarations.€Ð pÀ ÐThis€insurance€covering€the€interest€of€the€loss€payee€shall€notÐ \¬ Ðbecome€invalid€because€of€your€fraudulent€acts€or€omissionsÐ H˜ Ðunless€the€loss€results€from€your€conversion,€secretion,€orÐ 4„ Ðembezzlement€of€your€covered€auto€...(ê½CEKQW]cioAutoList7A.A.A.A.A.A.A.A. ”CEKQW]ekqAutoList81.1.1.1.(1)1.1.1.(µhCEKQW]cioAutoList91.1.1.1.1.1.1.1.(*ùEGMSY_ekqAutoList10A.A.A.A.A.A.A.A.(å£EGMSY_ekqAutoList111.1.1.1.1.1.1.1.(õ£EGMSY_ekqAutoList121.1.1.1.1.1.1.1.,c½¬AZ‹"Arial Regular Ý ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú7Ú  ÚóóÝ  ÝÔ_Ô€€The€validity€of€the€cancellation€òòab€initioóó€as€to€the€insured€is€not€at€issue€in€this€appeal. Ý ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú8Ú  ÚóóÝ  ÝÔ_ÔÔ‡XÌ–XXXÌ–Ô€€A€voidable€contract€is€one€where€one€or€more€parties€have€the€power€to€avoid€theÐ ° Ðlegal€relations€created€by€the€contract,€or€by€ratification€of€the€contract€to€extinguish€the€powerÐ œì Ðof€avoidance.€€€Accordingly,€a€voidable€contract€is€valid€and€binding€until€it€is€avoided€by€theÐ ˆØ Ðparty€entitled€to€avoid€it.€€òòSeeóó€òòNewton€v.€Coxóó,€878€S.W.2d€105,€108€(Tenn€1994).Ô‡¼ëc»XXÌ–ÔÐ tÄ Ðà Ø àÔ#†¼ëc»»¼ëc¹#ÔÔ#†XÌ–X»¼ëcˆ#Ô ŒÑTR[¬ AØ'ÿ Legal[¬ AØ'ÿ Legal AØ'ÿ Legal AØ'ÿ LegalTÑÑ8€g»»d XXdê8Ñ ¿Ý ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú4Ú  ÚóóÝ  ÝÔ_ÔÔ€XÌ–XXXÌ–Ô€€Generally,€the€rights€of€a€loss€payable€mortgagee€are€determined€at€the€time€of€theÐ ° Ðloss.€€òòSee€Benton€Banking€Co.€v.€Tennessee€Farmers€Mut.€Ins.€Co.óó,€906€S.W.2d€436,€438Ð œì Ð(Tenn.€1995). åÝ ƒ\+$ÝÒ€°ÒÒ„°ÒÓ  ÓÔ€XÌ–XXXÔÔ€XÌ–XXXÌ–Ôà Ø àòòÚ  Ú6Ú  ÚóóÝ  ÝÔ_Ô€€Ô€XÌ–XXXÌ–ÔIn€òòNolesóó,€813€S.W.2d€at€439,€this€Court€held€that€the€loss€payee€was€protected€evenÐ ° Ðthough€the€insured€had€let€the€policy€lapse€by€failing€to€pay€premiums.€€The€loss€payable€clauseÐ œì Ðin€that€contract€required€the€insurer€to€give€ten€days€notice€prior€to€cancellation€of€theÐ ˆØ Ðlienholderððs€protection€and€also€stated€that€the€loss€payeeððs€interest€would€ð ðnot€be€invalidatedÐ tÄ Ðby€any€act€or€neglect€of€the€.€.€.€mortgagor.ðð€òòId.óó(3¯$££Ý ƒ!ÝÝ  Ý )ÿÿ!dxdxabZc[Cþÿ<<CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý($$””ò òÚ  Ú1Ú  Úó óÝ ƒ!ÝÝ  ÝÔ_ÔÒ€°ÒÒ„°ÒÔ‡X)*XXXÔÓ  ÓÔ€¼à‰»XX)*ÔÑTR[° AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÑ€8ÉÑÔ_Ôßv€`[@0,j:`  `€€@ÿEô±` 8ttxP,°ð  vßÔ_ÔIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÐ ° ÐAT€NASHVILLEÌÔ#†¼îk»»¼à‰G#ÔÓfÓÔ‡¼îk»»¼îkÔÌÌED€REEVES,€d/b/a€EDððSà0 8 àà08T$8T$à)Ðì<T$T$ ÐIMPORTS,à 0 àÔ#†¼îk»»¼îk#ÔÔ‡¼îk»»¼îkÔà0 ˆ àà0àˆT$ˆT$àà08àT$àT$àà08T$8T$à)Ðþ NT$T$ Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è àÐ  ` Ðà Ø àPlaintiff/Appellee,à 8 àà  à)Ð " r Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)Ìv.à Ø àà 0 àà ˆ àà à àà 8 àà  à)à è àNo.€01A01„9807„CH„00379Ð F–  Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)ÌGRANITE€STATE€INSURANCEà  à)à è àGrundy€Chancery€Ð jº  ÐCO.Ô#†¼îk»»¼îkµ#ÔÔ‡¼îk»»¼îkÔ,à0 Ø àà00 Ø T$Ø T$àà0ˆ0 T$0 T$àà0àˆT$ˆT$àà08àT$àT$àà08T$8T$à)à è àNo.€€4708Ð|Ì T$T$ Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)Ìà Ø àDefendant/Appellant.à 8 àà  à)à è àÐ  ð ÐÔ#†¼îk»»¼îk…#ÔÌÌÔ‡¼à‰»»¼îkÔÓ  ÓAPPEAL€FROM€THE€CHANCERY€COURT€OF€GRUNDY€COUNTYÐ Ö& ÐTENNESSEEÌÌTHE€HONORABLE€JEFFREY€F.€STEWART€PRESIDINGÌÌÓ  ÓÌÌERNEST€D.€BENNETT,€IIIÌTAYLOR,€PHILBIN,€PIGUE,€MARCHETTIÌ&€BENNETT,€PLLCÌ2908€Poston€AvenueÌNashville,€Tennessee€37203ÌÌAttorney€for€the€Defendant/AppellantÌÌROBERT€S.€PETERSÌ100€First€Avenue€S.W.ÌWinchester,€Tennessee€37398ÌÌAttorney€for€Plaintiff/AppelleeÌÌÌÌÓ  Óò òAFFIRMED€AND€REMANDEDÐ ê.:*( Ðó óÓÌ ÓÌà Ø àà 0 àà ˆ àà à àà 8 àà  àà è àà @ àÌà Ø àà 0 àà ˆ àà à àà 8 àà  àà è àà @ àPATRICIA€COTTRELL,€J.ÌÌCONCURS:ÌBEN€Ô_ÔCANTRELLÔ_Ô,€P.€J.,€M.S.ÌÌDISSENTS€IN€SEPARATE€OPINION:ÌWILLIAM€C.€KOCH,€JR.,€J.ÌÌÓ  ÓòòÖ€#ÿÿÖÔ€„þX „»¼à‰ÔÓÓÖ€#ìÖÐ p:À53 ÐÑ8ÉÑâ 8âÑTR[° AØ'ÿ Legal[° AØ'ÿ Legal AØ'ÿ Legal AØ'ÿ LegalTÑÑ8€îk»»dXXdì8Ñâ 8âÑ  ÑÔ_ÔOPINIONóóÔ#†„š¶ „ „„þX#ÔÐ ° ÐÓ  Óà Ø àÔ€¼}» „„F8ÔThis€is€€an€action€to€recover€upon€an€insurance€policy€insuring€anÐ  ` Ðautomobile€against€loss.€€The€named€insured,€Mr.€Nance,€the€owner€of€theÐ @  Ðautomobile,€is€not€a€party€to€the€action.€€Instead,€the€suit€was€brought€by€EdÐ pÀ  ÐReeves,€doing€business€as€Edððs€Imports,€in€his€capacity€as€the€loss€payee€namedÐ  ð  Ðin€the€insurance€policy.€€This€appeal€involves€the€rights€of€the€loss€payee€underÐ Ð   Ðthe€loss€payable€provision€of€the€insurance€contract€where,€after€the€loss,€theÐ P Ðinsurance€company€canceled€the€policy€€retroactively€due€€to€a€discoveredÐ 0€ Ðmisrepresentation€in€the€application€by€the€insured.€€The€trial€court€ruled€in€favorÐ `° Ðof€the€appellee,€Edððs€Imports.€€We€affirm.Ð à Ðà Ø àEd€Reeves,€doing€business€as€Edððs€Imports,€€sold€a€1992€Nissan€MaximaÐ À Ðto€Mr.€Nance€and€financed€this€purchase.€€Mr.€Nance€gave€Mr.€Reeves€aÐ ð@ Ðpromissory€note,€and€agreed€to€maintain€insurance€coverage€on€the€car.€€Mr.Ð  "p ÐNance€purchased€that€insurance€from€Granite€State€Insurance€Company,€theÐ P$  Ðappellant.€€Granite€State€issued€the€policy,€which€designated€Edððs€Imports€as€theÐ €&Ð! Ðloss€payee.€Also€included€in€the€policy€was€a€provision€establishing€aÐ °($  Ðð ðdeductibleðð€for€the€loss€payee.€Edððs€Imports€received€notice€of€the€insuranceÐ à*0&" Ðand€its€loss€payee€status€from€the€insurer.Ð -`($ Ðà Ø àMr.€Nanceððs€car€was€stolen€on€June€8,€1996,€and€a€claim€was€filed.€In€theÐ @/*& Ðcourse€of€its€investigation,€Granite€State€discovered€that€Mr.€Nance€had€beenÐ p1À,( Ðconvicted€of€felonious€possession€of€marijuana€before€he€applied€for€insuranceÐ  3ð.* Ðcoverage.€€In€his€application€for€insurance,€he€had€answered€ð ðnoðð€to€the€question,Ð Ð5 1, Ðð ðhas€anyone€in€household€been€arrested€for€any€offense€other€than€trafficÐ 8P3. Ðoffenses?ðð€€Based€upon€this€misrepresentation€by€the€insured,€Granite€StateÐ ° Ðdenied€the€claim€and€canceled€the€insurance€policy€retroactively,€declaring€itÐ à0 Ðvoid€òòab€initioóó.Ð  ` Ðà Ø àEdððs€Imports,€the€loss€payee,€does€not€dispute€the€insurance€companyððsÐ @  Ðright€to€cancel€€the€policy€retroactively€with€regard€to€the€insured.€€Therefore,€weÐ p À Ðneed€not€consider€the€validity€of€the€insurance€companyððs€retroactiveÐ  ð  Ðcancellation€of€the€policy€as€to€the€insured.Ð Ð  Ðà Ø àEdððs€Imports,€the€loss€payee,€attempted€to€recover€from€the€insuranceÐ P Ðcompany,€and€Granite€State€denied€that€claim.€€Edððs€Imports€filed€suit€in€theÐ 0€ ÐChancery€Court€of€Grundy€County,€and€the€matter€was€tried€by€Stipulation€ofÐ `° ÐFacts€submitted€by€the€parties.€The€trial€court€found€that,€under€the€terms€of€theÐ à Ðpolicy,€the€loss€payee€was€entitled€to€recover.€The€court€found€that€the€policyÐ À Ðshould€be€construed€to€require€notice€to€the€loss€payee€before€cancellation€wouldÐ ð@ Ðbe€effective€as€to€the€loss€payee,€that€any€ambiguity€in€this€regard€should€beÐ  !p Ðresolved€in€favor€of€the€loss€payee,€and€that€the€loss€occurred€prior€to€the€noticeÐ P#  Ðof€cancellation€of€the€policy.€The€trial€court€awarded€Edððs€Imports€the€stipulatedÐ €%Ð  Ðamount,€$12,008.€€Granite€State€appeals€that€decision.Ð °'#  Ðà Ø àCounsel€for€both€parties€have€clearly€and€accurately€defined€the€issue€forÐ à)0%" Ðthis€Court€and€for€the€trial€court:Ð ,`'$ ÐÓÓà8 Ø àWhether€Granite€Stateððs€òòab€initioóó€cancellation€of€the€policy,Ð @.)& Ðsubsequent€to€the€loss,€prevents€recovery€by€the€loss€payee,€basedÐ X/¨*' Ðupon€the€terms€and€conditions€of€the€policy€and€applicable€law.Ðp0À+(Ø ü!Ø ü! ÐÓÓà Ø àÌà Ø àSince€the€questions€raised€herein€are€purely€questions€of€law€and€not€ofÐ ¸3/+ Ðfact,€our€review€is€òòde€novoóó€on€the€record€with€no€presumption€of€correctness€ofÐ è581- Ðthe€trial€courtððs€conclusions€of€law.€€òòSee€Chrysler€Credit€Corp.€v.€Nolesóó,€813Ð 8h3/ ÐS.W.2d€437,€438€€(Tenn.€App.€1990);€òòAdams€v.€Dean€Roofing€Co.óó,€715€S.W.2dÐ ° Ð341,€343€(Tenn.€App.€1986).Ð à0 ÐÓ  ÓI.Ð  ` ÐÓL"Óà Ø àBoth€parties€rely€upon€the€following€provision,€which€they€refer€to€as€theÐ @  Ðloss€payable€clause,€and€the€outcome€of€this€case€largely€turns€on€theÐ p À Ðinterpretation€of€this€language:Ð  ð  ÐÓÓà8 Ø àà80 Ø ü!Ø ü!àLoss€or€damage€under€this€policy€shall€be€paid,€asÐ Ð  Ðinterest€may€appear,€to€you€and€the€loss€payee€shownÐ è8  Ðin€the€Declarations€or€in€this€endorsement.€ThisÐ P Ðinsurance€with€respect€to€the€interest€of€the€loss€payee,Ð h Ðshall€not€become€invalid€because€of€your€fraudulentÐ 0€ Ðacts€or€omissions€unless€the€loss€results€from€yourÐ H˜ Ðconversion,€secretion€or€embezzlement€of€ð ðyourÐ `° Ðcovered€auto.ðð€€However,€we€reserve€the€right€toÐ xÈ Ðcancel€the€policy€as€permitted€by€policy€terms€andÐ à Ðcancellation€shall€terminate€this€agreement€as€to€theÐ ¨ø Ðloss€payeeððs€interest.€€We€will€give€the€same€advanceÐ À Ðnotice€of€cancellation€to€the€loss€payee€as€we€give€toÐ Ø( Ðthe€named€insured€shown€in€the€Declarations.Ðð@0 ¤0 ¤ Ðà Ø àÌÓÓà Ø àUnder€Tennessee€law,€where€an€insurance€contract€includes€an€ð ðopenðð€orÐ  !p Ðð ðsimpleðð€loss€payable€clause,€€a€loss€payee€has€no€greater€right€than€the€insured.Ð P#  ÐòòSeeóó€òòHocking€v.€Virginia€Fire€&€Marine€Ins.€Coóó.,€99€Tenn.€729,€42€S.W.€451Ð €%Ð  Ð(1897);€òòCentral€Natððl€Ins.€Co.€v.€Manufacturers€Acceptance€Corp.óó,€€544€S.W.2dÐ °'#  Ð362€(Tenn.€1967).€€Open€or€simple€clauses€designate€the€loss€payee,€and€declareÐ à)0%" Ðthat€the€loss,€if€any,€is€payable€to€the€mortgagee€as€its€interest€may€appear.€TheÐ ,`'$ Ðrights€of€the€mortgagee€under€a€simple€loss€payee€clause€are€wholly€derivativeÐ @.)& Ðand€cannot€exceed€those€of€the€insured.€In€òòHockingóó,€the€court€held€that€the€act€ofÐ p0À+( Ðthe€insured€in€burning€down€the€covered€property€extinguished€her€right€toÐ  2ð-* Ðrecover€under€the€insurance€contract€as€well€as€the€rights€of€the€mortgagee€or€lossÐ Ð4 0, Ðpayee.€€òòHockingóó,€42€S.W.€at€451.€€In€òòCentral€National€Insuranceóó,€the€chattelÐ 7P2. Ðmortgagee/loss€payee€was€denied€recovery€because€of€the€acts€of€the€insured€whoÐ 09€40 Ðbreached€material€conditions€of€the€policy.€€òòCentral€Natððl€Ins.óó,€544€S.W.2d€atÐ ° Ð364.€€In€that€case,€however,€the€court€noted€that€the€contract€in€questionÐ à0 Ðcontained€no€language€ð ðprotecting€the€interest€of€the€mortgagee€from€acts€orÐ  ` Ðomissions€of€the€insured„mortgagor.ðð€€òòId.óóÐ @  Ðà Ø à€A€clear€majority€of€jurisdictions€recognize€the€existence€of€a€second€typeÐ p À Ðof€mortgagee€or€loss€payee€clause,€the€ð ðstandardðð€or€ð ðunionðð€clause,€€which€is€theÐ  ð  Ðtype€referred€to€in€òòCentral€National€Insuranceóó€as€missing€from€that€contract.€Ð Ð  ÐStandard€or€union€clauses€designate€the€mortgagee,€and€then€go€a€step€further.€Ð P ÐThe€signature€characteristic€of€a€standard€clause€is€that€it€contains€languageÐ 0€ Ðinsuring€that€the€interest€of€the€mortgagee€will€not€be€invalidated€by€certain€actsÐ `° Ðof€the€insured.€òòSee,€e.g.,óó€òòNationwide€Mut.€Ins.€v.€Dempseyóó,€€495€S.E.2d€914€(N.C.Ð à ÐApp.€1998);€òòsee€generallyóó€òò€4€óóLee€R.€Russòò,€Couch€on€Insurance€3d€óóðð€65.32€òòet€seqóóÔ‡¼}»»¼}ÔÔ‡XœÚX»¼}Ôò ò.ó óÔ#†XœÚXXXœÚ*1#ÔÔ#†¼}»XXœÚI1#ԀРÀ ÐA€€standard€or€union€clause€€appears€in€a€policy€obtained€by€the€mortgagor€forÐ ð@ Ðthe€benefit€of€both€the€mortgagor€and€the€mortgagee.€Where€an€insurance€policyÐ  !p Ðcontains€a€standard€or€union€€mortgage€clause,€the€mortgagee€has€an€independentÐ P#  Ðcontract€with€the€insurer,€the€rights€of€a€mortgagee€can€be€greater€than€those€ofÐ €%Ð  Ðthe€insured,€and€the€mortgageeððs€rights€are€determined€by€its€separate€contractÐ °'#  Ðwith€the€insurer.€€òòId.€óóat€ðð€65.32.Ð à)0%" ÐÓÓÓÓà Ø àTennessee€courts€have€long€recognized€the€existence€of€the€two€types€ofÐ ,`'$ Ðmortgagee€or€loss€payee€clauses€and€the€difference€in€the€effect€of€their€inclusionÐ @.)& Ðin€an€insurance€contract.€€òòSeeóó€òòÔ‡¼}»»¼}ÔLaurenzi€v.€Atlas€Ins.€Co.,€óó131€Tenn.€644,òò€óó176€S.W.Ð p0À+( Ð1022€(1915)Ô#†¼}»»¼}5#Ô.€€Ó4ÓÐ  2ð-* ÐÌà8 Ø àà80 Ø ü!Ø ü!àThat€view€is€that€the€contract€evidenced€by€the€rider€isÐ Ð4 0, Ða€separate€and€distinct€one€with€the€mortgagee,Ð è581- Ðdesigned€for€his€protection,€and€in€operation€from€theÐ 7P2. Ðdate€of€its€execution;€that,€in€so€far€as€the€policy€orÐ 8h3/ Ðcontract€with€the€mortgagor€is€in€harmony€therewith,Ð 09€40 Ðit€is€to€be€referred€to,€to€supplement€and€complete€theÐ ° Ðterms€of€the€mortgageeððs€contract,€and,€in€so€far€as€theÐ È Ðpolicy€is€out€of€harmony€with€the€rider,€such€adverseÐ à0 Ðprovisions€are€to€be€disregarded;€and,€further,€thatÐ øH Ðunder€such€a€contract€the€security€of€the€mortgageeÐ  ` Ðcannot€be€invalidated,€either€in€whole€or€in€part,€byÐ ( x Ðany€act€or€neglect€of€the€mortgagor,€either€prior€orÐ @  Ðsubsequent€to€the€execution€of€such€contract€with€theÐ X ¨ Ðmortgagee.Ðp À0 ¤0 ¤ ÐÌòòÓÓLaurenzióó,€176€S.W.€at€1024.Ð  ð  Ðà Ø àOur€courts€have€consistently€held€that€where€the€insurance€policy€containsÐ Ð  Ða€standard€or€union€mortgage€clause,€the€mortgagee€has€an€independent€contractÐ P Ðwith€the€insurer.Ô‡¼}»»¼}Ô€€òòSeeóó€Ô#†¼}»»¼}!;#ÔÔ‡¼}»»¼}Ôòò€Third€Natððl€Co.€v.€Thompson,€€óó28€Tenn.€App.€436,€€191Ð 0€ ÐS.W.2d€190€(1945)Ô#†¼}»»¼}o;#ÔÔ‡¼}»»¼}Ô;€òòPhoenix€Mut.€Life€Ins.€Co.€v.€Aetna€Ins.€CoÔ#†¼}»»¼}<#ÔÔ‡¼}»»¼}Ô,€óó59€S.W.2d€€517Ð `° Ð(Tenn.€1933)Ô#†¼}»»¼}ˆ<#ÔÔ‡¼}»»¼}Ôòò;€€Ô#†¼}»»¼}þ<#ÔÔ‡¼}»»¼}ÔPhoenix€Mut.€Life€Ins.€Co.Ô#†¼}»»¼}F=#ÔÔ‡¼}»»¼}Ô€v.€Greene€County€Farmersðð€Mut.€FireÐ à ÐIns.€Co.,€óó54€S.W.2d€971€(Tenn.€1932).Ô#†¼}»»¼}¢=#ÔÔ‡¼}»»¼}Ô€Ô#†¼}»»¼}H>#Ô€Although€these€cases€deal€with€policiesÐ À Ðinsuring€real€property,׃,×Ý ƒ#ÃÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×€Ô‡¼}»»¼}ÔTennessee€courts€have€also€recognized€that€a€standardÐ ð@ Ðmortgage€clause€contained€in€an€insurance€policy€for€personal€property€has€theÐ  !p Ðsame€effect.òò€€See€Union€Planters€Natððl€Bank€v.€American€Home€Assurance€Co.,Ð P#  Ðóó865€S.W.2d€907€(Tenn.€App.€1993)€(bank€which€lent€money€for€purchase€of€anÐ €%Ð  Ðaircraft€sued€insurer€under€standard€mortgage€clauseòò);€€Nolesóó,€813€S.W.2d€at€439Ð °'#  Ð(ð ðThe€primary€importance€of€the€distinction€is€that€the€standard€clause€providesÐ à)0%" Ða€separate€and€distinct€contract€between€the€insurer€and€the€lienholder,ððÐ ,`'$ Ðregarding€an€automobile€liability€policy);€€òòÔ#†¼}»»¼}3?#ÔCentral€Natððl€Ins.€Co.óó,€544€S.W.2dÔ‡¼}»»¼}Ô€atÐ @.)& Ð364€(while€interpreting€a€simple€or€open€clause€contained€in€a€motorcycleÐ p0À+( Ðinsurance€policy,€€the€court€in€dicta€€noted€the€existence€of€€standard€or€unionÐ ° Ðclauses).Ð à0 Ðà Ø àIn€a€recent€case€involving€the€applicability€of€the€doctrine€of€òòres€judicataóóÐ  ` Ðto€subrogation€claims€against€the€insured€by€an€insurer€who€had€paid€the€lossÐ @  Ðpayee,€this€Court€noted:Ð p À ÐÓÓà8 Ø àà80 Ø ü!Ø ü!àWe€begin€our€analysis€with€the€observation€thatÐ  ð  Ðplaintiff€[the€insurer]€was€charged€with€the€knowledgeÐ ¸  Ðthat€its€separate€contractual€obligation€with€FirstÐ Ð  ÐTennessee€[the€loss€payee]€would€not€generally€beÐ è8  Ðinvalidated€by€the€acts€of€the€insured€or€others€.€.€.ÐP0 ¤0 ¤ ÐÌòòPenn„America€Ins.€Co.€v.€Crittendenóó,€984€S.W.2d€231,€232€(Tenn.€App.€1998).Ð 0€ ÐÌÓÓà Ø àOur€Supreme€Court€has€stated€that€the€essential€nature€and€purpose€of€aÐ `° Ðstandard€or€union€clause€is€ð ðto€furnish€to€the€mortgagee€a€reliable€security€in€aÐ à Ðdefinite€sum€free€from€any€interference€on€the€part€of€the€mortgagor€Ô#†¼}»»¼}uB#ÔÔ€¼ëc»»¼}ÔwhichÐ À Ðwould,€to€any€extent,€invalidate€or€make€less€adequate€that€security.ðð€€òòLaurenzióó,Ð d Ð176€S.W.€at€1026.Ð 8!ˆ ÐÓ  Óà Ø àThe€loss€payable€clause€at€issue€herein€clearly€includes€the€languageÐ \#¬ Ðnecessary€to€classify€it€as€a€standard€or€union€clause:€ð ðThis€insurance€withÐ €%Ð  Ðrespect€to€the€interest€of€the€loss€payee,€shall€not€become€invalid€because€ofÐ ¤'ô"  Ðyour€[the€insuredððs]€fraudulent€acts€or€omissions€unless€the€loss€results€fromÐ È)%" Ðyour€conversion,€secretion€or€embezzlement€of€ððyour€covered€auto.ðð€ðð׃-×Ý ƒ#ÃÝòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×€Thus,Ð ì+<'$ ÐGranite€State€has€provided€greater€protection€to€Edððs€Imports€than€to€theÐ ° Ðinsured€€and€hasÔ‡XÌ–X»¼ëcÔÔ‡XœÚXXXÌ–Ô€Ô#†¼}»XXœÚK#ÔÔ#†¼ëc»»¼}žK#Ôcreated€a€separate€contract€with€Edððs€Imports.€In€its€brief,Ð Ô$ ÐGranite€State€acknowledges€that€the€loss€payable€clause€in€its€policy€is€aÐ  ` Ðstandard€mortgage€clause,€but€asserts€that€it€provides€only€a€ð ðmodicumðð€ofÐ 4 „ Ðprotection€greater€than€that€of€the€insured.Ô‡¼}»»¼ëcÔÔ‡XœÚX»¼}ÔÐ X ¨ ÐÓ  ÓII.ò òÐ |Ì  ÐÓ›MÓà Ø àó óÔ#†¼}»XXœÚgM#ÔThe€issue,€therefore,€is€whether€the€separate€contract€between€theÐ \¬  Ðinsurer€and€the€loss€payee€allows€the€insurer€to€retroactively€cancel€it.Ô#†¼ëc»»¼}HM#Ôà  # àÐ ŒÜ ÐIn€interpreting€an€insurance€contract,€standard€principles€of€contract€lawÐ ¼  Ðapply.€€òòSee€Hurley€v.€Tennessee€Farmers€Mut.€Ins.€Co.óó,òò€óó922€S.W.2d€887,€892Ð à0 Ð(Tenn.€App.€1995);òò€Union€Plantersóó,€865€S.W.2d€at€912.€€In€construingÐ T Ðcontracts,€the€words€expressing€the€partiesðð€intentions€should€be€given€theirÐ (x Ðusual,€natural,€and€ordinary€meaning.€€òòSee€Taylor€v.€White€Stores,€Inc.óó,€707Ð Lœ ÐS.W.2d€514€(Tenn.€App.€1985).€€All€provisions€of€a€contract€should€beÐ p À Ðconstrued€as€in€harmony€with€each€other,€if€such€construction€can€beÐ ”"ä Ðreasonably€made,€so€as€to€avoid€repugnancy€between€the€several€provisions€ofÐ ¸$  Ða€single€contract.€€òòSee€Bank€of€Commerce€&€Trust€Co.€v.€Northwestern€NatððlÐ ° ÐLife€Ins.€Co.óó,€160€Tenn.€551,€26€S.W.2d€135€(1930).€Ð Ô$ Ðà Ø àAdditionally,€where€by€reason€of€ambiguity€in€the€language€employedÐ øH Ðin€a€contract€of€insurance,€if€there€is€doubt€or€uncertainty€as€to€its€meaning,Ð  l Ðand€it€is€fairly€susceptible€of€two€interpretations,€one€favorable€to€the€insuredÐ @  Ðand€the€other€favorable€to€the€company,€the€former€will€be€adopted.òò€€See€Ð d´  ÐElsner€v.€Walkeróó,€879€S.W.2d€852,€855€(Tenn.€App.€1994)òò;€€See€also€PalmerÐ ˆØ  Ðv.€State€Farm€Mut.€Auto€Ins.€Coóó.€,€614€S.W.2d€788,€789€(Tenn.€1981);€Ð ¬ü ÐòòTravelers€Ins.€Co.€v.€Aetna€Cas.€and€Sur.€Co.óó,€491€S.W.2d€363,€365€(Tenn.Ð Ð  Ð1973)€(exclusions€will€be€strongly€construed€against€the€insurer).€Ð ôD Ðà Ø àWhile€a€standard€mortgage€clause€creates€a€separate€contract€ofÐ h Ðinsurance€for€the€mortgageeððs€separate€benefit,€that€separate€contract€isÐ <Œ Ðengrafted€upon€the€main€policy€and€can€be€understood€by€reference€to€theÐ `° Ðpolicy.€€òòSee€Union€Plantersóó,€865€S.W.2d€at€912.€€However,€the€standardÐ „ Ô Ðmortgage€clause€will€prevail,€as€to€the€loss€payeeððs€interest,€over€contraryÐ ¨"ø Ðprovisions€in€the€policy.€€òòSee€Third€Natððl€Co.óó,€191€S.W.2d€at€193.€€As€statedÐ Ì$  Ðin€òòLaurenzióó,€the€insurance€policy€is€to€be€referred€to€and€will€be€used€toÐ ð&@"  Ðsupplement€or€complete€the€terms€of€the€mortgageeððs€contract€only€ð ðin€so€farÐ )d$" Ðas€the€policy€with€the€mortgagor€is€in€harmony€therewith.ðð€€òòLaurenzi,€óó176Ð 8+ˆ&$ ÐS.W.€at€1024.Ð \-¬(& Ðà Ø àThe€provisions€of€the€separate€contract€between€the€loss€payee€and€theÐ €/Ð*( Ðinsurer,€created€by€the€standard€mortgage€clause,€determine€the€loss€payeeððsÐ ¤1ô,* Ðrights.€€ð ðObviously,€any€claim€...€must€arise€from€a€contract€and€the€contractÐ È3/, Ðbetween€the€parties€in€this€instance€is€the€breach€of€warranty€endorsementÐ ì5<1. Ð[standard€mortgage€clause],€which€provisions€must€control.ðð€€òòUnion€Plantersóó,Ð 8`30 Ð865€S.W.2d€at€912.€€Thus,€the€language€of€the€standard€mortgage€clause,€orÐ ° Ðloss€payable€clause,€is€the€primary€source€of€the€loss€payeeððs€rights.€€òòSeeÐ Ô$ ÐPhoenix€v.€Greene€County€Farmersðð€Mut.óó,€54€S.W.2d€at€972;€òòPhoenix€v.Ð øH ÐAetna€Ins.€Co.,€óó59€S.W.2d€at€518.€€The€independent€or€separate€contract€ð ðisÐ  l Ðmeasured€by€the€terms€of€the€mortgage€clause€itself.ðð€€òòNolesóó,€813€S.W.2d€atÐ @  Ð439.Ð d´  Ðà Ø àBoth€parties€rely€on€the€same€paragraph€in€the€insurance€contract€(theÐ ˆØ  Ðloss€payable€clause),€but€differ€in€their€interpretation€of€that€paragraph€byÐ ¬ü Ðstressing€different€provisions€within€it.€€The€insurer€relies€on€the€language€ofÐ Ð  Ðthe€loss€payable€provision€which€states:€€ð ðWe€reserve€the€right€to€ò òcanceló ó€theÐ ôD Ðpolicy€as€permitted€by€policy€termsòò׃)×Ý ƒ#ÃÝòòÚ  Ú3Ú  ÚóóÝ  Ý×  ×óó€andò ò€cancellationó ó€shall€terminate€thisÐ $t Ðagreement€as€to€the€loss€payeeððs€interest.ðð€€(emphasis€added).€€The€insurerÐ T¤ Ðargues€that€it€retroactively€canceled€the€policy€as€to€the€insured,€and€that€suchÐ xÈ Ðcancellation€also€terminated€the€loss€payeeððs€interest.Ð ° Ðà Ø àOn€the€other€hand,€the€loss€payee€relies€upon€the€provision€whichÐ Ô$ Ðstates,€€€ð ðThis€insurance€with€respect€to€the€interest€of€the€loss€payee,€shall€notÐ øH Ðbecome€ò òinvalidó ó€because€of€your€fraudulent€acts€or€omissions€unless€the€lossÐ  l Ðresults€from€your€conversion,€secretion€or€embezzlement€of€your€coveredÐ L œ Ðauto.ðð€€(emphasis€added).€€òò€óóà 8 àÐ pÀ  Ðà Ø àThe€loss€payable€paragraph€can€be€read€to€give€effect€to€all€of€itsÐ ”ä  Ðcomponent€provisions,€and€can€be€read€in€harmony€with€the€policy€as€a€whole,Ð ¸ Ðif€the€words€ð ðinvalidðð€and€ð ðcancelðð€are€given€their€plain€and€distinctÐ Ü, Ðmeanings.€€By€the€language€it€used,€Granite€State€has€promised€the€loss€payeeÐ P Ðthat€the€insurance€will€not€become€invalid€as€to€the€loss€payeeððs€interest€due€toÐ $t Ðfraudulent€acts€or€omissions€of€the€insured€except€those€specific€acts€named€inÐ H˜ Ðthe€loss€payable€clause.€A€cancellation€which€is€retroactive€to€the€date€ofÐ l¼ Ðissuance€of€the€policy€is,€in€effect,€an€attempt€to€render€the€policy€invalid€fromÐ  à Ðits€inception.€The€insurer€cannot€avoid€its€commitment€not€to€invalidate€theÐ ´" Ðloss€payeeððs€interest€by€calling€its€action€a€cancellation€which€becameÐ Ø$(  Ðeffective€on€the€date€of€policy€issuance.€In€view€of€the€insurerððs€commitmentÐ ü&L"  Ðto€the€loss€payee,€the€terms€ð ðcancelðð€and€ð ðcancellationðð,€€must€be€interpretedÐ  )p$" Ðas€providing€a€prospective€remedy€only,€unavailable€to€invalidate€the€lossÐ D+”&$ Ðpayeeððs€interest€after€a€loss,׃9×Ý ƒ#ÃÝòòÚ  Ú4Ú  ÚóóÝ  Ý×  ×€absent€one€of€the€circumstances€enumerated€byÐ h-¸(& Ðthe€insurer€in€its€contract€with€the€loss€payee.׃*T×Ý ƒ#ÃÝòòÚ  Ú5Ú  ÚóóÝ  Ý×  ×Ð Œ/Ü*( Ðà Ø àThe€insurer€would€have€us€interpret€its€commitment€to€the€loss€payee€toÐ °1-* Ðbe€limited€to€the€situation€where€the€insuredððs€misrepresentation€relates€to€theÐ ° Ðloss,€asserting:€€ð ðWhere€the€insurer€would€seek€to€avoid€payment€of€a€lossÐ Ô$ Ðafter€its€occurrence€because€of€some€fraudulent€conduct€of€the€insured€inÐ øH Ðreference€to€the€loss,€the€loss€payee€would€be€protected€by€the€provision€of€theÐ  l Ðloss€payable€clause€in€regard€to€fraud€of€the€insured.€Where,€however,€theÐ @  Ðinsured€lawfully€cancels€the€policy€pursuant€to€its€cancellation€provision,€andÐ d´  Ðthe€reasons€have€nothing€to€do€with€fraud€of€the€insured€in€connection€withÐ ˆØ  Ðthe€loss,€instead€having€to€do€with€fraud€in€the€inception€by€the€insuredÐ ¬ü Ðwrongfully€procuring€the€policy,€the€cancellation€is€as€effective€against€theÐ Ð  Ðloss€payee€as€against€the€insured.ðð€à  àÐ ôD Ðà Ø àWe€disagree€with€the€insurerððs€interpretation€of€the€loss€payeeððsÐ h Ðseparate€contract.€The€loss€payable€provision€simply€does€not€contain€theÐ <Œ Ðwords€the€insurer€would€have€us€insert.€We€interpret€the€provision€asÐ `° Ðprohibiting€invalidation€by€the€insurer€of€the€loss€payeeððs€interest€due€to€anyÐ „ Ô Ðfraudulent€acts€or€omissions€of€the€insured€except€those€enumerated€in€theÐ ¨"ø Ðprovision€itself.׃:×Ý ƒ#ÃÝòòÚ  Ú6Ú  ÚóóÝ  Ý×  ×Ð Ì$  Ðà@XX,êàIII.ˆÐ ð&@"  Ðà Ø àThe€insurer€also€argues€that€the€insuredððs€misrepresentation€in€theÐ )d$" Ðapplication€renders€the€policy€voidable€from€its€inception,€at€the€option€of€theÐ 8+ˆ&$ Ðinsurer,€on€the€basis€of€€provisions€of€the€policy€and€on€the€basis€of€€Tenn.Ð \-¬(& ÐCode€Ann.€ðð€56„7„103.Ð €/Ð*( Ѐà Ø à€€The€insurer€relies€upon€the€policyððs€termination€provisions€and€theÐ ¤1ô,* Ðfollowing€two€provisions,€the€first€of€which€is€part€of€the€loss€payable€clause,Ð È3/, Ðand€the€second€of€which€is€referred€to€as€the€fraud€provision:Ð ° ÐÓÓà8 Ø àà80 Ø ü!Ø ü!àHowever,€we€reserve€the€right€to€cancel€the€policy€asÐ Ô$ Ðpermitted€by€policy€terms€and€cancellation€shallÐ æ6 Ðterminate€this€agreement€as€to€the€loss€payeeððsÐ øH Ðinterest.€€We€will€give€the€same€advance€notice€ofÐ  Z Ðcancellation€to€the€loss€payee€as€we€give€to€theÐ  l Ðnamed€insured€shown€in€the€Declarations.Ð. ~0 ¤0 ¤ ÐÌà@YY,êà.€.€.ˆÐ R¢  ÐÌà8 Ø àà80 Ø ü!Ø ü!àWe€do€not€provide€coverage€for€any€ððinsuredðð€whoÐ vÆ  Ðhas€made€fraudulent€statements€or€engaged€inÐ ˆØ  Ðfraudulent€conduct€in€connection€with€any€accidentÐ šê  Ðor€loss€for€which€coverage€is€sought€under€thisÐ ¬ü Ðpolicy.€Ð¾0 ¤0 ¤ ÐÌÓÓà Ø àIt€is€the€insurerððs€position€that€the€fraud€provision€allows€it€to€cancel€theÐ â2 Ðpolicy€due€to€the€insuredððs€misrepresentation,€that€the€termination€provisionÐ V Ðallows€the€cancellation€to€become€effective€on€the€date€the€insurer€chooses€toÐ *z Ðstate€in€the€notice€of€cancellation,€that€the€cancellation€notice€herein€datedÐ Nž ÐNovember€25,€1996,€stated€that€the€cancellation€was€to€take€effect€atÐ r Ð12:01a.m.€on€February€28,1996,€that€the€loss€payee€was€only€entitled€to€theÐ –!æ Ðsame€notice€as€the€insured,€and€that€the€retroactive€cancellation€was€valid€asÐ º#  Ðto€both€the€insured€and€the€loss€payee€under€the€language€of€the€loss€payableÐ Þ%.! Ðclause.Ð (R#! Ðà Ø àWe€respectfully€do€not€agree€with€the€insurerððs€interpretation€of€theÐ &*v%# Ðpolicy€provisions€as€they€apply€to€the€separate€contract€with€the€loss€payee.Ð J,š'% ÐFirst,€although€the€loss€payeeððs€interest€can€be€terminated€by€cancellation,€thatÐ n.¾)' Ðcancellation€must€comply€with€the€policy€terms,€under€the€language€theÐ ’0â+) Ðinsurer€relies€on€and€under€well„settled€law.€When€an€insurance€companyÐ ¶2.+ Ðseeks€to€cancel€a€policy,€strict€compliance€with€policy€cancellation€provisionsÐ Ú4*0- Ðis€required€in€order€to€effectuate€cancellation.òò€€€See€Jefferson€Ins.€Co.€v.€Curleóó,Ð þ6N2/ Ð771€S.W.2d€424€(Tenn.€App.€1989);€€òòState€Automobile€Mut.€Ins.€Co.€v.€Lloydóó,Ð "9r41 Ð54€Tenn.€App.€587,€393€S.W.2d€17€(1965).Ð ° Ðà Ø àThe€termination€provisions€of€the€policy€contain€no€languageÐ Ô$ Ðauthorizing€retroactive€cancellation€and,€in€fact,€require€advance€notice€ofÐ øH Ðcancellation.€The€insurer€has€promised€to€give€the€loss€payee€the€sameÐ  l Ðò òadvanceó ó€notice€as€is€given€to€the€insured.€€Second,€even€if€the€fraud€clauseÐ @  Ðprovides€a€basis€for€the€insurer€to€deny€coverage€òòab€initio׃5×Ý ƒ#ÃÝòòÚ  Ú7Ú  ÚóóÝ  Ý×  ×óó€to€the€insured,Ð pÀ  Ðthere€is€a€distinction€between€canceling€a€policy€and€denying€coverage€after€aÐ ”ä  Ðloss€or€attempting€to€avoid€the€policy.€While€we€agree€that€such€a€distinctionÐ ¸ Ðmay€not€have€practical€meaning€with€regard€to€the€insured€in€this€situation,€itÐ Ü, Ðhas€significance€to€the€interest€of€the€loss€payee€by€virtue€of€the€language€usedÐ P Ðby€the€insurer€in€its€policy.€Lastly,€the€fraud€clause,€by€its€terms,€applies€onlyÐ $t Ðto€coverage€of€the€insured.€It€does€not€affect€the€loss€payeeððs€separateÐ H˜ Ðcontract.€Ð l¼ Ðà Ø àWe€find€that€the€policy€provisions€do€not€authorize€the€insurer€toÐ  à Ðretroactively€cancel€the€policy€so€as€to€invalidate€the€loss€payeeððs€interest€onÐ ´" Ðthe€basis€of€the€insuredððs€misrepresentation€in€his€application.Ð Ø$(  Ðà@RR-êàIV.ˆÐ ü&L"  Ðà Ø àThe€insurer€also€relies€on€Tenn.€Code€Ann.€ðð€56„7„103€as€authorizing€itÐ  )p$" Ðto€void€the€policy,€thereby€invalidating€the€loss€payeeððs€interest.€That€statuteÐ D+”&$ Ðprovides:Ð h-¸(& ÐÓÓà8 Ø àà80 Ø ü!Ø ü!àà ˆ àNo€written€or€oral€misrepresentation€orÐ Œ/Ü*( Ðwarranty€therein€made€in€the€negotiations€of€aÐ ž0î+) Ðcontract€or€policy€of€insurance,€or€in€the€applicationÐ °1-* Ðtherefor,€by€the€insured€or€in€the€insured's€behalf,Ð Â2.+ Ðshall€be€deemed€material€or€defeat€or€void€the€policyÐ Ô3$/, Ðor€prevent€its€attaching,€unless€suchÐ æ460- Ðmisrepresentation€or€warranty€is€made€with€actualÐ ø5H1. Ðintent€to€deceive,€or€unless€the€matter€representedÐ  7Z2/ Ðincreases€the€risk€of€loss.а0 ¤0 ¤ Ѐ€Ð  ÐÓÓà Ø àAs€stated€by€the€insurer,€Tenn.€Code€Ann.€ðð€56-7-103€provides€anÐ Ô$ Ðinsurer€with€a€defense€which€may€render€a€contract€voidable.׃6×Ý ƒ#ÃÝòòÚ  Ú8Ú  ÚóóÝ  Ý×  ×€òòSee€NationalÐ øH ÐUnion€Fire€Ins.€Co.€v.€F.D.I.C.,€óó€837€S.W.2d€373,€381€(Tenn.€1992).€TheÐ  l Ðstatute€prohibits€an€insurer€from€invalidating€an€insurance€contract€except€inÐ @  Ðthe€specified€circumstances.€Where€those€circumstances€are€present,€anÐ d´  Ðinsurer€is€allowed,€but€not€required,€€to€avoid€a€contract.€€An€insurer€retainsÐ ˆØ  Ðthe€option€to€waive€invalidation€and€continue€a€contract€of€insurance€afterÐ ¬ü Ðdiscovery€of€misrepresentation.€An€insurer€also€retains€the€right€to€limit€itsÐ Ð  Ðability€to€void€a€policy€by€an€express€agreement€to€do€so.€€Similarly,€€we€seeÐ ôD Ðno€reason€why€an€insurer€cannot,€€by€contract,€€agree€to€waive€its€right€toÐ h Ðinvalidate€a€policy€as€to€the€loss€payee€to€whatever€extent€it€wants.Ð <Œ Ðà Ø àWith€regard€to€the€effect€of€Tenn.€Code€Ann.€ðð€56„7„103€on€theÐ `° Ðseparate€and€independent€contract€between€Granite€State€and€Edððs€Imports,Ð „ Ô Ðeven€if€Granite€State€can€avoid€its€contract€with€the€insured€in€reliance€on€theÐ ¨"ø Ðstatute€and€its€policy€provisions,€the€voiding€of€that€contract€does€notÐ Ì$  Ðautomatically€render€the€separate€contract€with€the€loss€payee€void.׃,×Ý ƒ#ÃÝòòÚ  Ú9Ú  ÚóóÝ  Ý×  ×Ð ð&@"  Ðà Ø àIn€òòJackson€v.€American€Eagle€Fire€Insurance€Coóó.,€92€S.W.2d€874Ð )d$" Ð(Tenn.€1936),€our€Supreme€Court€held€that€both€the€insured€and€the€loss€payeeÐ 8+ˆ&$ Ðwere€cut€off€from€their€right€to€recover€where,€at€the€time€of€the€purchase€ofÐ ° Ðthe€policy,€the€loss€payee€was€aware€that€the€insured€did€not€haveÐ Ô$ Ðunconditional€ownership€of€the€covered€property,€as€was€required€by€theÐ øH Ðpolicy.€€The€court€relied€in€part€upon€the€statute€and€upon€the€standardÐ  l Ðmortgage€clause€in€that€policy€which€required€the€mortgagee€to€give€notice€ofÐ @  Ðany€increase€in€hazard,€finding€that€ownership€as€tenant€by€the€entirety€whileÐ d´  Ðinsuring€the€property€as€sole€owner€was€an€increased€hazard.€€òòIdóó.€at€875.Ð ˆØ  Ðà Ø àHowever,€in€òòThird€National€Co.óó,€this€Court€found€that€aÐ ¬ü Ðmisrepresentation€as€to€the€nature€of€the€use€of€the€insured€premises€and€aÐ Ð  Ðbreach€of€a€stipulation€against€an€increase€in€hazard€did€not€render€the€policiesÐ ôD Ðvoid,€where€the€policy€included€the€statement€that€the€entire€policy,€unlessÐ h Ðotherwise€agreed,€would€be€void€if€the€hazard€was€increased€by€any€meansÐ <Œ Ðwithin€the€control€or€knowledge€of€the€insured.€€òòId.óó,€191€S.W.2d€at€192.€Ð `° ÐHolding€that€the€policies€were€ð ðmerely€voidable€if€the€insurers€chose€to€avoidÐ „ Ô Ðthem,ðð€the€Court€further€stated:Ð ¨"ø ÐÓÓà8 Ø àà80 Ø ü!Ø ü!àThe€policies,€however,€were€voidable€only€as€to€theÐ Ì$  Ðinsured,€not€as€to€the€mortgagee.€€Such€is€the€effectÐ Þ%.! Ðof€the€mortgage€clause.€€This€misrepresentation,€orÐ ð&@"  Ðincrease€of€the€hazard,€was€an€act€of€the€insured,€notÐ (R#! Ðparticipated€in€or€known€by€the€mortgagee.€€ThatÐ )d$" Ðclause€stipulates,€among€other€things,€that€theÐ &*v%# Ðinsurance€as€to€the€interest€of€the€mortgagee€ððshallÐ 8+ˆ&$ Ðnot€be€invalidated€by€any€act€or€neglectðð€of€theÐ J,š'% Ðmortgagor€or€owner€of€the€property€insured,€nor€byÐ \-¬(& Ðthe€ððoccupation€of€the€premises€for€purposes€moreÐ n.¾)' Ðhazardous€than€are€permittedðð€by€the€policy.€Ð€/Ð*(0 ¤0 ¤ ÐÌòòId.óó,€191€S.W.2d€at€193.Ð ¤1ô,* ÐÌÓÓà Ø àIn€òòGeneral€Electric€Credit€Corporation€v.€Kelly€&€Dearing€Aviationóó,Ð È3/, Ð765€S.W.2d€750€(Tenn.€App.€1988)€this€court€denied€recovery€to€theÐ ì5<1. Ðlienholder/loss€payee€because€it€found€that€the€loss€was€due€to€conversion,€aÐ 8`30 Ðsituation€expressly€excluded€from€the€protection€afforded€the€loss€payee€in€theÐ ° Ðpolicy.€€The€relevant€provision€of€the€policy€stated,€ð ðshould€you€do€anythingÐ Ô$ Ðwhich€makes€your€coverage€invalid,€we€will€still€make€a€payment€to€thatÐ øH Ðlienholder€or€lessor€.€.€.€.€€We€wonððt€cover€your€conversion,€embezzlement€orÐ  l Ðsecretion€of€the€aircraft.ðð€€The€insurer€also€had€argued€that€the€insured€hadÐ @  Ðmade€material€misrepresentations€on€its€application,€thereby€rendering€theÐ d´  Ðpolicy€void€òòab€initioóó,€and€that€the€policy€should€be€considered€as€if€it€neverÐ ˆØ  Ðexisted.€€Id.€at€753.€€This€court€found€no€evidence€of€misrepresentation€in€theÐ ¬ü Ðapplication,€but€stated:Ð Ð  ÐÓÓà8 Ø àà80 Ø ü!Ø ü!àFurthermore,€in€Tennessee€clauses€such€as€this,Ð ôD Ðlienholderððs€endorsement€have€long€been€held€toÐ V Ðcreate€ð ða€separate€and€independent€contract€betweenÐ h Ðthe€insurer€and€the€mortgagee€that€the€latterððs€rightsÐ *z Ðcannot€be€invalidated€by€any€act€or€neglect€of€theÐ <Œ Ðmortgagor€or€insured€.€.€.ðð€€òòThird€National€CompanyÐ Nž Ðv.€Thompsonóó,€191€S.W.2d€190,€193€(Tenn.€App.Ð `° Ð1945).€€òòSee€alsoóó,€òòCouch€on€Insuranceóó€2d,€ðð€74:€347.ÐrÂ0 ¤0 ¤ ÐÌòòIdóó.Ð –!æ ÐÌà8 Ø àà80 Ø ü!Ø ü!àThe€court€further€held:к# 0 ¤0 ¤ ÐÌà8 Ø àà80 Ø ü!Ø ü!àThe€language€used€in€the€lienholderððs€endorsementÐ Þ%.! Ðprovides€that,€regardless€of€whether€the€insured€doesÐ ð&@"  Ðanything€which€would€cause€his€coverage€to€beÐ (R#! Ðinvalidated,€the€insurer€will€pay€the€lienholder.Ð)d$"0 ¤0 ¤ ÐÌà@YY,êà.€.€.ˆÐ 8+ˆ&$ ÐÌà8 Ø àà80 Ø ü!Ø ü!à[U]nless€conversion,€embezzlement€or€secretion€byÐ \-¬(& Ð[insured]€can€be€shown,€[lienholder]€is€entitled€toÐ n.¾)' Ðpayment€under€the€lienholderððs€endorsement.€€Ð€/Ð*(0 ¤0 ¤ ÐÌòòId.óó€Ð ¤1ô,* ÐÌÓÓà Ø àSimilarly,€in€òòFirst€Tennessee€Bank€National€Assððn€v.€U.S.€Fidelity€andÐ È3/, ÐGuaranty€Co.,€óó829€S.W.2d€144,€(Tenn.€App.€1991),€this€court€found,€partiallyÐ ì5<1. Ðon€the€basis€of€Tenn.€Code€Ann.€ðð€57„6„103,€that€a€mortgagee€bankððs€failureÐ 8`30 Ðto€disclose€material€information€(the€co„insured€former€spouse€had€threatenedÐ ° Ðto€burn€his€dwelling€to€the€insurer€made€the€separate€contract€between€theÐ Ô$ Ðmortgagee€and€the€insurer€voidable.€€The€court€based€its€reasoning€on€the€factÐ øH Ðthat€the€mortgagee,€as€a€party€to€the€independent€contract€created€by€theÐ  l Ðmortgage€clause,€was€under€the€duty€to€disclose€conditions€affecting€the€risk.€Ð @  ÐòòIdóó.Ð d´  Ðà Ø àIn€the€case€now€before€us,€there€is€neither€proof€nor€allegation€that€EdððsÐ ˆØ  ÐImports,€the€loss€payee,€had€any€knowledge€of€the€insuredððs€misrepresentationÐ ¬ü Ðon€his€application.€€Such€knowledge€and€failure€to€disclose,€if€under€a€duty€toÐ Ð  Ðdo€so,€appear€to€be€the€determining€factors€in€denying€recovery€to€a€loss€payeeÐ ôD Ðdue€to€an€insuredððs€misrepresentation.€€This€interpretation€is€consistent€withÐ h Ðthe€premise€that€the€loss€payee€has€a€separate€contract€and€with€the€lawÐ <Œ Ðregarding€the€ability€of€an€insurer€to€avoid€liability€under€its€contract€with€theÐ `° Ðinsured€on€the€basis€of€misrepresentation€by€the€insured.€€To€avoid€coverageÐ „ Ô Ðon€the€basis€of€the€statute,€the€insurer€must€first€prove€a€misrepresentation.€Ð ¨"ø ÐòòSee€Gatlin€v.€World€Serv.€Life€Ins.€Co.óó,€616€S.W.2d€606,€608€(Tenn.€1981);Ð Ì$  ÐòòWomack€v.€Blue€Cross€&€Blue€Shieldóó,€593€S.W.2d€294,€295€€(Tenn.€1980).€Ð ð&@"  ÐSince€Edððs€Imports€committed€no€misrepresentation,€the€statute€cannot€beÐ )d$" Ðused€by€the€insurer€to€void€its€separate€contract€with€the€loss€payee.Ð 8+ˆ&$ Ðà Ø àIn€essence,€the€statute€provides€to€an€insurer€a€defense€€ofÐ \-¬(& Ðmisrepresentation€to€a€claim€by€the€insured€under€an€insurance€contract,€whenÐ €/Ð*( Ðproperly€pled€and€under€the€appropriate€circumstances.€€òòSee,€e.g.,€NationalÐ ¤1ô,* ÐUnion€Fire€Ins.€v.€F.D.I.C.óó,€837€S.W.2d€373€(Tenn.€1992);€òòBland€v.€AllstateÐ È3/, ÐIns.€Co.óó,€944€S.W.2d€372€(Tenn.€App.€1996).€€We€interpret€the€loss€payableÐ ì5<1. Ðclause€at€issue€as€an€assurance€that€the€insurer€will€not€assert€the€defense€ofÐ 8`30 Ðthe€insuredððs€misrepresentation€provided€by€Tenn.€Code€Ann.€ðð€56„7„103Ð ° Ðagainst€the€loss€payee,€unless€the€loss€resulted€from€the€insuredððs€conversion,Ð Ô$ Ðsecretion€or€embezzlement€of€the€covered€auto.€€€It€is€undisputed€that€€Mr.Ð øH ÐNance€did€not€convert,€secrete€or€embezzle€the€insured€automobile,€€therefore,Ð  l Ðunder€the€terms€of€the€loss€payable€clause,€his€conduct€does€not€give€theÐ @  Ðinsurance€company€the€right€to€assert€the€defense€of€misrepresentation€againstÐ d´  Ðthe€loss€payee.Ð ˆØ  ÐÓ  Óà @ àIV.Ð ¬ü ÐÓ—­Óà Ø àGranite€State,€through€the€language€of€its€policy€provisions,€providedÐ Ð  Ðgreater€protections€to€the€loss€payee€than€it€provided€to€the€insured,€and€in€soÐ ôD Ðdoing€created€a€separate€and€independent€contract€between€itself€and€EdððsÐ h ÐImports.€€Based€on€the€foregoing€we€interpret€the€language€of€the€loss€payableÐ <Œ Ðclause€in€the€instant€case€to€prohibit€the€insurance€company€from€retroactivelyÐ `° Ðcanceling€the€contract€or€rendering€it€invalid€or€void€òòab€initioóó€with€respect€toÐ „ Ô Ðthe€loss€payee.€€Ð ¨"ø ÐThe€case€is€remanded€to€the€trial€court€for€whatever€further€proceedings€mayÐ Ì$  Ðbe€necessary.€€The€costs€of€this€appeal€are€hereby€taxed€to€the€appellant.Ð ð&@"  ÐÓÓÌÌà Ø àà 0 àà ˆ àà à àà 8 àà  à_____________________________Ð 8+ˆ&$ Ðà Ø àà 0 àà ˆ àà à àà 8 àà  àPATRICIA€J.€COTTRELL,€JUDGEÐ J,š'% ÐÌCONCURS:Ð n.¾)' ÐÌÌ___________________________Ð ¤1ô,* ÐBEN€H.€CANTRELL,€P.€J.,€M.S.Ð ¶2.+ ÐÌÌÌDISSENTS€IN€SEPARATE€OPINION:Ð þ6N2/ ÐÌWILLIAM€C.€KOCH,€JR.,€J.