John Jones carries a Homeowners Policy on his dwelling, with Easy Money Mortgage Company listed as a mortgagee. Jones tells his agent to cancel the policy because the property has been sold. The agent cancels the policy and Jones obtains a return of the premium. About 6 months later, when the building burns, Easy Money Mortgage Company makes claim for recovery. Investigations reveal the dwelling was not sold and Jones canceled the policy without the mortgage company’s knowledge. Discuss the liability of the insurer and the agent.

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