N.C.G.S. § 58-160. This provision only applies to situations in which more than one mortgagee is named on the same policy. Normally, a second mortgagee would not have to prove the amount of the first mortgage in order to recover under the policy if the first mortgagee was not insured. Jeffreys v. Insurance Co., 202 N.C. 368, 372, 162 S.E. 761 (1932). In the present case, however, where the first mortgagee is covered by a separate insurance policy, the second mortgagee must prove the amount of the first mortgagee's interest in order for the court to prevent total insurance payments from exceeding the value of the loss.

A judgment on the pleadings is proper only when the pleadings fail to present any issue of fact for the determination of a jury. Fisher v. Motor Co., 249 N.C. 617, 107 S.E.2d 94; Waggoner v. Waggoner, 246 N.C. 210, 97 S.E.2d 887; Erickson v. Starling, 235 N.C. 643, 71 S.E.2d 384; Jeffreys v. Insurance Co., 202 N.C. 368, 162 S.E. 761; 3 Strong's N.C. Index, Pleadings, 30, and supplement to ibid, 30. On a motion for judgment on the pleadings it is error for the court to hear evidence and find facts in support of its judgment, since only the pleadings themselves may be considered. Crew v Crew, 236 N.C. 528, 73 S.E.2d 309; Remsen v. Edwards, 236 N.C. 427, 72 S.E.2d 879.

Both a mortgagor and a mortgagee have an insurable interest in encumbered property. Shores v. Rabon, 251 N.C. 790, 112 S.E.2d 556; Jeffreys v. Ins. Co., 202 N.C. 368, 162 S.E. 761; Bank v. Bank 197 N.C. 68, 147 S.E. 691. The mortgagee's interest is limited to the debt due him.

1. The law confers upon the parties to a civil action the right to a jury trial when, and only when, an issue of fact arises on the pleadings. G.S. 1-172; Jeffreys v. Ins. Co., 202 N.C. 368, 162 S.E. 761; Comrs. v. George, 182 N.C. 414, 109 S.E. 77; McQueen v. Bank, 111 N.C. 509, 16 S.E. 270. An issue of fact arises on the pleadings whenever a material fact is maintained by one party and controverted by the other. G.S. 1-196; Lupton v. Day, 211 N.C. 443, 190 S.E. 722. A material fact is one which constitutes a part of the plaintiff's cause of action or the defendant's defense.

In Riley v. Carter, 165 N.C. 334 (337), it is said: "There being no conflict of testimony, and the facts being virtually admitted, the court could direct a verdict or instruct the jury as it did. Purifoy v. R. R., 108 N.C. 101." In Jeffreys v. Ins. Co., 202 N.C. 368 (372): "Only issues of fact which arose on the pleadings, and are determinative of the rights of the parties to the action, must be submitted to the jury." Under the statute, supra, "An issue of fact must be tried by a jury.

In this situation, the general rule is that the proceeds for the loss are payable only to the mortgagee provided for in the policy. Ditmore Land Cattle Company v. Hicks, 282 S.W.2d 753, 757 (Tex.Civ.App.-Eastland 1955), modified on another ground and aff'd, 155 Tex. 596, 290 S.W.2d 499 (1956); Jeffreys v. Boston Ins. Co., 202 N.C. 368, 162 S.E. 761, 762 (1932). Second, unless Black has shown that the Farmers policy was issued after Stephens agreed to procure insurance with a loss payable clause in its (Edwards's) favor, then Black is a stranger to the Farmers policy and, as such, may not sue thereon.

Hatley v. Payne, 25 Ark. App. 8, 13, 751 S.W.2d 20, 22 (1988). See also Nat `l Bedding Furniture Indus., Inc. v. Clark, 252 Ark. 780, 783, 481 S.W.2d 690, 691-92 (1972);Sharp v. Pease, 193 Ark. at 354-55, 99 S.W.2d at 590; Wiener v. Sentinel Fire Ins. Co., 87 F.2d 286, 288 (2d Cir. 1937); Jeffreys v. Boston Ins. Co., 202 N.C. 368, 162 S.E. 761, 762-63 (1932); Shelton v. Providence Washington Ins. Co., 131 S.W.2d 330, 332 (Tex.Civ.App. 1939). ATRS cites Hatley, 25 Ark. App. at 13, 751 S.W.2d at 22, as authority for its contention that an equitable lien theory cannot be applied in favor of a mortgagee where a union mortgage clause exists naming a specific mortgagee.

Only issues of fact which arise on the pleadings, and are determinative of the rights of the parties to the action must be submitted to the jury. Jeffreys v. Boston Ins. Co., 202 N.C. 368, 162 S.E. 761 (1932); 12 Strong, N.C. Index 3d, Trial, 18, p. 386. Finally, we observe that a shareholder has a fundamental right to be intelligently informed about corporate affairs.