216 Wis. 513 | Wis. | 1934
The dispute arises over the interpretation of part of the mortgage clause reading: “That no default of the mortgagor shall affect the mortgagee’s right to recover in case of loss hereunder except upon ten days’ written notice to the mortgagee of such default.” The appellant contends that “default” as there used refers to the non-payment of premiums and does not enlarge the coverage. It appears to be conceded that had the clause been drawn using the words “any act or neglect of the mortgagor” instead of the words “that no default of the mortgagor” shall affect the mortgagee’s right, the mortgagee’s interest would be fully protected and it would be entitled to recover the insurance stipulated.
The word “default” may properly be used to define a failure in the performance of a contract or in the keeping of an obligation. It is often used to indicate a wrong action in the way of a transgression against stipulation, and, under particular circumstances in given instances, it denotes unwarranted acts or neglects on the part of one bound to do or not to do certain things. If the word “default” as used in the mortgage clause is limited in meaning to the non-payment of premiums, and can be said to have no relation to acts of the owner in increasing the hazard of loss by fire, the appellant’s point would be well taken. But the agreement as there expressed goes much beyond the mere limitation of a default in payment of agreed premiums. The accompanying and related parts of the agreement decidedly show an intention on the part of the insurer, in certain instances, to continue the insurance after the owner, in violation of his agreement, has increased the hazard. To do this, of course, the mortgagee must pay “according to the established scale or rates for any
It is urged by the appellant that a non-registered town mutual insurance company has no statutory authority to insure a distillery, and that the barn ceased to be a risk insurable in such a company when such conversion took place. The insurance company had authority to insure the buildings when the policy was issued. They continued to be used as a barn and silo although the still and gasoline engine were installed. Any conversion into some excepted risk would void the policy as to the mortgagor, but it would not affect the rights of the mortgagee under the mortgage clause until notice thereof was brought home to it. Having determined that the word “default” as used in the mortgage clause in question means “act or neglect,” the rights of the mortgagee are controlled by the case of Prudential Ins. Co. v. Paris Mut. Fire Ins. Co. 213 Wis. 63, 250 N. W. 851.
By the Court. — Judgment affirmed.