Ormsby v. Phenix Ins.

Citations

• 5 S.D. 72
• 58 N.W. 301
• 1894 S.D. LEXIS 39

Syllabus

<p>1. The mortgage clause' agreement annexed to the policy of insurance in this action constitutes a new contract between the insurer and the mortgagee, which, so long as the conditions therein contained are complied with, suspends the effect of the stipulations of the policy as to the acts of the owner or mortgager which will forfeit the policy.</p> <p>2. The stipulations in the mortgage clause agreement annexed to the policy of insurance that “the insurance as to the interest of the mortgagee or trustee only therein shall not be invalidated by any act or neglect of the mortgagor or owner of the property insured, or by the occupation of the premises for purposes more hazardous than are permitted by the terms of the policy; * * * provided, also, that the mortgagee or trustee shall notify the company of any change of ownership or increase of hazard which shall come to his or her knowledge, and shall have permission for such change of ownership or increase of hazard duly endorsed on the policy,” — constitute conditions and not covenants.</p> <p>3. Failure on the part of the mortgagee to comply with the conditions in the mortgage clause agreement suspends the operation of the same, and leaves in force and effect the stipulations in the policy as to the acts on the part of the owner or mortgagor that will operate to forfeit the policy.</p> <p>4. The evident design and the legal effect of such condition is to require the mortgagee to notify the insurer of any change of ownership or increase of hazard which shall come to his knowledge, as a condition of continuing such stipulations in force.</p> <p>5. The burden of proving that the conditions contained in the mortgage clause agreement have not been complied with by the mortgagee or trustee rests upon the insurer.</p> <p>6. The record of foreclosure proceedings, the regularity of which is not questioned, instituted to foreclose a subsequent mortgage upon the insured property, and the sheriff’s deed thereunder, made prior t