Is a mortgage policy a guarantee that the bank will not be able to pay?
Saskatchewan, Canada
The following excerpt is from Terra Power Tractor Co. v. Saskatchewan Government Insurance, 1987 CanLII 4479 (SK QB):
In considering the submissions made by counsel for the defendant, to whom I am indebted for his thorough review of the facts and the law, I am bound to repeat that which was stated by Lord Esher at p. 61 in Dane v. Mortgage Insurance Corporation, Limited: “The policy is not a guarantee that the bank will be able to pay; it is a positive direct contract that, if the bank does not pay a certain amount on a fixed day the insurance company will pay that amount.”
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