Peerless Mineral Springs Co. v. German American Insurance , 151 Wis. 352 ( 1912 )

Tramar, J.

This is an action to recover on a policy of insurance against loss by fire in the sum of $5,000, covering the sanatorium of the respondent and running from June 16, 1909, to June 16, 1910, containing also the following: “Subject to all the stipulations, provisions, and conditions of this policy, the loss if any on building is payable to D. S. Eoberts, trustee, as his interest may appear.” D. S. Eoberts was made a defendant in the action, and the complaint prayed that his interest be ascertained and determined.

Error is assigned because the circuit court refused a continuance on application of the defendant made on May 13, 1912, after the case was called for trial. Issue had been joined since July 9, 1910, and the alleged ground for continuance was the inability to procure the testimony of one Mrs. Oobine, who resided in Chicago. There was no attempt to take her deposition during the time the cause was pending. Counsel contend that under the laws of Illinois such deposition could not be taken, citing McIntyre v. People ex rel. 227 Ill. 26, 81 N. E. 33, and Martin v. People, 77 Ill. App. 311. These cases merely decide that a witness cannot be compelled to give her deposition before a notary public. We do not understand that the'courts of Illinois refuse to extend the comity of letters rogatory to the courts of other states. There was no reversible error in denying thp application for a continuance on the ground of lack of diligence.

The defendant D. S. Eoberts answered to the complaint, setting up a copy of tbe instrument under wbicb be claims, calling it a mortgage or trust deed, securing twenty bonds of tbe plaintiff aggregating $10,000. Thereupon tbe defendant amended its answer to allege tbat tbe plaintiff’s interest was not tbat of unincumbered and sole owner of tbe insured property, but tbat D. S. Roberts was tbe owner under tbis trust deed. It is contended tbat upon tbis showing tbe complaint should have been dismissed.

When tbe defendant executed this policy making tbe loss if any payable to D. S. Roberts, trustee, as bis interest might appear, it contracted with tbe insured for tbe benefit of Roberts as trustee to tbat extent. It cannot be beard to say, after making such an indorsement on its policy, tbat it did not know be was trustee, 'and it must at its peril ascertain tbe nature and character of bis trust. It would be a strange sort of commercial morality wbicb would justify one in contracting with another to pay what might become due on tbe contract to a third person as trustee as bis interest might appear and then defeat tbe obligation of the contract upon proof tbat such third person was a trustee. But tbe so-called trust deed is in tbe form ordinarily used to secure railroad and other negotiable bonds. It is in substance and legal effect a mortgage for tbe purposes of insurance. Wis. Cent. R. Co. v. Wis. River L. Co. 71 Wis. 94, 36 N. W. 837; Central T. Co. v. Burton, 74 Wis. 329, 43 N. W. 141. Marvin v. Titsworth, 10 Wis. 320, is overruled by Goodrich v. Milwaukee, 24 Wis. 422, in its most vital and essential part, but even there (10 Wis. 329) it was said: “There can be little question tbat under tbe circumstances a court of equity, upon a proper application, would have given effect to tbat intention as an equitable mortgage, notwithstanding tbe irregularity of tbe instrument.” Dictum from tbis overruled case cannot, however, now be put forward as authority. To now go back to tbe theory tbat a mortgage security could not be taken in tbe form of a trust deed would unsettle many titles and many se-cnrities in tbis state. So far as tbe writer’s observation goes,, tbis is a common form of securing bonds of private and quasi-pnblic corporations. This is bow it was treated by tbe covenant in tbe policy to pay tbe trustee as bis interest should appear, and tbis is what it is in law as to such insurer.

By the Court. — Judgment affirmed.