Is a mortgage insurance company liable to a bank for defaulting on a loan?

In Dane v. Mortgage Insurance Corporation, Limited, supra, by an instrument purporting to be a “policy of insurance”, the defendants guaranteed to the plaintiff payment of a sum of money deposited by her in a bank if the bank defaulted in paying the same. The bank made default in payment of the sum deposited. Subsequently, a scheme of arrangement, to which the plaintiff was not a party and to which she did not consent, was entered into between the bank, its creditors and the colonial court under the provisions of a colonial statute. Notwithstanding the scheme of arrangement, it was held that the contract: the policy of insurance, was upon its true construction, one of insurance against a certain event, viz., the bank’s default, and, that event having happened, the defendant was liable to pay the sum insured.