Opinion ID: 2178484
Heading Depth: 1
Heading Rank: 3

Heading: The loan exclusion under the bond.

Text: The bond provides no coverage for losses sustained as the result of bad loans: This bond does not cover: ..... (e) loss resulting from the complete or partial non-payment of, or default upon, (1) any loan or transaction in the nature of, or amounting to, a loan made by or obtained from the Insured, . . . . While we do not believe an insurer could rely upon this exclusion in every case in which a pre-existing loan was renewed on the strength of a forged or altered instrument, we believe it applies here and provides further support for the trial court's disposition. The exclusion is applicable because the bank failed to show that its loss was the result of the alteration of the document, and not due to the loans already in default. It resolves basically into an issue of causation. We believe the evidence supports the trial court's finding that the bad loans, not the alteration, were the cause of the bank's loss and that the bad loan exclusion was therefore properly applied. We find no error in the trial court's disposition of the case and therefore affirm. AFFIRMED. All Justices concur except ALLBEE, J., who takes no part.