Grand Rapids Auctions, Inc. v. Hartford Accident & Indemnity Co.

Plaintiff is a Michigan corporation which operated as an auctioneer-broker for used car dealers. In 1963, Harold Brink was the majority stockholder of plaintiff. He was also president and general manager with control of the day-to-day operations of the company.

In 1963, plaintiff purchased an indemnity bond from defendant in the amount of $50,000 which was in force for the period from September 24 to December 24, 1963. The agreement was subject to certain conditions regarding prompt notice of loss and filing of a proof of loss.

In December of 1963, suspicions of alleged wrongdoing on the part…