Aetna Life & Casualty Co. v. Hampton State Bank

GUITTARD, Justice.

Hampton State Bank sued Aetna Life and Casualty Company on an insurance contract called a “banker’s blanket bond” for a loss resulting from a forged check. Aetna answered that no insured loss occurred, since Hampton forwarded the check through banking channels to the drawee, Northwest National Bank, and after Northwest paid the check, Hampton asked Northwest to send it back and voluntarily refunded the payment. In order to determine whether an insured loss occurred, we must decide whether Hampton was legally required to make this repayment. We hold that repayment was not…