First Federal Savings & Loan Association of Salt Lake City v. Transamerica Insurance Company, a California Corporation, and John Clark

McWILLIAMS, Circuit Judge.

First Federal Savings & Loan Association of Salt Lake City (hereinafter “First Federal”) had in force and effect a Financial Institution Bond issued it by Trans-america Insurance Company, a California corporation (hereinafter “Transamerica”). The bond provided that Transamerica would pay First Federal for any loss sustained by it “resulting directly from dishonest or fraudulent acts of an Employee committed alone or in collusion with others.”

John Clark, a loan officer in First Federal’s loan office, participated in three residential property loans which eventually…