American Empire Insurance Company of South Dakota v. Fidelity and Deposit Company of Maryland

I respectfully dissent.

F & D denied liability on the bond on the stated ground that “F. Wylly Clarke, Jr. was never covered”. In the complaint F & D alleged that Clarke was “the sole stockholder and alter-ego of each of the assured”; that his fraud was therefore attributable to the assureds. This .position, basic to the complaint, rendered the bond worthless to the persons for whom it was primarily issued— the owners of the premium money in the pool.

*78The law of contracts is not so encrusted with form that we cannot, in this case, cut through the shell of a two-party contract and give effect to…