London & Lancashire Indemnity Co. v. Allen

Defendant Allen was an employee of Security State Bank. In October and November, 1952, he embezzled approximately $15,000, the offense was discovered and he was discharged. The bank carried insurance with plaintiff London & Lancashire Indemnity Company indemnifying it against such losses. Acting to protect itself or its insurer, soon after the bank had discovered the loss it informed Allen that he must cover his shortage with promissory notes signed by reputable and solvent citizens. A note was prepared by the bank’s attorney for $8,500, dated December 9, 1952, and payable on demand. This was…