Social Security Administration v. Employers Mutual Liability Insurance

This appeal must determine whether a corporate insurer under a fidelity or indemnity bond is liable to a defrauded employer for interest on the principal sum embezzled by an employee.

The appellant is a federal credit union. An assistant treasurer, a Miss Mand, perpetrated a series of embezzlements of money belonging to her employer by purportedly making loans to fictitious persons and pocketing the proceeds. From June 1957 to February 1962 she entered on the credit union’s records some one hundred twenty such loans, totalling $50,890. According to the stipulation of facts:

“The repayment of…