American Life Insurance v. United States Fidelity & Guaranty Co.

In May, 1921, Lew Wallace was plaintiff’s Oregon State agent. Among his duties was the collection of premiums on policies. Defendant executed to plaintiff a bond to reimburse it to the sum of $2,000, for loss “directly occasioned by larceny or embezzlement on the part” of Wallace. The bond expired June 1, 1921.

Wallace’s contract provided that insurance premiums collected by him for plaintiff—

“shall be deemed to be held by him in a fiduciary capacity, and shall be used by him for no personal or other use whatever, but shall be by him immediately paid over to said party of the first part,…