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Aetna Casualty & Surety Co. v. Cunningham

United States Court of Appeals for the Fifth Circuit
224 F.2d 478 (1955)


Cunningham (defendant) was hired as a contractor to construct a building. In the event that Cunningham was unable or unwilling to complete the construction, an insurance policy held by Aetna Casualty & Surety Company (Aetna) (plaintiff) provided funds to another contractor so that the project could be completed. After Cunningham failed to complete the project and proceeds from the Aetna insurance policy were provided to another entity to finish the construction, Aetna filed suit against Cunningham to recover the expended funds. At trial, Aetna presented two theories for recovery. First, it claimed that the terms of the insurance policy allowed recovery from Cunningham. Second, even if the policy did not expressly provide for such recovery, Cunningham had committed fraud in applying for the policy. The district court found for Aetna on the policy claim but held that Cunningham had not committed fraud. Both parties appealed.

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Holding and Reasoning (Rives, J.)

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