it she did not unless we count the commissions but well your honor that i think that there's a question of fact regarding whether how she profited from it tell me other than the conditions which is a separate argue that point me to evidence and the record that shows she profited received other than the commission cannot you that was my question so your focus then is on the commissions and it seems to be on this parsing of the phrase normal course or whether it was normal to get these commissions why isn't it i understand you think the transaction was dishonest but why isn't it normal for someone to get a commission if they're in a commission job well it's not normal for misrepresenting collateral it's not normal abnormal that would not be a commission that would be the kind of thing we're looking for or you know you give me part of this property or whatever that you're getting out of this but here she does a transaction that you all question and challenge that if loans are clearly fraudulent and if there are misrepresentations as that and it's an admissions as there were over and over by mr than that is not in the normal course of business as delay which of the bond reads and if it's not in the normal course of business it cannot be excluded by that language but it's in your main argument that this personal gain provision in the policy should be invalidated because it's inconsistent with the miss statute but it's not what the statute contemplates really i mean if we're going to be home everybody to the letter of the law the letter of the law is that the employee provides a bomb that's not what this is this is indemnity insurance of tain by the bank and so it seems to me you're trying to have it both ways you're trying to make this a statutory bond while ignoring the fact that it's not and then using that statutory bond as a kind of a hammer to say well and you have to cover everything regardless of whether we prove any dishonesty as understood by the policy you have to cover everything this lady cost us the last you cover it so it seems like you're trying to have it both ways explain to me wh well the district court address that directly and found that the formality of who pays for the bond who secures the bond is of no consequence in light of the statutes essential purpose the essential purpose is to protect the banking public and the banking system of the state of mississippi who buys the bond is a formality that does not affect that essential purpose so just that if we construe this statute to cover everything caused by somebody you know mistakes misapprehensions mis whatevers you never go be able to get this insurance or this insurance is going to be so costly that all these banks we're trying to protect are going to go out of business so it seems to me you're trying to take this go with the intent of the statute the intent of statute is it to cover everything that somebody does wrong to cover dishonesty and this policy defines dishonesty as wrongdoing for gaming and what's wrong with that first your honor i think  statement about what may or may not happen to the insurance industry speculation and there's no proof in this record one way or the other about that and i don't think these are standard policies will be the first court to say it and there's what i think about twenty states that have similar statutes when it would be the first court to say that this standard nationwide policy isn't consistent it has to be so supplemented by the statutes that a lot of states have well your honor i think the principle of reading and reading you know out has been applied to numerous times but to this this foreign policy has it has as a chord ever said the personal gain requirement is at odds with this statute in this area i think that there have been trial court decisions that have done so i know of one in tennessee where that has happened but appellate court decisions on this issue have not have not happened now mississippi statute  is notably more emphatic than other states that have statutes on this issue the mississippi statute contains the language that says the conditions whether the instrument so describes the conditions or not shall be the principal shall with the case law that again interprets statutory bonds which are a special case statutory bonds are written to comply with the statute and private parties are not at liberty to do that what is dishonesty means and isn't that what the district court in finding this to be a statutory bond none the less said that the way the policy describe dishonesty or the policies approach to personal gain versus you know i could make a mist of a big giant mistake that hurts the bank a lot don't gain anything from it and i just was stupid i mean that could happen and that's what we're trying to distinguish dishonesty when you take all of the facts over the fact that she you know scribbles in a change when i could envision where she told bill the borrower you don't need you're going to need x amount of collateral and then the committee approved something different and that she's got to try to make this right because she's got a bar we're thinking one thing the committee another that isn't necessarily dishonesty it's unethical in my view i wouldn't do it i'm not suggesting i would but to me statutory dishonesty is the kind of embezzling why would we be having bank officials having to give a bond it's so that they're not embezzling money basically and i don't see that here at least in the evidence you show me i don't see an embezzlement i don't see a kickback what i see is somebody get in a little bit over their head and that doesn't strike me as statutory dishonesty that you would need a bond from an officer to have you could have errors and omissions type coverage that's a different requirements fit the statute that is a legal question what it means not a jury question now whether she actually had the intent or something that might be a jury question but what does dishonesty mean in putting some parameters on it that's what the district judge all statutory bonds but the adams case says that sure it sure does can either add to nor detract from those conditions in the statute by anything they may choose to insert the law to claire's all such surplus conditions  raised in the summary judgment of st paul that's true but what so we can affirm for any reason supported by the record and what evidence do you have that she intended to participate in the benefit it's clear to share in that person one of the borrowers in this case bought seventy thousand dollars worth of jewelry the day after the loan closed and in the middle line of the check to the jewelry store he wrote deal gives and then when i said moreover as asked about the whereabouts of the jewelry he bought that day he couldn't account for all of it that same borrower testified that he quote always took care of people who helped him get deals now these are the evidence problem with this morning which has been in existence basically for about six decades in this form when the problems is going to be pure investment it's easy to find evidence of that when the employee reaches his or her hands into failing at pretty much every week and that's why we have f d i c it f a so i see type insurance over the years i needed i was before you're out of back then finding some of those exact cases so the difficulty in the case that was before the work was determining whether this was just a bad loan or poorly made or a loan made by a bank officer who has never worked in deciding whether it's truly dishonest it is difficult most  time to discern what is in the employee's mind will he make in a bathroom or does he really have some evil intent to cause the bank to sustain a loss in from the beginning of these policies dating back prior to nineteen thirty for the purpose of these policies is about coverage for employee dishonesty you think the lack of any civil or criminal prosecution is hurt is irrelevant or do you think it's just something that judge mentioned in passing that we should all ignore i relevant i think it's relevant to say that the bank did not truly believe this loan officer was dishonest because if he did they would have prosecuted her they would have filed suit against her to try to recover from her these off the streets and out of facts that was the problem in the banking system back in the one nine hundred thirty s when the statute was enacted that remains a significant problem today you make a good policy argument a number of courts have relied on them to say because it's so hard to sort out negligence vers fraudulent intended or intentional lying that it's ok to add in this requirement of personal gain but would you acknowledge the plain meaning of dishonesty doesn't require that i mean to look at a common law fraud point common law fraud you have to have an intent to hurt the other side but you don't have to have it again you are that's a great question because of the meaning of a goal which this might go to the second issue which is whether commissions and bonuses can be personal benefits it might be more in that that world but take a situation where if you get ten million dollars in loans for the year you get a big bonus you're a banker and you're need a million more in loans it's december fifteenth and so you can call three or four your friends and say hey look i'm going to come up with these fake loan applications and you fill out all kinds of lies you lie about their income you know you lie about their credit history you lie about the collateral and you have all your friends come in and sign these forms you filled out filled with lies and they get a loans that put you over the ten million dollar mark i mean to me h you would have to say one in two that that's not covered depends upon what the evidence shows i've never seen this case that you're talking about in thirty years of practicing in this area it's never that claim if what you're telling me is the employee comes in and admits to each and every point that you just stated maybe the bank would be hurt because they get their million dollars  precisely that's exactly a bonus structure that incentivizes people to kind of fake fake it out that's a different over the ones wouldn't be these people one of the ability to repay that they got the money to pay back they're not investing it in anything the way these guys were these guys were taking the money to use somewhere about collateral etc and i normally there's a kickback there i'll give you that normally there's a gag back i mean why would a banker commit professional suicide in less he or she was getting something out of it profiting for a time and thought they would and i think the employees involved while also quite corrupt and improper thought the banks would keep getting something i mean the flips would go on forever until something pulled the rug out from under and that's when everybody went to present but in the meantime people were profiting including the banks and s n l's and this is same reason why bankers ignore loan policy every day because they think in their heart of hearts that the loan is actually going to be paid back on the i thirty corridor in the eighty's and you're talking about properties were being flipped on it on a daily basis sometimes and those developers were making money hand over foot and ellsworth in the us now those were in bankers w looking the other way for certain you know we're going certain carmen's because it didn't matter because the loans got paid off and that's what happens in ninety nine percent of these cases but in the truly difficult cases that judge cost me your aides where it's incredibly difficult to determine what's in the mind of the employee there has to be some objective truth dishonesty and that is what the american bankers working together with the surety association of america agreed upon in one nine hundred eighty and then again in one nine hundred eighty six i have a question about your argument and you do it artfully it's not your primary argument and you do it at the end by scent you're not really pressing that these aren't statutory bonds but then you say well if we get to that issue if they're arguing for this strict textual view of the law then we should be entitled to that too and they wouldn't be statutory bonds but if we were to find they want statutory bonds every bank in mississippi has no no bank has every employee go by these things philosophical and because we can spend a half an hour talking about it is it is it any banks have the act employees go by these things anymore oh they have existed in seventy years you this  that legislature talked about in one nine hundred thirty four has not existed for a long long time and it's not just technical requirements that no longer exist it's two different processes it's sure to ship on the one hand versus insurance on the other surely ship the employee in the bank losses over this the employee goes out and employers the product and they are primarily liable and guess what they typically provide clatter of for that today every day construction projects or collateralized by surety bonds and the contractor provides cloud reform that's what happened back in one nine hundred thirty four and it's a different different product than is available on the market today statutory bond which we may not need to reach issue but if we did it's really the bank employees who are in violation statute not the bank well the comptroller has to approve should be inspected i think it is limping stop buying your product though if it was an income it wouldn't make them in compliance with the state statute i think it is a complicated question let me answer it first this way i think th comply with what probably is expected of today by the mississippi banking commission they want out and they bought insurance for employees dishonesty so if if there is still that requirement in the statute  let's keep in mind that that product doesn't exist but if there is a requirement for employee dishonesty insurance the bank complied with it and guess what it purchased the gold standard on the market there's not a better policy available in the united states today in st paul's policy and the mississippi commission charged with overseeing this hasn't gone around saying well this ain't what we're talking about here you know you guys are out of the five and started fining every bank in the state every bank or every regulator in the united states knows about this bond i've had roy aarons from the f t i see on panels talking about this bond i've had associate general counsels on panels talking about this bond this isn't something that st paul slipped by somebody to try to earn an unfair dollar this this is the standard in the industry well including all of these provisions about what dishonesty is absolute that if mississippi  in the view that this was not of compliance with their statute they would pretty much have to shut down all of the banks in mississippi that they would it's not going to find a bank that has that anything is covered stab policy that your opponent would like to  dozen fidelity insurers writing these policies in the market that's because they were losing money day after day after day the it is a strange marriage between the banking industry and the insurance industry when it comes to fidelity and dishonest insurance there's nothing like it that i'm aware of and in the world and of insurance it truly is a marriage they walked hand by hand for decades to come up with what we now have and it's the but i think renaissance is very aware of what's been going on one of their officers serves on the board of directors of the american bar association insurance services just decided to take a quick  search last night and saw that i know that's probably neither here nor there but it's not again it goes back to my point that st paul is not pulling a fast one over this bank this is a sophisticated bank that participates in industry  and the like and they were aware of what they were purchasing they've been represented by one of the foremost plainest fidelity counsel in the country pat artist he knows what he's doing that the problem is look here here's the fallacy in this case my clients bond provides coverage for what the bank believe they purchase and for the very claim the bank asserted that a long time loan officer made dishonest loans and received tens of thousands of dollars in jewelry and other kickbacks that is covered the problem came about because no evidence developed to support that  just briefly your honour's there was a lot of i think you started with a question about the cross q sion when you heard i respectfully disagree with the district court's assessment that it's relevant all in the considerations before in fact i and do it again well that is not up to the bank frankly but the fact of the fall i cannot is if you brought this to the authorities attention and a prosecutor then she's unlikely to get a job in a bank whereas if you all sit quietly and just try to go after the insurance company then she is going to go work at another bank well i think that whether or not to criminally prosecute her is a decision that's made by the district attorney to which it does not is not privy to all pilot complaint with the district attorney no we did not i would the district attorney know about this i don't i'm not privy to how they say these things come before them but the other repeatedly i think this court might my opposing counsel talked about how difficult it is to discern what's in the mind of an employee i think that points to the fact that this that's why it's a jury question a jury is entitled to hear a case and hear all the surrounding circumstances just as it did in the s n b l case which is the fifth circuit so let's say we have a jury trial and the question is dishonesty of ms hurt what is the definition of dishonesty to be submitted to the jury well your honor i think that the court could could instruct the jury how to differentiate between the two whether it's not give me that and the word dishonesty me you are instructed that the word dishonesty means quote give it to me well it means acting with intent it means acting to deceive with intent and i don't think that that you don't have to put hurdles such as she must receive a financial benefit over twenty five hundred dollars and you know all of the things that are in the bond in order to reach that point i think the jury's make that kind of decision every day the other point i wanted to address was that my counsel opposing counsel says this is not an anything is covered kind of a policy or perhaps it was a statement by the court this is what we're arguing for to comply with the mississippi statute is not in anything is covered type of policy what we're arguing for the bank still has the duty under the policy to  show that there was a loss and b that there was fraud of its employee and it must prove that and three that the loss was due to the for all so there are still proof requirements it's not that it just covers any loss or any negligence of any employee you still has to kind of throw some definitional structure i mean even in the all all covered type policies that insurance companies have all risks policies they're still definitions in there they don't just say hereby cover all risks have a nice day still goes on for pages and pages even when it's at all risks that's true so it seems to me that you can't really expect an insurance company not definitions and not have restrictions and strictures in their provided and you know it would be either the statute would be revised by the legislature or the market sounds like a a little reexamination the statutes in order for i agree that's beyond our scope but i respect that