In the case of Miller v. American Bonding Company, 1921, the U.S Supreme Court was tasked with determining whether a surety company could be held liable for damages incurred by an individual due to actions taken by a public official who had been bonded by that company. The plaintiff, Miller, argued that he suffered financial losses as a result of wrongful acts committed by a county treasurer in Nebraska who was under bond from the defendant company. However, the court ruled in favor of American Bonding Company stating that it could not be held responsible for any loss or damage unless it is specifically mentioned and covered within its contract obligations outlined in their bond agreement with the public officer. Therefore, since there were no specific provisions covering such liabilities in this particular bonding agreement between them and said treasurer; they cannot be made to pay compensation for those alleged losses.

In the dissenting opinion for Miller v. American Bonding Company, Justice McReynolds disagreed with the majority's interpretation of a surety bond contract and its application to bankruptcy law. He argued that the language of the bond was clear in stating that it only covered losses resulting from fraudulent or dishonest acts committed by an employee during his term of employment, not after he had left his position. Therefore, any fraudulent actions taken by this employee after leaving his job should not be covered under this bond agreement according to its explicit terms. Furthermore, Justice McReynolds contended that allowing such coverage would contradict established principles of insurance law which typically limit liability to specific periods and circumstances outlined in contracts. He also expressed concern about potential negative implications on future business practices if courts were allowed to interpret contractual obligations so broadly beyond their original intent.