In the case of United States v. National Surety Company, 1920, the Supreme Court dealt with a dispute over whether or not a surety company was liable for losses incurred by the U.S. government due to fraudulent actions committed by an employee who had been bonded by that company. The defendant argued that they were not responsible because their bond contract specified it only covered "lawful" duties and responsibilities of the position in question; since fraud is illegal, they claimed this fell outside their coverage obligation. The court disagreed with this argument on two grounds: firstly, even though committing fraud was obviously not part of his official job description or duties as defined by law - when he did so while acting in his capacity as an employee (i.e., during work hours using work resources), those activities became de facto part of his employment role and thus should be considered within scope for purposes of liability coverage under such bonds. Secondly, if companies could simply exclude any unlawful acts from being covered under these types of bonds then there would essentially be no point in having them at all – since most cases where such insurance would come into play are likely going to involve some form illegal activity anyway.

In the dissenting opinion for United States v. National Surety Company, Justice McReynolds disagreed with the majority's interpretation of the Miller Act and its application to this case. He argued that a surety company should not be held liable for damages beyond what was explicitly stated in their bond agreement. According to him, if Congress had intended such an expansive liability, it would have clearly indicated so in the language of the statute. Moreover, he contended that by imposing additional liabilities on sureties without clear statutory authority undermines contractual certainty and could potentially discourage companies from providing bonds for government contracts due to increased financial risks involved.