Beckman v. Edwards

Mount, J. Appellant brought this action to recover from the respondent the sum of $1,000, because of the alleged negligence of the respondent in insuring the appellant in an insolvent insurance company, and in permitting such insurance to remain in said insolvent company after the company had been placed in the hands of a receiver. At the close of plaintiff’s evidence, the trial court directed a nonsuit, and dismissed the action. This appeal followed. It appears that the respondent was an insurance agent, and in the year 1907, he represented the Pacific Mutual Fire In [412] suranee Company, a local company doing business in this state. In August, 1907, an employee of the respondent called upon the appellant and solicited insurance upon a certain stock of goods in Spokane. The appellant applied for a policy of insurance and it was issued. The name of the company by which this policy was issued is not shown. Soon after the policy was issued, the same employee of the respondent called again upon the appellant and took away the first policy and left another, and said to the appellant: “You see the policy is.changed, but it is the same name put in the policy, and we are back of it, and if the company is no good, we are good for it,” or words to that effect. The policy was one issued by the Pacific Mutual Fire Insurance Company for $1,-000, on new and second-hand goods, in favor of the appellant. This company was authorized by the insurance commissioner of the state to transact the business of fire insurance in the state until December 31, 1907, and a certificate was regularly issued to that effect on January 2, 1907. The policy in question was issued on September 19, 1907. On March 18, 1908, the respondent resigned his agency for the company. The reason therefor does not appear. On July 24, 1908, the insurance company was adjudged insolvent, and a receiver was appointed therefor. On August 3, 1908, the stock of goods owned by the appellant and insured by the policy above referred to was damaged by fire, and it appears that the company refused to pay the loss. It is not shown that the insurance company was insolvent at the time the policy was issued, and there is no evidence that the respondent knew, or should have known, that the company was insolvent at that time, except the mere fact that some nine months after the policy was issued the company was adjudged insolvent. The appellant offered to introduce in evidence certain copies of Best’s Insurance Reports for 1908, but the evidence shows that the respondent had not seen these reports prior to the time the company was adjudged insolvent, and the reports did not show the insolvency of the [413] company. They did, however, say that “the company’s condition is very weak.” While it is true that an agent may become liable to one insured where the insurance is placed in a company known to be insolvent or not authorized to do business in the state, no such facts appear in this case. The facts shown here are that the company was both authorized to do business in the state and was solvent at the time the policy was issued, and remained so for nine months thereafter. The authorities cited by the appellant do not, therefore, apply to this case. Where an agent provides a policy in a company which is solvent or generally considered so, he is not personally liable for a loss which occurs when the company subsequently becomes insolvent. Gettins v. Scudder, 71 Ill. 86. It was not shown that the respondent knew of the statements made by his employee after the policy was issued, or that the employee was authorized to make such statements. But if respondent did know of such statements, they were made after the policy was issued, and were not made as an inducement to the appellant to take the policy, and the statements were not made in writing. It is clear, therefore, that no liability was shown against the respondent. The judgment must be affirmed. Rudkin, C. J., Crow, Parker, and Dunbar, JJ., concur.