McCormick v. Shuman

15 Pa. D. & C.2d 660, 1958 Pa. Dist. & Cnty. Dec. LEXIS 323
CourtPennsylvania Court of Common Pleas, Columbia County
DecidedMay 9, 1958
DocketNo. 2; no. 179
StatusPublished
Cited by1 cases

This text of 15 Pa. D. & C.2d 660 (McCormick v. Shuman) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Columbia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCormick v. Shuman, 15 Pa. D. & C.2d 660, 1958 Pa. Dist. & Cnty. Dec. LEXIS 323 (Pa. Super. Ct. 1958).

Opinion

Kreisher, P. J.,

... The fifth reason [for judgment n. o. v.] that “the verdict is against the law” presents a more difficult question, and counsel for defendant at the oral argument stated their proposition to be “purely a question of law” and that is the reason the motion for judgment n. o. v. was not accompanied with a motion for a new trial.

[661]*661Counsel for defendant took this same proposition when they filed their preliminary objections to plaintiffs’ complaint as their fourth objection was captioned demurrer.

It was for this reason that the court in the said opinion filed February 18, 1957, 11 D. & C. 2d 88, 92, quoted at length from authorities on the subject and dismissed the demurrer.

Beginning on page four of the opinion, we stated, inter alia, the following:

“In 16 Appleman, Insurance Law and Practice, sec. 8841, p. 300, it is said:
“ ‘An insurance broker is the agent of the insured in negotiating for a policy, and owes a duty to his principal to exercise reasonable skill, care and diligence in effecting insurance. While such broker is not obligated to assume the duty of procuring a policy, without consideration for his promise, he must exercise ordinary care in the performance of such duty when assumed, the promise to take the policy being a sufficient consideration. . . .
“ ‘If a broker or agent of the insured neglects to procure insurance, or does not follow instructions, or if the policy is void or materially defective, through the agent’s fault, he is liable to his principal for any loss he may have sustained thereby. If the agent or broker fails to act with the proper and customary skill and care generally used by those in a like business, such neglect or breach of duty will render him liable in damages, not exceeding the amount of insurance he was employed to effect. Connecticut has pointed out that such principal may sue either for breach of contract or in tort for a breach of duty.
“ ‘It is generally considered that if the neglect or breach of duty of such broker results in loss to his principal, the broker is liable to the same extent as the [662]*662insurer would have been liable had the insurance been properly effected, and must pay the resulting loss/
“To the same effect are 1 Cooley’s Briefs on Insurance (2nd ed., 1927) 152, 2 Couch, Cyclopedia- of Insurance Law, section 181 . .

In Volume 1, Law of Insurance in Pennsylvania, by Goldin, sec. 128, p; 80, it is stated:

“A broker of insurance assumes to have the requisite knowledge and ability to transact the business for his patrons, and are bound to use reasonable- skill, care and diligence.. Failure to do this, resulting in a loss to the insured such broker is liable to the insured for the loss so sustained.”

Like statements are found in 44 C. J. S. §172. In section 141, it is stated:

“The general rule that the same person cannot act as agent for both the company and insured is subject to some exceptions. The same person may act for the different principals in separate matters in which their interests -are not conflicting and his duties not inconsistent. It is possible for an insurance broker, although first employed by one party to the insurance contract, to become during the progress of the negotiations the agent of the other; and in that event he may acquire rights, have powers, and incur obligations respecting both insurer and insured. The same person may be both an insurance agent and an insurance broker, and at different time's act in both capacities; he may be the agent for insured, although as to the procuring of the insurance he also represents the company.-
“Whether in a particular case or particular matter one acts as agent for the company or for insured depends on the intention of the parties, which is to be determined from the facts and circumstances .of the case.”

In the case of Walker v. Black, 216 Pa. 395, in a per curiam opinion, a verdict against an insurance [663]*663agent for negligence was affirmed stating that the question of defendant’s negligence was strictly a matter for the jury.

In the early and oft referred to case of Kroeger v. Pitcairn, 101 Pa. 311, Mr. Justice Sterrett, in delivering the opinion of the above, referring to eases in which agents have been adjudged liable personally, made the following classifications:

“1st. Where the agent makes a false representation of his authority with intent to deceive; 2nd. Where, with knowledge of his want of authority, but without intending any fraud, he assumes to act as though he were fully authorized; and, 3rd. Where he undertakes to act, bona fide believing he has authority, but in fact has none, as in the case of an agent acting under a forged power of attorney. As to cases fairly brought within either of the first two classes there cannot be any doubt as to the personal liability of the self-constituted agent; and his liability may be enforced either by an action on the case for deceit, or by electing to treat him as principal. While the liability of agents, in cases belonging to the third class, has sometimes been doubted, the weight of authority appears to be that they are also liable. In Story on Agency, the learned author, recognizing the undoubted liability of those belonging to the first two classes, says, ‘Another case may be put which may seem to admit of some doubt, and that is where the party undertakes to act as agent for the principal, bona fide believing he has due authority, and therefore acts under an innocent mistake. In this last case, however, the agent is held by law to be equally as responsible as he is in the two former cases, although he is guilty of no intentional fraud or moral turpitude. This whole doctrine proceeds upon a plain principle of justice; for every person, so acting for another, by a natural if not a [664]*664necessary implication holds himself out as having competent authority to do the act; and he thereby draws the other party into a reciprocal engagement. If he has no such authority and acts bona fide, still he does a wrong to the other party; and if that wrong produces injury to the latter, owing to his confidence in the truth of an express or implied assertion of authority by the agent, it is perfectly just that he who makes such assertion should be personally responsible for the consequences, rather than that the injury should be borne by the other party who has been misled by it’.”

In the recent case of Kraftsow v. Brown, 172 Pa. Superior Ct. 581, the verdict for plaintiff against defendant insurance agent for negligence was affirmed and the opinion by Dithrich, J., indicates that the personal liability of an insurance agent for negligence was taken for granted as the whole context of the opinion is directed to the validity of the insurance policy in the event the agent had not been negligent.

In the case of Rossi v. Firemen’s Insurance Company, 310 Pa.

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Bluebook (online)
15 Pa. D. & C.2d 660, 1958 Pa. Dist. & Cnty. Dec. LEXIS 323, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccormick-v-shuman-pactcomplcolumb-1958.