Colpe Investment Co. v. Seeley & Co.

THE COURT.

An action for damages based upon the alleged fraud of the defendant while acting as the agent of plaintiff and its assignors.

[18]

It was alleged that defendant concealed, with intent to deceive, the material facts concerning the terms, premiums and types of insurance coverage procurable upon properties of plaintiff and its assignors which defendant was employed to keep insured, and falsely represented that such terms, premiums and types of insurance coverage procured upon said properties were the best that could he procured for adequate coverage thereon.

The complaint consisted of six separate causes of action, three of which, namely, the second, fourth and sixth, are not before us on this appeal. Of the remaining three, the first, third and fifth, the first is based upon the failure to write certain policies with a co-insurance clause attached. The other two are based upon the alleged failure to procure the attachment of co-insurance clauses to certain policies and to procure policies' for a three-year term upon a two-year premium.

Upon the trial the court granted defendant’s motion for a nonsuit as to the three causes of action last mentioned.

Defendant contends that there was no proof that the alleged representations were in fact untrue, or that it violated any duty as agent, or that damage resulted to plaintiff.

It was testified on behalf of plaintiff that defendant was employed as alleged to keep the properties insured continuously up to one hundred per cent of their value. Defendant was instructed that full coverage should be carried, and that this should be procured upon the terms most favorable to the owners. Further, that whenever the policies were to be renewed—-which happened annually—the owners and defendant’s agent would agree as to the correct values of the -properties for the purpose of fixing the amounts of the insurance. It was also testified by qualified experts that the practice of writing co-insurance was known to all brokers, who ought to advise their principals with reference to the effect thereof and also as to the discount allowed in such instances, and also the possibility of procuring a three-year coverage for a two-year premium. Plaintiff’s president, who represented the owners in the negotiations with defendant during the period when defendant was procuring the policies, testified that he was never advised of the possibility of procuring these discounts. It was further testified that defendant represented from time to time that the insurance placed