Opinion ID: 1170632
Heading Depth: 1
Heading Rank: 1

Heading: The complaint was sufficient on demurrer.

Text: Defendant Nelson first contends that the trial court erred in overruling his demurrer to the complaint on the ground that because it alleges that he was the general agent for a disclosed principal, the United Pacific Insurance Company, and alleges no limitations on his authority as agent, he cannot be held personally liable to plaintiffs because of the rule that an insurance agent is not personally liable to the insured if, with authority to do so, he effects a binding contract of insurance between his disclosed principal and the insured and one which conforms to the agreement between the agent and his insured, in the absence of an express understanding to the contrary, citing Leavens v. Northwestern Mutual Ins., 249 Or. 418, 421, 439 P.2d 17 (1968), among other authorities. That rule may apply in an action upon a contract of insurance, as alleged in Count I of this complaint, because in such an action the insurance company is the named contracting party to the insurance contract and is thus the party responsible for a breach of that contract. Such a rule has no application, however, in an action against an agent for breach of an agreement to procure a policy of insurance because such an action involves an agreement in which the agent has contracted directly with the person for whom he has agreed to procure the insurance. Although Count II of this complaint adopted by reference some of the allegations of Count I, including reference to Nelson as an agent of United Pacific, that was not a material allegation in Count II. That count also adopted by reference the allegation that Chaney was a solicitor and agent only of Larry C. Nelson General Agency and alleged that Chaney and Larry C. Nelson Agency agreed with plaintiffs to procure and have issued a policy of fire insurance and failed to do so. These alleged facts were sufficient to constitute a cause of action against both Nelson and Chaney for breach of a contract to procure the issuance of a policy of insurance. Cf. Franklin v. Western Pac. Ins. Co., 243 Or. 448, 453, 414 P.2d 343 (1966). It is also clear that Count II was understood at the time of trial as proceeding on that theory, despite defendant Nelson's present contention as to the legal effect of its allegations, and no objection was made to submitting that theory to the court for decision under the allegations of Count II. Cf. Leavens v. Northwestern Mutual Ins., supra , and Anderson Feed & Produce Company v. Moore, 66 Wash.2d 237, 401 P.2d 964, 967 (1965). The trial court did not err in overruling the demurrer, at least to Count II.