Opinion ID: 1643748
Heading Depth: 1
Heading Rank: 1

Heading: transamerica, as principal, is responsible for its agent's, dakota insurance agency, negligence or omission to its insured, peterson grain systems.

Text: The majority opinion sets out the key statute but fails to abide by it. 59-6-9. Responsibility of principal for agent's negligence or omission. Unless required by or under authority of law to employ that particular agent, a principal is responsible to third persons for the negligence of his agent in the transaction of the business of the agency, including wrongful acts committed by such agent in and as part of the transaction of such business; and for his willful omission to fulfill the obligation of the principal. This statute means exactly what it says. In simple language it says that the principal is responsible for its agent's negligence or omission. There is no question in this case but that the principal's agent Dakota Insurance Agency was negligent for failing to notify the insured, Peterson. Further, there is no question that Transamerica is the principal and Dakota Insurance Agency is its agent. The general rule is that the revocation of the agent's authority is not effective between a principal and a third person until that person receives notice of the termination. Zukaitis v. Aetna Casualty and Surety Co., 195 Neb. 59, 236 N.W.2d 819 (1975); 3 Am.Jur.2d Agency §§ 50, 52 (1986). A third person does not have notice of the termination unless he knows, should know, has reason to know, or has been given notification. Restatement (Second) Agency § 135 (1958). The record does not reveal any such notice to Peterson. Therefore, Dakota Insurance Agency remained Transamerica's agent as to Peterson. This is a simple case. The facts are simple. The law is simple. We are not dealing here with any theory of ostensible authority as implied in the majority opinion by its reference to SDCL 59-3-3. Pure and simple, we are dealing with SDCL 59-6-9 which provides that Transamerica, as principal, is liable for agent's negligence or omission.