Plaintiff insurance commissioner sought review of an order from the Superior Court of the City and County of San Francisco (California), which awarded a judgment to defendant agent in an action involving the collection of the commissions due from an insolvent insurance company.

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Overview

An insurance company was declared insolvent and plaintiff insurance commissioner was appointed the liquidator and was vested with all the property rights of the company. Defendant agent filed a claim with plaintiff to recover the commissions allegedly owed by the insurance company. In the same month, plaintiff filed an action against defendant for the premiums collected by defendant and not turned over to the insurance company or to plaintiff. Defendant denied liability and filed a counterclaim against plaintiff for the commissions. The trial court awarded a judgment to defendant. On appeal, the court held that insofar as defendant was deprived by the insurance company’s insolvency of the commissions for the policies written and not cancelled, he was entitled to a compensation equal to the commissions. The court further held that the case was to be retried and the claims of the parties were to be recomputed.

Outcome

The court reversed the trial court’s judgment for defendant agent because the trial court incorrectly computed the claims of the parties. The court held that insofar as defendant was deprived by the insurance company’s insolvency of the commissions for the policies written and not cancelled, he was entitled to a compensation equal to the commissions.