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Linn v. Employers Reinsurance Corporation

Supreme Court of Pennsylvania
139 A.2d 638 (1958)


Facts

Walter Linn was president of Walter Linn and Company (Linn) (plaintiff), an independent insurance-brokerage business. Linn met with William Ehmann, an agent of Employers Reinsurance Corporation (ERC) (defendant), in New York City to negotiate an agreement. Linn offered to place certain reinsurance contracts with ERC in exchange for a five-percent commission on all premiums ERC collected on the policies. Ehmann told Linn that he had to speak with ERC executives before the offer could be accepted. After the meeting, Linn returned to Philadelphia, Pennsylvania. Later, Ehmann telephoned Linn from New York and accepted the offer. The parties had carried out the terms of the agreement for nearly 28 years when ERC suddenly stopped paying commissions to Linn. Linn filed suit against ERC in Pennsylvania state court for breach of contract. At the close of the evidence, the trial court dismissed Linn’s suit. The court reasoned that New York law applied to the matter, and that the agreement was unenforceable pursuant to New York’s statute of frauds. Linn appealed. The Supreme Court of Pennsylvania reversed, holding that because there was no evidence presented regarding Ehmann’s physical location when he made his telephonic acceptance, the matter had to be remanded to the trial court for determination of Ehmann’s location. Upon remand, the jury found that Ehmann’s call was not placed from New York. In finding for Linn, the trial court held that the default forum law of Pennsylvania applied, and that under Pennsylvania law the contract was valid. ERC appealed.

Rule of Law

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Issue

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Holding and Reasoning (Cohen, J.)

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  • A “yes” or “no” answer to the question framed in the issue section;
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