Farmers & Merchants Bank v. Home Ins. Co.

These appeals and cross-appeals arise from a summary judgment entered in a consolidated action. We affirm the judgment.

In July 1975, Farmers Merchants Bank of Centre (the "Bank") purchased an insurance policy from The Johnson Agency (the "Agency") — the insurance agency with which the Bank transacted all of its insurance business. This new policy was secured on the request of a vice president of the Bank to protect against monetary losses resulting from thenegligence of the Bank's officers or directors.1

The Bank's president and board of directors approved the purchase of the new insurance…