Case ID: ohio-cc-dec_15/html/0420-01.html
Source: Caselaw Access Project
Author: {"author": "MARVIN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CONTRACTS — COUNTERCLAIM—DAMAGES—VERDICT.
    [Cuyahoga (8th) Circuit Court,
    November 30, 1903.]
    Hale, Marvin and Winch, JJ.
    Horace W. Power v. George G. Brown.
    1. Contract Divisible Containing one Consideration and two Independent Covenants.
    An agreement entered into between two agents of different insurance companies whereby one agrees, in consideration of an agreement by .the other to pay him a certain per cent, of premiums on insurance turned over to him by the former, to use his best efforts to place the business of insurance under his control with the company represented by the other agent, and also to turn over to such agent his good will and interests in certain renewals and not solicit for said business in the future for any' other company, is a oontract containing a single consideration which supports two independent covenants of the same party, and is therefore divisible; and where there is a performance of the former covenant, but a breach of the latter, a recovery may be had for the commissions earned under the former subject to a counterclaim for the damages resulting to the promisee by reason of the breach of the latter.
    2. Verdict not Disturbed for Improper Charge not Affecting Same.
    A verdict will not be set aside on account of an improper instruction contained in the charge as to the allowance of nominal damages in case the jury is unable to ascertain the amount with reasonable probability, when it is manifest from the verdict that it did not affect the same. Hence, a verdict for nearly $200 will not be disturbed by reason of an improper instruction that, in such a case, five or six cents may be allowed as nominal damages.
    Error to the court of common pleas.
    Hoyt, Dustin & Kelley, for plaintiff.
    Kline, Carr, Tolies & Goff, for defendant.
   MARVIN, J.

Suit was brought in the court of common pleas by Brown against Power, claiming to recover a balance due to him for commissions upon certain insurance policies issued by Power to parties who had been taking their insurance from Brown and by his influence had been induced to take policies in companies represented by Power. Both Power and Brown were insurance agents in the city of Cleveland.

On or about November 15, 1897, Brown, deeming it best for some reason to have parties who were insured in the company represented by him reinsured in some other company, entered into an arrangement with Power by which he (Brown) was to transfer certain business to Power. This is evidenced by a writing, in the following words:

“Confirming my proposition, I propose to use my best efforts in placing this business with your company, and on all business so placed and ■premiums collected, you to allow me full general agent’s commission as per your contract.
“And in consideration of said full general agent’s commission, I agree to turn over my good will and interests in all renewals after the first year, and agree not to solicit said business in the future for this or any other company.”

This was signed by Brown and accepted by Power,

Pursuant to this contract, Brown turned over a considerable amount of business to Power and received from Power a considerable amount by way of commissions on premiums. It is stipulated in the record that the amount of commissions provided for in this contract for the first year, which Brown would be entitled to in case he has not forfeited his right by reason of facts hereinafter to be stated, is $786.11, with interest from October 27, 1899.

It is further stipulated that Brown, after the making of the contract between himself and Power, became the agent of the Maryland Casualty Company and as such agent solicited and secured quite a number of natural persons and corporations to take out policies of insurance in said last named company who had been insured in the 'company which Brown represented at the time he made his contract with Power and who, through his influence, had turned over their insurance to the company represented by Power.

The defense set-up is that this conduct of Brown in thus soliciting and securing parties- tp insure with him in the Maryland company was such a violation of the contract entered into between him and Power as to bar him from any recovery and to entitle Power to recover back the commissions which he had already paid to Brown.

On the other hand, the claim is made thát the contract was a divisible one; that Brown for one single consideration undertook to do- two separate things; that he did one of these two things, to wit, in the language of the contract, used his best efforts in placing the business of insurance which lie then had with the company represented by Power; that the other thing which Brown undertook to do, to wit, turn over his good will and interests in all renewals after the first year and not to solicit said business in the future for any other company, he failed to do; that this failure to do the two things is not a defense to the claim made for doing the first thing, but is only a ground for damages to be asserted by Brown and available in this action only as a counterclaim to whatever claim Brown has for doing the first thing, to wit, the $786.11. This latter view was taken by the trial court and the jury were charged accordingly, and properly charged if this view of the case is correct.

There remains, therefore, the question of whether this contract is to be treated-as an entirety or as divisible. We hold that it is divisible. When Brown used his best efforts to place the business which he had with the company represented by Power, he did the first thing which he undertook to do.

Suppose that he had done nothing in violation of any stipulation of his contract until the expiration of one year from its date after having turned over the business, so far as he was able, to Power; could it be doubted that he would then have been entitled to the commissions for that, one year which are provided for in the contract, and that if thereafter he had solicited the same business for his Maryland company Power would have been remitted to his claim for damages because of such actions on the part of Brown ? The time for which Brown contracted that he would not solicit such business was unlimited, and it would seem that it must have been in the contemplation of the parties that if Brown violated his contract by soliciting said business in the future he was to be liable in damages to Power. If this is correct, we are unable to see that his violating the contract in this manner before the expiration of the year gave Power any remedy against him which he would not have had if the violation had taken place after the expiration of the year.

The case of Burckhardt v. Burckhardt, 36 Ohio St. 261, is in point. That was a suit brought by one who had sold the property and good will to his partner in the business of the copartnership. By the contract the plaintiff, among other things, agreed that lie (the plaintiff) would not thereafter do business by or under the name of Burckhardt & Co., which was the name of the copartnership between the parties, in the city of Cincinnati. Immediately after the execution of the contract the plaintiff did enter into business in Cincinnati under the name and style of L. Burckhardt & Co. In purchasing the property the defendant had given to the plaintiff his promissory notes secured by a mortgage. The suit was for a foreclosure of this mortgage. The defendant for answer set up that the plaintiff, having violated his contract, was not entitled to any payment upon the notes and mortgage. The court held that this was not a defense to the action, but that if the plaintiff had violated his contract such violation could only be made available to the defendant as a counterclaim, and on page 280 uses this language:

“The counterclaim to which the defendant was entitled was one for damages only. There was no failure of consideration, in the proper sense of the term, v.hich could be available as a mere defense.”

The case of Courcier v. Graham, 1 Ohio 330, is also in point. The opinion, which is by Judge Hitchcock, is exhaustive and the reasoning is sound. In this opinion there is a complete discussion of the matter of mutual and independent covenants in the contract. Many cases are cited in the opinion in support of the views expressed, and we think the case fully justifies the view of the case now under consideration taken by the court below.

If the contention of the defendant here is sound, then Brown was entitled to nothing for the business which he had transferred to Power because, after transferring it, he solicited and obtained for the Mainland company a comparatively small part of the business which Power got from him or by his efforts. Before this suit was brought Brown had received a considerable amount by way of commissions on this business, and, as .before stated, was still entitled to more than $800 on account of such commissions except for the fact that by his solicitation, in violation of his agreement, he had obtained some of it for his new company, and not only should he be barred of a recovery here but he should be adjudged to repay to Power all that he (Brown) had already received; and .yet the amount of business that he had taken from Power was but a small part of that which Power had received from him, and it would seem, upon principles of justice between the parties, that Power’s only right should be compensation in damages for the amount of business so diverted from his agency to that of Brown.

Complaint is made that the court erred in its charge to the jury on the measure of damages to be allowed to Power. The court used this language in the charge, speaking of .the measure of such damages:

“The amount of such injury or loss, if any, which you find that the defendant thereby sustaihed will be the measure of the damages which the defendant is entitled to recover on his counterclaim and 'cro.ss-petition, in case you find for him thereon. In arriving at the amount of such damages, if any, you may consider in connection with the other facts and circumstances in the case as found by you the amount of commission received by the plaintiff upon the premiums for policies of insurance solicited and obtained by him from persons whose policies had been transferred to the Travellers’ Insurance Company by or through the instrumentality of the plaintiff, and it is for you to say from the testimony whether the commissions on such premiums would otherwise have been received by the defendant. ' Although you may not be able to determine accurately the amount of damages, if any were sustained by the defendant, yet if from all the testimony, you are able to estimate with reasonable probability the amount of such damages, you may thus estimate the same.”

This would seem to be a fair statement of the means for determining the measure of the defendant’s damages, and perhaps would not be complained of but for what follows, in these words:

“If from all the testimony and the facts and circumstances of this case you are unable either to find or to estimate with reasonable probability the amount of damages, if any, sustained by the defendant, then the defendant would be entitled to recover only nominal damages, that is, five or six cents, or some other small sum.”

Whether this last quotation properly stated 'the law or not, it is manifest from the verdict in the case that it did not affect the verdict of the jury. If that verdict had allowed to the defendant only nominal damages we should be called upon to determine whether this language was erroneous or not, but in view of the fact that the jury found that they could determine,- and did determine the amount of the defendant’s damages to be nearly $200, it is clear that this part of the charge did not affect the verdict.

The judgment of the court of common pleas is therefore affirmed.