Case Name: Henry Hale, Resp't, v. The Brooklyn Fire Insurance Company, App'lt
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1887-10-27
Citations: 11 N.Y. St. Rep. 544
Docket Number: 
Parties: Henry Hale, Resp’t, v. The Brooklyn Fire Insurance Company, App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 11
Pages: 544–549

Head Matter:
Henry Hale, Resp’t, v. The Brooklyn Fire Insurance Company, App’lt.
(Supreme Court, General Term, First Department,
Filed October 27, 1887.)
Insurance—Contracts—Interpretation of—Commission of insurance agent—Renewal policies.’
The plaintiff entered into a contract with the defendant as an agent. The contract was to last but for a year and contained the following clause: “ The company agree likewise to give yon regular renewal commissions on the policies obtained by you when the premiums shall have been paid to the company.” The contract was terminated before the expiration of the first year. Plaintiff here sues to secure his renewal commissions. Held, that the subsequent abrogation of the contract of employment by mutual consent did not deprive him of his right to renewal commissions. So far as the contract remained executory the agreement to terminate it destroyed it as to both parties, but to this extent it had been executed by the plaintiff, and the mutual abandonment of the contract did not take away this right of the renewal commissions already earned any more that the expiration of the contract by the efflux of time would have done at the end of a year from the date of the agreement. Daniels, J., dissenting. Distinguishing STiaw v. Home Life Ins. Co. (49 N. Y., 681).
Appeal from judgment for plaintiff entered on the report of a referee.
William, H. Ford, for app’lt; Hamilton Wallis, for resp’t.

Opinion:
Bartlett, J.
—This action is brought to recover renewal commissions on policies of fire insurance obtained by the plaintiff as agent of the defendant. On the 13th. day of February, 1880, the president of the Brooklyn Fire Insurance Company made a proposition in writing to the plaintiff, who was then in the defendant's service, that he should continue in the employment of the company as agent, upon certain terms as to salary and compensation therein specified. One of the terms of the offer was in the following words: "The company agree likewise to give you regular renewal commissions on policies obtained by you, when the premiums shall have been paid to the company." The plaintiff accepted the proposition, and his employment under the contract thus made continued until about the 81st day of December, 1880, when, as the referee has found, at the request of the defendant, the contract terminated by the agreement or consent of the parties.
No question arises here as to any portion of the contract, except that which has already been quoted relating to renewal commissions.
A renewal commission, according to the uncontradicted testimony of the president of the defendant corporation, is the commission on premiums paid on a policy subsequent to the first year's payments. If a man pays $100 a year premium, the second $100 and all subsequent payments, are called renewals, and the commissions on such payments are renewal commissions. It is obvious that such commissions can never become due until the second year of the life of a policy.
The plaintiff sues for renewal commissions on premiums paid to the defendant upon policies obtained by him before February 13, 1880, and also during the existence of the contract of that date. The defendant contended on the trial that the phrase "policies obtained by you," in that part of the agreement concerning renewal commissions, meant only such policies as the plaintiff had procured to be issued prior to the execution of the contract; but the referee correctly rejected this construction, and held that the commissions were plainly to be paid upon policies obtained, as he says, under the contract, that is to say, between February 13 and December 31, 1880.
That they were payable upon policies taken out through the agency of the plaintiff prior to the execution of the contract appears to have been assumed without question, by both parties, for renewal commissions on such earlier policies seem to have been paid to the plaintiff by the defendant during 1880, while the contract was in full force and effect, and the defendant has insisted throughout the case, and now insists, that the contract contemplated no other or later policies whatsoever.
During the existence of the contract the plaintiff's right to commissions on premiums received by the company after the premium for the first year had been fully paid became fixed as soon as the plaintiff caused a policy to be taken out. The subsequent abrogation of the contract of employment by mutual consent did not deprive him of this right. So far as the contract remained executory, the agreement to terminate it destroyed it as to both parties, but to this extent- it had been executed by the plaintiff, and the mutual abandonment of the contract did not take away his right to the renewal commissions already earned any more than the expiration of the contract by the efflux of time would have done at the end of a year from the date of the agreement. In an action for goods sold and delivered, the plea that the sale and delivery were made under a contract which has subsequently been wholly an: nulled and rescinded by both parties constitutes no defense. Edwards v. Chapman, 1 Mees. & W., 231.
So far as the policies are concerned upon which the plaintiff claims renewal premiums, the insurance company has derived all the benefit which was intended under the contract, and the agreement to rescind does not bar the agent from recovering his just compensation.
In the case of Shaw v. Home Life Insurance Co. (49 N. Y., 681), cited by the appellant, the contract differed materially from that under consideration here, as appears from an examination of the record itself. Court of Appeals Case, 1872. There the agreement provided for the payment of comrqissions after the termination of the contract,, only in the event that the agent himself should continue,, thereafter, to perform the services necessary to procure the payment of the renewal premiums. In other words, the right to commissions on renewal premiums was made expressly dependent on the rendition of future services; and as the plaintiff voluntarily surrendered the right to perform these, it was held that he could not recover. There is no such element, however, in the case at bar.
As to the charge that the plaintiff failed to perform his duties under the contract, the testimony is conflicting, but the referee's conclusion in the plaintiff's favor is amply sustained by the proof.
The judgment should be affirmed, with costs.
Van Brunt, P. J., concurs.