Opinion ID: 1801467
Heading Depth: 1
Heading Rank: 5

Heading: did the court err in permitting the jury to find an ambiguity as to the responsibility of everson for debts of subagents and to disallow charge-offs against everson for debts of sub-agents?

Text: This appears to be the principal issue between the parties. We quoted in full above the court's instruction to the jury as to ambiguity. Section L of the contract, referred to in the instruction, reads: SECTION L: Any indebtedness owing to the Company by the Agency whether arising under this contract or otherwise and any indebtedness of any sub-agent incurred after the date of this Contract and while under the supervision of the Agency shall be a first lien against any commissions provided herein, and the Agency hereby assigns, transfers and sets over to the Company any monies that from time to time may become due it under this Contract or otherwise (except proceeds of Life Insurance policies in which the Agency has an interest as either owner or beneficiary) to secure such indebtedness, and any monies due the Agency shall first be applied to liquidate such indebtedness to the Company. The dispute arises over the meaning of the phrase and while under the supervision of the Agency. The evidence indicates that during the time Everson was general agent and the company was located in Minot, prior to its move to Billings, Montana, and subsequent merger with Bankers Union Life Insurance Company, advances made to subagents by the company were not deducted from Everson's overriding commissions. Later, they were. It appears that the practice of the defendants was to advance half of a subagent's premium to him at the time the business was submitted, and the second half after the first premium was paid. If the premium was not paid for any reason, advances would be charged back against the subagent. Even if the premium was eventually paid, there was always a delay between the submission of the application and the delivery of the policy, and during that time the advance to the subagent would be charged against him. Thus, most of the time, a subagent would be in a position of owing money to the company. After the policy of the company was changed and the indebtedness of the subagents was charged against Everson, as general agent, purportedly in accordance with Section L, quoted above, Everson also would appear on the books of the company to be indebted to it. The company, after the move to Billings, regularly subtracted such debts of subagents not paid by them from the renewals due Everson, and it asserts that it was entitled to do so under the language of Section L. It also appears that subagents could, and very often did, obtain advances from officers of the company (not Everson) for various purposes, including payment of operating expenses while awaiting payment of commissions. Many times the subagents obtained such advances and did not repay them, with the result that the subagent owed the company money which the company charged against Everson. Everson objects to such charge-offs, as well as the others mentioned above. It is Everson's position that such advances, either on new business or otherwise, are not chargeable back to him under Section L because, in almost all cases, the subagent, at the time of obtaining the advance, was not under the supervision of Everson or his agency. Contractual provisions relative to this dispute include Section L, quoted above, and the following: WITNESSETH, that said Partners Agency, Inc. is hereby appointed as the agency of the Company for the purpose of recruiting, recommending, supervising, training, and assisting in management of agents in the sale and securing of life insurance policies for the Company. In addition to those agents recruited by the Agency, other agents may be assigned to the Agency by the Company with the consent of the Agency. Subject to the terms, conditions, and limitations herein set forth, the parties hereto do hereby covenant and agree as follows: . . . . . SECTION I: All sub-agents recommended by the Agency will be contracted directly with the Company and the Agency hereby authorizes the Company to pay commissions directly to the sub-agent in accordance with the contract entered into between the parties and such commissions paid are a reduction of commissions provided for in this agreement. In the event of termination of any sub-agent's contract, renewal commissions on business produced by the sub-agent revert to the Agency. It is Everson's position that he was obligated to, and did, recruit subagents, recommend them to the company, supervise them during their training period, train them, and assist in management of them. However, he denies that he supervised all subagents at all times, and he particularly denies that he supervised them after their training period. He asserts that he should not be, and cannot be, required to repay advances made without his knowledge or consent to subagents who applied directly to the officers of the company, and were given advances without the knowledge or consent of Everson. As indicated, the trial judge considered that the contract and the practices of the parties created an ambiguity as to whether agents who received advances were under the supervision of Everson and his agency. The jury obviously determined that they were not under such supervision, and therefore disallowed the company's charge-backs of the debts of subagents against Everson's account. Again, we believe that the court was within its discretion in determining that there was an ambiguity and in allowing the jury to resolve the ambiguity by a determination of the intention of the parties under the instruction quoted above. The evidence is sufficient and we find no error. The judgment is affirmed. ERICKSTAD, C. J., and PEDERSON, PAULSON and SAND, JJ., concur.