Court Opinion

ID: 8744180
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:00:27.13652+00
Date Added: 2024-06-11T17:00:34.263418
License: Public Domain

TOUtAHN. District Judge,
stating the case as above, delivered the opinion of the court.
We think the undisputed facts show that the plaintiff in error had done all that he undertook to do under the terms oí his enqiloy-oient. He procured applications for insurance in accordance with his instructions and with the rules and regulations of the defendant in error, and forwarded them to the home office of the defendant in error for iis action upon them. The applications were in due form, and it is to he presumed that the applicants were insurable risks, and that the risks were satisfactory to the defendant in error. Ho objection to them was pointed out, and the presumption is that none, existed. The only objection made to delivering the policies was that the rate of premium on them was too low. The defendant in error decided, after some of the applications were made and received by it, to raise the premium. It had authorized the rate of premium agreed on, by the plaintiff in error, its agent, and the applicants. It had published the rates of premium in its rate circular, and had specially called the attention of the plaintiff in error to that fact when asked for advice on the subject. Were not the published rates of premium of the defendant in error a promise that it would insure at such rafes, and. all prerequisites being complied with and satisfactory, that policies would be issued accordingly? Unquestionably, the defendant in error had a reserved rigid: to reject the insurance for good reasons. But it cannot be justly urged that it reserved the right of arbitrarily refusing to deliver the policies when every prerequisite which it had itself prescribed had been compiled with, and thus deprive the agent of compensation for the services rendered in procuring the applications. The defendant in error had proposed to insure at a particular rate. That rate had been agreed on, and the applications procured on that basis. Can it legally refuse to pay the agent his commissions, solely on the ground that it had decided to change its rate, and to charge a higher one, after he had performed the services required of him in procuring the insurance? We think not. We understand the rule of law to be that, while ordinarily an agent is not on tilled to his commissions until the transaction is complete, yet, if he has faithfully performed his part of the transaction, and from no fault of his own, but by the refusal of the principal to complete the contract, it is not consummated, the agent will be entitled to his commissions. 4 Am. & Eng. Enc. Law (2d Ed.) 972. Mechoin, in his work on Agency, says, “If it be found that an agent has done all that he undertook to do, his right; to his compensation is'complete, and he cannot be deprived of it because the principal has failed to avail himself of the benefit of the act, or refuses to do what: he had agreed to do upon performance.'’ Mechera, Ag. § 611. “An agent employed to sell property *740earns Ms commission if he finds a purchaser who is able and ready to purchase on the terms directed, though the vendor changes Ms mind and refuses to sell.” Story, Ag. § 329; Kock v. Emmerling, 22 How. 69, 16 L. Ed. 292. And “the principal cannot defeat the agent’s claim by the refusing to sell at all, or only upon different terms.” Mechem, Ag. § 612. “Thus, an agent who is employed to procure a loan for his principal is entitled to his commission when he procures a lender ready, willing, and able to lend the money upon the terms proposed. The principal cannot deprive the agent of his commission by refusing to accept the loan which the agent’s efforts have resulted in securing.” Mechem, Ag., supra. “The rights of an insurance agent, as regards Ms principal, are, in the main, governed by the rules of law applicable to agents in general. Where there is an express contract, it will govern.” 16 Am. & Eng. Enc. Law (2d Ed.) 911.
The defendant in error contends that by its contract with the plaintiff in error it was expressly agreed that no commissions were to be paid to him “unless the payment from which the same is to be allowed has been received in cash by the association,” the defendant in error. It is true that the agent may, by special agreement with his principal, so contract as to make his compensation dependent on a contingency. Under such contract, he will be entitled to compensation only on showing that the contingency has happened, or that performance was prevented through some fault or act of the principal. 1 Am. & Eng. Enc. Law (2d Ed.) 1096. “The contract will be conclusive unless it appears that the performance has been waived or prevented by the principal.” Mechem, Ag. § 611. “An agent may be entitled to remuneration for his services, although he has not done the whole service or duty originally required. * * * This may arise from the entire performance being prevented by the act of the principal himself.” Story, Ag. § 329, note 4. If, then, the right of the plaintiff in error to commissions was dependent’on the receipt in cash by the defendant in error of the “payment” (premium) from .which the commissions were to be allowed, and the receipt of such premium was prevented by the defendant in error, or if it was a part of the service or duty of the plaintiff in error under his contract to collect and pay over such premium to the defendant in error, and he was prevented from doing so by the defendant in error, he would be entitled to his compensation. The premium was not received by the defendant in error because it prevented the delivery of the policies on which it appears the premium would have been paid.
It is further contended that the right of the plaintiff in error to compensation on the face of his contract was based on “accepted business” solicited by him. The fact is, most of the business’on which commissions áre claimed was accepted. The policies on some of the applications were issued, but they were not delivered solely od the ground that the applicants refused to pay a higher rate of premium than they had agreed to pay, and higher than the defendant in error had authorized them to be insured for, at the time the applications were made; and it appears that the defendant in error *741reconsidered its refusal to issue and deliver the policies on the basis of the rates originally published and authorized, and did issue and authorize some of them to be delivered on that basis. But this action of the defendant in error was so long delayed that the applicants had left for the Philippines, and the delivery of the policies by the plaintiff in error was rendered impracticable, and without his fault so far as is disclosed by the evidence.
Our opinion is that the plaintiff in error is entitled to commissions on all applications received prior to September 6th, and on which policies were issued, and that the circuit court was in error in directing a verdict for the defendant in error. The judgment is reversed, and the case remanded, with instructions to grant a new trial.