Court Opinion

ID: 8263252
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:57:32.873114+00
Date Added: 2024-06-11T16:43:15.043129
License: Public Domain

GOODE, J.
Raleigh, the defendant, is the agent of the John Hancock Mutual Life Insurance Company for the State of Missouri, and on the seventh day of April, 1898, he made a written contract with the plaintiff, King, by which he appointed King agent “with *4authority to procure applications for policies of insurance upon the lives of individuals and collect premiums in accordance with the rules of'said company.”
Other clauses of the contract material to- the case before us are:
First. " The said J. J. Raleigh agrees to allow the said party of the second part, during the continuance of his. agency under this contract, commissions' at the following rates upon premiums paid to J. J. Raleigh for said company upon business done by the party of the second part, or upon business done by subagents hereafter appointed by the party of the second part, the same to be in full of claim upon said company, or said J. J. Raleigh on account of services as such agent; upon ordinary life policies, seventy per cent of the premiums of the first year when collected by said agent; and on the subsequent premiums when collected by said agent, five per cent for five years.”
Then follows a schedule of rates *on other policies than ordinary life policies:
Second. “This contract may be terminated by thirty days ’ notice by either party. ’ ’
King wrote insurance under his contract until the first day of November, 1900, when he resigned and his resignation was accepted by Raleigh.
The decision of this controversy turns on the construction to be given to the clause of the contract providing for the compensation to- King; which he contends should be interpreted to- mean that he was entitled to a commission on premiums paid on policies written by him, for five years subsequent to- their dates, regardless of whether he continued to be agent for the John Hancock Company or not; while Raleigh says its meaning is that he should only receive a commission on such premiums as were collected during the term of his agency.
If we are to be bound by the very words of the contract, King would be entitled to no premiums, whether collected during his agency or subsequent to it, unless *5they were collected by himself; but the undisputed testimony shows that in no case did King collect premiums, which were all paid to the principal, Raleigh, who sent out notices to policy-holders prior to the dates when premiums would fall due, of their impending maturity and directed the policy-holders to make all checks payable to J. J. Raleigh, State Agent; so the parties construed the contract in this regard, to entitle King to premiums on his policies when collected by Raleigh, and no point is made against Eng’s right to recover by respondent’s counsel on the theory that King must have made collections in person to get commissions.
Respondent’s argument is, that the clause of the contract first quoted, defeats plaintiff’s claim, because Raleigh therein agreed to allow him commissions only during his continuance as agent, and the agency having terminated, his right to commissions thereafter accruing likewise terminated.
It is to be observed that the fact of King’s resignation cuts no figure in the decision of this question, because either party had the right to terminate the contract on thirty days’ notice and his posture is as good as it would have been if Raleigh had dismissed him, and the latter’s posture is no better than it would have been if he had dismissed Eng; therefore, the interpretation invoked by the respondent and adopted by the circuit court would permit this hardship: King might have worked for the company for four years or more and have written many policies whose premiums he was interested in for five years, and Raleigh could then have discharged him and cut off his interest in those premiums; and this view inclined us at first against the respondent’s position; but an examination of the cases has since shown us' it is supported by authorities of controlling weight. Stagg v. Ins. Co., 10 Wall. 589; Ins. Co. v. Williams, 91 N. C. 69; Jacobson v. Conn. Mut. Life Ins. Co., 61 Minn. 330; Ins. Co. v. Holloway, 51 Conn. 310; Spaulding , v. Ins. Co., 61 Maine 330; *6Trimble v. Conn. Mut. Life Ins. Co., 13 Wkly. Law Bul. 109, 22 Id. 37, a case afterwards affirmed by tbe Supreme Court of Ohio, but not reported.
In Stagg v. Ins. Co., supra, the clause of the contract between the agent and the insurance company, construed by the Supreme Court of the United States, was:
“For your services as above, you will be allowed a commission of ten per cent on tbe first premiums (cash and notes) and five per cent on all subsequent renewal premiums, so long as you continue the agent of the company
Stagg procured policies under the contract for fifteen years when be was discharged by the company, and thereupon brought suit claiming some-three thousand dollars as five per cent commission on the renewal premiums of policies originally made by him as agent, the premiums having been received by the company after bis discharge; and it was ruled that the company bad the right to discharge him at its discretion and be could not recover for any premiums which accrued after the termination of bis agency.
In Jacobson v. Conn. Mut. Life Ins. Co., supra, the clause of the contract with regard to compensation provided that the agent should receive a commission of twenty-five per cent on the first premium paid on any policy be wrote, and ten per cent on each of the next four renewal premiums so long as be should continue as agent. He was dismissed from the company’s employ and sued afterwards for an interest in the renewal premiums.
Tbe opinion says:
“Under tbe express terms of tbe contract before it was modified, tbe plaintiff was to continue. in tbe employment of tbe defendant only during tbe pleasure of its board of directors, and be was to be paid tbe stipulated commissions so long only as be continued to be such general agent, and was to receive tbe commis*7sion on foui" succeeding renewal premiums ‘unless Ms agency be sooner terminated.’ TMs would seem to leave no room for discussion and construction. It was clearly the intention of the parties under this original contract that all right to compensation and commissions on the part of the plaintiff should cease whenever his agency should terminate for any cause.”
The courts in construing agreements like the one we have before us, proceed on the notion that the compensation to be received by the agent from year to year through commissions on renewal premiums, is associated with the continuance of his agency and is partly earned by services subsequent to the procurement of the risk, not solely by its procurement; the purpose being to bind him to steady work in behalf of the company. Such an agreement looks one-sided and the hardship of the construction has not passed unnoticed; but the courts have félt unable to disregard the language employed merely because it might work injustice; for contracts must be enforced as made, not remodeled to render them just. Strong dissents have been filed in some cases, nor is there a total absence of authority the other way. Burelson v. Northwestern Mut. Life Ins. Co., 86 Calif. 342.
"WMle we feel a doubt as to whether the contract between Raleigh and King was unsusceptible of the interpretation put on it by the latter’s counsel, we are constrained by the decisions to adopt the other view.
The judgment is affirmed.
Bland, P. J., and Barclay, J., concur.