Court Opinion

ID: 9665240
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:43:10.035957+00
Date Added: 2024-06-11T18:15:14.140244
License: Public Domain

NORVELL, Justice.
I concur with the view of my associates that under a proper construction of the contract or contracts here involved Wear, is not entitled to commissions upon insurance written by Earl’s sub-agents. This holding, regardless of the views relating to the effective date of the cancellation of Wear’s override on business produced by Earl, disposes of the larger part of the money judgment rendered in favor of Wear by the trial court. As to this point there is no disagreement among us. •
As to the effective date of the cancellation of Wear’s override, I concur in the result reached by the Chief Justice that Wear’s right to the override came to an end on January 1, 1948. The contrary view is that this right did not terminate until .thirty days after May 28, 1948, when written notice of cancellation was given. Adoption of this contention would mean a difference in the money recovery awarded to Wear of something over four thousand dollars.
However, the question of date of cancellation is basic in this lawsuit and I reach the conclusion that the terms of the contract providing for the override terminated upon January 1, 1948, because under the jury verdict, which I regard as having sup^ port in the evidence, Wear was estopped from contending that the override did not end on said date. I believe the contract involved is ambiguous and regard the recent *290Supreme Court case of Humble Oil & Refining Company v. Harrison, 1947, 146 Tex. 216, 205 S.W.2d 355, as controlling the disposition of this appeal.
The evidence and jury findings,1 to my mind, establish that Hennessey, the Vice President of the Company, told Wear in October, 1947, that that part of the contract *291which gave Wear an override on business produced by Earl would terminate on January 1, 1948, because it was advisable in his opinion to increase Earl’s commissions, and he did not intend to pay further commissions to Wear upon business produced by Earl. This occurred at least sixty days prior to the effective date of the cancellation. There is no doubt but what a conversation between Wear and Hennessey occurred in which the matter of increasing Earl’s commissions and the terminating of Wear’s override was discussed. It seems to me immaterial whether the conversation took place before or after Hennessey had entered into a new agreement or an amended agreement with Earl. The company possessed the undoubted right to terminate the override agreement, and at the time the new or amended agreement with Earl was made, the company could 'have cancelled Wear’s override by giving written notice, had such been required. Hennessey construed the contract as not requiring a written notice and Wear knew that he was acting upon that construction in making a re-arrangement of the company’s agency contracts. Earl’s commissions were increased from and after January 1, 1948. Wear remained in the employ of the company until thirty days after May 28, 1948, and was paid no override on business produced by Earl after the first of the year. He made no protest as to this non-payment and his conduct was such as was calculated to lead the other contracting party to believe that he ae-quiesced in its construction of the contract. It was only after Wear’s connection with the company had ceased that he asserted his claim to an override on business produced by Earl from and after January 1, 1948.
From recitations appearing in the order granting judgment non obstante veredicto, it appears that the trial judge regarded the contract providing for written notice as being clear and unambiguous. With this view I do not agree. If we leave aside all consideration of the circumstance that the supplemental agreement (referred to by the Chief Justice as Contract No. 2) contained no provision within itself as to written notice of cancellation and consider that it is an integral part of the primary contract (referred to by the Chief Justice as Contract No. 1), the same as if the provisions thereof were simply additional paragraphs of the primary contract, an ambiguity nevertheless exists.
Paragraph X of the primary agreement, insofar as here pertinent, relating to written notice, reads as follows: “Except for such renewal rights as may be provided for, this agreement may be terminated by the Company or by the Agent on thirty days written notice to the last known mailing address. * * * ”
This clause seems to apply to a termination of the entire agreement. Would it be applicable to the abrogation of certain specific clauses of the contract, so as to effect *292a partial cancellation only ? In my opinion, it would not be unreasonable to take the position that the clause relating to written notice applied only to complete and total termination of the agreement. This view has support in the wording of the clause, and even if the same be incorrect, as a matter of legal construction, this does not mean that the provision is free from uncertainty and ambiguity. This proposition is settled by the cited case of Humble Oil & Refining Co. v. Harrison, 146 Tex. 216, 205 S.W.2d 355.
Ordinarily, when a contract is ambiguous, resort may be had to parol evidence and the conduct of the parties thereunder becomes important. While here we have no mutually adopted construction of a contract of doubtful meaning, we do have the adoption of a reasonable construction of a contract by one of the parties, and a seeming acquiescence in such construction by the other party over a comparatively long period of time. The unilateral construction, if it be so called, did not relate to a provision which was of the essence of the contract, or which constituted a dominant clause thereof. No term was fixed by the contract. It was cancellable by either party. The point involved here relates to a confused and uncertain provision as to the means whereby the abrogation of certain clauses of a contract might be accomplished and the contract in part cancelled. Under such conditions equity will afford relief by way of estoppel. The doctrine is admittedly narrow and the case of Lohmann v. Hooper, Tex.Civ.App., 87 S.W.2d 803, involving unambiguous contractual clauses need not be relied upon, for the facts of this case bring it well within the equitable doctrine announced in Humble Oil & Refining Company v. Harrison, 146 Tex. 216, 205 S.W.2d 355. Harrison, after seeming acquiescence was not allowed to take advantage of Humble’s misconstruction of an ambiguous written instrument. It follows that Wear should not be allowed to take advantage of Hennessey’s misconstruction of an ambiguous written instrument in view of his seeming acquiescence. The cited case is controlling and on the basis of that authority I concur in the result reached by the Chief Justice as to the termination date of Wear’s override. I further concur in his holding upon the question of attorney’s fees and agree that judgment in this case should be rendered as indicated in his opinion.

. The jury, by its answers to Special Issues Nos. 2, 6 and 9, found that the “Supplemental Agreement” had not been cancelled by mutual agreement; that the insurance company had acted in good faith toward Wear in cancelling Earl’s contract of July 1, 1946, and fixed an attorney’s fee. The remaining issues were answered as follows:
“Question No. 1: Do you find from a preponderance of the evidence that when Peter J. Hennessey in October or November, 1947, orally notified plaintiff, Wear, that the contract of July 1, 1946, between plaintiff and defendant, insofar as it related to overriding commissions, would bo cancelled by the defendant effective on January 1, 1948, that plaintiff, Wear, waived the thirty days written notice of cancellation as provided for in said contract? Answer: Yes. * * *
“Question No. 3: Do you find from a preponderance of the evidence that on the occasion when such oral notice of cancellation was given, plaintiff, Wear, knew that defendant intended to increase the commissions of C. H. Earl and other agents effective January 1, 1948, in reliance if he did rely, upon the cancellation, if any, of the contract of July 1, 1946, between plaintiff and defendant. * * * Answer: Yes.
“Question No. 4: Do you find from a preponderance of the evidence, that defendant thereafter did increase the commissions of O. II. Earl and other agents, effect (sic.) January 1, 1948, in the belief that the contract of July 1, 1946, between plaintiff and defendant had been cancelled? Answer: Yes.
“Question No. 5: Do you find from a preponderance of the evidence that but for the belief if any by defendant that the Supplemental Agreement in question had been properly cancelled by oral notice, said defendant would not have increased the commissions to said Earl and other Agents? Answer: Yes. * * *
“Question No. 7: Do you find from a preponderance of the evidence that the plaintiff, Wear, had knowledge that defendant did not intend to pay him after December 31, 1947, override commissions under the Supplemental Contract? Answer : Yes.
“Question No. 8: When do you find from a preponderance of the evidence the plaintiff, Wear, had knowledge that the Defendant did not intend to pay him after December 31, 1947, override commissions under the supplemental contract?
“Answer by stating the day, month and year, if you can; if you cannot, state the month and year. Answer: October, 1947.”
With reference to a conversation with Wear in October, 1947, Hennessey, the Vico President of the Company, testified as follows:
“Q State the substance of what was said by each of you in that conversation * * *. A Well, I told Mr. Wear at the time that beginning on January 1, 1948, that we would enter into an agreement with Mr. Earl whereby ho would be general agent and that the agreement between the company and Mr. Wear would be terminated and that he would receive no more override on business effective on or after January, 1948, and Mr. Weax-’s first remark at that time was, ‘Well, I have been expecting it for some time.’ (Prom Hennessey’s deposition read upon cross-examination.) * ⅜ *
“Q Mr. Hennessey, before recess you were testifying concerning your conversation or talks with Mr. Wear in the fall of 1947, with regard to the termination of the supplemental ten per cent ovei*ride agreement on Mr. Earl’s business. At that time did Mr. Wear ask for written notice? A No, nothing was mentioned about written notice; he didn’t ask for it, and I didn’t give it to him.
“Q Was there time to give him written notice? A Sure. I would have been glad to have given him written notice if he had asked for it. I didn’t think it required it. I would have given it; I would have been glad to give it.
“Q Was this period approximately just befoi’e January 1st? A More than sixty days before. It was some time during October, 1947, or it may have been towards the end of September. It was more than sixty days before the end of the year.
“Q So, you had time to have given it if he had demanded or requested it, that is thirty days written notice, is that right? A Yes. * * *
“Q Did he object to the oral or verbal notice? A No. ⅝ * *
“Q Mr. Hennessey, you have testified that it was along in October, 1947, that you agreed on new commission rates with Mr. Earl, and that those new commission *291rates would go into effect on January 1, 1948? A Yes.
“Q If the supplemental agreement had not been terminated in October, 1947, if you had not considered that the supplemental agreement was terminated in October, 1947, would you have made this new agreement with Mr. Earl? A No, I would have checked the figures. There are certain laws as to how much commissions that we can pay. If we had raised Mr. Earl and also paid Mr. Wear, I feel sure that some of the commissions paid would have been in violation of the law.”
Wear’s testimony differs in some detail from that of Hennessey, but he stated that he knew in the fall of 1947 that Hennessey wanted to raise Earl’s commissions. He testified that:
“Mr. Earl's agency continued to grow, he was very successful, he produced a lot of business and he wanted more commissions. He thought he deserved them. He probably did, but according to law (probably referring to Article 4807,
Vernon’s Ann.Civ.Stats., now Article 11.08 of the 1951 Insurance Code) the only way a mutual company could increase the commission would be to take them away from me, so this conversation came up with Mr. Hennessey, he wanted to increase Mr. Earl’s commission so he wouldn’t quit, and I didn’t want to give up my commissions. * * * He wanted to reduce mine so as to give it to O. H. Earl. * * * Mr. Earl was demanding and requesting that his commissions be increased and the only way they could be increased was to decrease mine.”