Court Opinion

ID: 9665241
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:43:10.040757+00
Date Added: 2024-06-11T18:15:14.142932
License: Public Domain

POPE, Justice
(dissenting).
The court is in agreement for the most part on the result reached in this cause, all being of the opinion that Wear is not entitled to recover commissions based on Earl’s sub-agents, but I do not agree that Wear should not recover commissions based on Earl’s personal production for the period between January 1, 1948, and June 28, 1948. To that extent I dissent.
This case presents five main questions: (1) Were the Wear original agreement and his “supplemental agreement” an entire single contract, or separate contracts? (2) What is the meaning of Wear’s complete contract, particularly with regard to his right to commissions on Earl’s sub-agents? (3) Was Wear’s contract ever changed by agreement of the parties? (4) Did Wear waive his right to insist upon written notice? and (5) Was he estopped from claiming his right to written notice?
On July 1, 1946, the insurance company entered into a written contract with Wear. At the same time the insurance company also entered into a written contract with Earl. On that same day, the insurance company made a second agreement with Wear, which enlarged upon and added to his compensation by allowing him commissions in addition to those allowed by the other instrument already executed by Wear and the company. This second Wear instrument was executed on the same day and it additionally obligated the insurance company to pay Wear certain commissions “on life insurance contracts issued by said company on insurance written by C. H. Earl under his contract dated July 1, 1946.” That additional document was physically attached to the former Wear contract. At the top of the second contract were typed the words, “Supplemental Agreement.”
Whether the original Wear agreement and the “Supplemental Agreement” are a part of the same contract becomes impor*293tant in the determination of the time the Wear contract was terminated. The insurance company claimed an oral termination given in the fall of 1947 to be effective on January 1, 1948. Wear contends that his contract could not be terminated until written notice was given him, as required by the first document which permitted termination only “on thirty days written notice.” Written notice was not mailed Wear until May 28, 1948. Since the written notice would be effective about six months later than the claimed oral notice, it affects the judgment by several thousand dollars, and that period is actually the only difference between the result reached by the majority of this Court and this opinion.
The insurance company contends that the original Wear contract and the supplemental agreement are separate and distinct contracts. The trial court concluded that they constituted a single entire agreement, and I concur in that view. The contracts were tied to each other in point of time, subject matter, and by terms of reference in each document. They were attached to each other. The original contract provided: “This agreement, together with any amendments thereto duly executed, constitute the entire contract between the parties * * *_>’ That document looked forward to possible amendments and it was agreed and contracted that those amendments would be considered, a part of the original contract and a single agreement. Moreover, the other Wear instrument, executed the same day, was entitled a “Supplemental Agreement.” Except for the original Wear agreement, what else could it or did it supplement? It did not stand alone in isolation, but the parties at the outset announced to each other by the title mutually selected by them, that it was to complete, add to, and aid something that had gone before. It was not in conflict with any provisions of the prior Wear contract, but was a completion of the contract. Surely there was no reason for or need to reiterate all of the provisions of the prior agreement after the parties had already agreed that they were an entire contract. The very absence in the second Wear agreement of clauses which had already been adequately settled upon between the same parties a short time before, evidences their understanding that the two agreements were one: To hold that the two documents were not parts of the same thing, requires us to disregard the first thing and the first word the parties decided should be put down upon their written agreement to guide them — the word “supplement.” I do not think the word can be held meaningless. The parties chose it, and whatever we might think about it, they selected it to mean something. The name of a document selected by the parties does not control over an idea otherwise manifested, but when their designation is an exactly correct one, I know no reason that it should be ignored, and surely words symbolize the ideas of the persons using them.
The “supplemental agreement” completed that which was incomplete. The insurance company, for reasons of its own, did not want Earl to know that Wear was making money on Earl’s services; but as between Wear and the insurance company the first agreement stated only a part of Wear’s true compensation for serving the company. It never did fully state the full Wear agreement for compensation.. The two documents together were the complete statement of his compensation, but separately they were both incomplete. The two documents are necessarily read together to find out what Wear was to earn with the company. At the time the first Wear contract was signed it still was an incomplete statement of the compensation agreement of the parties. Only after the supplemental agreement was signed did the parties conclude their understanding as to the full measure of Wear’s compensation. The first contract standing alone at all times was an incomplete statement of the parties’ agreement. Together they constitute the complete and single agreement for compensation and a single transaction. Execution of the supplement was the final act that consummated a full, agreement and a complete statement of a bargain that was nonexistent until its execution. Rudes v. Field, 146 Tex. 133, 204 S.W.2d 5; Veal v. Thom*294ason, 138 Tex. 341, 159 S.W.2d 472; Wood Motor Co., Inc., v. Hawkins, Tex.Civ.App., 226 S.W.2d 487; Carpenter v. Southern Properties, Tex.Civ.App., 299 S.W. 440; Texas Co. v. Waggoner, Tex.Civ.App., 239 S.W. 354; Chicago Life Ins. Co. v. Tiernan, 8 Cir., 263 F. 325.
The inquiry here is not whether several documents should be construed together to clarify ambiguities. Cowden v. Broderick & Calvert, 131 Tex. 434, 114 S.W.2d 1166, 1170, 117 A.L.R. 61. The true inquiry here is: What was the full and complete agreement between the parties? When that question is answered, there is no ambiguity. When it. is answered we simply follow the express terms of the full contract instead of its fragments. This is not an instance of taking bodily certain terms of one contract and placing them in another separate contract. I recognize that separate contracts may explain each other, and yet their provisions may not be juggled about between them. Mechanics’ Lumber Co. v. Yates American Mach. Co., 181 Ark. 415, 26 S.W.2d 80. That is the correct holding of such cases as Huylers v. Ritz-Carlton Restaurant & Hotel Co. of Atlantic City, D.C., 1 F.2d 491, 492, relied upon by appellant and cited in the opinion of the Chief Justice. In the Huylers case, quite properly, it was held that a simple contract and a sealed agreement could not be considered a single complete contract. The court there recognized that separate instruments could be construed together to determine intent even though they were not considered a single contract. The court, in speaking of this rule of construction, said: “It does not convert a specialty into a simple contract, or a simple contract into a specialty.” The rule permitting the construction together of separate instruments simultaneously executed is one rule, but the rule treating more than one document as parts of an entire and complete contract is another rule. In the case of separate and different contracts, clauses in one document are not bodily taken from one document and transposed into another. But if the contract is entire, the clauses are all a part of that entire contract. Whereas the Huylers case was a holding that a specialty and a simple, contract could not by reason, among other things, of their formal nature, be a single contract, this is a case of a single entire contract — not separate contracts. Once it is determined that the two documents are in reality one document, the clauses of one, not only may be construed with the other, they are a part of each other. This has been previously decided by this court. Volunteer State Life Ins. Co. v. Snipes, Tex.Civ.App., 209 S.W.2d 935; accord, Haddad v. Tyler Production Credit Ass’n, Tex.Civ.App., 212 S.W.2d 1006; Guadalupe-Blanco River Authority v. City of San Antonio, 145 Tex. 611, 200 S.W.2d 989, 996; Frankfurt Finance Co. v. Treadaway, Tex.Civ.App., 159 S.W.2d 514; Empire Gas & Fuel Co. v. Stern, 8 Cir., 15 F.2d 323.
- I think these documents formed a single complete contract for the reasons stated in United States v. Bethlehem Steel Corporation, 315 U.S. 289, 62 S.Ct. 581, 86 L.Ed. 855, where thirteen shipbuilding contracts were involved. On February 1, 1918, seven contracts were executed for the construction of ships, tankers and tugs, but during March, April and May six other contracts were executed. Under the contracts Bethlehem Steel was to receive a bonus for effecting certain savings, and it was held in the Circuit Court that the bonus for savings formed part of the consideration for Bethlehem’s obligation to build the ships. U. S. v. Bethlehem Steel Corp., 3 Cir., 113 F.2d 301. The Supreme Court, in affirming the case, said: “Whether a number of promises constitute one contract or more than one is to be determined by inquiring ‘whether the parties assented to all the promises as a single whole, so that there would have been no bargain whatever, if any promise or set of promises were struck out.’ Williston on Contracts, Rev.Ed. § 863, and cases there cited. The record makes it clear that each of the contracts here was assented to as a single whole, and that consummation of a bargain between the parties depended upon inclusion of the half-savings clause.” [315 U.S. 289, 62 S.Ct. 587.]
For these reasons, Wear’s complete contract provided that the consideration for his serving the company would consist of com*295missions on his own production and the additional compensation given by the supplemental contract.
Did Wear’s contract entitle -him to compensation also on business produced by Earl’s sub-agents? I think not, and on this result all members of the court are in accord, but for different reasons. The parties in integrating their understanding prepared and signed three documents. Wear’s original agreement expressly provided that he could employ sub-agents. On the same date, and on exactly the same kind of printed form, Earl made his agreement with the same insurance company, and Wear’s “supplemental agreement” referred to it in aid of his agreement for compensations. The supplemental agreement stated that Wear would receive an override on “insurance written by C. H. Earl under his contract dated July 1st, 1946.” Earl’s contract, unlike Wear’s contract, did not contain a clause authorizing Earl to employ sub-agents. Wear had three documents before him when he executed his agreement controlling his compensation. Wear’s contract gave him the right to employ sub-agents, and Earl’s contract executed at the same time did not give Earl that same right. The parties undertook to define their rights as regards sub-agents. Wear required it in his own contract, but he did not require it in Earl’s, though he knew that his compensation was in part measured by Earl’s contract. The parties were contracting ■with an eye toward sub-agents. After the parties did undertake to contract about sub-agents, Wear will not be heard to say that he would have had the right in any event. He may have had such a right by the general custom of the business, but general custom becomes immaterial when the parties define their rights by contract as regards those matters of custom.
Evidence was presented showing abundantly that over a period of twenty-three months the insurance company actually did pay Wear an override on the business produced not only by Earl personally but also on that produced by several other sub-agents, or persons who were selected and trained by Earl. ■ The company also sent monthly cards or notices to Wear advising him of the business produced by those other persons. This evidence is used to show that the contract was practically construed to mean that Wear should receive an override not only on Earl but on Earl’s sub-agents too.
I would agree with this except for the dominant fact that Wear did not make such a contract. His contract is clear on its face. Custom and the practical construction by the parties may be controlling evidence where there is an ambiguity in the contract. Instead of explaining an ambiguity, however, it is used in this case to raise the ambiguity. “The practical construction put on a contract by the parties cannot control or vary the express unambiguous provisions of the instrument itself and the legal effect thereof; it cannot prevail where it contradicts the clear meaning of plain terms; and the fact that the parties have placed an erroneous construction on an unambiguous contract will not prevent the court from giving the true construction to the contract.” 17 C.J.S., Contracts, § 325, pp. 760, 761; Richardson v. Hart, 143 Tex. 392, 185 S.W.2d 563; Shropshire v. Commerce Farm Credit Co., 120 Tex. 400, 39 S.W.2d 11, 39 S.W.2d 282, 84 A.L.R. 1269; Highlands Farms Corporation v. Fidelity Trust Co., 125 Tex. 474, 82 S.W.2d 627; Lone Star Gas Co. v. X-Ray Gas Co., 139 Tex. 546, 164 S.W.2d 504; Parrott v. Brotherhood of Railroad Trainmen, Tex.Civ.App., 85 S.W.2d 306,
On the matter of Wear’s right to recover commissions on Earl’s sub-agents, Wear finds himself in the position of claiming by his contract commissions on sub-agents that Earl could not under the contract employ. He would have us imply the power to employ agents, though the contract was express as to him and silent as to Earl; and then he would have us imply that he would recover commissions on those employed, though the contract was express as to “insurance written by C. H. Earl,” and silent as to anybody else.
When we place these three documents side by side in front of us, knowing that Wear’s contract consisted of his own agreement and its supplement, and that the supplement referred to Earl’s contract, we have *296before us clear answers to all of the questions in this case. There is no need to go beyond those three documents, and there is no ambiguity in their meaning.
Did the parties ever modify Wear’s contract of July 1, 1946? The jury said that there was never any agreement to cancel the contract. It is undisputed that Wear continued on with his work with the company until he received the written notice of cancellation and 'that this was with the knowledge and consent of the insurance company. If, during that time, Wear was working for less compensation than his entire contract awarded him, where is that new contract and when was that modified .contract agreed upon? Out of the controversy raging about cancellation of a contract, some way or another, a new contract mysteriously comes into being. Actually the position of the insurance company is not that the Wear contract was orally can-celled before January 1, 1948, but that it was changed and modified so that he would receive less compensation, but keep on working. The new arrangement would give Wear compensation for his own business .produced, but not commissions on Earl’s production.
The insurance company advances the argument that Wear’s supplemental agreement by referring to the Earl contract of July 1, 1946, gave Wear compensation on Earl’s production. It argues that the company changed Earl’s contract of July 1, 1946, that there was no longer any basis for the Wear contract, and that it was changed to that extent. Earl never ceased to work and prodttce but after January 1, 1948, he had a different contract with the company, though it was not actually reduced to writing until some five months later. This argument means that the insurance company by changing its contract with Earl,' upon which the Wear contract depended, also worked a corresponding change in the Wear contract, whether Wear agreed to the change or not.
Wear’s rights were controlled by his own contractual relations with the insurance company. His contract provided for its complete elimination on thirty days’ written notice. If Wear’s complete compensation was ever reduced for the period between January 1, 1948, and June 28, 1948, it was by some method other than his own agreement, the terms of his express written agreement, and not by reason of cancellation by the terms of his contract.
While the insurance company was not required to keep its original Earl contract in existence, insofar as Wear’s rights depended upon it, Wear’s contract required the company to give Wear written notice of a change which would cancel out his rights. This is not an instance where the contract of July 1, 1946, expired by its terms, as in the royalty cases cited in the opinion of the Chief Justice; it is a case where the insurance company has by its affirmative acts shortened the agreement by destroying a part of the subject matter. So long as Earl’s contract was the subject matter of Wear’s contract, it could not be terminated insofar as he was concerned until he was given thirty days’ written notice, or by a mutual agreement, if they wanted to modify Wear’s contract. I do not think that one who voluntarily destroys the yardstick by which 'he has covenanted to measure the rights of another can be heard to say that such conduct wipes out that other’s rights. Zachry v. Robertson, 147 Tex. 307, 214 S.W.2d 949; Dodds & Wedegartner v. Reed, Tex.Civ.App., 69 S.W.2d 165; Miller v. Hodges, Tex.Com.App., 260 S.W. 168, 172; City of Kirbyville v. Smith, 104 S.W.2d 564; Bueche v. Eickenroht, Tex.Civ.App., 220 S.W.2d 911; Business Men’s Assur. Co. of America v. Eades, 290 Ky. 553, 161 S.W.2d 920.
Did Wear waive his right to have thirty days’ written notice? There is nothing abstruse about the provision in the Wear contract stating that Wear’s contract could be cancelled on thirty days’ written notice. It was executed by an insurance executive who, from the evidence, had executed many other contracts containing the same provision. The insurance company handled all of its agents and representatives by written rather than oral contracts, and this provision was in all of them. Wear relied upon the plain and simple terms of his contract, and the insurance company did not. The insurance company took the position that *297Wear should have coached the insurance representative about the company’s contractual rights that had only to be read to he understood. Wear simply remained silent at a time where there was no duty to speak. The insurance company, in effect, told Wear that some time in the future a change would be made, and the insurance company says that under those circumstances it is the duty of the employee to announce his future plans. In this case, the contention is that Wear should have told the insurance executive that his rights were controlled by a written contract, a thing which certainly he already knew. The executive did not read the' documents — just the supplement. Barron G. Collier, Inc., v. Davidson-Levine, Inc., Tex.Civ.App., 294 S.W. 223, 224, in holding that there was no waiver of a contractual provision for written cancellation notice, said: “This evidence constituted neither a waiver of the written contract nor a cancellation of the contract. The parties had directed by contract the precise manner in which the contract could be canceled. * * * At most this testimony can only be considered as a warning that appellant could expect within the 90 days’ time written notice from appellee that it would exercise its right of cancellation.” I find no circumstances which required Wear to speak up; he could, as he did, rely on 'his contract which embodied the full understanding between himself and the company. East Texas Fire Insurance Co. v. Perkey, 89 Tex. 604, 35 S.W. 1050; Sammons v. Hodges, Tex.Civ.App., 95 S.W.2d 734; Miller v. Deahl, Tex.Civ.App., 239 S.W. 679; Texas Life Insurance Co. v. Huntsman, Tex.Civ.App., 193 S.W. 455; Lucas Hunt Village Co. v. Klein, 358 Mo. 1054, 218 S.W.2d 595; Clark v. Dye, 158 Minn. 217, 197 N.W. 209, 212; Wiser v. Lawler, 189 U.S. 260, 23 S.Ct. 624, 47 L.Ed. 802, 809; Allenbaugh v. City of Canton, 137 Ohio St. 128, 28 N.E.2d 354.
Thé final matter is whether Wear is es-topped to claim his contractual right to a written notice. The jury found that Wear was estopped, inasmuch as he learned in October about the company’s plan of a change and said nothing, but stood by while the company changed its position by increasing commission rates to Earl and other agents, in reliance upon Wear’s silence and failure to speak up. The earliest that the' evidence shows W'ear was advised orally of a change in his status was during October, 1947. Any conduct on his part which could give rise to an estoppel necessarily would occur after that date. But a letter in evidence from the company to Earl, dated in September, 1947, shows that Earl and" the ■company had already reached their agreement about the increased commission. The September letter explained to Earl that he would get no commission on one of his new sub-agents to whom Earl 'had given a 70% commission, that being all that Earl could get, and it went on to. say: “At the present time this means that you will receive no overwrite. Of course, on all policies effective on or after January 1, 1948, you will receive 5% overwrite and 2½% renewal.” When confronted with this record testimony, I ask the same question asked by the trial court in explanation of his action disregarding the jury findings on estoppel: “How could the conduct of Wear subsequent to October, 1947, have lead defendant company into an injurious position by making the agreement with Earl, when the company had already made the agreement with Earl in October, 1947?”
■ I conclude-that the original Wear-contract and its supplement are a single complete contract; that it, together with Earl’s contract, which is referred to by the supplement, should all be construed together. When this is done there are no ambiguities and the contract required that written notice be given Wear to effect a cancellation. This was not given until May 28, 1948, which terminated the contract on June 28, 1948, up to which time Wear is entitled to recover under his complete contract. There was never any agreement to modify or cancel Wear’s contract. Construing the plain words of all the three documents together, Wear should recover insurance written by Earl, but not by his sub-agents. Wear did not waive and under the evidence could not be estopped from insisting upon the contractual written notice. I would allow Wear his commission on Earl’s individual production up to June 28, 1948.
*298I would reform the judgment and award Wear a judgment for $4,703.28, together with attorney’s fees and interest, and award him commissions on those renewals allowed by the majority but would allow them up to June 28, 1948, instead of January 1, 1948.