Court Opinion

ID: 4140400
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:58:34.823672+00
Date Added: 2024-06-11T14:35:22.662789
License: Public Domain

Honor~able 0. F. Lockhart, Chairman
Board of Insurance Commissioners
Austin. Texas

Dear   Sir:                                 Opinion No. O-5913
                                            Re: Whether the Vice-President       of
                                                 the American    National Insurance
                                                 Company is entitled to continue
                                                 to draw his renewal commissions
                                                  on the business he wrote prior to
                                                 December    31, 1943. when he was a
                                                 branch manager,     in view of Article
                                                 4745, Vernon’s   Annotated Civil
                                                 Statutes.

                     Your letter of March 4. 1944, requesting the opinion of
this department      on the question stated therein, reads, in part, as follows:

                      w * * * At this time I have this question to de-
            cide:  The American   National Insurance Company of Gal-
           ,veston. Texas, had an agent employed by them as a Branch
            h4anager in Salt Lake City, Utah.   This ,man was paid a sal-
           ary and, also received commissions     and renewal commissions.

                       “On January 1, 1944, he was called into the home of-
            fice and made a Vice President because of the outstanding
            work he had done as a Branch Manager and the Management
            of the company as a reward promoted him to the status of a
            full Vice President.    The question we wish you to answer is
            this:  Is this man entitled to continue to draw his renewal
            commissions     on the business that he wrote prior to December
            31, 1943 under his agent’s contract and, before that either he or
            the company had thought he would become an executive      officer
           ~of the company?”

                    Article   4745,   Vernon’s   Annotated   Civil   Statutes,   provides,
in part:

                     “No life’insurance     company transacting    business
           in this State shall pay,,or contract to pay, directly or in-
           directly,  to its 0 * * vice-president,     * * * any commission
           or other compensation      contingent upon the writing or pro-
           curing of any policy of insurance       in such company, or pro-
           curing an application therefor by any ‘person whomsoever,
  Honorable    0.   P. Lockhart,   page 2 (O-5913)

           or contingent upon the payment of any renewal premium,
           or upon the assumption       of any life insurance risk by such
           company.      Should any company violate any provision        of
           this article,   it shall be the duty of the Commissioner       of
           Insurance to revoke its certificate       of authority to trans-
           act business     in this State.”

                     We have failed to find any case by our appellate          courts
  where   the foregoing statute has been interpreted  or construed.

                     We do not have before us the contract between the man
   in question and the insurance company.    However, for the purposes of
   this opinion, we assume that such contract was the general contract or-
  ‘dinarily :executed by life insurance companies  and their respective agents.

                        Generally   speaking, the utmost freedom to enter into any
  ~‘.’
    contract,   permitted by existing law, is the inherent right of every citizen,
‘~ ‘and when he exercises      that right in a lawful way, no Legislature    has the
   “p$wer to disturb the purpose or effect, or in any manner re-write          any of
    the provisions    of that contract,  or make a new contract for him. and the
     right to comply with and enforce its provisions      as written is fixed and
    vested.   The degree in which the offending statute may impair the obliga-
    tion of contract is immaterial.       The only question is: has the obligation
   ‘been encroached      upon in any respect?     (See Chappin v. Frank, (Civ.App.)
    236 S.W. 1006, 1011, reversed,       Frank v. State Bank & Trust Company,
     (Com.App.)    10 S.W. (2d) 704)

                     In view of the foregoing,   it is our opinion that the man in
  question is entitled to continue to draw his renewal commissions           on busi-
  ness which he wrote prior to December         31, 1943, under his agent’s con-
  tract. although he is now Vice-president       of his company.    In view of Ar-
  ticle 4745, supra, it is our further opinion that the Vice-president        would
  not be entitled to any commissions      or other compensation     contingent upon
  the writing or procuring~of any polrcy of insurance in such company or
  procuring nnapplicrtiantherefor       ,by’any person whomsoever       ,OZ contin-
  gent upon the payment of any renewal premium,          or upon the assumption
  of any life insurance risk by such company after December           31. 1943.
  Stated another way, the Vice-president       would not be entitled to any com-
  mission on the payment of any renewal premium,           etc., on any business
  of the company after he became vice-president,         except such commissions
  as he was entitled to under his contract on business        that he wrote prior to
  December     31. 1943.

  APPROVED      3-14-44                     Yours      very   truly
  /s/  Geo. Blackburn
  Acting Attorney General                   ATTORNEYGENERALOF                 TEXAS
  of Texas
                                            By   /s/     Ardell   Williams
                                                                   Ardell Williams
  AW:EP/cm                                                         Assistant
  Approved Opinion       Committee
  By /s/  BWB
      Charman