Locher v. New York Life Insurance

OPINION.

REYNOLDS, P. J.

— (after stating the facts as above) — The controlling, in fact the only, question involved in this case,'arises over the claim of the plaintiff (appellant). to a percentage or commission on renewals received and realized by the defendant corporation after the termination of the agency of plaintiff, who had been such agent in the territory embraced within the city of St. Louis, Missouri, on policies written by him while he was such agent, the renewals falling in and being collected by defendant after the termination of his agency.

The determination of this question turns upon the construction of Sections 20 and XX 22, the latter referred to as section 22.

It is said in 16 Am. & Eng. Ency. of Law (2 Ed.), p. 919, subdivision 2:

“Though the cases leave some ground for doubt, they seem to sanction the rule that a contract providing *669 for the payment of commissions to the agent on renewal policies confers npon him no right to collect and retain such commissions after the termination of the agency, or to recover them from the company when collected by another agent. The question has generally been determined with reference to the peculiar provisions of the particular contract in question.”

In 22'Cyc., p. 1441, subdivision C, it is said:

“In the absence of express stipulation to the contrary, an agent is not entitled to commissions on renewal premiums paid after the termination of the agency, and the forfeiture of his right thereto is not affected by stipulating in the contract specific grounds of forfeiture, none of which occurred.”

In 14 R. C. L., p. 869, sec. 42, it is said:

“The most important question which arises with reference to the compensation of insurance agents is whether an agent entitled to commissions on renewal premiums is entitled to a commission on such a premium paid after the termination of his agency. Of course where his contract of employment provides that he shall receive a certain commission on renewal premiums so long as he continues to be the agent of the company, he is not entitled to commission on renewals made after his discharge. . . . The right to commissions on renewal premiums terminates at his death, discharge for cause, or resignation, especially where the contract discloses an intent that the right to commissions shall not extend beyond that time. ’ ’

The underlying principle back of this holding rests upon the idea or rule that the agent has acquired no interest in renewals on policies written by him which becomes vested at the time of the writing of the policy. This claim was long ago disposed of by the Supreme Court of the United States in Hunt v. Rousmanier’s Admrs., 8 Wheat. (U. S.) 174, where Chief Justice Marshall says, beginning at page 203:

“If a power be coupled with an ‘interest,’ it survives the person giving it, and may be executed after his death. As this proposition is laid down too positive *670 ly in the books to be controverted, it becomes necessary to inquire what is meant by the expression, ‘a power coupled with an interest?’ Is it an interest in the subject on which the power is to be exercised, or is it an interest in that which is' produced by the exercise of the power? We hold it to be clear, that the interest which can protect a power after the death of a person who creates it, must be an interest in the thing itself. In other words, the power must be engrafted on an estate in the thing. The words themselves would seem to import this meaning. ‘A power coupled with an interest, ’ is a power which accompanies, or is connected with', an interest. The power and the interest are united in the same person. But if we are to understand by the word ‘interest,’ an interest in that which is to be produced by ■ the exercise of the power, then they are never united. The power, to produce the interest, must be exercised, and by its exercise, is extinguished. The power ceases when the interest commences, and, therefore, cannot, in accurate law language, be said to be ‘coupled’ with it.”

Quoting this definition, which Judge Philips, presiding in the circuit court for the Western District of Missouri, in Stier v. Imperial Life Ins. Co., 58 Fed. 843 , has said aptly defines a power coupled with an interest, that learned judge applying it in a case in which an a.gent claimed a right in renewals, has said (p. 845), that clearly the plaintiff had no such interest in the subject-matter of the contract; that is to say, in the renewals, as would take away the customary option of the principal to terminate the agency.

So the Supreme Court of North Carolina, in Ballard v. Travellers’ Ins. Co., 119 N. C. 187 , l. c. 191, also citing and quoting the same matter from Hunt v. Rousmanier’s Admrs., supra, likewise applied it to commission renewals, holding that the contract did not confer upon the agent a power coupled with an interest.

In the case at bar there can be no pretense that it was not within the power of the respondent, defendant company, here to terminate the agency of the plaintiff *671 when it did, and for the cause which' it did, for that agent had specifically contracted to ‘ ‘ act exclusively as agent for said party of the first part and as such agent .shall devote his entire time, talents and energies to the business of the agency hereby established,” and it appeared by the evidence in the case that he not only had not acted exclusively as agent for the defendant but had actually entered into the employment of a rival company while his contract with the defendant was in force, and for this he was discharged.

In King v. Raleigh, 100 Mo. App. 1 , our court, speaking through Judge Goode, although acknowledging that in that case it was a matter of hardship toward the plaintiff, which, however, Judge Goode said had at first inclined our court against the respondent’s position in that case, comes to the conclusion that an examination of the cases sustains the position of th,e respondent that by the contract between him and the appellant, respondent had agreed to allow appellant commissions only during his continuance as agent, and the agency having terminated, his right to commissions thereafter accruing likewise terminated. This, said Judge Goode, is supported by many authorities which he cites. After quoting from two of them, namely, Stagg v. Connecticut Mutual Life Ins. Co., 10 Wall. (U. S.) 589, and Jacobson v. Connecticut Mutual Life Ins. Co., 61 Minn. 330 , Judge Goode says (l. c. 7):

“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. ’ ’

Noting there is strong dissent to this in some decisions, Judge Goode cites, as one of this class, Burelson v. Northwestern Mut. Life Ins. Co., 86 Calif. 342, but with the concurrence of Judges Blakd and Babclay, *672 holds that the court is constrained by decisions cited to adopt the 'other view.

In Arensmeyer v. Metropolitan Life Ins. Co., 254 Mo. 363 , 162 S. W. 261 , our Supreme Court refers tó this decision of King v. Raleigh with approval and noticing Judge Goode’s citation of Burelson v. Northwestern Mut. Life Ins. Co., supra, says that in citing that case the judge probably had in mind a previous part of the opinion, for, says Mr. Commissioner Blair who wrote the opinion, the last part of the opinion “is squarely in point and in accord” with the conclusion-reached by the Supreme Court in Arensmeyer v. Metropolitan Life Ins. Co., supra. That this is true will be found by reference, to Burelson v. Northwestern Mut. Life Ins. Co., 86 Calif. 342. There it is expressly said that undoubtedly by the termination of the original contract, all right of the plaintiff or his assignee to commissions was forfeited “as to any and all business done after the termination of the contract, but we think it was not so as to business already, done, and where commissions had been earned before the contract ceased to exist. Therefore, as to any renewal premiums upon which A. would have been entitled his five and one-half per cent, commissions before and at the time the contract was terminated, or, rather, at the time of any violation of the terms of the contract which authorized, and for and on account of which it was terminated, would have been entitled to recover, subject, however, to any indebtedness on his- part to the defendant growing out of his agency under the contract and its subsequent modification.”

The decision of our court in King v. Raleigh, supra, is referred to approvingly by Judge Rose, presiding in the United States District Court of Maryland, in Fidelity & Deposit Company of Maryland v. Washington Life. Ins. Company of New York, 193 Fed. 512 . Reciting the terms of the contract, Judge Rose says (l. c. 513):

The authorities are overwhelming that such provisions, standing, alone, deprive an agent of any *673 right to commissions on renewal prea?rurus paid after the termination of his agency.”

In addition to the. authorities cited by Judge Goode, in King v. Raleigh, supra (l. c. 5), and to those which we have here above cited, see Scott v. Travellers’ Ins. Co., 103 Md. 69 , where it was held, on practically the same kind of contract as here before us, that upon the termination of the contract, the right of the agent to commissions on the renewal premiums ceased, since the provision providing for their payment was operative only so long as the contract was in force and while plaintiff continued as the agent of the company and it was a part of his compensation as such agent. To the same effect is Ballard v. Travellers’ Ins. Co., supra.

In Walker v. John Hancock Mutual Life Ins. Co., 80 N. J. L. 342, it is held that the agent, having been discharged under the terms of the contract, was not entitled to damages because the company prevented him from collecting premiums which became due after his discharge. This last case is reported and annotated in 35 L. R. A. (N. S.) 153. In the notes to it, on page 155, a number of cases are cited in which it was held that where the contract provided that the agent should be entitled to renewal commissions only during the continuance of his agency, recovery was denied the agent for commissions on. renewals paid the principal after it had terminated the agency. A multitude of authorities are cited in support of this, among others, King v. Raleigh, supra.

So that the decided weight of authority leads to the conclusion that, unless it is- expressly stipulated or clearly to be gathered by the contract, the agent’s right to commissions on renewals is to continue on renewals falling in after the term of his employment, he is not entitled to commissions on renewals received or falling in after the expiration of -his agency. The right of the agent to commissions on renewáls collected or falling in after the end of his agency, can rest only on express terms in his contract, or be necessarily drawn *674 from an interpretation of that contract as a whole. This must be so, for the right to commissions on renewals rests, in part, on the consideration of the services by the agent to the company in keeping the policies written by him alive.

The authorities to the contrary chiefly relied on by learned counsel for the appellant are those of Hercules Mutual Life Assurance Society v. Brinker, 77 N. Y. 435 ; Heyn v. New York Life Ins. Co., 192 N. Y. 1 ; Michigan Mutual Life Ins. Co. v. Coleman, 118 Tenn. 215 .

We have carefully examined these cases. They are all noted by Mr. Commissioner Blair (l. c. 376,) in Arensmeyer v. Metropolitan Life Ins. Co., supra, and disposed of as not fitting the contract in the case- then before the court. We think that is the situation here. Furthermore, the only published opinion in Hercules Mutual Life Assurance Co. v. Brinker, supra, is an opinion by' the minority of the court, three out of the seven judges, who, Mr. Justice Earl writing the opinion, held that the judgment of the trial court should be affirmed, Mr. Justice Earl, with the concurrence of two of his associates, holding that under the contract before them the defendant was not entitled to the commissions on renewals falling due and collected after the termination of' his contract with the company. While it is noted in the report that the Chief Justice and three of his associates concur for a reversal and new trial, it nowhere appears upon what ground the majority took this view, as the opinion of the minority judges covered a number of propositions apart from the one as to the meaning of the contracts. So that case can hardly he quoted as authority one way or the other.

It is true that in Heyn v. New York Life Ins. Co., supra, the judgment of the lower courts, which held that no recovery could be had for renewals falling in after the termination of the agency, was reversed. The contract before those courts is one to which the defendant here was a party but it is not of like tenor, or effect, or form, as the one before us. It was made and entered *675 into between the parties two years before the contract now before us was entered into. Commenting on the decision of the Court of Appeals in the Heyn Case, supra, the Supreme Court for Erie County, New York, in Sutherland v. Connecticut Mut. Life Ins. Co., 149 N. Y. Supp. 1008 , says (l. c. 1014) that the judgment of the lower court was reversed by the Court of Appeals “upon the ground, not that the court below was mistaken in the law, as applied to the contract, as it was assumed to be, but that the contract itself did not limit the commissions to those collected during the term of the employment. It was held that a different clause of the contract furnished the measure of the compensation. There is no suggestion that, if the terms of the contract had limited the commissions to the time that the plaintiff remained in the employment, the court would'not have enforced that provision. It simply held that this clause, being left blank as to the term of years, was not complete, and that the clause of the contract in writing controlled. It announced no new principle' of law. It simply gave a construction to the contract which took it' out of the rule announced in the court below. [See Aldrich v. New York Life Ins. Co., 121 App. Div. 18 , 105 N. Y. Supp. 493 .]”

In Aldrich v. New York Life Ins. Co., above referred to, the Appellate Division of the Supreme Court of New York held, construing-,a contract almost identical with the one before us, that, first, there was no .definite term to the agency but a hiring at will; that while the referee had found as a fact that the reason given for terminating the agreement was not correct, the court held that that was unimportant as the defendant possessed the right to terminate the agency when it saw fit, and the court said (l. c. 20) that by the contract between the parties it was provided:

“A commission on the original or renewal cash' premiums which shall, during his continuance as such’ agent of said party of the first part, be obtained, collected, paid to and received by said party of the first part up to and including the sixth year of as *676 surance (should Ms agency continue so long) on policies of insurance effected with, said party of the first part, by or through said party of the second part, which commission shall be at and after the following terms.”

Citing other provisions, the court concludes:

“The purpose is to forfeit all interest of the plaintiff either accrued or to accure if he disregards any of the provisions contained in these three sections. There is nothing in any of them which pares down the effect of section 21. That provision is the general one regulating the compensation to which he is entitled,, and in unequivocal language cuts it off unqualifiedly with the ending of the agency.”

At page 155, in the notes to Walker v. John Hancock Mutual Life Ins. Co., 35 L. R. A., before referred to, the writer of the notes, appears to have taken the same view of the decision of the Court of Appeals in Heyn v. New York Life Ins. Co., supra, as taken by the court in Sutherland v. Connecticut Mut. Life Ins. Co., 149 N. Y. Supp. 1008 , l. c. 1014, supra. It was held that his term being blank, the company could not, by terminating his- agency, deprive the agent of his right to commissions upon renewal premiums after he had secured sufficient new business to entitle him to such commissions for a certain number of years. So we do not think that the decision of the New York Court of Appeals in the Heyn case is here controlling.

Without going into an analysis of Michigan Mutual Life Ins. Co. v. Coleman, 118 Tenn. 215 , we think the contract there involved, in so far as the provisions here germane, is radically different from that before us.

We have set out the two sections, 20 and XX22, in the contract here involved. Section. 20 specifically provides that the agent shall be allowed under the agreement “the following compensation only, unless otherwise expressly stipulated in writing, namely, a commission on the original or renewal cash premiums which shall, during his continuance as said agent of *677 said party of the first part, be obtained, collected, paid to and received by tbe said party of the first part up to and including the first year of assurance (should his■ agency continue so long) on policies of insurance effected with said party of the first part, by or through said party of the second part. “By clause XX 22 it is agreed that “should the procurements of placed insurance by or through said party of the second part, ■during the period beginning January 25, 1898, and ending January 31, 1899, . . . the annual premiums on which shall have been paid to and received by said party of the first part in cash in due course during said period, or within sixty days thereafter,. . . . said party of the second part shall be entitled to a commission of seven per cent, on such premiums of business written during said period, ... as shall renew for the years of assurance stated below subject to all the terms and conditions of said section 20.” (Italics ours.)

In the various extensions that were made from year to year of the first year’s term, it is expressly set out, referring to the first agreement of January 25, 1899, that “subject to all the terms and conditions of’ same, it is hereby agreed and understood that the bonus renewal offer provided for by section 22. of your said agreement for the period ending January 31, 1899, is hereby made to you for the year beginning February 1, 1899, and ending January 31, 1900, in accordance with and under the same conditions as specified in said section 22 of your- said agreement. In all other respects your contract remains in full force and effect.”

Section XX22 calls into and makes it “subject to all the terms and conditions ’ ’ specified in section 20. Section 20 provides for a commission on “original or renewal cash premiums which shall, during his continuance as said agent ... be obtained, collected, paid to and received by said party of the first part up to and including the first year of assurance (should his agency continue so long).” By this the agent’s commissions are limited to his term as agent. That ap *678 pears to be the intention of the parties. This condition of section 20 would be entirely nullified by section XX22 if. we were' to look to that section alone.. But section XX21 expressly reckons with section 20 and adopts ’ it, making section XX22 subject .to all its provisions, and section 20 expressly limits the right to renewals to the term of continuance of the agency. Hence the condition in section 20 that must be carried. into section XX22 is that which limits the right of an-agent to commissions to the term of his agency. That followed into the various extensions of the term of employment from year to year, and that, we think, was in the minds of the parties to be gathered from an interpretation of the contract as a whole. Hence we hold that this contract does not, expressly or by necessary implication, provide for continuing commissions' to the agent on Renewals collected or' falling in after the end of the agent’s employment.

With these provisions before us it is impossible to hold that plaintiff here is entitled to a commission on renewals on policies written by him when such renewals were collected' after the termination of his ■employment.

We have .duly considered all of the points cited by • learned counsel for the appellant. One of these points is that the. defendant had no right, -under the contract, to terminate the agency. As we have before said, we do not think this position is maintainable.

We do not think it essential to notice the other points urged by that learned counsel, as what we have said disposes of the real crux of the case. Even if some of those points were sustained, and for that reason the judgment reversed and the cause remanded, the cause would ultimately turn upon the construction of the contract. Construed, us we have undertaken to do, as that contract must be, in no event could plaintiff recover.

It follows that the judgment of the circuit court should be, and it is affirmed.

Becker, J., concurs; Allen, J., in result only.