
    OWNERSHIP OF PREMIUMS PAID AFTER A LIFE INSURANCE AGENT CEASES TO BE CONNECTED WITH THE COMPANY.
    Common Pleas Court of Montgomery County.
    J. B. Henley v. The Metropolitan Life Insurance Company.
    Decided, July 9, 1925.
    
      Idfe Inswranee — Bight of an Agent to Commissions after Leaving the Company’s Service — Must be Based on <an Express Provision in His Contract to that Effect — Such an Agency not one Coupled ■ with an Interest, Unless — Custom of Life Insuiance Companies between Themselves and thevr Agents — Can not be Crafted on a Superintendent’s Contract and Made Part Thereof,
    
    
      A life insurance superintendent is not entitled to renewal commissions which have fallen due and been paid since he left the service, where the contract with his company provides that upon termination of his employement all his interest in fees and commissions shall cease.
   Snediker, J.

This case is before the court on the merits. The action of the plaintiff is based upon a contract of agency which existed between J. B. Henley and the Metropolitan Life Insurance Company. The plaintiff’s contention is that he is entitled to commissions on renewal premiums on policies written by J. B. Henley during such agency, and he asks that an accounting be had between himself and the company, and that the amount now due and owing on account of such commissions be ascertained and determined, and that he be awarded judgment accordingly.

The plaintiff not only relies upon the written agreement between Henley and the Insurance Company, but also claims that as a part of said contract there existed at the time of the making of it a custom of the business of life insurance by which, as between themselves and their agents, there was a permanent interest in the life insurance secured by a general agent or superintendent such as Henley was, or by those acting under such general agent or superintendent; that that interest was in the form of a percentage of the renewal premium on the policies representing such insurance, and is ordinarily known as renewal commissions. He claims this vested interest in commissions in the Ordinary Department.

We have before us then the question as to whether Henley’s estate (he having died since bringing this action) has a right to such renewal commissions upon the policies placed by him personally, which were collected and received by the company subsequent to his discharge.

As the plaintiff principally relies upon the custom to which we have referred, it is perhaps our first duty to determine whether or not it may be added as a part of a contract made between himself and the company, and if it may not, then to lay it out of the case and to consider only the written contract of agency before us. The custom relied upon is one of vested interest in the commissions referred to.

“A vested interest is one in which there is a present fixed right either of present enjoyment or of future enjoyment.”

Plaintiff is not entitled to the benefit of a usage or custom pf such vested interest if it be inconsistent with the written agreement between himself and the company. A custom or usage may add to, but not take from a written contract to which it is sought to be applied.

There have been offered in evidence two agreements entered into between Henley and the company. We refer for quotation to that of February 7, 1921, and find the following subdivisions therein:

‘ ‘ 8th. To accept as compensation for my services in the Industrial Department Five (#5.00) dollars, regular salary per week, and, in addition thereto, as contingent salary, payable at the end of each year from the date hereof, provided I am then in the employ of the Company as Superintendent, an amount equivalent to one time such proportion of the actual increase in the weekly debit of my District (for the year only, ending with the date upon which said payment shall fall due), as shall be represented by the ratio which the total premiums collected and accounted for to the Company shall bear to the total debit for the year.

“I further agree to accept and abide by the calculation made by the Home Office of the Company, of any contingent salary herein referred to.

“9th. My compensation in the Ordinary Department shall be the commissions allowed by the Company as set forth by its rules from time to time.

“11th. That my appointment as Superintendent, and this agreement, as well as the duties and emoluments thereunder, may be revoked, terminated, changed or modified from time to time by the Company in its discretion or at its pleasure, with or without cause, without notice and without any liability therefor on the part of the Company to me.

“12th. If at any time I resign or ami (dismissed from the Superintendency, the compensation to which I am entitled under this agreement at that date shall he m full payment and satisfaction of all services rendered to the Company under this agreement and of nil claims upon the Company.”

There has also been introduced a copy of the company’s rules as showing its scale of commissions and collection fees, same date as the agreement, from which we have just given excerpts. On an examination of these rules, we find the company saying:

“We give you below the scale of Commissions and Collection fees you will be paid hereafter in the Ordinary Department (including Intermediate Branch), until otherwise announced, while in charge of the Dayton, Ohio,' District, subject to the terms of your agreement dated February 7, 1921:

“1.. On business in force in the Dayton, Ohio District on this date.

“a. Commissions on collections made during the renewal period, while the business remains on the books of the District.” (Here foEows a list of such commissions.)

“h. Collection Fee on collections made in or through the, District after the renewal period has expired.” (Here foEows such fee.)

“2. On business issued to your personal credit subsequent to this date:

“Upon applications secured by yourself (that is, applications not secured by Agents, Deputy Superintendents or other employees under your supervision), during the first year and the renewal period, commissions will be payable in accordance with the following printed schedule.” (Here foEows the percentage rate.)

“3. On business issued to the District subsequent to this date, including your personal issue:

“Commissions on premiums.collected by you or by any person active in the District and while under your supervision and reported to the Company or paid at the Home Office, while the business is in force in the above District, during the first yean' and the renewal period, will be payable in accordance with the following printed schedule.” (Here follows the percentage rate.)

In the general provisions, which are a part of- this document, are the following:

“PAYMENT. As provided herein, Commissions and Collection Fees are payable only upon collection of the premiums and remittance to the Company’s Home Office, in the same manner as the premiums are paid — annually, semi-annually or . quarterly.

“The scale of commissions and collection fees herein given is subject to any change determined upon by the Company.

“DISCONTINUANCE. Upon your transfer from the District heretofore mentioned, your interest in first year and renewal commissions and collection fees shall cease, except on your personal issue as to the balance of first year commission, if any; and the renewal commission, as referred to in Section 2, less the 3% collection fee payable to a succeeding Agent.

“It is understood and agreed that upon your retirement as superintendent all your interest in renewal commissions and collection fees shall cease and determine.

The dueuments from which we have read constitute the entire contract between Henley and the company, unless the plaintiff is entitled to the benefit of the custom which he pleads, and upon which he relies. It seems to us very clear that the definite agreement between Henley and the company was with respect to the commissions on collections made while his contract as superintendent was still in effect.

With respect to the word “retirement” used in the last sentence of the “schedule of commissions and collections, made,” we are of the opinion that a proper interpretation should be, not only that he voluntarily retired, but also that he was caused to retire. A definition of this term is either “the act of retiring” or “the state of being retired.” The control which the company exercises over the employment of Henley throughout its contract indicates the true construction of this word.

On February 10, 1923, the company sent Henley this- letter:

“Mr. J. B. Henley, 333 Rockwood avenue, Dayton, Ohio. Dear Sir: We telegraphed you today as follows: ‘You are hereby notified of your dismissal from'the service of this Company. Please turn over immediately affairs of District, including bank account, monies and other property of the Company in your possession, to Supervisor of Accounts, Russell Corbly. Letter of confirmation follows.’ The same is hereby confirmed and your incumbency terminates accordingly. Yours truly, Geo. B. Woodward, Second Vice-President.”

The force of this letter, was a cessation of all relations of Henley and the company under their contract. The effect of such termination of employment is passed upon by the Supreme Court of Missiouri in Volume 254, page 363, in the case of Arensmeyer v. Metropolitan Life Insurance Company. The the language is as follows:

“When an insurance superintendent’s contract with his company provides that upon the termination of his ‘Sniployment all his interest in fees and commissions shall cease, he is not entitled to renewal commissions on premiums falling due and paid after his abandonment of the service.”

In the case of Locher, Appellant, v. New York Life Insurance Company, 200 Missouri Appeal, page 659, the court holds:

“ Unless it be expressly stipulated, or clearly to be gathered by the contract, or 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; under the contract in question, the agent has acquired no interest in renewals on policies written by him which became vested at the time of the writing of the policy.

“The right of an agent to commissions on renewals collected or falling in after the end of his agency, can rest only on expressed terms in his contract or be necessarily drawn from an interpretation of that contract as a whole; for the right to commissions on renewals rests, in part, on the consideration of the services by the agent to the principal in keeping the policies written by him alive.

“Where the contract of employment does not, expressly, or by necessary implication, provide for continuing commissions to the agent or renewals collected or falling in after the end of the agent’s employment, the agent is not entitled to a commission on renewals on policies written by him when such renewals were collected after the termination of his employment.”

In the 117 Maine, at page 49, Bowles v. Sawyer, the Supreme Court of that state holds:

"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.”

In his work on the Law of Insurance, Joyce, at page 1564 of the second volume says:

- "The right of an agent of a life insurance agent to commissions on renewals of policies issued by his procurement ceases when his agency terminates; the rule for the allowance being limited, to apply ‘to business procured by the agent under this appointment.’ So renewal commissions are not recoverable after termination of the agency where they were to continue by the terms of the contract only so long as the agency existed. So if either partjr may terminate the contract at pleasure, no right exists to commissions not collected before the termination of the employment, although it be done by the company, where it also appears that commissions were to be on premiums collected. So where an action was ^brought by an insurance agent for breach of contract against defendant, by whom he was employed to solicit renewal policies on commissions, it was held, in the absence of any agreement of employment for a definite period of time, that the contract right of the plaintiff to the commissions did not make his agency an agency coupled with an interest, and that it might be determined by defendant at will.”

It is contended by counsel that this contract ought to be construed having regard to the conduct of the parties under the contract. We think the true rule with respect to this contention is as expressed in the case of Fass v. Atlantic Life Insurance Company, 89 Southeastern Reporter, 558.

"Only where a written contract is equivocal or ambiguous can the rights of the parties thereunder be determined by the conduct or construction by the parties to such contract. ’ ’

We do not regard the contract between Henley and the Insurance Company as in any sense equivocal or ambiguous.

'We may properly close the authorities on the point which we are ’discussing with the case of Stagg v. Insurance Company, 10 Wallace, (Supreme Court U. S.), page 589, in tvhieh the court say:

“Where there is an express contract for the compensation of an insurance agent, no proof of a general custom as to such compensation is admissible which is in conflict with the contract.”

We are aware that some of the decisions take a different view of the rights of an ag’ent of insurance who has been discharged, where his contract with the company has terminated. We have examined among others — 121 New York (Appellate Division) page 18; 84 Indiana, page 347; and 118 Tennessee, page 215.

These cases, so far as the agent is concerned, are actions for damages for wrongful discharge, which cannot be contended for in this case in view of the contract of the parties.

Not finding from the foregoing that the contract between Henley and the Insurance Compaq may be supplemented or modified by the custom or usage which was sought to be proven, and finding affirmatively that the company had a right under its contract to discharge Henley as it did, and further finding that he did not have a vested interest in the commissions on renewals collected by the company or their agent after his discharge, but that,, on the contrary, after he was dismissed from the superintendeney, the compensation (which includes commissions on renewals) to which he was entitled under the agreement was paid by the satisfaction of what was due him up to that date; and therefore, finding that a cause of action does not now subsist in favor of this plaintiff against the defendant company, the prayer for an accounting is denied and the petition of plaintiff is dismissed.  