
    Llewellyn M. Aldrich, Respondent, v. The New York Life Insurance Company, Appellant.
    Fourth Department,
    July 9, 1907.
    Principal and agent — right of principal to end aggncy — when insurance agent not entitled to commissions on renewal premiums..
    When a contract of agency Sets no definite term, the principal may. discharge the agent at his election; his reasons for the discharge are immaterial.
    An insurance agent who has procured applications for life insurance upon which policies have heeri issued is entitled to commissions upon, the renewal premiums after the termination of his agency, in the absence of an agreement to the contrary.
    Biit when a contract with an insurance agent provides that he is entitled to commissions only on the Original or renewed cash premiums which shall be obtained, collected and paid “during his continuance as said agent” up to the sixth year ■ of assurance, “should his agency continue so long,” he is not entitled to • commissions, on renewal premiums after his discharge.'
    Provisions in said contract specifying penalties for the agent’s failure to transmit funds collected, or for withholding money, or for selling insurance at reduced rates, etc., are not'.inconsistent with a prior clause limiting his right to commissions to the term of his agency.
    Appeal by the defendant, The New York Life Insurance Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of'the clerk of the county of Jefferson on the 14th day of December, 1906, upon the report of a referee:
    
      G. S. McCartin and John N. Carlisle, for the appellant.
    
      J. F. La Rue and Henry Purcell, for the respondent.
   Spring, J.:

In February, 1898, the parties entered into a written agreement by which tlie defendant employed the plaintiff as its agent to can-' vass for applications for life insurance in its behalf. The plaintiff continued in this employment until July 16, 1903, when the agreement was terminated by the defendant. . There was no definite term to the agency — a hiere hiring at will, and the defendant had the right to end it, therefore, at its election. (Martin v. New York Life Ins. Co., 148 N. Y. 117; Outerbridge v. Campbell, 87 App. Div. 597.)

The contract provided that the plaintiff should, devote his time and energies exclusively to the business of the defendant. Some friction arose over the contention that the plaintiff was not fulfilling this covenant of the agreement, but the court has found that the defendant waived strict compliance with the provision.

The reason assigned by the defendant for the termination of the agreement was that the plaintiff was “not producing business.” The referee has' fotind as a fact that this reason was not correct. It is unimportant inasmuch as the defendant possessed the right to ter-, mínate the agency whenever it saw fit; The rate of compensation to be paid the plaintiff was prescribed in the agreement, which was a fixed percentage on the. business produced by him. After liis' discharge the plaintiff commenced this action to recover commissions on the renewals of the policies issued upon applications procured by him; and also for damages by reason of the cancellation of the agreement. The court held he was not entitled to recover damages sustained by him because of the termination of the agreement, and no appeal has been taken by the plaintiff from that decision. .

The referee allowed the plaintiff for commissions on the renewal policies to the date of the commencement of the action, the amount of which was not in controversy.' The right to these commissions is disputed by the. appellant. .

The plaintiff concededly was paid up to the time of the termination of the agreement, so that the only question involved is as to commissions accruing after the agency had ended. The rule seems to be settled that where there is no agreement fixing the rights of the parties that the agent, who has procured applications for life insurance upon which policies have been issued, is entitled to commissions upon the. renewal premiums, even though his agency with the company lias ceased. (Hercules Mut. Life Assurance Society v. Brinker, 77 N. Y. 435; Hale v. Brooklyn Life Ins. Co., 120 id. 294.)

The parties', however, had the right to fix this matter by agreement, and we think it is clear that this ivas accomplished in this case. ■

The contract by which the agency Avas created is a long one. The 21st provision reads as follows : “It is agreed, that said party of the second part shall be- allowed under this 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 'canti/núance as éaii'd- 'agent' of' said party of the first pa/rt,: be obtained, collected, - paid to and received by said'party of the first -part, up fo.and'inchidingthe-sixth year of assurance {should his agency. Continue so long) 'on policies of insurance effected'with said party of the first part, by dr through said party.of the'second part,-which commission shall be at and after.the-following terms:” Following this is a.table'adjusting the rates of compensation.' " •/ ■ ■■ ’

It is admitted by the counsel .for the respondent that" "if this provision is to obtain the plaintiff is not entitled to an y:commission-on the renewal premiums accruing after:the termination of-his agency;.. It is his'contention, however; that there are other provisions in-the contract modifying this paragraph and that the whole contract' must be construed together ; 'and, as a whole, it indicates no. intention' on the part of the parties to it to limit the commissions t'o the life of the agency. . ■ a.

The "sections of the policy to which he'refers are B, l'6'"and. 20. Section .5 is designed to guard against the failure to transmit funds collected by the plaintiff in his capacity as agent, or the- withhold-. ing of its money, policies or receipts in -his’ custody after demand. made, and" declares that “such, dereliction shall, work a.forfeiture to-said party of the first part, unconditionally, of all-claims whatsoever, accrued or .to' accrue under this agreement to said party .of the'second part.” 'Section 16 provides that if-the plaintiff shall sell policies of insurance . “ at any .reduction - from, the-"regular table rates” the. sale shall immediately terminate the'agreement “ and a forfeiture of all rights and interest hereunder to said party of-' the-first part.” . Section ,20 is intended to insure the,confidential character of tile 'agreement,'.and stipulates that a violation of-the-"clause is “under- penalty of forfeiture of the same and of .all benefits thereunder.” .....

These,provisions relate to distinct-offenses or infract'ions'of ■ tile-agreement, or the agency • created by it; and'the -pénalty in each instance is prescribed. .The purpose-is'to forfeit all interest of .the plaintiff either accrued- orto-accrue-if .'he disregards' stay'd! 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.

There are two or three other sections, notably 22 and 23, relating, to commissions, but they pertain, to special subjects. Section 23 is. explicitly made “subject to all the terms and conditions Of” section 21, and each of them recognizes section 21 as the general one governing compensation. In 1903 the agreement was modified in "relation to commissions, but it explicitly provided that it was made V subject to all the terms'and conditions of said agreement.”

This subject has recently been up for review in Heyn v. N. Y. Life Ins. Co. (118 App. Div. 194; 103 N. Y. Supp. 20). In that, case a like provision- in a similar contract Of this defendant was construed by that court. It was there contended that other provisions in the contract limited the effect of the paragraph referred to. The court unanimously held otherwise, and that the parties by their Own. agreement had made the commissions on renewals to end when the agency terminated. -

In Wightman v. N. Y. Life Ins. Co. (119 App. Div. 496; 104 N. Y. Supp. 214) the Appellate Division of the second department in construing a like provision followed the Lleyn case referred to. These cases áre decisive of 'the present one and require, a reversal Of the judgment. (See, also, Butler v. N. Y. Life Ins. Co., 87 Pac. Rep. 1119.)

All concurred.

Judgment reversed and new trial ordered,- with costs to the appellant to abide the event. '  