Hercules Mutual Life Assurance Society of the United States v. Brinker

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 437 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 438 The judgment in this case was reversed, because in the opinion of a majority of the members of the court, the defendants were entitled to have allowed commissions on all renewal premiums received by the plaintiff or its assigns "upon policies procured to be issued" by Fleischl, less the expense of collection, not exceeding one per cent. This was secured to him by the terms of the agreement, and the question whether this right continued after his discharge as agent, was the turning point in the case. It seemed to us that it did, and that the contrary construction given to the contract by the Supreme Court, and insisted upon by the respondent, was in this respect incorrect. Fleischl was to procure and effect insurance; he was authorized to appoint subagents throughout the State of New York for the same purpose, and supervise their action, and was required to be responsible for them. His powers under this responsibility were therefore large, and it is easy to see that in the very beginning or outset of his agency, large expenditures must be incurred by him beyond those provided for by the company, and much labor bestowed to make the field productive. The result might not appear for a long time, and we should expect the stipulated reward to be proportionate to the expectation of the return, not instant, but future; and so we find in the agreement, that the appointment is accepted upon condition that the compensation to be allowed for business obtained by him, or by his agents through him was to be, on ordinary policies thirty per cent on the first year's premium, and seven and one-half per cent on renewals, and a like difference in the commission for other kinds of policies; in each case and for the first year a large commission, and less on renewals. We regard this as a positive agreement, continuing so long as the policy is kept alive by renewals, and effective as to each policy procured *Page 445 by him, or by his subagents. That these commissions are to accrue only as the premiums are paid to the society in cash, secures the company from loss, and makes it for the interest of Fleischl that the policies shall be kept up, and so secures the company from any interference by him in case he ceases to be their agent; for to the extent of his commissions his interest would still be with them. But again, it is not contemplated that Fleischl shall collect the premiums in all cases, and therefore provision is made for such a case; "when," says the agreement, "premiums upon the policies of said agent are collected by other agents, the expense of collection, not exceeding one per cent, shall be deducted from the commissions to be allowed on such premiums, as above stated." This is done without interference or action by him. The contention of the plaintiff's counsel is therefore against the plain language of the agreement when he argues that commissions were to be paid Fleischl, only on premiums actually collected and paid to the society by him. The commissions, by whomsoever the premiums are collected, are to be paid by the society to Fleischl as due for business obtained by him or his agents. He acquired a right to them the moment a policy was issued; payment, however, depends upon their collection by the company through him or some other person, — as to that he takes the risk, — but so long as the premiums upon the policies are paid to the company, he is entitled to his commissions. The termination of the agreement does not affect this right. It was to be his compensation for securing the policy taker, and the measure of that compensation is not limited to commission on the first year's premiums, but extends to all thereafter paid. The agreement may be terminated by notice, and there are many provisions in it to which that act would apply, but it is nowhere provided that the agreement may be rescinded, or that the rights acquired under it shall be forfeited. For aught that appeared upon the trial the policies were still alive, and renewal premiums paid. Whether this was the case or not, was known to the plaintiff, and *Page 446 could not be known to the defendant, and the burden asw thus upon the plaintiff to show what, in this respect, the fact was. In the absence of all evidence, the presumption is in favor of the existence rather than the lapse or cancellation of a policy. The various questions presented upon this motion so far as they affect the one above referred to, were considered by the court in the decision of the appeal, and no sufficient reason is stated for a re-argument. The motion should therefore be denied, but without costs. All concur, except EARL, J., dissenting, and FOLGER and ANDREWS, JJ., absent Motion denied.