North Carolina State Life Insurance v. Williams

Smith, C. J., after stating the above. The only question *72 presented is in reference to the construction of the contract of agency, and the rights of defendant thereunder. The entire structure of the. agreement for the creation of the agency, while silent as to its duration, evidently contemplates a continued connection between the service to be rendered and the compensation provided therefor, and is terminable at the election of either party. It may be put an end to by the principal. Story on Agency, § 463 ; by the renunciation of the agent, § 478 ; by operation of law where an incapacity in either party to maintain the relation is brought about, § 481. The exception to the rule is where the agency is associated with an interest, and then it is not revoked, nor revocable by the principal to the detriment of the agent. What such an agency is, is thus explained by Chief Justice Marshall in the opinion in Hunt v. Rousmanier, 8 Wheat., 174, cited in brief of plaintiff’s counsel: “ We hold it to be clear,” say the court, “ 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 en-grafted on an estate in the thing. The words themselves 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 ive 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.” Tested by the rule thus laid down, it is manifest that when the authority to insure ceases, the capacity of the agent ends also, and the relation of the parties terminates. Accepting this, the defendant claims compensation in damages for the withdrawal of the power to continue to act in the renewals, and measures his loss by the sum he would have received as commissions had he been permitted to act in two renewals made since the transfer. *73 This contention involves the assumption that the contract confers an absolute and permanent right to proceed with renewals when the original insurance was effected through the efforts -and instrumentality of the defendant, when he can no longer act as agent in making the renewals. Such is not the fair interpretation of the terms of the contract, which allows the specified commissions, as compensation for services to the company in the renewals, and necessarily ceases when the services cease. The right to compensation is associated with a continuance of services, and the compensation is the agreed measure of their value. When the policy first issues, the per centum specified becomes due, and on each renewal the reduced per centum is allowed. Very manifestly the scope of the agreement conferring the authority is to provide the measure of remuneration for what the agent may do while he remains such, and no further. He was not to be paid for renewals afterwards made, unless participated .in by him while in possession of authority to renew. Although renewals are the consequence of the original contract of insurance, and in this particular beneficial to the company, yet the full compensation given and accepted for this service is the twenty-five per centum on the sum received, provided in the contract which creates'the agency and regulates its terms. This is in our opinion a fair and reasonable interpretation of the instrument, and the result is adverse to the counterclaim. It must be declared there is no error in the ruling and the judgment must be affirmed. No error. Affirmed.