New York Life Insurance v. Rilling ( 1905 )

Mr. Justice Adams

delivered the opinion of the court.

Appellant’s counsel contend that appellee’s resignation, meaning the document executed by appellee October 11, 1902, is conclusive against any recovery by appellee. Clause 18 of the contract between appellant and appellee, of date July 16, 1892, provides that “either party hereto may terminate this agreement upon thirty days’ notice.” It is not questioned that appellee voluntarily executed the so-called resignation, and that appellant accepted it. The language of the resignation is, “Referring to the agreement that has been in existence between your company and myself, I wish to avail myself of the clause which gives me the privilege of terminating such agreement. Please have this take effect immediately.” Plainly, the execution of this paper by appellee at once terminated his contract of agency with the appellant, and he was no longer appellant’s agent for any purpose. He had no authority after October 11, 1902, to solicit or accept applications to appellant for insurance. This, however, is not conclusive of the question, whether if the company subsequently insured Mr. Braun, and such insurance was wholly or partly owing to appellee’s services performed prior to erminatmn of the contract, he is or not entitled, to compensation for such services. Appellee was employed by appellant solely because of his acquaintance with Mr. Braun, and his supposed influence with him, and because of the fact that he had been acting for Mr. Braun, in endeavoring to procure insurance on his life for the sum of $100,000. He procured Mr. Braun to apply to appellant for insurance to the amount of $100,000, and Braun, as is evidenced by his payment of the sum of $10,870, the total of the first or cash premiums on the foiir policies subsequently issued to him, was able and willing to accept insurance to the amount of $100,000, and pay the premiums on the same. We think, therefore, the questions whether the services performed by appellee, prior to the termination of his contract of agency, contributed in any degree to the subsequent insurance of Mr. Braun’s life by appellant, and,' if so, to what amount he is entitled as compensation for such services, were questions for the jury on the evidence. There is not a particle of evidence that appellee procured or had anything to do with the application of Mr. Braun for the four policies issued July 21, 1903, aggregating $200,000 of insurance, and such evidence was not to be expected, because, as heretofore stated, appellee, after October 11, 1902, was no longer an agent of appellant to solicit insurance. Appellee, in his testimony, did not claim that after October 11, 1902, he made any effort to procure insurance from appellant on Mr. Braun’s life. Mr. Braun testified that he signed the applications for the four policies by the request of Mr. Edwin iSTichols, and that he never spoke to appellee about his, Braun’s, talks with ISTichols; that he had quite a number of conversations with ISTichols on the subject, and that ISTichols made an appointment with him in the office of the New York Life, in Chicago, and he, Braun, went over there and saw appellant’s physician; that while he was making visits to appellant’s office from time to time during three months, and up to the time he received the policies, he did not mention to appellee that he was having negotiations with appellant, and that, as far as he knew, appellee knew nothing of such negotiations. The application for $100,000 insurance, procured by appellee, was made July 17, 1902, and the applications for the four policies, aggregating $200,000 insurance, are dated July 21, 1903. It is very evident that appellee did not influence Mr. Braun to apply for insurance in double the amount which he first applied for. The question therefore is, what his compensation should be, if anything. The declaration contains six special counts and the common counts, and in each special count it is averred that appellee procured Braun to apply to* appellant fd'r $100,000 insurance on his life, and that appellant insured his life in the sum of $100,000, and commissions on the cash and deferred premiums are claimed in the declaration; but on the trial appellee withdrew his claim for commissions on the deferred premiums, and stated, as his only claim, 50 per cent on the first premium, and the jury estimated appellee’s compensation at 50 per cent of $10,870, or $5,435 and interest, and on remittitur of $22.65 interest judgment was rendered for $5,684.10. Appellee’s counsel, in their argument, claim 50 per cent of $10,870, the total first premiums on the four policies. This claim can only be made on the hypothesis that Braun’s application for $200,000 insurance was induced solely by appellee. It certainly was not induced by appellee prior to the termination of his contract of agency, and we think it equally clear from the evidence that it was not induced by him after such termination, when he was no longer the agent of appellant, and had no authority to act in its behalf. In Leviness v. Kaplan (Md. Ct. of Appeals), 59 Atlantic Bep. 127, Leviness was the general agent of the Bankers’ Life Insurance Company, and employed Kaplan as a solicitor of insurance, and in Kovember, 1900, Kaplan procured a Mr. Middendorf to apply to the Bankers’ Ins. Co. for insurance to the amount of $10,000. The application was postponed for six months by the medical director of the company, during which time nothing could be done either by the insurance company or Kaplan. In Kovember, 1901, Mr. Middendorf met Charles F. Leviness, Jr., who was the son of the appellant and also an agent of the insurance company, and said to him that he had had some dealings with the insurance company, but the company refused to accept him at the time, and that he would be glad to go ahead with the matter if it were then practicable and possible. Young Leyiness then questioned him about his health, and the result was that Mr. Middendorf made a new application for a policy for $20,000, which the company accepted. The suit was against the elder Leviness for commissions on the $20,000 insurance, and he requested the trial court, sitting as a jury, to accept the following proposition, which the court refused: “That if the court does find for the plaintiff, that its verdict cannot be for the amount in excess of the commissions claimed on $10,000, as to that item of the plaintiff’s suit, and not upon the second $10,000, if the court should believe that the plaintiff procured an application for $10,000, and that the defendant, through another agent, procured the second $10,000.” The Court of Appeals, after discussing some questions, among which was the question whether the evidence tended to prove abandonment by Kaplan, say: “Even if the two questions above referred to be decided in favor of the appellee, he should not be allowed to recover commissions on more than the $10,000 for which the original application was filed. The evidence shows that the application for $20,000 was made at the suggestion of young Leviness. The testimony of the appellee is to the effect that he expressly limited the one he got to $10,-000. He said: ‘It was policy to do it, although the fact seems to be that there was then that limit by the company.’ But if there be no limit, then, according to the appellee’s contention, if the policy had been issued for $10,000, and young Leviness or some other agent had afterwards induced Mr. Middendorf to take another policy, the appellee was then entitled to commissions on the ground that his work was ‘the procuring cause leading to’ the second application. We have been referred to very few authorities on the subject, but in 16 Am. & Eng. Ency. of Law, 911, it is said: ‘Where an agent of an insurance company, employed on a commission basis, procures an application for insurance, and subsequently another agent of the company induces the applicant to increase the amount of the application, the former agent is not entitled to his commission on the additional insurance thus secured.’ Citing Brackett v. Met. Ins. Co., 18 Misc. Rep. (N. Y.), 239, 41 N. Y. Supp. 375. The principle thus stated seems to us to he just and eminently proper, and in this case, where the first application entirely failed, and a year .after the first was filed a new application for double the amount was made, and accepted through another agent, there is still more reason for the application of the principle. If the appellee be entitled to recover at all, his recovery should therefore be limited to commissions on the amount of the original application.”

See, also, Brackett v. Met. Ins. Co., 41 N. Y. Supp. 375, cited by the court in the last case, which is directly in point, with the exception that the plaintiff in- the case was still an agent of the company when the second application was made, while appellee was not.

Appellee’s counsel base his claim for compensation on clause 20 of the contract of agency, which provides: “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 cash premiums for the first, year of insurance, and, subject to conditions given in paragraph C of this section, upon the second premiums, which shall, during his continuance as said agent of said party of the first part, be obtained, collected, paid to and received by said party of the first part, on policies of insurance effected with said party of the first part (written with 15, 20, 25 or 30 year accumulative periods) by or through said party of the second part,” etc. How can it he said that the policies for $200,000 were exclusively effected with appellant by or through appellee, in the face of the fact that he knew nothing of the negotiations between Braun and appellant for the $200,000 policies left after the policies were issued? In passing, we may say that we do not concur in the construction of appellant’s counsel, that the words of the clause in question—“which shall, during his continuance as said agent, be obtained,” etc.—include first year or cash premiums. ' Our construction is, that these words apply solely to the deferred premiums. By clause 15 of the written contract it is provided: “That in case any special agents, or other parties acting for said party of the first part, shall secure any business conjointly with said party of the second part, the commissions herein provided shall be divided equally between the parties to this agreement, unless specifically agreed to the contrary in writing.” Appellee’s counsel contend that this has no application in the present case, for the reason that appellee and ISTichols did not act “conjointly.” In the sense that they did not act together at the same time or times, this is true. But the $200,000 policies may have been the result of their combined action, namely, the action of appellee, before he terminated his agency agreement, and the action of Hichols after that time, in which case we think the clause applicable.

But appellee’s counsel further contend that the application for a $100,000 insurance was never rejected by appellant, and that the insurance of $200,000 issued on that application. It appears from the testimony of Pearman, Greenwood and Billing himself, that instead of appellant accepting the $100,000 application, it made a counter proposition, which Billing testified was to issue to Mr. Braun a $10,000 ten-year endowment policy, Mr. Braun’s application having been for a $100,000 15-year accumulation policy, and that he refused to attempt to influence Mr. Braun to accept the offered policy.

The four policies issued were not only for double the amount of insurance, but were entirely different in other respects. But counsel for appellee further contend that the four policies were not issued on the applications for them in evidence, and argues that, therefore, they must have been issued on the original application. This conclusion is a nonsequitur, and is apparently recognized so to be by appellee’s counsel, who say, in another part of their argument: “The truth is that the .application is not of controlling importance; the contract of employment says nothing about applications,” etc. The basis of counsel’s argument consists of the following evidence: The four applications and the four policies are dated July 21, 1903, and at the head of each application are the following words:

“Application to the New York Life.

¡Received July 31, 1903.

Home Office.”

From this counsel argue that the applications appearing to have been received by appellant at the home office, in ¡New York, July 31, 1903, the policies, which are dated July 21, 1903, could not have been issued on the applications. Hr. Braun, in his testimony, is not clear as to the date when he signed the applications. He testified that he signed the applications ; that ¡Nichols asked him to come to his office, which he did, and then ¡Nichols took him to another place, across the street from appellant’s Chicago office, where there were several physicians to examine, and that this was before they wanted him to go to ¡New York. On being asked whether he signed the four applications on the day of their dates, he answered: “I don’t remember,” but subsequently said: “Well, the assumption is that I signed at that date,” and on being asked whether that was his best recollection, he answered, “Yes.” On being further examined, he testified that he signed no paper after he got the policies. We think it evident from the examination of the witness that he could not recollect the date when he signed the applications, and that he was only certain in respect to the signing, and that he signed them before he received the policies. The fact that the applications and policies are of the same date may be merely for convenience and owing to the following in each application: “I agree on behalf of myself * * * that the insurance under any policy issued on this application shall take effect on the date of this application, unless otherwise agreed in writing.” We do not think it material whether the applications were received by the appellant at its home office in ¡New York or its branch office in Chicago. That they were signed by appellee before the four policies were delivered, is proved by Hr. Braun’s testimony, and that the policies were issued on the four applications is evidenced by the fact that the applications and the policies substantially correspond. There was no evidence of the first or cash premium on a policy for $100,000, such as Mr. Braun first applied for. In a note from. Billing accompanying Braun’s first application, this occurs: “I have made the following settlement of first premium of $7,110,” which is the only reference to premium on the first application. But counsel for appellee elected, on the trial, to estimate appellee’s compensation as 50 per cent of the total of first or cash premiums on the policies, namely, $10,870. On this theory, our conelusion is that his compensation should be 50 per cent of half that amount, or $2,717.50. There is no evidence of any demand by appellee for compensation, except the commencement of this suit, and there has been no vexatious or unusual delay. Therefore, appellee is not entitled to recover any interest.

Counsel for appellant objects that the testimony of the witness Oarlile as to the conversation between him and Pear-man, prior to the execution of the written contract, was incompetent on the gTOund that it tended to vary the written contract between the parties, and cites authorities in support of the familiar rule that all prior negotiations leading up to the execution of the written contract are merged in the contract. The rule applies only to negotiations or agreements between the parties prior to or contemporaneous with the written contract, and has no application to conversations between one of the parties and a third person. That a conversation between Pearman and Mr. Carlile could not possibly vary the terms of the subsequent written contract between appellant and appellee, is, we think, self-evident.

Counsel also objects that the admission in evidence of the four policies of date July 21, 1903, was error. We think the policies were properly admitted in evidence.

Counsel for appellant asked the witness Pearman the following questions:

“Q. I will ask you to look at the four policies which have been introduced in evidence here, dated July 21, 1903, and state whether or not you know of your own knowledge whether those policies were issued on the application dated July 17, 1902?

Plaintiff objects; sustained; defendants except.

Q. Up -to the time, October 11, 1902, to date of Mr. Killing’s resignation, did you ever receive a policy for $100,000, fifteen-pay life, on the life of Mr. George P. Braun for delivery ? •

Plaintiff objects; sustained; defendants except.

Q. What, if anything, did you receive from the company on that application ?”

The first question was properly ruled against. The policies and applications were in evidence, and, by inspection and comparison of these, it could be determined whether the policies were issued on the applications. The ruling against the second and third questions could not, as we think, have prejudiced appellant. The testimony of Pearman and Billing was to the effect that the only answer to the application of July 17, 1902, was a counter proposal by appellant to issue a policy different from that applied for, and the only contention by appellee’s counsel, in respect to the issuing of a policy on that application, is that the four policies were issued on it. Appellant’s counsel asked the witness Braun questions as to whether appellee ever procured for him a policy from appellant, on his application signed in May, 1902; whether Billing ever presented him to the Equitable Life Insurance Company for a policy; whether he was not presented to said company for a $100,000 policy in April, 1903, etc., and offered to prove that witness, at Billing’s request, submitted himself to said company for an examination for life insurance after October 11, 1902. The court ruled against the questions and offer, correctly, as we think. The questions were asked in support of the theory of counsel, that Billing’s resignation is to be construed as an abandonment of compensation for services rendered before his resignation, even though it should appear that such services contributed to the subsequent insurance effected by the four policies, a construction in which we cannot concur. We concur in appellant’s contention, that the damages are excessive.

Counsel for appellant complains of certain remarks of appellee’s counsel on the trial. We will consider only such remarks as exceptions were preserved to and rulings made. The witness Pearman testified that he did not remember having seen Mr. Braun in appellant’s office subsequent to January, 1903. Mr. Levinson, appellee’s attorney, said: “Yes; you don’t remember now.” Witness: “Is there no way that I can be protected from this man stating things to me in court, that he would not state to me out of court?” Mr. Levison: “When a man comes to your Honor, and says that he did not know and does not know anything about it, when he was there when this man was examined, and now he dodges about, and says, ‘I don’t remember.’ He knows he was there.” On appellant’s counsel excepting, the court said: “Yes, I think it is very objectionable to state, as a fact, that which the witness has testified was not a fact.” The witness was subsequently recalled, and testified that he did then remember, when the following occurred: Mr. Levi-son: “How he remembers again. He has been talking with somebody.” Witness: “Mr. Levison, I said on oath that I hadn’t been talking.” Mr. Levison: “I don’t think that an oath amounts to anything with you.” On exception the court said: “I cannot see any reason for making any such statement, in regard to any witness in this case. There is nothing in this case to give the court any reason for making such a statement to these witnesses.” We agree with appellant’s counsel that the last-mentioned remark to the witness was very improper, and that the court might well have severely censured its author, but, in view of the court’s rulings, we are not inclined to hold the remarks of counsel cause for reversal. The court instructed the jury to disregard all statements and remarks of counsel not based on the evidence.

Counsel for appellant objects that appellee had no license to carry on business as a broker. It is sufficient to say of this objection, that appellee’s business was not that of a broker, that he acted merely as an insurance solicitor.

Lastly, appellant’s counsel objects to certain instructions given and to the refusal of others.

Counsel say the fundamental error in the instructions given is that they permitted the jury to consider the oral evidence offered to vary the terms of appellee’s contract of agency. There was no evidence which so tended. Instructions B and S, given by the court of its own motion, are favorable to the appellant in that they authorize the jury to find for the defendant, if they found from the evidence that appellee abandoned his contract. We have already shown that appellee’s so-called resignation was merely a termination of his agency, and not an abandonment of any claim he might have on account of past services. Instruction B, however, is erroneous in that it authorized the jury, in the event they should find for appellee, to estimate the commissions due him on the total of the first premiums on the four policies. We think there was no error in the refusal of appellant’s instruction 4. It applied only to one witness, Pear-man.

Appellant’s refused instruction 9 is substantially included in its given instruction 13. "When the court had concluded the reading of instructions to the jury, a juror asked this question: “In bringing in our verdict, must we bring in a verdict for a definite sum, if we bring in a verdict for the plaintiff ?” Whereupon it was agreed by the parties that the court might give a further instruction to the jury orally, and the court orally instructed the jury .thus: “If your verdict should be for the plaintiff, which neither yourselves nor the court, at this time, undertake to express an opinion about, you would find a verdict for a definite amount, being a percentage on the premium which the evidence shows to have, been paid.” The only evidence of premiums paid was as to the premiums on the four policies aggregating $10,870, and the only claim as to percentage made by appellee, as stated by his counsel on the trial, was 50 per cent of the first or cash premium. The instruction, therefore, could not have been otherwise understood by the jury, than that if they found for the plaintiff they were to estimate his commissions at 50 per cent of $10,870. The instruction is misleading and erroneous. The verdict of the jury, although excessive, is, in so far as it finds appellee entitled to commissions, warranted hy the evidence, and is not manifestly contrary to the weight of the evidence. We do not find in the record any evidence ' of partiality, prejudice or passion on the part of the jury. The estimating appellee’s commissions ,at 50 per cent of $10,870 was a mistake, probably induced by the oral instruction of the court, which we think curable by remittitur. Upon appellee filing a remittitur, within ten days from this date, of the sum of $2,966.60, the judgment will be affirmed for the sum of $2,717.50; otherwise the judgment will be reversed and the cause remanded for further proceedings in conformity with this opinion.

Affirmed on remittitur; otherwise to he reversed and remanded.

Remittitur filed in accordance with opinion and judgment affirmed for $2,717.50, June 19, 1905.