American Insurance Co. v. Bean

• Decision Date: 13 December 1929
• Citation: American Insurance Co. v. Bean, 232 Ky. 111, 22 S.W.2d 426 (Ky. 1929)
• Parties: American Insurance Company v. Bean et al.
• Court: Supreme Court of Kentucky

232 Ky. 111

American Insurance Company v. Bean et al.

Court of Appeals of Kentucky.

Decided December 13, 1929.

1. Insurance. — Provision in insurance agency contract that cancellation of contract shall not terminate or change agent's liability to company for return commissions upon unpaid notes or policies, canceled prior to cancellation of contract, held to require agent on cancellation of contract to account to company for all unearned commissions upon unpaid notes or policies canceled in view of intention ascertained from contract as whole to reserve right to terminate contract at any time and that agent should account for unearned commissions.

2. Contracts. — Generally, unless intention appears otherwise, relative word in contract will be construed as referring to its nearest antecedent.

Appeal from Marshall Circuit Court.

COLEMAN & LANCASTER for appellant.

E.L. COOPER for appellees.

OPINION OF THE COURT BY JUDGE REES.

Reversing.

On June 20, 1923, the appellant, American Insurance Company, and the appellee J.M. Bean, entered into a written contract wherein it was agreed that Bean should become the local agent of the company for the purpose of soliciting insurance on farm and city property in Marshall and adjoining counties. At the same time Bean executed and delivered to the company a bond for the faithful performance of his duties under the contract. Bean acted as agent of the company under the contract until late in the year 1926, or early in 1927. The company determined to withdraw from the territory covered by Bean's agency and terminated the contract of agency and canceled all outstanding policies.

The contract signed by the company and Bean contained this clause: "This contract shall be terminated by the agent upon written notice to the Company to that effect, or at the pleasure of the said Company by its special agent, or officers, or by notice in writing addressed to the said agent at the postoffice above stated, (nothing herein contained being construed to the contrary) but the cancellation of this contract shall not terminate or change the liability of said agent to the American Insurance Company for return commissions upon unpaid notes or policies canceled or for any work, business or transaction done prior to the cancellation of said contract."

Another writing which was signed by the parties, styled "Memorandum of commission agreement," and which was attached to the agent's contract, contained the following clause: "Where policy of insurance issued upon an application taken by such agent is canceled, the commissions on the amount of return premium shall be charged back to said agent, and refunded to the company unless the amount of such commission shall have been deducted from the premium refunded to the assured."

The bond executed by the agent provided that it should be void if the principal, among other things, should "in all respects, faithfully fulfill the agreements with the said company, as well as observe and carry out the instructions which may be given to him, or them, either through its own officer or through the managers of Southern Farm Department, special or State Agents, and shall duly and properly account for and pay over to the said company all premiums, notes, and proceeds of such notes, coming into his or their hands on or for policies of insurance, and shall pay back to the said company, the commission and fees advanced to him or...