Barr v. Sun Life Assur. Co. of Canada

• Decision Date: 04 February 1941
• Citation: 146 Fla. 55,200 So. 240
• Parties: BARR v. SUN LIFE ASSUR. CO. OF CANADA.
• Court: Florida Supreme Court

200 So. 240

146 Fla. 55

BARR v. SUN LIFE ASSUR. CO. OF CANADA.

Florida Supreme Court

February 4, 1941

En Banc.

Suit by Leal Barr against the Sun Life Assurance Company of Canada for an accounting and an adjudication of the amount allegedly due plaintiff under terms of contracts of employment under which plaintiff represented defendant company as its agent and for commissions on renewal premiums alleged to have accrued after plaintiff's acceptance of employment with another insurance company. From an order sustaining defendant's motion to dismiss bill of complaint, the plaintiff appeals.

Affirmed. Appeal from Circuit Court, Orange County; Frank A. Smith, judge.

COUNSEL

G. P Garrett, of Orlando, for appellant.

Osborne Copp & Markham and H. P. Osborne, all of Jacksonville, for appellee.

OPINION

BUFORD Justice.

Leal Barr on the 6th day of April, 1933, entered into a contract with Sun Life Assurance Company of Canada to represent that company as its agent for the writing of insurance contracts.

Section 5 of the contract set up a schedule of commissions to be paid to the agent on premiums for the first policy year and on renewal premiums paid on the second policy year and on renewal premiums for the third to tenth policy years inclusive, and inter alia, provided: 'No commission in any case shall be paid on any premium beyond that of the tenth policy year.'

Section 7 of the contract provided: '7. The agent shall act exclusively for the Company so far as to tender to it first all risks obtained by him or subject to his control, and agrees to be governed strictly by all rules, regulations and instructions contained in the 'Instructions to Agents', a copy of which is on file at the Company's Branch Offices, or such as he may receive from time to time from the Company.'

The contract of agency terminated on May 25, 1936.

On May 25, 1936, the parties entered into a new contract. Section 6 of that contract set up a schedule of commissions to be paid to the agent and, inter alia, provided: '6. The Company agrees to pay, and the Agent agrees to accept, as full compensation for his services of every kind, commissions upon such premiums as shall be collected and paid by the Agent to the Company in cash during the continuance of this Agreement only, on policies issued on applications received from him during the continuance of this Agreement, which commissions shall be determined according to the following schedule of commissions:'

Paragraph (q) of Sec. 6 provides: 'The rate of commission on renewal premiums on Participating Jubilee Policies shall be the same as provided on Endowment Policies with premiums payable for twenty years. Renewal commission on Non-Participating Jubilee Policies shall be at the rate of five per cent (5%) of the second year's premium and two and one-half per cent (2 1/2%) on the premiums of the third to tenth policy years inclusive respectively.'

Paragraph (r) of Sec. 6 provides: 'The rate of commission on any renewal premium of a Ten Year Renewable policy shall be the same as that provided on the corresponding premium on a Whole Life policy. No commission, however, shall be allowed on any premium beyond that of the tenth policy year of the original policy.'

Section 7 of the Contract provides: '7. If this agreement be terminated for any cause other than a violation of its terms or death, after having been in force at least one full Branch business year, a commission not to exceed five per cent (5%) shall be allowed the Agent for a period equal to that during which this Agreement may have been in force, on the renewal premiums paid in cash to the Company subsequent to such termination, on policies pur in force by the Agent personally under this Agreement, provided (a) that during each such Branch business year of the continuance of this Agreement the Agent shall have put in force not less than $40,000 of new assurances accepted by the Company and on which the first years premiums thereon shall have been paid to the Company in cash (exclusive of assurances on the agent's own life and of Term Assurances, except as provided in Section 16, page 3, hereof,); (b) that the Agent be not indebted to the Company; (c) that the Agent does not become connected or do business directly or indirectly with any other life assurance company. No commission, however, shall be paid on any premiums beyond that of the tenth policy year.' (emphasis supplied)

Section 10 of the Contract provides: '10. Should the Agent become connected with, or do business directly or indirectly, for any other life assurance company, this Agreement, if then in force, shall at once terminate, and, whether this Agreement is in force or not, he shall forfeit and hereby specially waives any claim to commissions in virtue of this Agreement.'

The latter contract was terminated on May 9, 1939, at the instance of appellant.

On August 1, 1939, the Company wrote Barr as follows:

'Where there is an existing indebtedness at the time of termination of an Agent's Agreement, we do not send out the statements of account until after the indebtedness has been liquidated. Of course, all commissions that are developed in the meanwhile go toward paying off the indebtedness. In the meanwhile you might be interested to know that yours has been reduced to just under $600.00. At that rate you can see it will take quite a while to completely wipe itself out.

'You understand, of course, that in the event you make contract with another company it forfeits your renewals. It had been my recommendation that you seek a connection outside of the insurance business. Inquiries from two of the local managers would indicate that you are seeking a connection in the life insurance business. I certainly hope that your final decision will be to find something perhaps in the bond business or something like that. I think you would do much better at it and would unquestionably be happier with a regular income.'

In August, 1939, Barr accepted employment as a life insurance salesman with the Mutual Benefit Life Insurance Company of Newark and has continued in that position. Plaintiff was at that time receiving considerable sums of money as commissions on renewal premiums but when he made this connection the defendant invoking the provisions of paragraph (c) of Section 7 and Section 10, supra, stopped payment of renewal premium commissions. All of which is alleged in the amended bill of complaint and therein plaintiff alleges, inter alia:

'With regard to provision (c) of said paragraph 7 of said contract of May 25, 1936, relating to renewal commissions, which said provision (c) is that the Agent will receive his said commissions on renewal premiums provided '(c) that the Agent does not become connected with or do business for any other life assurance company' any time, anywhere, the plaintiff says that in August, 1939, he did become connected with the Mutual Benefit Life Insurance Company of Newark as a life insurance salesman and ever since has been, and still is, employed by said company as a life insurance salesman. However, plaintiff says that, by accepting such employment he has not forfeited his commissions on renewal premiums paid after the termination on May 9, 1939, of the aforesaid agency agreement of May 25, 1936, because the said provision (c) is wholly void and of no effect because it is a provision in restraint of trade and the same is not limited as to territory. For many years the plaintiff was employed by the defendant company as a life insurance agent. All plaintiff's contacts and experience is in the field and employment of life insurance salesmanship and all the good will he has been able to build up during his business life is invested in the insurance business. Plaintiff is not capable of following, or trained in, or fitted to, follow any other business with success. Plaintiff can follow said business of life insurance salesman with success. Since the termination of said Agency contract and/or since his employment by said Mutual Benefit Life Insurance Company, plaintiff has dealt fairly with defendant company and had not in any way mistreated the Sun...