Beck v. Modern American Life Ins. Co., 10840

Decision Date09 October 1979
Docket NumberNo. 10840,10840
Citation589 S.W.2d 98
PartiesKenneth L. BECK, Plaintiff-Respondent, v. MODERN AMERICAN LIFE INSURANCE CO., Defendant-Appellant.
CourtMissouri Court of Appeals

Dale C. Doerhoff, Cook, Vetter & Doerhoff, Jefferson City, David B. Rogers, Smith, Lewis & Rogers, Columbia, for plaintiff-respondent.

Gerald H. Lowther, C. Ronald Baird, Craig F. Lowther, Lowther, Johnson & Baird, Springfield, for defendant-appellant.

BILLINGS, Presiding Judge.

Suit by plaintiff Kenneth L. Beck against defendant Modern American Life Insurance Company for breach of an oral contract. Plaintiff alleged that defendant had breached its contract by refusing to pay him a one-half percent commission on all renewal premiums received by defendant on policies sold while the plaintiff was "Vice-President" of defendant. Plaintiff claimed that, pursuant to an April 6, 1966 oral contract, he should have received these payments for five years and 330 days subsequent to his termination of employment on December 31, 1969. The jury returned a verdict in the amount of $61,161.10 principal and $19,221.16 interest for the plaintiff. We affirm.

Defendant is an insurance company that was founded in November 1963 with its principal place of business in Springfield, Missouri. The organizational structure of the company, "in its early days", consisted of the Board of Directors, the "Top Three", Regional Vice-Presidents, District Managers and Agents.

The "Top Three" referred to W. E. Parker, president; Lloyd Parker, executive vice-president; and M. W. Crabtree, senior vice-president. These "Top Three" were responsible for the organization and the running of the day-to-day operations of defendant. They reported to the Board of Directors. Immediately below the "Top Three" were the four Regional Vice-Presidents. The Regional Vice-Presidents supervised certain geographical regions of Missouri that contained several "districts". (The State of Missouri had been divided into four regions by defendant, with defendant originally only doing business in the State of Missouri). Immediately below the Regional Vice-Presidents were the District Managers. They were in charge of the agents in the various "districts" within a "region". These "districts" usually consisted of just several counties.

On February 5, 1964, plaintiff was employed by the defendant as an agent. Plaintiff was employed pursuant to a written agreement, referred to in the defendant company as the "Blue Agent's Contract". This contract provided, inter alia, that "If after three (3) years or more of satisfactory service to the company this contract is terminated and the agent has produced a minimum of One Hundred Thousand Dollars ($100,000) of life insurance, exclusive of term insurance each contract year, then the renewal commissions set out above shall be payable to the agent for an Additional period equal to the number of years of service." (Emphasis added).

Plaintiff was promoted to District Manager in August 1964. He served as District Manager until he was promoted to the Regional Vice-President position on November 8, 1965. His employment contracts for both of these positions were oral. On April 6, 1966, plaintiff was again promoted to a newly created position of Vice-President, that was above the Regional Vice-President's position and below the "Top Three" in the organizational structure. Plaintiff, Charles Fieth, and Raymond Ridge were all promoted to this position together in a meeting held on April 6, 1966 in W. E. Parker's office in Springfield. (Prior to the creation of this new position there had been only two other "vice-presidents" and the position of an "area vice-president").

The employment contract was again oral for this position. At trial, the plaintiff introduced testimony to show that the "vesting" provision of his agent's contract had been "incorporated" into his prior oral contracts with the defendant and that this incorporation continued into the agreement of April 6, 1966.

Defendant's first assignment of error is that the trial court erred in refusing to direct a verdict for the defendant at the close of the whole case. In support of this assignment, the appellant urges that (1) the plaintiff "failed to establish by clear and unequivocal evidence the terms of his oral contract", and (2) the plaintiff failed to establish that the officers of the defendant had the requisite authority to bind the defendant to the terms of this oral contract of employment.

Whenever an assignment of error is based upon the trial court's refusal to direct a verdict, the appellate court will review the evidence presented at trial and will determine whether or not the plaintiff has introduced substantial evidence that tends to prove the facts essential to the plaintiff's recovery. If the plaintiff has introduced such substantial evidence, the trial court will not be found to have committed reversible error. Brawley v. Esterly, 267 S.W.2d 655 (Mo.1954); Coleman v. Ziegler, 226 S.W.2d 388 (Mo.App.1950). And, we review the evidence in the light most favorable to the plaintiff, giving the plaintiff the benefit of all favorable inferences, arising therefrom, and will disregard the defendant's evidence unless it aids the plaintiff's case. Holland v. Lester, 363 S.W.2d 75 (Mo.App.1962); Stevens v. Waldman, 375 S.W.2d 633 (Mo.App.1964); Mincielli v. Sloan's Moving and Storage Company, 303 S.W.2d 17 (Mo.1957).

Testimony from the plaintiff, Raymond Ridge, and Charles Fieth, established that their employment contract of April 6, 1966 incorporated by reference the terms of their earlier employment contracts with the defendant. The plaintiff introduced into evidence the contract that he had as an agent, and testified that Lloyd Parker, during this April 6, 1966 meeting, stated that the renewals for the vice-president position would "work just the same" and would be vested as per the agent's contract. The plaintiff testified that he had been told, before this April 6, 1966 meeting, that higher managerial positions within the company had renewals vested as per the agent's contract and that he taught this concept in training schools for new agents, with the knowledge and acquiescence of members of the "Top Three". The plaintiff and others testified that the plaintiff had satisfactorily performed his duties for the defendant and that he voluntarily resigned from the company. The plaintiff further testified that during a January 1970 meeting he was told by W. E. Parker that he would not be receiving renewals pursuant to the April 6, 1966 agreement.

The plaintiff introduced testimony from Raymond Ridge, Charles Fieth, the "Top Three", and a member of the Board of Directors to show that the "Top Three" had acted with apparent authority. The testimony from these could clearly create a reasonable inference that the Board of Directors knew that the "Top Three" were creating and employing the plaintiff to the position of vice-president and had allowed the "Top Three" to set the plaintiff's compensation. The plaintiff, Raymond Ridge, and Charles Fieth indicated that they knew that the Board of Directors knowingly permitted the "Top Three" to hire, create, and set the compensation of employees and that they reasonably believed that the "Top Three" had the authority to give "vested renewals".

The above is a sample of the testimony and evidence introduced by the plaintiff and the defendant, but is sufficient to show that the requisite "substantial evidence" was introduced.

Defendant next contends the trial court erred in permitting Charles Fieth and Raymond Ridge to testify about their employment contracts with the defendant and cites Pyrtle v. International Shoe Co., 291 S.W. 172 (Mo.App. 1927) for the proposition that "evidence of other contracts between a party to a lawsuit and a third person to the suit, regardless of the similarities of the contracts, are not admissible . . . ."

In Pyrtle, the plaintiff, a former employee of the defendant, sought to recover a "bonus" on his wages pursuant to a special oral contract of employment. The plaintiff called two other employees of the defendant to testify that they were also promised a similar "bonus". The court stated the defendant's objection that this testimony related to "a distinct and independent matter that transpired between the defendant and a stranger, with which the plaintiff was in no way connected in other words, that such matter related to a transactions inter alios, and that the testimony therefore was not relevant for any purposes in the case," and held that the introduction of this testimony constituted reversible error. 291 S.W. at 173.

The rule announced in Pyrtle is not applicable in the present case. Unlike Pyrtle, the testimony from Raymond Ridge and Charles Fieth did not relate to separate, independent, and distinct contracts of employment with the defendant. In the present case, the plaintiff, Raymond Ridge, and Charles Fieth were promoted to the position of Vice-President pursuant to the Same oral contract of employment. Their contracts of employment were necessarily identical and contained the same provisions that the plaintiff claimed the defendant had breached. As such, it would be permissible for the plaintiff to prove the terms of his contract with the defendant through the testimony of Raymond Ridge and Charles Fieth. Their testimony asserted that the terms of the April 6, 1966 contract incorporated the provisions of earlier employment contracts with the defendant. It was, therefore, permissible for the trial court to permit Raymond Ridge and Charles Fieth to testify to these earlier employment contracts for the purpose of proving the contract provision that the plaintiff had claimed that the defendant had breached.

Defendant's third assignment of error is that "the trial court erred in...

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