Cottle v. Oregon Mutual Life Ins. Co.

• Decision Date: 13 October 1939
• Docket Number: 6623
• Citation: 94 P.2d 1079,60 Idaho 628
• Parties: REUBEN F. COTTLE, Appellant, v. OREGON MUTUAL LIFE INSURANCE COMPANY, a Corporation, and HENRY C. SCHUPPEL, an Individual, Respondents
• Court: Idaho Supreme Court

94 P.2d 1079

60 Idaho 628

REUBEN F. COTTLE, Appellant, v. OREGON MUTUAL LIFE INSURANCE COMPANY, a Corporation, and HENRY C. SCHUPPEL, an Individual, Respondents

No. 6623

Supreme Court of Idaho

October 13, 1939

CONTRACTS-INTERPRETATION.

1. In construing an ambiguous contract, the interpretation placed on it by parties thereto should be given great weight in ascertaining their understanding of its terms. (I. C. A sec. 5-216.)

2. Where parties to written contracts whereby a life insurance comapny agreed to pay an agent a renewal commission on annual premiums had interpreted the contracts as calling for a commission of 5 per cent on policies written prior to September 16, 1929, which was the date upon which the second contract was executed, and 4 per cent on policies written thereafter, the agent could not recover commissions claimed from defendant when agent had been paid commissions earned in accordance with such interpretation. (I. C. A., sec. 5-216.)

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Charles E. Winstead, Judge.

Action on contract to recover renewal commissions claimed to be due insurance agent. Judgment for defendants. Affirmed.

Judgment affirmed with costs in favor of respondents.

John A Carver and Frank Griffin, for Appellant.

A contract should be construed most strongly against the party preparing it or employing words concerning which doubt arises. (Ries v. Pacific Fruit & Produce Co., 50 Idaho 140, 145, 294 P. 336; Hauter v. Coeur d'Alene etc Min. Co., 39 Idaho 621, 635, 228 P. 259.)

A party proposing the terms of a contract cannot be heard to object to them, and when a party has executed a written contract he is estopped to deny its terms. (10 R. C. L. 799, sec. 111, and cases cited.)

Richards & Haga, for Respondents.

The practical construction placed upon a written contract by the parties thereto will control, although without such practical construction another construction may have seemed more natural. (Page on Contracts, vol. 5, sec. 2034, and cases cited.)

AILSHIE, C. J. Givens, Morgan and Holden, JJ., and Sutphen, D. J. (who sat in place of Budge, J.), concur.

OPINION

AILSHIE, C. J.

--Respondent Oregon Mutual Life Insurance Company is successor to the Oregon Life Insurance Company and was incorporated under the laws of Oregon. Respondent Schuppel had been the general agent of the company.

January 7, 1928, appellant entered into an agreement with the Oregon Life Insurance Co., whereby he was to canvass for applications for life insurance; the contract provided for payment of 5 per cent renewal commission on cash annual premiums on $ 50,000 or more of approved first-year business "for nine policy years after the first," subject to certain limitations and conditions; additional 5 per cent commission to be paid, should the "total annual paid-for production" amount to $ 100,000 and less than $ 150,000; and still another 5 per cent commission for annual production of $ 150,000 or more; the renewal commissions to "continue to be paid to second party, his executors or administrators, for the term of whole years" the contract was in force. The agreement is signed by "Henry C. Schuppel, Gen. Agent" of the company, and appellant. Between January 7, 1928, and September 16, 1929, appellant paid respondent company cash premiums on $ 50,000 or more of approved first-year business" and was entitled to renewal commissions of 5 per cent on same.

September 16, 1929 Schuppel as general agent of respondent and the appellant entered into an agreement containing, among others, the following paragraphs:

"The Agent, . . . . shall be paid renewal commissions amounting to five per cent (5%) of the renewal premiums for the second to tenth years inclusive. . . .

"(b) If this contract terminates under two full years from its effective date no renewals will be paid after such termination.

"(c) In the event of the termination of the Agent's service with the Company, after this contract has been in force two or more full years, the Company shall have the right to deduct from renewal commissions hereunder a collection fee of one per cent (1%) of renewal premiums paid."

. . . .

"This contract, which covers and includes all agreements, verbal and written, between parties hereto, shall take effect as of September 16, 1929, and supersedes and annuls any and all previous contracts and agreements between the parties hereto, excepting that all obligations to the General Agent or the Company, heretofore assumed by the Agent, still exist, and the Agent's right to commissions heretofore earned is not impaired

"Should this contract take the place of a previous contract, then, for the purpose of crediting renewal commissions, hereunder, its effective date shall be January 7, 1928."

January 23, 1930, appellant by letter to Schuppel tendered his resignation and advised respondent that he had decided to represent another insurance company. January 29th a second letter was sent to Schuppel by appellant, calling attention to appellant's conformity with paragraph 27 of the 1929 contract, regarding the 30...