Fireman's Fund Ins. Co v. Davis

• Decision Date: 08 September 1930
• Docket Number: No. 20235.,20235.
• Citation: 155 S.E. 105,42 Ga.App. 49
• Parties: FIREMAN'S FUND INS. CO. v. DAVIS et al.
• Court: Georgia Court of Appeals

42 Ga.App. 49

155 S.E. 105

FIREMAN'S FUND INS. CO.

v.DAVIS et al.

No. 20235.

Court of Appeals of Georgia,

Division No. 2.

Sept. 8, 1930.

Rehearing Denied Sept. 29, 1930.

Syllabus by the Court.

Where local agents of a fire insurance company were obligated by the written terms of their appointment to "return to the company all unearned commissions on premiums on cancelled policies, " and it was further agreed that the agency could "be terminated at any time at the pleasure" of the company, but the writings were otherwise silent as to the meaning of the expression "unearned commissions, " or as to the compensation or consideration to be paid for the agents' services, the agency contract was upon its face ambiguous and incomplete, and in a suit by the company to recover of the agents a sum alleged to be due as "unearned commissions on cancelled policies, " it was permissible for the defendants to allege and prove a contemporaneous parol agreement as to the meaning of the phrase "unearned commissions, " and as to the amount of the commissions to be paid and when the same would be earned.

(a) Cancellation clauses in policies written by the company and countersigned by the agents after the making of the agency contract would not necessarily supersede or become a part of such agreement.

(b) Allegations in the answer of the local agents, that they made a verbal agreement with the company through a named person as its special agent, were, as against a general demurrer, sufficient to show by implication that such special agent had authority to represent the company in such matter.

Syllabus by the Court.

The extent of an agent's authority is not determined by the title affixed to his name, but, as between his principal and third persons, the test is in the authority whichhe actually has or which his principal expressly or impliedly represents him as having.

(a) In the instant case the evidence authorized the inference that the plaintiff, through its superintendent, led the defendants to rely and act upon the assumption that the special agent had the power to contract with them in behalf of the plaintiff.

(b) If the court erred in overruling the plaintiff's special demurrers relating to the sufficiency of the allegations of the answer with respect to the authority of the special agent, the error was harmless under the facts of this case.

Syllabus by the Court.

The evidence authorized the verdict and judgment in favor of the defendants, and no material error was committed.

Error from Superior Court, Stephens County; E. D. Kenyon, Judge pro hac.

Suit by Fireman's Fund Insurance Company against J. H. Davis and others. Judgment for defendants, and plaintiff brings error.

Affirmed.

In April, 1925, Fireman's Fund Insurance Company appointed John H. Davis & Son, a partnership, as agents to solicit applications for insurance on farm property in Stephens county, Ga. The agency was canceled in November, 1926, after which the insurance company brought the present suit against Davis & Son, as its former agents, to recover, among other items, the sum of $2,115.96 claimed as unearned commissions on policies of insurance placed through the defendants but canceled by the plaintiff when it withdrew from "farm business" in Stephens county. The suit also included an amount claimed as unearned commissions on policies canceled during the period of the agency, but the liability for this was conceded, and judgment was rendered therefor without objection on the part of the defendants. The suit was defended as to the first item mentioned, and resulted in a finding and judgment in favor of the defendants. The case was tried before the judge pro hac vice, without a jury, and upon an agreed statement of facts supplemented by other evidence. The plaintiff sued out a bill of exceptions, assigning error upon the overruling of its demurrers to the answer as amended, upon the admission in several instances of testimony over abjection, and upon final verdict and judgment.

Attached to the petition was a copy of the written agreement, called 'Solicitor's Agreement, " upon which the defendants were appointed as the plaintiff's agents and in which were the following provisions: "9th. That I will return to the company all unearned commissions on premiums on cancelled policies, and on notes that are not paid at maturity." "14th. * * * This agreement can be terminated at any time at the pleasure of the Fireman's Fund Insurance Company, and nothing herein shall be construed to the contrary." The petition further gave an itemized statement of all policies alleged to have been canceled, and averred that each of them was countersigned by the defendants and contained the following condition: "This policy shall be cancelled at any time at the request of the insured; or by the company by giving five days notice of such cancellation. If this policy shall be cancelled as hereinbefore provided, or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate; except that when this policy is cancelled by this company by giving notice it shall retain only the pro rata premium." At the time of delivering the solicitor's agreement the defendants executed a bond, with security, to pay to the plaintiff any and all indebtedness incurred by the defendants in connection with the agency, "including commissions and/or fees advanced by the said company, on all notes accepted in payment of premiums on insurance written through the Farm Department of the said company, which are not paid at maturity; and [to] refund to the said company the unearned commissions on the premiums returned under cancelled policies, written through the Farm Department of said company." The suit is not upon the bond, however, and, since the fact of its execution and acceptance appeared only from the evidence, it is not material in the consideration of the pleadings, and will become so only in the determination of those questions relating to the admissibility of testimony and the sufficiency of the evidence to sustain the finding and judgment in favor of the defendants. There was no dispute as to the correctness of the account, provided the defendants were liable for anything as unearned commissions on the policies canceled in bulk on the company's withdrawal from "farm business" in Stephens county.

The substance of the plea and answer filed by the defendant was as follows: The paper attached to the plaintiff's petition (the solicitor's agreement) was not a contract of agency, but amounted merely to an application for an agency, and the contract in regard to commissions rested entirely in parol and "all negotiations and representations as to com-missions and when they would be earned by defendants were likewise in parol, * * *' as there could be no completed contract for the payment of commissions unless there was a definite time when the same should be considered as earned." All the negotiations between the plaintiff and the defendants leading up to and resulting in the contract of agency were had by the defendants with George B. Cooper, an agent of the plaintiff, who assured the defendants that "the defendants' commissions would be earned at the time the insurance policies written by them were delivered and settlements made for the same by cash and/or notes, and acting upon this representation by plaintiff's agent, and upon this construction of the alleged contract by defendants, which was concurred in by plaintiff's agent, defendants agreed to accept said agency for plaintiff and to procure applications and perform other duties as agents for plaintiff in procuring business. * * * The term 'unearned commissions' in said contract in paragraph 9 is ambiguous, and defendants understood said term to mean as expressed in said alleged contract, commissions on policies where the policyholders failed and refused to pay notes or other obligations for premiums, and they signed said contract with the understanding that said term applied only to such commissions as they should collect from policyholders who subsequently failed or refused to pay premium notes, and not to apply in any case where plaintiff company cancelled its policies of its own volition. * * * Under the terms of said contract as understood by them, and which understanding was concurred in by plaintiff's special agent, all the various items alleged in plaintiffs petition to be unearned commissions are not unearned commissions, but under said contract were absolutely earned by defendants at the time of the delivery of the policies of insurance to the parties named in the amended petition. * * * The construction of said contract herein set out as being the construction placed upon the same by defendants was fully known to plaintiff's agent at the time said contract was signed, and plaintiff's agent fully concurred in said construction of said contract. * * * The plaintiff in its business of insuring buildings on farm property, through its farm department issued its policies on a plan providing for payment of premium in five annual installments, one fifth cash at the date of the delivery of the policy, and the remaining four fifths by notes payable in equal annual installments. Plaintiff agreed with defendants through its agent, George B. Cooper, that defendants' commissions for all business written by them should be the first installment of the premium, namely, the cash payment of one fifth premium paid when policies were delivered, which agreement was never questioned by the plaintiff company and was ratified by them in accepting the notes of various policy holders and knowingly per mitting defendants to retain the cash payment."

The above allegations were made in two amendments to the answer, and each of these amendments was demurred to generally and specially by the plaintiff. The testimony objected to tended to support the...