Government Personnel Mut. Life Ins. Co. v. Wear

• Decision Date: 01 October 1952
• Docket Number: No. A-3617,A-3617
• Citation: 151 Tex. 454,251 S.W.2d 525
• Parties: GOVERNMENT PERSONNEL MUT. LIFE INS. CO. v. WEAR.
• Court: Texas Supreme Court

Page 525

251 S.W.2d 525

151 Tex. 454

GOVERNMENT PERSONNEL MUT. LIFE INS. CO. v. WEAR.

No. A-3617.

Supreme Court of Texas.

Oct. 1, 1952.

Rehearing Denied Oct. 29, 1952.

Hubert W. Green and Frank M. Rosson, San Antonio, for petitioner-respondent, Government Personnel Mut. Life Ins. Co.

Trueheart, McMillan & Russell and Wier & Wier, San Antonio, for respondent-petitioner Gordon Ware.

SHARP, Justice.

Gordon Wear filed this suit against the Government Personnel Mutual Life Insurance Company to recover 'override' commissions on certain insurance and for attorney's fees. Wear's claim was based upon three contracts. The case was submitted to the jury upon special issues, and many of the issues were answered favorably to the Insurance Company. Notwithstanding such favorable answers, the trial court disregarded same and entered judgment for Wear for the sum of $68,630.79 and the further sum of $5,000 as attorney's fees. The Court of Civil Appeals held that Wear's right to recover 'override' commissions on certain insurance was terminated on the date when the contract on which the 'override' commissions were based was terminated. The Court of Civil Appeals, by a divided court, reformed the judgment of the trial court in the following respects:

'Appellant tendered the sum of $942 to appellee as being due him under his override contract, and the judgment will be amended so as to eliminate the recovery of $68,630.79, and in place thereof provide for a recovery of $980.40, together with interest at the rate of 6% per annum from January 1, 1948, until paid.

'Paragraph (6) of the judgment will be amended so as to hereafter read as follows:

'(6) That, in addition, defendant Government Personnel Mutual Life Insurance Company, either now owes or else will owe plaintiff, Gordon Wear, two and one-half (2 1/2%) percent commission on renewal premiums paid or that may later be paid, on each and every twenty-year endowment and twenty-payment life insurance policy, application for which was originally procured by C. H. Earl prior to January 1, 1948, that has been or is later renewed within ten years of its original issuance, if, as and when the premiums have been paid thereon to defendant since December 31, 1949, or are hereafter paid thereon to defendant in the future.' (247 S.W.2d 289.)

Mr. Justice Pope in his opinion states his views as follows: 'I would reform the judgment and award Wear a judgment for $4,703.28, together with attorney's fees and interest, and award him commissions on those renewals allowed by the majority but would allow them up to June 28, 1948, instead of January 1, 1948.'

The judgment of the trial court by a majority of the Court of Civil Appeals was reformed as to the amount of recovery for commissions, as stated above, but the judgment of the trial court was affirmed as to attorney's fees. 247 S.W.2d 284.

This suit involves the construction of three contracts. Gordon Wear, formerly an agent for the Insurance Company, sued the Insurance Company on November 18, 1951, upon a written contract of July 1, 1946, styled 'Supplemental Agreement,' and referred to by the court below as 'Contract No. 2.' This agreement provided that Wear was to receive 'override' commissions on life insurance policies solicited by Earl under his respective agent's contract of July 1, 1946, with the Insurance Company, referred to by the court below as 'Contract No. 3.' The 'Supplemental Agreement' contained no provision for cancellation, but was appended to the agent's contract of Wear executed on the same day, and which provided for its termination on thirty days' written notice by either party. This is referred to by the court below as 'Contract No. 1.' Alleging that he was also entitled to receive an 'override' on insurance sold by Earl's subagents, and that thirty days' written notice was required for termination of the 'Supplemental Agreement' as well as for his agent's contract, Wear sued to recover 'override' commissions on insurance sold by Earl and his subagents from January 1, 1948, when the Insurance Company ceased paying such commissions, to June 28, 1948, being thirty days after Wear had received written notice of termination of his agent's contract. Wear prevailed in the trial court on these two theories. However, the Court of Civil Appeals unanimously held that he was not entitled to an 'override' upon insurance sold by Earl's subagents, and, by a divided court, held that the 'Supplemental Agreement' was effectively terminated as of January 1, 1948, by oral notice given Wear in October, 1947.

The following Special Issues were submitted to the jury, and they were answered as set out below:

'Question No. 1: Do you find from a preponderance of the evidence that when Peter J. Hennessey in October or November, 1947, orally notified plaintiff, Wear, that the contract of July 1, 1946, between plaintiff and defendant, insofar as it related to overriding commissions, would be cancelled by the defendant effective on January 1, 1948, that plaintiff, Wear, waived the thirty days' written notice of cancellation as provided for in said contract?

'We, the jury, answer: 'Yes.'

'Question No. 2: Do you find from a preponderance of the evidence that in the month of October, 1947, plaintiff and defendant, by mutual agreement between them, cancelled, effective January 1, 1948, the Supplemental Contract dated July 1, 1946?

'We, the jury, answer: 'No.'

'Question No. 3: Do you find from a preponderance of the evidence that on the occasion when such oral notice of cancellation was given, plaintiff, Wear, knew that defendant intended to increase the commissions of C. H. Earl and other agents effective January 1, 1948, in reliance, if he did rely, upon the cancellation, if any, of the contract of July 1, 1946, between plaintiff and defendant?

'We, the jury, answer: 'Yes.'

'Question No. 4: Do you find from a preponderance of the evidence that defendant thereafter did increase the commissions of C. H. Earl and other agents, effective January 1, 1948, in the belief that the contract of July 1, 1946, between plaintiff and defendant had been cancelled?

'We, the jury, answer: 'Yes.'

'Question No. 5: Do you find from a preponderance of the evidence that but for the belief, if any, by defendant that the Supplemental Agreement in question had been properly cancelled by oral notice, said defendant would not have increased the commissions to said Earl and other Agents?

'We, the jury, answer: 'Yes.'

'Question No. 6: Do you find from a preponderance of the evidence that defendant acted in good faith toward plaintiff, Wear, in the cancellation effective December 31, 1947, of C. H. Earl's contract of July 1, 1946, if there was such cancellation?

'We, the jury, answer: 'Yes.'

'Question No. 7: Do you find from a preponderance of the evidence that the plaintiff, Wear, had knowledge that defendant did not intend to pay him after December 31, 1947, override commissions under the Supplemental Contract?

'We, the jury, answer: 'Yes.'

'Question No. 8: When do you find from a preponderance of the evidence the plaintiff, Wear, had knowledge that the defendant Company did not intend to pay him after December 31, 1947, override commissions under the supplemental contract?

'We, the jury, answer: 'Oct., 1947.'

'Question No. 9: What amount of money do you find from a preponderance of the evidence would, if paid now in cash, fairly and reasonably compensate the attorneys of Gordon Wear for legal services rendered plaintiff in connection with the matters in controversy in this suit?

'We, the jury, answer: '$5,000.00."

Two controlling questions are presented here: (1) Was the contract under which Wear claims his 'override' commissions terminated on December 31, 1947; and (2), does Article 2226, as amended, Vernon's Annotated Civil Statutes, operate retrospectively so as to authorize the recovery by Wear of $5,000 attorney's fees?

The majority opinion of the Court of Civil Appeals held that the evidence raised an issue of fact as to whether the Insurance Company intended to cancel the contract on December 31, 1947, and we think the findings of the jury upon this issue and the holding of the Court of Civil Appeals are sustained by the evidence; and no sound reason is presented here why such findings should be disturbed by this Court.

This brings us to a consideration of the recovery by Wear of $5,000 as attorney's fees. Petitioner Insurance Company contends that the allowance of the attorney's fees was error, on the grounds that: (1) the Court of Civil Appeals retroactively applied Article 2226, as amended; and (2), Wear's claim was not based on 'personal services rendered' within the meaning of the statute. Since the matter will be disposed of on the first ground, there is no need to consider the second. In upholding the allowance of attorney's fees, Chief Justice Murray reasoned that Article 2226, as amended, 'does not require that the claim must have accrued subsequent to the effective date of the amendment,' and that the claim on which Wear relies was brought within the provisions of the amended statute since it was presented and refused on November 15, 1949, after the effective date of the amendment. That court held that the criterion for the application of the amendment was the date on which the claim was presented and refused, rather than the date on which the cause of action arose,...