Masden v. Travelers Ins. Co.

• Decision Date: 08 September 1931
• Docket Number: No. 9095.,9095.
• Citation: 79 ALR 469,52 F.2d 75
• Parties: MASDEN v. TRAVELERS' INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

79 ALR 469, 52 F.2d 75 (1931)

MASDEN v. TRAVELERS' INS. CO.

No. 9095.

Circuit Court of Appeals, Eighth Circuit.

September 8, 1931.

William G. Boatright, of Kansas City, Mo. (I. J. Ringolsky and Harry L. Jacobs, both of Kansas City, Mo., on the brief), for appellant.

O. C. Mosman, of Kansas City, Mo. (Clay C. Rogers, Paul A. Buzard, and Don E. Black, all of Kansas City, Mo., on the brief), for appellee.

Before STONE and GARDNER, Circuit Judges, and YOUMANS, District Judge.

GARDNER, Circuit Judge.

This is a suit in equity, brought by appellant, as plaintiff below, against appellee, an insurance company, for an accounting, based upon a contract of employment as a soliciting agent. The parties will be referred to as they appeared in the lower court.

The contract was for an indefinite duration, but provided that it could be terminated by either party on seven days' written notice to that effect. By its terms, plaintiff was entitled to receive a commission on all premiums reported and paid on policies issued on applications secured by him after the date of the contract, as follows: (a) A certain per cent. on premiums the first year of the insurance, and (b) a certain per cent. for a certain number of years of renewal premiums. The right to the commission on renewal premiums is the only question involved in this suit.

Section 1 of the contract described the territory of plaintiff's employment as "Kansas City, Missouri and vicinity." Section 3 provided that plaintiff should devote his entire time and energies to the promotion of the interests of the defendant and to faithfully canvas in the territory described, for life, accident, and health insurance, and that "he will not, without the written consent of the defendant, directly or indirectly transact life, accident or health insurance for any other company."

Paragraph 8 provided that: "If the agent shall neglect to report and pay over premiums collected by him as provided herein, or shall otherwise violate any of the provisions hereof, all of his rights hereunder and under any previous contracts, including the right to commissions on all premiums payable thereafter and on renewals of all policies written hereunder and under any previous contracts shall thereby forthwith terminate."

Paragraph 11 dealt with the subject of compensation with considerable detail. Part 3 of that paragraph provided as follows: "If this contract shall be terminated after the agent has been continuously in the service of the company under this or any previous contract for two or more years, or shall be terminated by the death of the agent, and if the agent has not violated any of his obligations hereunder, the company will pay the renewal commissions earned under part 2, to the agent, his executors or administrators, or to such person as he may designate with the consent of the company; but in case of the termination of this contract other than by the death of the agent before the agent shall have served the company continuously for a period of two years, and if the agent has not violated any of his obligations hereunder, all premiums thereafter reported and paid on which the agent shall have earned a renewal commission shall be subject to a collection fee of two (2) per cent."

Paragraph 15 provided that: "If the agent shall leave the service of the company and endeavor to take an agent of the company away from its service, or shall induce a policyholder to relinquish a policy or policies in the company, the agent shall forfeit any interest in commissions that he might otherwise be entitled to under this or previous contracts."

Paragraph 18 provided that: "If the agent shall at any time within one year from the date of the termination of this contract for any cause whatsoever, enter the employment of any other life insurance company to work in the territory specified in Section 1, all right to further commissions on renewals shall cease with the date of such employment."

Plaintiff's right of recovery is bottomed on the contract, and his right to commission on renewal premiums must therefore be derived from the contract itself. Chicago Life Ins. Co. v. Tiernan (C. C. A.) 263 F. 325, 332; Travelers' Ins. Co. v. Hermann, 154 Md. 171, 140 A. 64; Chase v. New York Life Ins. Co., 188 Mass. 271, 74 N. E. 325; Sutherland v. Connecticut Mutual Life Ins. Co., 87 Misc. Rep. 383, 149 N. Y. S. 1008; Sunshine Cloak & Suit Co. v. Roquette Bros., 30 N. D. 143, 152 N. W. 359, L. R. A. 1916E, 932. If these provisions of the contract were valid and had not been waived, then, confessedly, plaintiff was not entitled to recover.

It is first contended by the plaintiff that the provision of section 18, to the effect that if within one year from the date of the termination of his contract for employment, he should enter the employ of any other life insurance company to work within the territory specified in section 1, all right to further commission on renewal premiums should cease, was waived by the insurance company at the time of the termination of his contract of employment, which was by mutual consent. To constitute a waiver there must be a voluntary relinquishment of a known right, and the question is largely one of intention. The question of intention must, therefore, be proven as a fact, and the best evidence of intention is to be found in the language used by the parties, or their acts and conduct. The intention need not necessarily be proved by express declarations, but may be shown by the acts and conduct of the parties from which an intention to waive may reasonably be inferred. The burden of proof is, of course, upon the party claiming the waiver. It is therefore necessary to examine the evidence claimed by the plaintiff to establish this waiver.

While plaintiff was in Hartford, Conn., consulting with representatives of the Connecticut General Life Insurance Company, he met the superintendent of agencies of the defendant and had a conversation with him. This was before he had signed his contract with the Connecticut General Company. It was found by the referee, and affirmed by the lower court, that plaintiff was invited to Hartford, Conn., by the Connecticut General Life Insurance Company to consider a proposition from that company for employment by it; that he accepted this invitation without the knowledge of the defendant, but that while there he met the representatives of the defendant company and went to the office of its superintendent of agencies; that he refused to disclose the proposition made him by the Connecticut General Company, but invited the defendant to make him a proposition to continue in its employ; that plaintiff and defendant's representatives again met the following morning at the office of the defendant, and the representatives of the defendant said to the plaintiff that the matter of his terminating his employment and accepting employment with the Connecticut General had been talked over and that they were reconciled to the plaintiff going with the other company and believed that if he accepted the proposition made to him by the Connecticut General it would be better for both plaintiff and defendant, and that they thought it was the best thing for the plaintiff to do and that they were willing that he should go and hoped that he would make the contract with the Connecticut General Life Insurance Company and wished him well; that if plaintiff ever wanted to return to the defendant company "the latchstring was out," or words to that effect.

The mere fact that defendant may have been willing that plaintiff not only terminate his contract, which, of course, he had a right to do, but should enter the employ of another insurance company at Kansas City, which also he had a right to do, did not imply that the defendant waived the conditions of its contract. No express waiver is contended for, and it is significant that while plaintiff knew and appreciated the provisions of paragraph 18 of his contract, having complained about it at various times and having sought to have it eliminated, yet he made no mention of it at the time of his...