National Union Fire Ins. Co. v. Weatherwax & Gentry

• Decision Date: 26 July 1945
• Docket Number: June 7 1945.
• Citation: 247 Ala. 143,22 So.2d 733
• Court: Alabama Supreme Court
• Parties: NATIONAL UNION FIRE INS. CO. v. WEATHERWAX & GENTRY et al. 8 Div. 279.

22 So.2d 733

247 Ala. 143

NATIONAL UNION FIRE INS. CO. v. WEATHERWAX & GENTRY et al.

8 Div. 279.

June 7 1945.

Supreme Court of Alabama

July 26, 1945

Rehearing Denied July 26, 1945.

H. A. Entrekin, of Cullman, for appellant.

R. L. Almon and Thos. C. Pettus, both of Moulton for appellees.

GARDNER Chief Justice.

The National Union Fire Insurance Company brought suit originally on the law side of the docket against Weatherwax &amp Gentry, a partnership, and the individual members of the firm, J. L. Weatherwax and L. W. Gentry, seeking a recovery of $1,065.83 due by account. Subsequently, upon the theory the accounts were complicated, the cause was removed to the equity docket, and a bill filed by the company seeking the same amount in the accounting.

The basis of the accounting was a contract of employment, or what may more properly be termed an agency contract, wherein these defendants were to represent the fire insurance company in Lawrence County in writing farm insurance. In this written contract was a provision reading as follows:

'That I will return to the company all unearned commissions on policies cancelled pro rata, or otherwise. * * *'

In another paragraph of the contract is the following stipulation:

'I agree that any or all contracts or agreements (either written or verbal) between the parties named herein, existing prior to this date shall be and are hereby terminated, and that no benefits shall hereafter accrue to me thereunder.

'And I further agree that my employment by the National Union Fire Insurance Company as solicitor may be terminated by said company at any time, and nothing herein contained shall be construed to the contrary.'

For the faithful performance of the contract an agency bond was executed which has in it the following clause:

'* * * And shall also pay over the returned commissions upon any and all policies of the said company which, for any cause may be cancelled at any time whether such policies were actually written by J. L. Weatherwax and L. W. Gentry, agents, or their predecessors.'

The bond and contract appear to have been executed as far back as 1928. The negotiations for the execution of these instruments were carried on by one Moorman, agent of the fire insurance company, who died many years prior to the institution of this suit. In the course of time the insurance company decided to withdraw from the State, and cancelled all outstanding policies written by these defendants, returning to the policy holders the unearned premiums. The defense rested in large part, if not entirely upon what defendants insist were misrepresentations on the part of Moorman in the execution of the agency contract and the agency bond, each testifying concerning the conversations with Moorman. They insist that Moorman, in discussing with them the clauses in the contract and bond above noted, stated there would be liability for return of commissions on policies cancelled only in those instances where the policy was cancelled on account of the premium not being paid at the expiration of sixty days from the due date of the notes given therefor, or in those instances in which the policies were cancelled on recommendation of the defendants themselves; that no others would be cancelled and no items charged back to the defendants.

These defendants were intelligent business men engaged in the banking business. They read the instruments executed, and there was some hesitancy about signing on account of the provisions in Paragraph 9 of the contract, which have been hereinabove set out. Notwithstanding the broad language of the contract, they executed these instruments, apparently resting content with the assurance of the agent there would be no wholesale cancellations and no liability except in the two instances mentioned.

In view of the fact there was no misrepresentation as to the contents of the instrument, counsel for complainant insist that the plain language of the contract must control, and that the case is one which prohibits a written contract from being contradicted by parol. Griffin v. Tatum Chev. Co., 231 Ala. 534, 166 So. 49; Miller Bros. v. Direct Lumber Co., 207 Ala. 338, 92 So. 473; Stephenson Brick Co. v. Bessemer Engineering Co., 218 Ala. 325, 118 So. 570; Scott v. McGill, 245 Ala. 256, 16 So.2d 866; Jackson v. Sample, 234 Ala. 75, 173 So. 510; General Mills v. O'Rear, 239 Ala. 270, 194 So. 823; W. T. Rawleigh Co. v. Cone, 232 Ala. 127, 167 So. 274; Jones v. Tenn. Land Co., 234 Ala. 25, 173 So. 233.

Counsel also insist that the evidence of these defendants was inadmissible by virtue of the express language of the statute, as it related to a conversation, transaction, or a statement by, the deceased agent, who at the time was acting in a representative or fiduciary relation to the party against whom such testimony was sought to be introduced. That the testimony in regard to these statements by the deceased agent Moorman was inadmissible under our statute requires no citation other than the statute itself. Title 7, Sec. 433, Code 1940.

The trial judge expressed, in the opinion accompanying the decree, his view that the complainant's objections were well taken, and that this testimony would have to be excluded had proper and timely objection been made thereto. Giving...