Newcomb v. Imperial Life Ins. Co.

• Decision Date: 09 September 1892
• Citation: Newcomb v. Imperial Life Ins. Co., 51 F. 725 (E.D. Mo. 1892)
• Parties: NEWCOMB v. IMPERIAL LIFE INS. CO.
• Court: U.S. District Court — Eastern District of Missouri

51 F. 725

NEWCOMB v. IMPERIAL LIFE INS. CO.

United States Circuit Court, E.D. Missouri, Eastern Division.

September 9, 1892

Hiram J. Grover, for plaintiff.

Charles Nagel, for defendant.

THAYER District Judge.

1. It cannot be admitted to be a sound proposition of law that in every case where a person engages to render services for another for a stipulated time and price, he may at any stage of the work undertaken abandon it without legal excuse, and sue his employer upon a quantum meruit for the services actually rendered, leaving his employer to offset against a recovery such damages as he may have sustained by the nonfulfillment of the contract. In the leading case of Britton v. Turner, 6 N.H. 494, that rule was applied to an ordinary hiring contract. It has also been applied to contracts to furnish labor and materials where the labor and materials furnished were of value to the employer, and had been accepted. Yeats v. Ballentine, 56 Mo. 530; Eyerman v. Association, 61 Mo. 489; 2 Pars.Cont.pt 11, § 5. See, also, Bish. Cont. Secs. 1442, 1444, 1445, and citations. But the rule in question is necessarily subject to some limitations, and is not of universal application to contracts of all descriptions. For example, where a person agrees to act as agent and solicitor for a life insurance company for a stated commission to be paid on premiums collected, he cannot abandon the agency at any time without cause, and sue the company upon a quantum valebat for services rendered; and it goes without saying that an agent working under such a contract cannot sue his principal upon a quantum valebat for services rendered, if the agency is lawfully terminated by the principal, in pursuance of a power reserved in the contract so to terminate it.

The present suit having been brought by the plaintiff upon a quantum valebat to recover the reasonable value of services rendered during a period of years while he was acting as agent and solicitor of the defendant for an agreed commission to be paid on premiums, the court holds, contrary to the contention of counsel, that to maintain such an action it is necessary that the complaint should show either that the agency was wrongfully terminated by the defendant, or that the defendant has in some respect violated the agency contract.

The first question to be considered, therefore, is whether the complaint does show that the agency was wrongfully discontinued, or that the contract between the parties was broken by the defendant. It is averred in the complaint, in substance, that the plaintiff was appointed agent of the defendant company to solicit insurance in a certain territory on what is termed 'the natural premium plan of insurance;' that the contract between the parties contemplated that the plaintiff should solicit policies based upon the 'natural premium plan,' as distinguished from 'the level premium plan;' and that that mode of insurance affords an agent or solicitor greater facilities for securing risks than the ordinary methods of insurance in vogue among life companies. It is further averred, in substance, that on or about the 14th day of April, 1891, while the agency contract was in force, the defendant company ceased to do business on 'the natural premium plan,' and refused to permit the plaintiff to solicit risks on that plan. It must be held without doubt, that if the plaintiff was appointed an agent of the defendant company to solicit risks according to one method of insurance, and the company subsequently abandoned that mode of transacting its business without his consent and refused to permit the plaintiff to solicit risks according to such method or plan, then it, in effect terminated the agency, and the act of the company in so doing was wrongful, unless, by the provisions of the contract existing between the parties, the company had reserved to itself the power of terminating the agency whenever it thought proper. Whether it had such power involves a brief reference to the agency contract. That agreement is not set out in full in the complaint, but a copy is...