Sandon v. John Hancock Mut. Life Ins. Co.

• Citation: 62 N.W.2d 247,245 Iowa 390
• Decision Date: 12 January 1954
• Docket Number: No. 48325,48325
• Parties: SANDON v. JOHN HANCOCK MUT. LIFE INS. CO.
• Court: United States State Supreme Court of Iowa

Page 247

62 N.W.2d 247

245 Iowa 390

SANDON v. JOHN HANCOCK MUT. LIFE INS. CO.

No. 48325.

Supreme Court of Iowa.

Jan. 12, 1954.

John F. Davis, Des Moines, for appellant.

Henry & Henry, Des Moines, for appellee.

LARSON, Justice.

On June 7, 1949, plaintiff became an agent of defendant company under a written agreement authorizing him to solicit various types of insurance including group insurance. His writing commissions were based on a schedule allowing percentages on first year premiums as follows: On the first $1,000 of premium, 20%; on the next $4,000, 20%; on the next $5,000, 15%; on the next $10,000, 12 1/2%; on the next $10,000, 10%; on the next $20,000, 5%; on all over $50,000, 2 1/2%.

Under this agreement he solicited Local Union No. 310, U.R.C.L.P.W.A.C.I.O. of Des Moines, Iowa, and this contact later resulted in the inclusion of the members of this Union (effective July 24, 1950) in a Group Insurance contract already existing upon the members of Local No. 7 of the same labor organization in Akron, Ohio. Though combined under one policy, the two Unions were listed separately and paid premiums monthly thereafter. Plaintiff was designated as 'writing agent' for the Local 310 insurance.

In the meantime plaintiff's agency contract had been amended, effective January 1, 1950, by striking out the authority to solicit group insurance. But his right to commission on the Local 310 premiums from July 24, 1950, to June 5, 1951, when he gave up his agency employment, is conceded. Whether it is to be computed under his original contract or a later one is in dispute.

On September 12, 1950, after this insurance upon the members of Local 310 became effective, plaintiff and defendant entered into a 'special case agreement,' recognizing and purporting to define his right to commission on the Local 310 group insurance he had solicited.

Defendant computes plaintiff's commission upon an interpretation of this 'special case agreement' which makes it amount only to $469.30, which has been paid. Plaintiff claims under his original contract and also denies correctness of defendant's interpretation of 'the special case agreement.' The court held in favor of defendant and directed a verdict denying plaintiff any further compensation. He appeals.

I. We may agree with defendant's contention that the case is ruled by the 'special case agreement,' though we think the two may be construed together as allowing the same rate or percentages of commission on the amount of premium involved here as would the original agency agreement. The later agreement recognizes plaintiff's right to pay for service he rendered under the original contract although no definite insurance contract had resulted before that contract was amended to withdraw his right to solicit group insurance.

II. We cannot however agree (under this record) with defendant's interpretation of the terms of the later contract. It provides in paragraph 1 that plaintiff's commission, during the continuance of his relationship as writing agent, shall be determined 'in accordance with the Commission Schedule contained herein * * * on the total amount of premium paid, as limited in paragraph 2 below * * * for insurance * * * provided under Group Policy No. * * * insuring the members of Local Union #310.'

Then follow the several brackets of the commission schedule, all identical in language except for the varying percentages on the several amounts making up the 'total premium' for the period involved (July 24, 1950, to June 5, 1951).

The language of the brackets, while covering the same divisions of premiums up to $50,000, and the same scale of percentage rates thereon, as did those of the original agency contract, is nevertheless quite different in form. Perhaps different verbiage was required because the premiums of the two Unions were commingled after July 24, 1950. The first bracket will serve for illustration:

'On that portion of the first $1,000 of the total premium under the Policy which is for insurance on members of Local Union #310-20%.'

Plaintiff would in effect construe these words as if they were rearranged as follows: 'On the first $1,000 of that portion of the total premium under the Policy which is for insurance on members of Local Union #310-20%.'

Defendant reads them literally as printed in the contract and claims that because $81,551.93 of premiums had already been paid by Local Union 7 from June 5, 1950, to July 24, 1950, before the Local 310 insurance began, the first six brackets of the 'special case agreement' (covering premiums up to $50,000) were all passed by and ineffective, and that plaintiff's commissions were to be computed under the succeeding brackets providing for 2 1/2% on the next $200,000 above the first $50,000, 1 1/4% on the next $250,000, and 1/2% on all over $500,000.

The premium of Local Union 310 for the entire period commencing July 24, 1950, was $34,035.63. Local Union 7 paid in during the same time $567,455.40; adding the $81,551.93 paid by Local 7 before Local 310 became insured, we find the combined premiums of both Unions from June 5, 1950, to June 5, 1951, (when plaintiff's employment ceased) amounted to $682,942.96.

Defendant, in construing the bracket language of the 'special case agreement', interprets 'total premium' as meaning the combined premiums of both Unions. We think the words may be construed to mean the Local 310 'total premium' of $34,035.63 for the entire period during which Local 310 members were insured before plaintiff's employment terminated--July 24, 1950, to June 5, 1951.

Plaintiff's commission was independent of any premiums except those paid on the insurance ...