Barker v. Sherman

California Court of Appeal Mar 15, 1954 No. Civ. 19849Published

Before: Drapeau

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Holding. The court held that the contract amendment was unambiguous and required the agent to meet specific annual sales quotas to render renewal commissions nonforfeitable, which the agent failed to do. Consequently, the trial court's judgment was reversed because it misinterpreted the amendment's requirements and failed to account for the original contract's termination provisions.

Issues

Whether the contract amendment rendered renewal commissions nonforfeitable regardless of the agent's failure to meet annual sales quotas after the amendment's effective date.
Whether the trial court erred in its construction of the contract and the amendment.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“Under the stipulation that he did not write the required amount of insurance from the date of the amendment, plaintiff has no rights under it.”

“When the language of a contract is plain and unambiguous it is not the province of a court to make a new one, or to rewrite or alter by construction what has been agreed upon.”

DRAPEAU, J.

This action involves renewal commissions on life insurance claimed by an agent to be due him from the general agent of Pacific National Life Assurance Company, and from that company.

The parties entered into a written contract dated July 16, 1945. It was agreed that the agent would be paid commissions upon the cash premiums on new policies, in accordance with a schedule in the contract, and renewal commissions, while he continued in the service of the agency, for a period of nine years on all second and subsequent years’ premiums, also in accordance with a schedule in the contract.

Paragraph 11 of the contract provides:

“Renewal commissions, as shown above, are payable under this contract only when new business issued and paid for in each contract year is equal to or exceeds the sum of Fifty Thousand Dollars ($50,000.00).

“Should renewals of the previous year’s business be less than 65%, it shall in and of itself be deemed cause for modification or cancellation of this agreement.”

By subsequent written agreement the parties amended paragraph 11 of the contract, as follows:

“Amending and modifying Paragraph 11—but no other:— At the end of three full years from date, providing this contract is in force at that time, renewals under this Contract shall become non-forfeitable for the term herein provided, if the agent has had issued, paid for and delivered business of the minimum of $50,000 per year on the annual basis. Dated January 1st, 1946.”

The amendment was executed by the parties about July 1, 1946, and was predated six months.

Defendants notified plaintiff that they would pay no more renewal commissions; whereupon he brought this action.

It was stipulated at the trial that plaintiff sold according to his contract $50,000 worth of life insurance each year for three years from July 16, 1945, through July 16, 1948, and did not sell $50,000 worth of life insurance for three years from January 1, 1946, through January 1, 1949. It is conceded that plaintiff remained in defendant’s employ for more than three years from the date of the amendment. He was paid renewals each year, including 1948.

[812]

Barker v. Sherman

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DRAPEAU, J.

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