Freeman v. Monarch Life Insurance

WOOD (Fred B.), J. Plaintiff's employment as agent of the defendant insurance company covered a period of four years, ten months and twelve days and was governed by a written contract, section 12 of which provided for payment of commissions for a period of time after termination of contract.* Defendant paid plaintiff termination commissions for a period of two years as literally provided in section 12 of the contract. Plaintiff claims he is entitled to payment for the additional period of ten months and twelve days and has appealed from a judgment in favor of the defendant.

Section 12 very clearly provides for the payment of termination commissions for a period of years, not parts of years. It says that such commissions will be paid “for the term of years specified in the following schedule.” The schedule, with equal clarity, provides for no such payments unless the agent has been employed for three full years, in which case the termination commission will be paid for a period of one year. Similarly, if he has been employed for four “full” years, as in this ease, the “Maximum Number of Years that Termination Commissions will be paid” is two years; and so on, to and including the agent who has been employed “8 or more” full years, in which case the com[704]missions will be paid for a maximum of six years. Clearly, this schedule creates a commission payment period of years, not years and parts of years, geared to an employment period of ‘ ‘ full ’ ’ years, not full years and a portion of a year.

Plaintiff attaches a certain significance to the word “maximum” in the formula “Maximum Number of Tears that Termination Commissions will be paid.” He says that only under his view of section 12 can this word have meaning and so, to give it meaning, we should adopt his interpretation. To give it meaning, he invokes section 22 of the contract, which says “The contract year shall begin as of January 1st, and all computations for any part of a full contract year shall be prorated.” Section 22 is not helpful. First, it deals with a year that begins with the first of January whereas the period of “full years” of employment in the section 12 schedule begins with the commencement of the particular agent’s employment, in this case August 29, 1946. Similarly, the period of years during which termination commissions will be paid is defined in section 12 as “commencing 30 days after the effective date of termination as provided in Paragraph 24, ”† in our case 30 days after July 11. 1951. Besides, section 22 deals with a method of computation, not a period of payment. It has possible application to the computation of commissions on premiums on health and accident policies as governed by s'ection 5 of the contract which uses the expression “contract year” and bases renewal commissions upon the “aggregate amount of premiums paid for the first policy quarter during such contract year.” Section 22 has no perceptible bearing upon section 12.