Gilbert v. Equitable Life Insurance

WHELAN, J. Plaintiff appeals from an adverse judgment in his declaratory relief action.

Plaintiff became a general agent of defendant in 1955. Previously, he had been an agent of another general agent of defendant since April 15, 1949.

On July 26, 1955, the parties entered into a written “Organization Allowance Agreement” (O.A.A.) which provided in part as follows: “To assist second party in developing and maintaining his general agency and servicing policyholders, first party will remit second party an organization allowance payable at the end of each month in the amounts and for the periods indicated. ...”

The allowance was to be in the sum of $416 per month for the first year, and in lessening amounts thereafter until the fifth year, during which time it was to be $137.48 per month and then terminate.

The agreement then provided: “In event of the termination of the principal contract, or any succeeding General Agency contract, within six years from the effective date of this agreement, except by reason of the death or total and permanent disability of second party as adjudged by first party, said second party shall then become indebted to first party for any and all organization allowances hereunder received by second party prior to said termination. If.such termination is subsequent to six years from the effective date of this agreement, the organization allowance debt will be reduced by 2.083% of said organization allowance for each full month elapsed from the end of said six year period to the date of termination of said principal contract. Such debt shall become a lien upon and be satisfied by all first year and renewal commissions, margins, residuals and all commissions of whatever nature, due or to become due second party under the terms of said principal contract. . . .

‘ ‘ This Agreement may be terminated by either party at any time on written notice to the other party to that effect and no further payments on account of said organization allowance will be paid to second party after such termination. Termination of the General Agency Contract will also terminate this agreement.”

The general agency contract in effect at the time of the making of the O.A.A. was replaced by one dated April 25, 1956. It provided that defendant agreed “to pay the General Agent as full compensation for the performance of his duties [897]and obligations under this contract” commissions under a certain schedule; that: “Any indebtedness of the General Agent to the Company under this contract or any preceding contract shall constitute a first lien upon any moneys that are due or may become due from the Company to the General Agent under this contract.”; that: “This contract may be terminated on thirty (30) days’ written notice by either party . . .”; that: “This contract takes the place of all preceding contracts and amendments or supplements thereto, executed by and between the parties to this contract, except as to the payment of commissions and any indebtedness due or to become due to the Company incurred under any of said preceding contracts.”