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Pofe v. Continental Ins. Co.

June 4, 1947


Author: Sparks

Before SPARKS and KERNER, Circuit Judges, and LINDLEY, District Judge.

SPARKS, Circuit Judge.

The plaintiff appeals from a judgment entered on motion of the defendant for judgment on the pleadings, or, in the alternative, for summary judgment. The judgment appealed from denied the relief sought by plaintiff and granted the relief sought by the defendant on its counterclaim.

Appellant filed his bill of complaint January 20, 1944, to recover $12,365 alleged to be a balance due as commissions for insurance written by him as agent for defendant for the period January 1, 1935, to September 1, 1940. It alleged employment under a contract alleged to have been entered into, in writing, December 21, 1927, under the terms of which defendant promised to pay plaintiff for his seinces at the same rate as that paid its other general agents for like services in the same territory; modification of the 1927 contract by a new contract entered into October 22, 1937, a copy of which was attached to the complaint; payment of plaintiff by defendant at certain rates which were in accord with the terms generally applied throughout the insurance industry and pursuant to the rules of the Chicago Board of Underwriters; discovery by plaintiff in June, 1943, that defendant was in fact paying certain other of its agents compensation exceeding that paid to him by as much as 10%, which fact he alleged had been willfully and fraudulently misrepresented to him, so that, instead of the $40,124, paid by defendant, there had been due $52,489, leaving a balance due plaintiff of $12,365. The complaint further alleged,

"That the indebtedness now remaining unpaid * * * to recover which this suit is brought, constituted part of a mutual account between the parties hereto and plaintiff alleges that defendant made payments on said indebtedness from time to time becoming due from defendant to plaintiff, and thereby renewed said indebtedness as a matter of law so that this action is brought within five years from the date when said indebtedness became finally due and owing;"

Attached to the complaint was a copy of the 1937 agency agreement which provided, as to payment of plaintiff, that he was authorized to retain out of premiums collected, as full compensation, "commissions at the following rates, viz.: As now or may be in the future mutually agreed upon." It further provided that it superseded all previous agreements, whether oral or written.

Defendant filed answer June 10, 1946, denying any written contract of 1927, or that plaintiff had acted as a general agent, but admitting that he had been employed as agent under a written contract of 1937, until its termination in September, 1940. It further stated that commissions at agreed rates were retained by plaintiff from premiums collected by him and reported in monthly accounts current rendered by him to defendant, and that such commissions were not in any other manner paid by defendant to plaintiff. It denied owing the $12,365 claimed. By way of counterclaim, defendant alleged that during the period of the agency, plaintiff rendered monthly accounts current of the business transacted pursuant to the agreement; that each such account stated and showed the policies issued by plaintiff on behalf of defendant each month, the amount of premium under each, plaintiff's commissions thereon at rates fixed and agreed upon between the parties, any authorized agency expenses, premiums returned to policy holders on cancellations and return commissions thereon, and other details of the business, and the balance due and payable on such account from plaintiff to defendant or vice versa; that plaintiff, although rendering such accounts failed to remit amounts shown thereby to be due, hence, that there was due and owing from plaintiff to defendant, as upon an account stated between them, upon such balances of premiums upon such accounts the sum of $2,654, as shown by a statement attached thereto, together with a letter dated May 27, 1946, and signed by plaintiff, enclosing $100 in payment on the account and stating the balance due at $2,654.

Plaintiff replied to the counterclaim, on July 1, 1946, admitting all the allegations of that counterclaim set forth above, and admitting further that he was indebted to the defendant in the sum of $2,654.

Upon the filing of this reply, admitting the indebtedness, defendant filed its motion for judgment on the pleadings and for summary judgment, attaching in support thereof, the affidavit of its manager, Vickery, stating the mode of operation of its agencies pursuant to rules of the Chicago Board of Underwriters. He further stated that plaintiff had become delinquent in his remittances so that in September, 1942, the balance due on his account was $6,000, after which it was reduced to the $2,654 claimed in the counterclaim, and further reduced by the following payments:

$100 May 27, 1946

54.72 June 22

100 August 20,

leaving a balance due on the counterclaim of $2400. He further asserted that the remittances, letters and transactions between the parties constituted an account stated in accordance with which there was due defendant $2,400, and by reason of which plaintiff was barred from claiming that defendant was indebted to him in any amount.

Plaintiff filed his affidavit in opposition to the motion for judgment. He set forth that defendant, through Vickery, always agreed to pay him at as high a rate as any other agents of the same class, and that he presumed that rates paid others were as established by the Chicago Board of Underwriters. He further set forth that in 1942, before he was aware of defendant's preference to other agents, he recognized a balance due for premiums collected, and, at Vickery's insistence, he executed a deed absolute in form to an apartment building owned by himself, which deed was intended as security for the debt; that later (at an undisclosed date), he was requested to execute another deed to replace the earlier one, this one also being absolute in form although intended merely as security; that thereafter, he learned that the deed clouded his title to the extent that he could not make a transfer; "that during 1945 and 1946 in the rising market * * * he had a ...

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