34 Ind. App. 268 | Ind. Ct. App. | 1904
Lead Opinion
Action by appellee upon two contracts entered into by him and appellant Arbaugh, by the terms of which the latter agreed to act as insurance solicitor for the former, and upon a bond signed by Arbaugh as principal and appellants Lesley and Gist as sureties, guaranteeing performance on the part of Arbaugh. The amended complaint is in two paragraphs, to which an answer in denial was filed. Trial by the court, resulting in a finding and judgment for appellee. Appellants’ joint and several mo
The two contracts and bond sued on were executed the same day. The contracts xnay px’opexdy be designated as prixnary axxd supplemental, and will be so referred to in this opixxion. By the terms- of the primary contx'act, appellant Arbaugh engaged to act as soliciting agent for appellee for life insurance companies designated by the appellee. The appellee was to pay Arbaugh for his services a specified commission oxx all premiuxns collected and paid over upon the insurance secux’ed by him. x^rbaugh bound himself not to solicit applications for life ixxsurance, or do any business conxxected therewith, for any other compaxxy than that designated by appellee. He also agreed to execute a bond with appx’oved sxxreties, conditioned for the faithful performance of his duties and obligatioxxs as sxxch agent. He also agx’eed to be governed by axxd'submit to all rules and regulations then existing or that xnight thereafter be adopted by the coxnpanv or companies for which he was to solicit business. The contract also px-ovided that the appellee might offset against any claims under the contract any and all debts or liabilities of Arbaugh to appellee. The contract further provided that all xnoneys or other evidences of value or of indebtedness that might be received by Arbaugh “should be a fiduciary txuxst ixx the hands of said Archibald N. Arbaugh,” and that all such funds, etc., should be paid ovey to the appellee at his option. It was fux’ther provided that either party might cancel the contract by giving to the other thirty days’ notice in writing.
The supplemental contract provided for advancements to be made by the appellee to Arbaugh, not to exceed $15 per week, conditioned that Ax’baugh shoxxld remit to1 appellee, on receipt of saxne, all moneys or notes secured by him for preixxium or premiums on applications for insurance. By the terms of this supplexnental contract, these advances wex’e to be a first lien on all commissions or renewals then due,
. By the terms of the bond, the obligors bound themselves that Arbaugh “shall pay or hand over all moneys payable in any event to James R. Shoekney, aforesaid, which shall at any time be received by him or for which he shall be accountable or liable, * * * including all moneys received prior to the date of this instrument (if any there be), as well as that received thereafter; as also all moneys which he now owes, or hereafter may owe, to said James R. Shoekney, aforesaid, on account of the advances made to him or otherwise, and shall now, and at all times hereafter, well, truly, and faithfully do and perform all the duties appertaining to his said agency, which are now, or which may hereafter be prescribed at any time for the government of the business of said agency by said James R. Shoekney, aforesaid, and shall well and faithfully conform to and fulfil all instructions and directions which he, as said agent,
It appears from the evidence that Arbaugh was an inexperienced insurance solicitor, and it is evident that the advancements provided for in the supplemental contract were to aid him in his business. The intention of the parties is made clear by a provision in that contract that Arbaugh was to repay appellee all such advances out of the commissions earned, and, to secure such repayment, the terms of the primary contract were modified, in that he was to turn over to appellee all of his commissions tO‘ reimburse him for such advancements, and was to remain in his employ until the commissions earned would equal the advancements
There- is a sharp contention between the parties as to whether or not the advances made by appellee to Arbaugh constituted a personal indebtedness which was covered by the bond, hut, from the view we have taken of the law as applicable to the facts proved, it is unnecessary for us to decide that question.
The supplemental contract provides that the appellee could terminate it at any time by giving to> Arbaugh written notice. Eo written notice of his intention to terminate it was given, but the uncontradicted evidence shows that he refused to carry out its conditions on his part.
Performance on the part of Arbaugh was rendered impossible by the act of appellee, for the rule is that one who has violated his obligations under a contract is in no position either to compel the other party to fulfil his duties, or complain because the latter is unwilling to do so. 7 Am. and Eng. Eney. Law (2d ed.), pp. 151, 152, and authorities there cited. It is a recognized rule of law that a failure to perform the engagements of a contract constitutes a breach. 7 Am. and Eng. Ency. Law (2d ed.), pp. 149, 150. A vital condition in the contract before us was the advancement to Arbaugh of $15 per week. This advancement appellee refused to continue, and refused, also, to carry out the contract in any of its parts. Under the original contract, the evidence fails to disclose any liability on the part of Arbaugh, and, as appellee is at fault for refusing to carry out the supplemental contract, no liability upon the bond is shown.
The evidence is not sufficient to- sustain the decision and judgment. Judgment reversed, and the court below is directed to sustain appellant’s motion for a new trial.
Rehearing
On Petition for Rehearing.
Appellant Arbaugh’s testimony was in part as follows: “Well, he said, 'Mr. Arbaugh, I am at the point where-1 am going to have to cut off this $15 a week expense. The business does not justify it, and I have got a big payment to make right here the middle of the month to the home office-, and I can not afford to- pay this money any longer.’ Well, I said, 'Is it your idea that we cancel the contract V
With deliberate care, appellee, in this letter written by himself, provides for every contingency which might prevent the application of earned commissions to the payment of advances, and stipulates that they shall be so paid with certainty and exactness, but wholly omits to mention any personal obligation on the part of the agent to repay such advances. Tf the intention was that the advances should constitute a loan, it is difficult to understand such omission. It is not only stipulated that the commissions earned shall be used to pay advances, but it is “specifically agreed that you shall remain in my employ, at my option, so long as you are in debt to me,” a stipulation strongly tending to show an intention to rely upon the commissions to be earned to meet the advances, and inconsistent with the idea of personal liability. The use of the word “debt” is not contra
As suggested by counsel for appellee, the agent evidently had no funds, and no experience as a life insurance agent. He was to be paid by commissions, not likely to come at once. The business of both would suffer from the agent’s lack of funds. The proposition to advance $15 per week was made by appellee for his own advantage. He was not bound to continue such advances longer than his own interest dictated. The fund to be created by the agent’s labor was the primary source from which both parties understood that the principal should be •reimbursed. The agent risked the loss of all his time, the principal of $15 a week. Had the venture succeeded, both would have gained; when it failed, they both lost. That the appellee cared anything about the personal promise of the agent is unlikely, and that the agent agreed to assume the entire risk of the enterprise is not shown.
Neither does an implied promise to pay arise upon the making of advances as shown by the contract between these parties. Lang v. Kaiser (1876), 34 Mich. 317-319; Northwestern, etc., Ins. Co. v. Mooney, 108 N. Y. 118.
In the Michigan ease just cited the defendant let a contract to the plaintiff for the making of tubs out of materials furnished by defendant. He gave evidence tending to show that he assisted in making the tubs, and sought to have credit upon the contract for the reasonable value of the services so rendered. The court said: “There was no evidence. given by defendant tending to show that plaintiff had ever requested such assistance to be given, or that he had
In Northwestern, etc., Ins. Co. v. Mooney, supra, suit was brought upon a bond given by an insurance agent, as in the case at bar, it being alleged that it had been agreed that the company should advance “to the said Mooney the sum of $1,200, which was to remain a first lien upon all the business and renewal interest secured to said Mooney under the contract, until repaid by said Mooney, with interest at seven per cent.;” and that the plaintiff did accordingly advance to him said sum, which he'has not paid. It was said, “the plaintiff’s contention in this action is, that the clause relating to advances of money in the contract named provides for a loan to Mooney to be repaid by him absolutely and unconditionally.” In reversing a judgment for the plaintiff the court said: “In the first place there is no express agreement on the part of Mooney to pay back the money; there is no agreement that its advance shall create’ an indebtedness on his part; no words signifying that he is to be a borrower, nor that the plaintiff will lend to him any money. These omissions in an agreement so fully and minutely defining the duties and contract obligations of the agent, and the contract rights of the company, are of great significance. It would have been much more natural to> insert words signifying that to be the true character of the transaction, if it was so intended, than to omit them, and much easier to say directly that Mooney assumed a personal liability, if that were the fact, than-to use words which require an extended argument on the part of counsel to satisfy a referree or court that such liability, although not expressed, may be inferred.”
The petition for a rehearing is overruled.