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Porterfield v. Am. Surety Co.

was waived by the Board but excluded that part of the Board's minutes containing a long statement of their reasons for releasing this feature of the contract).

Up to the time suit was brought no order of the Board was made discharging the Contractor's bond or relieving the Contractor or its sureties from any further liability upon the contract or bond. Consequently, there is no question but that the bond was in force throughout the year involving the commission for which suit is brought, namely, from November 28, 1916, to November 28, 1917.

The answer of defendant, among other things, set up that it "agreed to and did not charge or collect any premium or premiums on said bond for a longer period than three years" and that "no premiums on said bond for the year beginning November 28, 1916, or for any time subsequent to that date, have been charged, paid, or collected by or remitted to this defendant."

The evidence on both sides disclosed that defendant, at the solicitation of the contractor, relieved and excused the Contractor from further payments of premiums after November 28, 1916. The defendant was not compelled to forego such premiums but did so for reasons of its own and without consulting the broker or obtaining his consent thereto.

The case then, to restate it in a condensed form, is one wherein a broker has been employed to procure for defendant the contract or right to furnish the suretyship on a certain required bond, and the terms of the broker's employment are that he is to "be paid a commission of thirty-five per cent. on the original premium and all renewal premiums received by this company as long as the bond remains in force" and that too whether the broker's contemplated connection with the Company "continues throughout the life of the said bond or not." The broker, concededly, obtained the contract for the suretyship, said contract expressly binding the one seeking the bond to pay the original premium on the date of the execution thereof which would continue the bond in force for a

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Porterfield v. Am. Surety Co.

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year, and to thereafter pay "a like sum annually in advance until the surety shall be discharged and rereased from any and all responsibility and until the indemnitor shall serve upon the surety competent written legal evidence of its final discharge from such obligation and all liability by reason thereof." The bond was given and the premiums were paid up to the 28th of November, 1916, but, notwithstanding the fact that the bond was in force throughout the year succeeding said date and the principal in said bond was obligated under its contract to pay and was fully able to pay the premium for said year, the defendant Surety Company saw fit to forego said premium. The question is, what effect does this have upon the right of the broker, or of his assignee, to the stipulated commission under the broker's contract?

Defendant's position, when stated in its bare and plainest terms, is that as the broker's contract says he was to get thirty-five per cent. "on the original and all renewal premiums received by this Company," the contract should be regarded as rigidly limited to a strict and literal interpretation of the word "received." Under this interpretation if the Company did not actually receive or collect a premium the broker was not entitled to his per centage thereon, even though the fact that the premium was not received was due wholly to the voluntary renunciation thereof by the Company. It is not conceived that the contract should be interpreted to mean that the obligation to pay the broker's commission was to be left to the Company's voluntary choice or volition, nor is this view in anywise weakened by the further provisions that the broker was to be paid his commissions "as long as the bond remains in force" and he was to receive his commissions whether his contemplated connection with the Company continued "throughout the life of the said bond or not." Similar contracts in reference to broker's commissions have not been so interpreted. In Knisely v. Leathe, 178 S. W. 453, 455, the broker was employed to procu contract of sale which he did, and his commissions

Porterfield v. Am. Surety Co.

were to be paid him out of the purchase price and as the owner received it. The owner refused to comply with the contract or, in other words, he voluntarily chose not to receive the purchase money. It was held, not only that the broker was entitled to his commissions but that the court should have peremptorily instructed the jury to find for him. At page 459, Judge GRAVES, Speaking for the Court en banc says that as "between he broker and his employer the latter could not refuse to enforce the contract which the broker's efforts had . obtained and thereby defeat the broker's right to his compensation. And on page 461 Judge GRAVES says that the owner having accepted the contract secured for him by the broker "owed the duty to enforce that contract" to the end that the purchase price would be paid and the deferred payments of commissions would become due. The owner could not say he would not enforce the contract the broker had obtained for him, and that therefore no commissions were due. It would seem that likewise in this case the employer in this case could not say to the broker, "You have done all you agreed to do, I have accepted the contract you obtained for me, but I will forego a part of the benefits thereof and as I have not received the benefits thus willingly foregone, you will have to also forego a part of your compensation."

In Currier v. Mutual Reserve, etc., Assn., 108 Fed. 737, the agent's contract was that no commissions under the contract should be payable to plaintiff "unless the payment from which the same is to be allowed [i. e. premiums] has been received in cash" by the defendant. It was held that since the agent had performed his services and obtained the contracts he was employed to secure, the defendant principal could not escape payment of the commissions by refusing to enforce the contracts it had. To the same effect are the following authorities: Goldsberry v. Thomas, 178 Mo. App. 334, 338; Knisely v. Leathe, 256 Mo. 341, 372 (first appeal); Vebster v. Meyers, 52 Mo. App. 338, 341; Reed v. Union Central Ins. Co., 61 Pac. 21, 23; Ketcham v.

Porterfield v. Am. Surety Co.

Axelson, 142 N. W. 62, 65; Groves v. Cook, 131 N. W. 854; Ely v. Wilde, 122 Pac. 1122; Pinkerton v. Hudson, 113 S. W. 35; Pedersen v. North Yakima, etc., Co., 116 Pac. 270; Alvord v. Cook, 54 N. E. 499; Ward v. Cobb, 148 Mass. 518.

The defendant sought to prove that a custom existed among surety companies whereby, in case the completion of a building is delayed through no fault th the contractor and no increased liability is incurred by the delay, no further annual premiums are charged during the additional time the bond is continued in force by reason of such delay. The alleged custom sought to be shown was not, primarily and directly, a custom among brokers and their principals whereby the former did not receive commissions on premiums voluntarily released for cause; but a custom on the part of Surety Companies in their dealings with contractors obtaining such companies as their surety, to waive the payment of premiums due for the time covered by delay in the completion of a building where the delay was without fault of the contractor and no increased liability was placed on the surety by reason of the delay. It will be observed, however, that the contract between the defendant Surety Company and the Contractor herein (which was the object for which the broker was employed and of the services which he rendered), was a straight, clear, out-and-out obligation on the part of the contractor to pay annual premiums so long as the bond remained in force. There was nothing therein providing for a release or adjustment of premiums due. Hence, in any suit based on such contract, no custom could be allowed to prevail over the explicit terms of the written agreement to pay. [Heffernan v. Neumond, 198 Mo. App. 667, 680; State ex rel. v. Public Service Comm., 269 Mo. 63, 75.] In other words, the defendant Surety Company could not have been compelled, by reason of any such alleged custom, to relieve the contractor from the payment of any premiums. Such custom, even if pleaded and proven, would have proved unavailing to the contractor. Since the employment

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Porterfield v. Am. Surety Co.

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of the broker had for its object the suretyship contract which allowed no operation of a custom, the question might arise whether the broker's contract of employment could be affected by any such custom unless definite and explicit provision was made therefor in said broker's contract. There was neither in the contract of employment nor in the contract of suretyship any clause giving scope to a custom. However, defendant's position or theory no doubt is that the broker's contract of employment was entered into in the light of such a custom and hence the said contract must be interpreted in that light. In such case the object in showing a custom would seem to be, not for the purpose of explaining the technical meaning of any term used in the contract, but to show what the real agreement was in the minds of both of the parties to that contract, or, in other words, that the alleged custom entered into and became a part of the contract. But, in order to do that, custom would have to be pleaded. [Staroske v. Pulitzer Publishing Co., 235 Mo. 67, 76; Sherwood v. Home Savings Bank, 131 Ia. 528, 532; Mendenhall v. Sherman, 193 Mo. App. 684, 687.] This was not done. The court, however, did not refuse to allow the claimed custom to be shown but excluded the proffer testimony because it did not tend to establish any such custom. And clearly it did not. On the contrary, it showed there was no such custom in the legal sense of that term. Before a course of procedure can be said to have arisen to the dignity of a custom so as to enter into and form a part of a contract, it must be shown to possess "those elements of certainty, generality fixedness and uniformity which are essential to constitute such a custom." [Staroske v. Pulitzer Pub. Co., 235 Mo. 67, 75.] None of these were shown. On the contrary, all that was shown was that oftentimes or "sometimes' the Surety Company would investigate the facts of a case and, if it was deemed by the company a case where a waiver or excusal of the payment of commissions should be made, they would do it; but whatever was

201 M. A.-2

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