April 5, 1916. The opinion of the Court was delivered by This is an action for damages for a fraudulent cancellation of a contract.
The plaintiff claims (only essentials stated): That E.J. Parham entered into a contract of agency with the defendant. That the contract was made up of two papers, to wit, an original contract and a letter bearing the same date. That the letter contained modifications of the contract. The original provided that it might be terminated at any time, by either party, on 30 days' notice. Among these modifications, there was a provision that the contract should continue as long as Parham secured $250,000 of new insurance per year. It also provided for 5 per cent. additional commissions. That Parham, under an agreement with the defendant, associated with him, Thomas and McSwain and incorporated the agency with a capital stock of $10,000, for the purpose of conducting the agency for the defendant. That the plaintiff, still under the advice of the defendant, bought out the shares of Thomas at the price of $5,000. That Dr. Smith, superintendent of agencies of the defendant, met Parham and told him that the defendant was dissatisfied with that 5 per cent. modification and advised him to write to the defendant, as if on his own motion, offering to surrender the 5 per cent. commission, *Page 227 and agree to a destruction of the original letter of modification and a substitution of a new letter of modification in which the 5 per cent. commissions was omitted. That Dr. Smith told Parham that was a discrimination against other similar agencies and embarrassing to the defendant. That the plaintiff wrote the letter as suggested, and a new letter of modification was substituted. That this new letter not only omitted the 5 per cent. commissions, but also the provision for the continuance of the agency, and left the original contract in full force with its provision for a termination of the agency upon 30 days' notice. This letter was written in September. Soon thereafter the defendant gave the 30-day notice of a termination of the agency and turned the agency over to Mr. Thomas, although the plaintiff had furnished more than $250,000 of new insurance. That all of this was done "in furtherance of a scheme and purpose on the part of the defendant to render the said stock valueless and to injure the plaintiff." On motion of the defendant, the presiding Judge struck out of the complaint paragraphs 7, 8, and 9. These were the allegations of the scheme and purpose to render the stock valueless and injure the plaintiff. These were allegations of fraud. The allegation of an intent to hinder, delay, or defeat, is an allegation of fraud.
The plaintiff's whole case depended on fraud. Without it the plaintiff was confronted with a contract in writing which allowed either party to terminate the contract on 30 days' notice, and the strict rules of evidence made the writing conclusive evidence as to the terms of the contract. In case of fraud, the rules are flexible. It is necessary to fix the issues before a cause can be tried. The allegation of fraud constituted the gist of plaintiff's cause of action, and it was error to strike out these allegations.
The exceptions that raise this question are sustained. The trial being had on the wrong issue, the other questions do not arise. *Page 228
The judgment is reversed, and the case is remanded for a new trial.
MR. CHIEF JUSTICE GARY and MESSRS. JUSTICES WATTS and GAGE concur in the opinion of the Court.