18. McLean has at all times received and kept all compensation from Phoenix which reflected all the increments based upon the favorable calculations made under the incentive formula of compensation for agency managers.
19. McLean has retained the payments of $5,287.70 made by Waters to him.
20. At no time was McLean authorized by plaintiff to keep the payments made to him by Waters.
21. McLean's defense that he is entitled to keep the money he collected from Waters because the cost of the services provided to Waters under the incentive formula of compensating managers lowered McLean's annual compensation is rejected under all the facts of this case.
22. At no time was any additional space rented for Waters nor was any new secretary hired for him. Any services or facilities received by Waters did not, and could not have, in any event, adversely affect McLean's compensation under the incentive formula.
23. From time to time, it was the obligation of the agency to make formal request to the home office for payment for services, commissions and for salary to which employees and contractees of plaintiff working through the agency were entitled. As agency manager, it was McLean's obligation to see that requests for such payment were made only for those persons who were in fact employees or contractees of the agency and who were in fact entitled to the sums of money requested.
24. As agency manager, it was McLean's obligation to make certain that the agency handled incoming checks so that they were delivered to the named payees, including the salesmen and agents of the agency.
25. The requests for payment of agents at the Keystone Agency who were being financed by Phoenix were made on Financing Factor Forms customarily used by Phoenix and its agencies, including the Keystone Agency. There was such a form for each agent being financed and that form shuttled back and forth between the home office and the agency.
26. A summary of Phoenix's procedure in issuing checks for payment of the Keystone agents during the period 1958 through 1962 is as follows: When a Financing Factor Form was received at Phoenix's home office, from the Keystone Agency, the form passed through the Agency Department. If McLean had approved the issuance of financing checks through the transmission of the Financing Factor Form to Phoenix's home office, then the Agency Department at the Home office authorized the Treasury Department, at the home office, to issue the requested checks and it did so. The Financing Factor Form and checks were thereafter sent to the Keystone Agency. Every financing check sent by Phoenix's home office to the Keystone Agency, payable to a supposed agent, was sent only because the home office had received from the Keystone Agency a Financing Factor Form bearing the certification by McLean that the agent was entitled to the payment. The Financing Factor Form was never sent from the Keystone Agency to the home office without the specific authorization of McLean to do so. The financing checks were sent to supposed agents only because his Financing Factor Form was received in the home office. The home office maintained no records which would have precipitated the issuance of a financing check for an agent if McLean as the agency manager had not directed the submission of the Financing Factor Form to the home office with its figures as to the agent's production. The home office's notice of termination of an agent's employment came from the agency through a notice of termination forwarded by the agency manager and through the cessation of any transmission to it by the agency manager of the Financing Factor Form relating to the particular agent.
27. Although the home office would never initiate the issuance of a financing check to an agent, it did exercise authority to terminate the issuance of such checks even though the agency manager may have certified a request to the home office for the issuance of such checks. The home office, however, applied a different criteria in making its decision. Whereas the agency manager was certifying that the agent was still working for Phoenix and satisfying the agency manager's standards, the home office applied an actuarially computed standard of what total production to date had been achieved by the financed agent. If and when that total production level fell below a specified standard, the home office would not approve further financing payments notwithstanding the agency manager's transmission to the home office of the Financing Factor Form of the agent.
28. On or about the times specified in the following list, the agency, acting through McLean or his expressed authorization, requested payment for the following persons from Phoenix's home office and the checks were sent by Phoenix's home office to the agency:
Month Checks Issued
Name of Payee (Number of Checks) Total of Checks
Herbert R. Belber July 1958 (1) $ 138.00
James O. Currie Nov. 1960 (3) 319.09
Riccardo L. Garofalo June 1960 to Aug. 1960 (4) 576.89
Don L. Heller May 1961 (1) 212.15
Mayer L. Kersun Sept. 1961 (2) 316.72
Richard J. Parker Dec. 1960 (1) 198.45
Lawrence D. Roseman June to July 1962 (4) 563.45
Eugene J. Sharpe Aug. to Oct. 1962 (4) 631.65
Norton Simons Dec. 1961 to Mar. 1962 (8) 1,181.36
Martin P. Webb Nov. 1961 to Mar. 1962 (7) 620.21
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