Opinion
No. 31804.
September 30, 1935.
1. BROKERS.
Agent held not entitled to commission under contract providing that, if purchaser did not go through with his part of contract, vendor would not be liable for any commission, where purchaser, who was mere figurehead through whom title was to pass to real purchaser who was party to whom vendor did not wish to sell land, refused to go through with sale and disclosed facts to vendor who sold to another person, notwithstanding vendor could have obtained specific performance.
2. PRINCIPAL AND AGENT.
Unless otherwise agreed, agent must use reasonable efforts to give his principal information relevant to affairs intrusted to him which, as agent has notice, principal would desire to have, and which can be communicated without violating superior duty to third person.
APPEAL from circuit court of Quitman county.
HON.W.A. ALCORN, JR., Judge.
Action by Charles W. Partee against Treadwell B. Crawford and others. From a judgment for defendants in the circuit court reversing a decree of the county court for the plaintiff, plaintiff appeals. Affirmed.
Brewer Montgomery, of Clarksdale, for appellant.
Where the contract between a broker and his principal specifies the terms upon which the land is to be sold, the broker has performed his duty and is entitled to his commissions when he produces a purchaser ready, willing and able to buy upon the terms specified.
Jenny v. Smith-Powell Realty Co., 125 Miss. 608, 88 So. 171; Hays v. Goodman-Leonard Realty Co., 146 Miss. 766, 111 So. 869.
No question is raised as to the ability of Wallis to perform the conditions of the contract.
Dalton v. Milliken, 52 L.Ed. (U.S.) 768, 209 U.S. 237; Humphries v. Smith, 63 S.E. 248; Pohl v. Fanton, 119 P. 400; Rike v. McHugh, 188 Ala. 237, 66 So. 452; Ketcham v. Axelson, 160 Iowa 456, 142 N.W. 62; Putnam Inv. Co. v. King, 96 Kans. 109, 150 P. 559; Hutchinson Plant, 218 Mass. 148, 105 N.E. 1017; Glade v. Eastern Ill. Min. Co., 129 Mo. App. 443, 107 S.W. 1002; Keinath v. Reed, 18 N.M. 358, 137 P. 841; Travis v. Graham, 23 App. Div. 214, 48 N.Y.S. 736; Schlegal v. Fuller, 149 P. 1118; Bleecker v. Miller, 40 Okla. 374, 138 P. 807; Colp v. Brazer, 161 S.W. 899; Leuschmer v. Patrick, 103 S.W. 664; Watkins Land Mtg. Co. v. Thetford, 43 Tex. Civ. App. 536, 96 S.W. 72.
Where the sale is fully consummated and the purchase price is paid agreeable to the contract or agency or to the owner of the land, the matter producing a purchaser ready, able and willing to buy is thereby concluded and no longer open to question.
Coffman v. Dyas Realty Co., 176 Mo. App. 692, 703, 159 S.W. 842; Handley v. Shaffer, 177 Ala. 636, 59 So. 286; Schlegel v. Fuller, 149 P. 1118; McGavock v. Woodlief, 15 L.Ed. (U.S.) 884, 886; Gibson v. Gray, 17 Tex. Civ. App. 646, 43 S.W. 922; Johnson v. Sutton, 94 Miss. 544; Dalton v. Milliken, 52 L.Ed. (U.S.) 768; Roberts v. Kimmons, 65 Miss. 332; 9 C.J. 596, note 33.
Voluntary cancellation of contract by the principal does not relieve him of obligation to pay the commissions earned by the broker.
13 C.J. 370; 9 C.J. 605.
A party complainant can have relief only on the case made by his bill of complaint, and it will not avail him to establish another, and a different case by his proof; and, it will not avail a defendant to rely on one defense by his answer and to show another and different defense by his proof, however ample the evidence on the issues not pleaded may be. Parties must therefore recover or defend upon the issues which they have respectively presented in their pleadings, or not at all.
Griffith's Mississippi Chancery Practice, sec. 565, page 621; Toulmin v. Heidelberg, 32 Miss. 274; Wilkins v. Flowers, 37 Miss. 584; Pinson v. Williams, 23 Miss. 67; Bacon v. Ventress, 32 Miss. 158; George v. Solomon, 71 Miss. 175; Pierce v. Jernigan, 57 Miss. 114; Prewitt v. Coopwood, 30 Miss. 369; Harney v. Morton, 36 Miss. 411; Fatheree v. Fletcher, 31 Miss. 266; Reynolds v. Wilkinson, 179 Miss. 590; Lee v. Newman, 55 Miss. 371; Solomon v. Compress Co., 69 Miss. 326.
The answer nowhere contains the charge that Partee had knowledge of any facts which would reasonably have affected Crawford's action in entering into the contract. The evidence shows without dispute that Partee had no dealings whatever with Wallis, but that he was presented with the contract fully executed by Wallis by another.
There is not the slightest reference in the answer to the contention here made that the real undertaking was to get the Crawfords to sell at a price pleasing to the real purchaser, Flowers. Flowers' name is not mentioned in the answer, nor is the name of any other prospective purchaser.
Unless there are restrictions against assignment, under general rules the holder of a bond or contract for purchase of land may assign his interest therein, in equity, particularly where the contract requires the vendor to convey to the purchaser or his assigns, or where the assignment is permitted by statute.
66 C.J. 1067, sec. 841.
Maynard, FitzGerald Venable, of Clarksdale, for appellees.
We think it appears from the evidence, beyond dispute, that Partee was not acting bona fide as agent of the Crawfords, to find a purchaser of the property at the highest price obtainable or at the price named by his principals.
The Crawfords were owners of the land. If they did not wish to sell the land to Flowers, or have him own it, they had the right to do this and the attempt of their purported agent, by misrepresenting the situation, to cause them to do that which the agent knew they would not do if they knew the facts, it is submitted is fraud in law.
The duty of an agent to give to his principal all material information and advice has been announced by this court.
Gwin v. Fountain, 159 Miss. 619; Hoopes v. Burnett, 26 Miss. 428; Johnson v. Outlaw, 56 Miss. 541.
Unless otherwise agreed, an agent is subject to a duty to his principal, not to act on behalf of an adverse party in a transaction connected with his agency.
2 American Law Institute Restatement, Agency, sec. 391, page 882.
Partee and Dalton pooled their commissions and Partee entered the transaction at the solicitation of Dalton, representing Flowers, to get the Crawfords to sell the land to Flowers, all of which Partee knew. He had to be untrue to Dalton or Flowers or to the Crawfords. A man cannot serve two masters.
An agent doubly employed cannot obtain commissions from a party.
Hayes v. Riker, 151 Miss. 382; Hook Co. v. Miller, 125 Miss. 1; Henry v. Lamensdorf, 121 Miss. 648; 2 American Law Institute Restatement, Agency, page 890, sec. 394.
Full knowledge and consent of both parties is necessary where there is a possible conflict between self interest and the integrity of the agent.
Riverside Development Co. v. Hartford Fire Ins. Co., 105 Miss. 184.
Where a broker conceals the real purchaser's name and puts forth a fictitious purchaser, it constitutes fraud in law, and he cannot recover commissions.
Pratt v. Patterson, 12 Phila. (Pa.) 460.
This is a matter of fidelity and so in such a case the broker should not be permitted to recover on the theory that he has produced the agent of an unknown principal.
Mott v. Minor, 11 Cal.App. 774, 106 P. 244.
The general rule is that even though a purchaser ready, able and willing to buy is produced, a right to commissions is recognized only where the broker acts in good faith.
Wiggins v. Wilson, 55 Fla. 346, 45 So. 1011; Myer v. Keating Land, etc., Co., 126 Miss. 409, 148 N.W. 452.
In the case here, appellant represented that Wallis was willing to buy, knowing or having the knowledge imputed to him, that such was not the case.
Bach v. Emerick, 35 N.Y. Supp. 548; Dougherty v. Stocks, 185 Mo. App. 541, 172 S.W. 616.
Argued orally by Fred H. Montgomery, for appellant, and by John W. McCall, for appellee.
This is a foreign attachment in chancery. It was begun by appellant, Partee, on the equity side of the county court of Quitman county. He filed his bill in that court against appellee Crawford, a nonresident, making Thomas a resident garnishee defendant. Partee sued for the sum of eight hundred fifty dollars which he claimed Crawford owed him for his services as a real estate agent in effecting a sale for Crawford to one Wallis of three hundred forty acres of land in Quitman county. Thomas was indebted to Crawford. Appellant sought to establish his alleged debt against Crawford and subject to its payment a sufficiency of the amount due Crawford by Thomas to pay it. Appellant recovered a decree in the county court, from which appellee Crawford appealed to the circuit court, where there was a trial resulting in judgment in his favor dismissing appellant's bill. From that decree appellant prosecutes this appeal.
There is little, if any, dispute as to the material facts. Crawford's home was in Memphis, Tenn. He owned three hundred forty acres of land in Quitman county in this state, which he desired to sell. Partee was a real estate agent, with his home and office in Memphis, Tenn. Wallis was vice president of a bank at Clarksdale in this state, where he also had his home. Dalton was a real estate agent at Clarksdale. Roy Flowers resided in that section of the state. On February 5, 1934, Crawford and Wallis entered into a written contract, by the terms of which the latter was to purchase from the former his three hundred forty acres of land in Quitman county, for which he was to pay the sum of seventeen thousand dollars, one thousand dollars in cash (which was put up by Wallis as earnest money at the time), four thousand dollars on delivery of deed, and the balance in deferred installments. The contract had the usual provision for abstract of title. The contract of sale was brought about by Partee and others acting with him, as will more fully appear. On the same day this contract was executed Partee and Crawford entered into a contract in writing, by the terms of which Crawford agreed to pay Partee eight hundred fifty dollars for making the sale to Wallis, and in addition not more than twenty-five dollars for procuring an abstract of title to the land; four hundred twenty-five dollars of the commission was to be paid on the consummation of the sale; and four hundred twenty-five dollars by Wallis out of the deferred purchase-money installments. The contract provided further: "It is also agreed and understood between parties of the first part and Charles W. Partee, that the one thousand dollars earnest money put up by J.O. Wallis is to be forfeited to Treadwell B. Crawford and Mrs. Treadwell B. Crawford in case the said J.O. Wallis does not go through with his part of the contract, and parties of the first part will not owe Charles W. Partee, Agent, any commission whatsoever, out of this one thousand dollars earnest money. In other words, if this sale is not consummated the said Charles W. Partee will not receive any commission or compensation whatsoever, but all earnest money will be forfeited to parties of the first part."
Partee and Dalton, the real estate agent at Clarksdale, appear to have been acting together in the matter of the sale. The real purchaser of the land was Flowers; Wallis was a mere figurehead — a mere conduit for the title to pass from Crawford to Flowers. Flowers put up the cash payment of one thousand dollars which Wallis was to forfeit if he refused to go through with the sale. This, however, was unknown to Crawford until the time came for the consummation of the sale. Wallis signed the contract without reading it carefully; his only interest in the matter was to aid Flowers in purchasing the land. Crawford was not willing to sell the land to Flowers, and, if he had known that Flowers was the real purchaser and not Wallis, he would not have signed the contract of sale. When the time came for the consummation of the sale by delivery of the deed and the making of the cash payment on the purchase money and the giving of notes for the deferred payments, Wallis refused to go through with it. The evidence to that effect was undisputed. Crawford went to Clarksdale and saw him about the matter and insisted that the sale be consummated. Wallis declined. He stated to Crawford the real facts about the matter; that the contract of sale was for Flowers and not for him. Crawford thereupon returned to Wallis the earnest money of one thousand dollars, and proceeded to sell the land to Thomas, the garnishee defendant. That sale was consummated.
The provision in the brokerage contract, above quoted, could mean nothing else except that, if Wallis refused to consummate the sale, as he did, Partee would receive no commission whatsoever for his services. Concede, for the sake of argument, that Crawford could have gone into the courts and forced Wallis to consummate the sale, still under the contract Crawford was not required to pursue that course. The contract provided for that contingency. After Wallis refused, Crawford had the right to treat the contract as at an end. In doing so his contract with Partee provided against any liability for commissions. In other words, Crawford had the right to provide, as he did, that he should not be liable for the commission if he were forced to resort to the courts to enforce the sale.
The evidence in this case fairly interpreted means that Partee and Dalton, the real estate agents, and Flowers knew that Crawford would not be willing to sell the land to the latter, and with that knowledge concealed from Crawford the fact that Flowers and not Wallis was the real purchaser. Section 381, A.L.I. Rest. Agency, provides: "Unless otherwise agreed, an agent is subject to a duty to use reasonable efforts to give his principal information relevant to affairs entrusted to him which, as the agent has notice, the principal would desire to have and which can be communicated without violating a superior duty to a third person." An illustration of that section is in the following language: "A, a real estate broker acting for P, introduces to P as the real purchaser one whom he knows to be acting for a person with whom P would be unwilling to deal. A commits a breach of duty by so doing and is not entitled to commission for conducting the transaction."
Affirmed.