Reed's Executors v. Reed

Mr. Justice Woodward delivered the opinion of the court, January 2d 1877. There was technical error in the answer to the first point of the defendants below. The declaration set out a contract on the part of Charles M. Reed to pay the plaintiff the sum of $10,000, if he “ would procure a purchaser of and effect a sale of what was known as the Erie canal, in which General Reed was the principal stockholder and largely interested.” This was followed by an averment that a purchaser had been secured, a sale effected, and his part of the agreement performed by the plaintiff. The point was in these words: “ If the jury believe from the evidence that some time in July 1870 there was an agreement between Charles M. Reed and the plaintiff, by which plaintiff was authorized to sell the Erie canal as the agent of General Reed, before the plaintiff is entitled to. recover he must show to the satisfaction of the jury that he made a sale or procured a sale to be made.” The answer was: “ Refused because no evidence of such a contract.” The disposition of the point thus made was entirely inadequate. The effect of it was to sever all connection between the case which the pleadings presented and the case which the evidence made out. The interpolation of the words “as the agent of General Reed,” into the point did not justify the answer, for the jury were told, in- another connection, that “ the plaintiff was in one sense of the word the agent of General Reed, at least to the extent of requiring from him perfect good faith towards the general in the whole proceedings;” In the general charge the relations of the parties were described with sufficient accuracy, but when the jury were told that there was no evidence of the contract averred in the declaration, the whole case was adrift, and thé grounds of the verdict for the whole amount of the plaintiff’s claim must have been chance and conjecture. In other respects the governing questions in controversy, so far as they were developed, were properly ruled. If the plaintiff acted upon the proposition made to him in July 1870, and procured parties to enter into a negotiation for the purchase of the canal, ahd while this was pending, five or six weeks were allowed to those ' parties to decide upon the offer of terms General Reed had made in answer to that which they had presented, a contract relation was created, which was violated by the sale to Scott within the time allowed. It is true that the agreement for the extension of time was without any consideration to support a contract which the parties proposing to purchase could assert. But the rights of the plaintiff -stood on different grounds. He had rendered service, in view of the inducement which had been offered him by General Reed, and when the sale to Scott made it impossible to carry the original agreement into effect, he became entitled to the stipulated compensation. In Edwards v. Goldsmith, 4 Harris 43, where a [426] broker was to receive a definite commission for procuring a purchaser for certain lots of ground, and complied with his part of the contract, but the defendant, without good reason, failed to comply on his part, it was held that the broker could recover in indebitatus assumpsit the amount of compensation agreed upon. And in Keys v. Johnson, 18 P. F. Smith 42, it was decided that when a broker authorized to sell at private sale has commenced a negotiation, the owner cannot, pending the negotiation, take it into his own hands and complete it, either at or below the price limited, and then refuse to pay the commissions. This view of the rights of the parties disposes in substance of the first, third and fourth assignments of error. The failure of the plaintiff to protest against the sale of the canal to Scott, when he was informed it was about to be made, was not necessarily fatal to his right to recover. It is to be assumed for present purposes that General Reed was aware of all the facts on which the rights of the plaintiff rested. The court charged that the neglect to make objections to the sale was “ strong evidence that the plaintiff did not understand that any time was given, as testified by Mr. Metcalf,” and they referred to the fact that none of the parties proposing to- buy, except Mr. Metcalf, testified that they were to have five or six weeks to make their decision on General Reed’s offer. The effect of the plaintiff’s silence was rightly submitted to the jury. If the plaintiff acted openly and fairly in uniting with the other gentlemen who proposed to buy the canal, his right to recover was not affected by the fact that he was one of the intended purchasers. His name was signed to the paper containing the offer, and his participation was not sought to be concealed. The court held that the plaintiff could not recover if he acted adversely to the interests of General Reed, and this was as favorable an answer to their fifth point as the defendants were entitled to receive. The general principle of law is well established. An agent cannot act for each of two contracting parties. He cannot buy or sell, on behalf of his principal, property in which he is interested without making known to his principal all the facts which are known to himself: Taylor v. Salmon, 4 Myl. & Cr. 139. The case of Bollman v. Loomis, 41 Conn. 581, was that of a person acting as the friend and confidential adviser of a purchaser while at the same time he was secretly receiving compensation from the seller for effecting the sale. It was held that this was forbidden by the policy of the law, and that a contract for such compensation was void. Here the connection of the plaintiff with the purchasers was disclosed to General Reed, and he did not require the connection to be dissolved. In their ninth point the defendants asked the court to charge upon the whole evidence that the plaintiff was not entitled to recover, [427] and the sixth error is assigned to the refusal of the point. In support of this assignment the counsel have subjected the whole of the testimony to elaborate review. Starting with the admitted principle that the plaintiff owed perfect fidelity and good faith to General Reed, the ground was taken in the first instance that this duty was violated by his failure to explain to-,the general the fact within his knowledge, that the parties proposing to purchase were willing to pay $250,000 for the canal at the time when the offer to pay $200,000 was made. This branch of the case was passed upon by the jury. The court said: “If the plaintiff knew that his party was willing to pay $250,000, it was not good faith to General Reed not to let him know that fact, and his failure to do so would forfeit all claim on his part to any compensation for what he had done, and in that case he cannot recover.” The verdict rendered under this instruction was decisive. In the next place it was alleged that the duty rested on the plaintiff promptly to disclose to his associates the counter-proposition of General Reed, and that this duty was wholly neglected. The general facts bearing on this subject, as gathered from the testimony, involve scarcely apparent conflict, and are capable of satisfactory reconciliation. At the meeting of the parties proposing to buy, on the 9th of August 1870, Mr. Rawle, Mr. Metcalf and the plaintiff were appointed a committee to present to General Reed a written offer to pay $200,000 for his interest in the canal. The offer was declined, and a counter-proposition was drawn up in pencil (formally written out and signed a week or two later) and given to Mr. Metcalf, by which the general’s interest was offered for $250,000, and some of the terms suggested by the purchasers were modified. It would seem that the agreement to give the purchasers five or six weeks for consideration must have been at this time made by General Reed. With the counter-proposition in Mr. Metcalf’s hands, the committee returned to the purchasers, and simply reported in the language of Joseph Walton, one of the witnesses, “ that the general was so poorly he could not give a definite answer at that time.” Not one word was said in reference to the terms that General Reéd had proposed. It does not appear that the agreement to give time was reported by the committee. Five witnesses, Messrs, E. A. Wheeler, Samuel Kimberley, James J. Bennett, Joseph Walton and-Thomas J. Burch-field, all testified that they never heard of the counter-proposition until after the sale of the canal to Scott, on the 15th of September 1870. With the facts fully within his knowledge as to the terms his principal was willing to make, it was contended on the argument here by the counsel for the defendants that, apart from the duty he owed to his associates, it was bad faith on the part of the plaintiff towards General Reed to withhold the facts from the purchasers, and permit them to separate with the vague understanding that a [428] second meeting should be held after their return from a pleasure trip to the east, which they were about to make. It was claimed that the plaintiff’s action could only have been taken in order to subserve some selfish purpose of his own, in the acquisition of which the interests of his principal would be sacrificed. And this court were asked, in view of the evidence, to lay their hands upon this record, and to reverse the judgment on this ground. Such a disposition of the cause is impossible for every reason. The testimony was parol, and a jury alone are competent to. establish facts. No point was presented to the court below by which this question could have been brought to their attention, and they were not required to grope for subjects of controversy which the parties did not themselves present. Judgment reversed and a venire facias de novo awarded.