Pratt v. Patterson's Executors

Mr. Justice Gordon delivered the opinion of the court, April 19th, 1886. It is certainly a correct rule of law, as held in Clendenon v. Pancoast, 75 P. S. R., 213, that a real estate broker’s commissions are earned whenever he has procured a buyer who will comply with the'conditions fixed by his principal for the property proposed to be sold. But it is to be understood that, this rule depends not only on the fact that the broker is to be regai’ded as the agent of the seller, but that, as such agent, he acts with the utmost good faith towards his principal, and if he does not so act he is entitled to nothing. In the case in hand, however, were we to consult the evidence alone, giving no attention to the allegations of the plaintiff, we might be compelled to regard him rather as the agent of the vendee than of the vendor. George Patterson, the defendants’ testator, had a property to sell, for which he agreed to take one hundred and forty thousand dollars; thirty thousand dollars in hand, and the balance to be secured by bonds and mortgage. Under these conditions the matter was placed -in the hands of the plaintiff as Patterson’s broker. He found a purchaser, and that purchaser was W. W. Harding, a perfectly responsible person, but through fear of competition, should his name appear in the transaction, the negotiation, so far as Patterson was concerned, was conducted in the name of Thomas Natt, Harding’s clerk. The latter was to be the ostensible buyer, Harding to advance the hand rnonej', and take an assignment of the deed after it had been executed by Patterson. The plaintiff himself testifies; “ I had nothing to do with Mr. Natt until the agreement was produced. Then Mr. Harding said Mr. Natt would represent him, for special reasons, in signing.” Now, it is hard to conceive why the name of Harding, the real vendee, should have been concealed from Patterson, unless the intention was to subserve the purposes of the former. It is urged, that whether the sale was made in the name of. a real or fictitious purchaser, it could make no difference to the seller; in either case he would get his hand money, and though admittedly the bonds, in the latter event, would be worthless, yet as the property itself was sufficiently valuable to secure the payment of the mortgage, the bonds were of no consequence. This argument, if such it may be called, is met by the pertinent inquiry; by what authority did the agent in this matter assume to judge for his principal? It does not require the discernment of a very acute casuist to perceive that it was Pratt’s duty to submit this whole matter to Patterson and allow him to determine whether he would prefer as a [480] purchaser the responsible or irresponsible party; whether he would, accept the bonds and mortgage of Natt rather than those of Harding. Good faith forbade the concealment of an arrangement intended for the advantage of the buyer rather than that of the seller. But passing this; when we come to that part of the transaction, in which, at the instance of Harding, the plaintiff carried to Patterson a bid "of. one hundred and thirty-five thousand dollars for the property, when, in fact, he, -the plaintiff, and Harding had, as between themselves closed the sale at one hundred and forty thousand dollars, we can no longer regard Pratt as the agent of Patterson. The learned and ingenious counsel for the plaintiff has endeavored to excuse and palliate the conduct of his client, but excuses and palliations cannot alter plain and obvious facts, or modify fixed rules of law. This conduct can only be excused on the ground of ignorance, and ignorance which caused him unwittingly, perhaps, to seem willing to tamper with the interests of his principal, in favor of the person with whom, as a professed agent of that principal, he was dealing. But not the less, had Patterson, on the discovery of this.fact, the right to dissolve, as he did, the relation between himself and Pratt, and treat the whole transaction as fraudulent and void. The judgment is affirmed.