Cloyd v. Reynolds

Opinion by Rice, P. J., In January, 1902, D. M. Cloyd, the original plaintiff, delivered to the defendant, in Virginia, a horse to be sold by the latter on commission. By the terms of the agreement, the animal was to be sold for such price as the defendant should deem fit “so that the colt shall pay to — 369 — D. M. Cloyd the full sum of $500 and whatever part of the profits over that amount that is mutually satisfactory.” The defendant brought the horse to Huntingdon county, Pennsylvania, and in February, 1902, sold him to the firm of Trexler Bros. & Co. for $700. Soon thereafter the horse was shipped by the latter to West Virginia and was killed in a railroad accident. On February 25 of that year, the defendant wrote to Mr. Cloyd informing him of the death of the horse, and also describing the railroad accident, but the letter did not inform him that he had sold the horse to Trexler Bros. & Co. Indeed it was so worded as to convey the impression that he personally had shipped the horse to West Virginia to be sold. Shortly after the accident Trexler Bros. & Co. brought an action in Bedford county, Pennsylvania, against the Baltimore & Ohio Railroad Co. for the recovery of damages for the loss of the horse (see 28 Pa. Superior Ct. 198, 207), and during the progress of that litigation the defendant wrote Mr. Cloyd letters regarding it, but did not inform him that the suit was brought by Trexler Bros. & Co. On the contrary, his letters, particularly the one of November 16, 1905, were calculated to convey the impression that the suit was one he was carrying on. In April, 1908, Mr. Cloyd brought this action of assumpsit to recover the price for which the defendant sold the horse. He alleged in his statement of claim, and the evidence given on this as well as on the first trial of the case, was sufficient to warrant a finding by the jury, that he did not learn that the horse had been sold until March, 1908, and that the defendant fraudulently concealed the fact until it was too late to bring suit against Trexler Bros. & Co. The case was twice tried. Before the second trial the plaintiff died and his executors were substituted in his place. His death and the issue of letters testamentary to the plaintiffs were admitted, but it is contended that they could not maintain the action without offering the will showing that they were vested with that right, “and — 370 — until it clearly appeared by that instrument that the right to maintain this action had not been vested in some other person or beneficiary under the will.” As the action was one which by law survives, their power to prosecute the suit to final judgment as fully as the decedent might have done if he had lived, was given by the act of February 24, 1834, P. L. 70. It was not necessary that this should be expressly mentioned in the will. And if there was anything in that instrument which would affect their prima facie right to prosecute the action, it was incumbent on the defendant to show it. Complaint is made of the rejection of the offer of the books of account of Trexler Bros. & Co. for the purpose of showing that they had not paid the defendant for the horse. As will be seen later, this was an immaterial fact. In other words, it was not essential for the plaintiff to show that the price of the horse had been paid to him, and it would have constituted no defense to have shown that it was not paid to him. The case did not turn on the question whether he had received the price, but on the question whether he had fraudulently concealed the fact of sale from Mr. Cloyd, and the latter had sustained loss in consequence of this breach of his duty as agent. Perhaps the books were properly admitted in evidence on the first trial, for the purpose of contradicting J. F. Trexler, who was a witness on that trial. But he was not a witness on the second trial, and we can see no ground whatever for admitting the books for the purpose of affecting the plaintiffs. It is argued that, in submitting the case to the jury, particularly in affirming the plaintiff’s second, third and fourth points, the court conveyed the impression that it was immaterial whether the concealment of the fact of sale arose by inadvertence or with fraudulent intent. It is true, the learned judge did not use the word “fraudulent’ ’ every time the subj ect of concealment was mentioned. But, viewing the charge and the answers to points as a whole, the jury could not have failed to understand that — 371 — fraudulent concealment, not mere inadvertent omission to inform Mr. Cloyd of the sale, must be found in order to entitle the plaintiffs to recover. This idea was clearly expressed and reiterated in the general charge. It was expressed in the qualifying remarks made in answering the plaintiffs’ second, fourth, sixth and seventh points, and was brought very forcibly to the jury’s attention by the unqualified affirmation of the defendant’s first point, • which was to the effect that, if the defendant did not disclose to Mr. Cloyd, his principal, the fact that he had sold the horse, “out of inadvertence and without fraudulent intent in said failure to disclose,” and did not receive the purchase money from Trexler Bros. & Co. or from any other source, the plaintiffs could not recover. There being no substantial error in the manner of submitting the question to the jury, their verdict must be taken as implying a finding that the defendant fraudulently concealed from his principal the fact that he had sold the horse, and that the latter did not learn that fact until it was too late for him to bring suit against the purchaser for the price. In view of such finding, it cannot be said that the plaintiff’s right of action against his unfaithful agent was barred by the statute of limitations. This was clearly decided when the case was here before. Our Brother Portee, speaking for the court, then said: “When property is delivered to an agent for sale upon commission at a distant point, while it is the duty of the creditor to make inquiry about his claim, it is likewise the duty of the agent to give him full and proper information in regard thereto when inquiry is made, and should the creditor be misled by the information thus given, within the time of the running of the statute of limitations, the statute will only begin to run against the creditor from the time he acquired knowledge of the receipt of the money by the agent. When a wrongdoer adds to his original fraud affirmative efforts to divert or mislead or prevent discovery, then he gives to his original act a continuing character by virtue of which he deprives it of the pro — 372 — tection of the statute until discovery: Wickersham v. Lee, 83 Pa. 416; Sankey v. McElevey, 104 Pa. 265; Smith v. Blachley, 198 Pa. 173:” Cloyd v. Reynolds, 44 Pa. Superior Ct. 81. The finding of the jury as to the defendant’s fraudulent concealment and Mr. Cloyd’s ignorance of the fact of sale, is also a conclusive answer to the defendant’s contention that in 1903 a new agreement was substituted for the original agreement, whereby Mr. Cloyd was to receive $500 and one-third of' the amount of damages that should be recovered from the Baltimore & .Ohio Railroad Co. The plaintiff denied that such new agreement was made, but the court submitted that question of fact to the jury, with instruction that if such agreement was entered into fairly and honestly between the parties, with full knowledge of the facts on the part of Mr. Cloyd, then this was a substitute agreement which bound the parties and was a complete defense, but if it was brought about by the defendant’s fraudulent concealment and misrepresentation of the facts it would not bind the parties. Viewing the answer to the plaintiffs’ fifth point in connection with these instructions in the general charge, which were then called to the attention of the jury, the answer to the defendant’s first point, to which we have alluded, the answer to his third point, and the answer to the plaintiffs’ eighth point, we are of opinion that the question as to the substitution of a new agreement was submitted to the jury in a manner quite as favorable to him as he was entitled to ask. For it is to be borne in mind that the defendant and his principal did not stand at arm’s length, but, by reason of the fiduciary relation between them, it was the duty of the former to act with entire loyalty and good faith towards the latter. Loyalty to his principal’s interest requires that an agent should make known to his principal every material fact concerning the subject-matter of his agency that comes to his knowledge in the course of his agency; and if he fails to do so he is liable to his principal for any — 373 — loss suffered in consequence of such failure. And in some cases it has been held that by so doing the agent makes the obligation or claim his own, on which he is hable to his principal as the third person would have been: 31 Cyc. 1450; Harvey v. Turner, 4 Rawle, 223; Arrott v. Brown, 6 Whart. 9; Brown v. Arrott, 6 W. & S. 402. This principle as to the agent’s duty to make full disclosures applies with peculiar force to transactions between the principal and agent respecting the subj ect-matter of the agency. Hence, if the alleged new agreement was entered into at the time when, as a result of the defendant’s intentional concealment, Mr. Cloyd was ignorant of this important and material fact, the defendant is not in position to insist that the original agreement was superseded by the new one, or, indeed, to claim any benefit whatever from the latter. With regard to the instructions concerning the solvency or insolvency of the purchasers of the horse, it is sufficient to say that it is immaterial whether they were solvent or insolvent. Certainly, there is no evidence of their insolvency, and, therefore, no error harmful to the defendant was committed in submitting the question to the jury. We think the case was well tried, and, upon full consideration of all the assignments of error, we discover no valid ground for disturbing the verdict and judgment thereon. The assignments of error are overruled and the judgment is affirmed.