Harten v. Loffler

Mr. Chief Justice Shepard delivered the opinion of the Court: The only question material to the determination of this case arises on the error assigned on the exception taken to the refusal of the court to direct a verdict for the defendant. The law is quite liberal in its recognition of the right of a real-estate agent or broker to recover reasonable compensation from the owner of property, who, desiring to sell the same, contracts for, or accepts his services in finding a purchaser ready and able to pay the price. On the other hand, it is a thoroughly well-established principle that, out of consideration for human weaknesses, the law will not permit such brokers, and others occupying fiduciary relations, to put themselves in a position where they are subject to the demands of conflicting duties; without, at least the full knowledge and consent of both vendor and vendee, even if then, one cannot act as the agent and representative of both in the same transaction. The duty of an agent for the vendor is to obtain the highest possible price for his property; of the agent for the purchaser to buy it for the lowest price. These duties are so irreconcilable and conflicting that they cannot be performed by the same agent without danger that he will sacrifice the interests of one to the other, or both to his own when [369] his commission is dependent upon the consummation of the sale. If he so acts as the agent of each without the knowledge of both, he is clearly guilty of a breach of his contract, and commits a fraud by his concealment. A contract under such conditions is contra bonos mores, and the law, acting in harmony with morals, will refuse to enforce it. Raisin v. Clark, 41 Md. 158, 161, 20 Am. Rep. 66; Farnsworth v. Hemmer, 1 Allen, 494, 495, 79 Am. Dec. 756; Rice v. Wood, 113 Mass. 133, 135, 18 Am. Rep. 459; Marsh v. Buchan, 46 N. J. Eq. 595, 597, 22 Atl. 128; Bell v. McConnell, 37 Ohio St. 396, 399, 41 Am. Rep. 528; Capener v. Hogan, 40 Ohio St. 203; Bollman v. Loomis, 41 Conn. 581; Murray v. Beard, 102 N. Y. 505, 508, 7 N. E. 553; Wilkinson v. McCullough, 196 Pa. 205, 208, 79 Am. St. Rep. 702, 46 Atl. 357; Warrick v. Smith, 137 Ill. 504, 27 N. E. 709; Hafner v. Herron, 165 Ill. 242, 247, 46 N. E. 211. Applying the principle above stated to the evidence offered on behalf of the plaintiffs, we are of opinion that the court should have directed a verdict for the defendant. It is clear that Andrew Loffler visited Harten at the suggestion, and on behalf of Ernst Loffler, who directed him to inquire if the property was for sale, and at what price. He said: “I went out there for the sole purpose of getting this business and this place for Ernst Loffler.” That he had no agreement for, or no intention of charging, compensation for his services, if such be the case, did not prevent the relation of principal and agent from attaching, and bringing his principal under an implied promise to pay the value of his services. He did not disclose this agency to Harten. Without disclosing the name of the proposed purchaser, whom he claimed to have found, he made the authorized offer of $11,000, which Harten declined to accede to, having fixed his price at $12,000. The many visits made were thus explained: “The necessity for so many visits to Harten was because I was trying to get it for Loffler.” Accepting the truth of this statement, which must be done on a motion to direct a verdict against him, to the effect that Harten authorized him to act as his agent for sale at $12,000, and promised to pay him a commission of $3,000, it appears that, instead of forwarding that object, as he was [370] in duty bound, he was trying to induce him to reduce the price in the interest of his first principal. Nor does it appear from the testimony that Ernst Loffler was informed that he was also acting as agent for Harten. The manner in which he attempted to perform these inconsistent and irreconcilable obligations to each principal appears from the following statement: “I was interested both ways; I was trying to get it as cheap as I could for Mr. Loffler, and I was trying to get all I could for Mr. Harten.” This alternate persuasion was practised upon parties adversely interested, by one whom each had the right to believe was acting solely in his own interest. That Harten did not yield to his persuasion while Loffler did, does not affect the question of his right to recover from Harten for his services, either upon an implied or an express contract. The law will not give enforcement to a claim founded on such conduct. The authorities cited on behalf of the appellee go no farther than to hold that, where one acts as a middleman, merely bringing vendor and vendee together, to make their own contract, without aid, advice, or interference to, or on behalf of, either, he may obtain compensation from both, even without knowledge by one of such arrangement with the other. Ranney v. Donovan, 78 Mich. 318, 329, 44 N. W. 276; McLure v. Luke, 154 Fed. 647; Manders v. Craft, 3 Colo. App. 236, 238, 32 Pac. 836; Orton v. Scofield, 61 Wis. 382, 384, 21 N. W. 262; Rupp v. Sampson, 16 Gray, 398, 401, 77 Am. Dec. 416; Knauss v. Gottfried Krueger Brewing Co. 142 N. Y. 70, 75, 36 N. E. 867. Whether this doctrine be sound to the full extent of want of knowledge by the respective parties, it is unnecessary to inquire, as there is nothing in the facts of this case to which it can be applied. Andrew Loffler was no such “middleman.” For the error pointed out, the judgment will be reversed with costs, and the cause remanded for further proceedings not insonsistent with this opinion. Reversed. A motion to recall and amend the mandate was overruled June 2, 1908.