Teague v. Hutto

HART, J., (after stating the facts). It is claimed by counsel for the plaintiff that' a breach of duty and obligation created by the relation of confidence between principal and agent is involved in this lawsuit and that Hutto and Scroggin acquired secret profits, during the existence of that relationship and that they should be held as trustees and compelled to account therefor to Teague, their principal. It is the theory of the plaintiff that Scroggin was the agent of Teague for the purchase of thé lands in question and that Hutto became aware of this fact, and entered into a conspiracy with him to secure a secret profit for themselves in the transaction based upon the trust and confidence which Teague placed in Scroggin. They rely upon the case of Tegarden v. Big Star Zinc Co., 71 Ark. 277, and contend that the facts of the present case bring it within the principles of law laid down in that case. Counsel for the defendants while admitting the correctness of the principles of law decided in that case and its application to the facts there presented by the record, insist that the holding of the chancellor was correct under the facts disclosed by the record in the present case. In this claim we think counsel are correct. It will be appropriate here to examine the case relied upon for a reversal of the decree by counsel for the plaintiff and compare the facts of that case with those shown by the record in the present case. There, Bordeen authorized the Tegarden Bros, to sell certain mineral lands for him. They in turn agreed with McFarland that if he would assist them in selling the lands they would divide the commissions to be received by them for selling the lands. McFarland organized the Big Star Zinc Company for the purpose of buying the lands. He became a member of it. The completion of the organization was delayed and during its progress, the lands were conveyed to McFarland for a much less sum than it was intended that the Zinc Company should pay for them. McFarland represented to each member of the corporation during the progress of its formation that the lands could not be purchased for less than $5,000, a sum greatly in excess of what Bordeen asked and received for them. Th^ corporation purchased the lands at this price. The Tegardens knew the representations made to the members by McFarland and sanctioned his course and conduct in the matter. The court held that under these circumstances McFarland could not make a secret profit out of the sale of the land, and the Tegardens being parties to what he did, occupied the same position he did because he had acted in the matter with their knowledge and approval. In the present case the record does not show that Hutto had any knowledge that Scroggin was acting as the agent of Teague. He only supposed that Scroggin was the friend of Teague and for that reason Teague consulted him. He intended that the deed should be made direct to Teague. England suggested otherwise for reasons of his own which are entirely disconnected with the theory that he was endeavoring to assist Hutto and Scroggin in making a secret commission out of the sale. The fact that Hutto did not state the amount of the commission to be received by him is not to be taken against him; for obviously such a course would tend to hinder the sale. It is claimed that the fact that the check by Hutto to Serogg'in was dated on the day of the sale, that this contradicts their testimony to the effect that it was done a few days after the sale, and was not thought of until it was done. It is true the check was dated the day of the sale but it was not presented for payment until the second day of February. This tends to corroborate the testimony of Hutto and Scroggin rather than contradict it. The check was doubtless presented for payment at the bank as soon as it was given, but was dated back ..as of the date of the original transaction. The check for the purchase money was collected at once and it is likely this check would have been presented at once too and the whole matter closed up. ¥e have not attempted to enter into a detailed discussion of the evidence, but both Hutto and Scroggin testify in positive terms-that there was no agreement of any kind between themselves for a commission in the sale. Their testimony is corroborated by England. He had no interest in the matter. It was generally known that he wished to sell the place. The negotiations between him and Hutto were free from suspicious circumstances. Under •all the facts .and circumstances, the chancellor was correct in holding- that the testimony was insufficient to show that Hutto knew that Scroggin was the agent of Teague for the purchase of the lands and conspired with him to induce Teague to purchase the lands in order that they might make a secret profit out of the transaction. This brings us to a consideration of whether or not Scroggin was the agent of Teague for the purchase of the lands. The testimony on this point is in direct conflict. According to the testimony of Teague, Scroggin was his agent. Scroggin denied the agency and testified that he only acted as the friend of Teague in the matter because he thought it to be a good investment. He said he was entirely disinterested and only advised with Teague about it as a friend. The investment turned out to be a good one. Scroggin says he was only interested as a friend of Teague in seeing that he did not make a bad bargain. That he had no thought of a commission in the matter until several days after the trade was made, .and then concluded that if Hutto had received a commission, he should have half of it. His demand for this was not, according to his testimony, the result of any agreement or understanding, direct or implied, before the sale. His testimony is in some respects corroborated by that of Hutto and England. The burden of proof was upon Teague to establish the allegations of his complaint by a preponderance of the evidence. The chancellor found that he had not done so. It is the settled rule of this court that the finding of facts made by a chancellor will not be disturbed on appeal unless they are against the preponderance of the evidence. Therefore, the decree will be 'affirmed.