Madden v. Cheshire Provident Institution

[418] The opinion of the court was delivered by Porter, J.: Several propositions are discussed in the briefs which, in the view we have taken of the case, it will be unnecessary to consider at length. Considerable ingenuity is displayed in two contentions: (1) It is said that if it were essential to the making of a binding contract that, the fact of acceptance be communicated to Madden,' it was communicated to him when Noble & Co. received the letter from the assignee authorizing them to deliver the deeds which had been duly executed. (2) It is contended that the deeds were actually deposited in escrow by the owner, and that Noble & Co. held them for that purpose. Both of these contentions rest upon the proposition that Noble &' Co. were the agents of Madden as well as agents for the owner. To this we cannot agree. They were the agents of the owner, and the law is well settled that an agent cannot represent both parties. There may be limitations to the general rule, but the rule is inflexible where the interests of the parties conflict. The vital principle of the law of agency is said to be'good faith, and this prohibits one from acting as the agent of opposing parties. (1 A. & E. Encycl. of L. 1073; Walker v. Osgood, 98 Mass. 348, 93 Am. Dec. 168; Mechem, Agency, §§ 455, 972.) In the recent case of Winter v. Carey, 127 Mo. App. 601, 106 S. W. 539, the Missouri court of appeals said: “There is scarcely a rule of law which has received more uniform approval than that an agent cannot serve the opposing party without the knowledge and consent of his principal. The law, recognizing that, in general, human nature is too weak to assure faithful service in such circumstances, has absolutely forbidden such dual position.” (Page 603.) In that case the agent claimed that his action was for the interest of his principal, and that in acting for the opposing party no fraud was intended and no in [419] jury done, but, in fact, a benefit accrued to his principal. After citing authorities, the court said: “Good faith, on the part of the agent and lack of harm to his principal will not interfere with application of the rule, for it is founded in public policy.” (Page 603.) It is very clear that Noble & Co. were not in any sense the agents of Madden. Again, it is insisted that under the facts in this case it was not essential to the making of a binding contract that the acceptance be commu’nicated to Madden at all. For the reasons which we shall attempt to show, it is wholly unnecessary to consider this claim.. Noble & Co. were agents with no authority to make or accept a proposition which would bind the owner. Their correspondence with Madden resulted simply in a proposition by Madden to purchase the property at a certain price. This proposition was submitted to their principal, and there was lacking only his acceptance to make a binding contract. Now, it is contended that there was an acceptance, and that this is shown by the proof which the plaintiff offered that the assignee sent to Noble & Co. a letter enclosing deeds duly executed, with instructions which, in fact, accepted Madden’s proposition. But this did not constitute an acceptance. It is true there was evidence tending very strongly to show that the owner was satisfied with the offer, and intended to accept it, and that he went so far as to have deeds .of conveyance executed and to notify his agents of his intention; and, if the instructions in this letter had not been afterward modified, they would doubtless have resulted in a completed contract of bargain and sale. But before closing the matter the assignee received a better offer, which he accepted, and for this reason declined Madden’s. Keeping-in mind the fact that Noble & Co. were his agents, and not Madden’s, and that what one does through and' by an agent he does through and by himself, it cannot, be said that the owner of the property accepted the: [420] offer of Madden so long as the acceptance was within his control. It was as much in his control while in the possession of his agents at Topeka as though the deeds which had been executed and the letter of instructions to his agents had been left upon his desk in New Hampshire. So long as they were in the hands of his agents they were in his own hands. This disposes of every contention in the case. If there was in fact no acceptance, it is useless to consider the question of the effect of notice to Madden of something which never occurred. Noble & Co. owed good faith to their principal, but were under no obligation whatever to Madden. As the agents of the owner they were bound to inform him of any increase in the value of the land which was unknown to him when he fixed the price, (Hegenmyer v. Marks, 87 Minn. 6, 32 N. W. 785, 5 Am. St. Rep. 808.) Since they owed no duty to the plaintiff, he cannot maintain an action against them based upon their performance of a duty which they owed to another. One of the theories upon which the plaintiff tried the case was that a conspiracy existed on the part of the agents and the owner to defraud him out of the benefits of a contract, but as there was no contract entered into there is no foundation for the theory, The judgment is affirmed.