Deakin v. Scheuer

Doerfler, J. In its decision the civil court found that the plaintiff, in procuring the exchange of the properties referred tO', acted in a dual capacity without having first made a full disclosure to both of the parties engaged in the exchange, and that such failure to make full disclosure, upon the grounds of public policy, debarred him of his right to a commission. The doctrine is well settled that a party engaging the services of an agent is entitled to the exclusive and undivided efforts of the latter in his behalf; that where an agent, unknown to his principal, upon an agreement for a commission, also engages to act for the purchaser or for a party with whom his principal desires to make an exchange, such agent cannot consistently represent the interests of both parties ; that in representing the one he must necessarily sacrifice the interests of the other, and vice versa; that he cannot sacrifice the interests of either party in order to further [237] his own individual interests by attempting to procure double commissions. 4 Ruling Case Law, 274, and numerous cases there cited in note 7. To this rule there are two well defined exceptions: Where the agent acts as- a mere middleman, and where he merely introduces the parties, leaving the bargain to be effected entirely to their negotiations, he may collect a commission from both. Herman v. Martineau, 1 Wis. 151; Stewart v. Mather, 32 Wis. 344; Siegel v. Gould, 7 Lans. 177; Mullen v. Keetzleb, 7 Bush, 253; Rupp v. Sampson, 16 Gray, 398; Green v. Robertson, 64 Cal. 75, 28 Pac. 446. Or where he acts as an agent for both parties, and has made a full and complete disclosure to each of the parties, a double commission may be earned. 4 Ruling Case Law, 275, and cases cited in note 9. In the instant case it appears that the plaintiff neither acted as a middleman nor did he make full disclosure. He was first hired as the agent of Weber. In his negotiations with the defendant he represented Weber. Such representation was continued until the agreement was fully executed, as is shown by his serving in the capacity of Weber’s appraiser. While a full disclosure of his relations with Weber was made by the plaintiff to the defendant, Weber at no time knew or was informed of the agreement made by plaintiff with the defendant under which the defendant agreed to pay plaintiff a commission. Under the evidence as thus disclosed plaintiff was acting in a dual capacity, not as a mere middleman, but as a broker, under an agreement for double commissions, without having first made a complete disclosure to both of the parties with respect to his hiring. Under such evidence the civil court was fully warranted in ordering the nonsuit. Meyer v. Hanchett, 43 Wis. 246. See, also, numerous cases cited in note to 93 Am. Dec. 173. “Even if the seller has knowledge of the double agency, but the buyer has not, the broker cannot recover from die former.” Sul [238] livan v. Tufts, 203 Mass. 155, 89 N. E. 239; Dennison v. Gault, 132 Mo. App. 301, 111 S. W. 844. See, also, extensive note in 24 L. R. A. n. s. 660, 661. We are referred by plaintiff’s counsel to the case of Donohue v. Padden, 93 Wis. 20, 66 N. W. 804, where, under the peculiar facts in that case, it was held by this court that the agent could recover from his principal notwithstanding he had entered into an agreement with the purchaser to also represent him. It appears, however, that in that case the agent was hired to procure a purchaser for a definite cash price. The agent, in procuring a purchaser for. the price fixed by his principal, fully complied with his undertaking, and there was from the very inception nothing that the agent could do which would jeopardize the interests of his principal. The agreement did not provide for the highest price or for advantageous terms of credit. When he procured the purchaser at the fixed price his commission was earned, and no opportunity was afforded at any time whereby it could become possible for'him to double-cross his principal. The rule pertaining to the dual agency above referred to is not a mere arbitrary, technical rule, but is founded upon reason and logic. Where the facts are such as to make the rule inapplicable the reason for the rule ceases, and the rule itself does not become effective. But where an agent is intrusted with a duty, pursuant to which he can consistently represent but one party, then a violation of his duty becomes a breach of trust and an act of disloyalty towards his principal. The public policy of this state on the'subject at issue is expressly declared by the provisions of sec. 4575m of the Statutes, under which the promise or payment of a commission to an agent by a third person, without the knowledge or consent of the principal, constitutes a criminal offense punishable by fine or imprisonment, or by both fine and impris [239] onment. An agent can no more legally accept a double compensation, unless he brings himself under the exceptions ,to the rule, than can an attorney at law represent both the plaintiff and the defendant in a lawsuit. What is needed in this day and generation is more honesty, devotion, and loyalty on the part of agents, and less dishonesty, disloyalty, and corruption. By far the great bulk of the business of the world under our complex industrial and commercial system is performed by means of agents. The relationship of an agent to his principal is in the nature of a trust. Business would soon become honeycombed with corruption if the rule were otherwise than as above indicated, and we are satisfied that the learned circuit judge was right in affirming the judgment of the civil court. By the Court. — Judgment affirmed.