203 P. 496 | Mont. | 1921
prepared the opinion for the court.
The facts essential to a determination of the appeals herein are that plaintiffs • and defendant entered into a written agreement by the terms of which the plaintiffs engaged to sell certain lands of the defendant in Broadwater county for the fixed sum of $40,000, for a commission of five per cent. The instrument under which plaintiffs operated was designated “authority to sell.” Subsequently the plaintiffs, assuming to act as agents of the defendant, entered into an agreement with Stella G. Crowley, Mary D. Crowley, Walter H. Hill, and Gilbert Burteh (hereinafter referred to as purchasers) whereby the purchasers agreed to buy the lands of defendant according to the terms of the authority to sell. Stella G. and Mary D. Crowley are the wives of M. IT. and W. E. Crowley, respectively, and Stella G. Crowley is treasurer and M. H. and W. E. Crowley president and secretary of the Logan Land Company, the corporate agent. The other purchasers are strangers. Thereafter plaintiffs tendered to defendant contracts to be executed for the sale of the land to the purchasers in pursuance of the terms of their agency. The defendant did not examine the contracts, declined to sign them, and in fact refused to comply with the “authority to sell.” The purchasers were ready, able and willing to buy upon the terms specified in their agreement. This action is for recovery of $2,000 claimed to be due as commission. Trial was had to the court with a jury, resulting in a directed verdict for defendant and judgment thereon. Motion for a new trial was denied, and appeal is from the judgment and order denying the motion.
If the question here involved the integrity of a contract
“In Porter v. Woodruff, 36 N. J. Eq., on page 179 et seq., the following language is found: ‘The general interests of justice, and the safety of those who are compelled to repose confidence in others, alike demand that the courts shall always inflexibly maintain the great and salutary rule which declares that an agent employed to sell cannot make himself the purchaser, nor, if employed to purchase, can he be himself the seller. The moment he ceases to be the representative of his employer, and places himself in a position towards his principal where his interests may come in conflict with those of his principal, no matter how fair his conduct may be in the particular transaction, that moment he ceases to be that which his service requires, and his ‘duty to his principal demands. He is no longer the agent, but an umpire. He ceases to be the champion of one of the ■ contestants in the game of bargain, and sets himself up as a judge to decide between his principal and himself what is just and fair. The reason of the rule is apparent. Owing to the selfishness and greed of our nature, there must, in the great mass of the transactions of mankind, be a strong and almost ineradicable antagonism between the interests of the seller and the buyer; and universal experience has shown that the average man will not, where his interests are brought in conflict with those of his employer, look upon his employer’s interest as more important, and entitled to more protection, than his own. In such cases the courts do not stop to inquire whether the agent has obtained an advantage or not, or whether his conduct has been fraudulent or not. When the fact is established that he has attempted to assume two distinct and op
“In Ruckman v. Bergholz, 37 N. J. L. 440, is found the following language: ‘The judge, distinguishing this ease from one where the price was left open to the negotiations of the agent, instructed the jury that, though the plaintiff was interested in the purchase when it was made, he might, nevertheless, recover his commissions as agent, notwithstanding the defendant was not aware of the existence of such
“These quotations we shall properly close with the language of Story, Ag., section 210, quoted, with the approval of this court, in Englehart v. Plow Co., 21 Neb. 48, 31 N. W. 391;
But as opposed to the rule that an agent intrusted with the privilege of selling his principal’s property cannot become the purchaser, counsel for appellants rely upon Martineau v.
The same exception is recognized in 4 R. C. L., section 25, pages 277, 278. Herbert Kraft Co. v. Bryan, supra, presents a condition wherein trustees named in a trust deed sold property of the principal to a corporation of which they were stockholders and directors. The trust deed specifically authorized the corporation to become a purchaser at the sale. The court disposed of the contention that the sale was void as follows: “The claim that the sale was void rests solely upon the naked fact that the two trustees who made the sale were stockholders and directors of the corporation, and that this fact, ipso facto, and without any further showing, rendered the sale void. This position is not tenable. The plaintiff occupied no fiduciary relation to the trustees, and as holder of the debt secured had, under the express terms of the deed, the right to purchase at the sale. The two trustees, being stockholders and directors of the corporation, had some relation to and interest in its affairs; but that relation does not bring the case at bar within the principle that a sale by a trustee to himself is absolutely void. The purchase was not made by or for the trustees, but by the corporation for itself, and the seller and purchaser were not the same
In Cuneo v. Giannini, supra, the court apparently distinguishes between a “family corporation” and corporations generally, and in that case, the action of a majority of the board of directors of that family corporation, in which defendant’s wife was a director, was not disturbed. The apparent confusion in the decided cases involving the question under discussion disappears under analysis, and the authorities are harmonious in holding the agent to that high degree of skill and fidelity in his principal’s behalf which requires that his best efforts shall result to the advantage of his principal, thereby excluding the theory that he may occupy the inconsistent position of both seller and buyer, except in the instances herein mentioned, and vindicates the law’s intolerance of any suggestions that the agent may serve two masters. (Northwestern Nat. Bank of Great Falls v. Great Falls Opera House Co. et al., 23 Mont. 1, 10, 11, 57 Pac. 440.)
The above quotations are an adoption of the principle enunciated by Chancellor Kent in Davoue v. Fanning, decided in 1816, and reported in 2 Johns. Ch. (N. Y.) 251. Kansas, with statutes commonly called emancipation statutes, similar to those of Montana, disposes of the question involving the invalidity of a sale by the agent to his wife thus: “It is true that the common-law fiction of the legal identity of the husband and wife, and the very nearly complete merger of the latter in the former, does not now have recognition. In this state, as allowed by statute, the wife may contract with her husband. They may own separate estates, free from any present claim of interest by one in the property of the other —that is, as against the other — but it is not true that as to their respective possessions they are strangers in such a sense as to take a trustee’s sale by one to the other from out the operation of the rule in question. Upon the death of either of them one-half of his or her property descends under the statute to the survivor, and under the statute neither one, without the other’s consent, cap, by will, devise more than one-half his or her property. IT is true the interest of the one in the property of the other tvis contingent and uncertain,
And hence it is to be observed that the same stamp of universal disapproval is impressed upon a sale to the wife as to the husband, as agent.
That two of the purchasers were strangers in the transaction to the selling agents, and bore no business, kindred or other relation toward them, does not alter the rule. This finds
The plaintiffs in this action are M. H. Crowley and W. B. Crowley, individually, and the Logan Land Company, a corporation. The complaint alleges that the defendant employed the plaintiffs (not severally but jointly) to make sale of certain lands described in the “authority to sell,”, and by reason thereof we are not called upon to decide the question as to whether'or not the rule would be other than as herein expressed, were the Logan Land Company alone the selling agent and the only plaintiff in this action, and the contract of sale made with an officer or stockholder of that company.
Supplementing all of the foregoing discussion is section 5437, Revised Codes 'of our own state, which attaches certain limitations upon the powers of trustees to those of an agent, and in substance and spirit are all in accord with the views expressed • herein. (Rev. Codes, sees. 5437, 5374-5385.) Jáenee, as our conclusion, we hold that the contracts of sale tendered by plaintiffs to defendant were voidable at his option, and that he exercised that option by refusing to execute the same.
For the reasons herein expressed, we recommend that the judgment and order appealed from be affirmed.
Per Curiam: For the reasons given in the foregoing opinion, the judgment and order appealed from are affirmed.
Affirmed.