54 Wash. 356 | Wash. | 1909
Action by Louisa Easterly against John Mills and Fred Mills, copartners as John Mills & Son, to recover
The appellant contends that the trial court erred in denying her motion for a directed verdict. The respondents insist that the proper judgment was entered, and contend that, even though there had been sufficient evidence in favor of appellant to warrant its submission to the jury, the appellant and respondents by their joint motions withdrew the cause from the jury. When the two motions were interposed, there being no conflict in the evidence as to any material fact, the parties in effect waived a verdict of the jury, and submitted the cause for determination by the trial judge, who was then authorized to enter such judgment as the evidence warranted, and we will on this appeal dispose of the case on the same theory. Knox v. Fuller, 23 Wash. 34, 62 Pac. 131; Grigsby v. Western Union Tel. Co., 5 S. D. 561, 59 N. W. 734.
The following facts appear from the evidence: That on' February 18, 1907, the appellant, being the owner of certain improved real estate in Puyallup, entered into a written contract whereby she authorized the respondents to sell the same for $4,000, one-half cash, and agreed to pay them a commission of $150; that on or about April 29, 1907, one T. Shenkenberg approached the respondent John Mills with a proposition to buy the place for $4,500, paying $500 cash and the remainder in installments; that thereafter Mills effected an arrangement with one J. H. Williams, by which he was to purchase the property from the appellant for $4,000 cash, and immediately sell to Shenkenberg for $4,500, payable in installments ; that before seeing Williams, Mills placed Shenkenberg in possession of the property and accepted $50 from him as a deposit, with the understanding that if he finally
In September, 1907, the appellant first learned of the sale to Shenkenberg, and commenced this action to recover the extra $500, less commission thereon. The respondents have shown that the appellant expressed herself as satisfied with the sale at the time it was closed, and that they were authorized by their written contract of employment to sell for $4,000. They contend that they could not sell for $4,500 and secure $2,000 cash; that the appellant at the time needed more money than the $500 cash payment Shenkenberg was willing and able to make; that they carried out appellant’s specific instructions; that they first made the sale to Williams for appellant, and that after their relation to her as agent had been thus terminated, they made the second sale to Shenkenberg. These contentions are not fully sustained by
“The relation between a broker and his principal is a fiduciary one, calling for the exercise of the utmost good faith. It is the duty of the broker to serve his principal to the latter’s best advantage, and all profits which are the result of the relation belong to the principal.” 11 Current Law, 4)50, and cases cited.
“A broker is not permitted to deal with the subject-matter of his agency for his own advantage, but must give the principal the benefit of any profit he may make in the transaction. Thus where a broker, employed to sell, sells at a higher price than that authorized by the principal, or than that represented by the broker as the price received, or where a broker, employed to purchase, buys at a less price than that limited by or represented to the principal, he must account to his principal for the difference.” 4< Am. & Eng. Ency. Law (2d ed.), p. 969.
In Holmes v. Cathcart, 88 Minn. 213, 92 N. W. 956, 97 Am. St. 513, 516, 60 L. R. A. 73, the supreme court of Minnesota said:
“The principal may authorize his agent to sell or exchange his property, but it does not necessarily follow that the agent, by carrying out the specific instructions given him, fully performs his duty, and is relieved from liability. He is bound to the exercise of the most perfect good faith, and to keep his principal informed of facts coming to his knowledge. affecting his rights and interests. If, after receiving instructions to sell property on certain specified terms, the agent learns that other and more advantageous terms can be obtained, it is his plain duty, and he is under every legal and moral obligation, to communicate the facts to the principal, that he may act advisedly in the premises.”
If a real estate broker sells for a price in advance of that stipulated by his principal, and fails to account to the latter or inform him of the true facts, he becomes liable to his principal for the excess. A broker is not entitled to realize
“Mr. Shenkenberg liked this place very much and they decided to take it, if he could get it on his terms at $4,500. . . . We told Mr. Shenkenberg we could not sell it to him; that Mrs. Easterly would not sell it to him under those' conditions; that she required half or approximately half cash. But, I said, it is possible we can get a third party to carry this title and sell it to you on these terms, and I took the deposit from him with the perfect understanding on his part that we might not be able to get the deal through at all. If we were not able to do that we would either refund his money or the money he paid would apply as rental. Mr. Shenkenberg thoroughly understood that. We had some of his money and we had something to tie to, so that we went out and tried to find somebody that would take that title . . . We finally found Mr. Williams who, for the $500 bonus, was willing to buy this property, inasmuch as we had Mr. Shenkenberg in tow and could re-sell it for him immediately after for $4,500 on terms. Under these conditions Mr. Williams was willing to take the place and did take the place. When*361 we sold the place to Mr. Williams we were acting for Mrs. Easterly . . . Q. Now, then, you may explain to the jury why that contract of sale was dated back until April, if you know. A. I know exactly why. Money was hard to get and our experience had shown that it was difficult to find a purchaser for that place and as an additional inducement to Mr. Williams we told him that the interest on this contract would start back from the time that Mr. Shenkenberg made his deposit or to that day. Now, this was agreeable to Mr. Shenkenberg. We talked with him and he was agreeable to that and that brought the first annual payment of interest on Mr. Williams’ contract that much nearer and was an additional incentive to him to pay out the money and buy this place ... I will say that we were using every effort at our command to effect this sale for Mrs. Easterly and after we had a tentative agreement with Mr. Shenkenberg that was a very great help in that transaction. In fact, it would have been impossible to have gotten the deal through without the preliminary contract with Mr. Shenkenberg . . „ I told Mrs. Easterly the best we could do — the best sale we could make was $4,000 cash, which was exactly the case . . . The sale could not have gone through without the preliminary arrangement with Mr. Shenkenberg . . . Q. You got a commission from Mr. Williams for making that sale? A. Part of a commission, yes. Q. You got your commission all right from Mrs. Easterly for making this sale? A. Yes, sir. Q. Part of commission — how much of a commission from Mr. Williams? A. $150.”
In Kingsley v. Wheeler, 95 Minn. 360, 104 N. W. 543, the court said:
“An agent to sell land does not fulfill the measure of legal requirements by merely carrying out his specific instructions. He owes the duty of making a full, fair, and prompt disclosure of all facts affecting the principal’s rights or interests, or pertaining to the sale of land by him. He is denied the right to profit at the expense of his principal by concealment of facts which he ought to have revealed. Whatever advantage accrues to him by violation of his duties he must make good to his principal whom he has wronged.”
Although it was their duty to do so, respondents never
Respondents, as evidence of their good faith, contend that they conducted no negotiations for a sale to Williams until after their agency for the appellant had been terminated. There is no question, however, but that their original negotiations were with Shenkenberg, and that they would not have entered into any arrangement with Williams had they not relied on such original negotiations with Shenkenberg and the deposit of the $50 made by him, which they concealed from appellant. They were undoubtedly appellant’s agents when dealing with Williams.
The judgment is reversed and the cause remanded with instructions to enter judgment in favor of appellant for