162 P. 1020 | Cal. | 1917
The plaintiff appeals from the judgment.
The complaint states a cause of action upon a promissory note for $1,350, executed by the defendant to J.C. Glenn and by him indorsed to the plaintiff, J.H. Glenn. The facts necessary to the decision of the case are stated in the findings.
J.C. Glenn, a real estate broker, as agent of the San Diego Construction Company and also as the agent of the defendant, *271 Rice, negotiated an exchange between them of a note of the construction company for a parcel of land owned by Rice. He acted, not as a middleman merely, but as the agent of each party. The exchange was duly carried out. Before its consummation, the construction company agreed to pay Glenn one thousand five hundred dollars for his services as its agent, and Rice orally agreed to pay a like sum for Glenn's services as his agent. The construction company paid the sum it had agreed to pay, as aforesaid. Glenn owed Rice the sum of $150, which was deducted from the compensation agreed on. For the remainder Rice executed to said Glenn the note sued on.
The construction company did not know that said Glenn was acting as agent for Rice, or that he was to receive from him any remuneration. Rice, however, did know, prior to said exchange, that the construction company had agreed to pay Glenn one thousand five hundred dollars, and with that knowledge he made his agreement to pay the like sum to Glenn, but he never expressly or otherwise waived any objection he might have to Glenn receiving the one thousand five hundred dollars from the construction company.
On September 12, 1913, the note was indorsed by J.C. Glenn to J.H. Glenn, the plaintiff, in consideration of $1,350 to be paid by J.H. Glenn, as follows: The sum of six hundred dollars in cash to J.C. Glenn; four hundred dollars to the American National Bank on the obligation of J.C. Glenn to said bank, and $350 to George E. Hart upon the obligation of said J.C. Glenn to Hart. He paid the six hundred dollars in cash to J.C. Glenn at the time of the indorsement, but he did not pay and has not paid the remainder of the consideration. It does not appear that the plaintiff, at the time he purchased the note and paid the six hundred dollars thereon, had any knowledge of the facts relating to the double agency of J.C. Glenn toward Rice and the construction company, as above stated.
On these facts the court rendered judgment for the plaintiff in the sum of six hundred dollars, with interest thereon and costs, and refused to render judgment for any larger sum. The plaintiff claims that he is entitled to recover the entire amount of the note.
The defendant claims that the facts relating to the double agency of the payee of the note for the two parties to the *272 exchange render the obligation to pay compensation for the services against public policy and void.
The authorities, with practical unanimity, declare that if an agent is engaged by both parties to effect a sale of property from one to the other, or an exchange between them, not as a mere middleman to bring them together, but actively in inducing each to make the trade, he cannot recover compensation from either party, unless both parties knew of the double agency at the time of the transaction. The reason for the rule is that he thereby puts himself in a position where his duty to one conflicts with his duty to the other, where his own interests tempt him to be unfaithful to both principals, a position which is against sound public policy and good morals. His contract for compensation being thus tainted, the law will not permit him to enforce it against either party. It is no answer to this objection to say that he did, in the particular case, act fairly and honorably to both. The infirmity of his contract does not arise from his actual conduct in the given case, but from the policy of the law, which will not allow a man to gain anything from a relation so conducive to bad faith and double dealing. And the fact that the party whom he sues was aware of the double agency and of the payment, or agreement to pay, compensation by the other party, and consented thereto, does not entitle him to recover. He must show knowledge by both parties. One party might willingly consent, believing that the advantage would accrue to him, to the detriment of the other. The law will not tolerate such an arrangement, except with the knowledge and consent of both, and will enter into no inquiry to determine whether or not the particular negotiation was fairly conducted by the agent. It leaves him as it finds him, affording him no relief. The following cases declare these rules, although the list by no means includes all the cases so holding: Chapman v. Currie, 51 Mo. App. 43; Capener v. Hogan,
No cases are cited by the respondent to the contrary. InJauman v. McCusick,
The note sued on reads as follows: *274
"San Diego, California, Sept. 2d 1913.
"Thirty days after date without grace, for value received I promise to pay to the order of J.C. Glenn at San Diego, Cal., Thirteen hundred and fifty and no-100 Dollars, with interest at the rate of seven per cent per annum from date until paid, interest payable quarterly and if not so paid to be compounded annually and bear the same rate of interest as the principal; and should the interest not be paid when due then the whole sum of principal and interest shall become immediately due and payable at the option of the holder of this note. Principal and interest payable in Gold Coin of the United States. Should suit be commenced, or an attorney employed to enforce the payment of this note I agree to pay an additional sum of ten per cent on principal and accrued interest as attorney's fees in such suit.
"J.C. RICE."
This note is negotiable in form. A negotiable instrument must be payable in money only, without conditions not certain of fulfillment, except the contingent agreement to pay attorney's fees and costs if suit be brought thereon. (Civ. Code, sec.
The cases cited by plaintiff to the effect that the bona fide purchaser of a negotiable instrument may recover its full face value, although he paid much less for it, apply only where he pays, or becomes indisputably bound to pay the whole price before he discovers the facts which render the instrument invalid. They are not contrary to the established rule above stated.
To the extent of the six hundred dollars which he paid, he is entitled to full protection, including the benefit of the agreement in the note to pay attorney's fees. The court should have allowed him ten per cent thereon as attorney's fees. To that extent the judgment was erroneous and should be modified accordingly. The interest will, of course, run from its original date. It does not appear, however, that this point was urged in the court below, and the appellant should not recover the costs of appeal on account of such modification. *276
In entering a judgment, it is not necessary to declare therein that it shall bear interest. It bears interest at the rate of seven per cent per annum from its date by force of the law and not by reason of any declaration it may contain to that effect. (Civ. Code, sec.
The judgment is modified so as to read as follows: "It is now, on this 12th day of November, 1914, considered by the court that the plaintiff recover of the defendant the sum of six hundred and sixty dollars, together with costs taxed at $15.25." As thus modified the judgment is affirmed without costs of appeal to either party.
Sloss, J., Melvin, J., Lorigan, J., Henshaw, J., Lawlor, J., and Angellotti, C. J., concurred.