153 P. 97 | Or. | 1915
delivered the opinion of the court.
“He said, ‘Well, there is no use beating around the bush. I know you have got all the information; you got it from Mr. Fear at the bank’; and he said, ‘We did pay Wilson a $3,000 commission.’ ”
Thereupon Kingsbury, as president of the defendant, demanded a rescission of the contract and a return of the $15,000. Wilson subsequently made written admission of the fact that he had received that amount of money from the plaintiffs for his services. The principal evidence coming from the plaintiffs on this point is found in the cross-examination of Gr. F. Hall:’
“Q. Now, isn’t it a fact that you told Mr. Kingsbury just in the words he gave in his testimony here — ‘I see you have got the whole thing; I had just as well own up’ — or words to that effect?
“A. I don’t think it was in that language.
“Q. Wasn’t in that language? Well, it was something like that, wasn’t it?
“A. I told him that he knew the amount, and it wasn’t necessary — well, I don’t know but what I used the words he said; beat around the bush. * # ”
On the knowledge of plaintiffs concerning Wilson’s interest in the corporation the same witness testified as follows:
*590 “Q. Didn’t you know that he had an interest and intended to take an interest in the development of that property?
“A. I knew he was interested in getting the thing going, but I didn’t know what his interest was.
“Q. Oh, you didn’t know what his interest was?
“A. No, sir.
“Q. You knew all of the time that'he was intending to take an interest in the development of the property?
“A. No, I didn’t know what his interest was.
“Q. I say, you knew that he was going to take an interest in that?
“A. Why the only way you can put that — I knew he was helping to push the project to completion, and taking an active part in it, but what his interest was I didn’t know.
“Q. Well, now, Mr. Hall, isn’t it a fact that you knew that he was to have a part of the proceeds or profits, whatever there was?
“A. I don’t know what this arrangement was in regard to the proceeds or anything about it.
“Q. You heard him talking with Mr. Kingsbury when they were up there, didn’t you?
“A. Yes; he talked about different things, and about the investment and about the project being a good one.
“Q. Yes, and isn’t it a fact now in your presence, while you were talking there, they figured up the probable gain or profits that could be made?
“A. I don’t know as any stated amount. They spoke about it being a profitable proposition all of the time, which I thought it was.”
Further as to the alleged concealment from the defendant of Wilson’s commission, the sworn statement of Gr. F. Hall is found in this excerpt from his testimony:
“Q. Now, then, Mr. Hall, you knew that Mr. Wilson did not want Kingsbury to know, didn’t you?
“A. Well, you might apply it in that way, but as for anything direct, why I would not know any more than*591 just naturally anybody would know about the transaction.
“Q. You did not expect him to get the information from Mr. Wilson, did you?
“A. Sure, I did. I supposed when he would ask Mr. Wilson, it would be up to Mr. Wilson to tell, because I had told him there would be a payment made.
“Q. You say there was never in the whole transaction any reason why you should not tell Mr. Kingsbury all about the commissions, was there?
“A. Why, I could have told him if I had felt disposed to, but I didn’t feel disposed to tell any more than I did.
“Q. You now claim there was nothing in the whole transaction that would prevent you from disclosing it?
“A. Only impliedly.
“Q. Only impliedly — and that was implied through Mr. Wilson?
“A. Well, through the circumstances of the deal.
“Q. Through the circumstances of the deal? And you knew about that at the time the deal was made, didn’t you?
“A. I knew that we had given Mr. Wilson a note for $3,000 to make this sale, and I had no occasion to go and tell Mr. Kingsbury or anybody else what we were giving. We had our price, and if Mr. Wilson sold at that price, and we were willing to pay him a commission, we considered that was our business and our privilege.
“Q. You impliedly knew at that time that Mr. Wilson did not want Mr. Kingsbury to know about the commissions, didn’t you — I mean at the time you gave the note ?
“A. Well, in an implied way, of course, I knew it.”
It is beyond controversy that the plaintiffs constituted. Wilson their agent to find a purchaser for the land. They not only did this, but they also gave him the additional character of an optionee to purchase the same in his own right. It is also thoroughly es
Hall’s admission that he knew Wilson was helping Kingsbury to push the project to completion, and taking an active part in it, imputes to the plaintiffs knowledge that Wilson was at least acting as promoter of the corporation, and consequently, that he was in its confidence and in duty bound to act in good faith toward it. It makes no difference that according to Hall’s claim he did not know what his interest was. He does not disclaim knowing that he had some interest. His own testimony is to the effect that he did know Wilson was a promoter of the defendant. The transaction was in fact tinctured with fraud as against the defendant. By clothing Wilson with the option as well as the employment to find a purchaser, the Halls equipped him for possible double dealing, and-at least placed themselves in the position of one who by an innocent act makes it possible for another to deceive to his hurt a third party who is equally innocent. The law is unquestioned that in such cases the loss, if any, must fall upon the one who made such a result possible. This is the rule laid down in Fiore v. Ladd, 22 Or. 202 (29
Again, the plaintiffs cannot accept the benefits of a transaction which is tinctured with the fraud of their own agent without suffering the consequent penalty of rescission at the election of the injured party: Dresher v. Becker, 88 Neb. 619 (130 N. W. 275).
*593 ‘ ‘ The notice must be more than would excite the suspicion of a cautious and wary person; it must be so clear and undoubted, with respect to the existence of a prior right, as to make it fraudulent in him after-wards to take and hold the property.”
Reversed. Rehearing Denied.