141 Iowa 386 | Iowa | 1908
The plaintiffs’ case, as stated in their petition, is to the following effect: On December 19, 1905, the Ottumwa Traction & Light Company was a corporation owning certain public service franchises in said city. Certain persons residing in said city, and spoken of in the record as the “Ottumwa crowd,” or “Ottumwa parties,” including plaintiffs and defendant, owned in varying proportions a majority of the shares of preferred and common stock which had been issued by said corporation and were then outstanding. The remainder of the stock issued was owned by parties residing in St. Louis, Omaha and places other than Ottumwa. These parties residing in Ottumwa were in the habit of consulting together and acting in harmony with reference to the protection and jmomotion of their several interests in said corporation, of which the plaintiff Merrill was president, and the defendant Sax secretary. All these parties desired to dispose of their stock if a buyer at a suitable price could be found. Late in October, 1905, a representative of LI. M. Byllesby & Co., of Chicago, appeared at Ottumwa and made some inqtiiry or investigation into the affairs of the corporation with a view to the purchase of the stock. While there, he made some' suggestion in a tentative way as to the price which his principal would be willing ■ to pay for said stock provided the entire issue could be obtained, and the Ottumwa parties, or those holding the bulk of the stock, including plaintiffs and defendant, met in consultation upon the subject. At that interview it seemed best that negotiations on behalf of said parties be conducted by some representative or representatives acting in the interest of all, rather than by each acting separately, and it was agreed to place the matter in the hands of the defendant, who was to be assisted by Maj. Mahon, one of their number, if assistance was required. Thereupon the de
In the first place, appellant performed no service as agent for Byllesby & Co. He did not represent that concern in any respect. He did undertake to sell to them an amount of stock substantially equivalent to tbe entire holdings of tbe Ottumwa parties for whom be was acting, and to use bis best endeavors to- procure tbe sale to them of all tbe remainder of tbe stock at a given price. In other words, as between him and Byllesby & Co., it was an ordinary contract of purchase and sale into which not tbe slightest element or appearance of agency entered. On December 7, 1905, the deal bad developed to a point where appellant felt himself in position to demand terms from Byllesby & Co. He bad in bis possession tbe stock which had been held by himself, Mahon, and tbe plaintiffs, and without which tbe scheme of tbe purchaser to take in tbe entire issue and reorganize the corporation could not be effected. Availing himself of this advantage, he impressed upon Byllesby & Co. the belief that the sale would not be carried out unless they paid him a large sum in addition to the contract price, and, yielding to his demand, the money in controversy was paid over to him. To call this exaction a commission is to dress the transaction in a garb it is not entitled to wear. The money so received by him was received for doing the very thing which he had agreed to do and which in good faith to those who intrusted him with their stock he was bound to- do, and it would be a most dangerous as well as inequitable rule to permit him to retain the sum so realized and avoid accounting therefor. If A. places his horse in the hands of B., with authority to negotiate a sale to C. on the best obtainable terms, and B., having obtained an offer which he is directed to accept, goes to C1., and, while having the horse
2. Same:gratuitous Appellant makes the further point that at most he was acting as a gratuitous agent, and is therefore not to be held to the same strict liability for an accounting; but he was not in any sense of the term acting gratuitously. These persons, as we have seen, were engaged in a common enterprise to dispose of their holdings of stock. As the purchaser wished all or none, the appellant and appellees each had a direct interest in bringing about the sale of the stock of his associates, and their agreement to share with appellant the expense incurred was also a valuable consideration, if any was needed, sufficient to support his express or implied agreement to represent their interests. Moreover, the agent who acts gratuitously is not in any manner relieved from the ordinary obligation upon agents to act in good faith with their principals and to account to them for all profits made out of the subject-matter of their agency. Salsbury v. Ware, 183 Ill. 505 (56 N. E. 149).
Other objections urged to the decree are either not borne out by the record, or they necessarily fall with those we have already considered and overruled.
The decree of the district court is right, and it is affirmed.