| Tenn. | Sep 15, 1912
delivered the opinion of the Court.
The complainant, Siler, a duly licensed real estate agent, sought by his hill a money decree against N. B. Perkins and A. Gatliff, as individuals and as trustees of the stockholders of the Westbourn Coal Company, a Tennessee corporation. His bill was double in scope— in one aspect, based on express contract; in the other, upon contract implied and the quantum meruit. His purpose in either phase of the bill was to recover compensation for his services rendered, as a real estate agent, in effecting the sale of all the capital stock of the corporation above named which amounted to 650 shares of the par value of $100 per share; the purchase price at which the same passed from vendor to vendee in the transaction being the sum of $225,000, a large portion of which was cash, with notes given to secure the deferred payments, secured by deposit of the shares as collateral.
The defendants being nonresidents, injunction and attachment writs issued, and the capital stock and indebtedness on the deferred payments, sufficient in amount to satisfy the demands of the bill, were by these means impounded, which resulted in.the giving of a bond by defendants to discharge the writs and to satisfy such decree as might be rendered. Defendants answered, denying any indebtedness to complainant, but admitting that they had made the sale of stock alleged in the bill. Only three depositions were taken on behalf of complainant. One of these was that of complainant, cover
By this decree, a recovery and execution thereon was awarded complainant against defendants, and the sureties on their bond aforesaid for the sum of $3000 principal, and interest thereon from January 20, 1909, making an aggregate sum of $3,450, together with the costs of the cause. From this decree, defendants appealed, and have assigned errors in this court. These are five as numbered in the brief; but they raise, in fact, only three questions.
First. It is said the proof shows that, as to part of the stock sold, defendants Perkins and Gatliff were not owners^ but agents merely, and of what proportion of the stock they were owners does not appear, but that complainant knew that they were acting as agents only in respect of part of the stock, and to sustain this insistence they quote one of complainant’s answers to this effect: “I have always understood that Dr. Gatliff and Mr. Perkins and a man in Ohio were the principal and largest owners of the- stock.” And upon this evidence is based the argument that defendants Perkins and Gat-liff were acting as agents for a disclosed principal, and that their contract to pay complainant a commission for
Tbe second answer to tbe first assignment of errors is that while it is true as a general rule that in law “an agent wbo, acting within tbe scope of bis authority, enters into contractual relations for a disclosed principal, does not bind himself, in tbe absence of an express agreement to do so,” yet it is also true that whether such an agent does by such a transaction bind himself depends on tbe intention of tbe agent and tbe person dealing with him, and this intention must be gathered from tbe facts and circumstances of each particular case. And it is tbe disclosed intention that governs, and
“When a purchase is made by an agent, in the name and ,on the credit of the agent, for a principal not, disclosed to the seller, the latter may, upon discovering the principal, treat the sale as a contract with the principal, and hold him responsible for the price. The seller may have his action for the price, at his election, against the agent or against the principal; and this, though the seller at the time supposed the agent to make the purchase for himself, as principal. In such case, the contract, though apparently and in form with the agent as principal is in fact for the benefit of the principal, and in the performance of the agency, and is the contract of the principal. The law regards the reality rather than the form.” Davis v. McKinney, 6 Cold., 17.
But as a matter of course, when a third person contracts with an agent with knowledge of that fact, and also with knowledge of the principal for whom the con
Under these legal principles we think it clear that when these defendants, without disclosing to complainant the names of the holders of the stock, assumed to represent the holders of all the stock, only giving to complainant the knowledge that one man in Ohio, and themselves were the principal owners of the stock, it cannot be said that these defendants disclosed the names of their principals to complainant; and when, under these facts, they, for themselves and their associate stockholders, accepted the benefits of the services of complainant in finding for them a purchaser for the entire capital stock under a contract, express or one arising by implication.of law out of the dealings between them and complainant, they cannot defeat his recovery of just compensation for making the sale or finding the purchaser who took all the stock at a price agreeable to all the stockholders, by invoking the defense that complainant’s contract for compensation was not with them, but with their principals. Who were their principals? The record gives no answer. Their answer to complainant’s bill does not disclose, and, if their depositions did disclose this fact, they were not read on the trial. So that, so far as the record shows, neither in their negotiations with complainant nor in the con
A part of the purchase-money indebtedness secured by a deposit of the stock as collateral was impounded by the injunction and attachment writs, and to discharge these writs the defendant, Perkins and Gatliff, executed an individual bond to pay any recovery which complainant might obtain in this cause, and by means of this bond they freed from the grasp of complainant, the fruits of his labors, which they had held as agents and trustees for all the stockholders. Therefore, they will not be heard to say that they are not personally liable for the decree in this case. The final decree, following the theory of the assumption by complainants of any liability which might be disclosed under the bill of complaint, ran against Perkins and Gatliff as individuals and against their individual sureties on the bond aforesaid. The same theory of the individual liability of defendants is followed in the execution by them of the appeal bond, by which they bring the decree of the chancellor to this court for review. That decree in general terms adjudges complainant to be entitled to the relief sought, whether upon the express contract or the impliéd contract averred in the bill. ,It does not show, nor did it show whether, in the opinion of the chancellor, they
It is next said that “the chancellor erred in holding and decreeing that the complainant carried out his contract, so as to entitle him to recover his alleged commission.” The record clearly discloses without dispute that complainant, under a contract so to do, did procure a purchaser who was acceptable to his principals, and who Avas ready, able, and willing to buy on the terms to Avhich the principals had agreed, and that the sale was actually closed, and the principals had in their possession the fruits thereof, before this suit was brought. The record does show that, after the agent had brought the parties together, some changes were made in the details of the trade, and that the agent was not present at the actual consummation of the trade and delivery of the property. But this all occurred after he had asked one of the defendants if there was anything further he (complainant) could do in the premises and had been assured to the contrary. It is clear that the sale was the result of the labors of this agent in bringing the parties together, and that his labors were by no
It is next said that complainant accepted from tbe parties to -whom tbe sale was made an employment to act for them in the same matter, and therefore that bis contract with defendants and right to recover under it ceased.
“In general, an agent may, with their full knowledge and consent, represent both parties to a contract, and his contracts, under these circumstances, bind each within the scope of his authority. But where an agent, without the full knowledge and consent of his principal, represents the adverse party in a transaction, his contracts relating thereto are voidable at the option of the principal. The payment of a bribe, secret commission, or gratuity to the agent by a third party as an inducement for entering into contractual relations on behalf of his principal, or an agreement to pay such commission, will entitle the principal to avoid the contract.” Cyc., vol. 31, pp. 1572, 1573. And on the same subject, see Moinett v. Days, 1 Baxt., 431; Tynes v. Grimstead, 1 Tenn. Ch., 508; Perkins v. McGavock, 3 Hayw., 265; Hadley v. Latimer, 3 Yerg., 537; Coffee v. Ruffin, 4 Cold., 487; Raht v. Union Consolidated Mining Co., 5 Lea, 1.
There is no doubt about the general rule of law urged in support of this assignment, nor question of the sound
The sum and substance of the whole business was that in shaping up the proposition to be submitted to the proposed purchasers and lest they might be deterred from buying by the fear that the price was loaded with a heavy commission for the complainant as agent, it was agreed that defendants, or one of them, should write complainant a letter stating, in substance, that he might add to the price demanded by defendants the sum of $1000. This letter it was intended that complainant should show to the purchasers, and this letter Avas written by one of these defendants, and was by complainant shown to the purchasers who made no objection to the arrangement, but never paid the $1000 to complainant. If there was collusion or fraud in this, it was leveled at the proposed purchasers, and defendants were particeps criminis. No harm ever came of it to defendants. The defendants, after taking advantage of the scheme to delude the purchasers as to the amount of commission carried in the purchase price, now seek to use it to defeat their obligations to complainant. It is also said under this assignment that complainant did not secure as much money for the property as the original price fixed by defendants, and from this fact
From what has been said, it follows that the decree of the chancellor must be affirmed, with costs.