Opinion
12539
December 5, 1928.
Before TOWNSEND, J., Richland, July, 1927. Affirmed.
Action by John M. Hawley against Henry F. Jennings. Judgment for plaintiff, and defendant appeals.
The decree of Judge Townsend here follows:
This action was brought by the plaintiff against the defendant, an attorney at law of the Richland bar, to require the defendant to account to the plaintiff for the sum of $1,500.00, together with interest thereon, which plaintiff alleges was received by the defendant as his attorney, and for which he has failed to account and pay over to the plaintiff, and was heard before me at chambers in Columbia. It is admitted in the answers of the defendant that he was retained and employed by the plaintiff as his attorney, as set forth in the third paragraph of the complaint, and also that the plaintiff made demand on him to account for the said sum of $1,500.00, and that he refused to do so, as stated in the tenth paragraph of the complaint.
I find from the evidence:
That a few years prior to the year 1921 the plaintiff had requested one W.D. Bates to sell for him a tract of land in Richland County containing approximately 900 acres. After that time it appears that this matter was handled by both Bates and the defendant herein, the plaintiff testifying that sometimes he talked to one and at other times to the other of these parties, with reference to the sale of the land. During the early spring or summer of 1921 certain creditors of the plaintiff threatened foreclosure proceedings, and did bring an action against the plaintiff, who thereupon retained and employed the defendant as his attorney to represent him in that litigation and to arrange for the settlement of certain claims on which the plaintiff was being pressed for payment at that time. During the pendency of that litigation the defendant, as attorney for the plaintiff, appears to have taken practically sole charge of the matter of selling said tract of land in order that the debts against the plaintiff might be paid. The correspondence between plaintiff and defendant shows that defendant represented to plaintiff that the best offer he could obtain for said land was approximately $5,500.00, and that the plaintiff, believing such to be the fact, wrote to the defendant that he would accept that amount for said tract of land. It appears that the negotiations for the sale of the land, which finally resulted in the execution of a deed by the plaintiff, was conducted between the defendant and his agent or co-partner, one Daniel, on the one hand, and one Hottal of Spartanburg, S.C. on the other hand. Hottal seems to have been the agent or attorney for Mr. Alexander of Spartanburg, and probably other parties, interested with him, in the purchase of the land. See letter from defendant to plaintiff — Exhibit A — dated May 17, 1921. Before the sale was actually completed, and while the relation of attorney and client existed between the plaintiff and defendant, it appears from correspondence between the defendant and Hottal that Hottal was merely the middleman in the negotiations, and that he was to bring his client, Mr. Alexander, to look over the land which was to be sold, if possible, to Alexander for a higher price than the sum of $5,500.00. In his letter to the defendant of June 29th, after the sale — Exhibit U — Hottal clearly shows that he was merely to produce a purchaser, and that he was endeavoring to conceal from the purchaser the fact that Hottal was to receive the difference between $5,500.00 and $7,000.00, the actual purchase money. In his letter to defendant of May 25th (Exhibit R) Hottal refers to the sum of $5,500.00, but does not state that he would give that amount. He says:
"You will hear from me in a few days definitely. Of course, you understand I must work with an overage in view and I shall ask that the consideration mentioned in the deed shall protect me, which will be worth something to you and Mr. D. You will hear finally from me yet this week."
In defendant's letter to Hottal of May 26th, acknowledging receipt of Hottal's letter of May 25th, defendant says:
"I am glad that you think the deal will go through and I am sure that you are getting hold of a money-making property. Mr. D. and I both appreciate your offer of making the deal worth something to us and are willing to co-operate with you — the consideration in the deed can be fixed to suit you."
In this letter defendant further says:
"I might say in addition that the place has not been offered for sale around Columbia for less than $12,500.00, and Mr. D. offered it to Gaffney interests for $10,000.00, and only their inability to raise the purchase price, they assured Mr. D., kept them from buying."
Later Hottal came down with Mr. A.M. Alexander, the prospective purchaser of the land, and on June 8th the deal was closed by payment of $1,000 in cash, and the balance of $6,000 to be paid on or before July 1, 1921. On that date defendant, as attorney for John M. Hawley, gave a receipt to Mr. Alexander for the $1,000 cash expressed as being a portion of the purchase price of the tract of land in question (Exhibit H). On June 9th (Exhibit B) defendant notified the plaintiff for the first time that the tract of land had been sold, and stated in his letter that he was inclosing for execution a deed to Mr. A.M. Alexander. He also says in that letter that Alexander "gave me $500 for you as earnest money." On July 1, 1921, defendant wrote a letter to plaintiff, and inclosed a statement showing how he had disbursed $5,500. The heading of the said letter has the following: "In re. sale of tract of land to A.M. Alexander," and the statement is headed as follows: "Statement of settlement between J.M. Hawley and A.M. Alexander for purchase of tract of 911 acres in Richland County on Hard Scrabble Road. Dr. purchase price, $5,500.00."
The plaintiff's testimony shows that he did not discover the fact that Alexander had paid $7,000 for the land until some time in October, 1923, when he made demand on defendant for information and settlement. (See Exhibits G and F.) The testimony further shows that the defendant failed to disclose the fact that Alexander had paid $7,000 for the land, and the deed to Alexander, sent to plaintiff for execution, expressed the consideration of $5 and other valuable consideration, including the payment of certain mortgages.
The defendant's contention is that he had sold the land to Hottal for $5,500, and that Hottal afterwards sold the land to Alexander for $7,000. The testimony, however, of Hottal, is to the effect that the defendant and Bates, his co-worker, repudiated the entire transaction, and Hottal's testimony in this respect seems to be corroborated by the other facts and circumstances connected with the transaction of dividing the $1,500 referred to as "overage." First, there is not a particle of evidence that any binding contract was ever made with Hottal for the purchase of the land by him, but it was represented to plaintiff that the land had been sold to Alexander. Second, if Hottal had purchased the land for $5,500, and then resold it to Alexander for $7,000, Hottal would clearly be entitled to the excess of $1,500. Third, after the money was paid by Alexander to the defendant, Hottal claimed the $1,500, but he testified that the defendant and Bates repudiated the whole transaction of his alleged purchase. Fourth, the $1,500 appears to have been distributed as follows:
Hottal ................................. $ 500.00 Bates .................................. 500.00 Daniel ................................. 387.50 The balance was retained by the defendant, as shown by his testimony. Taking the whole testimony with reference to the commissions and the $1,500 excess, it appears that the total amount deducted from the $7,000 was as follows: Alleged excess or overage .............. $1,500.00 5% commissions of $5,500 ............... 275.00 _________ $1,775.00 The testimony of defendant and Bates and Daniel shows that the sum of $1,775 was distributed as follows: Amount paid to Hottal ................. $ 500.00 Amount paid to Bates .................. 500.00 Amount paid to Daniel ................. 387.50 Amount retained by Jennings ........... 387.50 _______ $1,775.00 Defendant said in his testimony that whatever amount Daniel got was to be equally divided between Daniel and himself. Therefore, as Daniel was to get the original commission of $275, or 5 per cent. on $5,500, as shown by the testimony, and as only $1,000 was paid to Hottal and Bates, the balance of $775 must necessarily have been divided between Daniel and the defendant. The defendant's own direct testimony, as well as his cross-examination, tends to prove these facts. It was defendant's duty to have notified plaintiff of all these facts prior to the execution of the deed. The plaintiff testified that he had the utmost confidence in the defendant, and believed his statements as to the sale of the land for $5,500 to be true, and that he would not have executed a deed had he known at the time that Alexander paid $7,000 for the land. The undisputed testimony shows that there never was any binding contract for the sale of the land to any one except Alexander, and that the true consideration paid by Alexander was never disclosed prior to the execution of the deed, by defendant to plaintiff, Nor was the fact that the defendant was personally interested in the consideration to be paid over disclosed to plaintiff until he had secured the information himself from Alexander.The facts show a clear case in which the defendant must account to the plaintiff for the sum of $1,500, with interest thereon from October or November, 1923, when he demanded a settlement from defendant.
The principles of law and equity applicable to the facts in this case have been repeatedly announced by our Courts, and they are well settled in this State.
In view of the fact that the defendant herein, while the relation of attorney and client existed between him and the plaintiff, agreed with Hottal to share in the $1,500 alleged overage claimed to arise from an alleged contract of sale, the decision in Miles v. Ervin, 1 McCord, Eq., 524, 16 Am. Dec., 623, is strikingly applicable, and conclusively shows that defendant is liable to plaintiff for the sum of $1,500, with interest thereon at least from November 1, 1923, as plaintiff made demand therefor upon defendant at least in the latter part of October, 1923. See, also, Sumter Trust Co. v. Moses, 116 S.C. 450, 107 S.E., 918.
It is therefore ordered, adjudged, and decreed that the plaintiff have judgment against the defendant for the sum of $1,880.36, which includes $389.36 interest from November 1, 1923, to July 15, 1927.
Mr. James S. Verner, for appellant, cites: Here fact that agent or broker, after having effected sale of a piece of property for one client resells same piece to another, does not render him liable for any profits realized on second sale: 9 C.J., 540, 541; 205 Mass. 224. No duty to communicate name of prospective purchaser to principal unless requested: 23 A. E. Enc. L., 913; 9 C.J., 615; 142 S.C. 33.
Messrs. McDonald McDonald, for respondent, cite: Principles of law and equity applicable to the relations of principal and agent: 4 DeS. Eq., 651; 1 McC. Eq., 524; 30 S.C. 238; 89 S.C. 352; 116 S.C. 450; 2 R.C.L., 966-68, 973-74; 6 C.J., 682, 686, 693; 60 S.E., 410; 105 S.E., 570; 111 S.E., 627; 61 S.E., 806; 23 L.R.A. (N.S.), 679, 690; 6 L.R.A., 369; 12 S.E., 153.
December 5, 1928. The opinion of the Court was delivered by
For the reason assigned by his Honor, Judge Townsend, it is the judgment of this Court that the judgment of the Circuit Court be affirmed.
MESSRS. JUSTICES COTHRAN, BLEASE, STABLER and CARTER concur.