Opinion
11-03-1902
BALLINGER et ux. v. WILSON.
Wm. T. Boyle and H. S. Scovel, for complainants. Wm. Early and Lewis Starr, for defendant.
Action by William F. Ballinger and wife against John O. Wilson. Decree for complainants.
Wm. T. Boyle and H. S. Scovel, for complainants.
Wm. Early and Lewis Starr, for defendant.
GREY, V. C. (orally). I think I can dispose of this case now as fully as if I took more time to consider it. There are neither complicated facts nor doubtful principles of law involved. The bill is filed by the complainants, claiming that Mr. Wilson, acting as their agent for the sale of a piece of property, secreted from them the fact that he could obtain a large sum of money for the purchase price, and induced them to believe that he could obtain only a smaller price; that he procured them to convey the property and to accept a settlement for the smaller price, under the belief that that was all that had been paid, when in fact he had received the larger price, and retained the difference for himself, thus depriving them of the benefit of the bargain. The allegations and charges of the bill are considerably wider in their scope as to the amount which the complainant Mrs. Ballinger is entitled to recover than the proof justifies. The answer denies the agency, insists that the defendant was himself the purchaser from the complainants by a written agreement of purchase, and that he made a resale for a higher price, and obtained the complainants to convey in ratification of his resale, and that the enhanced price belongs to him. The proof is, and I find as a fact, that Mr. Wilson, although he denies that he was the agent of the complainant Mrs. Ballinger, the owner of the lot, was in truth her agent for the sale of this land; that the bargain between them was that he should sell it for such a price that $1,050 should come to the complainants, and that all over that sum he might retain for himself, irrespective of what the amount might be. The transactions between Wilson and the Ballingers clearly recognize the fact that the latters' compensation for the sale of the land was to be $1,050, and no more, and that they had no right to anything above that if Mr. Wilson effected a sale. It was their property which he sold. He had no interest in the property, but he had an interest in effecting the sale. The arrangement between the parties that Wilson should find a purchaser for the Ballingers at the named price established the relation of these parties as principal and agent. They agreed that he might sell for a named price. He agreed that he would sell, if possible, for that price. When Mr. Wilson first testified on this point, he said he did not remember that anything was said between him and Ballinger to the effect that whateverthe lots brought over $1,050 he might have. Afterwards, upon being pressed on cross-examination, he admitted that there was a proposition by the Bailingers that he (Wilson) was to have all he could sell the lot for over and above $1,050. This he says he did not accept, but he admitted that there was a final arrangement between them, that what was realized above $1,000 should belong to him. Mr. Wilson claims that he purchased the lots himself from the Bailingers for $1,000 by a written agreement, which he produces, and that he resold them to Davis for $1,200, and obtained the Bailingers to convey to Davis to carry his (Wilson's) sale into effect, and that he is entitled to retain the whole $200 of profit. The proofs satisfy me, as above stated, Mr. Wilson did undertake to sell the lots for the Bailingers at the price of $1,050, his compensation to be whatever advance in price he could secure above that sum. They further show that Mr. Wilson sought to effect a sale to Davis at a higher price than the $1,050, and, having ascertained that he could probably accomplish this, he, without disclosing that fact to the Bailingers, induced them to agree to take $1,000 for their share of the purchase money, and to execute the mem. of sale to himself, and the deed to Davis, under the belief that he could not obtain so high a price as $1,050. In fact, he got $1,260. Such a transaction did not accord with the duty which an agent owed to his principals. Written agreements thus obtained will not be regarded in this court as of any binding effect, and the contract between the principals and the agent will be enforced as if no written agreement had been made. When the agent seeks to induce the principal to make a bargain with him touching the subject-matter of the agency, he is bound to disclose every fact which he knows, which might affect the principal's action. This is at the very basis of the confidential relation of principal and agent. To hold otherwise would permit the agent to obtain the disclosure of the principal's valuations of his property, his expectations of prices therefor, and his intentions as to sale, and to use them all for the private profit of the agent. It would destroy the relationship of principal and agent, for no man could safely employ another to do his business, and inform him of the incidents necessary to its conduct. The contract of employment in this case was, I am satisfied, originally undertaken by Mr. Wilson to sell the property for such sum as would pay $1,050 to the Bailingers. All over that sum was to go to Wilson for effecting the sale. The wrong done was in inducing them to reduce that price. The case of Quinn v. Le Due (N. J. Oh.) 51 Atl. 199, is no precedent for the matter now under consideration on the point of denying all compensation to an agent where he has been guilty of fraudulent conduct. In that case the agent did not perform the service for which he was employed, and was, of course, denied any compensation. In this case the agent did the work, but by suppressing that which he was bound to disclose, induced the principal to allow him a greater amount than the agreed compensation. Justice will be done by compelling the agent to restore to the principal the overcharge. The complainants are entitled to recover the sum of which they have been unjustly deprived. They settled with Mr. Wilson, accepting $1,000 as their share of the price, when he should have accounted to them for $1,050.
I will advise a decree for the difference,— $50,—with interest from the time of the settlement, and the costs of suit.