Desfosses v. Notis

• Decision Date: 25 February 1975
• Citation: 333 A.2d 83
• Parties: Robert DESFOSSES v. Steve A. NOTIS.
• Court: Maine Supreme Court

Page 83

333 A.2d 83

Robert DESFOSSES v. Steve A. NOTIS.

Supreme Judicial Court of Maine.

Feb. 25, 1975.

Drummond, Wescott & Woodsum by Theodore A. Kurtz, Portland, for plaintiff.

Preti & Flaherty by John J. Flaherty, John Paul Erler, Portland, for defendant.

Before DUFRESNE, C. J., and WEATHERBEE, POMEROY, ARCHIBALD, and DELAHANTY, JJ.

DELAHANTY, Justice.

The Superior Court (Cumberland County) entered a judgment of $15,377.92 in favor of plaintiff Robert Desfosses in his action for deceit and breach of fiduciary duty against defendant Steve A. Notis. The Superior Court awarded defendant a real estate broker's commission of $1,547.46 based on defendant's role in selling certain real estate to plaintiff. Defendant appeals from the judgment entered against him; plaintiff cross-appeals from the award of a broker's commission to defendant. We deny the appeal and sustain the cross-appeal.

The Superior Court found the following facts, which are amply supported by the record and are not challenged on this appeal. Plaintiff owned and operated a close corporation engaged in selling mobile homes and developing mobile home parks. In May 1969 plaintiff employed defendant, a licensed real estate broker in the State of Maine, to assist generally in the work of the company, with the special assignment of acquiring land for development as mobile home parks. From May through August 1969 defendant received a weekly salary of $125.00 for his work.

During May and June of 1969 plaintiff requested defendant in the course of his employment to negotiate for plaintiff the purchase of a tract of land suitable for the company to develop as a mobile home park. When defendant related that the land in question was available, plaintiff requested defendant to purchase the land as a straw man, in the course of his employment, and then to convey the land to plaintiff.

During the period when defendant was negotiating for the purchase of the land, he repeatedly told plaintiff that the land would cost $32,400.00 although defendant knew the land could be purchased for $15,474.62. Defendant made these false statements for the purpose of inducing plaintiff to deliver to him the sum of $32,400.00. Relying on defendant's false statements as to the cost of the land, plaintiff delivered $32,400.00 to defendant, it being plaintiff's intention to deliver only the money necessary to make the purchase. On June 23, 1969, using plaintiff's money defendant paid the owner of the land $14,474.62 to close the sale; defendant took title in his own name and promptly conveyed the land to plaintiff and plaintiff's wife. After paying out the sum necessary to complete the purchase of the land, defendant retained the balance of the $32,400.00 which the plaintiff had given him.

It will be noted that the total purchase price paid by defendant for the land was $15,474.62, but that defendant only needed to use $14,474.62 of plaintiff's money to consummate the purchase from the owner. This apparent discrepancy can be explained by recourse to documents appearing in the record before us, which are not included among the findings or conclusions of the Superior Court, but which are substantially undisputed in their terms and effect, and which we may consult to elucidate the matter in hand. See Allstate Insurance Company v. Government Employees Ins. Co., Me., 263 A.2d 78, 81 (1970). From these documents it would appear that in November 1968, prior to his commencing to serve the plaintiff, defendant had entered into a separate agreement, under a bond for a deed, to purchase the land in question from its owner. Pursuant to this agreement defendant had participated in a deposit of $1,000.00. Thus, at the time when defendant was negotiating the purchase of the land for plaintiff, the contemplated purchase was to be achieved by effectuating defendant's own bond for a deed agreement, although defendant did not inform plaintiff of the existence or operation of the bond for a deed. Thus, the $32,400.00 extracted from plaintiff was applied to the sum of $14,474.62 due in order to close the bond for a deed agreement. But the actual and total price which defendant paid for the land was $15,474.62.

Defendant's present appeal virtually concedes his liability on the facts and documents adduced before the Superior Court. Defendant mainly argues that if he sold to his principal property in which he, defendant, had an ownership interest before the commencement of his agency, and if the principal chose to keep the property, the principal cannot compel the agent to refund the difference between the price paid by the principal in excess of the cost of the property to the agent. We think this argument is plainly untenable on the facts of this case. We must look to the legal relations of the parties and the duties they owed each other; then we can properly establish the extent of the remedies the law provides, and whether the conduct of the defendant warranted the relief granted by the Superior Court.

Defendant was not entitled to receive a real estate broker's commission for his role in transferring the land in question to plaintiff. Defendant never claimed such a commission as a part of his case; there is no basis in the record for concluding that defendant acted as a real estate broker on behalf of any of the parties concerned. The Superior Court erred in awarding the commission gratuitously. We sustain plaintiff's cross-appeal on this issue.

On the facts as found by the Superior Court, we hold the legal relation between plaintiff and defendant to be that of principal and agent. Whether the relationship might be characterized as that of master and servant is immaterial to our present discussion, since the master-servant relationship is also a form of agency. See Restatement (Second) of Agency § 2(1) & (2) (1957). Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. Id. § 1(1) (1957). Here, the parties agreed that the defendant was to seek out property to advance plaintiff's business purposes, that defendant's endeavors were subject to plaintiff's control and approval, and that defendant consented to act on plaintiff's behalf for the purposes of the agency, and accepted salary and other emoluments in doing so. The Superior Court properly determined that an agency relationship existed both in fact and in law. Cf. Poretta v. Superior Dowel Co., 153 Me. 308, 313-16, 137 A.2d 361, 365-66 (1957).

An agent is a fiduciary with respect to matters within the scope of his agency. Restatement (Second) of Agency § 13 (1957). No principle of law is better settled than that which requires the agent in all his dealings concerning the matter of his agency to act with utmost faith and loyalty and disclose all facts within his knowledge which bear materially upon his principal's interest. Jensen v. Snow, 131 Me. 415, 418, 163 A. 784, 786 (1933); see Devine v. Hudgins, 131 Me. 353, 354, 163 A. 83, 84 (1932). An agent acting for the purchaser of land, whether by appointment or as a volunteer, must see that he meets fairly and squarely the responsibility of his position and does not take any advantage, either for his own gain or to the injury of the person whom he represents. Spindler v. Krieger, 16 Ill.App.2d 131, 147 N.E.2d 457, 464 (1958). The agent's fiduciary duties to his principal may be broadly phrased as duties of service and obedience, and duties of loyalty. Here, plaintiff has...