Donnelly v. Cunningham

• Decision Date: 23 July 1894
• Docket Number: No. 8898.,8898.
• Citation: 58 Minn. 376
• Parties: JOHN J. DONNELLY <I>vs.</I> WILLIAM CUNNINGHAM <I>et al.</I>
• Court: Minnesota Supreme Court

Page 376

58 Minn. 376

JOHN J. DONNELLY vs. WILLIAM CUNNINGHAM et al.

No. 8898.

Supreme Court of Minnesota.

Argued July 17, 1894.

Modified July 23, 1894.

Appeal by defendants, William Cunningham and George W. Wentworth, from a judgment of the District Court of Ramsey County, John W. Willis, J., entered March 7, 1894, rescinding their sale of a lot to plaintiff, John J. Donnelly, and adjudging repayment to him of $3,257.84 the purchase price.

Stringer & Seymour, and C. D. & Thos. D. O'Brien, for appellants.

James Schoonmaker, for respondent.

MITCHELL, J.

This was an action to rescind and set aside a conveyance of real estate to plaintiff from defendant Wentworth, and recover back the purchase money from both defendants. The case comes up on the pleadings and findings of fact, without any "case" or bill of exceptions. The facts found are as follows:

The two defendants were, equitably, tenants in common of a lot in St. Paul; but the legal title to one part of it was wholly in Wentworth, and of the remainder wholly in Cunningham, but both of them supposed that the title to the entire lot was in Wentworth. Plaintiff, a resident of Montana, employed Cunningham, a resident of St. Paul, to invest some money for him in real estate in that city. Cunningham reported to plaintiff two lots in St. Paul that could be purchased, and the prices at which they could be bought, and requested him to select the one he wanted to buy. One of these lots was the one referred to, and the other a lot on University avenue, in which Cunningham was also interested. Cunningham informed plaintiff that he was interested in the University avenue lot, but through the inadvertence of his clerk who conducted the correspondence, and without any fraudulent intent, failed to inform plaintiff that he was also interested in the other lot. In response to Cunningham's letter, plaintiff instructed him to buy whichever lot most commended itself to his judgment. Thereupon, Cunningham, honestly exercising his best judgment, and without any intention to defraud, purchased for plaintiff the first lot, and secured a conveyance thereof to him from Wentworth; both supposing, as already stated, that the title to the whole lot was in him. On discovering the mistake, and before the commencement of this action, Cunningham executed and tendered to plaintiff a conveyance of the part of the lot the title to which was in him, but plaintiff refused to accept it. Wentworth "did not know or suppose or believe" that Cunningham had failed to inform plaintiff of his interest in the lot. Both defendants acted in good faith, and without any intention to defraud plaintiff. The lot was worth all that was paid for it, and plaintiff has sustained no actual damage. Plaintiff supposed that Wentworth was the sole owner of the lot, as indicated by his conveyance. Upon discovering that Cunningham was interested in it, plaintiff seasonably tendered a reconveyance of the property, and demanded back his purchase money.

There is no finding that Cunningham and Wentworth were partners, or that the former was agent for the latter in the transaction. On the contrary, the fair construction of the findings is that, as tenants in common, each acted for himself in the sale of the property, although, on the supposition that the legal title was wholly in Wentworth, he alone executed the deed.

1. As to Cunningham, and his undivided half interest in the property, there can be no doubt of plaintiff's right to rescind. It is one of the first elementary principles of the law of agency that the law will not tolerate any secret or undisclosed interest in the agent antagonistic to that of the principal. An agent is not permitted to become a secret vendor or purchaser of property which he is authorized to buy or sell for his principal. If he sells to his principal his own property as the property of another, without disclosing the fact, the bargain, at the election of the principal, will be held void. It is not necessary to show that fraud was intended, or that loss afterwards followed. Actual fraud or actual injury is not the principle upon which the law proceeds in such cases. Fidelity in agents is what is aimed at, and, as the best means to insure that, the law declares all such transactions void, as respects the principal, unless ratified by him with full knowledge of all the facts. These propositions are so elementary that the citation of authorities in support of them is unnecessary. The fact that plaintiff failed to prove the allegations of actual fraud and of a fraudulent conspiracy between the two defendants will not prevent his obtaining the relief to which he is entitled on...