Easterly v. Mills

• Decision Date: 03 August 1909
• Citation: 103 P. 475,54 Wash. 356
• Parties: EASTERLY v. MILLS et al.
• Court: Washington Supreme Court

103 P. 475

54 Wash. 356

EASTERLY v. MILLS et al.

Supreme Court of Washington, En Banc.

August 3, 1909

Appeal from Superior Court, Pierce County; W. O. Chapman, Judge.

Action by Louisa Easterly against John Mills and another, copartners as John Mills & Son. Judgment for defendants, and plaintiff appeals. Reversed and remanded, with instructions.

Bates Peer & Peterson, for appellant.

L. C Stevenson and M. F. Porter, for respondents.

CROW J.

Action by Louisa Easterly against John Mills and Fred Mills copartners as John Mills & Son, to recover a portion of the proceeds of a sale of real estate made by the defendants as her agent. On trial and at the close of the evidence, the defendants moved the court to discharge the jury and enter judgment in their favor. Thereupon the plaintiff moved for a directed verdict in her favor. The defendants' motion being sustained, the action was dismissed. The plaintiff has appealed.

The appellant contends that the trial court erred in denying her motion for a directed verdict. The respondents insist that the proper judgment was entered, and contend that, even though there had been sufficient evidence in favor of appellant to warrant its submission to the jury, the appellant and respondents by their joint motions withdrew the cause from the jury. When the two motions were interposed, there being no conflict in the evidence as to any material fact, the parties in effect waived a verdict of the jury, and submitted the cause for determination by the trial judge, who was then authorized to enter such judgment as the evidence warranted, and we will on this appeal dispose of the case on the same theory. Knox v. Fuller, 23 Wash. 34, 44, 62 P. 131; Grigsby v. Western Union Tel. Co., 5 S. D. 561, 59 N.W. 734.

The following facts appear from the evidence: That on February 18, 1907, the appellant, being the owner of certain improved real estate in Puyallup, entered into a written contract, whereby she authorized the respondents to sell the same for $4,000, one-half cash, and agreed to pay them a commission of $150. That on or about April 29, 1907, one T. Shenkenberg approached the respondent John Mills with a proposition to buy the place for $4,500, paying $500 cash and the remainder in installments. That thereafter Mills effected an arrangement with one J. H. Williams, by which he was to purchase the property from the appellant for $4,000 cash, and immediately sell to Shenkenberg for $4,500, payable in installments. That, before seeing Williams, Mills placed Shenkenberg in possession of the property and accepted $50 from him as a deposit, with the understanding that, if he finally bought, it should apply on the purchase price, otherwise he was to become appellant's tenant; the deposit to be then applied on rent. That, after separate negotiations with Williams and Shenkenberg, the respondent John Mills went to Everett, where Mrs. Easterly lived. That he told her he could sell the place for $4,000, and effect an arrangement whereby the sale would be for cash, but that he could not sell for any larger sum. That, relying on these statements, appellant finally agreed to sell for $4,000, executed a deed to Williams reciting a consideration of $10, and on June 11, 1907, received from respondents a draft for $3,338, as proceeds of the sale, less commission and expenses incurred. Immediately thereafter a written contract of sale was executed by Williams to Shenkenberg for $4,500, which was antedated to April 29, 1907, the day upon which the original interview occurred between Shenkenberg and the respondent John Mills. Williams then paid respondents an additional commission of $150. The respondents did not inform the appellant that they could sell to Shenkenberg for $4,500, that they had placed Shenkenberg in possession, or that Williams was about to sell to Shenkenberg for $4,500 and pay them an additional commission of $150. In September, 1907, the appellant first learned of the sale to Shenkenberg, and commenced this action to recover the extra $500, less commission thereon. The respondents have shown that the appellant expressed herself as satisfied with the sale at the time it was closed, and that they were authorized by their written contract of employment to sell for $4,000. They contend: That they could not sell for $4,500 and secure $2,000 cash; that the appellant at the time needed more money than the $500 cash payment Shenkenberg was willing and able to make; that they carried out appellant's specific instructions; that they first made the sale to Williams for appellant; and that, after their relation to her as agent had been thus terminated, they made the second sale to Shenkenberg.

These contentions are not fully sustained by the evidence; but, conceding them all to be true, and assuming that no fraud was intended, respondents nevertheless ignored and failed to perform duties which devolved upon them as appellant's agents. 'The relation between a broker and his principal is a fiduciary one, calling for the exercise of the utmost good faith. It is the duty of the broker to serve his principal to the latter's best advantage, and all profits which are the result of the relation belong to the principal.' 11 Current Law, 450 and cases cited. 'A broker is not permitted to deal with the subject-matter of his agency for his own advantage, but must give the principal the benefit of any profit he may make in the transaction. Thus where a broker, employed to sell, sells at a higher price than that authorized by the principal, or than that represented by the broker as the price received, or where a broker, employed to purchase, buys at a less price than that limited by or represented to the principal, he must account to his principal for the difference.' 4 Am. & Eng. Enc. Law (2d Ed.) 969. In Holmes v. Cathcart, 88 Minn. 213, 216, 92 N.W. 956, 957, 60 L. R. A. 734, 94 Am. St. Rep. 513, 516, the Supreme Court of Minnesota said: 'The principal may authorize his agent to sell or exchange his property; but it does not necessarily follow that the agent, by carrying out the specific instructions given him, fully performs his duty, and is relieved from liability. He is bound to the exercise of the most perfect good faith, and to keep his principal informed of facts coming to his knowledge affecting his rights and interests. If, after receiving instructions to sell property on certain specified terms, the agent learns that other and more advantageous terms can be obtained, it is his plain duty, and he is under every legal and moral obligation, to communicate the facts to the principal, that he may act advisedly in the premises.' If a real estate broker sells for a price in advance of that stipulated by his principal, and fails to account to the latter or inform him of the true facts, he becomes liable to his principal for the excess. A broker is not entitled to realize any financial benefit in addition to his stipulated commission, as the result of secret negotiations which h...