Featherston v. Trone

• Court: Arkansas Supreme Court
• Writing for the Court: RIDDICK, J.
• Citation: Featherston v. Trone, 102 S.W. 196, 82 Ark. 381 (Ark. 1907)
• Decision Date: 22 April 1907
• Parties: FEATHERSTON v. TRONE

102 S.W. 196

82 Ark. 381

FEATHERSTON v. TRONE

Supreme Court of Arkansas

April 22, 1907

Appeal from Benton Circuit Court; J. S. Maples, Judge; reversed.

Judgment reversed and cause remanded.

J. A Rice, for appellant.

1. A real estate broker who is negotiating a sale or exchange of real property, or otherwise acting in the line of his business, cannot represent both parties to the transaction without their mutual knowledge and consent; and if he attempts to do so, he forfeits all right to any compensation or commission from either. 23 Am. & Eng. Enc. of L. (2 Ed.) 907 and notes, 921-2; Mechem, Agency, §§ 66, 67 598, 643-4; 19 S.W. 268. Under the facts in this case appellees were agents of appellant at the time negotiations with Smith began, and thereafter they were acting for both appellant and Smith without appellant's consent. 33 Ark 446; 12 L. R. A. 395.

2. The seller has the right, on discovering the broker's bad faith, to discharge him, and the latter cannot recover compensation. 37 L.Ed. 721; 34 L.Ed. 984; 76 Ark. 395. See also Tiffany on Agency, 142; 50 Am. Rep. 21; 24 Am. Rep. 415; 65 Ga. 512.

McGill & Lindsey, for appellees.

Appellant admitted on cross-examination that he knew that Trone represented Smith as well as appellant. His argument and citations do not apply. Upon his own testimony appellant is liable for the commission.

OPINION

RIDDICK, J.

This is an appeal by J. E. Featherston from a judgment against him for $ 87.50 rendered by the circuit court of Benton County on an appeal from a judgment of a justice of the peace. The judgment was rendered in favor of J. E. Trone and J. M. Jackson for commissions claimed by them for services in bringing about an exchange of land owned by Featherston for town property owned by J. B. Smith.

The facts are that Trone and Jackson were real estate brokers at Bentonville, Arkansas. Featherston owned a farm of 40 acres adjoining the town which he desired to exchange for town property. Knowing Trone was a real estate agent, Featherston informed him that he desired to sell or exchange his farm at a valuation of $ 6,000 for property in the town of Bentonville. Trone testified on the trial that Featherston asked him what he would charge as a commission for effecting an exchange, and that he replied that his custom, when an exchange of property was effected, was to charge each party half commissions, and that Featherston expressed himself as satisfied with that arrangement. Featherston testified that he listed his land with Trone for sale or exchange, and told Trone to send him a man, and that he would do his trading himself. He further testified that nothing was said about commissions at that time. "I did not," he said, "expect to pay any commission. I told them to send me a buyer, and I would do my own trading and pay no commission, just like one neighbor would tell another to send him a buyer for his horse and not pay any commission."

At the time of this conversation Trone had on his books for sale or exchange certain real property in the town of Bentonville owned by J. B. Smith. Trone at once informed Smith that he could exchange his town property for the farm of Featherston, and Smith expressed a willingness to make the exchange. A day or two later Trone showed Featherston the Smith property, and told, him the price at which it was held. Featherston afterwards told Trone that he would like to get a piece of cheap farm land as well as town property in exchange for his farm, which was a highly improved place near the town. At that time Trone had on his books for sale a small farm owned by Geo. P. Jackson, for which Jackson asked $ 2,000 net, or $ 2,150, including fees of the real estate agent. On being informed by Featherston that he desired to get some farm property as well as town property in exchange for his farm, Trone went to Smith and told him of that fact, and said that Smith could buy the Jackson place and put it in the trade with Featherston. Smith replied that the price of the Featherston place, $ 6,000, was too high, and asked Trone at what price he could put the Jackson place in the trade. Trone said that the Jackson place could be bought for $ 2,150, and if Featherston liked it he might be willing to take it at $ 2,500 in part exchange for his place. This was the testimony of the plaintiff. On the other hand, there was testimony of witnesses for the defendant tending to show that Trone, when he ascertained that Featherston wanted a farm, went to Smith, proposed to him that he buy the Jackson place at $ 2,000 and put it in the Featherston deal at $ 2,500, and asked Smith if he objected to making $ 500 in that way; that, upon being assured by Smith that he had no objections, Trone then went to Featherston and told him that Smith owned the Jackson farm, that he rated it at $ 2,500, and would put it in the exchange at that valuation; that Featherston thereupon went out to see the Jackson place and found that it did not suit him. He also ascertained from Smith and Jackson that Smith did not own the Jackson place, that it was owned by Geo. P. Jackson, who held it for sale at two thousand dollars. On ascertaining these facts, Featherston came to the conclusion that Trone was not dealing fairly with him; that he was trying to aid Smith to his disadvantage. He thereupon notified him that he would have no further dealings with him. A few days later he and Smith made the trade, he exchanging his farm for town property owned by Smith and $ 500 in cash.

"The general rule is that a real estate broker or agent who is negotiating a sale of property or otherwise acting in the usual line of his business cannot represent both parties to the transaction without their mutual knowledge and consent and if he attempts to do so he forfeits all rights to any compensation or commission from either." 23 Am. & Eng. Enc. Law, 907; Taylor v. Godbold, 76 Ark. 395, 88 S.W. 959. But we do not think that any prejudice resulted to the defendant in this case from the refusal of the court to give an instruction to that effect, for the reason that there does not seem to be any conflict in the evidence on that point. The plaintiff Trone testified that he informed Featherston that if he effected an exchange of his property he would charge each of the parties to the exchange one-half of the fees. There were other circumstances in proof tending to show that Featherston had notice of the fact that Trone was assuming to act for Smith and him both in bringing about the exchange. Featherston does not deny that he had such notice, and the court was therefore justified in treating such fact as established. In truth, the testimony of Featherston himself tends to show that Trone was employed by him merely to find some owner of town property willing to exchange it for his farm with the distinct understanding that Featherston would do his own trading without any assistance from Trone. The rule that forbids the agent from...