Genter v. Conglomerate Min. Co.

• Decision Date: 08 January 1901
• Citation: 23 Utah 165,64 P. 362
• Court: Utah Supreme Court
• Parties: E. W. GENTER, Respondent, v. THE CONGLOMERATE MINING COMPANY, a Corporation, and G. LAVAGNINO, Appellants

64 P. 362

23 Utah 165

E. W. GENTER, Respondent, v. THE CONGLOMERATE MINING COMPANY, a Corporation, and G. LAVAGNINO, Appellants

Supreme Court of Utah

January 8, 1901

Rehearing Denied February 4, 1901.

Appeal from the Third District Court Salt Lake County.--Hon. A. N Cherry, Judge.

Action to recover a commission claimed by plaintiff for services rendered in finding a purchaser for certain mining ground. From a judgment for plaintiff defendants appealed.

AFFIRMED.

A. R Barnes, Esq., and Messrs. Brown & Henderson for appellant.

The doctrine of election between remedies is nowhere more strongly applied than where a party deals with the agent of an undisclosed principal; he is at liberty on discovering the principal to elect either to hold the agent or the principal, but he can not hold both. Pollock on Contracts (4 Ed.), p. 102; Addison on Contracts (8 Ed.), p. 46; Sessions v. Block et al., 40 Mo.App. 569; Mechem on Agency, sec. 698; Jones v. Ins. Co., 14 Conn. 501; Kingsley v. Davis, 104 Mass. 178-180; Silver v. Jordan, 136 Mass. 319; Priestly v. Fernie, 34 L. J. (Ex.) 172.

And this rule applies not only to the case where the principal at the time of the dealing with the agent was unknown or undiscovered, but applies equally where at that time the other party knew both the fact of the agency and the name of the principal. Mechem on Agency, sec. 698; Scheppler v. Dessar, 20 Mo.App. 575; In re Bateman, 28 N.Y.S. 37.

The point is further illustrated by the cases which hold that the creditor has an election to sue either the agent or the principal, but he can not, after he has sued the one to judgment maintain another action against the other, even though the judgment does not result in the satisfaction of the debt. Kingsley v. Davis, 104 Mass. 177; Tuthill v. Wilson, 90 N.Y. 423; Silver v. Jordan, 136 Mass. 319. See, also, Pollock on Contracts supra; Addison on Contracts, supra; Priestly v. Fernie, 34 L. J. (Ex.) 172; Am. and Eng. Ency. of Law (1 Ed.), vol. 1, p. 416.

The president of a corporation has no implied authority to act as its agent, but like other agents, he must derive his power from the board of directors or from the corporation. Wait v. Nashua Armory Ass'n, 14 L. R. A. (N.H.) 356; Bi. Spool Sewing Mach. Co. v. Mfg. Co., 153 Mass. 404; Cook on Stock and Stockholders (3 Ed.), vol. 2, sec. 716.

It is well established that presumptive notice to a principal by reason of knowledge of an agent or trustee interested in concealing the fact from his principal can not be imputed to the principal. Mechem on Agency, sec. 723; Story on Agency, sec. 210; Stone v. Hays, 3 Denio 579; National Bank v. Foot, 12 Utah 169; American Surety Co. v. Pauly, 170 U.S. 134.

The ratification of an unauthorized act of an agent, in order to be effectual and binding upon the principal, must have been made with a full knowledge of the material facts; and even though accepting benefits under the act the principal is not necessarily bound thereby. Moyle v. Congregational Society, 16 Utah 84; Swayne v. Ins. Co., 49 S.W. 518; Cook on Stock and Stockholders (3 Ed.), vol. 2, sec. 709.

The plaintiff was not entitled to recover and a nonsuit should have been granted for "It is a rule of public policy that an agent for the sale of property can not at the same time act as the agent for the purchase thereof, or interest himself therein, and thus become entitled to compensation for both vendor and purchaser." Rice v. Davis, 136 Pa. St. 439; Rice v. Wood, 113 Mass. 133; Everhart v. Searle, 71 Pa. St. 256; Penna R. Co. v. Flannigan, 112 Pa. St. 558; Walker v. Osgood, 98 Mass. 348; Leathers v. Canfield, 45 L. R. A. (Mich.) 23; Byrd v. Hughes, 84 Ill. 174; Bell v. McConnell, 37 Ohio St. 397; Chatfield v. Simonson, 92 N.Y. 209; Mechem, secs. 67, 643, 644, 798.

The contract itself is void as against public policy and good morals and both parties thereto being in pari delicto the law will leave them as it finds them. Rice v. Davis, 136 Pa. St. 439; Chapman v. Currie, 51 Mo.App. 40; Atlee v. Fink, 75 Mo. 100; Holcomb v. Weaver, 136 Mass. 265; Rice v. Wood, 113 Mass. 133.

"The knowledge acquired by the officers or agents of a corporation, but while acting for themselves, is not imputable to the corporation." Thompson on Corporations, vol. 4, sec. 5204; Johnson v. Shortridge, 93 Mo. 227.

"Neither is such knowledge imputable to the corporation when the agent acts for himself and adversely to the corporation." Thompson on Corporations, vol. 4, secs. 5205, 5209; Mechem on Agency, sec. 723.

There can be no estoppel in such a case. The contract was void as contrary to public policy. "The courts refuse to countenance such an employment not for the sake of the principal, but for the sake of the law." Chapman v. Currie, 51 Mo.App. 40.

It is error for the court to submit to the jury a fact or state of facts, which there is no evidence tending to prove. Thompson on Trials, vol. 2, sec. 2315, and cases cited; Am. and Eng. Ency. of Law (1 Ed.), vol. 11, p. 248; Clay Company v. Harvey, 9 Utah 497-507.

Messrs. Stephens & Smith for respondent.

The books are full of cases where an agency has arisen by estoppel, and the proof of such agencies must necessarily arise by proving the acts of the agent, and the fact that the principal has allowed an agent to exercise authority, and do certain things generally about its business is always evidence of the agent's authority to act. See Herman on Estoppel, sec. 1077; Mechem on Agency, sec. 86; Neibles v. R. R. Co., 33 N.W. 332.

A party dealing with a corporation in good faith, and being unaware of any defect of authority on the part of those acting for the corporation, the company is bound by the contract if it is within its corporate powers. Merchants Bank v. State Bank, 77 U.S. 10, 604; Crowley v. Mining Co., 55 Cal. 273; Fitzgerald Company v. Fitzgerald, 107 U.S. 98; McComb v. Association, 134 N.Y. 598; Mining Co. v. Bank, 2 Colo. 248; Nashua Co. v. Chandler Co., 44 N.E. 348; Winsor v. Bank, 18 Mo.App. 665; Bank v. Bank, 7 A. 318; Carrigan v. Co., 34 P. 148; Mining Co. v. Bank, 104 U.S. 192.

"By ratifying the unauthorized act, the principal assumes and adopts it as his own, and as has been seen this adoption extended to the whole of act, it goes back to its inception, and continues to its legitimate end. It is the universal rule that as against the principal the ratification is retroactive and equivalent to a prior authority." 1 Am. Ency. of Law, (2 Ed.), p. 1213 of authorities there cited; R. R. Co. v. Middleton, 20 Ill. 629; Kiley v. Farsee, 57 Mo. 178; 42 Am. Rep. 397; 1 Am. Eng. Ency. of Law (2 Ed.), 997, and authorities there cited; Araphoe Company v. Stevens, 13 Colo. 534; Marine Bank v. Butler Company, 23 N.Y.S. R. 319; R. R. Co. v. Bastian, 15 Maryland, 494; William v. Gray, 72 Am. Dec. 757; Mechem on Agency, sec. 311; R. R. Co. v. Bridge Company, 131 U.S. 371; Bank of Columbia v. Paterson, 11 U.S. 299.

All the evidence, and all the instructions requested by the appellants, based upon this alleged double employment, as being contrary to public policy should have been excluded from the jury, and the refusal to give the instructions requested on this point was not error, for the reason that the defendants failed to set up any fraud or misconduct on the part of the plaintiff in their answer, and the questions raised by the requests and upon this evidence were not within the issues before the court, and a failure to plead such a defense, waives the same. Lawson v. Thompson, 10 Utah 462; Croco v. R. R. Co., 18 Utah 311.

The Court of Appeals in Missouri, in Reese v. Garth, 36 Mo.App. 641, in an alleged double dealing by a real estate agent, held that the defendants must plead the fraud in order to avail themselves of it. Same ruling in Bonwell v. Auld, 29 N.Y.S. 15; Childs v. Ptomey, 43 P. 714; see Bliss Code Pl., sec. 352; Pom. Code Rem., sec. 660.

The great weight of authority, in fact, it is most unanimous that an agent for the sale, or exchange of property, no matter what the agent's duty, as to faithfulness and honesty may be to his principal, may act for the purchaser of the property, and receive a commission from both, providing both purchaser and seller have knowledge of the double relation and assent thereto.

See the following authorities: Acting for both, with knowledge, 42 N.E. 139 (Ill.); Cox v. Hann, 26 N.E. 822; Rupp v. Sampson, 82 Mass. 389; Harnickle v. Mining Co., 15 N.Y.S. 223; Bonwell v. Howes, 1 N.Y.S. 435; same as Auld, 27 N.Y.S. 936; affirmed, 29 N.Y.S. 15; Lansing v. Bliss, 33 N.Y.S. 310; Manders v. Craft, 32 P. 836; Childs v. Ptomey, 43 P. 714; Montrose v. Eddy, 94 Mich. 100; 53 N.W. 916; Campbell v. Yager, 32 Neb. 266; 49 N.W. 181; Alexander v. University, 57 Ind. 466; Collins v. Fowler, 8 Mo.App. 588; Rowe v. Stevens, 53 N.Y. 621; Donohue v. Padden, 93 Wis. 20; Raney v. Donovan, 78 Mich. 318; Stewart v. Mathis, 32 Wis. 344; Hardy v. Sombraker, 31 Wis. 640.

MINER, J., delivered the opinion of the court. Bartch, C. J., concurs. BASKIN, J., dissenting.

OPINION

MINER, J.

STATEMENT OF FACTS.

This action was brought by the plaintiff to recover a commission claimed to be due him for his services rendered to the defendants under an employment by them to procure a purchaser for the Conglomerate Mining Company's property. The plaintiff claims that defendant agreed to pay him a commission of $ 10,000 in case he found a purchaser for the said mining property for the sum of $ 550,000, and that he found such purchaser on the twenty-fourth day of February, 1899, in the person of C. A. Hight, and that such purchase was consummated and a conveyance made of the property at the price named.

The defendants answered separately, and each denied the employment of the plaintiff either...