Jacobs v. George

• Decision Date: 19 January 1889
• Docket Number: Civil 235
• Citation: Jacobs v. George, 20 P. 183, 3 Ariz. 9 (Ariz. 1889)
• Parties: WASHINGTON M. JACOBS, Plaintiff and Appellee, v. J. M. GEORGE, Defendant and Appellant
• Court: Arizona Supreme Court

20 P. 183

3 Ariz. 9

WASHINGTON M. JACOBS, Plaintiff and Appellee, v. J. M. GEORGE, Defendant and Appellant

Civil No. 235

Supreme Court of Arizona

January 19, 1889

APPEAL from a judgment of the District Court of the First Judicial District in and for the County of Pima.

Reversed.

Thomas D. Satterwhite, and H. W. Maxwell, for Appellants.

The alleged contract, which forms the basis of this action, even if it was ever executed and delivered to the plaintiff, was fraudulent and void, for the reason that, at the time of the alleged execution thereof, the plaintiff was the retained agent of Manuel Sanchez for the sale of said mine, and was under obligation to him to sell the same for the largest sum he could possibly obtain therefor. Hence any contract which the plaintiff might have entered into with the purchasers of said mine, of the nature or character of said exhibit C, by which he was to receive a commission from the defendants for procuring the sale of said mine to them, would necessarily be fraudulent and void.

Such contracts are universally held to be contrary to public policy, and courts of equity everywhere refuse to enforce them.

The decision of this court, on the former appeal of this case, is conclusive. Dutton v. Milner, 52 N.Y. 312; Grumley v. Webb, 44 Mo. 444, 100 Am. Dec. 304; 2 Pomeroy's Equity Jurisprudence, 959; 1 Wait's Actions and Defenses, pp. 246-248, and authorities cited.

Even if the plaintiff was a part owner of said mine with Sanchez this would not give him any better equitable standing before the court, for the reason that he would then be acting as trustee for said Sanchez in the sale of his three fourths of said mine. Therefore, if he held this fiduciary relation to said Sanchez he would be under the same equitable obligations, and would be required to exercise the same good faith towards him, and would be just as much forbidden to become the agent of the defendants for the purchase of said mine, as if the said Sanchez owned the whole of the said mine. 2 Pomeroy's Equity Jurisprudence, sec. 958, and authorities cited; 1 Wait's Actions and Defenses, pp. 246, 247, and authorities cited.

Even if it was a valid, executed contract, the court erred in decreeing to the plaintiff one sixteenth, or any other part of said mine, under said contract, for the reason that, if the plaintiff acquired any interest therein, he acquired it by reason of his trading and speculating with his principal's property. In such a transaction the rule is well settled, that, when an agent thus deals with his principal's property and makes a profit out of the transaction, such profit, and the whole of it, belongs to his principal. 1 Pomeroy's Equity Jurisprudence, sec. 422; 2 Pomeroy's Equity Jurisprudence, secs. 587, 1049, and authorities; Ferris v. Van Vechten, 73 N.Y. 113; Stow v. Kimball, 28 Ill. 93; Reichoff v Brecht, 51 Iowa 633; Ringo v. Rinns, 10 Pet 269; Story's Equity Jurisprudence, sec. 1261.

Haynes & Mitchell, for Appellee.

Wright, C.J. Porter, J., concurring. Barnes, J., dissenting.

OPINION

The facts are stated in the opinion.

WRIGHT, C.J.

This is the second time this case has been passed upon by this court having been first decided at the January term, 1886, hereof. 2 Ariz. 93, 11 P. 110. It was stipulated by the attorneys in the case at the last trial that the evidence at the former trial should be considered as given at the new trial, subject to legal objections, etc. The case was tried by the court without the intervention of a jury. The court found for the plaintiff and appellee, whereupon the defendants and appellants duly filed their motion for a new trial; and, it being overruled, they have brought their case here by appeal.

The grounds specified in the motion for a new trial were that the decision of the court was not justified by the evidence, and that the decision was against the law. The suit was one to enforce the specific performance of a contract, alleged to have been entered into on the tenth day of May, 1883, by and between Jacobs, the appellee, and the appellants, George, Hiertz, and Morgan, by the terms of which, in case they bought the mine, they were to deed back one fourth of it to the said Jacobs as commission for the sale and purchase thereof. The substantial facts, as deduced from the evidence,--at least all the facts we deem necessary for the proper determination of the questions raised by the motion for a new trial,--are as follows: That one Manuel Sanchez, who was a mining prospector both in Arizona and Mexico, was in the habit, during the years 1881 and 1882, and perhaps earlier than that, of taking samples of ore from mines which he had discovered to the appellee, W. M. Jacobs, to make assays of them,--Mr. Jacobs being an assayer in Tucson, Arizona Territory. In this way quite an intimacy seems to have grown up between them. Sanchez was a Mexican, quite ignorant, unable to write his own name, and with practically but little knowledge of the English language. There seems no doubt that Sanchez reposed great confidence in Jacobs. Hiertz, one of the appellants, testifies that, at the time negotiations were pending for the property, Jacobs said: "If you want that property, you keep quiet, and I will procure the owner of the property. You must not interfere with us, as this man [meaning Sanchez] has confidence in me, and I can deal better with him than you can." So that on the twenty-sixth day of January, 1883, Sanchez executed to Jacobs the following written appointment of agency, or power of attorney, to sell the mines of Sanchez:--

"This document is to show that I, Manuel Sanchez, for myself and my partners, give ample power to Don Washington M. Jacobs, whom I recognize as one of my partners, to sell, contract, or bond to whomever may interest themselves for the mines at the prices, to-wit, [here follow names and prices,] the quarter part of which mines belongs to W. M. Jacobs, as the owner of the fourth part of which he represents, so as to enable Mr. Jacobs to contract and guaranty with legality, give this, my signature, obliging me to respect in this country or Sonora, religiously; and in proof whereof signed this in Tucson, the twenty-sixth day of January, 1883, before whom signed.

his

"MANUEL X SANCHEZ.

mark.

"Witnesses: MARK TULLY, and

"FRANK R. BETTIS."

The mine in question is called the "San Ricardo," and is situated in the Ures District, State of Sonora, Mexico. Some months after the execution of the above power of attorney, Mr. Jacobs returned from a trip to this mine, with some of the ore therefrom, which sampled very rich. Morgan, one of the appellants, was at that time a mining agent in Tucson, and Jacobs exhibited to him the assays of this ore, and gave him the use of his (Jacobs') assay office, for Hiertz, another one of the appellants, to make assays of the ore also; he (Jacobs) agreeing to pay the expense of Hiertz's assay if it did not corroborate his. This assay of Hiertz was satisfactory; and on the eighth day of May, 1883, Morgan, who seems to have been the moneyed man of the individual appellants, entered into the following agreement with Jacobs, viz.:-- "I will go and examine the mine in Sonora at our expense, and, if the mines suit us, will take a bond for six months on the property at $ 5,000, we to have all the ore we wish to take out of the mine, and have the privilege to do such work on the mines as we think proper, and either work the same by arastras or otherwise during the time pending our bond; or if, after examination of mines, we conclude to purchase, we will pay the owners $ 1,000 cash after examination, if found satisfactory, and $ 1,000 in sixty days, and $ 1,000 in ninety days; balance, $ 2,000, at expiration of bond. A failure or non-compliance to above will forfeit right to claim, and what is paid.

"Tucson, May the 8th, 1883. J. S. MORGAN.

"I agree to use my best endeavors to secure the property above described, upon the terms specified.

"W. M. JACOBS."

A short time before this contract was executed Mr. Jacobs says Sanchez had told him he would take five thousand dollars for the mine, and no less. Two days after this contract between Morgan and Jacobs was entered into, Jacobs having sent for Sanchez, a contract for the sale of said mine for the sum of five thousand dollars was entered into by and between the appellee, Jacobs, and Manuel Sanchez, parties of the first part, and the appellants, George, Hiertz, and Morgan, parties of the second part, the terms of sale being identical with those contained in the contract between Jacobs and Morgan. At the same time, but in the absence of Sanchez and without his knowledge or consent, Jacobs, the appellee and the appellants, George, Hiertz, and Morgan, entered into the following contract, viz.:--

"It is hereby agreed by and between J. M. George, J. J. Hiertz and J. S. Morgan, parties of the first part, and W. M. Jacobs, party of the second part, as follows, to wit: The parties of the first part agree to proceed to Sonora, and there examine the Saint Ricardo Mine, and, if found on examination to be satisfactory, to pay for said property as provided for and specified in certain contract of May 10, 1883, made by the above-named parties and one Manuel Sanchez; and, in case said property shall be purchased by the said J. M. George, J. J. Hiertz, and J. S. Morgan, they each of them mutually agree to deed to the said W. M. Jacobs, as commissions for the sale and purchase of said mine, free of any and all expense to him, one quarter of said mine, for him to have, hold, or transfer at option, without expenses of taxes or assessment work, or other expense whatever. The party of the second part agrees, that for and in consideration of said one quarter of said mine, to...