"This is a bill by a purchaser against a vendor for the specific performance of a written agreement to convey lands. The execution of the agreement is admitted by the answer, and also the complainant's payment of the purchase-money agreed to be paid on the execution of the agreement. The complainant's readiness to comply with the terms of the agreement on his part, at the time and place provided for in the agreement, is proved. The defendant failed to attend at the time and place appointed for the delivery of the deed, and the complainant's attorney then sought her at her residence, and tendered to her the balance of the cash payment, together with a bond secured by a mortgage on the premises for the balance of the purchase money, as provided for in the agreement, demanding a deed for the premises. The defendant declined to accept the money or the bond and mortgage, and also refused to deliver the deed. On August 17 or 18, 1887, and about ten days previous
to the time fixed for the delivery of the deed, (August 29, 1887,) the defendant, through her attorney, notified the complainant that she would not carry out the agreement, and tendered to the complainant the amount of the money paid on the execution of the agreement, which the complainant refused to accept. The contract in question was signed by one Charles H. Sleight, a real-estate broker, as the agent of the complainant, and the ground upon which specific performance is now resisted is that the contract was procured through the fraudulent conduct of Sleight, the agent of the complainant. The fraudulent conduct is alleged to have consisted in false representations made by Sleight to the defendant, and also in his fraudulent concealment of facts. * * * My conclusions are:
"First. That Sleight, having been originally employed by the purchasers, must be considered as primarily their agent, although he afterwards acted, or assumed to act, as the agent for the defendant. This is the rule laid down by Story, Ag. § 31, in reference to those brokers who are for some purposes treated as agent for both parties, and certainly no other rule could safely be applied to real-estate brokers, where the very nature of the employment is such as to imply a reliance on their skill and integrity in the interest of the original employer, and is also such as generally to preclude a subsequent employment in the adverse interest. And in this case it makes no difference whether the original employment by the purchasers was a general employment to purchase, as alleged in the bill, or a special employment to obtain the prices; for, in the obtaining of prices, the broker is interested to obtain the lowest prices from the vendor, and it is his right and duty, by all faitmeans, to obtain the lowest prices. He also becomes interested in bringing about a sale to his employers, to the exclusion of all other purchasers.
"Second. Being the agent of the purchasers at the time of his application to the defendant, Sleight had no right to accept from her the employment as her agent to sell the property, without a disclosure to her of his agency for the purchasers, and his failure to make this disclosure to the defendant, before she signed the written contract, was, on his part, a fraudulent concealment of a material fact. In some instances of sales and purchases by real-estate brokers, there is no legal or practical impediment to their acting as brokers or agents for both parties, but in such cases it is settled that there must be the fullest disclosure to each of the principals that the broker is acting as agent for both, in order that the principals may deal at arms-length. Otherwise the principal, ignorant of the agency for the other, may question the transaction. Whart. Ag. §§ 214. 366. In Farnsworth v. Hemmer, I Allen, 494, it was held that a broker employed to sell real estate could not subsequently accept a commission from a purchaser, and that, having received this, without disclosure to his original employer, the seller, he could not recover his commission from his original employer after the sale was effected; and it was further held that a custom of brokers so to act for both parties, without disclosure, was so unreasonable and contrary to good morals and sound policy that it could not be sustained, and proof of it was inadmissible. This case was approved in Rice v. Wood, 113 Mass. 133, (1873,) where it was held that a broker, acting for both parties in effecting an exchange of real estate, cannot recover compensation from either, unless his double employment was known and assented to by both. In the present case, I am inclined to think that Sleight was absolutely precluded from accepting the agency for defendant, because he could not, in justice to his original employers, and with a due regard for their interests and rights, disclose that he was acting for all of these associates, or disclose that he knew of their scheme of purchase and improvement. All the persons interested in the purchase, as appears by the bill and their evidence, considered it of vital importance that their plans should not be disclosed, as this might lead to a rise in prices. They had the undoubted right, I think, by themselves or by their agent, to purchase without making such disclosure; and the mere failure to communicate the scheme to the defendant was no fraud upon her which would entitle her to refuse to perform the contract. But the very fact that the agent of the purchasers knew of the association, and knew something of the scheme, and knew as he must have known, that silence as to the scheme of purchase by the associates was then of importance to the proposed purchasers, made it impossible for hi in fairly, openly, and in entire good faith to accept an agency from the seller. That Sleight's knowledge as to the proposed plan, however limited it might have been, would have been of some advantage to the defendant, if disclosed, is evident; and he must have known, in assuming the agency for her, that he could not deal openly and fairly with her by disclosing what he knew of the desire of his employers to purchase, and of their general scheme for purchase. The bill leaves it open for inference that he knew all about the plan for purchase and improvement, as it makes no qualification or denial of his knowledge, but justifies his concealment of it, on the ground that, as the agent of the complainant, he was not bound to disclose. That Sleight's agency for the purchasers, even if restricted to the mere obtaining of prices, turned out in this instance to be incompatible with his assumption of the confidential relation of agent to the seller, is made entirely clear by Sleight's statement that, at the time of assuming this agency for the defendant, and in fixing the price, she told him that she wanted a good round price. This was a confidential statement by a principal to an agent, which would scarcely have been made to a person supposed to be an agent of the purchasers, whose duty it would be to disclose it to the purchasers. Such communication, if made, would undoubtedly result in fixing a less sum for the offer.
" Third. The mere signing of the contract by Sleight as the agent of Marsh
one of the purchasers, did not operate as a disclosure to the defendant of his agency for the purchasers during the negotiations, and at the time the terms were verbally agreed on. The negotiations were conducted, and the terms of...
