Mcleod v. Gaither
| Decision Date | 28 June 1927 |
| Citation | 113 So. 687,94 Fla. 55 |
| Parties | McLEOD v. GAITHER et al. |
| Court | Florida Supreme Court |
Suit by Leon Prine against George A. McLeod and W. C. Gaither. From a decree in favor of complainant and respondent Gaither, George A. McLeod appeals.
Affirmed.
Syllabus by the Court
Principal dealing with coprincipal or broker must deal squarely and in good faith; agent dealing with principal must deal squarely and in good faith. The doctrine of Quinn et al. v Phipps, 113 So. 419, decided April 11, 1927, is equally as binding on the principal when dealing with his coprincipal or broker as it is on the broker when dealing with his principal. Both are required to deal squarely and in good faith.
Mere relation of agent and principal is of itself insufficient to entitle agent to maintain bill for accounting. The mere relation of an agent to his principal is of itself insufficient to entitle the agent to maintain a bill for an accounting against the principal. This rule is predicated on the ground that there is no duty on the part of the principal as there is on the part of the agent to keep an account of the dealing between them and there is no confidence reposed by the agent in the principal as there is by the principal in the agent.
If relation of principal and agent is fiduciary, or transactions are so involved that legal remedy is insufficient, equity will entertain agent's bill for accounting; agent, who could have maintained bill for accounting, made party defendant to bill for accounting by coprincipal, was required to set up counterclaim in answer (Rev. Gen. St. 1920, § 3120). This rule is subject to the exception that, when the relation between the agent and the principal is of a fiduciary character, or the transactions between the parties are so involved and complicated that the remedy at law is insufficient to administer complete justice, a court of equity will entertain a bill by an agent for an accounting. Appeal from Circuit Court, Hillsborough County F. M. Robles, judge.
Knight Thompson & Turner and James F. Glen, all of Tampa, for appellant.
Mabry, Reaves & Carlton and Marion Wannamaker, all of Tampa, for appellees.
Leon Prine, Solon G. Wilson, and George A. McLeod owned 17,600 acres of land in Pasco county, Fla., which they sold through McLeod to W. L. Stanley and associates for $35 per acre. W. C. Gaither, a real estate broker of Tampa, Fla brought Stanley to McLeod pursuant to the terms of a verbal contract he had with McLeod to produce a purchaser for the lands. It appears that McLeod promised Gaither $3.50 per acre or 10 per cent. on the sale price to produce a purchaser ready, able, and willing to buy.
It also appears that McLeod had secured an agreement with Prine and Wilson to use $5 per acre to cover the expense of making the sale. When Gaither brought Stanley to McLeod as a purchaser, McLeod indicated that he was negotiating with another party and could not sell to Stanley at that time. After talking the matter over with Stanley, McLeod later returned to Gaither and told him that Stanley and his crowd demanded a commission of $5 per acre if they purchased and that, if he (Gaither) would agree to take a commission of $7,500 in lieu of the 10 per cent. commission on the gross sale, he would sell to Stanley, rather than to the purchaser he had been negotiating with. Gaither yielded to this proposition and the sale was concluded.
It was subsequently revealed that McLeod did not use the $5 per acre to pay commission on the sale of the land according to the terms of his agreement with Prine and Wilson, nor did 'Stanley and his crowd' demand or know anything about the $5 per acre commission that McLeod represented to Gaither that they were to receive. McLeod had paid Gaither $7,500 commission and had converted the balance of the $5 per acre, part of which was in cash and part in notes, to his own use, thereby perpetrating a fraud on both his coowners and his broker.
Predicated on McLeod's fraudulent dealings with Prine, Wilson, and Gaither, suit was brought by Prine to require him (McLeod) to account for the money and notes so acquired by him, to pay Gaither such sums as were found due him for commission, and to make proper distribution of any balance of the $5 per acre so procured by the said McLeod for selling said lands.
The chancellor found that all the material allegations of the bill of complaint and the answer of the respondent Gaither were proven; that the equities of the cause were with the complainant and the respondent Gaither; and that they were each entitled to the relief prayed for in the bill of complaint and in the answer of Gaither. Appeal was taken from that final decree.
In Porte F. Quinn et al. v. John S. Phipps, 113 So. 419, decided last term (April 11, 1927), this court at some length announced the law in this state governing the conduct and fidelity of a real estate broker to his principal. In this case we have the reverse situation so the main question presented concerns the degree of good faith due on the part of a principal to both his coprincipal and his broker. Pertinent to the facts in this case, among other things, in Quinn et al. v. Phipps, we said:
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