Siler v. Perkins

• Decision Date: 05 October 1912
• Parties: SILER v. PERKINS et al.
• Court: Tennessee Supreme Court

149 S.W. 1060

126 Tenn. 380

SILER v. PERKINS et al.

Supreme Court of Tennessee.

October 5, 1912

Appeal from Chancery Court, Knox County; Will D. Wright, Chancellor.

Action by T. E. B. Siler against N. B. Perkins and others. From a judgment for complainant, defendants appeal. Affirmed.

Lindsay Young & Donaldson, of Knoxville, for appellants.

Shields Cates & Mountcastle, of Knoxville, for appellee.

BUCHANAN J.

The complainant, Siler, a duly licensed real estate agent, sought by his bill a money decree against N. B. Perkins and A Gatliff, as individuals and as trustees of the stockholders of the Westboourn Coal Company, a Tennessee corporation. His bill was double in scope--in one aspect, based on express contract; in the other, upon contract implied and the quantum meruit. His purpose in either phase of the bill was to recover compensation for his services rendered, as a real estate agent, in effecting the sale of all the capital stock, of the par value of $100 per share; the purchase price at which the same passed from vendor to vendee in the transaction being the sum of $225,000, a large portion of which was cash, with notes given to secure the deferred payments, secured by deposit of the shares as collateral.

The defendants being nonresidents, injunction and attachment writs issued, and the capital stock and indebtedness on the deferred payments, sufficient in amount to satisfy the demands of the bill, were by these means impounded, which resulted in the giving of a bond by defendants to discharge the writs and to satisfy such decree as might be rendered. Defendants answered, denying any indebtedness to complainant, but admitting that they had made the sale of stock alleged in the bill. Only three depositions were taken on behalf of complainant. One of these was that of complainant, covering each of the phases of the bill. The other depositions taken by him were of two real estate agents of Knoxville, each of which depositions was addressed to the quantum meruit feature of the bill. On behalf of defendants, the deposition of each of them was taken; but neither of them was read on the hearing, nor does either of them appear in the record before us. The fact that they were taken and not read appears in the final decree.

By this decree a recovery and execution thereon was awarded complainant against defendants, and the sureties on their bond aforesaid for the sum of $3,000 principal, and interest thereon from January 20, 1909, making an aggregate sum of $3,450, together with the costs of the cause. From this decree, defendants appealed, and have assigned errors in this court. These are five as numbered in the brief; but they raise, in fact, only three questions.

First. It is said the proof shows that, as to part of the stock sold, defendants Perkins and Gatliff were not owners, but agents merely, and of what proportion of the stock they were owners does not appear, but that complainant knew that they were acting as agents only in respect of part of the stock, and to sustain this insistance they quote one of complainant's answers to this effect: "I have always understood that Dr. Gatliff and Mr. Perkins and a man in Ohio were the principal and largest owners of the stock." And upon this evidence is based the argument that defendants Perkins and Gatliff were acting as agents for a disclosed principal, and that their contract to pay complainant a commission for the sale of the stock did not bind the agents personally. The first answer to this contention is that the record does not show that defendants Perkins and Gatliff ever disclosed to complainant who their principals were in respect to that portion of the stock of which they were not themselves the owners; nor does it appear that they ever disclosed to him how much of the stock they owned individually, but it does clearly appear that the defendants were assuming, in the making of the contract sued on, to be acting for the holders of shares of the entire capital stock in the corporation, and that they did sell and deliver, pursuant to negotiations conducted by complainant under the contract sued on, all of that capital stock. It is clear that complainant, under the terms of his contract with them, was made to understand that they and each of them personally were bound to him for the commissions which it was agreed that he should receive; that being the principal sum of the chancellor's decree.

The second answer to the first assignment of errors is that while it is true as a general rule that in law "an agent who, acting within the scope of his authority, enters into contractual relations for a disclosed principal, does not bind himself, in the absence of an express agreement to do so," yet it is also true that whether such an agent does by such a transaction bind himself depends on the intention of the agent and the person dealing with him, and this intention must be gathered from the facts and circumstances of each particular case. And it is the disclosed intention that governs, and not some hidden intention of the agent; and so the agent may become personally liable, although this be contrary to his actual intention, if he has in fact bound himself according to the terms of the contract. And an agent who makes a contract in his own name, without disclosing the identity of his principal, renders himself personally liable, even though the person with whom he deals knows that he is acting as agent, unless it affirmatively appears that it was the mutual intention of the parties to the contract that the agent should not be bound. Cyc. vol. 31, pp. 1552 to 1555, inclusive, and Page on Contracts, § 975, vol. 2.

"When a purchase is made by an agent, in the name and on the credit of the agent, for a principal not disclosed to the seller, the latter may, upon discovering the principal, treat the sale as a contract with the principal, and hold him responsible for the price. The seller may have his action for the price, at his election, against the agent or against the principal; and this, though the seller at the time supposed the agent to make the purchase for himself, as principal. In such case the contract, though apparently and in form with the agent as principal, is in fact for the benefit of the principal, and in the performance of the agency, and is the contract of the principal. The law regards the reality rather than the form." Davis v. McKinney, 6 Cold. 17.

But as a matter of course, when a third person contracts with an agent with knowledge of that fact, and also with knowledge of the principal for whom the contract is made, then the contract, if it be within the scope of the powers of the agent, is in law the contract of the principal, and on such a contract the...