Escolar Documentos
Profissional Documentos
Cultura Documentos
[ Book I
CHAPTER II.
FOR WHAT PURPOSES AN AGENCY MAY BE CREATED.
RI CE vs. WOOD.
( Supreme J udicial Court of Massachusetts, September, 1873.)
iffs were middle-men only, bringing the parties together and doing
nothing further, the parties themselves making the contract. I n
Rupp vs. Sampson, 16 Gray (Mass.) 398, the plaintiff was permit-
ted to recover, not for services rendered to the defendant as s.
broker, but for the performance of a certain specific act, nameJv,
the introduction of the other party to him, the parties after such
in trodnction making their own con tract. • H was there held that
this was not such a fraud upon the other party, who also paid for
the service of the plaintllf in introducing him, although concealed
from such party, as to make the contra.ct of the plaintiff with
the defendant void for illegality. That, however, is not the pres-
ent case.
It here appears, by the bill of exceptions, not only that there
was evidence that the plaintiffs introduced the parties, but that,
through the instrumentality of the plaintiffs, the exchange was
effected, and that in effecting such exchange the plaintiffs acted as
brokers for both parties. It is to be observed also, that both the
instructions asked for by the defendant aucl those given by the
presiding judge proceed upon the ground that the plaintiffs were
brokers and not micldle-men only.
Exceptions sustained.
him a commission of two and one-half per cent. All o! these allo.
gations were denied by plaiutifls' replication. The defendant
obtained a judgment for $38. 73, from which plaintiffs appeal.
The evidence shows that plaintiffs resided at Fort .Madison,
I owa, and were engaged in manufacturing and selling lumber;
that they established a branch of their business at Kansas Oity,
Missouri, and placed J. O'Sullivan in charge of it, to sell lumber.
O'Sullivan testifies tbat he was employed by plaintiffs to sell their
lumber. Samuel Atlee, one of plaintiffs, testifies that O'Sullivan
was not authorized to make any agreement to pay commissions to
other persons for selling their lumber. The firm paid O'S ullivan
a salary of $1,800 per annum. The defendant, Fink, testifies that
he, O'Sullivan and W. H. Atlee (who was not a member of the
firm of plaintiffs), were together when O'Sullivan and defend-
ant made the agreement by which the latter was to receive the
commission on 1tales O'Sullivan might mske to defendant's
employers through defendant's influence with them; that his
employers paid him for superintending the erection of the various
buildings erected by them, and it was his duty to keep the laborers
at work, and see about materials and all details; that his employers
would pay no bills for labor or lumber until certified by defendant
to be correct; that he never informed them or any of them that he
wa.a to get a commission on the lumber purchased by them of
plaintiffs. This is the substance of the testimony on the only
branch of the case which we deem it necessary to consider.
O'Sullivan was not expressly, or by the nature of his employ-
ment, authorized to make the contract in question. He was, s.s he
testified, but an agent to sell, and could not delegate that authority
to another. Especially was he not authorized to promise a com-
pensation for sales made for the firm by others, w hieh would bind
the firm. Story on Agency (6th. ed.), sec. 387; Warner vs. Martin,
11 How. (U. S.) 209.
But it is unnecessary to extend our remarks on that proposition,
because if O'Sullivan had had ample authority to make snch a con-
tract, it is contrary to public policy to allow the plaintiffs to
recover on it. Fink was employed by others to transact business for
them, and they paid no bills for lumber not certified by him to be
correct, and for two and one-half per cent. commission on sales to
his employees, he sold his influence with them to the plaintiffs.
He kept them in ignorance of the agreement he bad made with
O'Sullivan. That agreement was a temptation to him to certify
16 OASES ON AC:rENCY. [ Book I
a.a correct bills for lumber which might be incorrect, both as to the
a.mount of lumber and the prices charged. His compensation
could be increased by such conduct, and it is no answer that noth4
ing of the kind occurred. In Fuller vs. Dame, 18 Pick. (Mass.)
472, the court said : "The law avoids contracts and promises made
with a view to place one under wrong influences; those which offer
him a temptation to do that which may affect injuriously the right
and interests of third persons." In Sp inks vs. Davis, 32 Miss. 152,
the court said: "It is a sufficient objection to a contract on the
ground of public policy, that it has a direct tendency to induce
fraud and malpractice upon the rights of others, or the violation or
neglect of high public duties." One employed by another to
transact business for him has no right to enter into a. contract with
a third person, which would place it in his power to wrong his
principal in the transaction of the business of the latter, and which
would tempt a bad man to act in bad faith towards his employer.
The interests of the defendant's employers and those of plaintiffs, as
buyers and sellers, were antagonistic, and defendant could not
serve two masters in a matter in which there was such a conftict in
their interests. It makes no dillerence that defendant was
not employed to purchase the lumber for his employers. It is
enough that it was his duty, under his employment, to examine and
certify to the correctness of the lumber bills.
Under this view, it is wholly immaterial whether the agreement
made by O'Sullivan with the defendant was ratified or not by the
plaintiffs. The ratification of the contract would not have elimi-
nated the element which rendered it invalid. The trial court
entertained a different view of the subject, and embodied, in
instructions given, that erroneous view, and refused instructions
asked by plaintiffs which declared the law as herein announced,
and its judgment is therefore reversed and the cause remanded.
Reversed and remande~
Non.-See also Smith vs. Sorby, L. R. 8 Q. B. Div., 1552, 28 Monk's Eng.
Rep. 455; Harrington va. Victoria (}raving Docl' Co., L. R. 8 Q. B. Div.•
M9, 28 Eng. Rep. 463.
Ohap. II] MrL1,s vs. if ILLS. 17
The owners o.f land in a city agreed with the owners of an adja-
cent building that if the latter would ofier that builuing to the
government for a postof:lice for a nominal rent for ten years, and
nse all "proper persuasion,, to secure its acceptance, they would
pay them a certain sum annually for that period, in case of the
government's acceptance. The building was accepted by the gov-
ernment, one of the owners, a personal friend of the postmaster-
gencral, truthfully representing that the situation was suitable, and
notes were given by the doienwmts !or the u.n.uual inatallmenta as
agreed.
Chap. II ] ELKHART Oou.NTY LoDOE vs. On.AnY. 19
that the location is restricted to one place for the ren::>on that it is
say
20 CASES ON AOE"NCY. [Book 1
p. 17) ; Ormerod vs. Dearman, 100 P enn. St. 561, 45 Am. Rep. 3!:11.
T he contract before us has two infirmities, one of an agreement
for the use of personal influence, and another of an agreement for
compensation dependent upon the contingency of success. That
we are correct in saying that the agreement is dependent upon a
contingency is shown by the fact that the consideration became
payable only in the event that the post-office was located and main-
tained in appellants' building.
Doubtless a contract to assist a property owner in fitting np or
purchasing a building to be given to the gonrnment for public
use would be valid, but in the present instance this was not the
character of the consideration of the notes in snit, although such
an element may have form ed part of the consideration. The con-
sideration of the notes is indivisible and the illegal cannot be sepa-
rated from the legal, and under the familiar rule that where the
oonsidera.tion is in part illegal and there can be no separation the
whole contract is void, the contract before us must be held invalid
because of the illegality of the consideration.
.Affirmed..
NOTB.-Compare with Beal v. Polhemus, 67 Mich. 180.
legal business as would necessarily grow ont of the money they had
invested and W"cre investing in Cook county.
The complainant, W"hosc duty it was to guard and protect the
interests of Tn\·ncr and Washington, whose agent he was, and give
them honest advice, and not place himself in a po~ition W"here there
would be a conflict between duty on the one hand, and self-interest
on the other, in atter disregard of these well-known and wholesome
principles, entered upon the task t o induce his principals to dis-
charge their attorney and employ, in his stead, the defendant.
What was the obj ect? Surely not to enhance the interest of his
principals, because he concedes that t hey had in their service an
attorney of skill and learning. But the sole object was, that he
might obtain one-half of all fees that the attorney might earn in
the transaction of bis priucip·1ls' business. The complainant, as
we learn from the bill, at last succec:<lcd in inducing his principals
to discharge their attorney and employ the defendant, and now,
as the attorney refuses to di·ritle thCI fees thus earned of appellant's
principals, he calls upon a court of equity to enforce his illegal
contract.
We are a.ware of no principle of equity jurisprudence which
would allow a court of eqnity to lend its aiu to a.ssi::;t the complain-
ant in the collection of fees earned nuder n contract based, as this
one is, upon a consideration immoral and illeglll. A coutr!l.ct based
upon an illegal considerution could not be enfoiccd in n. court of
law, much less woulcl a court of equity, where a complainant is
required to come into court wiLh clean hands, enforce the per-
fo rmance of a contract founded u1 1on an illcJal consideration.
But e\en if the coutract set up in tho bill rested upon a. valid
consideration, we perceive no gronutl upon which the bill could bo
maintained. St.ppose tbc defc1ulunt was associated with the com-
plainant in the agency and retained a.s the attorney of Washington
and Turner, under an urraHgcment that ho would divide fees with
the compluinant-whcn W nshington and Turner clischa.rged the .
complainant, that terminated the arrangement.
T he contract was iu tl•e natnro of a partnership which might be
terminated nt such time as citlier party saw proper to withdraw.
It is true neitlier withdrew, but Washington aucl Tarner terminated
the arran gement 1Jy discharging U1e complainant from tho manage-
ment of t ho bnsincss. 'The mere fact that they saw proper,
after complainant was no longer an agent, to enter upon a new
contract with the dc!cn<lant, unclor which ho performed service and
Cb~Lp. II ] BYRD vs. lluonEs. 25