Murray v. Beard — 2 N.Y. St. Rep. 466

Majority

p. 466

James Murray, App’lt, v. William H. Beard et al., Resp’t.

(Court of Appeals,

Filed June 1, 1886.)

Headnote

1. Contract—Principal and agent—Agent cannot act por several

PRINCIPALS HAVING ADVERSE INTERESTS.

An agent cannot take upon himself incompatible duties or characters, or act in a transaction where he has adverse interest or employment. And where plaintiff knowing that proposals were about to be made for a large number of piles to be purchased from the lowest bidder, contracts with several dealers in them, for commissions if he secured the sale for them, he cannot enforce his contract against the successful bidder—as the contract was void for want of consideration, and also as being contra bonos nwres.

Appeal from general term of the city court of Brooklyn, affirming a judgment dismissing the complaint.

Henry D. Hotchkiss, for appellant; Thomas E. Pearsall, for respondents.

The claim in this case presents a novel industry, and one which, if successful, would promise to be the source of profit to its prosecutors, without much expenditure of time or money. The plaintiff, a timber broker, learning that the Hamburg American Packet Company was about to build a pier, requiring a large number of piles in its construction, and to advertise for bids from timber merchants to supply them, visited the several dealers in such materials in New York and Brooklyn, and obtained prices therefor, and under the inducement that he would act for them respectively in securing a sale of piles, obtained promises from each that if he secured a sale for such dealer he should receive a commission of twenty-five cents on each pile sold. He did not inform the dealers of the name of the intending purchaser, or the fact that a contract could be obtained only by competitive bidding, or that he had effected a similar understanding with other dealers. The company soon thereafter issued proposals for the supply of piles, and sent invitations to dealers generally, among whom were the defendants, to compete for a contract for the piles required. A number of persons, among whom were the plaintiff, the defendants and other dealers, submitted bids for such contract, and after a canvass of such proposals by the company’s engineer, he awarded the contract to the defendants. The defendants having refused to pay the plaintiff’s claim for commissions, this action was brought to recover them.

On the trial the plaintiff was nonsuited upon the ground that there was no consideration for the promise to pay commissions. We think- the judgment was properly ordered on that ground, and that it can also be sustained upon the ground of fraudulent suppression of material facts

p. 467

by the plaintiff in making the contract, as well as that it was contra bonos mores. The plaintiff, while assuming to act for the defendants in obtaining the contract of sale, was in fact under equal obligations, to competing dealers, to assist them in effecting the same sale. Thus if the plaintiff’s services could have been of advantage to any one, he was under the necessity of being treacherous to one employer or another. An agent is held to uberrima fides in his dealings with his principal, and if he acts adversely to his employer in any part of the transaction, or omits to disclose any interest which would naturally influence his conduct in dealing with the subject of the employment, it amounts to such a fraud upon the principal, as to forfeit any right to compensation for services. Story on Agency, §§ 31, 334; Story’s Eq. Jur., § 315; Ewell’s Evans on Agency, 268; Dunlap Paley on Agency, 105, 106; Carman v. Beach, 63 N. Y., 97 , 100. It is an elementary principle that an agent cannot take upon himself incompatible duties, and characters, or act in a transaction where he has an adverse interest or employment. N. Y. Cent. Ins. Co. v. Nat. Pro. Ins. Co., 14 N. Y., 85 ; Ewell’s Evans on Agency, 14; Greenwood v. Spring, 54 Barb., 375 ; Neuendorff v. World Mut. Life Ins. Co., 69 N. Y, 389 . In such a case he must necessarily be unfaithful to one or the other, as the duties which he owes to his respective principals are conflicting, and incapable of faithful performance by the same person. The plaintiff in this case was a bidder for the contract, and if he succeeded in obtaining it himself, and had not the piles to fulfill it, he was under equal obligations to several different persons to employ their piles in its performance. Some or all of his principals must have been disappointed by him, and he would have been under the necessity of violating his obligations to some of his employers. Such conduct is violative of the plainest principles of morality and fair dealing, and cannot be sustained by a court of justice.

Heither does the proof show that he rendered any service to the defendants in effecting the sale. His situation rendered him incapable of serving the defendants to advantage even if he had desired to do so; but the evidence fails to show any effort on his part to sell the defendant’s property. He did attempt to sell his own property, or secure the contract for furnishing piles, but whether this was done for the defendant’s benefit or not, does not appear. As we have seen, he was under contract obligations to others as well as to the defendants, and it does not lie in his mouth to allege that he intended to defraud others for the benefit of the defendants. There was no evidence showing a performance by the plaintiff of the obligations of his contract

p. 468

with defendants, and he was, therefore, properly non-suited on the trial.

The judgment should be affirmed.

All concur.