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son as to the right of the latter to receive the compensation provided for in the contract sued on.

2. It is further contended by defendant, and this seems to be his main contention, that the court erred in directing a verdict for the plaintiff, because it appears from the pleadings that the deceased Gibson was acting for both the vendor and vendee in the matter of the sale of the Broadwater group of mines, and there was no evidence showing that the parties to that transaction knew that he was acting in such dual capacity. The principle for which the defendant contends is that it is prima facie contrary to public policy for a broker to act as agent for both vendor and vendee in a sale of property, and that, when such double employment is shown, the agent is not entitled to recover compensation from either of his principals, without proof that both of them knew of the dual capacity in which he acted, and consented thereto. This may be regarded as the statement of an elementary rule of law, and is supported by numerous authorities, among which the following may be cited: Meyer v. Hanchett, 43 Wis. 216; Scribner v. Collar, 40 Mich. 375, 29 Am. Rep. 541; Leathers v. Canfield, 45 L. R. A. 33, 117 Mich. 277, 75 N. W. 612; Hobart v. Sherburne, 66 Minn. 171, 68 N. W. 841; Young v. Trainor, 42 N. E. 139, 158 I11. 428; Hannan v. Prentis, 124 Mich. 417, 83 N. W. 102; 19 Cyc. p. 279. It will be found upon examination that this principle of law is only applied in cases where the agent is clothed with some discretion in the matter of advising or negotiating the sale or purchase of property, where the duty which he owes to one principal is inconsistent with that which he owes to the other. The rule is based upon the doctrine that “the duty of an agent for a vendor is to sell the property at the highest price; and of the agent of the purchaser, to buy it for the lowest." Farnsworth v. Hemmer, 1 Allen (Mass.) 494, 19 Am. Dec. 756. When the fact of such inconsistent relation is either admitted or proved, the burden is then upon the agent to show that both principals had knowledge and consented to his acting in such dual capacity, and without such proof he is not entitled to recover compensation from either; but where the agency is not of this nature, where the agent is given no discretionary power to negotiate the sale, and his employment is merely to bring the principals together that they may make their own contract upon such terms as they may agree, the reason for the rule above stated ceases, and the agent is entitled to recover from both principals, if both have agreed to pay him for such services. Rupp v. Sampson, 16 Gray (Mass.) 401, 77 Am. Dec. 416; Knauss v. Brewing Co., 142 N. Y. 70, 36 N. E. 867; Empire State Ins. Co. v. American Cent. Ins. Co., 34 N. E. 201, 138 N. Y. 446.

The question then is, to which of these classes does the present case belong? There is nothing in the evidence to throw any light upon this question, as it does not disclose the scope of Gibson's agency, what assistance he was to render the defendant in making the purchase of the Broadwater group of mines, or what service he was to perform for the owner of the property sold. It is, however, admitted by the pleadings, that Gibson was to receive compensation from both parties to that transaction, and defendant claims that, such fact being admitted, the burden

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of proof was upon the plaintiff to prove that both parties knew of and consented to such double employment. It is alleged in the answer, as one defense to the action, that Gibson was to receive compensation from the owner of the Broadwater group of mines, as well

as from the defendant, for his services as broker in the matter of effecting a sale thereof, and that neither of his principals knew that Gibson was acting in such dual capacity. The plaintiff in his replication admits that Gibson was to receive compensation from both the defendant and the owner of the Broadwater group of mines, in the event that the defendant should become the purchaser thereof, but in this connection alleges:

"That in the effecting of the said sale the said Charles S. Gibson merely acted as agent in bringing the said parties together and in keeping them informed as to the condition of the property, and that he had nothing whatever to do with the fixing of the price for which the property was to be sold, or in determining as to whether or not either of the parties would accept the proposition so made by the other."

It will be seen from this that the replication in effect denies that Gibson's agency was one which gave him any discretion in the matter of negotiating a sale of the Broadwater group of mines, or imposed upon him any other duty in relation to such sale than that of a middleman, and keeping the parties "informed as to the condition of the property.” The admission of the double agency being thus qualified, we think the burden was upon the defendant, under the authorities, to offer some proof to sustain the broad allegation of his answer in relation to the scope of Gibson's agency. In the absence of evidence tending to show that Gibson's agency was one which vested him with some discretion in the matter of negotiating the sale of the Broadwater group of mines plaintiff's replication is to be taken as true, and the case is thus brought within the rule of Knauss v. Brewing Co., 142 N. Y. 70, 36 N. E. 867, in which case it was said:

"It is undeniable that where the broker or agent is invested with the least discretion, or where the party had the right to rely on the broker for the benefit of his skill or judgment in any such case, an employment of the broker by the other side in a similar capacity, or in one where, by possibility, his duty and his interests might clash, would avoid all his right to compensation. The whole matter depends upon the character of his employment. If A. is employed by B. to find him a purchaser for his house upon terms and conditions to be determined by B. when he meets the purchaser, I can see nothing improper or inconsistent with any duty he owes B. for A. to accept an employment from C. to find one who will sell his house to C. upon terms which they may agree upon when they meet; and there is no violation of duty, in such case, in agreeing for commissions from each party upon a bargain being struck, or in failing to notify each party of his employment by the other."

The fact admitted by the replication, that, in addition to his employment as a middleman, Gibson was also employed by the parties to give information as to the condition of the property, does not affect the question before us, as it cannot be said as matter of law that such an employment imposed upon Gibson any inconsistent duty in the matter of the conflicting interests of the vendor and vendee. There certainly is no presumption that Gibson was employed by either of his principals to deceive the other, to suppress facts within his knowl

edge, or to give false information to the other as to the condition of the mines. The replication avers that he was to keep them informed as to the condition of the property, and this must be construed as an allegation that his contract with both was to furnish true information as to its condition, and the double employment for such purpose, was not contrary to public policy, as the duty which he owed to one under such contract, was not inconsistent with his duty to the other.

The judgment is affirmed.

ROSS, Circuit Judge (dissenting). I am unable to agree to the judgment in this case. As stated in the opinion, there is nothing in the evidence to disclose the scope of Gibson's agency. In the answer to the complaint the defendant set up:

"That Gibson was to receive compensation from the owner of the Broadwater group of mines, as well as from the defendant, for his services as broker in the matter of effecting a sale thereof, and that neither of his principals knew that Gibson was acting in such dual capacity.”

The answer does not allege that Gibson's agency was one which gave him any discretion in the matter of negotiating a sale of the mines, or anything about the scope of that agency. The answer, therefore, contained nothing calling for or admitting of any denial in the replication of the scope of the agency; so that the statement in the replication, "that in the effecting of the said sale the said Charles S. Gibson merely acted as agent in bringing the said parties together, and in keeping them informed as to the condition of the property, and that he had nothing whatever to do with the fixing of the price for which the property was to be sold, or in determining as to whether or not either of the parties would accept the proposition so made by the other,” cannot be properly regarded as a denial of anything contained in the answer, but only as an affirmative allegation on the part of the plaintiff, and one to be proved by the plaintiff. In the opinion of the court it is said:

"The admission of the double agency being thus qualified. we think the burden was upon the defendant, under the authorities, to offer some proof to sustain the broad allegation of his answer in relation to the scope of Gibson's agency.”

But the answer does not contain any allegation at all in relation to the scope of Gibson's agency. The effect of the decision, therefore, it seems to me, is that an agent may act for a vendor in the sale of his property, his duty to the vendor being to sell it at the highest price, and at the same time, without knowledge of either of the principals, act as agent for the purchaser, his duty to him being to buy at the lowest price. Yet the law is, as I understand it, and as is stated in the opinion, that this cannot be permitted.

NOTE.

Rights of Brokers to Compensation from Both Parties.

I. IN GENERAL. [a] Where a broker, employed to sell land on a commission, receives a commission from the buyer without the knowledge of the seller, he cannot recover his commission from the seller. -(Cal. 1906) Rauer's Law & Collection Co. v. Bradbury, 3 Cal. App. 256, 84

Pac. 1007; (N. Y. 1905) Kaake v. Griswold, 104 App. Div. 137, 93 N. Y. Supp. 459.

[b] Where a real estate broker, without consent of the parties, represented both the vendor and the vendee, he cannot recover commissions for the sale. -(Mo. 1900) Rosenthal v. Drake, 82 Mo. App. 358;

(N. Y. 1855) Pugsley v. Murray, 4 E. D, Smith, 245. [C] (Ala. 1904) Plaintiff was employed by defendant to find a purchaser for lands, and was also under an agreement with certain prospective purchasers by which he was to participate with them in the advantages of the purchase, if made. He induced these purchasers to inspect the lands, and, on their objecting to the price, which, unknown to them, included plaintiff's commissions from defendant, urged them to make the purchase, and finally induced them to agree to do so. Afterwards, when they discovered the dual character of plaintiff's agency, they refused to consummate the contract, and defendant refused to pay plaintiff commissions, whereupon he brought suit therefor. Held, that a charge that, if defendant employed plaintiff to find a purchaser at a price which would be satisfactory to defendant and the purchaser, defendant could not defeat the action by proof that plaintiff was also to be paid for services by the purchaser, was erroneous.-Green v. Southern States Lumber Co., 141 Ala, 680, 37 South. 670.

[d] (Ala. 1901) A real estate broker who is negotiating a sale of property, or otherwise acting in the usual line of his business, cannot represent both parties to the transaction without their mutual knowledge and consent; and, if he attempts to do so, he forfeits all right to any compensation or commissions froin either.-Green v, Southern States Lumber Co., 141 Ala. 680, 37 South. 670.

[e] (Ill.) Where an agent in making a sale of real estate has acted as agent for the vendor as well as for the vendee, he cannot recover commissions from the vendee unless he brings the case within one of the established exceptions to the general rule that an agent cannot recover commissions from both parties to a transaction.—(1904) Keach v. Bunn, 116 Ill. App. 397, judgment affirmed Bunn v. Keach (1905) 214 Ill. 259, 73 N. E. 419.

[f] (111. 1905) Where plaintiffs, being agents for certain persons to purchase land, became the agents of the owner to sell it or find a purchaser therefor, without disclosing their agency for the other parties, and were also guilty of bad faith towards the owner, they are not entitled to commissions of the owner for a sale to the other persons, whether made by them or by the owner after they had brought the parties together.—Bunn v. Keach, 214 III. 230, 73 N. E. 419.

[g] (Mass. 1883) Where a broker is employed to sell a house, and effects a transaction by which such house is bought by another, who sells his house to a third person, the purchase and price paid by such other being dependent upon the purchase and the price paid by such third person, by whom the purchase money (the amount of which is the same in each case) is paid directly to the broker's immediate employer, who pays the broker a commission for his services in selling his house, the broker cannot recover a commission of such third person, even if he was employed by him to buy a house for him.-Follansbee v. O'Reilly, 135 Mass. 80.

[h] (Mich. 1879) It is well settled to be contrary to public policy to allow a broker to recover commissions from both the parties to a sale or exchange, neither of whom knew that he was acting for the other, although he acted in good faith.-Scribner v. Collar, 40 Mich. 375, 29 Am. Rep. 541.

[1] (Mich. 1889) P. and O., real estate brokers, having been commissioned to sell land, agreed to divide commissions with plaintiff, another broker, if he should find a purchaser. Before defendant purchased the lands, he had agreed to pay plaintiff one-half the profits he should realize from their sale, over and above the fixed price. Held that, though 0. and P., and the owners of the lands, were ignorant of the contract, and plaintiff thus received a commission from both seller and purchaser, the contract was not in contravention of public policy, where it appears that the owners had fixed the prices they demanded before its execution, and had reposed no confidence in plaintiff to procure a higher price.-Ranney v. Donovan, 78 Mich. 318, 44 N. W. 276.

[j] (Mich. 1892) Where a person agrees to pay a real estate broker for finding a purchaser for his land at a fixed price, and the broker finds a purchaser, and a sale of such land is consummated, he is entitled to compensation therefor from the seller, though he also receives compensation from the purchaser for services rendered him.-Montross v. Eddy, 94 Mich. 100, 53 N. W. 916, 34 Am. St. Rep. 323.

[k] (Mich. 1898) An agent who is employed by a lumber company to negotiate with the owner of pine land for its purchase at a stated commission, and who acts in the negotiations always in the interest of the lumber company, and against the interest of the seller, cannot recover a commission for the sale from the seller.—Leathers v. Canfield, 117 Mich. 277, 75 N. W.612, 45 L. R. A. 33.

[1] (Mich. 1901) Where, in an action to recover commissions for a sale of defendant's real estate, it was shown that plaintiff was not a middleman to bring the parties together, but that he first took a contract to himself from defendant, refusing to disclose who the purchaser was until he had secured the contract; that plaintiff had received a sum from the purchaser for his services in the matter; and that neither the vendor nor vendee knew the other was paying a commission—plaintiff could not recover from defendant.—Horwitz v. Pepper, 128 Mich. 688, 87 N. W. 1034.

[m] (Mich. 1903) A real estate agent having property of others for sale, who requests a prospective buyer to go with him to see the property, cannot charge the latter for his services and expenses in making such trip.—Hale v. Knapp, 134 Mich. 622, 96 N. W. 1060.

[n] (N. Y. 1850) In making a bargain, a broker can hardly act with fairness if he expects to be paid by both purchaser and seller. These two employments are entirely incompatible, and, having received commissions from one party, he cannot obtain additional compensation from the other.- Watkins v. Cousall, 1 D. D. Smith, 65.

[0] (N. Y. 1853) A broker employed by the owner of lands to procure a sale thereof to one who shall agree to take from the owner a loan, and improve the property, cannot, after recovering compensation from the owner of the property for effecting the sale, recover compensation from the purchaser for procuring the loan to him.— Vanderpoel v. Kearns, 2 E. D. Smith, 170.

[oo] (N. Y. 1853) One cannot be employed as an agent or broker for both purchaser and seller and earn a compensation from each, unless by a distinct arrangement between all who are concerned.-Dunlop v. Richards, 2 E. D. Smith, 181.

[p] (N. Y. 1895) A real estate agent, employed to buy certain property at a certain price, does not forfeit the commission which the purchaser agreed to pay him because he secured another commission from the vendor after the vendor had accepted the terms offered.-Jones v. Henry (Com. Pl.) 15 Misc. Rep. 151, 36 N. Y. Supp. 483.

[q] (N. Y. 1900) Where a real estate broker sustains a confidential relation to his employer, it is error, on the trial of his action for commission, to exclude evidence of a secret agreement with the opposite party to a sale for an additional commission, since such an agreement would violate the broker's good faith towards his employer, and hence preclude his recovery.--Brierly v. Connelly, 31 Misc. Rep. 268, 64 N. Y. Supp. 9.

[r] (N. Y.) Where a broker, having been engaged by a landlord to secure a tenant, was promised by persons who leased the premises, after the lease was made, that they would pay him his commissions if the landlord did not, such agreement did not release defendant from his obligation to compensate

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