Court Opinion

ID: 7119235
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:36:17.063407+00
Date Added: 2024-06-11T12:49:32.551556
License: Public Domain

De Graee, J.
(dissenting). The character of the agency in the instant suit, as defined by the parties, is not in question. ^Defendant Sehaum was an agent to lease and collect rents, and not to sell the land in controversy. No actual fraud is pleaded, and the action is not predicated on deceit. To affirm the findings and decree of the trial court, the record must disclose fiduciary relations between the plaintiff and the defendant Sehaum. The writer of this dissent is unable to discover that a fiduciary relation existed, or that there was any assumption of agency for sale on -the part of Sehaum. Plaintiff never listed the farm for sale with Sehaum, although it appears that she was desirous of selling it, and had talked with one or two parties relative to sale, and had, in fact, listed same with one William Lang, in the spring of 1918. True, she had conversations with Sehaum, during his tenure of office as her agent to lease, but no material misrepre*227sentations were made by him to ber that induced the sale. In the last conversation with Schaum, plaintiff stated that she would take $39,000 for the farm, and defined the terms of payment. Shortly thereafter, she went to Lansing, Iowa, and while she was there, defendant Schaum, for himself and on behalf of his copurchasers, prepared the contract of sale, which was sent to the plaintiff at Lansing; and, on January 11, 1919, she went before a notary public -and acknowledged same as her voluntary act and deed. The contract was then returned to Schaum, and the initial payment was made. Later, she went to "California, where she spent the winter, and returned to Iowa in the month of April. In May, after the marked rise in land values, she made a formal demand upon Schaum and his codefendants, asking for a return of the farm and the cancellation of the contract. This demand was based on the claim that Schaum occupied a fiduciary relationship, and that, at the time of the sale, he failed to disclose facts within his knowledge, relative to the value of said farm. Defendants Lynch and Young had no personal relations or conversations with the plaintiff during the negotiations for the sale, and relied solely upon the arrangements made by Schaum.
The law of this case has been determined and stated many times by the decisions of- this court. In the application of the controlling principle, it is necessary to distinguish and differentiate an agency to lease and collect rents from an agency to sell.
An agent for the sale of property may purchase the subject-matter of his agency, but in so doing, he must fairly and fully disclose all the facts, and, in the strictest good faith, impart to his principal all information that would control or have a tendency to influence the conduct of his principal in the sale. It is his duty to secure the highest price possible. It is his duty to inform his principal as to the true value of the land, and to communicate any offers made therefor, and to give his best advice and suggestion in the sale thereof. He occupies a position of confidence, and must bear true allegiance to his principal. If such agent negotiates a sale in which he has a pecuniary interest, and the transaction is reasonably impeached, a presumption of mala fides arises, and he has the burden of proof to show affirmatively that he acted fairly, openly, and in good faith.
*228Since the defendant Schaum was not this kind of an agent, either expressly or impliedly, the duties and obligations inherent in an agency to sell were not owed by Schaum to the plaintiff, and the principle stated finds no application. An agent to lease real estate may purchase from the owner-principal, and no presumption of mala fides arises. It is said in Douglass v. Lougee, 147 Iowa 406:
“From the moment he attempts to buy, the parties are at arm’s length, and it is the buyer’s right to obtain the property for the least sum he can, without aiding the seller, to whom, with reference to such sale, he is under no obligations whatever.”
Such an agent is under no obligation to assist his principal in securing the highest price possible. He is under no obligation to disclose the true value of the land, if he knows such fact. In brief, he does not occupy a position of confidence in such a relationship.
The freedom of contract is a fundamental principle in our social and industrial life, and, subject to certain limitations, receives the same legal protection as the right of property. In the instant case, defendant Schaum, being an agent to lease land, and none other, was at liberty to negotiate a purchase for himself and others whom he interested in the purchase.
In the opinion of the writer, the evidence fails to give basis for a recovery on the theory of fiduciary relationship, and since no actual fraud is claimed, the petition should have been dismissed and judgment entered in favor, of defendants on their cross-petition. The following cases should control the case at bar: Douglass v. Lougee, 147 Iowa 406; Brown & Co. v. Cash, 165 Iowa 221; Green v. Peeso, 92 Iowa 261; Collar v. Ford, 45 Iowa 331; Ingle v. Hartman, 37 Iowa 274; Smith v. Dell, 30 Iowa 594.