Court Opinion

ID: 9760411
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:53:49.006422+00
Date Added: 2024-06-11T07:29:11.739911
License: Public Domain

Dissenting Opinion by
Mr. Justice Bell:
I agree with the authorities and the principles of law stated in the majority opinion, but not with their application to some of the facts in this case.
*495All the parties agree that defendant was employed as plaintiff’s agent to sell 525,000 shares of stock and as such was duty bound to sell her shares of stock at the highest price obtainable. Defendant acted throughout the entire transaction as plaintiff’s agent, except as to 50,000 shares which it purchased as principal; but even as to these shares defendant claimed a commission as her agent.
For approximately 2,000 years the civilized world has believed the ancient moral precept that man cannot with fidelity serve two masters when their interests are conflicting. This moral principle has become embedded in the law. In this case defendant attempted to serve two masters — the seller and the purchasers of 475.000 shares — and also itself (in the capacity of both agent and principal), and to take for itself an agent’s commission from the seller on 525,000 shares of stock (including a commission on 50,000 shares which it purchased as principal), and still another commission from the purchasers of 475,000 shares. The majority agree that this can be lawfully done only if defendant proved such an arrangement by the clearest possible evidence, and the entire transaction was clearly explained to and agreed to by plaintiff. Obviously, the best evidence was not a telephone conversation between defendant’s representative and plaintiff’s lawyer which preceded the written contract and produced oath against oath — the best evidence was the telephoned telegram sent by Bear Stearns & Company, and especially the subsequent written contract entered into between plaintiff and Bear Stearns & Company.
The seller was an inexperienced woman who was in a critical financial condition. On June 28th she and Bear Stearns signed a written agreement of sale for 525.000 shares “for the price of $13.75 per share less $18.75 per 100 shares, less Federal and State transfer taxes, . . . .” Defendant admits that plaintiff accepted *496this offer reluctantly because she felt the price was too low and because defendant agreed to use its best efforts (which, so far as the record shows, it made no attempt to do) to secure a higher price for the stock. The contract, we repeat, was dated June 28th, and settlement was made July 5th. On August 12th the stock sold on the New York Stock Exchange at 21% per share.
The telephoned telegram (June 28, 1955) was sent to plaintiff’s attorney and reads: “This confirms offer to purchase 525,000 shares of Missouri Kansas Texas common stock by a group of which Bear Stearns & Go. is a member at a price which is the equivalent of 13 3/4 less $18.75 per hundred shares less tax. (Signed) Bear Stearns & Co.” If this telegram can be said to clearly disclose that Bear Stearns was acting as principal and also as plaintiffs agent in the sale of this stock, it is clear as crystal that nothing is said as to its also receiving a commission from the purchasers of 475,000 shares.
The written agreement between plaintiff and defendant dated June 28, 1955 is very short and pertinently provides:
“Whereas, the purchaser representing a group of investors of which it is a member is desirous of purchasing said 525,000 shares of the common stock aforedescribed, subject to the terms and conditions hereinafter set forth:
“(1) The Seller hereby agrees to sell and deliver to the Purchaser stock certificates evidencing said sale, 525,000 shares of the common stock of Missouri-Kansas-Texas Eailroad Company for the price of $13.75 per share less $18.75 per hundred shares, less Federal and State transfer taxes, said purchase price to be paid in cash at the time of delivery of said stock certificates.”
*497If this contract can be construed to clearly prove that Bear Stearns was acting not only as plaintiff’s agent but also as the purchaser of 50,000 shares, it is certainly clear that the contract does not reveal that Bear Stearns would receive an additional commission from the purchasers of 475,000 shares.
To summarize: In my judgment, there is nothing in the telephoned telegram, or in the written contract which clearly and sufficiently disclosed to plaintiff that Bear Steams & Company was not only charging plaintiff as her agent a commission on 525,000 shares (including a brokerage commission on 50,000 shares, which, we repeat, it purchased from her as principal) but was also charging the purchasers a brokerage commission on 475,000 shares. In other words defendant did not reveal its dual conflicting position.
Mr. Felix, plaintiff’s counsel, has aptly expressed my feelings on this transaction in his letter of July 22nd, the relevant portions of which are as follows :
“Dear Mr. Lewis: [Bear Stearns & Company]
“Two facts, which were not disclosed prior to Monday night, June 27, when you telephoned that you had sold the above-mentioned stock, have caused Mrs. Claughton and ourselves a great deal of concern. Up until after the time the offer, made through you as her agent * had been accepted, she believed, as she had every right to believe, that you were representing her at the bargaining table solely and exclusively as her agent and with the ‘singular loyalty’ which that fiduciary relationship implies. And it was because of that relationship and the confidence she placed in your integrity and judgment that, in a telephone conversation with you on Friday, June 24, she, at your insistence, reluctantly agreed to a firm offer of the estate’s *498stock at $13.75 per share until Midnight, Monday, June 27.
“You will recall, however, that in that conversation she stated that she thought this block of stock, because of its control feature, was worth considerably more and only acceded to the $13.75 price you urged upon the condition that you would exert every effort to get a higher price. . . .
“When you recall these circumstances and keep in mind the implicit trust she placed in you, you can readily understand what a shock it was when, at the time you telephoned that the sale had been made, you disclosed, for the first time, that you were buying 50,-000 shares of the stock yourself. Also, what a second shock it was when she learned for the first time on July 6 and after the stock had been transferred> that you were being paid a commission by the other purchasers. She reasons that a commission implies a service, and wonders how, in good conscience, you could sit on ‘both sides of the bargaining table’ and properly serve two masters. In other words, she seriously questions whether the price of $13.75 was negotiated and fixed in the arms-length manner which your agency, as well as your statements and advice to her, led her to believe that it was.”
Under the above mentioned facts, I believe that Bear Stearns and Company is not entitled to any commissions from plaintiff.
Mr. Chief Justice Jones joins in this dissent.

 Italics throughout, ours.