Court Opinion

ID: 4942245
Source: CourtListenerOpinion
Date Created: 2021-09-24 11:39:42.763607+00
Date Added: 2024-06-11T08:14:56.808390
License: Public Domain

HOOD, Associate Judge
(dissenting).
Accepting the findings of the trial judge and the uncontradicted testimony of plaintiff’s witnesses, I think the substance of this case is as follows:
Plaintiff authorized Jay to find a purchaser for the property; Jay secured from the Brownes an offer to purchase at the price fixed by plaintiff, and plaintiff, after investigating the Brownes’ financial responsibly, accepted the offer; the Brownes in making the offer acted for themselves alone and in good faith intended to buy the property; after the offer was accepted the Brownes for personal reasons did not wish to consummate the sale and so told plaintiff who informed them that it “was too late” and that the contract would have to be dosed; the Brownes also informed Jay that they did not wish to go through with the deal and asked Jay to find someone to take over the contract; Jay put up the money to close the contract and had the Brownes convey to Hampton, who was acting as a straw party for Jay; and thereafter Jay sold to Howard at a higher price than that contracted for by the Brownes and thereby Jay realized a profit.
The sole question is whether Jay violated her obligations to plaintiff. When plaintiff authorized Jay to find a purchaser, Jay became plaintiff’s agent. As such agent, she could neither act for a purchaser nor. purchase on her own account, without first making full disclosure to her principal; her principal’s interests were her interests; and so long as the relation continued she could not assume a position even remotely antagonistic to her principal. National Savings & Trust Co. v. Sands, 44 App.D.C. 20. With these principles the majority and I are in accord, but we differ in their application to the facts of this case.
The fact that a broker acts for a principal in effecting a sale does not prevent the broker from thereafter either acting as a broker for the new owner or purchasing for himself from the new owner, so long as the original sale was bona fide and free from collusion between the purchaser and the broker. Robertson v. Chapman, 152 U.S. 673, 14 S.Ct. 741, 38 L.Ed. 592.
In the instant case the Brownes contracted in good faith to purchase from plaintiff, at a price fixed by plaintiff and after plaintiff had investigated the Brownes’ financial responsibility. After contracting to buy, the Brownes asked plaintiff to release them from their bargain and plaintiff refused. Up until this point, there is not the slightest suggestion in the record, or in the court’s finding, of any dereliction of duty on the part of Jay.
The Brownes, finding themselves with a contract which they did not wish to complete but which plaintiff insisted should be completed, turned to Jay and sought her help in getting “it off their hands.” The vital question in this case, as I see it, is whether at this point Jay was free to deal with the Brownes either as their broker or as a purchaser from them, without first making disclosure to the plaintiff.
At this point there was a binding contract of sale between plaintiff and the Brownes. Equitable title to the property had passed to the Brownes, and they were free to convey or dispose of such title as they saw fit. Lenman v. Jones, 33 App.D.C. 7, affirmed 222 U.S. 51, 32 S.Ct. 18, 56 L.Ed. 89. Both plaintiff and the Brownes recognized the contract as binding, with no power in either to rescind. Jay had performed the work for which plaintiff had employed her, i.e., had secured a purchaser acceptable to plaintiff. Before dealing with the Brownes, should Jay have first disclosed the proposed plan to plaintiff? If she had, what could plaintiff have done? Jay was purchasing from the Brownes. Would plaintiff have had a right to slop such sale or refuse to complete its sale to the Brownes?
Hie controlling principle is that no one shall be permitted to purchase an interest when he has a duty to perform inconsistent with the character of a purchaser. When Jay arranged to purchase the Brownes’ interest, she had no duty to perform for plaintiff inconsistent with such purchase. Plaintiff had sold the property to the *757Brownes and any profit made by Jay on the sale to Howard was a profit at the expense of the Brownes and not of plaintiff.
In a situation very similar to the present case the Supreme Court, in Robertson v. Chapman, 152 U.S. 673, 683, 14 S.Ct. 741, 745, 38 L.Ed. 592, said:
“If the sale to O’Donohoe was an actual sale, in good faith, so far as Polk had any agency in effecting it, — if the contract between the plaintiff and O’Donohoe had been so far executed, at the time Polk took O’Donohoe’s place in the purchase, that it could not be rescinded by either party to it, —-then Polk’s agency in selling the property did not prevent him from purchasing from O’Donohoe; and his failure to give notice of his purchase, immediately upon its being made, cannot be regarded as a fraud upon the rights of the plaintiff.”
I realize there is some language in Dahlgren v. Story, 39 App.D.C. 29, which appears inconsistent with the views here expressed, but in that case the original sale by the principal was engineered by the broker for the purpose of making a profit for the broker and his associates. I think the language of that case must be confined to the facts of that case, especially in view of Robertson v. Chapman, supra, cited in the Dahlgren case. See also, Hermann v. Hall, 9 Cir., 217 F. 947; Payne v. Beard, 8 Cir., 247 F. 247, certiorari denied 246 U.S. 666, 38 S.Ct. 335, 62 L.Ed. 929; Harvey. v. Tucker, 136 Kan. 61, 12 P.2d 847; Magnolia Petroleum Co. v. Taylor, Tex.Civ.App., 173 S.W.2d 969.
In my view, Jay in purchasing from the Brownes violated no duty she owed plaintiff, and the judgment should be reversed.