undertaken by him. As said by the Supreme Court of the United States in Michoud v. Girod, 4 How. 503, 554, L. Ed. 1076: "The general rule stands upon our great moral obligation to refrain from placing ourselves in relations which ordinarily excite a conflict between self interest and integrity. It therefore prohibits a party from purchasing on his own account that which his duty or trust requires him to sell on account of another.' * "These salutary principles have been repeatedly laid down and enforced by this court. [The court here considers the evidence.] "On these findings it is clear that defendant while acting as the paid agent of complainant to serve him faithfully in finding a purchaser for his land, had a secret agreement or understanding with Fish, with whom he negotiated the sale, and who ostensibly became the purchaser, that he the defendant should have a substantial interest in the trade. This, under the authorities cited entitled complainant to rescind the sale, and to a restoration of the title upon complying with the established rule in equity to place the defendant in statu quo. "But it is contended that complainant did not promptly and unevasively rescind the sale after being advised of defendant's fraud. The well settled rule on this subject is that one entitled to rescind a contract on the ground of fraud must announce his purpose to do so promptly, unconditionally and unevasively upon the discovery of the fraud practiced upon him. "The learned trial judge this to have been done. * * ** * found distinctly Question 220: In what manner did the agent in this case accomplish the purchase himself? Why did he violate a duty in that regard? Was his purchase voidable or void? Did the principal ratify in this case? Was it of any moment whether the agent did in fact pay as much himself as he would have obtained from a third person? § 220. (Agency, Sec. 36.) An agent cannot take secret profits and benefits. Case 221. Davis v. Hamlin, 108 Illinois Reports, 39. Facts: Bill in equity brought by John A. Hamlin against William I. Davis, asking that Davis be held to hold a lease on the Grand Opera House in Chicago for benefit of Hamlin. Hamlin had been lessee of said theatre. This lease was to expire April 23, 1883, and it was Hamlin's intention to renew the lease. In 1880 he secured the services of Davis, as general business manager for $50 per week and 10% of the profits. Davis procured the lease before the expiration of the old one. Point Involved: Whether an agent who procures a lease upon the premises of the principal, to begin after the expiration of the present lease, is entitled to the benefit thereof, or whether the principal can have that benefit if he desires it. * In the em MR. CHIEF JUSTICE SHELDOR : 66* ployment of an agent, the principal bargains for the disinterested skill, diligence and zeal of the agent for his own exclusive benefit. Upon entering into the employ of Hamlin, there rested upon Davis the duty of fidelity to his employer's interest, and of acting for the furtherance and advancement of the business in which he was engaged, and not in its injury. We view the whole conduct of Davis in regard to the lease in question as violative of the duty of the relation in which he stood toward Hamlin. * * "Public policy, we think, must condemn such a transaction as that in question. To sanction it would hold out a temptation to the agent to speculate off from his principal to the latter's detriment. Davis very well knew that his employer would be willing to pay a much higher rent than that at which he obtained the lease and that he could dispose of the lease to Hamlin at a large profit to himself, and such means of knowledge was derived from his position as agent. If a manager of a business were allowed to obtain such a lease for himself there would be laid before him the inducement to produce in the mind of his principal an under-estimate of the value of the lease, and to that end, may be, to mismanage so as to reduce profits, in order that he might more easily acquire the lease for himself.." Question 221: Upon what grounds did the court believe that it would be against public policy to permit this agent to retain the benefit of this lease? B. Duty to Obey Instructions, Use, Care and Skill, etc. § 224. §225. Whether agent is selected to perform or to obtain agent to perform. § 221. (Agency, Sec. 37.) Duty of agent to obey instructions. Case 222. Johnson v. New York Central Transp. Co., 33 N. Y. 610. Facts: Action against a railroad company for loss of hemp. The loss did not occur on the defendant's line, but took place after the goods had been delivered to a connecting carrier, defendant's contract of carriage simply covering its own line. The consignors had, however, given instructions as to the connecting carrier and these were disobeyed by the initial carrier, the defendant. Point Involved: The duty of the agent to obey the instructions of his principal. PORTER, J.: "The defendant undertook to transport the flax to Albany, and to forward it thence to New York by the People's Line of steamboats. On the refusal of that line to receive it, the defendant's obligation as a carrier ceased; and if it incurred any further liability, it was in the character of agent for the owner of the property. In the absence of instructions as to the mode of transportation from Albany, it owed no duty to the plaintiff, beyond the delivery of the property, in the usual course of business, to safe and responsible carriers for transmission to its destination: Brown v. Dennison, 2 Wend. 593; Van Santvoord v. St. John, 6 Hill, 157. But when the forwarding agent is instructed as to the wishes of his principal, and elects to disregard them, he is guilty of a plain breach of duty. When he sends goods in a mode prohibited by the owners, he does it at his own risk, and incurs the liability of insurer: Ackley v. Kellogg, 8 Cow. 225. "It appears in the present case that the contract was made with the freight agent of the defendant, who suggested that it would be better to forward the hemp by tow-boat from Albany; but the plaintiff replied, in substance, that it was so late in the season that he would not send it, unless it could go by the People's Line. This proof tends to show that the defendant received the property with an express understanding that the hemp was not to be forwarded to New York unless by the People's Line. If this was so, the defendant was clearly liable. On the refusal of the steamboat proprietors to receive the property, the company should either have communicated the fact to the plaintiff, and awaited further instructions, or it should have relieved itself from liability, by depositing the hemp for safe-keeping in a suitable warehouse: Forsyth v. Walker, 9 Pa. St. 148; Goold v. Chapin, 20 N. Y. 259 (75 Am. Dec. 398); Fisk v. Newton, 1 Denio, 451 (43 Am. Dec. 649). "There is a class of cases in which an agent is justified by an unexpected emergency in deviating from his instructions, where the safety of the property requires it. In this instance no such exigency arose. The only inconvenience which would have resulted to the owner from compliance by the carrier with his known wishes would have been mere delay in transmitting the hemp to market; and he had notified the company that he would rather submit to this delay than to the hazard of towboat transportation, at the close of the season of navigation. The primary duty of the agent is to observe the instructions of his principal, and when he departs from these, he must be content with the voluntary risk he assumes: 1 Parsons on Contracts, 69; Forrester v. Boardman, 1 Story, 43; Acklev v. Kellogg, 8 Cow. 223." Question 222: (1) What instructions were given to the agent in this case? Why couldn't the agent follow the instructions? What was its duty in that event? (2) What did the Court say about a class of cases in which an agent is justified in disobeying instructions? (Note to above case: In some states a carrier which accepts goods destined to a point beyond the terminus of its own line, undertakes the liability of a common carrier for the entire distance, unless it affirmatively stipulates otherwise. In other states (as in the case above), its duty is that of carrier only while the goods are upon its own line, its further obligation being merely that of a forwarder, that is, to deliver the goods to a responsible connecting carrier or to the carrier designated by the consignor. The interstate commerce acts of the United States now make a carrier which accepts interstate shipments liable as a carrier for the entire distance.) Case 223. Wilson v. Wilson, 26 Pennsylvania St. 393. Facts: Thomas Wilson sued Matthew C. Wilson to recover the sum of $300. Matthew, residing in Pennsylvania, had in his hands $300, belonging to Thomas residing in North Carolina. Thomas wrote, "You can send inclosed in letter in $50's or $100 notes on par banks, *. Only be careful and send it carefully folded up and sealed." The defendant purchased 18 bills chiefly in denominations of $5, $10 and $20, and one of $100 and enclosed the same in a letter carefully folded and sealed and properly addressed and stamped. This letter never reached its destination. ** ** This suit is brought on the ground that defendant by disobeying instructions assumed the risk. Point Involved: Whether a direction to send money in a particular way, imposes on an agent who sends it in another manner, the risk of loss. |