ALLAN v. FAMA.

Hawera & Normanby Star, Volume XLII, Issue XLII, 27 April 1922, Page 5

ALLAN v. FAMA.

Ihe judgment of Mr Justice Chapman was given on Saturday last in favow\of the respondent in the appeal brought by the plaintiff against the defendants Ihe judgment says, inter alia: ~/' Til? fading f?cts. are as follows: llamtiff had instructions from the respondent, 8..v2t. Fama, to sell a property of tbs Respondent, Mrs A. J Fama. According to the statement of claim this property for the purpose xo^ cha? ge ,or sale > was val*ed at ±-2500. Appellant,had at the same time authority from one Burtt to dispose of Burtt's interest in a mortgage. Tins security jvas a third mortgage for £4000 on the property of one Saunderson, of which one-third, that is to say, £1383 6s Bd, was held in trust for Burtt. Appellant negotiated a .sale of respondent's land to Burtt, part of the arrangement being that respondent should take a transfer of Burtt's interest in the mortgage, apparently representing .' £1383 6s1 Bd, as so much cash^ and that the balance should be adjusted in a " manner agreed to by the parties, this involving treating the mortgage as worth- £1383 6s BdV In the statement of claim the transaction is referred to as an exchange arranged "at the'request of the defendants and by the sole efforts and work ,of the • plaintiff." Burtt, being unable to find means to finance the transaction, failed to complete the purchase and the agreement . tor sale was rescinded. Appellant claims that having thus brought the parties together so that they,had made an agreement, he had done 'all thai respondents' expected him to,do, and that he was - therefore entitled to earn his commission, £62 10s. Various questions were raised, one of which had beea dealt with by the Magistrate.- The appellant, acting for both parties, had allowed the respondents to enter this contract on the assumption that Burtt's interest in the mortgage was worth its face value. £1383 6s Bd. The evidence shows that he knew that Burtt was willing to sell itjor £900, and had actually placed it in appellant's hands'for sale for cash at £900.' "It is, in this action, necessary for the appellant to support his claim that he has earned the commission sued for" "by his sole efforts and work," byshowiiig that he has fully and faithfully performed his duty to the respondents: A land agent may act for both vendor and, purchaser, or for botft parties, to an exchange, just as any broker may, when his doing so is known to both, but he should only do so when he is clearly in a. position to act faithfully towards one m the position of the respondents I agree with the Magistrate, who has heid that the appellant did not perform this duty when, knowing that- the security was not worth £1383 6s Bd,he allowed his' principals to accept it in payment of that sum when he could have procured it for them for some hundreds less. "The law which governs an agent' 9 conduct m such a case is carefully stated in Bowstead, on Agericv 6th. edition, p. 139, article 50, thus:"Where an agent enters into any contract or transaction with his principal, or with his principal's representative in interest, he must act with the most perfect good faith, and make full and f*ir disclosure of all the material circumstances and of everything known to him respecting the subject matter of the contract or transaction which would be likely to influence the conduct of "the principal or his representative. 'This rule applies when a principal knowingly deals with an agent; it applies with far greater force when the agent concealing the fact that he has an indirect but actual interest in the transaction, allows his principal to be placed m a position of disadvantage ■ Had the transaction been carried out and. had the respondents suffered loss by reason of the fact that this security was worth less than the sum it apSnh! iT PrT nt the aPPe"ant would ?es c held liable f<«.dam-N "It may in this case be regarded as certain that if the appellant Ihad sail Burtt is putting m this mortgage at its face value, but I could buy it for Setsufd 900'" n° tra*SaCtio» ™S Ai3°f ? WS6 rea.sons I hold that the Magistrate was right in, deciding as he' %'.» PP dlsmissed/with co?t s £1Q h f r«°'P c? 11 a PPeai«d at the hearing on