Clay v. Cummins , 207 Ala. 105 ( 1921 )

This appeal results from a second trial of the cause, following a reversal of the judgment rendered in favor of the appellee on a former trial. Clay v. Cummins, 201 Ala. 34,77 So. 328.

On the former appeal no decision was made as to the rulings of the trial court on the demurrer to defendant's plea No. 3, and to plaintiff's replication thereto, the reversal of the judgment being based upon the giving of the affirmative charge for defendant, and upon a holding by this court that on the whole evidence the plaintiff was entitled to recover a commission of 5 per cent., amounting to $900.

The theory upon which the latter conclusion was reached was that defendant's provisional ratification of the sale made by plaintiff, and his offer to pay plaintiff a commission of 5 per cent., under the terms of the original contract between them, followed by his execution of the contract of sale as made, reinstated the obligations of the original contract, although plaintiff may, by concealment and bad faith, as charged in the pleas, have forfeited his right to compensation thereunder.

On the former trial there was no plea setting up plaintiff's rejection of defendant's provisional offer to proceed under the original contract and to compensate him for making the sale according to the terms therein specified; and, though the evidence then was the same as it is now, including plaintiff's alleged letter of rejection, neither the fact of such a rejection nor its legal effect was considered by this court on the former appeal.

In the opinion on that appeal (201 Ala. 34, 77 So. 328) the duty of good faith on the part of an agent was fully discussed, and it was held, in line with all the authorities, that bad faith in the execution of the agency forfeits all right to compensation. It was further held that the principal may waive this protection given him by the law, if he sees fit to do so with a full knowledge of the facts, and will be presumed to have done so if he does not repudiate his obligation within a reasonable time after he acquires knowledge of his agent's culpability.

From these principles it seems clear that the effect of such a waiver is merely an affirmance of the principal's original obligation to pay his agent for the service rendered by him, and not to make a new and independent contract.

Plea 3, as amended, sets up plaintiff's breach of duty in that he was guilty of bad faith in not informing defendant of the fact that the purchaser he had found was willing to pay, and had offered to pay, $37.50 per acre for the land. This part of the plea was clearly sustained by the undisputed evidence in the case. The plea further shows that defendant provisionally waived his right to refuse any compensation to plaintiff, after he was informed of the facts, but avers that the waiver was not effective because the condition upon which it was made was rejected by plaintiff. This averment rests upon the correspondence between the parties, and more particularly upon the meaning and effect of plaintiff's letter of July 15th.

The demurrer challenges: (1) The sufficiency of the plea to show a rejection by plaintiff of defendant's conditional waiver; and (2) the efficacy of such a rejection to nullify the waiver made by defendant, or to defeat plaintiff's claim for compensation under the original contract.

We are of the opinion, after very thorough consideration, that the letter referred to, in connection with the other correspondence set out in the plea, may support the conclusion of the plea, charged as an inference of fact, that plaintiff never assented to defendant's proposal, but in fact refused to do so; and that such refusal, if it is to be inferred as a fact, nullified defendant's proposal and avoided the operation of his waiver of plaintiff's breach of duty.

As we understand the law, an agent's breach of duty — such a breach as is here shown — nullifies his right to compensation regardless of the question of injury to his principal; and his right to compensation is not revived nor saved by reason of the fact that his principal elects to execute the contract of sale initiated by the agent, and so enjoys its fruits or benefits.

We are further of the opinion that on the evidence adduced, including the fact that plaintiff has claimed in this suit the right to recover outside of the terms of his original contract with defendant, the trial judge properly submitted the issue of plaintiff's acceptance or rejection of defendant's proposal for determination by the jury, in his oral instructions to them, and properly stated that upon that question plaintiff's right to recover would depend.

The special written charges, given to the jury at defendant's request, are in substantial accord with our views as to the law of the case. It seems that charge "B" goes too far in requiring an agent to disclose "all facts about the business" to his employer, since ordinarily he need disclose only such matters as might affect his principal's interests. However, there was no question here as to any outside matters; and, as we have pointed out, the evidence showed a sufficient breach of duty, as a matter of law, to forfeit plaintiff's right to a commission. Hence the inaccuracy noted was academic merely, and without prejudice to plaintiff.

So, also, charge 2 contains the inaccurate statement that the breach of duty imputed to plaintiff would put an end to the original contract, whereas it in fact merely authorized plaintiff to refuse to compensate plaintiff for his services thereunder. But under the evidence, and in view of the principles of law which we have applied, the statement criticized is not material, since the practical result would be the same under either theory of the law.

We think the material issues in the case were properly submitted to the jury, and we find no error in the record to justify a reversal of the judgment based upon their findings.

The judgment will therefore be affirmed.

Affirmed.

McCLELLAN, GARDNER, and THOMAS, JJ., concur.

SAYRE, J., concurs in the conclusion.

ANDERSON, C. J., dissents.

MILLER, J., not sitting.