Lee v. Patillo , 105 Va. 10 ( 1906 )

Whittle J.,

delivered the opinion of the court.

This appeal is from a decree dismissing the bill in a suit in equity brought by the appellant against the appellee to rescind a contract on the ground of fraud in its procurement.

The contract bears date June 24, 1904, and by its terms the plaintiff conferred authority upon the defendant to “buy or sell” tire standing timber upon a tract of 844 acres of land,, situated in ISTottoway county, for $1,200, to be paid within, thirty days from the date of the contract.

The circumstances which led up to and induced the plaintiff to execute the contract were as follows: In May, 1904, the-defendant sought and obtained from the plaintiff authority to sell the timber for $2,000, cash; but, in a subsequent interview, after the defendant had inspected the timber, he represented to-the plaintiff that he could not effect a sale at that price, and advised the execution of a thirty-days’ option at $1,500, at the-same time assuring the plaintiff that he would put forth his best efforts to obtain the highest possible price for the timber.

On June 24, 1904, the defendant again approached the plaintiff on the subject, and declared that he had been unable to dispose of the timber for $1,500; that the quantity was inconsiderable; that the pine trees had become infested with bugs, which in a few years would utterly destroy them; and that he could not then realize more than $1,000 for the timber. As the result of these representations, the plaintiff, who seems to have reposed the utmost confidence in the judgment and integrity of the defendant, executed the contract in controversy, which was subsequently extended to. August 1, 1904, upon the assertion of the defendant that he had obtained purchasers (Cobb and Robertson) for the timber at the price of $1,250; of which amount $1,200 was to be paid to the plaintiff, and the residue to the defendant as compensation for his services.

Relying and acting upon the asseveration of the defendant that $1,250 was the actual price at which he had sold the timber, the plaintiff, on July 22, 1904, conveyed the same to the purchasers, Cobb and Robertson. On the day following, the defendant unintentionally delivered to the plaintiff a secret agreement between himself and Cobb and Robertson, by which' they obligated themselves to pay him $800, in addition to the $1,200 which they had stipulated to pay the plaintiff for the timber. Discovering his mistake, the defendant seized and recovered possession of the paper, but not until after the plaintiff had become apprised of its purport.

Prom the foregoing narration of the facts disclosed by the record, it is obvious that the plaintiff was not dealing with the defendant as with a stranger, but that the quasi relation of principal and agent existed between them—a relation of trust and confidence, which, upon familiar principles, imposed upon the defendant the positive duty of exercising the utmost good faith towards his principal. Story on Agency, §§ 207, 214; Mechem on Agency, sections 454, 455, 456, 469; Moseley’s Admr. v. Buck, 3 Munf. 232, 5 Am. Dec. 508; Halsey v. Monteiro, 92 Va. 581, 588, 24 S. E. 258; Central Land Co. v. Obenchain, 92 Va. 130, 22 S. E. 876; Jackson v. Pleasanton, 95 Va. 654, 29 S. E. 680.

Yet the evidence clearly discloses a premeditated and systematically pursued purpose on the part of -the agent to overreach and defraud his principal. Thus with respect to the first two contracts, the witness Cobb, who was introduced by the defendant, testified: “He (the defendant) said that he did not try to sell under the $2,000 option,- hoping to get a better one at the expiration of it. He said at the expiration of the $2,000 option, that he could not handle it at that price. Mr. Lee then' gave him an option at $1,500, which he kept and handled as he did the $2,000 option. At the expiration of the $1,500 option, Mr. Lee gave him the $1,200 option.” Continuing the witness says: “He asked me not to mention what I had paid for the timber, as it would have a tendency to make all of ns have to pay more for standing timber; and suggested that I might say $1,200 was the purchase price.”

Por the purpose of securing a renewal and extension of the contract of June 24, 1904, the defendant told the plaintiff that $1,200 was the price agreed to he paid for the timber (making a similar statement to three other persons) ; when at that time he had made the sale to Cobb and Robertson for $2,000, and had in his possession the secret agreement that he was to receive $800 of that amount.

So that, in every aspect of the case, the bad faith of the defendant is palpable and flagrant, and “cannot receive countenance in a court of equity, which is always open to afford relief in such cases. Wilson v. Carpenter, 91 Va. 183, 189, 21 S. E. 243, 50 Am. St. Rep. 824, and authorities cited.

Since,, however, it appears that the defendants, Cobb and Robertson, are still willing to abide by their contract of the purchase of the timber at the price of $2,000, and to pay the same as the court may decree, the decree of the Circuit Court will be reversed, and this court will make such order as that court ought to have made, and direct the payment by Cobb and Robertson of $1,950 to the appellant, and $50, the residue of the $2,000, to the appellee.

Reversed.