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Free Books / Real Estate / American Law Of Real Estate Agency / | ![]() |
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Sec. 291. Concealment And Its Effect Upon Rights |
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This section is from the book "American Law Of Real Estate Agency", by William Slee Walker. Also available from Amazon: American law of real estate agency.
Where defendants, who were employed by plaintiff to find a purchaser for a lot, after finding a purchaser and receiving part of the price, knew before the deed was delivered that the purchaser had sold at an advance, but did not inform plaintiffs, his claim, if any, against them, is for damages, for which an action at law is the proper remedy. Dickinson v. Updike (N. J. Err. & App.), 49 A. 712. The rule that a fiduciary land agent is bound to make the fullest disclosure of all matters connected with property bought by himself from his principal extends to avoid a subsequent sale of the property by such agent to a party cognizant of the concealment. Norris v. Taylor, 49 I11. 17. Compare, Collins v. Case, 23 Wis. 230. A real estate broker who conceals from his principal the name of the purchaser whom he procures, and the fact that such purchaser has bought an adjoining lot, and does this for the avowed purpose of preventing the principal from advancing the price, is not entitled to commissions. Wilkinson v. McCullough, 106 Pa. St. 205, 46 A. 357. See also Sec. 290.
Where the broker possesses an interest, in addition to his employment, in the transaction he has contracted to negotiate, and fails to disclose it to his principal, such omission of duty deprives him of the right to compensation for his services. Collins v. McClurg, 1 Colo. App. 348, 29 P. 299; Jeffries v. Bobbins 66 Kan. 427, 71 P. 852; De L'Archerie v. Rutherford (Wash. Sup. '09), 102 P. 1033; Buck v. Hozeboom (Neb. Sup. '02), 90 N. W. 635; Ryan v. Kahler, (Tex. Civ. App. '98), 46 S. W. 71; Central Turnverein of Pitts. v. Fitzpatrick, 86 A. 487, 238 Pa. 532; Nichols v. Greenstreet, 130 N. Y. Sup. 843, 71 Misc. Rep. 196, judg. aff. 131 N. Y. Supp. 1131, 146 App. Div. 940; Andrew v. Mace, 194 S. W. 598, - Tex. Civ. App. -; Braden v. Hollan, 163 N. W. 199, - Iowa Sup. - . All agreements between a real estate agent or broker and a proposed purchaser touching the subject-matter of his employment, which are not disclosed to his principal should be scrutinized closely, and if not found compatible with entire integrity and good faith toward his principal, they will defeat the agent's claim for commissions from his principal. Hobart v. Sherburne, 66 Minn. 171, 68 N. W. 841. See also supra and Secs. 290, 314, 320. Where a sub-agent allows the owner to go on and deal with a prospective purchaser as though he was free from obligations for commissions, and lowers his price to him in consequence, while concealing the fact that he, the said sub-agent, was acting for the agent, this conduct prevents the latter, on a sale being made, from recovering from the seller any compensation for his services. Mullen v. Bowen, 22 Ind. App. 294, 53 N. E. 790. Where the broker's name was signed to a paper containing an offer to purchase the property and his participation was not sought to be concealed, and he acted openly and fairly, his right to recover commissions was not affected by the fact that he was one of the intended purchasers. Reed's Ex. v. Reed, 82 Pa. St. 420. Where an agent purchases the property at a grossly inadequate price, by the concealment of facts and information relating thereto, which it was his duty to disclose, the sale will be set aside. Norris v. Taylor, 49 I11. 17.
Where an agent employed to sell a ranch introduced to the owner a customer who, at the time, had not the money to buy, but was expecting to get money, and did afterwards get the money and completed the purchase from the owner on substantially the same terms as those furnished to the agent by the owner, the agent was entitled to his commissions; the fact that the connection of the agent with the transaction was, by agreement between the agent, the owner and a third party, through whom the purchaser was introduced to the owner, kept secret from the purchaser, did not taint the contract with dishonesty so as to defeat the agent from recovering his commissions. McCampbell v. Cavis, 10 Cal. App. 242, 50 P. 728.
Where an agent for the sale of land is to receive as his compensation all above a minimum sum per acre and a fixed sum in addition, and the agent sells the land for an amount above the minimum, but conceals that fact and reports to the principal that he has sold it at the minimum, he will not be entitled to recover the additional fixed sum agreed upon. Fulton v. Wat-ters, 28 Pa. Super. Ct. 269, Rev. 216 Pa. 56, 64 A. 860. (This ruling was reversed by the Supreme Court and the broker held entitled to the additional fixed sum, on the ground that there was no relation of trust and confidence that required from the broker a disclosure to the owner of the terms of the sale.)
Where the agents for the sale of land conceal from the purchaser the fact that they are part owners of the land, but instead express an intention to purchase an interest themselves upon the same terms as they are selling to the purchasers, such representations would constitute such a fraud as would avoid the purchase. Wren v. Moncure, 95 Va. 369, 28 S. E. 588.
In an action by a real estate agent for commissions, the owner testified that when the agent's sub-agent introduced a purchaser, the latter stated he wished to deal directly with the owner, who then stated a less price than fixed in the contract of employment; the owner testified that the sub-agent and the purchaser stated that they made no arrangement with the agent, that the sub-agent said nothing about commissions, and that he (the owner) told the purchaser and sub-agent that if the agent had sold the land, he would have to let it go; the sub-agent testified that he asked the owner if the latter would not have trouble with the agent about the commissions; to which the owner replied that he would not, as he was selling the farm; the sub-agent-testified that he told the owner he did not charge any commission, as he would get that from the agent; the purchaser substantiated the sub-agent's testimony; there was no evidence to show that the owner knew that the sub-agent was acting for the agent. Held, that the question whether the sub-agent concealed such fact from the owner should have been submitted to the jury. Mullen v. Bowen, 22 Ind. App. 294, 53 N. E. 790.
 
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