If a party enters into a contract through an agent who was also secretly acting for the other party, the contract is not only unenforceable specifically against the principal,78 but, on the ground of fraud if the other party knew of the double employment, and, it seems, of mutual mistake, if he did not, is subject unless ratified to a defence in any court;79 and, for the same reason, if the agent enters into arrangements with third persons without the knowledge of his principal which give the agent an interest inconsistent with his duty to the principal, the latter may avoid the transaction.80
Lee v. Port wood, 41 Miss. 109; Porell v. Cavanaugh, 69 N. H. 364, 41 Atl. 860; Root v. French, 13 Wend. 570, 28 Am. Dec. 482; Paddon v. Taylor, 44 N. Y. 371; Sinclair v. Ilcaly, 40 Pa. St. 417, 80 Am. Dec. 589; Dettra v. Kestner, 147 Pa. St. 566, 23 Atl. 889; Singer Mfg. Co. v. Summons, 49 Wis. 316, 5 N. W. 788; Arnett v. Cloudas, 4 Dana, 299.
75 Shaw v. Railroad Co., 101 U. S. 557, 25 L. Ed. 892.
76 Mendenhall v. Treadway, 44 Ind. 131; Hogan v. Wixtcd, 138 Mass. 270; Gordon v. McCarty, 3 Whart. 407; Longcncekcr v. Church, 200 Pa. St. 567, 575.
77 Nash v. Minnesota Title Ins. Co., 163 Mass. 574, 581, 40 N. E. 1039, 28 L. R. A. 753. Sec trupra, Sec. 1518.
78 Hesse v. Briant, 6 De G. M. etc G. 623; Fish v. Leser, 69 111. 394; MeElroy v. Maxwell, 101 Mo. 294, 14 S. W. 1; Marsh v. Buchan, 46 N. J. Eq. 595, 22 Atl. 128. See also Bunn v. Reach, 214
111. 259, 264, 73 N. E. 419; Palmer v. Gould, 144 N. Y. 671, 39 N. E. 378.
79 Findiay v. Pertz, 66 Fed. 427, 13 C. C. A. 559, 29 L. R. A. 188; Donovan v. Campion, 85 Fed. 71, 29 C. C. A. 30; Bunn v. Reach, 214 111. 259, 264, 73 N. E. 419; Young v. Iowa Toilers, etc., Association, 106 la. 447, 76 N. W. 822; Hunter Realty Co. v. Spencer, 21 Okl. 155, 95 Pac. 757, 17 L. R. A. (N. S.) 622; Wiruth v. Lashmctt, 82 Neb. 375, 117 N. W. 887; Hoerling v. Lowry, 58 Wash. 426, 108 Pac. 1090; Truslow v. Parkersburg Bridge, etc., R. Co., 61 W. Va. 628, 57 S. E. 51.
80 Panama & S. Pacific Tel. Co. v. India Rubber, etc., Co., L. R. 10 Ch. App. 515; Smith v. Sorby, 3 Q. B. D. 552; Findiay v. Perts, 66 Fed. 427, 13 C. C. A. 559; Alger v. Anderson, 78 Fed. 729; Young v. Hughes, 32 N. J. Eq. 372; Hitter v. Lehigh Valley R. Co. (Pa.), 7 W. N. Cas. 122. And sw Western Union Tel. Co. v. Union Pacific Ry. Co., 1 McCrary, 581; Baltimore Sugar
An exception to the general rule that an agent cannot accept employment from both parties, and that a contract entered into under these circumstances is fraudulent, has been laid down in some cases. It is universally admitted that if an agent or broker has any discretion, or if the principal is entitled to rely on him for his skill and judgment, it is fraudulent to act in a double capacity; but if an agent is employed merely as broker for the purpose of bringing parties together, and has nothing to do with fixing the price or terms of the bargain in question, he may act for both principals, and bargain for compensation from both.81 The exception has been denied, however, in other jurisdictions.82 The questions whether the agent can recover compensation and whether the contract is enforceable between the parties must receive the same answer, for where the agent is acting improperly for both parties the transaction may be rescinded on the application of either.83 Other cases of fraudulent misconduct by an agent have been previously considered.84