Sec. 56. General Rule As To Discretion

"It is undeniable that where the broker or agent is invested with the least discretion, or where the party has the right to rely on the broker for the benefit of his skill or judgment, in any such case an employment of the broker by the other side in a similar capacity, or in one where by possibility his duty and his interest might clash, would avoid all his right to compensation. The whole matter depends upon the character of his employment. If A is employed by B to find him a purchaser for his house upon terms and conditions to be determined by B when he meets the purchaser, I can see nothing improper or inconsistent with any duty he owes B for A to accept an employment from C to find one who will sell his house to C upon terms which they may agree upon when they meet. And there is no violation of duty in such case in agreeing for commissions from each party upon a bargain being struck, or in failing to notify each party of his employment by the other." 21

Colo. App. 236, 238; 32 Pac. 836; Orton v. Scofield, 61 Wisc. 382, 384; 21 N. W. 262; Rupp v. Sampson, 16 Gray 398. 401; 77 Am. Dec. 416; Knauss v. Gottfried Krueger Brewg. Co.. 142 N. Y. 70, 75; 36 N. E. 867).

20 Jones v. Henry, 15 Misc. 153 (N. Y. 1805). And see Sec. 121 infra.

Sec. 57. Reason For The Rule

In Empire State Ins. Co. v. American Central Ins. Co., 138 N. Y. 446, 449, 450 (1893), the court said: "It is not doubted that the same person may sometimes act as agent for the two parties in the same transaction. But he can do so only in case he has no discretion to exercise for either party. An agent to sell for one party may also act as agent for the buyer, but only in case the price and terms of sale have been fixed by each party, so that nothing is left to his discretion. But an agent to sell, intrusted with a discretion, and thus bound to obtain the best price he can, cannot buy for himself or as agent for another. In such a case he would occupy antagonistic positions and there would be a conflict of interests. He could not faithfully serve the one party without betraying the interests of the other. He would at least be under great temptation to betray the interest of one of the parties. So a person may sometimes act as agent of both parties in the making of any contract. But he cannot do so when he is invested with a discretion by each party, and when each is entitled to the benefit of his skill and judgment. The rules of law upon this subject have been laid down and illustrated in many cases, of which it is sufficient for the present purpose to cite the following: Utica Ins. Co. v. Toledo Ins. Co., 17 Barb. 132; Rett v. Washington Marine and Fire Ins. Co., 41 Barb. 353; N. Y. Central Ins. Co. v. National Fire Ins. Co., 14 N. Y. 85; Claflin v. Farmers' & Citizens' Bank, 25 N. Y. 293; Murray v. Beard, 102 N. Y. 505, 509; Porter v. Woodruff, 36 N. J. Eq. 174; Michoud v. Girod, 4 How. (U. S.) 503.

Knauss v. Krueger Brewg. Co., 142 N. T. 75 (1894).

"Contracts thus negotiated are void at the option of any non-assenting party thereto. The policy of the law condemns them. It matters not that the agent has acted fairly and honestly, and even that neither party to the contract has suffered injury. It is enough to condemn the contract that the common agent in fact had any, even the least, discretion to exercise for the parties. As said by the Chancellor in Porter v. Woodruff, 'so jealous is the law upon this point that it will not even allow the agent or trustee to put himself in a position in which to be honest must be a strain upon him.' "22