Estes v. Crosby, 171 Wis. 73.

"If the evidence satisfies the jury to a reasonable certainty that this question should be answered affirmatively, then you will so answer it. Otherwise you should answer it 'No.'"

After the verdict the two defendants made separate motions for judgment in their favor, or, in default thereof, for other relief, which were severally denied and plaintiffs' motion for judgment upon the verdict granted, and thereupon judgment entered for the amount of damages as found by the jury, together with interest and costs, and from the judgment so entered the two defendants have severally appealed.

The cause was submitted for the appellant Crosby on the brief of Charles F. Smith, Jr., of Rhinelander; for the appellant Hume on that of E. D. Minahan of Rhinelander; and for the respondents on that of J. & M. Van Hecke of Merrill.

The following opinion was filed January 13, 1920:

ESCHWEILER, J. The appellant Hume assigns as error: (1) that there is no evidence to warrant the instruction to the jury given by the court to the effect that he, Hume, was the agent of the owner, Shepard; (2) or that Crosby was such agent; (3) that there is no cause of action shown as against him, Hume; (4) that the representation made by Crosby that the bottom price of this property was $4,000 was not within the scope of Crosby's employment; (5) that there is no ground for liability against the agent Crosby and therefore there can be none predicated against Hume; and lastly, (6) that there is no evidence to support the finding of the jury to the fourth question of the special verdict.

However much Mr. Hume may have felt justified, from his manner of dealing with Mr. Shepard and possibly from more or less of a custom among people engaged in that line of business, in proceeding to deal with this farm as though he were the owner and therefore fixing such price upon it

Estes v. Crosby, 171 Wis. 73.

as he pleased and lawfully might, it nevertheless appears from the correspondence and testimony given above, there being no writing sufficient to meet the requirement of the statute, that there was at no time any binding agreement in law between them sufficient to give Hume an interest in the real estate. When the time came for the conclusion of the transaction with the plaintiffs Hume evidently did not consider that any prior negotiations between himself and Shepard were complete or binding before he offered to Shepard the cash to meet the latter's then terms. This was after the plaintiffs had paid their $1,000 to Crosby and he in turn sent that sum to Hume.

owner.

In offering this property for sale as he did, Hume could only act on his own behalf in case he had such a legal interest as would warrant such a course; if he did not possess such interest he was in law an agent of Shepard, the real Not having placed himself in the first position, the legal consequences of his acts necessarily placed him in the second. The trial court was therefore correct in his charge to the jury in summarizing the situation by saying that Hume was the agent of Shepard. As between Shepard and Crosby, the latter was therefore a subagent of the former, conceding Hume's right to employ such a subagent.

The contention on the third point, to the effect that there is no cause of action against Hume, also cannot be sustained.

Although Crosby was subagent for Shepard he was also at the same time agent for the defendant Hume in this transaction with the plaintiffs. As such agent for Hume he represented to the plaintiffs that the lowest price for this property was $4,000. Hume fixed that price himself, and, knowing that it was being made by Crosby to the plaintiffs, received the benefit of such representation. Having profited thereby, he, as principal for his agent, Crosby, must be held chargeable with the damage done to the plaintiffs by their relying upon and acting on such representation. First Nat. Bank v. Hackett, 159 Wis. 113, 119, 149 N. W. 703.

Estes v. Crosby, 171 Wis. 73.

There is support for the finding of the jury that the plaintiffs relied upon this representation that $4,000 was the lowest purchase price from the evidence of the plaintiffs as well as by the assumption, in which a jury may properly indulge, that in the usual course of human affairs purchasers do not pay the higher in preference to a possible lesser price.

On the fourth point the evidence warrants the conclusion that, in making the representation to the plaintiffs as to the price being the lowest, Crosby was acting within the scope of his employment. Hume fixed this price, gave it to Crosby to be given to possible purchasers, and it was therefore strictly within the scope of the employment to so represent it.

The question argued in the fifth proposition as to whether or not there was a liability against Crosby is immaterial so far as defendant Hume is concerned. His liability is predicated upon that which was done on his behalf by Crosby, who acted only as agent for him and from whose acts as subagent Hume reaped the benefit. Hume alone was the moving cause for this error of fact which resulted in damage to plaintiffs, therefore he alone must assume the consequent liability.

The finding of the jury embodied in their answer to the fourth question of the special verdict, that Crosby had reasonable grounds to believe that the bottom price for this property was $4,000, is supported by the correspondence between the two defendants and the testimony. Crosby dealt with Hume alone, and not with Shepard. It was Hume who fixed the price, and he confirmed what Crosby had done in regard to the same by accepting the result.

On the appeal of defendant Crosby we deem it necessary to discuss but one of the several points urged by him.

Being satisfied, as we have above indicated, that the jury were warranted in arriving at the conclusion that Crosby had reasonable grounds, based upon his transactions with

any

Estes v. Crosby, 171 Wis. 73.

the defendant Hume, to understand that the price of this property was $4,000 to Mr. Shepard less a commission, this in effect determined that Crosby acted in good faith in this transaction, and necessarily, also, that he used reasonable diligence in ascertaining as to the fact before representing the same. Being acquitted, therefore, by this finding of lack of either good faith or reasonable care, there is no basis upon which he can be held personally liable. He concealed no material fact within his knowledge; he discloses in the letter of August 26th, supra, that he is merely conveying from Hume to plaintiffs the statement as to Shepard's selling price being $4,000, and he did not fail in the exercise of the ordinary care required of an agent in such a situation. He therefore breached no duty that he owed, if any, to the plaintiffs and incurred no liability. While a principal may be liable for the mistake of the agent, it does not follow that an agent, having acted in good faith and with reasonable care, is liable for the mistake of his principal.

It follows that the trial court was right in awarding judgment against the defendant Hume, but erred in denying the motion of the defendant Crosby for judgment in his favor.

By the Court.-The judgment is so modified as to discharge the defendant Crosby from any liability thereunder, and it is allowed to stand as against the defendant Hume. Appellant Crosby to have his costs on this appeal as against the plaintiffs, the plaintiffs to have theirs as against the defendant Hume.

The appellant Hume moved for a rehearing.

In support of the motion there was a brief by E. D. Minahan of Rhinelander, attorney for the appellant Hume. In opposition thereto there was a brief by Charles F. Smith, Jr., of Rhinelander, attorney for the appellant Crosby, and a brief by J. & M. Van Hecke of Merrill, attorneys for the respondents.

Whitewater T. & P. B. M. Co. v. Johnson, 171 Wis. 82.

The motion was denied, with $25 costs, on March 9, 1920.

On April 5, 1920, a motion was filed by the appellant Crosby for an order amending the mandate. The following opinion was filed May 5, 1920:

PER CURIAM. The decision and mandate of this court on the appeal in this case determined that the defendant Crosby was entitled to a judgment in the court below of dismissal of the action as against him. Upon such a judgment in the circuit court he would be entitled to costs in his favor as against the plaintiff as a matter of course. For this reason we do not deem it necessary to change the mandate, and the motion to amend it is therefore denied without costs.

WHITEWATER TILE & PRESSED BRICK MANUFACTURING COMPANY, Appellant, vs. JOHNSON, Respondent. December 2, 1919-March 9, 1920.

Corporations: Sale of stock at less than par value: Fraudulent issue: Intent: Accounting by promoter: Equity: Measure of damages.

1. An action by a corporation against one who was its promoter, secretary, and treasurer, for an accounting and to recover the value of stock fraudulently issued without consideration, is one in which fraud in a fiduciary relation is alleged, and equity will take jurisdiction.

2. The issue of stock at less than par value, or with an understanding that it is not to be paid for, is contrary to sec. 1753, Stats., and, when such facts appear, the issue is fraudulent in law irrespective of the intent.

3. The measure of damages in an action against a promoter of the plaintiff corporation for the issuance of stock to himself at less than par value is the difference between what he paid for the stock and the par value thereof, plus interest thereon from the date when the stock was issued to him.