51 N.W.2d 801
SYNOPSIS: Defendant agent sought review of the judgment of the District Court for Hennepin County (Minnesota) in favor of plaintiff business purchaser in the purchaser's actions that sought to recover an alleged secret commission that was obtained by the agent and to recover damages against the agent.
-After the purchaser employed the agent to investigate and negotiate the purchase of a business, the purchaser made an investment.
-Subsequently, the purchaser discovered that the agent's representations concerning the business were false and obtained a judgment against the sellers for rescission.
-The purchaser then brought actions against the agent that sought to recover an alleged secret commission that was obtained by the agent and to recover damages arising out of the prior judgment. -The trial court entered judgment in favor of the purchaser, and the agent sought review.
-On appeal, the agent contended that the purchaser's recovery in an action against the sellers was a bar to the actions against the agent.
The court held that the purchaser had an absolute right to any commission received by the agent, irrespective of any recovery resulting from the action against the sellers for rescission.
The settlement and dismissal of the actions against the sellers were not a bar to the action against the agent, although their individual torts might have been based on the same fraud.
All profits made by an agent in the course of an agency belong to the principal.
-Don’t want the agent to be tempted by own private interests and disregard those of the principal.
1. An agent acts solely for the benefit of his principal.
2. An agent who makes a profit is under a duty to give such a profit to the principal.
The monitoring expenditures by the principal, the bonding expenditures by the agent, plus the residual loss.
OUTCOME: The court affirmed the trial court's judgment in favor of the purchaser in the purchaser's actions that sought to recover a commission received by the agent and to recover damages against the agent.
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