Cases - Salomons v Pender

Record details

Name

Salomons v Pender

Date

[1865]

Citation

3 H & C 639

Keywords

Estate agency

Summary

The plaintiff agent found a purchaser for the vendor's property. The purchaser was a company in which the agent had a substantial shareholding and of which he became a director before contracts were exchanged. The plaintiff obtained no commission from the purchasing company, nor was there any evidence that the property had been undersold.

It was held that the plaintiff forfeited his commission because of the undisclosed interest, which was in direct opposition to the interests of the principal. In quoting from Story on Agency, Baron Martin said:

'... in matters touching the agency, agents cannot act so as to bind their principals, where they have an adverse interest in themselves. This rule is founded upon the plain and obvious consideration, that the principal bargains, in the employment, for the exercise of the disinterested skill, diligence, and zeal of the agent, for his own exclusive benefit. It is a confidence necessarily reposed in the agent, that he will act with a sole regard to the interests of his principal, as far as he lawfully may; and even if impartiality could possibly be presumed on the part of an agent, where his own interests were concerned, that is not what the principal bargains for; and in many cases, it is the very last thing which would advance his interests. The seller of an estate must be presumed to be desirous of obtaining as high a price as can fairly be obtained therefor; and the purchaser must equally be presumed to desire to buy it for as low a price as he may.'