(concurring).
I concur, but with the gravest doubts so far as the bank and its principal officers are concerned. Those doubts arise (a) from certain facts, not fully stated in the foregoing opinion, and (b) from the difficulty of interpreting Wechsler v. Bowman, 285 N.Y. 284, 34 N.E.2d 322, 134 A.L.R. 1337, as applied to those facts.
1. The bank’s position in the sale of the Houde stock was, clearly, I think, solely that of selling-agent for the stockholders. The cases hold that a so-called “option” agreement, containing a provision for a commission to the person named as optionee, is ambiguous and may be nothing but an exclusive agency.1 The bank itself contemporaneously construed this instrument as merely an agency agreement: One of its chief officers unequivocally testified, in earlier litigation, that, just after the agreement was signed, the bank decided that it gave the bank no right to purchase. 2 And, in that earlier litigation, there was no testimony that the bank had ever otherwise construed the agreement. Such sworn admissions are the most significant kind of testimony. Cf. Pence v. United States, May 11, 1942, 62 S.Ct. 1080, 86 L.Ed. -. Moreover, the chief bank officers, at a time when they contemplated a sale to General Motors, after the so-called “option” agreement was signed, were fearful of objections by Shultz because he was friendly to Ford; had they thought the agreement gave the bank a right to purchase, they would not have been worried, since, if the bank had such a *898right, Shultz could not have objected to a purchase by the bank followed by resale to General Motors. A further indication that the agreement gave the bank no “option” to purchase is found in the New York Banking Law, which would have made such a purchase by the bank unlawful.3 That Shultz, after he had been told that' there had been a sale to the New York Car Wheel- Company, signed papers referring to the exercise of the “option” has, I think, no significance; he had been previously told by one of his associates that the bank was to act as agent, so that his use, in those circumstances, of the ambiguous word “option” can be given no weight. Nor did the bank rely on his use of that word since, as above noted, its officers regarded the bank as merely an agent, not an optionee.
The bank, as agent to sell, was, therefore, under a fiduciary obligation not itself to become a purchaser, alone or in concert with anyone else, without the knowledge and consent of its principals. See, e. g., Commonwealth Finance Corporation v. McHarg, 2 Cir., 282 F. 560; 2 C.J. 695, 700, 701; 3 C.J.S., Agency, §§ 139, 144; Restatement of Agency, §§ 389, 390. That same obligation was, of course imposed upon its principal officers. Mechem, Agency, 2d Ed., §§ 1208 (note), 326, 333. An agent is responsible for the conduct of such sub-agents. Restatement of Agency, § 406. And it is well settled that where the agent violates such an obligation, the principal can recover the commission he paid the agent. Mechem, loc. cit., § 2477; Restatement of Agency, § 399 (cf. §§ 13 and 388). This is true, regardless of whether the principal suffered any financial loss from the transaction. In rejecting the defense that the agent acted in good faith and that his breach caused the principal no damage, Judge Cardozo, in Wendt v. Fischer, 243 N.Y. 439, 443, 444, 154 N.E. 303, 304, quoted the language of Judge Andrews in Munson v. Syracuse, G. & C. R. Co., 103 N.Y. 58, 74, 8 N.E. 355, to the effect that the law “does not stop to inquire whether the contract or transaction was fair or unfair.” Cf. United States v. Carter, 217 U.S. 286, 287, 305, 30 S.Ct. 515, 54 L.Ed. 769, 19 Ann.Cas. 594, and cases there cited. Thus the purchase is improper even if the principal has authorized sale at a fixed price. Meek v. Hurst, 223 Mo. 688, 122 S.W. 1022, 135 Am.St.Rep. 531; Merriam v. Johnson, 86 Minn. 61, 90 N.W. 116. See, also, City of Findlay v. Pertz, 6 Cir., 66 F. 427, 434, 29 L.R.A. 188, by Lurton, C. J.; Mechem, Agency, 2d Ed., § 1199 (cf. §§ 1225, 1226, 1227).
It is, therefore, of the highest importance that the sale to Cooley was, in fact, a sale to the principal bank officers and Cooley. Before Cooley obligated himself to purchase, those bank officers had agreed to relieve him of $3,500,000 of the $4,000,000 purchase price. A memorandum signed October 11, but embodying terms settled upon on October 10, “in order to induce him (Cooley) to make such purchase (of the Houde stock),” 4 provided that Harriman, Rea and Wurst would take over Cooley’s entire commitment in the event of his death or disability, and that they were presently able and ready to organize a syndicate to “relieve” Car Wheel of approximately $3,500,-000 of the purchase, although the formation of the syndicate was put off for three or four days. Those officers were thus, wrongfully, purchasers to the extent of seven-eighths of the price. Their position as co-purchasers was never disclosed to Shultz, plaintiff’s decedent. He was informed that “we have secured as a purchaser the New York Car Wheel Company.” True, he knew that that company was, in fact, Cooley, and that the bank had loaned Cooley the money to complete the purchase. But there was never a word said to Shultz as to the large participation of the other officers.5 The situation is the same as if the bank itself, an agent to sell, had secretly participated in the purchase. In the circumstances, the bank forfeited its right to the agent’s commission of $120,000 which it received, *899and Shultz had a cause of action for the recovery of his share of this amount plus interest. 6
It is true that Shultz knew that the bank’s officers joined in the subsequent purchase, purportedly and so far as he knew a purchase from Cooley alone. But he had been led by the bank to believe that there had previously been a sale to Cooley, i, e., that the bank’s agency had thus previously been terminated by performance of the agency. Once an agent to sell has ended his agency through proper performance, he is, of course, free of all obligations. He can then buy from the purchaser. Shultz’ knowledge of, and acquiescence in, a participation by the bank’s officers in the purchase from Cooley was, therefore, not knowledge of or acquiescence in the unlawful participation by them in Cooley’s earlier purchase from Shultz. The New York rule is that “if dual interests are to be served, the disclosure to be effective must lay bare the truth, without ambiguity or reservation, in all its stark significance.” Cardozo, J., in Wendt v. Fischer, supra.
It will not do to say that because Shultz approved a purchase by Cooley, a director of the bank, he could not have objected to the bank’s chief officers joining in that purchase. Even assuming that Cooley, although not an active bank officer but merely a bank director, could not properly have purchased without Shultz’ consent, it does not follow that a consent to a purchase by Cooley carried with it a consent as to any purchase by any active bank officer, which, without Shultz’ consent, would have been wrongful. A principal might tell his selling agent that he will accept the agent’s son as purchaser; that would not authorize a concealed sale through the son to the agent himself. And the great care with which the participation of the chief officers in the purchase was concealed from Shultz — it being, throughout, made to appear to be solely a sale to Cooley —serves to show that these officers were well aware of the impropriety of that participation.
2. There was another aspect of these transactions which illuminates the impropriety of that secret participation in Cooley’s purchase and which also gave rise to another cause of action: Cooley made a secret deal with the bank’s chief officers to pay them 60% of his net profits on a resale by him. They secretly received that percentage — in the amount of $261,604.12. It is of no significance whether this secret deal was made at the time when these officers agreed to become joint purchasers with Cooley or two days later; for the details of the arrangement as to the precise share of the profits to be received by each of the several joint purchasers was but incidental to the previous secret agreement for the joint purchase. Shultz could have recovered his share of the $261,604.12 secretly paid to those officers, pursuant to that arrangement, with interest.
What I have said above .as to Shultz’ lack of knowledge or acquiescence in the officers’ participation in the purchase is applicable to his alleged knowledge or acquiescence in those officers’ share in the profits. He knew that they participated in the syndicate, but at that time he thought the sale to Car Wheel— and therefore the agency — had been completed ; accordingly, his knowledge that they took part in and profited by the later syndicate operations was no condonation of the impropriety in profiting from the earlier sale. Much is made of the fact that he knew that the net profits — the 25% — were to be paid to Car Wheel’s “assigns.” But that was an apt word to describe those legitimately interested in Car Wheel. In fact, and- as Shultz knew, the 25% was paid to Cooley as an “assign” of Car Wheel. But what Cooley, the “assign,” had agreed to do and did do with those profits, when received by him, was elaborately concealed: At the suggestion of the bank officials who were his secret joint adventurers, Cooley went to a bank in another city (a bank with which he had never before dealt); there he deposited the 60% of the 25% profit, and procured cashier’s checks for that amount which he then secretly distributed to those officials. 7
3. It is argued that the findings of the trial court stand in the way of the version of the facts above narrated. I do not agree, *900and for these reasons: The testimony of the bank officers that, when the sale to Car Wheel occurred, they construed the “option” agreement as creating merely an agency and as giving the bank no -light itself to purchase, was given in tifiáis of earlier suits. We are in as good a position to weigh that testimony as was the judge below, for neither he nor we heard that testimony given. He did hear the lame testimony in the trial of this case in which an effort was made to explain away those earlier solemn admissions under oath.8 As those explanations were hopelessly inadequate, we can say that the findings on the point are clearly erroneous. And to do so is peculiarly justifiable here: The findings are unusually detailed; they consist of 41 printed pages comprising 239 separately numbered clauses, and go into the minutiae of much of the testimony. Yet, despite that elaborate detail, there is not the slightest mention of the significant former testimony, either in the findings or in the accompanying 24-page opinion. Nor do the findings or opinion of the trial judge so much as mention the unpleasantly evasive method used to conceal the secret payments to the bank officers.
It has often been held — and especially where the crucial testimony was given at former trials or in depositions — that an upper federal court may regard the findings of a trial court as clearly erroneous because patently against the weight of the testimony. 9
*901As to whether the arrangement between Cooley and the bank officers constituted a joint purchase, there is no dispute in the testimony but only as to the inferences to be drawn therefrom. We are as free as the trial judge, in such circumstances, to draw such inferences.10
4. It seems to me, then, that there were two clearly valid causes of action: (a) one for the recovery of the secret profits ($261,-604.12, and interest) and (b) one for the recovery of the commission ($120,000, and interest).11
5. The facts on which these two causes of action rest were unknown to Shultz and were only recently learned by plaintiffs, his representatives. But in Wechsler v. Bowman, supra, it was held (following earlier New York decisions) in a suit against brokers authorized to sell, that an action to recover from them secret profits (in that case commissions secretly paid to them by the purchaser) sounded in quasi-contract rather than in fraud. The six-year period prescribed by § 48(1) of the New York Civil Practice Act was accordingly held applicable. It bars recovery here for the secret profits, without regard to plaintiffs’ lack of knowledge of the facts underlying this claim.
But Wechsler v. Bowman, supra, is not entirely clear as to whether the cause of action to recover back the commission paid by the seller, the principal, to the agent, is in quasi-contract. If it is for fraud, the action was timely, for the statute does not begin to run until discovery of the facts constituting the fraud. Civil Practice Act § 48 (5). In the Wechsler case [285 N.Y. 284, 34 N.E.2d 327, 134 A.L.R. 1337], the commissions which the principal paid, and later sought to recover, were not retained by the faithless agents, but were paid over by them to a third party. The court held the action for the recovery of the commissions to be in fraud rather than in contract, saying: “Under such circumstances, no implied contractual obligation arises since ‘the offender acquires no gain to himself * * *’ and his estate is not enriched. Lord Mansfield in Hambly v. Trott, 1 Cowp. 372.” Although puzzled, I incline to think this is an implied holding, by way of dictum, that if those commissions had been retained by the agents, the action would have been in contract and, therefore, subject to the bar of the Civil Practice Act § 48(1), under which no significance attaches to the plaintiff’s knowledge or ignorance of the facts. Applying the same principle to the case at bar, the cause of action for the commission paid to the bank would also be barred. I say this with hesitation, because it rests not upon a flat holding in Wechsler v. Bowman, but upon a dictum consisting of an implication from the opinion.
It is an implication, furthermore, which leads to an incongruous result. For I can find no more rational basis for applying the statute of limitations to a case where the agent has retained the commissions received from his principal than to a case where he has paid those commissions over to another. The principal’s opportunity to discover the impropriety would seem to be as great in one case as in another; yet Wechsler v. Bowman appears to say that the time of discovery is significant only if the agent fails to retain the commissions received when he was unfaithful.12
*902I am, therefore, inclined to believe that, in the case at bar, the plaintiffs’ cause of action both for the secret profits and the commission paid to the bank by the principal is, under the rationale of the Wechsler case, barred by § 48(1) of the New York Civil Practice Act. Yet I should not be surprised if the New York courts, in some later case, should hold that this conclusion is wrong with respect to commissions paid by the principal in such circumstances as are found here, or if the United States Supreme Court, should it review our decision, were to hold that we had misunderstood the Wechsler case.
In Greenough v. Willcox, 238 Mich. 52, 213 N.W. 175, 177, the instrument was denominated by the parties to it as an “option” six times, and the agent was referred to as a “purchaser” the same number of times; yet the court said that under “the uniform holdings of this and other courts” the instrument created the relation of principal and agent. Citing this very case, the New York Appellate Division held in Shultz v. Manufacturers & Traders Trust Co., 254 App.Div. 128, 5 N.Y.S.2d 61, 62, that the instrument before us “did not confer on the defendant the right to purchase the stock,” saying that the plaintiffs there had established that it “was a form of agency and not an option.” See, also, the opinion of Story, J., in Doggett v. Emerson, 7 Fed.Cas. pages 804, 817, 818, No. 3,-960; Alger v. Keith, 6 Cir., 105 F. 105, 122, 123; cf. Reed v. Pitkin, 231 Mich. 621, 204 N.W. 750.
Wurst, executive vice-president of the Bank, testified in an earlier case in 1935, as follows: “We had some discussion as to the nature of the option, of this option, as to whether it was an absolute option that could be enforced or whether it was a contract of agency that could be withdrawn. The test I applied in my own mind and discussed about was as to whether we could become purchasers, and my judgment was that we could not.”
In still another suit, in 1933, he testified : “The subject came up, I know, at the time, as to whether the Bank could exercise this option and we decided that we could not, that we could not buy it and still collect the commission for selling it. In other words, we could not be principals and agents both.” He also testified thus at the same trial:
“Q. As I understood your testimony this morning, you said you thought your bank was acting as the agent for the sellers of the stock? A. That is correct. That is my view of it.
“Q. That is, they are acting as agents for the persons who entered into the option of September 26, 1928? A. That is correct.”
And again:
“Q. You testified that the reason for your securing the New York Car Wheel Company was the fact that the bank was acting as the agent for the sellers? A. That is my understanding.”
in 1928, § 190(9) of the New York Banking Law, Consol.Laws, c. 2, As Amended by Laws 1926, c. 259, forbade a trust company to invest more than 10% of its capital and surplus in the stock of private corporations. Under this limitation, the bank could not have put more than $1,500,000 into Houde stock.
Quoted from finding 58.
Subsequent reference to Cooley’s “purchase,” by failing to mention the position of Harriman, Rea and Wurst, may well have aided to keep Shultz in the .dark. Thus, on November 14, when he was given his allotment in the syndicate’s operation, he was informed that he need not put up any cash until requested and that “in the meantime, Mr. Cooley will continue to carry the stock.” And when the syndicate profits were divided on December 5, reference was made to a purchase from Mr. Cooley, without mention of his co-adventurers.
As he was a 46% stockholder, he was entitled to recover 46% of this sum.
Evidence of the manner in which certain of these defendants moulded their testimony to suit the occasion is found in their sworn statements in other lawsuits as to receipt of these amounts from Cooley. Thus the record in the case at bar shows that on the trial of the stockholders’ suit brought by Goetz against the bank (see Goetz v. Manufacturers & Traders Trust Co., 248 App.Div. 665, 289 N.Y.S. 918), Wurst testified that neither he nor the other defendant bank officers *900had received any proceeds of the sale of Oar Wheel except under the syndicate agreement.
In a deposition offered in the same case, Rea, while admitting when pressed that he had received the $130,802.06, said that “it was a very generous gift from Mr. Cooley to me.” Yet in a verified petition to the Board of Tax- Appeals he asserted that the sum was income received as the profit of a syndicate operation, and made no claim that it was a gift.
On a motion for summary judgment in the case at bar, Babcock, the bank’s general counsel, stated in an affidavit that “the evidence is absolutely conclusive” that there was no agreement in advance that Cooley would pay these sums.
Harriman, in a similar affidavit, said that it was only when'the proposed Eastman, Dillon deal to finance the resale had collapsed, that Cooley “stated for the first time” that he would share in profits with Harriman, Rea and Wurst. Yet Harriman later testified on the trial that the Eastman, Dillon plan was not dropped until the end of October and that the agreement to pay a share of the profits to the bank officers was made on October 13.
“ ‘Afterthought’ is a word commonly used by judges to designate testimony that labors under grave suspicion because, if it were true, the party’s neglect to produce it at an earlier stage » * * is a singular oversight,” writes Moore in his invaluable treatise, Facts. “Thus it often happens on new trials * * * that a party changes his testimony to meet the varying fortunes of the ease. Although such testimony must be submitted to the jury subject, however, to the power of the trial court or of an appellate court to review the evidence to grant a new trial because of a verdict against the evidence, judges usually express a strong feeling that no dependence can be placed upon the testimony which has thus been changed to meet the views of the court which reversed the original judgment. For similar reasons, distrust attaches to new evidence introduced on appeal in admiralty cases, to alleged newly discovered evidence on a motion for new trial, or on a bill of review, to testimony given by a witness on his re-examination, and generally to evidence tardily introduced after a party has had an opportunity to mould it into conformity with altered circumstances of his case.” Many courts have said that where a witness gives testimony which contradicts his prior testimony under oath, his evidence is unworthy of credit. “A witness who has had ample opportunity to narrate his connection with a transaction, and apparently fully relates the same, and thereafter, in another litigation, gives a different narrative in relation thereto, or one from which an entirely different inference may be drawn, is not usually to be depended upon for accuracy of statement.” Moore, Facts, § 1132, cf. §§ 757, 1079.
I think that the testimony given in the instant ease by the defendant bank officers is not worthy of belief. But I am not to be taken as saying they were guilty of perjury. I should rather (to quote Mr. Justice Baldwin) call their testimony “latitudinarian.” Poole v. Nixon, 19 Fed.Cas. at pages 992, 996, No. 11,270.
State Farm Mutual Automobile Ins. Co. v. Bonacci, 8 Cir., 111 F.2d 412, 415; Fleming v. Palmer, 1 Cir., 123 F.2d 749, 751; Equitable Life Assur. Co. v. Irelan, 9 Cir., 123 F.2d 462, 464; United States v. Anderson Co., 7 Cir., *901119 F.2d 343, 346; Wigginton v. United Commercial Travelers, 7 Cir., 126 F.2d 659, 661; United States v. Mammoth Oil Co., 8 Cir., 14 F.2d 705, 717, 718; Levy v. Weinberg & Holman, Inc., 2 Cir., 20 F.2d 565, 567; cf. MacGowan v. Barber, 2 Cir., 127 F.2d 458, 461.
Valentine v. Chrestensen, April 13, 1942, 62 S.Ct 920, 86 L.Ed. —; Kuhn v. Princess Lida, 3 Cir., 119 F.2d 704, 705, 706; United States v. South Georgia R. Co., 5 Cir., 107 F.2d 3; United States v. Mitchell, 8 Cir., 104 F.2d 343, 346; Midwood Associates,Inc., v. Com’r, 2 Cir., 115 F.2d 871, 872; Com’r v. Buck, 2 Cir., 120 F.2d 775, 779; Kycoga Land Co. v. Kentucky River Coal Corp., 6 Cir., 110 F.2d 894, 896; United States v. Anderson Co., supra; Wigginton v. United Commercial Travelers, supra.
As above noted, Shultz as a 46% stockholder would have been entitled to 46% of those respective sums.
I would perhaps regard this apparent distinction as the result of a misreading- of Wechsler v. Bowman, if it were not for the fact that a contrary reading would be equally incongruous. For, if the opinion were interpreted to mean that, even if the commissions had been retained by the faithless agents, the statute begins to run only upon discovery, there would be a distinction, so far as the statute of limitations is concerned, between this situation and the case of commissions paid by the principal, where time of discovery is irrelevant. This distinction would be illogical, since there seems to be no greater likelihood of discovery in one case than in the other; *902in fact, in Wechsler v. Bowman itself, the cause of action for the commissions paid by the principal rested on the same facts as the cause of action for the commissions paid by the purchaser, so that discovery of the facts giving rise to ei-tiler cause of action necessarily gave rise to knowledge of the other. But it was held that one must be brought within six years of the operative facts, while the other dated only from discovery of these facts.