Wheeler v. Ryon

The Chief Justice

delivered the. opinion of the Court.

If all that was done by the defendants, Ryon and Tracy, was done bona fide., as they allege it to have been, without *147any misrepresentation or deception of any kind, and with full knowledge on the part of the plaintiffs, there could be no ground for the relief sought. But it is charged in the bill that the stock in the building association was procured to be cancelled by Ryon and Tracy fraudulently and without any color of authority; that the notes for the unpaid balance of purchase money due from Watt and Fowler were purchased upon false pretenses and misrepresentations as to the real value of the notes and the true purchaser thereof; and that the release of the lien therefor was fraudulent and without authority; and that the whole transaction was so managed and contrived by Ryon and Tracy that they were enabled to, and in fact did, purchase the property through and in the name of another, and procured the release thereof from the liens, and thereby made large profit and gain, to the detriment and loss of the plaintiffs.

It may be laid down, as an unqualified rule, that all profits directly or indirectly made by an agent in the course of,’ or in connection with, his employment, without the sanction of the principal, belong absolutely to the principal, and he may require an account therefor. Massey v. Davies, 2 Ves. Jr., 318, 320; Morison v. Thompson, L. R., 9 Q. B., 480. But to entitle the principal to the benefit of this rule, it is essential that the profits should be made by the agent in the course of his employment as agent, and without the consent of the principal. And it would appear to be equally well settled, that whenever a fiduciary relation exists between the principal and agent, the latter may be called upon to account in a court of equity, especially in connection with other relief prayed, or where there is an element of fraud involved, and that reciprocity of accounts between the parties is not essential to relief in siTch case. Mackensie v. Johnston, 4 Madd., 373; Makepeace v. Rogers, 34 L. J., (N. S.), Ch. 367, 396.

Here, the only material proof offered by the plaintiffs in support of the allegations of the bill is found in the testimony of Mr. Wheeler, one of the plaintiffs, who acted in the business for his wife, and his testimony does not in all particulars *148support the allegations of the bill. The defendants, Ryon and Tracy, are called upon to answer the bill, and special interrogatories appended, under oath, and they were also examined as witnesses in their own behalf; and in their answers, which appear to be full, they deny all charges of fraud and alleged misrepresentations, and deny most of the material facts alleged and proved on the part of the plaintiffs, both as to the purchase and cancellation of the stock, and the sale and purchase of the notes. And there is no ground shown for account for profits, for whatever profits were made in the purchase of the property from Watt and Fowler, or Mrs. Martin, were not made in the course of the agency for the plaintiffs. In fact, the defendants swear away all the substantial ground for relief; and they are, to a certain extent, supported in their statements by the testimony of the treasurer of the building association. In such state of case, the familiar and well settled rule applies, that in a bill praying relief, when the facts charged in the bill as the ground for obtaining the decree are clearly and positively denied by the answer, and proved only by a single witness, the court will not decree against the defendant. Union Bank of Georgetown v. Geary, 5 Pet., 99, 111. As the case is presented on the record before us, we cannot do otherwise than affirm the decree dismissing the bill, with costs to the defendants.

Decree affirmed, with costs to the defendants.