CADWALLADER & CO. v SMITH, BELL & CO and HENRY PEABODY & CO.

1907, Tracey J.
FACTS
1. 1902 Pacific Export Lumber shipped 581 piles of lumber aboard the
Quito
2. Peabody & Co were to sell each pile of lumber at over $15 dollars for a
commission half of price over $15
3. Peabody & Co told Pacific Export that there was no demand and that the
lumber would have to be sold at less than $15 the two parties agreed on
selling them at $12
4. Peabody & Co had a deal with Insular Purchasing Agent of the Govt to
sell the piles at $20 amounting to $10k total sales
LOWER COURT
Defendants guilty, should pay plaintiffs 1k
RULING
the agents committed a breach of duty from which they should benefit. The
contract of sale to themselves thereby induced was founded on their fraud and
was subject to annulment by the aggrieved party. (Civil Code, articles 1265 and
1269.) Upon annulment the parties should be restored to their original position by
mutual restitution. (Article 1303 and 1306.) Therefore the defendants are not
entitled to retain their commission realized upon the piles included under the
contract so annulled.
Defendants to pay $4k