Professional Documents
Culture Documents
Henry W. O'Mel"e.,1)
Mernbe.to' A"c.l* Ba.
13C TlLeR&Lta BIue Book ol CaklonLia
CONCLUSION DEDUCED
From these pfinciples, the following conclusions can be deduced:
First-Unless the principal is fullv advised of the facts, a broker
to ouy p.op"ity a" a rule sell property in.whictl he
"*ptovJ t'^" i" "onnot
i;rdividual inLerest. Thal is Io sav: That if Mr'
iiiJt,"l"t.
Lo employ Mr. Minp5 as agPrrtto buv a certain sleci-fi'
d;;;;;;;t"
tracr ot land, a'ld it Mf. Mjnes had er, interesl in thp ploperlJ
iirli",i. tti
pur-
noi selt that propertvto IIr' Gravesunlesshe dis-
,
io Mr.".itta
Gravesbeforehand that he, Mr' Mines,had au interest
"ioi"a
. therein and $'as intelest€d as a seller. .i
Secontl-Nor can a broker emploved to sell propelty become the
Uvei lrrereor. Thus again, if Mr'. Glaves *'ere th€ owDel o{ a tract
;ii;;,i ;"4 were to piace the sale of it in the hands of Mr' Mines,
iir. i.iines mignt recii,te ua.io.rs offers for the plopertv-ald cases
frru" l""n Lnoiu" in fos Angeles courtv where srich offers have been
made and not reported to the principal, and subsequently the agent
Uui rl'. p'i,p"ny l"f himl"lf surfentitiorr'lv. lr srrc\ 'asFsthc
"oria ot'lhe lard can s.t alide lhe silp nrrd dcmrnd a leron\eyan(p
owner
of *re DroDertvIo hirrsclf, oI have an a(counl;ngol 'il I he profrtsand
oroceeds der.ir:edfrom {hp sale of LhPlarrd. The.ouris lsve hPlclas
ioio*i i
:tn"t t .r" the (lerk oi a brokPr pr'1ploved to nrakpa salp of
the land who had " a..pos lo the co[Iespondence belwperl lhe frrln'lpal
anilhe venctor,bought the land himself at a fair'pdce, h€ was com-
pJt"J opo" fv il1e vendor to reconvev the larrd to the odginal
"uii
-ie""iu"a a broker employed to sell prcpertv und€rctates the
Third-If
ly him anal lieeps th€ difference, he must,turn that
;;;";i;".. Ioihe pr'ncipal arrd account to thP plinc)pal lherefor"
A n d t h i si s t r u ' i f t " i u n r o u n l i h a r m i g h r t e t u r r r e do v e | b v t h e a g p n t
;;;;i;;-;';;;i itrar rn" plin"ipat had agr.ed ro 1rkp. rhat
io iai' tt t $pre Io alrhorrze Mr" Io\3:^r^o sFlla lot for me ror
o-oO ii"a ll'. Rowar.hould s.ll it lor $1500and rurrr ovpl Io me
io6.he still woutdbe liabla,o mAfof ihp orhp' $400.
Fourth-If a broker emploled to buy propFrty ovelstales.the
iat which ji may bP bought and retains the-diffprpncethe princi-
i.au t".o*t 'n" liom him. Again.toillulLralebyexample
ivl.i" io * * " s Marsh lo oulchaseIhc 'olrra-r'ofPico ahd
"Robpn
ui,an" tota-" it coutdbe boughtfor $250,000,
"-p,oy when
"i""Lii i
'1'hc
1:1,1 RenLtlt Bl.tt. Bool; of Ctllilai.nia
"No m:rn call serve tlvo rnastels, fol either he will hate the one
and love the othcri or',he will hold 10 the one:lnd despiscthe other'."
A st:utling pcrcentage ol litigated nlattels betl'!een prircit):1] and
agent arise pl'imalil)- oul oi r disteg:u'dof Ulis rvholesome statenrent,
fol upon this statenent rcsts lhe well-esLr.blishedIules of comDron
la1vgo\,ehiDg the Drimaly duty ol the agent to the plirciDnl:
"Loyalty to his lr'usl is the iil'st duty which the age l o*'es to the
principal. Without it the Derfect rel:rtion c:unot exist. lteliancc Lrpo
the agcrt's inteslitr',, fidelity arld capacity is the moving considelntlor
ir the c]'eation of all asercies; in some it is so Duch the insDifi|g
spilit that lhe law looks $-ith jcalous eyes uDoDthe rnannel oi lheir-
execuiiotl, aDd condemDsnot only as inrlalid :1sto the plircipal, bnl
as reDugnant to thc public policy, evcrythjng r-hich tends to destt oy
th:11reliaDcc-"
IIDDLI|T_ IS URCED
agent, the property of his prjncipal, or the lik€. All such transac-
tions are void, as respectsthe pdncipal, unlessratified by him with a
full tnowledge of all the circumstances.To repudiatethem, he need
not show himself damnified, Whether he has been or not, is imma-
telial. Actual injury is not the principle the law proceedson in hold-
ing suchtransactionsvoid. Fidelity in the agent is what is armedat,
end as a means of secu ng it the law will not permit the agent to
placehimself in a situation in which he may be temptedby his own
privateinterest to disregardthat of his principal."' "This doctdne,"
to speak again in the beautiful language of another, "has its founda-
tion not so much in the comnission of actual fraud, as in that pro-
Joundknowledgeof the humar heart which dictated that hallow€d
petition, 'Lead us not into temptation,but deliver us from evil,' and
that causedthe announcement of the infallible truth that 'a man can-
not servFtwo masters,'"
tr{echemon Agency,SecondEdition, Sections1188 and 1189.
SOME..DON,TS',
ARDGTVEN
I have given you actual examples for the purpose of making my
meaning plain in as few words as possible. They show to you how
absolutelynecessary it is that there should be a full disclosure of all
facts connected with a transaction to your principal, and that there
must be no secret proffts. Now for a few "don'ts."
Becauseyou are the agent for a party to eilect a sale of land,
don't try to make a contract for the sale that would be binding upon
the owner. During the boom I saw a great many contracts for sale
ol propedy that E€re signed merely by the agent, which contracts
verc not worth the paper they were waitten on. Don't represent to
your principal that you ar€ purclasing Dropertyfor one price, when
in fact you are purchasingit for a lower price, you all the time intend-
ing to retain the difi€rence. Dont s€ll to your p ncipal prop€rty in
vhich you are interestedyou$elf, without making a full disclosureof
the fact of your ownership, Don't representto your pdncipal that
youare purchasingproperty for $15,000when as a matter of fact you
are purchasingit for $10,000,and hope or-expectto retain the difier-
ence. Don't obtain an optjon o)r a pieceof prope y for, say $10,000,
then tur-n it over to some sl.ndicate on the reprcsentation you are pay-
ing $15,000,concealingthe truth and hoping to retain the difference.
Suppose you've an option, and a syndicateis forrned to take it over
and that syndicatetak€s the form of a coryorstion,and acquiresthe
plopelty; you sigl1a subscdptionlist which upon its face would indi-
cateyoll were p^ying.ash lor yout subsctiplion. u4renin trulh and
fact you are paying for Ihp subscr'iption wilh your pro61sin hand-
ing over the property to the corporation. Other stockholderswho
subscnbe upon the face of the subscriptionlist, believingyou are pay-
ing in cash,and not knowing you are paying for it with profits dedved
fmm the sal., havp lhe righl to lps.ind their subsc|iplions.
Don't sell lots situatedin the Mojave deseftunder the suggestive
of Harbor tract, Bay View tract, Ilarbor View tract and sim-
nampqsuggestiveot proximily to the deep blup sea. Neither flee
fides, barbecues,automobiles,free lunch€s or pictures of
136 TlLeReeltuBl e Book ol Oalifornin
stately ships ladeDto the gualds with the ll.ealth of Ormus and of Ind
will save someonefrom future disaster.
Thele \,!'asa lime when it was consideled there \r'ele but lhree
plofessions, law, rninistry aDd medicine, bnt *-ith the enlargement of
the activities of the $'orld nurlrer.l)usother plofessions have developed
which are equal in point of dignity with that of thc thlee old conven-
tional sta dard ones. I legal'd your Drofessionjust as lespectable and
just as important as 1do the profession of iaw. Developedto its high-
est poiDt it requires skill, intelligence, knolvledge of humatl nature,
and, as a basis of all success in any profession, strict integdty. Oi
coulse, the larv has numerous members in its profession, some of them
I am solry to say, are not mer of integ ty. So tbere will always be in
your ranks some who axe not men of integrity. That is a failing that
happens to all professions, and your pro{ession, by reason of a popu-
lar inU)ression,has Dot gained that position in the rank of Drofessions
it shouldhave atta-red-
We all know-that many of the allusions that are made to real
estate agents are ill founded. The same remarks can be made of doc-
tors, or of ministers, or of lawyers, or of bankeN. But it is your duty
to place your Dlofessioll upo the highest basis and as far frcm crit-
icism as possible. This can be done only by a strict adherenc€to the
lalv of honesty. This honesty is not only the best policy, but it is the
only policy, and this hoDesty can be shown by an observaDceof fair
dealing, full disclosur€, strict accounting of all moneys received, and
by telting of the absolute truth. The law provides for this, the law
demands this; it is satisfled vrith nothing else. Any departure not
only reflects upon youl pr:ofessioD,but is a stain upon the reputrtion
of your city and of your state, and is a disgrace to yoursell.