Plaintiff contends that Republic was Fortune's Agent from March 2, 1973, (when Fortune executed the loan application prepared by Republic) until May 1, 1975, (when the second and third level loan should have been closed). Republic argues instead that any agency obligation it had to Fortune ended when Fortune accepted the CAC loan commitment on May 4, 1973, since the loan application which Republic prepared and which Fortune signed provided that Fortune's $14,000 fee to Republic was due and payable upon Fortune's acceptance of the loan commitment. For reasons which follow, we find it unnecessary to decide whether Republic's agency was continuous over the period contended by plaintiff. We assume, without deciding, that any agency created by the terms of the loan application by Fortune to Republic terminated on May 4, 1973, when Fortune accepted the CAC loan commitment which Republic obtained.

The decisive agency issue before this Court is whether the conduct of the parties after May 4, 1973, established that Republic was acting as Fortune's agent between April 28 and May 1, 1975, in connection with the prepayment negotiations with CAC, and if so, whether Republic breached its duty to Fortune. We rule the issue in plaintiff's favor.

"Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act." Restatement (Second) of Agency § 1 (1957); Northern v. McGraw-Edison Co., 542 F.2d 1336 (8th Cir. 1976) cert. denied, 429 U.S. 1097, 97 S. Ct. 1115, 51 L. Ed. 2d 544 (1977); Leidy v. Taliaferro, 260 S.W.2d 504 (Mo.1953). "Agency is a legal concept which depends upon the existence of required factual elements: the manifestation by the principal that the agent shall act for him, the agent's acceptance of the undertaking and the understanding of the parties that the principal is to be in control of the undertaking." Restatement (Second) of Agency § 1, Comment b (1957). Dunaway's testimony is alone enough to provide the factual elements4 sufficient to support a legal conclusion that Republic was an agent a special agent5 of Fortune concerning the loan prepayment negotiations with CAC April 28 to May 1, 1975.

The agreement to act on behalf of the principal causes the agent to be a fiduciary, that is, a person having a duty, created by his undertaking, to act primarily for the benefit of another in matters connected with his undertaking. (6 Among the agent's fiduciary duties to the principal is the duty . . . not to compete with the principal on his own account . . . in matters relating to the subject matter of the agency, and the duty to deal fairly with the principal in all transactions between them.7

"(D)uring the existence of the relation, a gratuitous agent . . . is subject to all the paid agent's duties of loyalty."8 "In short, the paramount and vital principle of all agencies is good faith, for, without it the relation of principal and agent could not well exist. So sedulously is this principle guarded that all departures from it are esteemed frauds upon the confidence bestowed." Groh v. Shelton, 428 S.W.2d 911, 916 (Mo.App.1968).

Undisputed evidence shows that Republic after becoming Fortune's special agent (1) secretly urged CAC to raise to $36,000 the $9,000 prepayment penalty fee CAC originally decided to charge Fortune; (2) secretly solicited and obtained an agreement from CAC to divide with it any prepayment fee over $9,000 paid by Fortune; and (3) reported back to its principal, Fortune, that CAC wanted $36,000 to allow prepayment, and urged upon Fortune the propriety of the four percent ($36,000) penalty.

In its brief, Republic writes that Fortune's prepayment of the existing "floor" loan mortgage would cause Republic to lose the loan servicing fee it would otherwise receive from CAC over the period of the loan. Republic goes on to concede that its "interest was thus potentially adverse to Fortune-Tampa's, should (Fortune) attempt to prepay the loan."9

Once Fortune requested Republic on April 28, 1975, to negotiate with CAC for prepayment, Republic's "potential" adverse interest immediately became an actual adverse interest. Republic nonetheless agreed to do as Fortune requested, remaining silent about its own adverse interest in the subject of the agency. We note also that there is nothing to show that Fortune knew or should have known that Republic intended to claim a fee out of any prepayment penalty collected by CAC.10 Republic, when it accepted the special agency, had a strong motive to want CAC either to refuse prepayment, or to permit it only if conditioned on a high prepayment penalty. Under the circumstances Republic should not have accepted the special agency at all but, having done so, its subsequent conduct must be measured against the fiduciary duty to Fortune implicit in the special agency Republic knowingly assumed.

Because of Republic's conflict of interest, and because of its secret competition with and disloyalty toward its principal, its claim of non-liability because of a mere "middle-man" status cannot stand, nor will the evidence permit its claim of a lawful dual agent status. Corder v. O'Neill, 207 Mo. 632, 106 S.W. 10, 14 (1907); Cox v. Bryant, 347 S.W.2d 861 (Mo.1961). There was sufficient evidence before the jury from which it could properly find that Republic was a special agent of Fortune from April 28 to May 1, 1975, and that Republic breached its fiduciary duties while acting as such agent. The trial court was correct in denying Republic's motion for directed verdict as to Count II of the complaint (which presented the issue of whether Republic breached an agency duty owed plaintiff).

Republic's Compensatory Damage Liability to Plaintiff

By judgment n. o. v. the trial court reduced to $14,000 the $75,000 sum the jury awarded Armstrong against Republic as actual damages. On his cross-appeal plaintiff Armstrong asks that we reinstate the $75,000 verdict. We decline to do so for reasons which follow.

In the spring of 1973, after Fortune applied in writing to Republic for a first mortgage loan, Republic obtained from CAC a written loan commitment to Fortune, which Fortune accepted. Fortune paid Republic the $14,000 provided for in the loan application as a commission, due Republic upon Fortune's acceptance of the loan commitment. In November, 1974, Fortune executed and delivered to CAC, pursuant to the loan commitment, a note and first mortgage for $900,000 (the "floor" loan).

The loan commitment and the mortgage together set forth in writing the agreement between Fortune and CAC concerning the $360,000 third level loan which CAC had agreed in the loan commitment to make to Fortune. Through Republic, Fortune obtained a contract under which CAC was legally bound to Fortune to make the third level loan under the conditions of the agreement, conditions which Fortune agreed to.

The duties of Republic to Fortune, stated most favorably to Fortune, must still be those and only those which could be reasonably and fairly implied under all the circumstances. This is so because Fortune had no written agency contract with Republic except the loan application. Nothing therein obligated Republic to guarantee that CAC would perform its contractual duty to Fortune, nor was Republic required by the terms of the loan application to "advocate" to CAC (in Fortune's behalf) that CAC perform its contractual duty. Once Fortune and CAC had mutually agreed in writing, Republic at most owed Fortune (1) a duty to assist it, when requested, in meeting its contract obligations,11 and (2) a duty not to prevent or hinder, by affirmative act, the execution of the contract. Nothing in the conduct of the parties (Fortune and Republic) after Fortune accepted the loan commitment would support a conclusion that Republic had expressly or impliedly agreed to any broader agency duty concerning CAC's obligation to make the third level loan.

CAC notified Republic on April 28, 1975, that CAC would not fund the third level loan. Republic notified Fortune of the CAC decision the same day. There is no evidence that between the spring, 1973, loan application and April 28, 1975, Republic affirmatively acted to obstruct the contract for the third level loan. Nor did Republic fail to do anything Fortune requested, which failure would have supplied CAC grounds for lawfully refusing to execute the contract.12

In our case, the fact that CAC may have first decided that it would not provide third-level funding, in breach of its contract, is irrelevant. Republic still owed a duty to Armstrong to attempt to change this decision. Thus, the critical decision in our case is the firmness of CAC's discretionary resolve not to fund the remainder.

We answer that CAC's duty to make the third level loan was not discretionary, but was instead contractual. Assuming, without deciding, that Republic was Fortune's agent during the time in question in this Part II, we hold that Republic had no duty to "advocate" nor to guarantee or assure that CAC would comply with its contract concerning the third level loan.13 We do not resolve the issue on the basis of causation (what caused CAC to violate its contract), but instead simply on the basis that, as a matter of law, on this record, Republic breached no fiduciary duty owed Fortune concerning CAC's obligation to make the third level loan.

Republic concedes in its brief that plaintiff sustained $14,000 actual damages (the commission paid Republic for placing Fortune's loan with CAC) if Republic breached a fiduciary duty it owed Fortune. We have already held (in Part I) that there was such a duty which Republic breached and thus we conclude that Republic owes plaintiff actual damages of $14,000.

The standards for granting a judgment n. o. v. are the same as those governing directing a verdict. Schneider v. Chrysler Motors Corp., 401 F.2d 549, 554 (8th Cir. 1968). The federal and Missouri standards are the same, Savage v. Christian Hospital Northwest, 543 F.2d 44, 46 (8th Cir. 1976). We have reviewed the record under the standards set out in Schneider, supra, 401 F.2d at 554, and conclude that the trial court was correct in reducing to $14,000 the compensatory damages awarded plaintiff Armstrong.

The jury awarded Armstrong $125,000 punitive damages against Republic. Republic contends that it cannot be charged with the legal malice necessary under Missouri law for punitive damages. It also contends that the amount of the award is excessive as a matter of law.

Under Missouri law, punitive damages may be granted as a means of punishing and deterring wrongful conduct. Punitive damages must be supported by an award of compensatory damages, Longmore v. Merwin, 585 S.W.2d 545, 546 (Mo.App.1979), but are not specifically limited in proportion to the amount of the compensatory award. Hoene v. Associated Dry Goods Corp., 487 S.W.2d 479 (Mo.1972); State v. Shain, 341 Mo. 733, 108 S.W.2d 351 (1937); Young v. Jack Borings, Inc., 540 S.W.2d 887, 897 (Mo.App.1976). The amount of punitive damages is also proportioned "to the degree of malice, criminality or contumely characterizing the act, to the age, sex, health and character of the injured party, the intelligence, standing and affluence of the tortfeasor, and other like circumstances." Hoene v. Associated Dry Goods Corp., supra, 487 S.W.2d at 486; State v. Shain, supra, 108 S.W.2d at 356.

A further prerequisite for an award of punitive damages is legal malice. Although actual malice in the sense of spite or ill will is not required, legal malice, or the intentional and knowing commission of a wrongful act, must be part of a plaintiff's proof in order to recover damages. Lamb v. Amalgamated Labor Life Insurance Co., 602 F.2d 155 (8th Cir. 1979). Pollock v. Brown, 569 S.W.2d 724, 732-33 (Mo.1978); Young v. Mercantile Trust Company National Association, 552 S.W.2d 247 (Mo.App.1977).

Republic's first contention is that punitive damages are precluded as a matter of law because the evidence does not show that its agent Dunaway did a wrongful act intentionally and without just case or excuse.

We have discussed the wrongfulness of Dunaway's actions in Part I of this opinion. In the two year period before April 28, 1975, Dunaway had worked closely with Fortune and Armstrong. He was known to them as an executive of a prominent mortgage brokerage firm. On several previous occasions he, at their request, negotiated with CAC in their favor concerning changes in the loan structure. As an expert in the field he fully realized Fortune's and Armstrong's difficult situation when at the last moment CAC refused to fund beyond the second level loan. He knew their need for new first mortgage financing made the negotiation regarding prepayment extremely important to them. After accepting their request that he act for them concerning prepayment, he not only failed to disclose Republic's actual conflict of interest but, in addition, pretended to assist his principal all the while he was engaged in a secret negotiation with CAC designed to profit Republic at the expense of his principal, Fortune. Dunaway's "self-help" approach is in principle not unlike that in Young v. Mercantile Trust Company National Association, 552 S.W.2d 247 (Mo.App.1977). As the Court there said: "It is the bank's self-help approach that constitutes the intentional, wrongful act justifying punitive damages." 552 S.W.2d at 251.

In this case the jury could properly find that Dunaway knew of the wrongfulness of his actions but took the course that would benefit him and his employer, in spite of this knowledge. His knowledge may be inferred from surrounding circumstances, which circumstances may include evidence from which a jury could find on Dunaway's part a reckless disregard for the rights of plaintiff. Beggs v. Universal C.I.T. Credit Corp., 409 S.W.2d 719, 722 (Mo.1966). There was no error in the award of punitive damages.

Republic's final contention is that the amount of the punitive damages was excessive when compared to the injury and to the amount of compensatory damages. Republic contends that amounts in excess of three times the compensatory award have traditionally been held excessive. See Johnson v. American Mutual Liability Insurance Co., 335 F. Supp. 390 (W.D.Mo.1971). We do not find support for such an absolute rule in the cases of Missouri. See State v. Shain, supra; Young v. Jack Boring's, Inc., 540 S.W.2d 887 (Mo.App.1976). In fact, the Missouri courts have upheld a punitive damage recovery of $4,000 where the compensatory damages were $1.00. State v. Shain, supra. Punitive damages must, however, bear some relation to the injury and the manner of its infliction. Beggs v. Universal C.I.T. Corporation, 409 S.W.2d 719, 724 (Mo.1966); Young v. Jack Boring's, Inc., supra.

Earlier in this Part III, we have cited from Missouri case law the factors which may be taken into account in passing upon the issue of whether the punitive damages assessed were excessive. Punitive damages are awarded to punish wrongdoing, as an example and deterrent to similar conduct. Citizens Bank of University City v. Gehl, 567 S.W.2d 423 (Mo.App.1978). In this connection the intelligence, standing, and affluence of the tortfeasor may be considered. In Gehl, supra, 567 S.W.2d 423, 426, the court noted that defendant, a chiropractor, was a man of "presumably high intelligence and professional standing in the community" and that his net worth was over $490,000. The court sustained a punitive damage award of $35,000. In this case, the jury could properly consider that Republic is a major national mortgage brokerage house, with offices in St. Louis, Chicago, Atlanta, Milwaukee, and Kansas City; that it acts as a correspondent for ten to twelve of the nation's largest life insurance companies; and that Republic has a net worth of approximately $4,000,000, with a gross annual income of $1,000,000. The jury could also consider, as Republic concedes, that Terry Dunaway is a knowledgeable, experienced and successful businessman (as are all the principals in this case). The Gehl court, as shown above, considered that factor important in assessing culpability, since knowledge and experience make such conduct as that shown here all the more unacceptable than if the wrongdoer were unsophisticated, as in Pollock v. Brown, supra, 569 S.W.2d at 724.

In Hoene v. Associated Dry Goods Corp., 487 S.W.2d 479, 486 (Mo.1972), the court stated:

(T)he matter of punitive damages is so "purely and peculiarly one for the jury's discretion" that only in an extreme case will the appellate court interfere. This point was raised in defendant's motion for a new trial and denied by the trial court. In view of that discretionary action we are unable to say that this part of the verdict was caused by bias and prejudice on the part of the jury.

. . . We do not find from this record that the award of punitive damages was caused by "improper motives or a clear absence of honest exercise of judgment", Beggs, supra, hence the amount rested within the discretion of the jury, subject to review by the trial court.

Republic did not ask for a remittitur as to the punitive damages awarded, requesting instead a new trial in the trial court. The trial court refused to grant a new trial on this issue, confirming the jury award. In the record before us we find no basis upon which we, as an appellate court, can or should disturb the jury verdict concerning punitive damages.

Affirmed.