The agent states in his brief that "At issue for determination on appeal is whether or not the death of a principal revokes the agency relationship retroactively so as to void acts carried out by the agent within the scope of his authority before the agency relationship terminated.” In the alternative it is argued that the agency power to purchase the stock was coupled with an interest and therefore irrevocable. The executor does not contend, however, that the purchase of the stock was void because the agency power was revoked by the death of the principal, but complains of alleged defaults of the agent subsequent to the purchase. In essence the executor seeks to rescind the agency agreement and recover the money advanced because of the breach or nonperformance of duties imposed by that agreement, 1 particularly the failure to deliver the stock as contemplated by the agency agreement.
In view of the agent’s insistence that the executor has no "cause of action” for the restitutionary remedy of return of the $25,000, *199 it becomes necessary to determine whether this remedy is available to a principal whose agent fails to follow instructions. The agency agreement mentions delivery in three instances, and we think it clear that this agreement created an agency for the specific purpose of purchase and delivery of the stock. No time is statеd for the delivery; but whether, nothing appearing, it should have been delivered "upon receipt” or "within a reasonable time,” a tender made some three years after the purchase, and only after demand for return of the purchase price, is obviously a breach or nonperformancе of the obligation of delivery contained in the contract of agency. We so treat the case for purposes of determining the availability of the remedy, but postpone to Division 3 questions pertaining to the propriety of its employment under the record before us.
There is no doubt that wherе specific instructions are violated the agent is responsible
in damages
for any loss which results from the violation regardless of the degree of care exercised. See, e.g.,
Benton v. Roberts,
In resolving this question it is important to note that violation or nonperformance of instructions may be considered as a breach of two obligations — the consensual obligation set forth in the contract of agency itself, and the fiduciary obligation of obedience to the principal’s instructions raised by the agency relationship. "Agency is both a consensual and a fiduciary relation. Normally it is the result of a contract between the parties. Where this is true, the agent’s duties include the performance of any contractual obligations; failure to perform these, if without excuse, is a breach of contract. Thus, in determining the existence and extent of the agent’s duties to the principal, the normal rules of contractual obligations come into play with reference to . . . the effect of a breach by one party or the other . . . and all the other rules which make up the subject known as contracts.” Restatement, Agency 2d, p. 171, introductory note preceding §376. And in Restatement, Agency 2d, p. 235, §400, it is stated that liability for an agent’s breach of contract with his principal is governed by the law of contracts. In accordance with this section are cases such as
Benton v. Roberts,
Citing this section of the Restatement, then Circuit Judge, now Chief Justice Burger stated in Brown v. Coates, 253 F2d 36, 39 (C.A.D.C.): "Ordinarily, an agent who has violated a duty he owes his principal, is considered to have breached his contract, entitling the principal to contract remedies of rescission or damages.” In accord is Anderson v. Badger,
We conclude that rescission of an agency agreement is an available remedy to the principаl for the agent’s breach or nonperformance of contractual obligations imposed by that agreement, whenever and to whatever extent it is authorized by the law of contracts.
"The general rule is that a contract may be rescinded for substantial nonperformance or breach, and ordinarily a material breach warrants rescission.” 17 AmJur2d, 981, Contracts, § 504. In this jurisdiction, "Nonperformance by a party of his covenants is a statutory ground of rescission
[Code
§ 20-907] . . .”
Riverside Academy v. Urigh,
In
Marietta Pub. Co. v. Times Pub. Co.,
While it appears that rescission and restitution is an available remedy for a material nonperformance or breach of contract, there are various rules governing the situations in which this remedy will be granted. See 5 Corbin on Contracts, 548-652, §§ 1102-1121; 17 AmJur2d 951-961, Contracts, §§ 482-489; 977-1007,§§ 501-520. The record in the case before us is too incomplete and inadequate to determine which of these rules may be applicable and whether a restitutionary judgment should have been summarily granted. 2 Although it is stated in the "Conclusion” part *204 of the executor’s brief that the agent never informed the princiрal of the purchase of the stock; never requested instructions of him; never informed the executor of the existence of the agency, the receipt of the funds or the purchase of the stock, and voted the stock under these conditions in the executor’s presence; and never, in short, attempted to report or account to the principal or the executor until after the latter discovered the existence of the agency agreement and demanded the return of the $25,000 — none of these matters, as well as others mentioned in oral argument, are sufficiently supported by the record. Nor is there any evidentiary basis upon which matters such as the materiality of the breach can be considered. We must conclude that it was error to grant summary judgment for the executor. On the other hand, the agent has contented himself by showing merely that he tendered the stock on March 28, 1969, some thrеe years after the purchase of property of presumably fluctuating value, and only after demand for return of the purchase price, with no explanation for the delay and for his acts of dominion over the stock. Hence we must conclude that his motion for summary judgment was properly deniеd.
Judgment granting plaintiff’s motion for summary judgment reversed; judgment denying defendant’s motion affirmed.
Notes
“[W]e are dealing with restitution as a remedy for breach of contract; a judgment for such restitution is truly a remedy for a 'breach’ as is a judgment for damages. It is true that the courts have often said, and a plaintiff has often alleged, thаt the contract has been 'rescinded’ by the injured party because of the defendant’s vital breach. Such a 'rescission’ as this is essentially different from one that is based on mutual agreement, both in its operative facts and in its legal effects. Such a 'rescission’ is merely an assertion by the injured party that the other has committed a vital breach, that he himself has been discharged from the duty of further performance, and that he asks for a restitutionary remedy. If he desires, he can make identically the same assertions and ask for 'damages’ instead of restitution. Also, he may properly ask for damages or restitution in the alternative, leaving his final choice to be made at the actual trial of the case.” 5 Corbin on Contracts 558, § 1104.
The trial court ruled that interest would run from October 2, 1966, the day after the principal’s death. However, for recovery of the amount paid on the theory of rescission and restitution, interest runs from the time of payment to defendant.
Supreme Council American Legion of Honor v. Jordan,