42 Ga. App. 76 | Ga. Ct. App. | 1930
J. B. Anchors brought suit against A. E. Rood, to recover a sum of money which the plaintiff alleges he had paid to Rood for the latter’s services as a real-estate broker in procuring for the plaintiff a purchaser of a business operated by the plaintiff, which consisted in the operation of storage garages. The plaintiff’s
The law requires utmost good faith on the part of an agent with his principal, when undertaking to carry out the contract of agency; and where the agent, through no fault of the principal, fails to perform the duties for which he has been employed, or where: through the agent’s fault, by reason of fraud perpetrated by him, a contract which he has negotiated for his principal’s benefit is unenforceable and is repudiated by the person with whom the agent has contracted, and thus the agent has failed to perform the duties of the agency, the agent is not entitled to compensation from the principal. It follows necessarily that when the principal has paid the agent for services rendered pursuant to the contract of agency, and is in ignorance of the fact that the agent has failed in the performance of his duties as agent, the principal has a right, upon a discovery of this fact, to recover the money thus paid to the agent as compensation. Where by the terms of the contract of agency the agent, as a real-estate broker, is to procure a purchaser of property belonging to the principal, and the agent by exceeding his authority and misrepresenting the property perpetrates a fraud upon the purchaser and thereby obtains an unenforceable contract with the purchaser, and on account of the fraud the contract is rescinded by the purchaser, and the agent knowingly, and without' the principal’s knowledge, substitutes as purchaser one who the principal believes is an agent of the purchaser whom the agent had procured, the agent thereby fails to act in good faith with his principal, and the principal is entitled to recover from the agent compensation for the services which the principal had paid to the agent in ignorance of the fraud of the agent in obtaining the contract, and in ignorance of the purchaser’s rescission of the contract.
Although the plaintiff had been paid the purchase-money for the sale of the property, it is immaterial, and can not affect his right as against his agent, that an amount of the purchase-money equal to the commission had not been refunded by the principal to the purchaser. The agent can not defeat his just debt to the principal because the principal may owe the same amount to another and has not paid it. Nor would the agent be entitled to defeat his just debt to the principal simply because a person had donated to the principal a sum of money equal to the debt, where
Judgment affirmed.