Thе appellant’s enumerations of error may be categorized into three basic contentions, which follow.
(1) There was no special plea raising the issue of “dual agency” as to Count 3. Since “dual agency” is an affirmative defense it must be plead. Thus, the only question relative to Count 3 is whether the allegations were proved. The appellant contends the allegations were supported by sufficient proof and therefore it is entitled to reсover régardles? of the merit of the other counts.
(2) “Dual agency” is not void per se but perfectly proper where the fact of such agency is known to the principals. The evidence reveals that the defendants knew of thе dual agency and did not repudiate it; therefore, they can not rely on such defense.
(3) The prohibition against “dual agency” is not applicable where the agent, acting for two different principals has no discretion and hе was a mere “middleman,” in that his duties were purely ministerial. The evidence showed this to be true; thus, for another reason the defendants failed to sustain their position.
We now consider these contentions in the order in which they were prеsented.
Relying on
Red Cypress Lumber Co. v. Perry,
Of course, dual agency рer se is not against public policy but dual agency unknown to the principal is. “It is contrary
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to public policy for an agent, without the full knowledge and consent of his principal, to do any act, or make any contract, in carrying out the business of his agency, the effect of which will be to bring the personal interests of the agent in antagonism with those of the principal.”
Sessions v. Payne & Tye,
Unquestionably, “the burden of making out a complete defense lies on the defendant; and where duality of agency is relied on as a defense, it is necessary for the defendant to prove, not only the fact of such agency, but also that the same was not known to both parties.”
Ballew v. Ware & Harper,
The evidence in this case reveals that the plaintiff informed the defendants by letter that: “As we told you, we feel that we represent two lenders who are prospects for the above financing namely: American National and Mutual Life.” The plаintiff’s own witnesses concede that “representing” merely meant the plaintiff had authority to submit loan applications for the lender’s consideration.
From the testimony adduced and exhibits offered into evidence it appeared that the plaintiff wrote to American National, the lender: “We are submitting this application with the understanding that we are to be paid a $10,000 finders fee and 1/16 servicing as discussed with Ray Wilson.” Subse *180 quently, the lender replied: “At the time this loan is clоsed in accordance with our commitment to be issued, we will pay Spratlin, Harrington & Thomas, Inc., a commission of $10,000 and a servicing fee of 1/16 of 1 The testimony of the defendants was that they were unaware of this arrangement until their attorney discovered it “from correspondence subpoenaed or produced on notice” just prior to the trial of this case. According to the defendants’ agent, the development manager of the shopping centеr, prior to the execution of the contract, when he inquired of the plaintiff’s agent if the plaintiff was going to get a servicing fee from the lender he was told the plaintiff was not going to get a servicing fee.
The Georgia courts havе held: “Contracts of dual agency are not void per se, but only so when the fact that the agent represented both parties was not known to each.”
Red Cypress Lumber Co. v. Perry,
“The first duty of an agent is that of loyalty to his trust. He must not put himself in relations which are antagonistic to that of his principal. His duty and interest must not be allowed to conflict. He cannot deal in the business within the scope of his agency for his own benefit. . .; nor is he permitted to compromise himself by attempting to serve two masters having a contrary interest, unless it be thаt such contracts of dual agency are known to each of the principals.”
Arthur v. Georgia Cotton Co.,
. In discussing what constitutes knowledge it has been pointed out that there must be knowledge of all material facts of agency. 3 AmJur2d 605, 606, Agency, § 234; Anno.,
Under the circumstances of this case the plaintiffs failed to reveal to the defendants a pertinent and possibly vital fact that they were going to receive a fee from the lender. This failure to disclose was a violation of a fundamental tenet of the agеncy relation. Without such disclosure we can not hold that the evidence demands a finding that the defendants “knew” of the dual agency so as to, in effect, waive the protection of the “dual agency” rule.
Relying on numerous citatiоns of foreign authority as well as language contained in
Todd v. German American Ins. Co.,
It is urged that a broker is not an agent in a true sense because a broker merely serves as a conduit to bring the parties together and afterwards they do all the negotiating аnd reach a final agreement without the broker’s aid. Appellants *183 contend the “middleman” rule is therefore especially applicable under these facts where the defendants had already determined and prescribеd the amount of loan and its basic requirements.
We can not agree with this conclusion. A broker is under the same compulsion as an agent: “A broker cannot, without violating his general duty of good faith, act for persons having interests adverse to those of his employer, unless he acts with the consent of his employer given with full knowledge of the facts.” 12 AmJur2d 840, Brokers, § 87.
Furthermore, here the evidence and pleading reveal that: the plaintiff undertook to assist the defendants in obtaining a loan on the most favorable terms possible; that pursuant to this aim the plaintiff's agents received from the defendants confidential information as to their plans for the development of the shopping center they рroposed to construct; that the plaintiff gave the defendants advice with respect to the amount and terms of the loan that they might expect to obtain, the interest rate they should seek, and the amount of “standby fee” they should pay for a loan commitment; that the plaintiffs actually negotiated a loan commitment from American National Insurance Company on behalf of the defendants. Hence, the rule would be applicable: “A broker is simрly a middleman, within the meaning of this exception, when he has no duty to perform but to bring the parties together, leaving them to negotiate and to come to an agreement themselves, without any aid from him. If he takes, or contracts to take, any part in the negotiations, however, he cannot be regarded as a mere middleman, no matter how slight a part it may be. . . Nor does it make any difference that the price was fixed by his first employer.” Jensen v. Bowen,
The plaintiff in this case was not a so-called “middleman,” but under a reasonable construction of the evidence was acting actively for the defendants and could not accept compensation from an adverse party without revealing, upon inquiry, the fact of such compensation.
There being an affirmance of the judgment of the trial court, no ruling will be made on the motion to dismiss.
Judgment affirmed.