O.C.G.A. § 10-6-2 (2019)

Annotations

Law reviews. For article surveying recent legislative and judicial developments in Georgia’s real property laws, see 31 Mercer L. Rev. 187 (1979).

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION REAL ESTATE TRANSACTIONS CORPORATE AGENTS General Consideration Editor’s notes. - Some of the cases cited below were decided prior to the 1991 amendment, which added the last sentence. Power to execute instrument under seal must be conferred by instrument under seal. Pollard & Co. v. Gibbs, 55 Ga. 45, 1875 Ga. LEXIS 323 (1875); McCalla v. American Freehold Land Mtg. Co., 90 Ga. 113, 15 S.E. 687, 1892 Ga. LEXIS 133 (1892); Overman v. Atkinson, 102 Ga. 750, 29 S.E. 758, 1897 Ga. LEXIS 683 (1897); Hayes v. City of Atlanta, 1 Ga. App. 25, 57 S.E. 1087, 1907 Ga. App. LEXIS 138 (1907); Neely & Co. v. Stevens, 138 Ga. 305, 75 S.E. 159, 1912 Ga. LEXIS 287 (1912); Harris v. Woodard, 144 Ga. 211, 86 S.E. 1097, 1915 Ga. LEXIS 135 (1915). Changing promissory note into sealed instrument. - Changing of an ordinary promissory note into a sealed instrument is the making of a sealed instrument, and the authority to make this radical change in the paper must be evidenced in the same way that authority to make a sealed instrument in the first instance would have to be shown. Thomason v. Wilson, 127 Ga. 141, 56 S.E. 302, 1906 Ga. LEXIS 775 (1906). Section not limited to execution of instruments under seal. - There is nothing in this section which confines it to agencies created for the execution of instruments under seal. It lays down a broad and sweeping rule for the creation of all agencies. Byrd v. Piha, 165 Ga. 397, 141 S.E. 48, 1927 Ga. LEXIS 408 (1927). Authority to execute contract required to be in writing must be in writing. Nalley v. Whitaker, 102 Ga. App. 230, 115 S.E.2d 790, 1960 Ga. App. LEXIS 594 (1960). Agency created by writing. - If the law prescribes that the act can be executed by the principal only by writing, then the act creating the agency must be

executed with the same formality; that is, the agency must be created by writing. Byrd v. Piha, 165 Ga. 397, 141 S.E. 48, 1927 Ga. LEXIS 408 (1927); Terry v. Kean, 180 Ga. 627, 180 S.E. 135, 1935 Ga. LEXIS 512 (1935); Union Camp Corp. v. Dyal, 460 F.2d 678, 1972 U.S. App. LEXIS 10518 (5th Cir.), cert. denied, 409 U.S. 849, 93 S. Ct. 56, 34 L. Ed. 2d 90, 1972 U.S. LEXIS 1323 (1972). Proper construction of this section is that agencies for the execution of agreements which are required to be made by principals to be in writing must be created by written authority; otherwise the purpose of the statute of frauds, which is to prevent frauds and perjuries, would be virtually done away with. Byrd v. Piha, 165 Ga. 397, 141 S.E. 48, 1927 Ga. LEXIS 408 (1927); Terry v. Kean, 180 Ga. 627, 180 S.E. 135, 1935 Ga. LEXIS 512 (1935); Atlanta Biltmore Hotel Corp. v. Martell, 118 Ga. App. 172, 162 S.E.2d 815, 1968 Ga. App. LEXIS 1342 (1968). But see Hirsh & Co. v. Beverley, 125 Ga. 657, 54 S.E. 678, 1906 Ga. LEXIS 240 (1906) (authority to sell mules and apply proceeds); Wesley v. Boyd, 10 Ga. App. 9, 72 S.E. 514, 1911 Ga. App. LEXIS 606 (1911); McNamara v. Georgia Cotton Co., 10 Ga. App. 669, 73 S.E. 1092, 1912 Ga. App. LEXIS 640 (1912) (authority to purchase cotton); Builders Homes of Ga., Inc. v. Wallace Pump & Supply Co., 128 Ga. App. 779, 197 S.E.2d 839, 1973 Ga. App. LEXIS 1615 (1973) (guaranty by agent authorized or principal estopped to deny authority). Lease of land for seven years being required to be in writing, if the agent signs for the principal, the agent’s authority must be in writing. Baxley Hdwe. Co. v. Morris, 165 Ga. 359, 140 S.E. 869, 1927 Ga. LEXIS 394 (1927) (commented on in 1 Ga. L. Rev. No. 3, p. 51 (1927)). This section applies if a contract which is required to be in writing under the

statute of frauds is executed by another as a disclosed agent for the person intended to be bound, and in such case the authority of the principal to the agent to so sign must also be in writing. Spiegel v. Hays, 103 Ga. App. 293, 119 S.E.2d 123, 1961 Ga. App. LEXIS 930 (1961). Oral agreements. - If the owner of personal property orally authorizes an agent to lease it to another for a period of three months and orally authorizes the agent to give to the sublessee an option to buy, the option price being more than $50.00, the option so given by the agent is not binding on the owner in the absence of facts sufficient to work an estoppel or show ratification of a completed sale; and, accordingly, if such authority rested in parol, and before the option was exercised by the third person, the owner notified the agent that the giving of such an option was without the owner’s authority, repudiated the contract in the contract’s entirety, and instructed the agent to retract the agent’s proposal, and the agent proceeded to sell the property under the option as the agent’s own, the agent was guilty of a conversion and was liable in trover for the property. Collier v. Wilson-Weesner-Wilkinson Co., 58 Ga. App. 44, 197 S.E. 516, 1938 Ga. App. LEXIS 181 (1938) (decided under former statute of frauds provision as to contracts for sale of goods, repealed by Ga. L. 1962, p. 156, which also enacted § 11-2-201). Authority of attorney-in-fact to issue a guardianship bond could not be mere apparent authority, but was required to be shown by a writing, i.e., a power of attorney from the insurance company named in the bond. Continental Ins. Co. v. Gazaway, 216 Ga. App. 125, 453 S.E.2d 91, 1994 Ga. App. LEXIS 1433 (1994), cert. denied, No. S95C0742, 1995 Ga. LEXIS 562 (Ga. Apr. 14, 1995). If agent must have written authority, the agent cannot be orally vested with apparent authority, any more than the agent can be orally vested with a real one. Union Camp Corp. v. Dyal, 460 F.2d 678, 1972 U.S. App. LEXIS 10518 (5th Cir.), cert. denied, 409 U.S. 849, 93 S. Ct. 56, 34 L. Ed. 2d 90, 1972 U.S. LEXIS 1323 (1972). Mere effort to ratify orally will not suffice. - Authority to execute a contract required by the statute of frauds to be in

writing must also be in writing, and a mere effort to ratify orally will not suffice. Hubert Realty Co. v. Bland, 79 Ga. App. 321, 53 S.E.2d 691, 1949 Ga. App. LEXIS 645 (1949). Principal may confer authority on agent merely by course of conduct holding out that person as an agent which induces others to rely on the statements of that agent. Ampex Credit Corp. v. Bateman, 554 F.2d 750, 1977 U.S. App. LEXIS 12721 (5th Cir. 1977). Estoppel to deny agency. - While a written instrument may have been executed by an agent not having any authority in writing to do so or not having been ratified by an act of comparable dignity, the principal may nevertheless be estopped by the principal’s acts from denying the authority of the principal’s agent. Atlanta Biltmore Hotel Corp. v. Martell, 118 Ga. App. 172, 162 S.E.2d 815, 1968 Ga. App. LEXIS 1342 (1968). Authority of an agent in a particular instance need not be proved by an express contract; it may be established by the principal’s conduct and course of dealing, and if one holds out another as one’s agent, and by one’s course of dealing indicates that the agent has certain authority, and thus induces another to deal with one’s agent as such, one is estopped to deny that the agent has any authority which, as reasonably deducible from the conduct of the parties, the agent apparently has. Atlanta Biltmore Hotel Corp. v. Martell, 118 Ga. App. 172, 162 S.E.2d 815, 1968 Ga. App. LEXIS 1342 (1968) (see notes to § 10-6-50). Authority of an agent to lease the land of another must ordinarily be in writing, but the jury might find oral authority sufficient if the principal was estopped by the principal’s later conduct from raising the issue. Union Camp Corp. v. Dyal, 460 F.2d 678, 1972 U.S. App. LEXIS 10518 (5th Cir.), cert. denied, 409 U.S. 849, 93 S. Ct. 56, 34 L. Ed. 2d 90, 1972 U.S. LEXIS 1323 (1972). Failure to ascertain if written authority exists deemed negligence. - One who enters into a 15-year-lease with an agent is charged with notice that the agent’s authority to execute the lease is required by law to be in writing and is

General Consideration (Cont’d) under a duty to inquire and ascertain whether such written authority exists and what the limits of the authority are, and such person is guilty of negligence in failing to make such an inquiry. Nalley v. Whitaker, 102 Ga. App. 230, 115 S.E.2d 790, 1960 Ga. App. LEXIS 594 (1960); Union Camp Corp. v. Dyal, 460 F.2d 678, 1972 U.S. App. LEXIS 10518 (5th Cir.), cert. denied, 409 U.S. 849, 93 S. Ct. 56, 34 L. Ed. 2d 90, 1972 U.S. LEXIS 1323 (1972). Failure to ascertain if authority exists bars recovery from agent. - One who enters into a 15-year lease with an agent without making due inquiry into the agent’s authority is precluded from recovering damages from the agent either on the ground that the agent contractually misrepresented the fact that the agent had authority, either expressly or impliedly, or on the ground that the agent fraudulently misrepresented that the agent had authority to execute the lease as agent. Nalley v. Whitaker, 102 Ga. App. 230, 115 S.E.2d 790, 1960 Ga. App. LEXIS 594 (1960). Power of attorney held valid. - Regardless of wife’s failure to follow instructions and have husband’s signature of the power of attorney properly witnessed, the power of attorney itself was technically valid as regards acts which themselves required no greater formality. Wheeless v. Gelzer, 780 F. Supp. 1373, 1991 U.S. Dist. LEXIS 18594 (N.D. Ga. 1991). Not applicable if statute of frauds does not apply. - Verbal authorization from a decedent was sufficient to create a valid agency relationship between the decedent and a brother and a wife, so as to allow them to withdraw money for the decedent from the accounts on a periodic basis; the equal dignity rule outlined in O.C.G.A. § 10-6-2 did not apply in this case because the instruments at issue were not subject to the statute of frauds. Rowland v. Rowland, No. 1:04-CV-2068-TWT, 2005 U.S. Dist. LEXIS 30296 (N.D. Ga. Nov. 16, 2005). Only principal proper party to raise issue. - Construction company’s claim that a grocery store owner’s

representative who signed a contract which contained an agreement to arbitrate lacked the power to sign under the Equal Dignity Rule, pursuant to O.C.G.A. § 10-6-2, as the authority to sign the agreement and the agreement itself, had to be in writing under O.C.G.A. § 9-9-3, lacked merit, as the contract clearly provided that the representative was acting on behalf of the owner, and further, the company was not the proper party to dispute the agent’s authority under O.C.G.A. § 10-6-2; rather, that statute was for the principal’s use to dispute an agent’s authority to act on the principal’s behalf. Barron Reed Constr. v. 430, LLC, 275 Ga. App. 884, 622 S.E.2d 83, 2005 Ga. App. LEXIS 1131 (2005), cert. denied, No. S06C0441, 2006 Ga. LEXIS 232 (Ga. Mar. 27, 2006). Real Estate Transactions Authority to execute long-term lease in writing. - Contracts creating the relationship of landlord and tenant, for any time exceeding one year, must be in writing; and when executed by an agent, the authority of the agent to execute the contract must likewise be in writing. Byrd v. Piha, 165 Ga. 397, 141 S.E. 48, 1927 Ga. LEXIS 408 (1927). One seeking to hold the principal liable for the undertaking of an agent on a lease for over a year must show that the agent had written authority to act for the principal. Garden of Eden, Inc. v. Eastern Sav. Bank, 244 Ga. 63, 257 S.E.2d 897, 1979 Ga. LEXIS 1104 (1979). When a new partner of a lessee signed an option to renew a lease, a guarantor’s emailed explanation regarding the partner’s authority did not satisfy the statute of frauds because the email was not a writing in equal dignity to that of the original lease; however, there was a genuine issue of material fact as to the partner’s apparent agency. Sage Atlanta Props., Ltd. v. Hawxhurst, 349 Ga. App. 758, 824 S.E.2d 387, 2019 Ga. App. LEXIS 129 (2019). Authority to execute mortgage must be in writing. Duke v. Culpepper, 72 Ga. 842, 1884 Ga. LEXIS 330 (1884). Authority of an agent to execute a contract or memorandum for the sale of real

estate or for the lease thereof for a period longer than one year must be evidenced by writing. Terry v. Kean, 180 Ga. 627, 180 S.E. 135, 1935 Ga. LEXIS 512 (1935); Deal v. Dickson, 232 Ga. 885, 209 S.E.2d 214, 1974 Ga. LEXIS 1125 (1974); Turnipseed v. Jaje, 267 Ga. 320, 477 S.E.2d 101, 1996 Ga. LEXIS 876 (1996). Third party seeking to compel a principal to deed real property alleged to have been acquired by written instrument with the agent must show written authority held by the agent empowering the agent to act. Dover v. Burns, 186 Ga. 19, 196 S.E. 785, 1938 Ga. LEXIS 545 (1938). When the plaintiffs’ rights in a suit for breach of contract to sell real estate must stand or fall on the contract set up by it and there was no evidence that the plaintiff-husband had authority in writing to execute the contract, nor that it was ratified in writing, nor that the defendant buyer had notice thereof and by the buyer’s subsequent conduct was estopped to deny the validity of the same, the evidence demanded a verdict for the defendant. Hubert Realty Co. v. Bland, 79 Ga. App. 321, 53 S.E.2d 691, 1949 Ga. App. LEXIS 645 (1949). Written authority to the agent must be shown to support the agent’s sale or lease of the principal’s lands. Union Camp Corp. v. Dyal, 460 F.2d 678, 1972 U.S. App. LEXIS 10518 (5th Cir.), cert. denied, 409 U.S. 849, 93 S. Ct. 56, 34 L. Ed. 2d 90, 1972 U.S. LEXIS 1323 (1972). This section requires that the agent’s power to sell land must be in writing, absent later ratification of the agent’s acts or estoppel of the agent’s principal to deny the agent’s authority. Union Camp Corp. v. Dyal, 460 F.2d 678, 1972 U.S. App. LEXIS 10518 (5th Cir.), cert. denied, 409 U.S. 849, 93 S. Ct. 56, 34 L. Ed. 2d 90, 1972 U.S. LEXIS 1323 (1972). A contract to sell land, as distinguished from authority to execute a deed to land, is not binding upon a principal if there is no written authority given the agent and the contract to sell is oral. Jones v. Sheppard, 231 Ga. 223, 200 S.E.2d 877, 1973 Ga. LEXIS 652 (1973). Evidence held insufficient. - In an action premised on allegations of a breach of a land sales contract between a group of

sellers and an investor, because the only evidence showing any authority to act as an agent for the sellers was based on hearsay, and not on a writing, and no exception applied, two of the sellers were entitled to a directed verdict against the investor pursuant to O.C.G.A. § 13-5-30(4). Dunn v. Venture Bldg. Group, Inc., 283 Ga. App. 500, 642 S.E.2d 156, 2007 Ga. App. LEXIS 93 (2007). Authority of agent to execute option contract. - Because the statute of frauds requires that an option contract for the purchase of land be in writing, the authority of an agent to execute such a contract likewise must be in writing. Garrett v. S. Health Corp. of Ellijay, Inc., 320 Ga. App. 176, 739 S.E.2d 661, 2013 Ga. App. LEXIS 151 (2013). Unauthorized conveyance of land cannot be ratified except by writing under seal. McCalla v. American Freehold Land Mtg. Co., 90 Ga. 113, 15 S.E. 687, 1892 Ga. LEXIS 133 (1892). No witnesses needed for authority to sell mortgaged property. - Contract whereby mortgagor is authorized to convey mortgaged property by agreement between the mortgagor and the mortgagee is not a power of attorney to the mortgagor to sell land of which the title is in the mortgagee, but only the consent of the lienholder to the release of the lien in case a sale is made, and it is not required by the laws of Georgia to be executed before two witnesses under former Code 1882, § 2690. Woodward v. Jewell, 140 U.S. 247, 11 S. Ct. 784, 35 L. Ed. 478, 1891 U.S. LEXIS 2460 (1891). Agent cannot execute contract containing provision requiring principal’s execution. - A proposed lease agreement negotiated by various representatives of landlord and tenant through conversations and exchanged correspondence did not constitute a binding, written agreement in view of a clause in the agreement providing that the lease would become effective “only upon execution and delivery by Landlord and Tenant.” 20/20 Vision Ctr., Inc. v. Hudgens, 256 Ga. 129, 345 S.E.2d 330, 1986 Ga. LEXIS 747 (1986). Partnership to own real estate. - Partnership formed for the purpose of acquiring interest in tracts of land must

Real Estate Transactions (Cont’d) be executed in writing. Shivers v. Sexton, 164 Ga. App. 490, 296 S.E.2d 749, 1982 Ga. App. LEXIS 2845 (1982). Spouse of seller as promisor. - Fact that promisor was seller’s husband did not negate the need for a written authorization to convey or promise to convey any interest in the seller’s land. Since the promisor had no written authorization and the buyers never asked for one, an agency was not established as a matter of law. East Piedmont 120 Assocs. v. Sheppard, 209 Ga. App. 664, 434 S.E.2d 101, 1993 Ga. App. LEXIS 950 (1993), cert. denied, No. S93C1797, 1993 Ga. LEXIS 1103 (Ga. Nov. 19, 1993). Corporate Agents Common law changed. - Sentence of this section relative to corporations changes the common-law rule. Brandon v. Pritchett, 126 Ga. 286, 55 S.E. 241, 1906 Ga. LEXIS 375 (1906). Corporations recognized as unique entities. - In codifying the “equal dignity” rule, the legislature apparently recognized that corporations are unique legal entities which must at all times act through corporate agents. Whiteway Neon-Ad, Inc. v. Opportunities Industrialization Ctr. of Atlanta, Inc., 243 Ga. 114, 252 S.E.2d 604, 1979 Ga. LEXIS 824 (1979). Legislature excepted the creation of corporate agents from the “equal dignity” rule and permitted corporations to create such agents in their usual mode of transacting business, i.e., shareholder action in the adoption of charters, bylaws, resolutions, and similar conduct vesting corporate agents with authority to act. Whiteway Neon-Ad, Inc. v. Opportunities Industrialization Ctr. of Atlanta, Inc., 243 Ga. 114, 252 S.E.2d 604, 1979 Ga. LEXIS 824 (1979). Creation of corporate agents is excepted from the “equal dignity” rule codified in O.C.G.A. § 10-6-2, which permits corporations to create such agents in their “usual mode of transacting business.” Travel Centre, Ltd. v. Starr-Mathews

Agency, Inc., 179 Ga. App. 406, 346 S.E.2d 840, 1986 Ga. App. LEXIS 1929 (1986). No sealed authority needed to execute sealed instrument. - When empowered by corporate authority, corporate agents are not required to have sealed authorization to enable the agents to execute sealed instruments on behalf of the corporation. Whiteway Neon-Ad, Inc. v. Opportunities Industrialization Ctr. of Atlanta, Inc., 243 Ga. 114, 252 S.E.2d 604, 1979 Ga. LEXIS 824 (1979); Dundon v. Forehand, 152 Ga. App. 749, 263 S.E.2d 687, 1979 Ga. App. LEXIS 3031 (1979). No written authority needed for written settlement with debtor. - When a corporation claimed that one who had been the corporation’s agent in certain transactions was indebted to it in a certain sum and sent another agent to close up its account with the agent, and the second agent took a note evidencing the amount of the indebtedness, it was competent for the agent thus authorized (there being a dispute between the agent and the debtor as to the actual amount of the debt, the debtor claiming that the debtor had evidence to show that a certain item of indebtedness should not be included in the note) to stipulate in writing, that if this evidence should be discovered, the debtor could use the evidence as against the note given; and it was not necessary to show that the authority to execute such a written agreement was itself in writing. Home Fertilizer & Chem. Co. v. Strickland, 145 Ga. 197, 88 S.E. 820, 1916 Ga. LEXIS 239 (1916). No written authority needed to fill in blanks on insurance policy for insurer. - Under this section and the insurance laws, it is not essential to the validity of a policy of insurance, which was actually signed by the president and secretary of the company by which it purported to have been issued, that the person who, in behalf of the company, after the policy had been so signed and placed in one’s hands, filled blanks therein so as to make it a complete contract, and who then delivered the contract to the insured, should have been clothed with

written authority either to fill such blanks or make the delivery. Smith v. Farmers Mut. Ins. Ass’n, 111 Ga. 737, 36 S.E. 957,

1900 Ga. LEXIS 706 (1900) (see O.C.G.A. §§ 33-24-1(1), 33-24-13, 32-24-18).

RESEARCH REFERENCES Am. Jur. 2d. 3 Am. Jur. 2d, Agency, § 11 et seq. C.J.S. 2A C.J.S., Agency, § 39 et seq. ALR. Applicability to corporate officers and employees of statute requiring agent’s authority to be in writing, 1 A.L.R. 1132. Liability of bank for losses incurred on loans or investments made on recommendation of its officers or employees, 113 A.L.R. 246. Recording laws as applied to power of attorney under which deed or mortgage is executed, 114 A.L.R. 660.

Construction and application of statute which enables real estate broker to recover commissions on oral contract with owner who has been served with written notice of the terms thereof, 148 A.L.R. 676. Advertising agency as agent of advertising medium or of advertiser, 53 A.L.R.2d 1139. Doctrine of apparent authority as applied to agent of municipality, 77 A.L.R.3d 925.