O.C.G.A. § 10-6-21 (2019)

Annotations

Cross references. Authority of attorney to act on behalf of client, § 15-19-5 et seq.

Law reviews. For article, “Theories of Stockbroker and Brokerage Firm Liability,” see 9 Ga. St. B. J. 12 (2004). For annual survey of real property law, see 57 Mercer L. Rev. 331 (2005).

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION POWER COUPLED WITH INTEREST WHEN PRINCIPAL BOUND BY AGENT’S ACT 1. GENERALLY 2. ACT OF SUBAGENT APPOINTED BY AGENT General Consideration Agent must follow principal’s instructions. - When the directions to an agent are clear and well defined, it is the agent’s duty to follow the directions faithfully, provided this may be lawfully done; although the agent is, in the absence of instructions, bound to follow the established usage or mode of dealing, yet

no custom or usage will authorize a departure from positive instructions; the instructions of the principal make the law by which the agent is governed. J. Day & Co. v. Crawford, 13 Ga. 508, 1853 Ga. LEXIS 121 (1853); McLendon v. Wilson, Callaway & Co., 52 Ga. 41, 1874 Ga. LEXIS 234 (1874); Hatcher & Baldwin v. Comer & Co., 73 Ga. 418, 1884 Ga. LEXIS

General Consideration (Cont’d) 140 (1884); Central of Ga. Ry. v. Felton, 110 Ga. 597, 36 S.E. 93, 1900 Ga. LEXIS 595 (1900). Specific instructions control general authority. - If specific instructions as to a particular matter have been given, the agent is charged with strict compliance with such instructions, no matter how broad the general powers as agent may otherwise have been. Lovejoy v. Lamar, 20 Ga. App. 499, 93 S.E. 153, 1917 Ga. App. LEXIS 953 (1917). Power of attorney did not create fiduciary relationship. - Limited power of attorney given by insured to an insurance premium finance company authorizing the company to cancel policies and perform certain other duties related thereto did not create a fiduciary relationship between the insured and the company. Gill Plumbing Co. v. Imperial Premium Fin., Inc., 213 Ga. App. 754, 445 S.E.2d 840, 1994 Ga. App. LEXIS 702 (1994). Violation or nonperformance breaches contract and fiduciary obligations. - 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. Cutcliffe v. Chesnut, 122 Ga. App. 195, 176 S.E.2d 607, 1970 Ga. App. LEXIS 833 (1970). Conversion. - If personal property has been by the property’s owner delivered to an agent with power of attorney in the agent to sell the property and convey title, and a limitation on the terms of sale is placed on the agent, and the agent sells the property in violation of these terms, neither the agent nor a subagent, who sells the property for the agent is guilty of a conversion of the property; and since title and right to possession pass out of the owner, the owner cannot recover in trover. Noras v. McCord, 59 Ga. App. 311, 200 S.E. 513, 1938 Ga. App. LEXIS 495 (1938). Rescission remedy for breach of contract obligations. - Rescission of an agency agreement is an available

remedy to the principal 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. Cutcliffe v. Chesnut, 122 Ga. App. 195, 176 S.E.2d 607, 1970 Ga. App. LEXIS 833 (1970). Agent liable if injury results. - If injury results to the principal from a failure of the agent to observe the principal’s instructions, the agent is liable therefor to the principal. J. Day & Co. v. Crawford, 13 Ga. 508, 1853 Ga. LEXIS 121 (1853); Central Ga. Bank v. Cleveland Nat’l Bank, 59 Ga. 667, 1877 Ga. LEXIS 368 (1877); Cason v. Heath, 86 Ga. 438, 12 S.E. 678, 1890 Ga. LEXIS 275 (1890); Georgia Southern & Florida Ry. v. Jossey, 105 Ga. 271, 31 S.E. 179, 1898 Ga. LEXIS 499 (1898); Cave v. Lougee & Zimmer, 134 Ga. 135, 67 S.E. 667, 1910 Ga. LEXIS 134 (1910). Agent liable regardless of degree of care. - If 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. Cutcliffe v. Chesnut, 122 Ga. App. 195, 176 S.E.2d 607, 1970 Ga. App. LEXIS 833 (1970). Intent to benefit principal. - Primary obligation of an agent or factor, whose authority is limited by instructions, is to adhere faithfully to those instructions; for if the agent unnecessarily exceeds the agent’s commission or risks the agent’s principal’s effects without authority, the agent renders oneself responsible to the principal for the consequences of the agent’s act; and if loss ensues, it furnishes no defense to the agent that the agent intended the benefit of the principal. Cutcliffe v. Chesnut, 122 Ga. App. 195, 176 S.E.2d 607, 1970 Ga. App. LEXIS 833 (1970). Agent not liable if principal ratifies or fails to disapprove. - If an agent deviated from instructions, and forthwith informed the agent’s principal, and the principal, with full knowledge of the facts, either ratifies the act, in terms, or fails, within a reasonable time, to disapprove, the agent is not liable for the deviation from the agent’s instructions. Bray & Bro.

v. Gunn, 53 Ga. 144, 1874 Ga. LEXIS 424 (1874). Agent not liable if no actual damage. - If an agent, such as a cotton factor, who has been instructed by the cotton factor’s principal to sell cotton belonging to the latter immediately and for the best price obtainable, fails to sell the cotton and thereby violates the contract with the principal, no actual damage is suffered by the principal when the cotton has not decreased in value from the time when the agent in the due exercise of the agent’s commission should have sold the cotton and the time when the principal learned of the agent’s violation of the agreement to sell and should have affirmed or disapproved of the agent’s conduct in failing to sell. Vinson v. Kinney & Co., 30 Ga. App. 731, 119 S.E. 217, 1923 Ga. App. LEXIS 654 (1923). No liability if agents’ act in accordance with general custom of trade. - If cotton factors sued customers for advances made on cotton consigned to the cotton factors for sale, the customers could not set off damages because of a sale of the cotton for a lower price than the cotton factors had instructed it sold for, when, in accordance with the general custom and usage of the trade at the place of sale, the cotton was sold after the customers had failed to comply with repeated notices from the factors to deposit with them more margins and when, in the opinion of the factors, the cotton was not a sufficient security for the balance due them. Leffler Co. v. Pearson & Son, 17 Ga. App. 57, 86 S.E. 256, 1915 Ga. App. LEXIS 257 (1915). Questions of fact. - Questions of the existence and extent of an agent’s authority are generally for the triers of fact. Allen & Bean, Inc. v. American Bankers Ins. Co., 153 Ga. App. 617, 266 S.E.2d 295, 1980 Ga. App. LEXIS 1924 (1980); Am. Global Dev. Group v. Sasser & Weatherford, Inc., 249 Ga. App. 479, 548 S.E.2d 465, 2001 Ga. App. LEXIS 533 (2001). Issues of material fact as to validity of agent’s transfer of property. - Genuine issues of material fact existed as to the validity of a property transfer

because there was evidence that the actions of the agent in transferring the property were in contravention of the principal’s actions and intent and were attempts to benefit the agent’s own position. Harris v. Peterson, 318 Ga. App. 382, 734 S.E.2d 93, 2012 Ga. App. LEXIS 918 (2012). Abuse of power of attorney in dealing with farm quotas. - In a dispute involving a family farm partnership, the trial court erred by granting summary judgment to the children/grandchildren as to the claim regarding the peanut and tobacco quotas and assignments because certain claims were not untimely since genuine issues of fact existed as to whether a son inappropriately used a power of attorney as to the quotas and assignments and the father/grandfather sought to recover damage to personalty. Godwin v. Mizpah Farms, LLLP, 330 Ga. App. 31, 766 S.E.2d 497, 2014 Ga. App. LEXIS 808 (2014). Burden of proving specific instructions. - If the contention of the principal is not that the agent exceeded the scope of the agent’s general authority, but that the agent violated specific instructions as to a particular matter, the burden is upon the principal to show that such instructions were given. Lovejoy v. Lamar, 20 Ga. App. 499, 93 S.E. 153, 1917 Ga. App. LEXIS 953 (1917). Power Coupled with Interest Agent may have interest. - That an agent is not prohibited from having an interest is evident from former Code 1933, §§ 4-202 and 3575. Pendley v. Jessee, 134 Ga. App. 138, 213 S.E.2d 496, 1975 Ga. App. LEXIS 1934 (1975). Agent who advances purchase price has interest. - Agent to sell becomes an agent with an interest when the agent advances the amount of the purchase price of the goods sold. Southern Trading Corp. v. Benchley Bros., Inc., 34 Ga. App. 625, 130 S.E. 691, 1925 Ga. App. LEXIS 450 (1925). Unreasonable instructions may be disregarded. - Ordinarily, an agent must be guided wholly by the wishes or directions expressed by a principal, but in cases of an agency coupled with an

Power Coupled with Interest (Cont’d) interest, unreasonable instruction, detrimental to the agent’s interests, may be disregarded. Gordon & Co. v. Cobb, 4 Ga. App. 49, 60 S.E. 821, 1908 Ga. App. LEXIS 194 (1908). If an agency is coupled with an interest and the principal gives to the agent unreasonable instructions detrimental to the agent’s interest, the agent may disregard the instructions and act for the agent, provided the agent acts in good faith, and the principal would be bound thereby. Southern Trading Corp. v. Benchley Bros., Inc., 34 Ga. App. 625, 130 S.E. 691, 1925 Ga. App. LEXIS 450 (1925). Bonded messenger. - If an express company employed a messenger and required the messenger to give bond, which provided that the messenger should “well and truly perform all the duties required of me in any position . . ., and indemnify and save harmless the said company from all liability on account of my fault or neglect,” as between the company and the messenger, the messenger’s liability was that of an agent and depended on the messenger’s diligence or negligence, and it was erroneous to charge the latter part of this section, as the power of this agent to act in this business was not coupled with any interest in the sense of this section. Southern Express Co. v. Frink, 67 Ga. 201, 1881 Ga. LEXIS 153 (1881). When Principal Bound by Agent’s Act 1. Generally Knowledge that agent exceeded authority. - Principal is not bound by the acts of an agent when those acts are beyond the scope of the agent’s authority and the person dealing with the agent knows thereof. Boles v. Hartsfield Co., 50 Ga. App. 442, 178 S.E. 416, 1935 Ga. App. LEXIS 354 (1935). Illegal acts. - Unless a borrower shows affirmatively that one who loaned the borrower money at the highest legal rate assented to the exaction of a commission by the latter’s agent, it cannot

be said that the lender ever understood and agreed that the collateral agreement between the agent and the borrower should be considered and become a part of the contract of loan. The borrower has no right to assume that even a general agent has power to bind a principal by such an agreement; for, the same being illegal and prohibited by law, the borrower is put upon immediate notice that the agent is transcending the agent’s general powers and going beyond the legal scope of the agency. Burnett v. Lewis, 40 Ga. App. 525, 150 S.E. 462, 1929 Ga. App. LEXIS 626 (1929). Ratification. - Principal is not chargeable with knowledge as to acts of an agent beyond the scope of the latter’s authority, nor in anywise bound thereby; but the principal must be shown by the party so alleging to have either tacitly or expressly assented to or ratified such acts on the part of the agent before they can be considered as having any binding effect. Burnett v. Lewis, 40 Ga. App. 525, 150 S.E. 462, 1929 Ga. App. LEXIS 626 (1929). Estoppel to deny liability. - Purchaser of personal property from one who is not the true owner acquires no title against the true owner by reason of the bona fides of the purchase, when the purchaser purchased from one who is an utter stranger to the title and who can convey no title, except if there may be some statute otherwise, or if the true owner, upon some principle of estoppel, would be precluded from asserting title. However, the mere permission by the owner for the agent to have possession of the truck would not be such an act as would estop the owner. Berger v. Noble, 81 Ga. App. 34, 57 S.E.2d 844, 1950 Ga. App. LEXIS 814 (1950). Although a principal is not bound by a sealed instrument signed by an agent without authority to execute the instrument under seal, yet, having allowed the opposite party to act upon the instrument in a way to be prejudiced and to one’s detriment but to the benefit of the principal, the principal is estopped from denying the validity of the instrument, and the court erred in excluding the instrument from the evidence and in directing the verdict for the plaintiff. Ferguson v.

Carter, 208 Ga. 143, 65 S.E.2d 600, 1951 Ga. LEXIS 305 (1951). Liability for tort of driver, injuring driver’s guest. - If agent, servant, or employee of defendant, while driving automobile in and about defendant’s business and in performance of the services for which the agent was hired or which the agent contracted to perform for the agent’s principal or master, invites a third person to ride with the agent as a guest and such third person is injured by reason of the negligence of the driver, no right of action arises in favor of such third person against the owner of the automobile for a tort committed by the driver as the owner’s agent, servant, or employee. Beard v. Oliver, 52 Ga. App. 229, 182 S.E. 921, 1935 Ga. App. LEXIS 118 (1935). Examination of special agent’s authority. - In the case of a special agency for a particular purpose, it is the duty of the one dealing with the agent to examine the agent’s authority. Van Arsdale v. Joiner, 44 Ga. 173, 1871 Ga. LEXIS 345 (1871). Broker is deemed special agent. - Under former Code 1882, §§ 2184, 2194, 2196, a broker was a special agent and derived the broker’s power and authority to bind a principal from the instruction given to the agent by a principal. Clark & Nunnally v. Cumming & Co., 77 Ga. 64, 1886 Ga. LEXIS 287 (1886). Power to borrow must be express. - It was held under former Civil Code 1895, §§ 3004 and 3021, which laid down the rule as to how the principal was bound by the acts of an agent, that authority to borrow money was among the most dangerous powers which a principal can confer upon an agent and must be created by express terms or be necessarily implied from the very nature actually created. Exchange Bank v. Thrower, 118 Ga. 433, 45 S.E. 316, 1903 Ga. LEXIS 580 (1903). Agency to sell does not necessarily carry with it authority to collect. - Agent must act within the authority granted the agent, and persons dealing with any agent appointed for a particular purpose are bound to inquire as to the extent of the agent’s authority. Miles v. Smith, 37 Ga. App. 619, 141 S.E. 314, 1928 Ga. App. LEXIS 530 (1928).

Power to make restricted endorsement does not authorize general endorsement in blank. Exchange Bank v. Thrower, 118 Ga. 433, 45 S.E. 316, 1903 Ga. LEXIS 580 (1903). Agent’s authority limited by policy ends with cancellation thereof. - If authority of an agent is limited by the terms of the group insurance policy and such policy is cancelled, such agent is without authority to continue such cancelled policy in force, unless such continuation is accepted and agreed to by the officers of the company empowered so to do or there has been an acceptance by the company of payments of premiums made for such purpose, and such agent is without authority to constitute the employer in group insurance policy the agent of the company to receive premiums for the employer. Lancaster v. Travelers Ins. Co., 54 Ga. App. 718, 189 S.E. 79, 1936 Ga. App. LEXIS 739 (1936). 2. Act of Subagent Appointed by Agent Acts of unauthorized assistant. - Relationship of master and servant cannot be imposed upon a person without the person’s consent, express or implied; hence, the defendant was free to select defendant’s own servant and was responsible for the acts of the servant within the scope of employment, but the defendant was not responsible for the act of an assistant permitted without the defendant’s authority to act for the defendant. Carter v. Bishop, 209 Ga. 919, 76 S.E.2d 784, 1953 Ga. LEXIS 444 (1953). Driver appointed by agent. - Unless a primary agent, expressly or impliedly authorized by the principal as owner of an automobile to drive it on the business of the owner, is himself expressly or impliedly authorized to appoint a subagent for that purpose, the owner will not be liable for the negligence of the latter. Carter v. Bishop, 209 Ga. 919, 76 S.E.2d 784, 1953 Ga. LEXIS 444 (1953). Ratification of act of employment. - If a servant, who is employed to do certain work for a master, employs another person to assist the servant, the master is liable for the negligence of the

When Principal Bound by Agent’s Act (Cont’d) 2. Act of Subagent Appointed by Agent (Cont’d) assistant only when the servant had authority, express or implied, to employ the assistant, or when the act of employment is ratified by the master. Carter v. Bishop, 209 Ga. 919, 76 S.E.2d 784, 1953 Ga. LEXIS 444 (1953). If one who is employed to drive a motor vehicle, without the consent of and against specific instructions of the master engages a substitute driver, the master is not liable for the negligence of the substitute driver unless the act of the servant employing the substitute driver is ratified

by the master. Carter v. Bishop, 209 Ga. 919, 76 S.E.2d 784, 1953 Ga. LEXIS 444 (1953); Burke County Bd. of Educ. v. Raley, 104 Ga. App. 717, 123 S.E.2d 272, 1961 Ga. App. LEXIS 780 (1961). Agent not authorized to delegate authority to sell. - Agent for the sale of personal property has only the authority to sell. If an agent, who is authorized to sell trucks but not authorized to delegate such authority to another, undertakes to exceed the agent’s authority by delivering a truck to an automobile dealer to sell, the agent was acting without authority and no title to the truck passed. Berger v. Noble, 81 Ga. App. 34, 57 S.E.2d 844, 1950 Ga. App. LEXIS 814 (1950).

RESEARCH REFERENCES Am. Jur. 2d. 3 Am. Jur. 2d, Agency, §§ 162 et seq., 213 et seq. C.J.S. 2A C.J.S., Agency, §§ 295, 300. ALR. Liability on the contract of one who without authority assumes to contract for another, 60 A.L.R. 1348. Contract for development and sale of land as creating a power coupled with interest or supporting an equitable lien, 65 A.L.R. 1080. Implied or ostensible authority of officer, agent, or employee to engage medical services, 71 A.L.R. 638. Power to mortgage as authorizing insertion of power of sale in mortgage, 72 A.L.R. 158. Authority of claim agent as regards terms or condition of settlement, 87 A.L.R. 1277. Power of sale as including power to mortgage, 92 A.L.R. 882. Agent’s authority to collect or receive payment as including implied, apparent, or ostensible authority to do so before maturity of obligations, 100 A.L.R. 389. Authority, or apparent authority, of agent to receive payment for commodities which he has authority, or apparent authority, to sell, or for which he is authorized, or apparently authorized, to find a market, 105 A.L.R. 718.

Sole actor doctrine where officer or agent of corporation acting adversely to it is its sole representative in the transaction, 111 A.L.R. 665. Profession at time of act or contract to be acting for another as a necessary condition of its ratification by latter, 124 A.L.R. 893. Gross or net profits as the measure of liability of agent or employee who has engaged in transactions on his own account in violation of his duty to his principal, 126 A.L.R. 1357. What amounts to ratification by principal or master of libel or slander by agent or servant, 139 A.L.R. 1066. Variance between allegation and proof as regards identity of servant or agent for whose acts defendant is sought to be held responsible, 139 A.L.R. 1152. Agent’s disregard of principal’s instructions where power coupled with an interest, 162 A.L.R. 1182. Competence, as against principal, of statements by agent to prove scope, as distinguished from fact, of agency, 3 A.L.R.2d 598. Rights and remedies where broker or agent, employed to purchase personal property, buys it for himself, 20 A.L.R.2d 1140. Agent’s authority to agree contemporaneously with sale to repurchase or resell or for return of personal property, 34 A.L.R.2d 510.

Authority of agent to endorse and transfer commercial paper, 37 A.L.R.2d 453. Salesman’s power to pledge employer’s or principal’s personal property, 49 A.L.R.2d 1271. Advertising agency as agent of advertising medium or of advertiser, 53 A.L.R.2d 1139. Implied or apparent authority of agent to purchase or order goods or merchandise, 55 A.L.R.2d 6. Truant or attendance officer’s liability for assault and battery or false imprisonment, 62 A.L.R.2d 1328. Liability of auctioneer or clerk to buyer as to title, condition, or quality of property sold, 80 A.L.R.2d 1237. Agent’s authority to execute warrant of attorney to confess judgment against principal, 92 A.L.R.2d 952. Liability of insurance agent, for expo-

sure of insurer to liability, because of failure to cancel or reduce risk, 35 A.L.R.3d 792. Liability of insurance agent, for exposure of insurer to liability, because of failure to fully disclose or assess risk or to report issuance of policy, 35 A.L.R.3d 821. Liability of insurance agent, for exposure of insurer to liability, because of issuance of policy beyond authority or contrary to instructions, 35 A.L.R.3d 907. Discharge of debtor who makes payment by delivering checks payable to creditor to latter’s agent, where agent forges creditor’s signature and absconds with proceeds, 49 A.L.R.3d 843. Principal’s liability for punitive damages because of false arrest or imprisonment, or malicious prosecution, by agent or employee, 93 A.L.R.3d 826.