O.C.G.A. § 10-6-31 (2019)

Annotations

JUDICIAL DECISIONS Agent impliedly agrees to exercise good faith. - Law implies as a part of the contract by which every agency arises that the agent agrees to have and exercise for and toward a principal loyalty and absolute good faith. Reisman v. Massey, 84 Ga. App. 796, 67 S.E.2d 585, 1951 Ga. App. LEXIS 800 (1951). Deception bars benefit to agent. - If the agent practices upon the principal any deception (whether intentional or not) whereby the principal is misled and damaged and the agent would reap any benefit, the transaction is fraudulent, and the courts will not allow the agent to take or retain the benefit. Reisman v. Massey, 84 Ga. App. 796, 67 S.E.2d 585, 1951 Ga. App. LEXIS 800 (1951). Agent must act in fiduciary manner for compensation. - Agent is entitled to compensation during the period of time in which the agent acts in a fiduciary manner; the agent forfeits compensation only during the period of time in which the agent fails to act in a fiduciary manner. E.H. Crump Co. v. Millar, 194 Ga. App. 687, 391 S.E.2d 775, 1990 Ga. App. LEXIS 291 (1990), cert. denied, No. S90C0828, 1990 Ga. LEXIS 689 (Ga. Apr. 12, 1990). Breach of duty of loyalty. - Although the language of O.C.G.A. § 10-6-31 states that if an agent has violated the agent’s engagement, the agent shall be entitled to no commission, this provision, by its very terms, can apply only in cases where an employee or agent breaches the duty of loyalty. Crippen v. Outback Steakhouse Int’l, L.P., 321 Ga. App. 167, 741 S.E.2d 280, 2013 Ga. App. LEXIS 333 (2013). Agent’s breach forfeits right to commissions. - Any breach of the agent’s implied contract on the agent’s part forfeits the agent’s right to commissions. Reisman v. Massey, 84 Ga. App. 796, 67 S.E.2d 585, 1951 Ga. App. LEXIS 800 (1951). Agent’s fault or lack thereof. - The law requires utmost good faith on the part

of an agent with a principal when undertaking to carry out the contract of agency, and if the agent, through no fault of the principal, fails to perform the duties for which the agent has been employed, or when, through the agent’s fault, by reason of fraud perpetrated by the agent, a contract which the agent has negotiated for a 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. Rood v. Anchors, 42 Ga. App. 76, 155 S.E. 65, 1930 Ga. App. LEXIS 237 (1930). Agent retained right to compensation. - Trial court erred in granting summary judgment to a home seller and against a realtor in construing the unambiguous language in the brokerage agreement at issue, which was for a definite term and was not terminable at will; moreover, although a sale was not consummated, the realtor remained entitled to the realtor’s six percent commission, and the seller remained obligated to pay that amount, which was the proper measure of damages. Ben Farmer Realty, Inc. v. Owens, 286 Ga. App. 678, 649 S.E.2d 771, 2007 Ga. App. LEXIS 768 (2007), cert. denied, No. S07C1820, 2008 Ga. LEXIS 81 (Ga. Jan. 7, 2008). Principal may recover agent’s compensation upon discovering failure to perform. - 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 the agent’s 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. Rood v. Anchors, 42 Ga. App. 76, 155 S.E. 65, 1930 Ga. App. LEXIS 237 (1930). Trial court incorrectly relied on the law firm’s failure to show that the firm in-

curred a loss or that the former managing member of the law firm obtained a benefit from the former managing member’s efforts to market the former managing member’s own professional corporation while working for the law firm when it granted summary judgment to the former managing member on the law firm’s claim that the former managing member breached the former managing member’s fiduciary duty to the law firm through such conduct; and the law firm was entitled to recover compensation the firm paid to the former managing member during the time the former managing mem-

ber breached the fiduciary duty. Helms & Greene, LLC v. Willis, 333 Ga. App. 396, 773 S.E.2d 491, 2015 Ga. App. LEXIS 422 (2015), cert. denied, No. S15C1833, 2015 Ga. LEXIS 728 (Ga. Oct. 5, 2015). Indemnification of agent for expenses. - General rule is that, if one is employed or directed by another to do an act in the other’s behalf, the law implies a promise of indemnity by the principal for expenditures incurred as a proximate consequence of the good faith execution of the agency. Dollar v. First Bank, 153 Ga. App. 789, 266 S.E.2d 566, 1980 Ga. App. LEXIS 1982 (1980).

RESEARCH REFERENCES Am. Jur. 2d. 3 Am. Jur. 2d, Agency, § 203 et seq. C.J.S. 2A C.J.S., Agency, § 328 et seq. ALR. Right of agent to offset his own claim against collection made for principal, 2 A.L.R. 132. Right of one selling on commission as affected by principal’s refusal to fill order, 12 A.L.R. 150. Rights and remedies upon cancellation of sales agency, 32 A.L.R. 210; 52 A.L.R. 546; 89 A.L.R. 252. Right, under contract of employment providing for commissions based on amounts collected, to commissions on amounts collected after termination of employment or discharge for cause, upon business effected during term, 65 A.L.R. 993. Duty and liability of former employee to former employer in respect of transactions or matters pending and uncompleted at termination of employment, 100 A.L.R. 684. What change affecting corporation satisfies condition of contract providing compensation for effecting sale of corporate stock or a specified change in the corporate structure or organization, 101 A.L.R. 1222. Employee’s or agent’s acceptance of bonus, gratuity, or other personal benefit from one with whom he deals on employer’s or principal’s account as affecting his right to recover wages, salary, or commissions, 102 A.L.R. 1115.

Principal’s right to recover commissions paid by him or by third person to unfaithful agent, 134 A.L.R. 1346. Real estate broker’s right to recover damages in tort upon ground that he was wrongfully prevented from earning or collecting commissions, 146 A.L.R. 1417. Right of agent or broker, employed to sell personalty on commission, to commissions on sales made or consummated by his principal or another agent, 12 A.L.R.2d 1360. Broker’s right to commission where customer repudiates or fails to complete contract or promise which is oral or not specifically enforceable, 12 A.L.R.2d 1410. What deviation in prospective vendee’s proposal from vendor’s terms precludes broker from recovering commission for producing a ready, willing, and able vendee, 18 A.L.R.2d 376. Broker’s right to commission on sales consummated after termination of employment, 27 A.L.R.2d 1348. “Exclusive right to sell” and other terms in real estate broker’s contract as excluding owner’s right of sale, 88 A.L.R.2d 936. Personal liability of servant or agent for advances or withdrawals in excess of commissions earned, bonus, or share of profits, 32 A.L.R.3d 802. Right of mortgage broker to commission where principal violated conditions of agreement, 45 A.L.R.3d 1326. Measure of damages recoverable by loan broker for breach of brokerage contract, 67 A.L.R.3d 1069.

Validity, construction, and effect of provision in exclusive listing agreement for

payment of commission on termination by owner, 69 A.L.R.3d 1270.