O.C.G.A. § 10-6-56 (2019)

Annotations

JUDICIAL DECISIONS Amplification of statute. - Former Code 1933, § 4-302, providing that the principal shall be bound by all the acts of the principal’s agent within the scope of the principal’s authority, was a mere amplification of former Code 1933, § 4-307, and the same was true of former Code 1933, § 4-315, insofar as it referred to scope of authority. Grant v. Hart, 197 Ga. 662, 30 S.E.2d 271, 1944 Ga. LEXIS 315 (1944). Principal bound by agent’s fraudulent conduct in its business. - Under this section, a corporation is bound by the fraudulent conduct of the corporation’s agents engaged in the corporation’s business and on that line of the business where it puts such agent to work. All deceit, misrepresentations, and falsehoods occurring in the course of business, whereby anybody is cheated, are the responsibility of the corporation. Scofield Rolling Mill Co. v. State, 54 Ga. 635, 1875 Ga. LEXIS 286 (1875). Chapter 11 debtor’s claim that the statute of limitations on the debtor’s claim seeking recovery of transfers under 11 U.S.C. § 547 was tolled until one of the debtor’s members learned that another member was misappropriating funds the member received from a lender failed as a matter of law because the debtor was an

LLC and the debtor was bound under O.C.G.A. § 10-6-56 by the fraudulent conduct of the debtor’s agents who were engaged in business where the debtor put those agents to work. Citrus Tower Blvd. Imaging Ctr., LLC v. Key Equip. Fin., Inc. (In re Citrus Tower Blvd. Imaging Ctr., LLC), 520 B.R. 892, 2014 Bankr. LEXIS 4745 (Bankr. N.D. Ga. 2014). Fraudulent conduct in obtaining contract principal accepts. - Principal who accepts a contract procured by fraudulent conduct of an agent, regardless of such agent’s authority, is bound by such fraudulent conduct of the agent in procuring such contract. W.T. Rawleigh Co. v. Kelly, 78 Ga. App. 10, 50 S.E.2d 113, 1948 Ga. App. LEXIS 668 (1948). Representations by agent exceeding authority, if benefits are retained. - If one purporting to act as agent exceeds the agent’s authority, the principal cannot ratify in part and repudiate in part, and therefore the principal cannot accept and retain the fruits of a contract so made by another in the principal’s behalf without becoming bound by the representations of the person so purporting to act for the principal in consummating the agreement. Lancaster v. Neal, 41 Ga. App.

721, 154 S.E. 386, 1930 Ga. App. LEXIS 1072 (1930); Hawthorne Indus. v. Attaway Assocs., 153 Ga. App. 155, 264 S.E.2d 663, 1980 Ga. App. LEXIS 1720 (1980). Representation of each partner when employing partnership. - When an owner of property employs a partnership as the owner’s agent to sell the property, the owner will be bound by the acts and representations of each of the partners within the real or apparent scope of the agency, although the owner may have dealt with the partnership through one of the partners only. Lancaster v. Neal, 41 Ga. App. 721, 154 S.E. 386, 1930 Ga. App. LEXIS 1072 (1930). Agent to sell may agree principal will repay purchase money. - Agent authorized to sell mules on behalf of a principal has authority to agree with a purchaser that if a mule which appears to be sick does not recover, the seller will repay the purchase money. Turner Bros. v. Manley, 14 Ga. App. 215, 80 S.E. 680, 1914 Ga. App. LEXIS 178 (1914). Right to presume insurance companies dealing through agents follow usual rules. - Under former Code 1868, §§ 2168 and 2173, those who deal with agents of foreign insurance companies have a right to presume that the companies conform to the usual rules. City Fire Ins. Co. v. Carrugi, 41 Ga. 660, 1871 Ga. LEXIS 164 (1871). Agent has duty to communicate material facts. - Since knowledge of an agent is imputed to the principal by law and only by the agent’s performance of this duty can the principal acquire actual knowledge and govern or protect oneself, an agent is under a duty to communicate to the principal all pertinent and material facts concerning any transaction entered into on behalf of the principal. Dawes Mining Co. v. Callahan, 246 Ga. 531, 272 S.E.2d 267, 1980 Ga. LEXIS 1184 (1980). Effect of dual representation by agent. - Rule set out in O.C.G.A. § 10-6-56 is not negated by the equally well-established rule that neither principal is civilly liable to the other for

the tortious acts of the dual agent of both unless there is collusion or participation in that conduct by the principal. Although the principal may be relieved of liability in tort, equity will not allow the principal to be relieved of responsibility for misrepresentations of the dual agent upon which the other principal relied to the principal’s detriment when the action is in contract. Home Materials, Inc. v. Auto Owners Ins. Co., 250 Ga. 599, 300 S.E.2d 139, 1983 Ga. LEXIS 586 (1983). One who issued and procured insurance held dual agent. - Acts of an individual in procuring liability insurance for a company, of which the individual was the chairman, and issuing liability insurance policies on behalf of an insurer of which the individual was the president, had been occurring and recurring for more than 30 years with the knowledge and consent of all parties, and made the individual a dual agent. The individual’s misconduct in procuring a policy which did not cover certain acts of employees could not be imputed to either of the principals, who were not actually at fault. Edwards-Warren Tire Co. v. Cole, Sanford & Whitmire, 188 Ga. App. 395, 373 S.E.2d 83, 1988 Ga. App. LEXIS 1048 (1988). Question of fraud is a jury question in action on agent’s false and fraudulent representations to induce purchase of mules. Johnson v. Renfroe & McCrary, 73 Ga. 138, 1884 Ga. LEXIS 69 (1884). Instruction as to agent’s representations held not erroneous. - Charge of the court that “if in the prosecution of the master’s business, the agent makes any representation with reference to the master’s business, then such statements are imputable to the master,” reasonably construed, restricted the statements of the agent to such portions of the master’s business as came within the scope of the agency, and was not error for the assigned reason that the charge did not contain such a restriction. Grant v. Hart, 197 Ga. 662, 30 S.E.2d 271, 1944 Ga. LEXIS 315 (1944).

RESEARCH REFERENCES Am. Jur. 2d. 3 Am. Jur. 2d, Agency, §§ 55 et seq., 148 et seq. C.J.S. 2A C.J.S., Agency, §§ 408, 412. ALR. Personal liability of servant or agent to third person for injuries caused by the performance or nonperformance of his duties to his employer, 20 A.L.R. 97; 99 A.L.R. 408; 96 A.L.R.2d 208. Admissibility of declarations by one involved in an accident in relation to his employment by or agency for other person, 67 A.L.R. 170; 150 A.L.R. 623. Acceptance by collection agent authorized to receive money only, of something else upon which he realizes money, as binding principal, 94 A.L.R. 784. Misrepresentations by one party’s agent, who was not authorized in that regard, as ground of rescission by other party, 95 A.L.R. 763. Liability of infant for torts of his employee or agent, 103 A.L.R. 487. Agent’s knowledge of his own embezzlement or other misconduct as imputable to principal in latter’s suit on fidelity bond or insurance, 105 A.L.R. 535. 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. Insurance company’s responsibility for torts of agent causing physical injury to person or damage to property, 116 A.L.R. 1389. Responsibility of bank for fraud of officer or agent inducing customer or debtor of bank to enter into transaction with such officer or agent personally or with third person, 117 A.L.R. 389.

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. Authority of agent who delivers commercial paper or other obligation to third person for collection, to receive payment of proceeds from the latter, so as to preclude principal’s right to enforce payment of proceeds, 163 A.L.R. 1209. Implied or apparent authority of agent selling personal property to make warranties, 40 A.L.R.2d 285. Real estate broker’s power to bind principal by representations as to character, condition, location, quantity, or title of property, 58 A.L.R.2d 10. Broker’s liability for damages or losses sustained by vendor of real property to vendee because of broker’s misrepresentations, 61 A.L.R.2d 1237. Personal liability of auctioneer to owner or mortgagee for conversion, 96 A.L.R.2d 208. Insurance agent’s statement or conduct indicating that insurer’s cancellation of policy shall not take effect as binding on insurer, 3 A.L.R.3d 1135. Insurer’s statements as to amount of dividends, accumulations, surplus, or the like as binding on insurer or merely illustrative, 17 A.L.R.3d 777. Insured’s responsibility for false answers inserted by insurer’s agent in application following correct answers by insured, or incorrect answers suggested by agent, 26 A.L.R.3d 6. Liability of bank, to other than party whose financial condition is misrepresented, for erroneous credit information furnished by bank or its directors, officers, or employees, 77 A.L.R.3d 6.