O.C.G.A. § 10-6-62 (2019)

Annotations

JUDICIAL DECISIONS Undisclosed principal is entitled to benefits of agent’s contracts and acts. - Governing principle is that an undisclosed principal, as the ultimate party in interest, is entitled, against third persons, to all advantages and benefits of acts and contracts of the principal’s agent. United States Fid. & Guar. Co. v. Coastal Serv., Inc., 103 Ga. App. 133, 118 S.E.2d 710, 1961 Ga. App. LEXIS 884 (1961). Injury to other party by substitution. - If an agent makes a contract for the agent’s principal but conceals the fact that the agent is an agent, the principal may claim the benefits of the contract so far as the principal can do so without injury to the other party by the substitution of the principal for the agent. Planters Gin & Whse. Co. v. Pitts Banking Co., 24 Ga. App. 731, 102 S.E. 183, 1920 Ga. App. LEXIS 492 (1920). Undisclosed principal may sue upon simple contract made in agent’s name. - If a simple contract, oral or written was made with an agent in the agent’s own name, and the principal was undisclosed, the latter may claim its fruits and sue upon it under former Code 1873, §§ 2197 and 2204, even though the agent also might sue. Spain v. W.H. Beach & Son, 52 Ga. 494, 1874 Ga. LEXIS 331 (1874); Atlanta & W. Point R.R. v. Texas Grate Co., 81 Ga. 602, 9 S.E. 600, 1888 Ga. LEXIS 287 (1888). Suit on contract disclosing agency but not principal’s name. - Principal may sue for breach of a written contract entered into by the principal’s agent, if the instrument disclosed on the instrument’s face that the agent was contracting as such and fails to disclose the name of the principal. Washington Mfg. Co. v. Callaway, 144 Ga. 89, 86 S.E. 225, 1915 Ga. LEXIS 60 (1915). Undisclosed principal may recover damages for delay in delivery of telegram sent by agent. - If an agent sends a telegram for an undisclosed principal, the principal may maintain an action in the principal’s own name for damages resulting from unreasonable delay in the telegram’s transmission or

delivery. Ruan v. Gunn, 77 Ga. 53, 1886 Ga. LEXIS 282 (1886); Rosser, Armistead & Co. v. Darden, 82 Ga. 219, 7 S.E. 919, 1888 Ga. LEXIS 394 (1888); Dodd Grocery Co. v. Postal Telegraph-Cable Co., 112 Ga. 685, 37 S.E. 981, 1901 Ga. LEXIS 56 (1901); Propeller Tow-Boat Co. v. Western Union Tel. Co., 124 Ga. 478, 52 S.E. 766, 1905 Ga. LEXIS 754 (1905); Seifert v. Western Union Tel. Co., 129 Ga. 181, 58 S.E. 699, 1907 Ga. LEXIS 328 (1907). Undisclosed principal’s rights are subject to claims against agent. - Rights of an undisclosed principal are subject to claims acquired in good faith against the agent. Standard Brick & Tile Co. v. Posey, 56 Ga. App. 686, 193 S.E. 613, 1937 Ga. App. LEXIS 205 (1937). Defenses. - If the agency has been concealed, the party dealing with the agent may set up any defense against the principal which the party has against the agent. United States Fid. & Guar. Co. v. Coastal Serv., Inc., 103 Ga. App. 133, 118 S.E.2d 710, 1961 Ga. App. LEXIS 884 (1961). Third person who contracts in ignorance of the existence of a principal can set up against the principal, who sues upon the contract, any defenses and equities which the third person could have set up against the agent, had the agent’s been in reality the principal suing on the principal’s own behalf. Standard Brick & Tile Co. v. Posey, 56 Ga. App. 686, 193 S.E. 613, 1937 Ga. App. LEXIS 205 (1937). Third person must have no notice of agency for application of defenses. - In a suit by principal, in order for third person to avail oneself of any equities, defenses, setoffs, or counterclaims one has against agent only, one must be innocent of any knowledge of facts and circumstances which would put a reasonably prudent person on inquiry that one is dealing with an agent; and, although the agent acts in the agent’s own name, if the third person knows or has reason to believe that the third person is dealing with one who is agent of another, the third person cannot successfully set up such a defense or setoff. Standard Brick & Tile Co. v. Posey, 56 Ga. App. 686,

193 S.E. 613, 1937 Ga. App. LEXIS 205 (1937). If principal gives indicia of authority to sell, principal cannot follow property. - If one gives to another such evidence of the right of selling the goods of the former as, according to the custom of trade or the common understanding of the world, usually accompanies the authority of disposal, or has given the external indicia of the right of disposing of the property, one loses the right of following it; a sale to a fair purchaser divests the first title, and the authority to sell, whether real or apparent, is good against the party who gave it, though the confidence of the principal is abused by the possessor of such indicia. Rosser, Armistead & Co. v. Darden, 82 Ga. 219, 7 S.E. 919, 1888 Ga. LEXIS 394 (1888). Payment to a principal will discharge an obligation assumed by another to the agent of such principal. Trust Co. v. Mobley, 40 Ga. App. 468, 150 S.E. 169, 1929 Ga. App. LEXIS 589 (1929). Payment to third person nominal payee must remit to. - If a mere nominal payee is bound on receiving money to pay it over to a third person, the debtor may be relieved by making payment directly to such third person. Trust Co. v. Mobley, 40 Ga. App. 468, 150 S.E. 169, 1929 Ga. App. LEXIS 589 (1929). Sale of intoxicating liquors to an agent may be alleged as a sale to the principal. Kemp v. State, 120 Ga. 157, 47 S.E. 548, 1904 Ga. LEXIS 475 (1904). Proof of undisclosed principal by parol evidence. - If fact of agency is concealed, it is necessary ordinarily to prove by parol evidence the existence of the undisclosed principal. United States Fid. & Guar. Co. v. Coastal Serv., Inc., 103 Ga. App. 133, 118 S.E.2d 710, 1961 Ga. App. LEXIS 884 (1961). Although parol evidence is inadmissible to add to, take from, or vary a written contract, parol evidence may be used in cases involving undisclosed principals in ordinary contracts which are not under seal; if the rule were otherwise, this section, which provides that the principal shall have advantage of its agent’s contracts in the same manner as the principal

shall be bound by them, could not be applied in all cases. United States Fid. & Guar. Co. v. Coastal Serv., Inc., 103 Ga. App. 133, 118 S.E.2d 710, 1961 Ga. App. LEXIS 884 (1961). If there was nothing in the record to show that the contract for the purchase of a car was under seal, the testimony of the agent that the agent was acting for an undisclosed principal was properly admitted; thus, the fact that the agency was not disclosed at the time of the contract would not prevent the principal from enforcing the contract in the principal’s own name. United States Fid. & Guar. Co. v. Coastal Serv., Inc., 103 Ga. App. 133, 118 S.E.2d 710, 1961 Ga. App. LEXIS 884 (1961). When issue of who is bound is question of fact. - Trial court erred by granting summary judgment to a private entity operating a county animal control shelter because genuine issues of material fact existed as to whether the shelter could be held liable for the euthanization of a hospitalized patient’s dogs based upon the theory of promissory estoppel since while the releases may have authorized the shelter to euthanize the dogs, the shelter was also authorized to subsequently enter into a promise not to do so; thus, the patient, as a principal, would be entitled to damages suffered as a result of representations made to the plaintiff’s authorized agent acting on the plaintiff’s behalf to protect the well-being of the plaintiff’s dogs. Greenway v. Northside Hosp., 317 Ga. App. 371, 730 S.E.2d 742, 2012 Ga. App. LEXIS 706 (2012), rev’d, 294 Ga. 112, 751 S.E.2d 351, 2013 Ga. LEXIS 951 (2013), vacated in part, 328 Ga. App. 473, 763 S.E.2d 488, 2014 Ga. App. LEXIS 337 (2014). Summary judgment improper. - Complaint alleging that an agreement had been reached between plaintiff’s neighbor and a representative of an animal control facility for the safekeeping of plaintiff’s dogs while plaintiff was hospitalized set forth a claim for promissory estoppel, O.C.G.A. § 13-3-44(a), and plaintiff, as a principal, would be entitled to damages suffered as a result of representations made to the plaintiff’s neighbor, the plaintiff’s authorized agent acting on the plaintiff’s

behalf, to protect the well-being of the plaintiff’s dogs. Thus, a grant of summary judgment in favor of the operator of the animal control facility was reversed. Greenway v. Northside Hosp., 317 Ga. App. 371, 730 S.E.2d 742, 2012 Ga. App.

LEXIS 706 (2012), rev’d, 294 Ga. 112, 751 S.E.2d 351, 2013 Ga. LEXIS 951 (2013), vacated in part, 328 Ga. App. 473, 763 S.E.2d 488, 2014 Ga. App. LEXIS 337 (2014).

RESEARCH REFERENCES Am. Jur. 2d. 3 Am. Jur. 2d, Agency, §§ 290 et seq., 298 et seq. C.J.S. 2A C.J.S., Agency, § 487 et seq. 3 C.J.S., Agency, § 502 et seq. 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. Liability of undisclosed principal on sealed contract, 32 A.L.R. 162. Right of defendant in action by undisclosed principal to avail himself of defenses or setoffs that would have been available in an action by the agent in his own right on the contract, 53 A.L.R. 414.

Concealment of fact that party to contract was acting for undisclosed principal as fraud which will toll statute of limitations, 114 A.L.R. 864. Right to join agent and undisclosed principal in same action, 118 A.L.R. 701. Exceptions to rule which permits suit by or against undisclosed principal, 130 A.L.R. 664. Personal liability of auctioneer to owner or mortgagee for conversion, 96 A.L.R.2d 208. Agency: Anti-assignment clause in contract as precluding enforcement by undisclosed principal, 75 A.L.R.3d 1184. Rights to expirations as between insurer and insurance agent or broker, 88 A.L.R.3d 1142.