Williams v. Moore-Gaunt Co.

60 S.E. 372, 3 Ga. App. 756, 1908 Ga. App. LEXIS 424

Opinion

Powell, J.

(After stating the foregoing facts.)

1. The relationship of principal and agent is fiduciary in character, and imposes upon the parties the duties of exercising toward each other the utmost good faith. Civil Code, §4030. The law implies, as a part of the contract -by which every agency arises, that the agent agrees to have and exercise, for and toward his principal, loyalty and absolute good faith; and any breach of this implied contract on his part forfeits his right to commission. Civil Code, §3014; Gann v. Zettler, ante, 589 (60 S. E. 283); Ramspeck v. Pattillo, 104 Ga. 772 (30 S. E. 962, 42 L. R. A. 197, 69 Am. St. R. 197); Sessions v. Payne, 113 Ga. 955 (39 S. E. 325). 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. Hawk v. Leverett, 71 Ga. 675; Sims v. Ferrill, 45 Ga. 585; Civil Code, §§3669, 4026. All sane men are supposed to know the law, but some do not; they are likewise supposed to be capable of. protecting their own interests in the contracts they make, but some are not; hence those who do not know the law, or who are not capable of protecting their own interests in the making of contracts, are sometimes put to the necessity of employing skilled agents, in order that they majr enjoy those advantages which the law presumes are common to all men, but which the law realizes they do not always personally possess. The very motive which would lead an ordinary citizen to pay a real-estate agent to represent him in the sale of his property is a belief that the agent can protect his interests in the transaction better than he can protect them himself; otherwise there would be no sense in his incurring the expense of hiring the agent. When the agent, instead of using his skill to remedy his principal’s ignorance of the law, expressly misinforms him in respect thereto, and, instead of furthering the client’s interest, in opposition thereto furthers his own, the contract of agency is subverted from the very foundations; and to allow the agent to reap any advantage from such a violation of his contract and duty would be utterly antagonistic to every principle of right, reason, and law.'

2. It is true that the plea in this case sets up a state of facts resting solely in.parol, which contradicts the written contract both in terms and in legal effect. As a general rule, a person signing an instrument purporting io bind him to the performance of obligations or the payment of money will not be permitted to prove by parol that no such 'object and intention existed between the par ties- — -in other words, to prove a purpose wholly at variance with the plain tenor and import of the writing. Hirsch v. Oliver, 91 Ga. 554, 560 (18 S. E. 354). We concede that under this plea the defendant sought to do all that; but she sought to do more, — - not merely to contradict the writing, but absolutely to destroy its very existence. Bor if the writing was the result of a fraud, it was not a contract at all, but mere paper and ink without the slightest substance of legal efficacy. Civil Code, §3669; Janes v. Merger University, 17 Ga. 515; Barrie v. Miller, 104 Ga. 312 (30 S. E. 840, 69 Am. St. R. 171); McCrary v. Pritchard, 119 Ga. 876, 880 (47 S. E. 341); Wood v. Cincinnati Safe Co., 96 Ga. 120, 124 (22 S. E. 909); Chapman v. Atlanta Guano Co., 91 Ga. 821 (18 S. E. 41). Fraud is to be abhorred; it vitiates everything it touches; and the person guilty of it is not to be countenanced in any way by the courts. We restate these venerable precepts not because they are in anjr doubt or disrepute, but because the human mind has sometimes the fault of being distracted from the obvious by being too attentive to the special, of sometimes overlooking irrefragable principles by concentrating notice too strongly on physical precedents, which, though trustworthy upon their particular facts, in no wise vary the general proposition, but only distinguish it the more clearly, as exceptions emphasize a rule.

3. In this case, according to the plea, the defendant, relying, as she had a right to do, upon the representations of her agent, and not upon her skill and judgment or knowledge of the law, was misinformed both as to the actual facts as they existed and as to •the legal purpose and tenor of the paper she signed. Not only that, but the signing itself was procured by a false representation to her that she was already legally bound to convey the property, and that if she did not enter the proposed plan, she would lose her home. Now as between parties sustaining no confidential relations, it is not every misrepresentation of the law or of the legal effect of the paper, or of the status of things present or future, that will constitute fraud. There, presumptively, the party contracting knows the law, knows his rights, has the discretion and ability to investigate the facts for himself, and can not justify a gross failure to exercise his own faculties and facilities to the protection of his own interests. In such cases the law will not let ■.the maker of the contract set up as fraud the fact that his own neg ligenee and inattention to the matters in hand have caused him to be overreached; and will therefore not permit him to say that the writing he has voluntarily signed, as the solemn embodiment of his contract, does not speak the truth. Bostwick v. Duncan, 60 Ga. 384; Jossey v. Railway Co., 109 Ga. 446 (34 S. E. 664); Walton Guano Co. v. Copelan, 112 Ga. 319 (37 S. E. 411, 52 L. R. A. 268), and cit.; Maxwell v. Willingham, 101 Ga. 55 (28 S. E. 672). In these eases the law considers the hardship on the maker the result not of fraud, but of his own negligence. But it is not negligent for one to rely upon the fidelity and loyalty of another, whom he has hired to he faithful and loyal. • The existence of confidential or fiduciary relations between the parties excuses that vigilance which the law would otherwise demand., -A breach of this confidence, a violation of the implied contract for utmost good faith, -is in law a fraud. Kellam v. Allen (sub nom.) Roe v. Doe, 31 Ga. 544; Granniss v. Bates, 55 Ga. 148, 150. A typical application of this principle is found in the case of Hawk v. Leverett, 71 Ga. 675. The headnote there states the proposition involved thus: “If a vendor of land acted upon the advice of. her agent or friend and confidential adviser, and accordingly made to the vendee a deed' instead of a bond for titles, and took notes for the deferred payments of purchase-money, believing, under the advice given, that the lánd would always be subject for the purchase-money, and the agent or friend thereafter bought the land from the original vendee, equity will relieve the vendor against the effect of the deed, and subject the land to the payment of.the purchase-money, although no fraudulent suggestion or practice-may have been used to induce the making of the deed.” In other words, the court, in effect, held, that because the agent misinformed his principal as to the law governing the transaction, even though at that time the agent may have believed his advice to be correct, the true legal tenor and effect of the written contract would be-disregarded, and the principal would, as against the agent who was about to reap an advantage from the bad advice given, be entitled to every right which she would have had if the legal effect of the writing had been as the agent represented it would be. In Sims v. Ferrill, 45 Ga. 585, the fiduciary, by misrepresenting,, to the woman who had imposed trust in him, that the title to her1 land was not perfect, secured a contract advantageous to -himself. The court promptly set it aside.

In the case at bar, the demurrer to the plea admits, that the relation of principal and agent, a relation which the law declares to be confidential, existed between the parties; that the defendant was inexperienced in business, was a person of small means, and was suffering the distresses of being recently left widowed with minor children dependent upon her; that the plaintiff called upon her, and, assuring her of his skill and experience in selling property, advised her to sell her home at a price less than its real value, telling her that this would be a fancy price;. afterwards he further deceived her by telling her that Durr, by reason of the fact that he had deposited with the agent $25 and had signed a contract to’ take the property, - could take her into court and force her to make a deed to her home, which she did not wish to sell at all unless she could make a satisfactory arrangement as to leasing it back; and that in addition to having to deed away her home, she would be liable for real-estate commissions; but that if she would sign the contract presented (the one which is the basis of the present suit), he could save her home for her, could induce Durr to take another piece of property, and could thus save her all expense as to commissions. Through these and other impositions upon her confidence and inexperience, he procured • the contract. This sets up such fraud as to vitiate the contract, and such a breach of duty as to deprive the agent of commissions. Any of the misrepresentations as to the value of the property, as to Durr’s power to force her to make a deed, as to the agent’s power to hold her to commissions after she had forbidden him to sell, as to Durr’s situation and attitude toward the matter, as to the purpose and effect of the written contract itself, separately or collectively, amount in law to fraud, and to such a breach of the contract of agency as to prevent a recovery of commissions.

4. . The plea further alleges, that, unknown to her, the plaintiff was acting also as agent for Durr, in the very transaction upon which the suit is based. This allegation alone is of such defensive value as to make the striking of the plea error. The existence of an undisclosed duality of agency is always a good defense to a claim for commissions, whether the contract to pay the same be in writing or not. Gann v. Zettler, ante, 589 (60 S. E. ), and cit. Real estate agents stand, in relation to their principals, somewhat as attorneys at law do to their clients. A high degree of honesty is to be expected of them; and the law will not countenance any breach of fidelity. Their principals are entitled not only to an absence of deceit, or misrepresentation, but also to the fullest and fairest disclosure of all things affecting their rights in the subject-matter of the dealings.

If Mrs. Williams can prove the allegations of her plea, the plaintiff is not entitled to recover; therefore the court erred in striking it, and in not permitting proof in its support.

Judgment reversed.