Clyde Chester Realty Co. v. Stansell

• Decision Date: 31 October 1979
• Docket Number: No. 57792,57792
• Parties: CLYDE CHESTER REALTY COMPANY v. STANSELL.
• Court: Georgia Court of Appeals

Page 639

259 S.E.2d 639

151 Ga.App. 357

CLYDE CHESTER REALTY COMPANY v. STANSELL.

No. 57792.

Court of Appeals of Georgia.

Argued May 7, 1979.

Decided Sept. 4, 1979.

Rehearing Denied Sept. 18, 1979.

Certiorari Denied Oct. 31, 1979.

Robert L. Berry, Oscar M. Smith, Rome, for appellant.

James A. Satcher, Jr., Rome, for appellee.

SHULMAN, Judge.

Plaintiff sued defendant for breach of an agency contract which allegedly authorized the defendant to sell plaintiff's business, fixtures and equipment to one Earl Harris (not a party to this suit) for $26,000, in return for a 10% Commission on the sale.

Although plaintiff's business was purchased by Harris through the defendant, the purchase price was paid to a third party, Lamar Davis (not a party to this suit), allegedly without plaintiff's knowledge or acquiescence.

Plaintiff contended that defendant's failure to account to him, his principal, for the proceeds received from the sale of his business, as well as defendant's failure to comply with the precise terms of the agreement (in regard to the mode of payment of the sales price), constituted a breach of contract.

Plaintiff sought damages for defendant's alleged breach of his agency contract in an amount equal to the profit he would have made on the sale of his business to Harris had he received the proceeds pursuant to the terms of his contract with defendant. In addition, he sought recovery of certain funds which were to be used to satisfy the outstanding indebtedness on the property, but which funds were allegedly not used for that purpose. From a judgment entered on a verdict in favor of the plaintiff, defendant appeals. We affirm.

1. At trial, plaintiff introduced into evidence a document signed by the plaintiff, which, he contended, evinced a contract of agency with the defendant. The document reads in pertinent part as follows:

"2. Ricky Stansell (plaintiff/appellee) authorizes Clyde Chester Realty (defendant/appellant) to sell said business, fixtures and equipment for $26,000 and further agrees to pay Clyde Chester Realty a commission of 10% Of the Sales Price . . .

"3. . . . (A) mortgage of approximately $14,400 . . . shall be paid from the proceeds of this sale.

"4. After paying commission and bank loan, the balance of proceeds to be paid to (plaintiff) . . ."

A. Defendant submits on appeal that the fact that he did not sign the plaintiff's alleged authorization of agency negates the existence of an agency relationship. We must take issue with appellant's contentions.

" The relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him . . ." Code Ann. § 4-101; Smith v. Merck, 206 Ga. 361, 368(1a), 57 S.E.2d 326. Contrary to appellant's contentions, a contract of agency signed by both parties is not essential to the creation of the principal-agent relationship. Cf. Hunter v. Benamy, 101 Ga.App. 907, 115 S.E.2d 424, affd. 216 Ga. 511, 117 S.E.2d 627. See, e. g., Davidson v. Ramsby, 133 Ga.App. 128(2), 210 S.E.2d 245; Greenbaum v. Brooks, 110 Ga.App. 661(2), 139 S.E.2d 432. " Existence of an agency may be established by proof of circumstances, apparent relations, and conduct of the parties. (Cit.)" Larkins v. Boyd, 205 Ga. 69, 72, 52 S.E.2d 307, 310.

B. Appellant argues that without his signature on the alleged contract of agency there is no evidence of his assent to plaintiff's authorization of agency. We disagree.

Defendant admitted preparing the document of authorization for plaintiff's signature. There was testimony that defendant orally promised to act as plaintiff's agent for the sale of his property and that defendant further agreed to contact the plaintiff when he had arranged the sale. Thus, contrary to appellant's contentions, there was sufficient evidence from which the jury could conclude that defendant had assented to act as plaintiff's agent for the sale of his business.

C. Defendant's argument that the contract is unenforceable since it does not create any obligation on the part of the defendant, is also without merit. Clearly, the contract provides for the defendant to sell plaintiff's business to Earl Harris (if so agreed by Harris) for $26,000, subject to the terms set forth in the statement of agency authorization.

Moreover, certain duties devolve upon agents, merely by virtue of their being agents. "The law implies, as a part of the contract by which every agency arises, that the agent agrees to have and exercise towards his principal, diligence, loyalty, and absolute good faith . . ." Render & Hammett v. Hartford Fire Ins. Co., 33 Ga.App. 716 (Hn. 4b), 127 S.E. 902. Therefore, the contract is not void for lack of mutuality of obligation.

2. Pretermitting the existence of a contract of agency between the parties, defendant contends that plaintiff failed, as a matter of law, to show defendant's breach of such contract. We disagree.

" '(An agent) can have no interest and do no act adverse to the interest of his employer, or incompatible with the application of his best skill, zeal, and diligence to the promotion of that interest.' (Cit.)" Napier v. Adams, 166 Ga. 403, 407, 143 S.E. 566, 567.

" 'The first duty of an agent is that of loyalty to his trust. He must not put himself in relations which are antagonistic to that of his principal. His duty and interest must not be allowed to conflict. He cannot deal in the business within the scope of his agency for his own benefit * * * ; nor is he permitted to compromise himself by attempting to serve two masters having a contrary interest, unless it be that such contracts of dual agency are known to each of the principals.' (Cits.)" Spratlin, Harrington, etc., Inc. v. Hawn, 116 Ga.App. 175, 180, 156 S.E.2d 402, 407; Ga. Ins. Service, v. Wise, 97 Ga.App. 461, 103 S.E.2d 445.

Plaintiff presented evidence that after agreeing to serve as plaintiff's agent, and without plaintiff's knowledge or permission, defendant (apparently as the agent of Lamar Davis) sold plaintiff's business on behalf of Mr. Davis, who claimed ownership of the property. Thus, there clearly was evidence of defendant's...