Pursley v. Stahley

• Decision Date: 07 March 1905
• Citation: 50 S.E. 139,122 Ga. 362
• Parties: PURSLEY v. STAHLEY.
• Court: Georgia Supreme Court

50 S.E. 139

122 Ga. 362

PURSLEY v. STAHLEY.

Supreme Court of Georgia

March 7, 1905

Syllabus by the Court.

1. Where an agent is guilty of an independent fraud for his own benefit, and to communicate the same would prevent the accomplishment of his fraudulent design, the principal is not charged with notice of such misconduct.

2. A could read and write, but was inexperienced in business. B had been her attorney, and she owed him $50. At his request and to enable him to raise the money, A. agreed to give a note therefor. The agent fraudulently made a note for $500, instead of $50, and procured her to sign the same. The note was made payable to X., who had money to lend, and who was a client of B. The money was advanced on the note to B., but none was paid over by him to A. Held, that the lender was not charged with notice of the agent's fraud.

Error from City Court of Atlanta; H. M. Reid, Judge.

Action by G. D. Stahley against M. C. Pursley. Judgment for plaintiff, and defendant brings error. Affirmed.

Smith & Wright, for plaintiff in error.

J. W. Preston, for defendant in error.

LAMAR, J. (after stating the facts).

The principal is bound by notice to his agent for the same reason and to the same extent that he is bound by the act of his agent. In both cases it must be limited to matters within the scope of the agency. Notice as to such matters binds the principal, according to some authorities, on the theory that the agent and principal are to be regarded as one; according to others, on the theory that the agent may and should act for his principal on such information; and, according to others, because there is a presumption that such notice would be communicated. See Morris v. Georgia Loan Co., 109 Ga. 24, 34 S.E. 378, 46 L.R.A. 506; Civ. Code 1895, § § 3027 3028. But when the agent departs from the scope of the agency, and begins to act for himself, and not for the principal; when his private interest is allowed to outweigh his duty as a representative; when to communicate the information would prevent the accomplishment of his fraudulent scheme--he becomes an opposite party, not an agent. The reason for the rule then ceases. Where, therefore, the agent, who is an intermediary, is guilty of an independent fraud for his own benefit, the law does not impute to the principal notice of such fraud. Instead of being communicated, it would be purposely and fraudulently concealed. Instead of...