2020 Georgia Code
Title 10 - Commerce and Trade
Chapter 6 - Agency
Article 3 - Rights and Liabilities of Principal to Third Persons
§ 10-6-55. Effect of Seller Giving Credit to Agent
If the credit shall be given to the agent by the choice of the seller, he may not afterward demand payment of the principal.
(Orig. Code 1863, § 2176; Code 1868, § 2172; Code 1873, § 2198; Code 1882, § 2198; Civil Code 1895, § 3025; Civil Code 1910, § 3597; Code 1933, § 4-306.)
Cross references.- Responsibility of agent, § 10-6-87.
JUDICIAL DECISIONS
Section not applicable when principal undisclosed.
- Provision of this section does not apply so long as the principal is undisclosed. Beacham v. Coe-Mortimer Co., 30 Ga. App. 456, 118 S.E. 441 (1923).
Generally, contract does not bind principal unless it purports to be principals.
- General rule is this: in order to bind a principal, on a contract made by an agent, it must purport on the contract's face to be the contract of the principal, and the principal's name must be asserted in the contract. It is not enough that the agent be described as such in the instrument. Kingsberry Homes v. Findley, 242 Ga. 362, 249 S.E.2d 51 (1978).
Known principal cannot be held liable by third person dealing with agent.
- Wife could not be held accountable under this section if the fact of agency was known to the seller, and the seller extended credit to her agent, not to her. Pinkston v. Cedar Hill Nursery & Orchard Co., 123 Ga. 302, 51 S.E. 387 (1905); Fisher v. Darsey, 21 Ga. App. 583, 94 S.E. 839 (1918).
When one with knowledge of the agent's authority to bind the agent's principal deals with the agent directly, and not with the principal, one cannot hold the principal liable. Morgan v. Georgia Paving & Constr. Co., 40 Ga. App. 335, 149 S.E. 426 (1929); Kingsberry Homes v. Findley, 242 Ga. 362, 249 S.E.2d 51 (1978).
If an agent buys in the agent's own name, without disclosing the principal, and the seller subsequently discovers that the purchase was in fact made for another, the seller may, at the seller's choice, look for payment either to the agent or the principal, and that too, notwithstanding the title had been made to the agent, and the agent debited with the account. On the other hand, if at the time of the sale, the seller knows not only the person who is nominally dealing with the seller is not the principal but the agent, and also knows who the principal really is, and, notwithstanding all the knowledge, chooses to make the agent the seller's debtor, dealing with the agent and the agent alone, the seller must be taken to have abandoned the seller's recourse against the principal and cannot afterwards, upon failure of the agent, turn around and charge the principal, having once made the seller's election at the time when the seller had the power of choosing between the one and the other. Kingsberry Homes v. Findley, 242 Ga. 362, 249 S.E.2d 51 (1978).
Credit given exclusively to agent.
- To constitute an election by the seller between a principal and agent, so that giving credit to the agent will prevent the seller from afterward demanding payment of the principal under this section, it should appear that the credit was given exclusively to the agent. Fontaine v. Eagle & Phenix Mfg. Co., 52 Ga. 31 (1874).
Principal is liable if agent not dealt with alone.
- When a travel agent was defendant's disclosed agent in making arrangements for hotel accommodations with the plaintiff, the defendant paid the agent for the hotel charges, but the agent failed to pay the plaintiff, the defendant was bound for the unpaid debt since it did not appear that the plaintiff had chosen to make the agent its debtor, dealing with the agent alone, and that exclusive credit was given to the agent. Southeastern Foam Prods., Inc. v. Hilton Hotels Corp., 149 Ga. App. 372, 254 S.E.2d 494 (1979).
When extrinsic evidence admissible concerning whether agent is party to contract.
- If it appears unambiguously in an integrated contract that the agent is a party or is not a party, extrinsic evidence is not admissible to show a contrary intent, except for the purpose of reforming the contract. If the fact of agency does not appear in an integrated contract, an agent who appears to be a party thereto cannot introduce extrinsic evidence to show that the agent is not a party except: (a) for the purpose of reforming the contract; or (b) to establish that the agent's name was signed as the business name of the principal and that it was so agreed by the parties. Kingsberry Homes v. Findley, 242 Ga. 362, 249 S.E.2d 51 (1978).
Cited in Henderson v. Citizens First Nat'l Bank, 151 Ga. 62, 106 S.E. 549 (1921); Dinkler Mgt. Corp. v. Stein, 115 Ga. App. 586, 155 S.E.2d 442 (1967).
RESEARCH REFERENCES
Am. Jur. 2d.
- 3 Am. Jur. 2d, Agency, § 273.
C.J.S.- 2A C.J.S., Agency, § 437.
ALR.- Principal's payment to or settlement with agent as affecting former's liability to third person with respect to contract negotiated by agent, 71 A.L.R.2d 911.
