Owens v. Schneider

In Owens v. Schneider (1938) 29 Cal. App. 2d 593, a realtor acted as a dual agent in the exchange of properties between owners. The Owens court announced the general rule of no vicarious liability for the fraud of a dual agent: "'"Where two or more principals employ the same agent, whether as a means of dealing with one another or to protect their common interests, one cannot charge the other not actually at fault with the misconduct of the common agent. The latter owes no more duty to one than to the other; each of the principals is under an equal duty to supervise the agent and to protect his own interest, and there is no reason why the misconduct of the agent should be imputed to one principal rather than to the other." '" (Owens v. Schneider, supra, 29 Cal. App. 2d at page 594.) The Owens court, however, recognized an exception to the general rule and held one principal could be liable for the agent's misrepresentations to the other principal because "'where an agent is interested in a result of a transaction adversely to the interest of his principal, the rule of imputed knowledge on the part of the principal no longer obtains.'" (Owens v. Schneider, supra, 29 Cal. App. 2d at page 595.)