This section is from the book "American Law Of Real Estate Agency", by William Slee Walker. Also available from Amazon: American law of real estate agency.
Where money was paid to an agent on a purchase of land, under circumstances showing bad faith, as where it was the design of the vendor to put upon the purchaser a defective title, the latter is entitled to a return of his money, and he will not be required to pursue the principal, but may sue the agent for a recovery of the money, although he knew at the time of paying the money to the agent that the latter was acting in that capacity; because, if the vendor or his agent knew at the time of the contract that the vendor had no title to the land, it was a palpable fraud and the purchaser was entitled to rescind the contract; payment of the money over to the principal, without notice of the fraud on the part of the agent, or notice not to pay it over, would be a good defense, but the agent should prove such payment over, as the law will not presume it. Shepherd v. Underwood, 55 I11. 475; Hurford v. Norvall, 145 P. 1060, 39 Okl. 496.
 
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