ON PETITION FOR REHEARING. On petition for rehearing, it is urged by appellant that the general rule in jurisdictions having the code procedure, that the defense of dual agency must be specially pleaded, is not applicable in this State for the reason that the Code (§ 127 Code of Civil Proc., § 386 Burns 1914, § 377 R.S. 1881) provides: "Under *Page 62 a mere denial of any allegation, no evidence shall be introduced which does not tend to negative what the party making the allegation is bound to prove."
It is appellant's contention that, under this provision, the general denial, which puts in issue the validity of the contract sued on, was sufficient to present the defense of dual 9. agency, citing, Cheney v. Unroe (1906), 166 Ind. 550, 77 N.E. 1041, 117 Am. St. 391. The rule in the case cited had no application here. The contract sued on in that case was one entered into by a public officer in violation of a statute imposing a fine and imprisonment for its violation. The court rightly held the contract absolutely void. Not so in a case like the one under consideration, where the action is on a private contract between an agent and his principal, and is not void, but is voidable. In such a case, the principal may waive the misconduct of his agent, or he may estop himself from taking advantage thereof. 2 C.J. 766. An Indiana case more nearly in point is, Casad v. Holdridge (1875), 50 Ind. 529, where, in an action on a note, it was held that the defense of illegal consideration must be specially pleaded.
The conduct of an agent in representing the other party to a transaction without the knowledge of his principal is in the nature of fraud; and this court, in the case of McAfee v.Bending (1905), 36 Ind. App. 628, 634, 76 N.E. 412, said: "It is well settled that when fraud is the basis of an action or a ground of defense, it must be shown by special plea containing facts directly averred, constituting fraud, before evidence will be admitted tending to prove the ultimate fact."
To the same effect is a statement in American, etc., LoanAssn. v. Fowler (1909), 46 Ind. App. 285, 292, 88 N.E. 118, 92 N.E. 183.
Rehearing is denied. *Page 63