diff --git a/libvncserver/vncauth.c b/libvncserver/vncauth.c
index 0b73531..83c56e6 100644
--- a/libvncserver/vncauth.c
+++ b/libvncserver/vncauth.c
@@ -120,12 +120,16 @@ rfbDecryptPasswdFromFile(char *fname)
     int i, ch;
     unsigned char *passwd = (unsigned char *)malloc(9);
 
-    if ((fp = fopen(fname,"r")) == NULL) return NULL;
+    if ((fp = fopen(fname,"r")) == NULL) {
+	free(passwd);
+	return NULL;
+    }
 
     for (i = 0; i < 8; i++) {
 	ch = getc(fp);
 	if (ch == EOF) {
 	    fclose(fp);
+	    free(passwd);
 	    return NULL;
 	}
 	passwd[i] = ch;