This Is Ratification.

A. Ratification May Be Expressed Or Implied

Story Case

James Newby was the traveling Secretary of Alonzo Benson. While in Boston, Newby saw a rare old piece of furniture which he purchased in the name of his principal, thinking that Benson would like the furniture and keep it after seeing what it was like. The furniture was shipped to Benson's home, and he had it unpacked and placed in his residence. A month later the dealer attempted to collect for the sale, but Benson refused to pay, saying that Newby had no authority to make the purchase, and that the dealer could have possession of the property. Can the dealer compel Benson to pay?

Ruling Court Case. Crosswait Vs. Montgomery Volume 12 Of The Lawyers' Reports Annotated At Page 140

This was an action upon a promissory note, for the sum of three thousand dollars, payable to J. A. Montgomery, signed by Percy R. Smith & Co. The note was indorsed by Montgomery to Crosswait, who brings this action against Montgomery as an indorser. Montgomery, in defense, contended that after he had indorsed it, the note had been materially changed. The facts showed that the note was originally signed by Percy R. Smith alone, and that after his endorsement "And Co." had been added without his authority. Cross-wait in reply to this defense contended that at various times before and after maturity of the note Montgomery, with full knowledge of the alteration, ratified the signature by promising to pay. Justice McClellan delivered the opinion.

In view of the fact that the defendant was shown to have known of the alteration, and not objecting thereto, promised to pay, the court was of the opinion that he ratified the note as altered. What a person may authorize in the beginning he may ratify subsequently, by express word or by conduct, provided rights of third persons have not intervened which would make it unjust for him to ratify subsequently.

Ruling Law. Story Case Answer

We have seen heretofore that if a person acts for another without due authority, or exceeds the authority granted him, he is himself responsible. But if the principal, subsequent to the agent's act, expresses his approval, either verbally or in writing, or by his conduct in accepting the benefits of the act, he will in general be bound to the same extent as if he had given the agent full authority, before the act. Such acceptance of an agent's act, subsequent to its execution is called ratification; stated legally, then, subsequent ratification is equivalent to precedent authority.

When the principal learns of the act or acts done by the agent, he cannot by ratification accept the benefits which would be conferred upon him, without subjecting himself to the consequent liabilities. If he accepts the benefits he is subject to the liabilities.

In the Story Case, the dealer can compel Benson to pay, because Benson has ratified the act of Newby in purchasing the furniture. This ratification was by conduct, in that Benson allowed the furniture to be unpacked at his home, and to be used for a month, without objection.