Story Case

Harry Simpson, the chauffeur of Frank Bond, without authority from the latter, agreed with John Stone to sell him a number of tires belonging to Bond. When Bond learned of this contract of sale, he said: "Well, I suppose I should not object this time, but, hereafter, I shall rule with a stronger hand." Later, Bond refused to deliver the tires. Stone thereupon brought suit alleging that Bond expressly ratified the contract made by Simpson. Was there an express ratification?

Ruling Court Case. Bank Of Utica Vs. Ballou, Volume 49 New York Reports, 155

One Shearman, being in need of money, drew up and signed three promissory notes which Ballou signed by way of accommodation. The notes came into the hands of the Bank of Utica, which brings this action against Shearman and Ballou. Ballon alone appeared, and contended that his liability as accommodation maker was barred by lapse of time, six years. To this the Bank of Utica replied that three payments of interest had been made by Shearman, purporting to be made for Ballon, the accommodation party, within six years of the commencement of the action. The bank claimed that it showed to Ballou this receipt given to Shearman acknowledging payment by Shearman on be-half of Ballou, to which Ballou assented.

Justice Rapallo delivered the opinion of the Court, which held that this was an express ratification of the act of Shearman. The Court said in part: "The payment was shown to have been made to the plaintiff by Shearman, the maker of the notes, in the name and behalf of the defendant, Ballou, taking a receipt at the time as for money paid by the defendant by the hand of Shearman. It is not disputed that a payment made by an authorized agent would be effectual to take a case out of the statute, and it is equally clear that Shearman, though the principal debtor on the notes, might act as such agent. An express ratification is relied on. Unless there is some reason why a transaction of this description should be an exception to the general rule, that a subsequent ratification is equivalent to a previous authority, it is impossible to say that the confirmation by the defendant, Ballou, of Shearman's act, with full knowledge of what Shearman had done, did not render it binding upon him, amounting to an express ratification."

Judgment is given for the plaintiff.

Ruling Law. Story Case Answer

The ratification may be expressly made, as when the principal, with full knowledge of all the material facts concerning a given transaction, states that he accepts the transaction completely. This express ratification may be oral or in writing, depending upon what requirements would have been necessary to confer the authority previous to the transaction.

In the Story Case, there would be an express ratification and Bond would be liable on the contract made by Simpson. Bond's words, while not absolutely unequivocal, would be construed as being an absolute acceptance of the contract and a ratification of the act of Simpson.