Story Case

John Anderson purported to act as agent for Lea Johnson in making a contract under seal with Joseph Smith for the sale of land belonging to Johnson. Anderson did not have authority to act, but when Johnson learned what Anderson had done, Johnson informed Smith that the land would be sold in accordance with the contract under seal. Later, Johnson refused to carry out the contract. What are Smith's rights!

Ruling Court Case. Stetson Vs. Patten, Volume 2 Greenleaf, Page 358; Also Volume 11 American Decisions, Page 111

One Simson Stetson, purporting to act for Amasa Stetson, drew up an agreement under seal, in the name of Amasa Stetson, with Patten, by which the latter agreed to make certain improvements upon the land of Amasa Stetson. Patten failed, or refused, to perform under the agreement. This action was then brought against him. Patten contended that there was no binding agreement between them, because Simson Stetson had no authority to execute an agreement under seal. To this Amasa Stetson replied that after it was done, she orally ratified it.

Justice Mellen rendered the opinion:

A ratification must be in form required by previous authorization. The Court said in part: "With respect to these facts, they cannot amount to anything more than ratification made by parol, and such ratification could not be more availing than a parol authority given before the instrument was signed, which, as we have seen, is of no importance."

Ruling Law. Story Case Answer

It has been pointed out that when a principal ratifies an act done without authority for his benefit, it has, in general, the same effect as authority given by him to the agent before the act was done. In other words, subsequent ratification is equivalent to precedent authority. From this it naturally follows that the same formality, and the same requirements are necessary to constitute a valid ratification as would have been necessary to confer the authority before the act was done. An instrument under seal is required in order to ratify the making of a sealed contract, but writing is not required to ratify a contract in writing, unless the Statute of Frauds required that the latter be in writing.

In the Story Case, the ratification was not under seal and was not sufficient. For Johnson to have been bound he should have ratified that act of Anderson by an instrument under seal.