Lynch v. Smyth

25 Colo. 103 | Colo. | 1898

Mr. Justice Gabbert

delivered the opinion of the court.

Before the court of appeals it was contended by counsel for Smyth, that he was not liable upon the bond, first, because no advantage resulted to, or consideration was received by, him for the execution of the bond, or its subsequent ratification on his part; second, no disadvantage resulted to, or damage was suffered by Lynch by the failure of Smyth to notify him that Ferris had no authority to execute the bond as his agent; third, the bond being sealed, and an instrument required to be in writing, there could be no binding ratification except by one in writing, or under seal; fourth, that the trial court erred in admitting evidence tending to show that Smyth was estopped by silence, no estoppel having been pleaded; fifth, admitting in evidence the power of attorney from Smyth to Ferris, and the record and pleadings in the receivership proceedings instituted by Smyth through Ferris; sixth, in instructing that the failure of Smyth to notify Lynch that he repudiated the act of Ferris in signing his name to the bond, if such failure resulted in preventing Lynch from collecting his debt, might be taken as a ratification of the bond on the part of Smyth, and in attaching to the instruction regarding knowledge relative to the material facts, the limitation “ or with such knowledge as he could, with reasonable diligence have obtained; ” seventh, in receiving verdict and entering judgment thereon when it was for a less sum than plaintiff was entitled to recover, if he prevailed. Other questions were also urged, but they are included in the above.

On behalf of Lynch it was claimed that the power of attorney from Smyth'authorized the execution of the bond in question, and he should, therefore, be held liable thereon. In answer to this proposition, counsel for Smyth insist that the failure to except to the instruction of the trial court, that the power of attorney did not, of itself, authorize Ferris to execute the bond on behalf of Smyth, precluded the consideration of the liability of Smyth by virtue of this power of attorney.

The third and fourth propositions advanced by counsel for Smyth were decided adversely to him by the court of appeals, and, we think, correctly. This is an action upon the bond as the obligation of Smyth. The ultimate fact pleaded was, that the instrument sued upon was executed by him, and evidence that Ferris had acted under an antecedent authority in the execution of the bond on behalf of Smyth, or that the latter had subsequently ratified an unauthorized act in that respect, was competent to establish such fact. Hoosac M. & M. Co. v. Donat, 10 Colo. 529. Ratification has a retroactive effect, and when established, is tantamount to an original authority. Ibid., Wharton on Agency, § 68; Story on Agency, § 239; Despatch Line v. Bellamy, 12 N. H. 205.

Bonds of the character under consideration are not required to be sealed. If they are, the liability of the obligors thereon is in no manner affected thereby. In order to authorize Ferris to have signed the name of Smyth to this bond, it was not necessary that such grant of authority should have been evidenced by an instrument under seal; parol evidence of such authority would have been sufficient, and no more formality relative to the ratification of an unauthorized act is required than what would have been necessary to have originally granted authority to perform the act which it is claimed the principal has subsequently ratified. Wharton on Agency, § 83 ; Despatch Line v. Bellamy, supra.

On the trial Lynch sought to establish the fact that Smyth had ratified the execution of the bond. There is no doubt that Ferris was the duly authorized agent of the latter in the receivership proceedings. The authority granted for that purpose was still in full force and effect at the time of the execution of this bond. When the question of ratification is involved, the relationship of the alleged principal and agent is important, as the presumption arising from acquiescence in the unauthorized act of an agent who has exceeded his authority is much stronger than if the act had beeft that of a mere stranger. Union M. Co. v. Rocky Mt. Bank, 2 Colo. 248 ; Story on Agency, § 256. For these reasons, the record and pleadings in the receivership proceedings were properly admitted, and as the court specially instructed the jury that the power of attorney from Smyth to Ferris did not, of itself, authorize the latter to execute the bond in question on behalf of Smyth, the error if any, in admitting this instrument, was cured by this instruction.

The benefit which accrues to the principal by the execution of a bond, is a sufficient consideration to bind his surety. No consideration need inure to the latter direct, and the effect of ratification being retrospective, so that the contract thus entered into becomes as effective for the party ratifying as if it had at its inception been executed under his orders, no further or other consideration is required different from that which would have been sufficient in the first instance had he executed the instrument himself, or- expressly directed his signature to be placed thereon. Drakely v. Gregg, 8 Wall. 242. This rule, however, may be different where the act of the assumed agent is void, and not merely voidable. By the execution of this bond, the benefit accruing to the company was an adequate consideration therefor, sufficient to bind Smyth had his name been signed by express authority, and a subsequent ratification having the effect of making it his obligation from the time his name was placed thereon by Ferris, no new consideration was necessary in order" to render it obligatory upon him by ratification.

Had the bond been executed in the first" instance by the • express authority of Smyth, it would not have been necessary for Lynch, as a condition precedent to his recovery thereon, to show that he had been damaged by reason of the ■execution thereof, and as the effect- of ratification was to make the bond the obligation of Smyth from its inception, it follows that if liable thereon under the doctrine of ratification, Lynch’s rights, in'so far as they relate to a recovery, are precisely the samé, and he is required to establish no facts ■different from what he would had Smyth signed the bond individually. Silence of the alleged principal, when fully .advised of what has been done in his behalf, by one who attempts to act as his agent without authority, may be sufficient from which to infer a ratification of the unauthorized .act, 2 Greenleaf on Evidence, § 67; Rae v. King, 13 Colo. 69, which, however, is not conclusive, except the party affected by such silence has been misled or injured, Rae v. King, supra; so that it does not necessarily follow that one seeking to enforce a. liability by ratification, arising from silence, of a failure to repudiate an unauthorized act after knowledge thereof, must also show that by such silence he has been misled to his prejudice, although it is proper to do ■so, as silence of the allegéd principal under such circumstances may, of itself, be sufficient to establish a ratification of such act. Union M. Co. v. Rocky Mt. Bank, supra. Where, however, after knowledge of the unauthorized act comes to the alleged principal, the party affected by such act has an opportunity to improve his position, the .alleged principal is bound to disapprove within a reasonable time after notice of such act, and a failure to do so is conclusive evidence of assent. Ibid. Smyth was a stockholder in the company against which Lynch was seeking to enforce his claim. By the execution of the bond in question, the company was permitted to enjoy the property attached in that action, and, proportionately, this benefit accrued to Smyth. • The evideuce tended to show that he knew his name had been signed to this bond, before the canse was finally disposed of in the district court. He admits that while the same was pending, in this court, he was advised that his name appeared upon the bond as a surety, placed there by Ferris. He took no steps to notify Lynch that he repudiated the act of Ferris, in this respect. Lynch would certainly have had the right so long as the cause was not finally determined to have taken steps to secure additional security in aid of his attachment, if advised that the bond was insufficient, without the name of Smyth. The power of the court in which the action was pending was inherent in this respect, if invoked, even if there is no statute on the subject; and it is no answer to this proposition to say, that Lynch, if notified by Smyth that he would not be bound by the bond might not have taken any steps toward obtaining other security in lieu of the latter, or, if he had, that such steps would have been unavailing, as it is sufficient when it appears that by reason of the conduct of Smyth he was prevented from taking such steps without regard to what might have been the result, Leather Mfg. Co. v. Morgan, 117 U. S. 96; Robb v. Vos, 15 Sup. Ct. Rep. 4, so conceding that it should appear that Smyth was benefited by ratification of the bond, or that it was necessary to show that Lynch was prejudiced by his silence, both of these facts-are established, or there was evidence tending to establish each. Smyth knew that his name appeared upon this bond as a surety, placed there by Ferris, assuming to act as his agent. This was knowledge of the essential facts which required him to approve or disapprove of the act of Ferris in this respect. Higgins v. Armstrong, 9 Colo. 38. He may not have known its exact terms, or the extent of his liability thereon, but. after knowledge of the material facts, he cannot escape the consequences' of his silence by remaining wilfully ignorant or purposely closing his eyes to means of information regarding the details within his control. Ibid. The instructions of which Smyth complains were more favorable than he was entitled to have given, because, as we have seen, ratification might have been established by silence alone; the evidence established Lynch had been prejudiced by such silence; and by his own admissions he had knowledge of the essential facts at a time which required him to speak, if he did not wish to assume any liability upon the bond.

The verdict of the jury is for a considerable less sum than Lynch established he was entitled to recover. Had there been a marked conflict in the evidence on the subject of ratification, this might have become a very important question in determining whether the verdict should stand or be set aside, as it might well be contended that if the jury had failed to consider the evidence on one subject regarding which there was no dispute, they might, also, have failed to give evidence on other subjects due consideration, or that the verdict was the result of a compromise on the question of ratification; but, in our judgment, the evidence is so clear on this latter subject, that the failure of the jury to return a verdict for the full amount to which Lynch was entitled, is of no moment, as the party prejudiced by such verdict is not complaining, and Smyth, certainly, is not in a position to do so. From the views already expressed, it becomes unnecessary to pass upon the question relative to the authority granted by the power of attorney from Smyth to Ferris, or whether the failure of Lynch to except to the instruction of the court on this subject precludes a consideration of it at this time.

The judgment of the court of appeals is reversed, and the cause remanded, with directions to affirm the judgment of the district court.

Reversed and remanded.

Campbell, C. J., not participating.