7 Colo. App. 383 | Colo. Ct. App. | 1896
delivered the opinion of the court.
The first thing to be settled is Smyth’s status with reference to the bond. His signature was affixed by Ferris, who assumed to act as his agent. If Ferris had authority, no question could arise respecting Smyth’s responsibility.- In the aspect which the case assumes on this appeal, it must be conceded Ferris was without the specific designation of authority requisite to the execution of this particular instrument. The appellee cannot insist on it, because the court instructed the jury that the power of attorney did not authorize him to sign the undertaking. The appellee took no exception to this instruction, and no question respecting it is presented to this court on any error assigned by him. On the case as made, it must be assumed the letter did not grant the authority. By its terms Ferris was authorized to act with reference to all matters pertaining to the appointment of a receiver for the company. This language can in no manner be construed to authorize the execution of the undertaking sued on. The letter of attorney contains a general clause authorizing Ferris to act in all other matters affecting Smyth’s interests as a stockholder in the company. According to the usual canon of construction, these general words are limited and controlled by the terms in which the specific authority is granted. Billings v. Morrow et al., 7 Cal. 171.
At the time the power was executed and sent, Lynch’s suit had not been commenced, nor is there anything in the
The evidence on the subject of the ratification was frequently objected to, and the position is taken that it was
• The circumstances of the execution of the bond are taken by the appellant as affording support to a position which he assumes as to the necessity of a new consideration to support such an instrument. We find no well considered case which would relieve a surety from his obligation, because no new consideration moved to him at the time he executed the obligation, when his execution was concurrent with that of the principal debtor. It is, of course, wholly unnecessary to discuss a class of cases which show a state of facts totally different from the present. If Smyth, the surety, is to be bound in the present instance because he has ratified what his agent has assumed to do for him, he must be taken to have done it at'the time when his agent acted and under the conditions which attended the performance. The bond was executed by the agent at the time the property was released to the principal debtor, the Rail and Electric Company. If the release of the attachment would furnish a consideration sufficient to bind the principal, and the advantage to him was adequate in law to make the undertaking valid, the same consideration must be taken to inure to the benefit of the surety, and therefore support the contract into which he has entered. This has been adjudged in several well considered eases, and we find none to the contrary where a similar matter has b'een involved. Commercial Bank v. Warren, 15 N. Y. 577; Drakely v. Gregg, 8 Wall. 242.
Another matter must be discussed which would seem to
The present case falls clearly within the line of these decisions. The attachment was levied and the property seized on the 24th of February. It was released on the execution of the bond the next day. The bond was executed by two persons, who brought themselves within the requirements of the statute as householders and freeholders and
The resolution of the principal inquiry is in no manner affected by the character of the instrument sued on. The undertaking is provided for by the statute, and is to be taken by the officer on the release of the property. It is a statutory instrument, authorized to be given under certain circumstances, and secures to the debtor certain privileges respecting the possession of his property. The statute does not provide for the execution of these undertakings under seal. In this state a seal is unnecessary to the execution of any instrument by which the title to property is transferred or wherein parties contract with others. Seals were essential at the common law to the due execution of divers instruments, and many refined distinctions were based on this fact in resolving the matter of the liability of parties on contracts into which they had entered. A specialty could not be declared on, like a parol contract, and the matter of consideration was solemnly imported because the seal had been affixed. Because of these and many other differences between special
The more liberal doctrine commends itself to our consideration. The policy of our state has resulted in the abolishment of seals. They are no longer necessary to the validity of any contract between parties. The statute which provides for the release of attached property permits the undertaking to be executed without a seal. The fact that the- agent undertook to affix a seal to this document neither adds to its force nor in any manner affects its validity. To hold the principal must execute a sealed instrument to ratify what was perfectly valid without one, is to establish a rule which seems to be destitute of any good reason on which to base it, and a rule which is altogether too technical for this age and for modern times. We therefore conclude as a matter of
This, brings us to the troublesome inquiry whether this ratification was satisfactorily established, and the jury were duly instructed respecting their duty in the premises. We are somewhat restrained in the argument by our purpose not to overstep the boundaries we have set in the discussion of the evidence, that neither the parties nor the court may ba embarrassed by the expression of our personal views. Whoever seeks to enforce a contract executed by an unauthorized agent is bound to prove a ratification with full knowledge of all the material facts attending the transaction. Mistake, ignorance, or misapprehension of any of the essential matters will relieve the alleged principal of any responsibility. In these cases, the law lays the same burden of proof on the plaintiff as in those matters of contract executed by an agent who possessed the requisite original authority. As, in the one, he would be bound to establish by satisfactory proof the existence of the power, so, in the other, he must demonstrate an adoption with full knowledge of what has been done in his name and on his behalf. The principal is under no obligation to accept the assumed agent’s act. He need neither sanction nor adopt it. The law imposes on him no duty to make inquiries about it. Where there is no legal obligation, the question of negligence or diligence is of no importance. Whoever, therefore, relies on a ratification, is obligated to show it was made under circumstances which in law will bind the principal. The duty of making inquiries and ascertaining what has been done is not cast on the one who is under no legal obligation to take on himself the responsibility, but it rests with the party who would gain a benefit by the enforcement of the contract. The requisite information is justly assumed to be within the reach and control of him for whose advantage the contract was made. Concerning these details the principal is presumed to be a stranger. While he may not close his eyes to what is with
This accepted doctrine of the law of agency was ignored by the court in its instructions to the jury. By the twelfth instruction the jury were undoubtedly told they must believe from the evidence that Smyth’s alleged ratification was made with a full knowledge of all material facts, but he attached a limitation which destroyed the force and effect of the instruction and imposed a duty on Smyth which is not recognized by the precedents. The court added this clause, “ or with such knowledge as he could with reasonable diligence have obtained.” From this the jury might have readily concluded it was possible for Smyth, when he learned of the execution of the bond in the fall of 1890, to ascertain, by inquiry of Ferris or of Lynch, the fact of the execution of the bond and all the circumstances attending it, and if they further concluded that he failed to repudiate the act and remained silent respecting his agent’s authority, he was holden as upon proof of a ratification with full knowledge. We must conclude the jury were liable to be misled 'by this statement of the law. The effect of it is apparent. Under the testimony, the jury could legitimately find that Smyth might have obtained full knowledge of all the facts and circumstances attending the execution of the bond, its character and purport, and the proceedings taken under it, by using reasonable diligence in making inquiries about it when the fact of the execution of the bond was first brought to his attention. Reaching this conclusion, it was an easy matter for them to find that Smyth had ratified his agent’s acts with a full knowledge of all the material facts. Whatever may have been his ignorance, or his misapprehension, he could have obtained full knowledge by inquiry; the exercise of reasonable diligence would have
Ratification cannot be accurately defined as a legal term. Generically, the word always expresses the same idea, and in legal effect is always the adoption of the act of one who has assumed to be an agent without the grant of an antecedent authority. In its application to different conditions, legal accuracy requires the observance of very wide differences in the significance of the term. There is a marked difference between the ratification of the acts of an agent possessing a general authority to represent the principal, who steps outside the usual limits of his business ; or the adoption of what has been done by one having a special authority which he has exceeded in the terms of the engagement into which he entered, which might otherwise have been deemed authorized; or the liability incurred by the principal, who lias permitted another to be misled by the conduct of his agent, and who has received the benefits of the transaction or suffered injury to come to the other, whereby he is estopped, and the case of a ratification of a completed act performed by one without authority, where the failure to repudiate worked no injury and the principal has not accepted or received any benefit from the transaction. These distinctions are recognized in all the cases, and wherever different principles are apparently expressed, it is due to the application of the general rules of law governing agency in their application to the varying conditions represented by the different controversies. The present case by proof falls entirely within the limit of the class of cases last suggested. Ferris was never authorized by Smyth to act as his agent in all business transactions, or in all business transactions of a particular'character. It is not therefore a case where an agent has overstepped the limits of an apparent authority, where his act will be presumed to have been adopted with very slight proof of acceptance on
These and many other cases approve the distinctions which
Under these circumstances, it cannot be successfully urged that harm came to Lynch from Smyth’s failure to repudiate Perris’ act, even though it be conceded full knowledge came to Smyth of the circumstances attending the making of the instrument. This demonstrates the fatal error into which the court fell when it gave its first instruction to the jury. Therein the jury were told, if they found from the evidence Smyth knew of the existence of the bond shortly after its execution, and thereafter failed within a reasonable time to give Lynch notice that lie repudiated Perris’ act, and by reason of this failure, plaintiff was prevented from collecting his debt, such failure, — that is, failure to give notice, — and such silence, might be taken as a ratification of the act. 'The instruction is bad. There was no evidence tending to show that Lynch lost his debt because of Smyth’s failure to notify him that he repudiated what Ferris had done. It is not easy to see what principle of good faith or fair dealing required Smyth either to pursue his inquiries to the extent of acquiring full knowledge about it or to give notice to Ljmch that he would not be bound. We must not be understood as holding it error for the court to receive proof on this subject, and submit it to the jury as evidence which may be taken in connection with the other proofs in the case and used as a basis for their finding. We simply hold that silence may not be taken as a ratification. To dispose of all the matters presented to our attention, we need consider but two further matters, which are relatively unimportant.
The other matter concerns the verdict of the jury. What we shall say about it is to be taken more as a guide to the court on the subsequent trial than as an absolute expression ■of the law, or as a suggestion that because of this error, were it the only one, the case would of necessity be reversed. The circumstances under which the same difficulty might occur in another case would not necessarily constitute error, though in all cases resembling the present one the verdict must necessarily deviate from the issue and fail to be an accurate finding on the question which it presents. The suit was on a bond to recover the amount of a judgment, which was capable of exact proof, and which was accurately established by the evidence. The principal and interest amounted to more than the penalty of the bond, which was $15,000. If the plaintiff recovered anything, he was- certainly entitled to recover this sum, but the verdict was for $12,250. This is incomprehensible, and on no possible by
The trial court should not have permitted the verdict for $12,250 to stand. On the receipt of it, the jury should have been sent out and instructed to find a verdict for the penalty of the bond, or a verdict for the defendant. That was the proper place in which to correct the error, and trial courts should not hesitate to exercise their authority in such matters. In the statement preceding the discussion of this proposition, we do not intend to criticise the rule, or in any manner dissent from it. The question which we desired to reserve is whether, if this were the only error disclosed by the record, it would operate to reverse the case, since it could not by possibility tend to the appellant’s prejudice.
For the errors committed by the trial court in instructing the jury, this case will be reversed and remanded.
Reversed.