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A PROBLEM AS TO RATIFICATION.

F a person whom I have not authorized to act as my agent has made in my name with a third person a contract composed of mutual promises, and if the third person, who originally believed in the authority of the assumed agent, has withdrawn from the transaction and has communicated his withdrawal to the assumed agent or to me, can I, nevertheless, thereafter, promptly upon learning of the contract, ratify the contract and hold the third person? In short, by ratifying an unauthorized bilateral contract can I hold the adverse party, although he has already withdrawn from the contract?

The questions underlying the problem go to the very foundation of the doctrine of ratification; and hence the problem, whether it arises often or not, seems worthy of discussion. Another reason for discussion is that, as to the solution, lawyers have held, and still hold, divergent opinions. To reconcile the opinions, or even to prove by undisputed argument that some one solution is theoretically correct, must be recognized as an impossible task, simply because of the absence of conceded elementary principles. Yet Agency, it should be remembered, is not a new branch of law, and ratification, as a mode of creating liabilities in Agency, is so old that cases are found in the Year-Books, and even earlier.1

In dealing with this problem, as with any other as to ratification, one first instinctively turns to the familiar and ancient maxim to the effect that ratification relates back, and is thereupon analogous or equivalent to original authorization. Bracton, obviously following language used by the Roman lawyers.2 says: "Ratihabitio in hoc casu comparatur mandato." 3 In a case decided in 1302 it is said: "Ratihabitio retro trahitur et mandato comparatur." Coke

4

1 See, for example, a case decided in 23 II. VIII. (1238-9), reported in Bracton's Note Book (edited by Maitland), pl. 1243.

2 In the Digest, lib. 43, tit. 16, 1. 1, § 14, Ulpian speaks of Sabinus and Cassius, "qui rati habitionem mandato comparant," and says "rectius enim dicitur, in maleficio ratihabitionem mandato comparari." Again, in lib. 46, tit. 3, 1. 12, § 4, Ulpian says: "Rati enim habitio mandato comparatur." And see Story on Agency, § 239.

3 Bracton de Legibus, f. 171 b.

4 Dean and Chapter of Exeter v. Serle de Lanlarazon, Y. B. 30 Ed. I. (edited by Horwood in the Rolls Series), 126, 129.

says: "Omnis ratihabitio retro trahitur et mandato æquiparatur."1 "Comparatur" and "æquiparatur" are certainly not quite synonymous; but it seems that changes in language do not necessarily indicate a difference in doctrine,2 nor even an attempt to secure greater accuracy. Bracton, Coke, and all the lawyers of the three centuries separating them used Latin in their profession as almost a living language. In that state of facts, to substitute one Latin word for another, or to add a word here and there, was easy and natural; and perhaps this is the reason why paraphase rather than quotation is common in the early books.

The several forms of the maxim, substantially identical in language and precisely identical in spirit, have been used so long as to make it certain that they are accurate descriptions of the general effect of ratification. Unquestionably ratification and original authorization are similar; and unquestionably ratification, unless some rule prevents it from having efficacy, relates back, and is thereupon substantially equivalent to original authorization. Yet there are many instances where ratification is wholly inefficacious, where relation does not take place, and where ratification and original authorization turn out to be very different things indeed. Of course too much must not be expected from any maxim. The whole law cannot be compressed into a sentence. In this particular instance the maxim carries upon its very face a warning to those who would use it as an infallible panacea. When a maxim says that two actually distinct things are equivalent, it obviously represents simply an approximation to accuracy; and when it lays down as an invariable rule a doctrine of relation, it gives emphatic notice that in many cases the solution prescribed by the rule must be disregarded. Hence, it is not at all strange that the ancient maxim as to ratification gives for many problems inadequate solutions or none at all, and that it has had to receive elaborate appendices defining the cases in which ratification is possible. One of these supplemental rules is that ratification is impossible if, meanwhile, rights of strangers have intervened; and apparently this is true whether such strangers did or did not know of the original transaction. A

1 Co. Lit. 207 a.

2 An opposite view is expressed by Mr. Justice Holmes, in 5 HARVARD LAW REVIEW, 12.

3 Bird v. Brown, 4 Exch. 786 (1850); Pollock v. Cohen, 32 Ohio St. 514 (1877). This seems a fair inference from Wood v. M'Cain, 7 Ala. 800 (1845), Taylor v. Robinson, 14 Cal. 396 (1859), and the cases in the preceding note; but see, contra, Wharton on Agency, § 80. It may be of importance to inquire whether the stranger was simply acting maliciously. Bowen v. Hall, 6 Q. B. D. 333 (1881).

second is that ratification is incapable of giving rights against the third person if the unauthorized act, for example a notice to quit, called upon him to do some act which, in the absence of authority on the part of the assumed agent, would be unnecessary, in short to do something promptly, in reliance upon ultimate ratification.1 A third is that ratification is impossible if the assumed agent and the third person have meanwhile agreed to cancel the unauthorized transaction. These supplemental rules indicate that, though in legal theory a ratification causes a relation back to the time of the original transaction and vivifies the original transaction throughout the whole intervening time, it is quite impossible to ignore the actual facts as to the temporary unenforceability of the transaction and as to the vast and controlling effect of the ultimate ratification. In short, these supplemental rules indicate that the enforceability of the transaction really arises at the time of the ratification, and is incapable of arising then if absurd or unjust results would follow.

The first supplemental rule stated above indicates that ratification will not be permitted to work injustice toward strangers. The second indicates that, pending ratification, even the third person, in some cases at least, may disregard the possibility of the assumed principal's eventually wishing to adopt the act of the unauthorized agent, and that here also ratification will not be permitted to work injustice. It may be suggested that in this second rule there is an intimation that ratification demands the concurrence of the principal and of the third person; but the fact is that the second rule is always conceived to be a mere application of a general principle that the doctrine of relation, being a fiction, must be disregarded whenever injustice would otherwise result. The third rule appears to be the most interesting of all. It is obviously not based upon a doctrine that an authorized agent making a contract has actual or apparent authority to cancel the contract; for there is no such doctrine. Is it based upon a doctrine that an unauthorized agent has a wider actual or apparent authority over the contract than an authorized agent would have? Apparently not; and apparently the underlying theory is not that the unauthorized agent has rights deserving protection; for though his unauthorized act, if

1 Right d. Fisher v. Cuthell, 5 East, 491 (1804). If the third person does the act, it seems that ratification will have full effect.

2 Walter v. James, L R. 6 Ex. 124 (1871).

never ratified, may make him liable to an action in case he really misled the third person, that liability was deliberately incurred by the unauthorized agent, and there seems no reason why the law should in his interest create an exception to even so elastic a fiction as the doctrine of relation. The real principle underlying this third rule seems to be that the third person is entitled to protect himself against the uncertainty as to ratification. The third rule, therefore, seems to rest upon the same basis as the second, the right of the third person to insist that the doctrine of relation shall not do him an injustice. It goes much further than the second rule, however; for it permits the third person, co-operating with the unauthorized agent, to cancel a transaction to which he actually assented; and obviously it goes further than the first rule, which simply protects strangers. Thus it seems that the third rule really rests upon a doctrine of its own, a doctrine that, though an unauthorized agent cannot be said to have power to cancel the transaction, and though the third person cannot disregard the transaction silently as if he were a stranger, the third person can withdraw his assent to the original transaction by communicating such withdrawal to the person with whom the original transaction actually was had, and this withdrawal entitles the third person thereafter to treat the transaction as a nullity and to insist that a ratification would do him an injustice.

It is already obvious that the maxim ratihabitio retro trahitur does not cover the whole ground. Indeed, it ought to be noticed that the maxim does not purport to indicate in what cases ratification is capable of taking place. It simply states that, if ratification does take place, it relates back and thereupon leads to results resembling those flowing from original authorization. To supplemental rules, several of which have been stated above, is left the designation of the instances in which ratification is possible. The general principles underlying possibility of ratification appear to be that the transaction in fact does not have full validity until there is ratification, and that this fact must be borne in mind in each individual case, and that in each case the question is whether in the light of this actual fact ratification would lead to absurd or unjust results. These general principles, and the more specific rules underlying them, cast interesting and valuable, though not adequate, light upon the general question as to the nature of an unauthorized contract in the time succeeding apparent formation and preceding ratification. Upon that general question there is no occasion

now to enter, save in so far as it bears upon the problem stated at the beginning of this article.

As furnishing solutions of this problem several theories can be advanced; and these will now be discussed.

The first theory is the one for which the chief authority is Dodge v. Hopkins,' a case decided by the Supreme Court of Wisconsin in 1861. In that case the doctrine of the court, as explained in the opinion, was that, as the principal's actual assent is not contained in the original transaction, the adverse party is not then bound; that consequently the original transaction is wholly nugatory; that consequently a ratification by the principal will not give him rights unless subsequently assented to by the adverse party.2 To this line of argument there are obvious objections. To take the last point first, it seems more natural to say that the adverse party assented originally, did not withdraw his assent before ratification, was capable of assenting then, and consequently must be taken to have assented still. Again, the assumption that an originally unauthorized transaction entered into in the name of a principal is, as between that principal and the adverse party, a mere nullity, seems to do away with the whole doctrine of ratification. Ratification cannot, even with the aid of a doctrine of relation, render that effective which was once a mere nullity. If the original transaction was a nullity, and if the assent of the adverse party must be obtained again, and if the effect of the ratification and of the renewed assent is to make a binding contract, it seems that the real con

1 14 Wis. 630. The case is followed in Atlee v. Bartholomew, 69 Wis. 43 (1887). The doctrine is attacked in an editorial note in 5 Am. St. Rep. 109. That note is answered in an article by F. R. Mechem in 24 Am. L. Rev. 580; and to the latter discussion there is a reply by F. A. Sondley in 25 Am. L. Rev. 74.

2 Dixon, C. J., delivering the opinion of the court, said: "It is very clear... that the plaintiff was not bound by the contract and that he was at liberty to repudiate it at any time before it had actually received his sanction Was the defendant bound? And if he was not, could the plaintiff, by his sole act of ratification, make the contract obligatory upon him? We answer both these questions in the negative. The cove. nants were mutual- those of the defendant for the payment of the money being in consideration of that of the plaintiff for the conveyance of the lands. The intention of the parties was that they should be mutually bound, - that each should execute the instrument so that the other could set it up as a binding contract against him . . . from the moment of its execution. In such cases it is well settled . . . that if either party neglects or refuses to bind himself, the instrument is void for want of mutuality, and the party who is not bound cannot avail himself of it as obligatory upon the other. . . . The same authorities also show that where the instrument is thus void in its incep. tion, no subsequent act of the party who has neglected to execute it can render it obligatory upon the party who did execute, without his assent."

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