Botticello v. Stefanovicz

Supreme Court of Connecticut
177 Conn. 22 (1979)

ELI5:

Rule of Law:

A marital relationship or joint ownership of property, without more, is insufficient to establish an agency relationship. For a non-signing party to be bound by a contract through ratification, they must have full knowledge of all material circumstances and an intent to ratify the act, which must have been purportedly done on their behalf by the other party.

Facts:

In 1943, Mary and Walter Stefanovicz acquired a farm as tenants in common.
In 1965, Anthony Botticello began negotiating with Walter to purchase the farm.
During negotiations, Botticello offered $75,000, which Mary stated she would not accept.
Walter and Botticello later agreed on a price of $85,000, and Mary commented that she would not sell for less than that amount.
Walter alone signed a lease and option-to-purchase agreement with Botticello; he never represented that he was acting as Mary's agent.
Botticello took possession of the property, made substantial improvements, and made rental payments which were used for family purposes.
In 1971, Botticello exercised his option to purchase, but both Mary and Walter refused to convey the property.

Procedural Posture:

Anthony Botticello sued Mary and Walter Stefanovicz in the trial court, seeking specific performance of the option-to-purchase agreement.
The defendants' motion for summary judgment based on the Statute of Frauds was denied by the trial court.
After a full trial, the trial court found for the plaintiff, Botticello, and entered a judgment ordering the defendants to convey the property.
The defendants, Mary and Walter Stefanovicz, as appellants, appealed the trial court's judgment to this court.

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Issue:

Does a non-signing spouse become bound by a contract for the sale of jointly owned real property when she participated in price negotiations, knew of the other spouse's subsequent contract, and accepted benefits from it, thereby creating an agency relationship or ratifying the agreement?

Opinions:

Majority - Peters, J.

No. A non-signing spouse is not bound by the contract because the circumstances did not create an agency relationship, nor did her subsequent actions constitute ratification. To establish agency, there must be a manifestation of consent by the principal for the agent to act on their behalf, acceptance by the agent, and an understanding that the principal is in control; marital status or joint ownership alone is insufficient. The facts here—Mary's participation in price talks and Walter's handling of some business affairs—do not meet this standard, especially since she had historically signed all major real estate documents herself. Furthermore, ratification requires an intent to ratify with full knowledge of the material circumstances of a transaction that was purportedly done on one's behalf. Since Walter never purported to act as Mary's agent, her acceptance of rental payments and acquiescence to improvements cannot constitute ratification of the sale contract; her actions are consistent with merely consenting to Walter leasing his own one-half interest in the property.

Analysis:

This decision reaffirms the strict requirements for proving agency and ratification in real estate transactions, particularly between spouses. It clarifies that mere knowledge of or passive acquiescence to a transaction is insufficient to bind a non-signing co-owner. The court's emphasis on the 'purportedly done on his account' element of ratification sets a high bar, effectively requiring the signing agent to have represented themselves as acting for the principal at the time of the contract. This holding protects co-owners from being bound by unauthorized agreements and reinforces the importance for third parties to ensure all property owners are signatories to a conveyance contract.

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