Evans v. Ruth
195 A. 163, 129 Pa. Super. 192 (1937)
Rule of Law:
A principal's subsequent affirmation of an act done on their behalf by an unauthorized person constitutes a ratification, which relates back to the original act and binds the principal as if prior authority had been given. No new consideration is required for a valid ratification.
Facts:
- In the fall of 1933, Homer Ruth was awarded two state purchase orders to furnish crushed stone for highway construction.
- Ruth entered into a written contract with George Darr, subletting all the work to Darr as an independent contractor.
- James S. Evans was hired by an unidentified foreman at the stone quarry, who told him the work was for the Ruth Lumber and Supply Company and the pay was 40 cents per ton.
- Evans was unaware of the subcontract between Ruth and Darr.
- During the job, weigh slips bearing the Ruth Lumber Company name, furnished by Ruth, were created for each load, with copies given to Ruth, the state, and Evans.
- Evans hauled stone from October 30 to November 23, 1933, earning $131.11.
- On December 5, after the work was done, Evans presented his bill to Ruth, who stated, 'Well, I see you finished the work for me... If you will have a sworn affidavit to that statement, I will pay you.'
- Evans provided the requested affidavit, but Ruth failed to pay him.
Procedural Posture:
- James S. Evans sued Homer Ruth in a Pennsylvania trial court for breach of an oral contract to recover $131.11.
- A trial was held, resulting in a judgment in favor of the plaintiff, Evans.
- The defendant, Ruth, as the appellant, appealed the judgment to the Superior Court of Pennsylvania, with Evans as the appellee.
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Issue:
Does a principal's subsequent affirmation of an unauthorized act, such as promising to pay for work done on his behalf, constitute a binding ratification of that act, even if the principal had a secret contract with a third party to perform the work?
Opinions:
Majority - Baldrige, J.
Yes, a principal's subsequent affirmation of an unauthorized act constitutes a binding ratification. The court found that while agency cannot be established by the agent's declarations alone, Ruth's own conduct provided sufficient evidence of ratification for a jury. Key acts of ratification included Ruth furnishing weigh slips with his company's name, receiving copies of those slips, and, most importantly, his failure to disavow the contract when presented with the bill. Instead of denying responsibility, Ruth affirmed the work was done 'for me' and made a conditional promise to pay, which manifested his election to treat the act as authorized. This ratification relates back, supplying the original authority for the employment, and does not require new consideration to be binding. The existence of a secret subcontract with Darr was a matter for the jury to weigh but did not preclude a finding of ratification.
Analysis:
This case provides a clear illustration of agency by ratification, where a principal's conduct after a transaction can create a binding obligation. It establishes that a principal who becomes aware of an unauthorized act done on their behalf must promptly disavow it to avoid liability. The decision underscores that a principal's affirmance—through words or actions—can override a secret, internal arrangement (like the subcontract with Darr), thereby protecting third parties who reasonably believe they are dealing with the principal. This precedent reinforces that liability can be created by subsequent conduct, not just by precedent authority, and that such ratification needs no new consideration to be effective.
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