McCrillis v. a & W ENTERPRISES, INC.

Majority - Lake, J.

Yes, a plaintiff presents sufficient evidence to overcome a motion for nonsuit when the evidence shows an agreement for employment was made with promoters before the defendant corporations' formation or before the promoters had authority to bind an existing corporation, but the corporations subsequently accepted the plaintiff's services and adopted or ratified the contract. When considering a motion for nonsuit, the court must interpret the evidence in the light most favorable to the plaintiff, resolve contradictions in his favor, and give him the benefit of all reasonable inferences. The plaintiff's evidence was sufficient to support findings that Lord and Chapoton agreed to employment on behalf of the future corporations. Although Lord and Chapoton were not agents at the time of the initial agreement, Root Beer Drive-Ins, Inc.'s Board of Directors, having full knowledge of the agreement and with Lord and Chapoton now as officers, ratified the contract by express resolution and acceptance of the plaintiff's services. An existing corporation can ratify a contract made without authority even if the other party knew of the lack of authority. Furthermore, A & W Enterprises, Inc., which came into existence shortly before the plaintiff began work and became the holding company for Root Beer Drive-Ins, Inc., adopted the contract. A corporation not yet formed cannot 'ratify' a pre-incorporation contract but can 'adopt' it by accepting its benefits with knowledge of its provisions. As A & W Enterprises, Inc. received the benefit of the plaintiff's services through its subsidiary, it is deemed to have adopted the contract. A minor variance between the complaint's allegation of a six-year contract and evidence of a five-year contract was not a material variance sufficient for nonsuit. The credibility of the evidence and whether the plaintiff was wrongfully discharged are matters for a jury to determine.