David v. Serges

• Decision Date: 02 September 1964
• Docket Number: No. 23,23
• Citation: 129 N.W.2d 882,373 Mich. 442
• Parties: T. G. DAVID, Plaintiff and Appellant, v. State SERGES, doing business as Gracelawn Meat Outlet, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 882

129 N.W.2d 882

373 Mich. 442

T. G. DAVID, Plaintiff and Appellant, v. State SERGES, doing business as Gracelawn Meat Outlet Defendant and Appellee.

No. 23.

Supreme Court of Michigan.

Sept. 2, 1964.

Anthony J. Mansour, Draper, Mansour, Daniel, Sordyl & Ruhala, Flint, for plaintiff and appellant.

Frank L. Talkow, Flint, for defendant and appellee.

Before the Entire Bench.

SOURIS, Justice (for reversal and remand).

When an agent purporting to act for his principal exceeds his actual or apparent authority, the act of the agent still may bind the principal if he ratifies it. The Restatement of Agency 2d, § 82, defines ratification thusly:

'Ratification is the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account, whereby the act, as to some or all persons, is given effect as if originally authorized by him.'

'Affirmance' is defined in § 83 of the Restatement:

'Affirmance is either

'(a) a manifestation of an election by one on whose account an unauthorized act has been done to treat the act as authorized, or

'(b) conduct by him justifiable only if there were such an election.'

Although Michigan cases in which ratification has been discussed usually have involved receipt of direct benefits by the ratifying principal, ¹ evidence of receipt of benefits, while it lends plausibility to an allegation of ratification and, indeed, may in itself constitute ratification, ² is not a sine qua non of ratification. Paragraph (d) of the comment to § 82 of the Restatement, supra, discusses the matter in these terms:

'That the doctrine of ratification may at times operate unfairly must be admitted, since it gives to the purported principal an election to blow hot or cold upon a transaction to which, in contract cases, the other party normally believes himself to be bound. But this hardship is minimized by denying a power to ratify when it would obviously be unfair. See §§ 88-90. Further, if the transaction is not ratified normally the pseudo-agent is responsible; if not, it is because the third party knew, or agreed to take the risk, of lack of authority by the agent. In many cases, the third person is a distinct gainer as where the purported principal ratifies a tort or a loan for which he was not liable and for which he receives nothing. This result is not, however, unjust, since although the creation of liability against the ratifier may run counter to established tort or contract principles, the liability is self-imposed. Even one who ratifies to protect his business reputation or who retains unwanted goods rather than defend a law suit, chooses ratification as preferable to the alternative. * * *' ³

In this case the only testimony taken was plaintiff's, who testified that defendant's managing agent had borrowed from him $3,500 upon defendant's behalf and for use in defendant's business a retail meat market. Plaintiff further testified that defendant subsequently had paid to him $200 on the alleged loan and had upon several occasions stated to plaintiff that the full sum would eventually be paid. With this testimony in the record plaintiff rested his case and defendant, without likewise resting, moved for a judgment of no cause on the theory that plaintiff had failed to prove a prima facie case.

The trial court erred in granting defendant's motion. Defendant not having rested, the procedural posture of the case then ⁴ was such that the court was required to consider defendant's motion as if it had been a motion for directed verdict made at conclusion of plaintiff's proofs in a trial to a jury. Stolt v. Shalogian, 326 Mich. 435, 40 N.W.2d 212, and Schian v. Bierlein, 369 Mich. 219, 119 N.W.2d 611. Only if plaintiff's testimony, viewed in its most favorable light, could be said to be insufficient as a matter of law to support a judgment in his favor would the judgment of no cause be permissible under our former practice.

Even if borrowing money were not within the agent's actual or apparent authority, plaintiff's evidence, viewed favorably, was legally sufficient to establish defendant's liability for the alleged loan upon a theory of ratification. Thus, plaintiff's evidence was sufficient to require defendant to be put to his proofs.

Reversed and remanded. Costs to plaintiff.

KAVANAGH, C. J., and BLACK, SMITH, and ADAMS, JJ., concurred with SOURIS, J.

DETHMERS, Justice.

I am not in accord with Mr. Justice Souris' position that, in this law action, tried by the judge without a jury, when defendant moved, at the conclusion of plaintiff's proofs, that the action be dismissed for failure to prove his liability, the judge was required to view the evidence in the light most favorable to plaintiff. I concede that the controlling opinion in Schian v. Bierlein, 369 Mich. 219, 119 N.W.2d 611, lends support. I did not agree with it when handed down and do not now. Stolt v. Shalogian, 326 Mich. 435, 40 N.W.2d 212, cited therein and containing language seemingly in support, did not actually decide this question but only that the proofs to be considered on review were those which had been adduced prior to defendant's motion for judgment in his favor and the those afterwards received.

In a jury trial a question involved in a motion for directed verdict is whether the opposite party would thereby be deprived of his constitutional right to jury determination of a question of fact if one has been presented by the proofs viewed in the light most favorable to him. When a jury...