Stammelman v. Interstate Co.

• Decision Date: 02 February 1934
• Docket Number: No. 92.,92.
• Parties: STAMMELMAN v. INTERSTATE CO.
• Court: New Jersey Supreme Court

170 A. 595

STAMMELMAN

v. INTERSTATE CO.

No. 92.

Court of Errors and Appeals of New Jersey.

Feb. 2, 1934.

Syllabus by the Court.

1. Ratification of an unauthorized act proceeds upon the theory that there was no previous authority, and acts as a substitute for such authority. Accordingly, the general rule is that whatever form of authorization would have been sufficient to clothe the agent with original authority to do an act will be sufficient to constitute a ratification of such act when done without previous authority; and, conversely, that whenever the law requires a particular mode of authorization there can be no valid ratification except in the same manner. Where the original authority to an agent to execute an act must be in writing, the ratification of the act done without authority must, in the absence of some element of equitable estoppel, be in writing, and the same principle applies to acts which could be authorized by a corporation only by resolution or vote.

2. Entry, continued possession, and payment of rent reserved under an unauthorized lease does not amount to ratification, but creates merely a tenancy at will which may ripen into a yearly tenancy.

3. Where the real question in controversy between the parties to an action appears to have been fully and fairly tried and correctly settled, the court will not reverse for an objection which may be avoided by an amendmerit of the pleadings, but will, in such case, exercise the power of amendment in aid of affirmance. Conversely, an amendment will not be directed to bring about a reversal and a new trial upon a different issue.

Appeal from Supreme Court.

Action by Rose Stammelman against the Interstate Company. From a judgment of the Supreme Court (111 N. J. Law, 122, 166 A. 724), affirming a judgment of the district court in favor of the plaintiff, the defendant appeals.

Judgment reversed.

Donald Lewis, of Newark (Charles H. Meyer, of New York City, on the brief), for appellant.

Maurice C. Brigadier, of Bayonne, for respondent.

CAMPBELL, Chancellor.

This is an appeal from a judgment of the Supreme Court affirming a judgment of the district court.

The action was to recover rent for the months of April and May, 1032, under a certain lease, in writing, dated November 13, 1928, for a term of ten years, commencing January 1, 1929, and ending December 31, 1938.

The state of demand based the right of recovery of plaintiff-respondent upon this lease.

The defense was that this lease was void under the statute of frauds (2 Comp. St. 1910, p. 2610, § 1), being for a term exceeding three years, and executed by the vice president of the appellant corporation, acting in the capacity of its agent, and without authorization in writing. This contention was countered and attempted to be overcome by proofs said to show ratification.

This appears to have been the principal issue raised, considered, and tried in the district court, and resulted in a finding by the trial judge, sitting without a jury, in favor of the plaintiff in that court, and evidenced by a judgment in favor of that party.

In reviewing this judgment upon appeal, it appears that the Supreme Court had before it two grounds urged for reversal, namely:

(a) That there was no competent proof before the trial court warranting a finding by that court that there was a ratification of the lease in question by the corporate appellant; (b) that the plaintiff below could not maintain the action because the original lessor had no title to the property which he could make the subject of a lease, and, if he had, there was no proper assignment of the lease to the plaintiff.

Upon this latter ground the Supreme Court found against the appellant, and, we conclude, properly so, and we are content with such finding and for the reasons expressed in the opinion of that court.

As to the first of these grounds, the Supreme Court also found against the appellant, holding that there had been a ratification of the lease by the appellant.

In this respect we find that the court below fell into error which calls for a reversal of the judgment of that court and, consequently, that of the district court.

The lease was executed by one Aymar, a vice president of the appellant, and, on its face, was regularly and properly executed.

The proofs show that Aymar, in the absence of the president, had that officer's powers and duties, and that at the time of the execution of the lease the president was absent in California.

Under section 2 of the by-laws of the corporation, the president had the following powers only: "* * * He may sign and execute all authorized bonds, contracts or other obligations in the name of the corporation. * * *" Therefore the president had no power to execute the lease in question and bind the corporation unless so authorized by formal action of its board of directors, and consequently Aymar, as vice president, had no greater power or authority. Concededly there was no such authority. There was no proof by the minutes of the board of directors or otherwise that any such authority had been bestowed upon the president, vice president, or any other agent of the corporation.

It must be conceded, therefore, that the execution of the lease was initially without authority, and never was the contract of the appellant-lessee, unless the act of its vice president, Aymar, was ratified.

We concede, as a general proposition, the correctness of the principle laid down by the Supreme Court upon this point, namely: "Ordinarily the ratification of an unauthorized act must be in the particular mode or form necessary to confer authority to perform it in the first instance, 21 R. C. L. p. 924, § 103,...