Atlanta Buggy Co. v. Hess Spring & Axle Co. , 124 Ga. 338 ( 1905 )

LüMPKIN, <7.

It is necessary to consider only one question raised by the demurrer, namely, that it appears that each of the contracts provided that it should “only become binding on the seller when signed by one or more of its officers;” that it was without consideration, unless there were mutual promises; and that the seller never made a promise or became bound, and therefore the defendant was not bound. No other consideration moving to the defendant is alleged or insisted on except that there were mutual promises, and that each contract was binding on both parties. If this were not so, then there was no mutuality, and neither would be bound. Under the allegations of the original declaration, it is clear that no contract binding on both parties was set forth. Each of the contracts contained the provision above quoted as to when it should become binding on the seller. It is not alleged that it was ever signed by an officer of the seller; nor is there any allegation that Cathcart was such an officer. Was this cured by the amendment? It still did not allege that Cathcart’was an officer of the seller, but that he was a duly authorized agent of the plaintiff, with full power to represent it in making the contract for the articles specified therein, and binding the company to make and deliver them. Concede that he had authority to make the contract and also to bind the plaintiff to make and deliver the articles, did he exercise it so as to thus bind the plaintiff ? Evidently not. The written contract which he actually made contained as one of its-terms that it did not become immediately binding. If Cathcart was an agent and had authority to contract absolutely for the making' and delivery of the articles, he did not exercise it, but in fact contracted that his principal should not become then presently bound. The cases in which it has been held, that, where there are provisions in an insurance policy declaring that none of its terms can be waived exeept in writing, there may nevertheless be a waiver by an agent shown to be in fact authorized by the company to make it, in some other manner (Western Assurance Co. v. Williams, 94 Ga. 128, and like decisions), do not affect this case. That a party may, by himself or his agent duly authorized to do so, waive a provision of a contract in his favor, and that the other party may take advantage of such waiver, is quite different from an effort on the part of one party to a contract to waive one of its terms providing for a certain signature as precedent to its becoming binding ■on him, and thus, without notice to or the assent of the other party, to establish a right in his own favor which would not otherwise exist. This case is much more like that of Reese v. Fidelity Mutual Life Assn., 111 Ga. 482, in which it was held that when the application for a policy of insurance and the policy itself stipulated that it should not become binding on the company issuing it until the first premium had been actually received, diiring the good health of the applicant, this payment of the premium during his good health was a condition precedent to fixing a liability on the company. See also Mutual Reserve Fund Life Assn. v. Stephens, 115 Ga. 192. In Perry v. Paschal, 103 Ga. 134, there was a consideration for the contract signed by the party sought to be bound, and the fact that both parties did not sign the agreement in regard to land was not fatal to a recovery, where the party not signing brought an equitable proceeding for specific performance. So in Swell v. Hogan, 119 Ga. 167, the contract was based on a consideration, or at least the seal attached imported a consideration. It was held that “a unilateral contract, though required by the statute to be in writing, may be made mutual by the other party’s doing some act which would take the case out of the statute so far as he is concerned.” But a tender of the purchase-price, made after the time specified for delivery (if a tender would otherwise be sufficient), was held not to have that effect. For mutual obligations to furnish a consideration, they must be mutually binding.

It is further contended by plaintiff, that, if the allegation was not otherwise sufficient, the statement that it ratified the action of Cath-cart showed the contract to be binding. If the act of Oathcart originally bound the plaintiff, ratification could give it no greater force. Pleading ratification of the act of one acting as agent implies that he originally was wanting in authority, or exceeded his authority. Otherwise, ratification would be unnecessary. As to whether, if one party to a contract is not bound by reason of want of authority in a person signing as his agent, he ean afterward ratify such act and claim that the other party became bound, although the contract was not originally binding on both, the authorities are. in conflict. In Wisconsin it has been held that “Ratification of contract entered into by person acting as agent, but without authority so to do, made by the person for whom he assumed to act as principal, can not validate the contract so as to bind the other contracting party without his assent.” Atlee v. Bartholomew, 69 Wis. 43, 5 Am. St. R. 109. Speaking of a vendee in a contract for the purchase of land, who has not signed the written contract, the same court says: “He ought not to be in a position where he can hold-the other party to the contract, and compel its performance if advantageous to him, and at the same time; be at liberty to avoid the contract on' his part if disadvantageous. Both parties ought to be bound by the contract, or neither should be bound.” Lowber v. Connit, 36 Wis. 183; Dodge v. Hopkins, 14 Wis. 630, 637, 641; Townsend v. Corning, 23 Wend. 435, 444; Governor v. Fox, Eng. Law & Eq. R. 420; Mechem on Agency, § 179(b). Judge Story thought the general rule to be that ratification related back to the act done, both for and against the principal, but with certain exceptions. Story on Agency, §245 et seq. An elaborate discussion of the subject will be found in a note to Atlee v. Bartholomew, 5 Am. St. R. 109, supra, in which the position of Mr. Mechem is criticised. See also Lawson on Contracts, §177; Andrews v. AEtna Life Ins. Co., 92 N. Y. 596; Hammond v. Hannin, 21 Mich. 374; Soames v. Spencer, 16 Eng. Com. L. 32 (Sergeant & Lowber’s ed. 14); McLean v. Dunn, 4 Bing. *722, 13 E. C. L. R. 710; Rev. Rep. 714; 1 Am. & Eng. Ene. L. (2d ed.) 12, 13. The Georgia cases hold, as a general rule, that ratification relates back to the act ratified, except where there is an intervening equity. Howard v. Cassels, 105 Ga. 412(2); Singleton v. Bank, 113 Ga. 527(2); Graham v. Williams, 114 Ga. 716; Civil Code, §3019. As to the point made in the quotation from Lowber v. Connit, supra, eompare decision in Perry v. Paschal, 103 Ga. 137.

We are not, however, required to decide whether in this ease the seller could retain the right to ratify or reject until it developed which would be the more advantageous, and then ratify if for its own interest, and thus by relation back make the contract mutual instead of unilateral. Suppose that the principal could ratify, what would it ratify? The exact contract which the person acting as agent made. What was that ? It was that the written instrument should .not become binding on the seller till signed by one or more of its officers. This agreement formed one of the terms of the written contract made by the person acting as agent. When his acts were ratified, it simply confirmed the contract which he made. It did not operate to make another contract or to change the terms of the one made. Ratification confirms. It neither changes the contract nor makes a new one with different terms.

The contract made, therefore, not having been binding on the seller, and there being no consideration, the purchaser was not bound, and could retire from it before it became a complete and mutually binding contract. Cooley v. Moss, 123 Ga. 707.

The case of George Delker Co. v. Hess Spring & Axle Co., 138 Fed. 647, is relied on by the plaintiff. That decision dealt with three points: that the contract was not too uncertain to be enforced; that the purchaser was not put on his election as to his action in certain events provided for in the contract; and the determination that the contract contemplated manufacturing the articles, and that the measure of damages was one adapted to a manufacturing contract and not to an ordinary contract of bargain and sale. The questions dealt with in this opinion were not involved.

The specification of certain articles under one of the contracts did not go further than to render it binding to the extent of the accepted specification. McCaw Mfg. Co. v. Felder, 115 Ga. 408.

Judgment reversed.

All the Justices concur, except Bede, J., not presiding.