Eadie, Guilford & Co. v. Ashbaugh , 44 Iowa 519 ( 1876 )

Seevers, Ch. J.

The following propositions may be regarded as established: 1. That Allen was not the agent of the plaintiffs, and had no authority to sell the machine with a warranty; 2. That he assumed to act as such agent, and did sell the machine with a warranty; 3. That the machine did not correspond with such warranty, and that defendant returned the same to Allen, as he was authorized to do by the terms of 'the sale; 4. That plaintiffs accepted the notes without any knowledge that it had been sold with a warranty; 5. That plaintiffs received the notes from their agent Woodward; and 6, That plaintiffs are now seeking to avail themselves of the benefit of the sale, and repudiate the warranty.

l. principal nvifflclatfon: sumed agent, The general rule is that the act of the agent “is treated throughout as if it were originally authorized by the principal,” for the ratification relates back to the time of the inception of the transaction, and has a eompíete retroactive efficacy. Hence it is, if the agent has made a contract without authority, and it is afterward ratified, the principal may be sued thereon in the same manner and with the same effect as if he had originally given the authority. Story on Agency, § 244, 250. If the principal accept, receive, and hold the proceeds, or beneficial results of a contract, he will be estopped from denying an original authority or a ratification. And if fie does not disavow the acts of his agent as soon as he can after they have come to his knowledge, he makes these acts his own. An adoption of the agency in part adopts it in the whole, because a principal is not permitted to accept and confirm so much of a contract made by one pmportmg to be his agent as he shall think beneficial to himself, and reject the remainder. 1 Parsons on Contracts, 50-52.

“Where one assumes, without authority, to act for another, if that other wishes to avail himself of the acts of the agent, he must adopt the whole or none.” Davenport Saving Fund Association v. N. A. Fire Ins. Co., 16 Iowa, 74-79.

The fact that the plaintiffs received and accepted the notes in ignorance of the fact that they were the proceeds of the sale of the machine, and that the same had been sold with a warranty, will not avail them unless they restore the defendant to as good a situation as he was before the acceptance of the notes. Culver v. Ashley, 19 Pick., 300.

It was the duty of Allen to have communicated the terms of the sale to the plaintiffs, or their agent, Woodward; and it was the duty of the plaintiffs to have made inquiries as to the terms and conditions of the sale before accepting the notes; failing to do this, and by blindly accepting the notes without making any inquiry, they must be deemed to have adopted whatever contract was made under and by virtue of which the notes were obtained. Meehan v. Forrester, 52 N. Y., 277.

It is not material that the plaintiffs authorized or knew of the warranty. They cannot be permitted to enjoy the fruits of the bargain without adopting all the instrumentalities employed in bringing it to a consummation. “ They have ratified the sale by seeking to enforce payment of the notes given for the thing sold.” Elwell v. Chamberlin, 31 N., Y., 611-19; Mundorf v. Wickersham, 63 Penn. St., 87; Morse v. Ryan, 26 Wis., 356.

“ Where one person assmnes to act as the agent of another' without authority, the person for whom he assumes to act cannot claim the benefit of his agency in part only, and reject it as to tbe. residue of the transaction.” Benedict v. Smith, 10 Paige, 127.

The plaintiffs in this action are seeking to avail themselves of the benefits accruing to them under the sale made by Allen, and at the same time avoid the burdens of such contract; they having now at least full and complete knowledge of the terms and conditions of such contract. This they cannot be permitted to do. If the rule contended for by plaintiffs should prevail, it would result in the grossest injustice and fraud; and upon neither principle nor authority can such a rule be justified. .

The judgment of the Circuit Court must therefore be

Reversed.