Very near the line of ratification, but is distinguishable from

it in theory.^ Some courts treat the case as one of ratifica-

tion,^ but tills is not justified under the general doctrine, un-

less, indeed, it be upon the theory that the court looks beyond

the corporate entity and fixes upon the stockholders as the

real principals.^

(2) The contract must be professedly made in behalf of such

existing principal. It seems to be the prevailing American rule

that in order that a person may ratify an act of another, the act

must have been done professedly in the name of, and on behalf

of, the one so ratifying, — in other words, that where the act is

done in the name of the actor, without naming or disclosing

any other person, there can be no ratification, even though the

actor was in fact acting in behalf of an undisclosed principal.^

1 Kelner v. Baxter, L. R. 2 C. P. 17i; Abbott i-. Hapgood, 150 Mass.

248.

2 In re Northumberland Avenue Hotel Co., L. R. 33 Ch. D. IG;

Stainsby v. Frazer's Co., 3 Daly (N. Y. C. P.), 98.

8 McArthur v. Tinaes Printing Co., 48 Minn. 319.

4 Howard v. Patent Ivory Co., L. R. 38 Ch. D. 156 ; Paxton Cattle

Co. V. First National Bank, 21 Neb. (521 ; Bell's Gap R. R. v. Christy, 79

Pa. St. 54 ; Rockford, &c. R. r. Sage, 65 III. 328.

6 Whitney v. Wyman, 101 U. S. 392 ; Oakes v. Cattaraugus Water Co.,

143 N. Y. 430.

* See Morawetz on Corp §§ 547-549.

"> Hamlin v. Sears, 82 N. Y. 327; Grund v. Van Vleck, 69 111. 478;

BY RATIFICATION. 45

This is now unquestionably tlie English rule. Where an

ao'cnt made a contract in his own name for the benefit of an

undisclosed principal, but without authority from that prin-

cipal, it was held by the House of Lords in the recent case of

KeigUe'y v. Burant^ that there could be no ratification. This

had previously been assumed to be the English law.^ But the

majority of the Court of Appeal held that the undisclosed

principal might ratify .^ The House of Lords unanimously

reversed this holding, and laid down the doctrine that if one

makes a contract in his own name, not purporting to act on

behalf of a priuci})al, but having a secret intention to act,

though without authority, for a principal, the contract so

made cannot be ratified by the undisclosed principal so as to

enable him to sue or render him liable to be sued upon it.

"The whole hypothesis of ratification is, that the ultimate

ratifier is already in appearance the contractor, and that by

ratifying he holds as done for him what already bore, pur-

ported or professed to be done for him. There is no room

for ratification (unless all the world may ratify) until the

credit of another than the agent has been pledged to the

third party."*

If a. Makes a contract in the name and on 1)ehalf of b., c.

cannot, by an attempted ratification, take advantage of it, nor

can C. ratify it so as to become liable upon it.^ If A. makes

the contract in his own name, and really on his own behalf,

B. cannot in any way become a party to it.'' If A makes the

Herd v. Bank of Buffalo, 66 Mo. App. 643; Pittsburg, &c. R. v. Gazzara,

32 Pa. St. 340; Western Pub. House v. Dist. Tp. of Rock, 84 Io^va, 101.

1 1901, A. C. 240.

2 ]\Iatheson v. Kilburn, 1 Sm. L. C. (10th ed.) p. 349; Saunderson v.

Griffith, 5 B. & C. 909 ; Wilson v. Tumman, 6 M. & G. 236 ; Watson v.

Swan, 11 C. B. n. s. 756 ; dissenting opinion of A. L. Smith, L. J., in

Durant v. Roberts, 1900, 1 Q. B. 629, 633.

3 Durant v. Roberts, 1900, 1 Q. B. 629.

4 Lord Robertson in Keighley v. Durant, 1901, A. C. 240, 259.

^ Saunderson v. Griffith, 5 B. & C. 909 ; Jones v. Hope, 3 Times L.

Rep. 247 ; Hawke v. Cole, 62 Law Times, 658.

8 Boulton V. Jones, 2 H. & N. 564; Boston Ice Co. v. Potter, 123

Mass. 28.

46 FORMATION OF AGENCY

contract in his own name as principal, but really on behalf

of an undisclosed principal, the latter cannot ratify it.^

Under the rule that the principal must be disclosed as a con-

dition precedent to ratification, it has been held that it is enough

that some person who may be ascertained and identified is re-

ferred to. Thus insurance may be effected in behalf of all

persons, generally, who may be shown to be interested, and

any person actually interested may ratify.^ So also one may

act in behalf of an heir or administrator or owner, though not

specifically identified, and if such person is capable of being

ascertained, he may ratify.^

Whether a sheriff, in making a levy without special instruc-

tions, acts on behalf of an attaching creditor or as an oflicer

of the court serving in a public capacity, lies at the root of a

difference of judicial opinion as to whether an unauthorized

and wrongful levy may be ratified. The leading English case

holds there can be no ratification,* but some American cases

hold that there may be a ratification,^

В§ 33. (II.) Assent of the principal.

Ratification, like prior authority by agreement, rests on

assent. The assent of the agent is already given by his

assuming to act. The assent of the third party is already

given by his entering into the contract.^ The assent of the

principal is therefore all that is required to make the contract

binding on him and on the third person. Much the same

considerations govern the doctrine of assent in ratification as

govern the assent in the acceptance of an offer.^ These may

^ Keighley v. Durant, supra.