Opinion ID: 889153
Heading Depth: 1
Heading Rank: 9

Heading: Satisfaction of the Criteria for Ratification

Text: ¶ 43 Sherick next argues that the elements for ratification, set forth in Safeco, are not satisfied under the uncontested facts herein. For the principal to ratify the agent's action, three criteria must be met: (1) the principal accepts the benefits of the act, (2) with full knowledge of the facts and (3) either the circumstances or an affirmative election indicate the principal's intention to adopt the unauthorized arrangement. Safeco, 200 Mont. at 453, 652 P.2d at 1163. Sherick argues that none of the elements were satisfied because [n]either Ms. Osburn nor Mr. Hill received any benefit by virtue of the forgeries, nor is there any evidence they had `full knowledge' of the facts ... [and] there isn't anything indicating `an intention to adopt the unauthorized arrangement.' ¶ 44 In considering whether Susan Hill's unauthorized conveyance was ratified, the District Court analyzed the status of the parties in the chain of title of the subject property. The court first concluded that, in light of the above-referenced deeds which had been voided by forgery, legal title was most recently vested in Raymond and Susan Hill by virtue of the warranty deeds from Osburn to Donald and Patricia Hill, and from Donald and Patricia Hill to Raymond and Susan Hill, recorded on December 14, 2000. However, Raymond and Susan Hill had both been served in this action and had been defaulted after failing to appear. Susan Hill was serving time in federal prison resulting from her convictions of wire fraud, mail fraud, money laundering, and criminal forfeiture, and Raymond Hill had apparently been indicted in federal court in connection with real estate fraud. Thus, the District Court determined that their failure to appear waived their interest in the property and further, citing 28 Am.Jur.2d Escrow § 38 (2000) ([r]atification may be presumed by a grantor remaining silent when called upon to speak and others have been injured) and the Modern Law of Deeds to Real Property, § 15.2 ([r]atification requires an intent to affirm the deed.... Sometimes ratification is implied from the circumstances), determined that Raymond and Susan Hill's actions had ratified whatever forged conveyance Susan Hill allegedly made. [3] ¶ 45 Moving back up the chain of title, the District Court noted that Donald and Patricia Hill were the next link pursuant to the warranty deed from Osburn to them, recorded on December 14, 2000. Patricia Hill had, prior to her decease, quitclaimed her interest to Donald in May of 1998, and her estate had been dismissed from the action. The District Court explained that Donald Hill had also been dismissed from the action and had waived any interest in the property by way of his stipulation with Erler, filed in December of 2001. [4] ¶ 46 The District Court then determined that the next link back up the chain of title was Osburn, who held title to the property when it was purportedly transferred to Erler. However, Osburn was also dismissed from the action and waived any interest she had in the property by way of her stipulation with Erler. The District Court concluded that, by her actions, Osburn had subsequently ratified the unauthorized conveyance by Susan Hill to Erler. ¶ 47 Osburn, the grantor, did not sign the March 25, 1997 Osburn-Erler deed, and at that time did not authorize Susan Hill to execute the deed on her behalf, or even know of the transfer. Further, the warranty deed from Osburn, which conveyed her fee interest via warranty deed to Donald and Patricia Hill, was signed when she originally sold the property on contract in 1986, prior to the purported Osburn-Erler transaction, and was held in escrow until the contract for deed was paid off, when it was released and recorded in December of 2000, along with the warranty deeds from the Hills to Raymond and Susan Hill. Nonetheless, Osburn's conduct clearly indicates that she knew the material circumstances affecting the purported transfer of the property by Susan Hill to Erler when she signed the December 2001 stipulation, including the effect of the warranty deed she had signed, and clearly expressed acceptance of the conveyance's result in ceding title to Erler. Ratification may occur in either an express oral manner or solely by means of personal conduct. Audit Services, 183 Mont. at 477, 600 P.2d at 813. Ratification may be effected by express declaration or by implication, and it may be implied from any acts or conduct on the part of the principal which reasonably tends to show an intention on his part to make the act of the agent his own. Larson, 61 Mont. at 8, 201 P. at 687. Moreover, the District Court noted that Osburn had been fully compensated for her interest in the property, thereby accepting the benefit of Susan Hill's conveyance to Erler. Nothing in her affidavit concerning her lack of knowledge about the forgery defeats the effects of her subsequent actions. Accordingly, we conclude that the District Court correctly concluded, on this evidence, that the elements of ratification were satisfied and that Osburn's subsequent actions ratified the Osburn-Erler deed.