Opinion ID: 1598165
Heading Depth: 1
Heading Rank: 12

Heading: the 2½% interest from jett to zink

Text: The trial court found that Zink had wrongfully extracted from Jett a 2½% interest in the transaction for a nominal consideration of $2,000. This occurred in April of 1959. In 1964, after the parties were already in litigation, Jett repurchased this 2½% interest from Zink for $141,921.73. Sterling learned of this entire side deal for the first time through an amended pleading by Jett seeking a return of his money. Zink subsequently, under pressure of disbarment from Sterling, paid $140,000 of this resale price to Sterling. By further amendment, Jett then claimed a refund of the $140,000 from Sterling. The court found that Zink's wrongful actions (the original extortion) were ratified by Sterling when it required Zink to pay to it $140,000 and decreed that Sterling pay to Jett $140,000 with interest from June 27, 1967the date of its receipt of its money from Zink. The immediate facts leading up to the repurchase of this 2½% interest by Jett from Sterling show that Chamberlain purchased Jett's interest in 1964, and, as a condition to this purchase, he required Jett to reacquire for Chamberlain Zink's 2½% interest. The purchase price was arrived at by simply applying the same ratio of value used by Chamberlain in purchasing Jett's interest. These facts render impossible our efforts to uphold the lower court's decree returning to Jett from Sterling the $140,000 sum. Indeed, appellees do not claim that there was any wrongful action connected with the repurchase of the 2½% interest by Jett from Zink; and the evidence does not contain even a scintilla that the resale transaction between Jett and Zink was tainted with any coercion, pressure, misrepresentation, or other wrongful act on the part of Zink at that time. All of the parties concede that Sterling knew nothing of this side deal between Zink and Jett, including the repurchase, until well after the fact. Conceivably, if Zink had sold this 2½% interest to a third party and Sterling had made Zink pay it the purchase price therefor, or if Jett had not repurchased from Zink and had included in his cross claim a prayer for rescission, a different situation might be presented in favor of the trial court's holding. However, the development of our case law on the principle of ratification compels the conclusion that one who treats the contract as in force through express affirmance by word or deed, after full knowledge of the alleged fraud, defeats the right of rescission. Where the parties, as here, were already in litigation and Jett voluntarily paid Zink approximately $142,000 for the repurchase of the 2½% interest, ratification of the initial wrongful act of extracting the 2½% interest unquestionably results as a matter of law. Nelson v. Darling Shop of Birmingham, Inc., 275 Ala. 598, 157 So.2d 23 (1963); Stephenson v. Allison, 123 Ala. 439, 26 So. 290 (1899). [10]