Court Opinion

ID: 9825051
Source: CourtListenerOpinion
Date Created: 2023-09-01 11:59:14.968761+00
Date Added: 2024-06-11T07:40:22.067428
License: Public Domain

Denied March 5, 1918.
On Petition for Rehearing. Rehearing Denied.
*574Department 2.
Mr. Justice Moore
delivered the opinion of the court.
In a petition for rehearing it is insisted that the defendant was under no legal obligation to reply to the plaintiff’s letter of January 11, 1915, containing the information that the term of the lease had been extended two months, from November 1st of that year and the monthly rent of $200 reduced to $125 to May 1,1915, and to $150 for the remainder of the term, which modification was made pursuant to an agreement with C. B. Williams, the agent of the defendant, with the understanding that its guaranty would continue until December 31,1915, and that when this court concluded' the defendant’s failure to answer such communication constituted an acceptance of the condition stated therein, the plaintiff was thus permitted to introduce evidence which had been manufactured for the occasion, whereby an error was committed.
6. When oral declarations are made by a party in the presence and hearing of his adversary who is under no restraint and conscious of the charge thus imputed, asserting against him an obligation which might be enforceable, or his commission of an offense, or limiting .his title to property, or affecting him injuriously, it is reasonable to suppose he would promptly deny such positive declarations, if he desired to escape unfavorable inferences which might be deduced from his silence, and hence he is usually required hastily to refute such charges: 16 Cyc. 958. This rule, however, does not generally apply to written communications containing statements of facts, a failure to deny which is not construed as a tacit admission of the truth of the writing, and no unfavorable inference arises from such silence, except in cases when the party receiving the letter has invited it, or where there is reason to *575believe he has acted upon the information thus received, or when there has been sent with the letter bills showing a shipment;of goods, which invoices have been retained without objection, or where money has been sent upon a condition stated in the letter, and the sum has not been returned: 16 Cyc. 960. As sustaining the legal principle thus stated, see State v. MacFarland, 83 N. J. L. 474 (83 Atl. 993, Ann. Cas. 1914B, 782); Seevers v. Cleveland Coal Co., 158 Iowa, 574 (138 N. W. 793, Ann. Cas. 1915D, 188).
7. These rules, however, have no application to the law governing the relation of agency. If a principal, when fully notified thereof, neglects promptly to disavow an act or contract of his agent in excess of his authority, such silence will usually be interpreted as an implied ratification, and particularly so, if the failure speedily to repudiate such conduct or agreement might impose upon the other party loss or injury: 31 Cyc. 1276; 2 C. J. 505; Curtze v. Iron Dyke Min. Co., 46 Or. 601, 606 (81 Pac. 815).
“The rule,” says Mr. Justice Bean in Reid v. Alaska Packing Co., 47 Or. 215, 220 (83 Pac. 139), “is elementary that when an agent, in contracting for his principal, exceeds his authority, ¡the principal, upon being fully informed of the facts, must, within a reasonable time, disavow or disaffirm the act of his agent, especially in cases where his silence might operate to the ¡prejudice of innocent parties, or he will be held to have ratified and affirmed such unauthorized act, and such ratification will be equivalent to a precedent authority.”
To the same effect see, also, 2 C. J. 504, § 124, and exhaustive notes on this subject.
8. Ratification by a principal of an unauthorized act of his agent has occasionally been grounded upon the doctrine of an equitable estoppel. A clear distinction, *576however, exists between an estoppel in pais and ratification.
“The substance of ratification is confirmation of the unauthorized act or contract iafter it has been done or made, whereas the substance of estoppel is the principal’s inducement to another to act to his prejudice. Acts and conduct amounting to an estoppel in pais may in some «instances amount to a ratification; but on the other hand ratification may be complete without any elements of estoppel”: 2 C. J. 469; 31 Cyc. 1247.
In the case at bar, it is possible the extension of the term of thedease and the reduction of the monthly rent might be regarded as creating an equitable estoppel, but however that may be, we rest our decision upon an implied ratification by the defendant of its agent’s unauthorized assumption of authority, by failing, when fully notified thereof, promptly to deny his power to consummate the agreement.
We therefore adhere to the former opinion and the petition for a rehearing is denied.
Rehearing Denied.
Mr. Chief Justice McBride, Mr. Justice McCamant and Mr. Justice Bean concur.