Court Opinion

ID: 6759307
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:29:59.379113+00
Date Added: 2024-06-11T16:02:32.945903
License: Public Domain

Clifford F. Brown, J.,
concurring. I wholeheartedly endorse the well-reasoned analysis and sound result expressed in the majority opinion. I write separately to reinforce that it would be inequitable, in my view, to permit appellee corporation, having accepted and retained the benefits of an employment contract with appellant, to repudiate that contract simply *59because corporate formalities were not technically followed in the consummation of the contract.
Both the majority and dissent ably recite 2A Fletcher, Cyclopedia of the Law of Private Corporations (1982), in support of their respective analyses. My concurrence with the majority’s viewpoint rests on my belief that the facts as alleged, if proven, fall squarely within the long-recognized doctrine of ratification by acquiescence. As the name of the doctrine implies, acquiescence does not require any particular formality, but instead is implied from the facts and circumstances surrounding the transaction.
“Ratification, being purely a voluntary act upon the part of the principal, ordinarily requires some positive act. But the rule that when a principal has not disaffirmed an unauthorized act of his agent within a reasonable time after it came to his knowledge, he will be deemed to have acquiesced in such act, applies to corporate bodies as well as individuals. Ratification may be implied, or the corporation be held estopped to deny ratification, from acquiescence on the part of the corporation. When the officers or agents of a corporation exceed their powers in entering into contracts or doing other acts, the corporation, when it has knowledge thereof, must promptly disaffirm the contract or act and not allow the other party or third persons to act in the belief that it was authorized or has been ratified. If it acquiesces, with knowledge of the facts, or fails to disaffirm, a ratification will be implied, or else it will be estopped to deny a ratification. In other words, acquiescence with the full knowledge of the facts is equivalent to ratification of unauthorized acts of corporate officers or directors. After knowledge of the unauthorized contract, the corporation must repudiate it within a reasonable time or else consent and approval will be presumed to have been given to the officer’s act or contract. * * *” 2A Fletcher, Cyclopedia of the Law of Private Corporations, swpra, at 472-473, Section 769.
I agree with the majority’s holding that summary judgment in favor of appellee herein was improper because the evidence presented was sufficient to raise questions of material fact. If the majority of the board of directors indeed had actual knowledge that an employment contract had been entered into with appellant, and the corporation accepted and retained the benefits of appellant’s services rendered in accordance with that contract during the transition period, that scenario would clearly constitute ratification by acquiescence. To hold otherwise would unduly elevate form over substance, and would unnecessarily penalize appellant for his legitimate reliance on the validity of his contract with appellee.
Accordingly, I concur.