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Bamber Contractors, Inc. v. Morrison Eng'g & Contracting Co. - 385 So. 2d 327 (La. Ct. App. 1980)

Rule:

Unless a principal expressly ratifies the acts of an agent who has exceeded his authority, the agent alone is bound. La. Civ. Code Ann. arts. 301030133021. Ratification, in the law of agency, is the adoption by one person of an act done on his behalf by another without authority. Ratification amounts to a substitute for prior authority. The burden of proving ratification is on the party asserting it, and to find ratification of an unauthorized act, the facts must indicate a clear and absolute intent to ratify the act, and no intent will be inferred when the alleged ratification can be explained otherwise. Ratification will occur when the principal, knowing of the contract, does not repudiate it but accepts its benefits. 

Facts:

Non-party Kibodeaux signed leases with plaintiff-appellant Bamber Contractors, Inc. for the purported lease of Bamber's equipment. Bamber filed an action against defendant-appellee Morrison Engineering & Contracting Company, Inc. for damages to equipment while in the possession of Morrison during the lease period. Bamber, as the lessor, argued that Morrison had clothed Kibodeaux with apparent authority to lease the equipment and that, as principal, Morrison was liable for the damage. The trial court granted judgment in favor of Morrison on the ground that Bamber had failed to carry its burden of proof. Bamber sought review.

Issue:

Did the trial court err in granting judgment for defendant Morrison after finding that plaintiff equipment lessor Bamber had failed to carry its burden of proving the apparent authority of a purported agent who had signed the leases? 

Answer:

No

Conclusion:

The Court of Appeal of Louisiana affirmed the trial court's judgment in favor of defendant-appellee Morrison. The evidence was clear that plaintiff-appellant Bamber did not lease any equipment to Morrison. Two requirements must be met for the doctrine of apparent authority to apply. First, the principal must make some form of manifestation to an innocent third party. Second, the third party must rely reasonably on the purported authority of the agent as a result of the manifestation. Here, no officer, director, shareholder or employee of Morrison ever approached Bamber regarding the equipment, much less signed a lease for it. Bamber could not have blindly relied on the assertions of an agent. The Court held that one dealing with an agent is given the right and duty to determine, at his peril, whether the agency purportedly granted by the principal would have permitted the proposed act by the agent. The facts did not support a finding of apparent authority in Kibodeaux. Morrison never ratified the acts of the signer of lease agreement, nor was equitable estoppel available to Bamber. To the contrary, the leases were signed by  Kibodeaux on behalf of Kibodeaux & Spell, a separate and distinct company. Thus, Morrison Engineering clearly was not the lessee of Bamber.

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