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It is a well-established rule that the declarations and representations of an alleged or reputed agent are not admissible evidence to prove the fact of his agency against the principal.
Defendant, distributor of video poker machines, entered into a business relationship with router/operator in which router was to procure video poker locations, install and service the machines, and collect the revenue produced by the machines. Router, representing itself as an agent of defendant, entered into an agreement with plaintiff in which plaintiff was to seek locations for defendant's machines. When plaintiff was not compensated for her services, she filed suit against defendant. Defendant argued that router was not its agent and had no express or apparent authority to enter into contracts on its behalf and that it never ratified the contract. Judgment was entered in favor of the plaintiff. Defendant appealed.
Was it proper to render judgment in favor of the plaintiff based on the alleged authority of the agent?
The court reversed the judgment in favor of the plaintiff, holding that there was no evidence that defendant gave router actual authority to contract with plaintiff. The court further found that the contract was not ratified, because defendant neither had full knowledge of all material facts nor expressed any interest in adopting the contract as its own.