Botticello v. Stefanovicz
411 A.2d 16 (1979)



Facts: Maiy and Walter, a married couple, got a farm as tenants in common. Botticello (P) was interested in buying and was told that their asking price was $100,000. P visited the farm and countered at $75,000. Maiy said no way, but P and Walter eventually agreed upon $85,000 for a lease with an option to purchase and during negotiations Mary stated she would not sell for less. The agreement was drawn up by Walter's attorney and modified by P's. Neither P nor his attorney nor Walter's attorney were aware that Walter did not own the property outright. Walter never represented to P or P's attorney or to his attorney that he was acting for his wife, Mary or as her agent. Mary's part ownership was discovered when a third party sought an easement. P took possession after the execution of the lease and option to purchase. After 3 years and substantial improvements, P exercised the option to purchase. Ds refused to honor the agreement. P sought specific performance and damages. The trial court awarded specific performance. D appealed claiming that Mary was never party to the agreement and thus it cannot be enforced against her. The trial court had found that Walter had acted as her authorized agent and thus the agreement was binding upon her.

Issue:Is a party bound by an agreement that a third party alleges the other party ratified, even if the other party did not have full knowledge of the material terms?

Rule: Ratification of an act allegedly done on behalf of a person by another requires that the person accept the results of the act with intent to ratify and complete understanding of the material circumstances of the act.

Holding:The Supreme Court, held that: (1) trial court's findings were wholly insufficient to support court's conclusion that husband acted as wife's authorized agent in discussions concerning sale of farm which they held as tenants in common, and in execution of written sale agreement; (2) wife did not ratify agreement; (3) memorandum of agreement and consequent part performance by vendee met requirements of statute of frauds, and (4) either specific performance or damages could be appropriate form of relief by vendee against husband.

Analysis: The owners refused to honor the agreement and in the lessee's subsequent suit for specific performance, the trial court compelled the owners to convey the land to the lessee. On appeal, the court ruled that trial court's finding were wholly insufficient to support its conclusion that the husband acted as the wife's authorized agent in the discussions concerning the sale and in the execution of the contract. Moreover, the court ruled, there was no evidence that the wife ratified the underlying contract. Thus, the court ruled, the wife was not bound by the agreement and she could not be forced to convey her interest. A new trial was necessary, however, because the lessee was entitled either to the husband's defective title or damages, but not specific performance as to the wife's interest. The court reversed the judgment as to the non-signatory owner and directed the trial court to enter judgment in her favor. The court ordered a new trial on the issue of relief with respect to the judgment against the other owner.