March 16, 1909, one McIntosh telephoned from his country place to Wilson, the agent of the Hartford Fire Insurance Company (the defendant) at Quincy, Fla., asking him to cover the stock of tobacco belonging to Kline Bros. & Co. (plaintiff's assignor) at that place with insurance against fire for one year from March 16, 1909, for the sum of $3,500. On the same day Wilson wrote the policy in suit for the defendant and took it to the warehouse of Kline Bros. & Co. with the intention of delivering it to McIntosh, and, not finding him, left the policy there for him. March 19th the property was totally destroyed by fire. Within a week thereafter McIntosh tendered to the defendant’s agent the premium, which the latter refused! to take; but the defendant did not deny liability until April 30, 1909, when it wrote:
“Messrs. Kline Bros. & Company, Quincy, Fla. — Gentlemen: This is to notify you that-the paper which, you hold, purporting to he a policy of insurance against loss by fire, dated March 16, 1909, No. 985, we have just-learned after diligent inquiry is not and never was a contract of this company. In the event that it shall appear we are mistaken either as to the fact or the law upon which this conclusion is based, we further notify you that this company hereby specifically denies liability under such policy.
“Xours very truly, Hartford Fire Ins. Co.
“Egleston & Prescott, General Agents.”
The statement that the policy delivered “is not and never was' a contract of this company” is founded upon the proposition that McIntosh had no authority to represent Kline Bros. & Co. when he ordered the insurance. A great deal of evidence on this subject pro
The trial judge directed a verdict for the defendant, apparently upon two grounds, which he had! passed upon in a previous action arising out of the same fire (Kline Bros. & Co. v. Royal Ins. Co. [C. C.] 192 Fed. 378) viz.: First, that McIntosh had no authority to make the contract for Kline Bros. & Co.; and, second, that they could not ratify it after the fire had occurred.
[1] .No one disputes the general principle that one may ratify an unauthorized contract made on his behalf and that the effect is the same as if he had himself originally made the contract. It is expressed in the Latin maxim: “Omnis ratihabitio retrotrahitur et man-dato equiparatur.” The very idea of ratification implies that one party has an option to ratify or not, and that he has this advantage over the other party, to wit: That he may hold the other party whether the other party wish it or not, whereas the other party cannot hold him if he is not willing- to be "held. The English cases go so far as to hold that one may ratify even after the other party has withdrawn from the contract. Boulton Partners v. Lambert, 41 Chan. Div. 295; In re Tiedeman, [1889] 2 Q. B. D. 66; In re Portuguese Consolidated Copper Mines, Ltd., [1890] 62 L. T. R., 88.
It is not surprising that the trial judge refused] to follow these cases, and it is not necessary for us to go so far in holding that the judgment below is erroneous. Before ratification an unauthorized contract is not binding, because it is not mutual. The party discovering the lack of authority may therefore withdraw. When he has done so there is nothing to ratify. What shocks us at first blush is that one may ratify an unauthorized contract after he knows that it is to his own advantage to do so, and so bind the other party to his apparent disadvantage. Further reflection, however, causes this apparent unfairness to disappear. The other party, having agreed to be bound by this contract and not having withdrawn from it, has no ground to complain if compelled to perform; the original lack of authority having been cured.
The latest English case cited fully sustained the view of the court below. Grover v. Mathews, [1910] 2 K. B. 401. In it the plaintiffs had a policy of the defendant on their factory for £1,000 for 12 months from March 26, 1908. It had been effected! through their broker, Brows, by another broker, Dott, representing the defendant. March 4, 1909, Brows wrote to Dott asking that the policy be renewed. March 5th Dott sent a binder renewing it. March 27th the factory was destroyed by fire, and on that date two directors of the plaintiff company sent the premium to Dott, who declined to accept it. The question was whether, assuming that a valid contract for fire insurance had been made through Brows with the defendant by Dott on behalf
Cases arising out of policies taken out by carriers or bailees and maritime policies for the benefit of whom it may concern throw no light on the question under consideration, because in them the insurer must be held to have insured any person whose interest the insured intended to cover.
[2] We agree with the court below that the plaintiff failed to prove that McIntosh was authorized to contract for Kline Bros. & Co. If they had been sued for the premium on the policy, they could have successfully defended, unless the company proved ratification. But as in this case their assignee is claiming on the policy, proof of ratification lay upon him. It is true that the record does not show expressly whether Kline Bros. & Co. ratified the contract before April 30th, when the defendant withdrew from it, although it may be inferred from the defendant’s letter of that date, the pleadings, the conduct of the parties, and the course of the trial that they had made claim on the policy before it. However, as the case was decided, so far as this question is concerned, on the ground that they could not ratify after the fire, we think there ought to be a new tidal,' at which the plaintiff will have an opportunity of showing, if he can, that they did ratify the contract before the defendant withdrew from it.
The judgment is reversed.