Story Case

Clyde Rucker was in the employ of a real estate agent by the name of R. A. James. Rucker was in need of money, so he made out a note, signed by himself, carried it to the First National Bank and requested that they discount it. The bank refused to do so unless he would get some other person to sign the note with him. Clyde Rucker went away and forged the name of R. A. James to the instrument, as a joint maker. He carried the note back, and the bank gave him money on it. A few days later Mr. James was in the bank, and he was asked about the note, looked at the instrument and said it was a forgery, but preferred to stand by it rather than have the young man prosecuted. When the note came due Rucker was unable, and James refused, to pay it. Suit was brought against Mr. James.

Under the foregoing circumstances what should be the decision of the Court?

Ruling Court Case. Workman Vs. Wright, Volume 14 Ohio Reports, Page 647

A third person, whose name was not mentioned in the case, forged the name of Wright to a promissory note. It was then indorsed to Workman, who paid full value therefor, and had no knowledge or means of knowing, that the maker's signature was forged. After the forgery was discovered, Wright told Workman that he would pay the note when it fell due notwithstanding the forgery. When that time came, however, Wright had changed his mind and refused to pay the note. Workman thereupon brought suit upon the note, alleging that, although it was a forged instrument in the beginning, Wright ratified the unauthorized act of the third person by his promise to pay.

Wright contended that the forgery was a void act and therefore could not be ratified. He contended that he could not have authorized the forgery, although he might have authorized the signing of the note.

Decision: The court was of the opinion that the act of the third person in the first instance was absolutely void, and such being the case, was incapable of being ratified by any subsequent act, conduct or promise of the person whose name was forged.

Mr. Justice Wright, in the course of his opinion said: "It is said that a distinction exists between the classes of cases to which principles of ratification apply. Where the original act was merely voidable in its nature, the principal may ratify the act of his agent, although it was unauthorized. But where that act was void, as in the case of a forgery, it is said that no ratification can be made."

Judgment was given for Wright.

Ruling Law. Story Case Answer

The doctrine of ratification presupposes that the act ratified is valid except for the lack of authority on the part of the agent. In this sense the act is merely voidable. When the principal approves the act, the defect in the act caused by lack of authority is removed, and the act becomes binding. But if the act is defective for reasons other than lack of authority on the part of the agent, obviously the approval of the principal can only remove the lack of authority, and cannot remove other defects over which he has no control. The authorities generally say that a forgery is such an act. It is void in itself, aside from lack of authority. So it cannot be ratified by the principal. In the Story Case, the act of Rucker in signing the note was void so far as Mr. James was concerned, and therefore cannot be ratified. James was not liable on the ratification.