A contract entered into with one who is believed to be the authorized agent of another, but who in reality has no authority to act in the premises, is void. The promise which is supposed to be made by the principal through the instrumentality of his agent is wanting. If the agent has been held out as possessing the authority to make the contract, the principal may be liable under the doctrine of estoppel.1 But if the agent has neither actual nor implied authority, a benefit conferred upon the supposed principal in the course of the performance is a benefit conferred in reliance upon a right which does not exist. It is true that by a subsequent ratification of the agent's promise the principal may make himself contractually liable;2 and the acceptance of the benefit of the other party's performance, with full knowledge of the circumstances, may be regarded as an implied ratification.3 But if the benefit is received under circumstances falling short of ratification, the principal should be required, upon quasi contractual principles, to make restitution.
1 See Tiffany, "Persons," (2d ed.) Sec. 230 and cases cited ; Wald's Pollock, "Contracts," (Williston's ed.) p. 93 and American cases collected in note.
2 Coburn v. Raymond, 1904, 76 Conn. 484; 57 Atl. 116; 100 Am. St. Rep. 1000; Scanlan v. Cobb, 1877, 85 111. 296; Fay v. Burditt, 1882, 81 Ind. 433; 42 Am. Rep. 142; Gribben v. Maxwell, 1885, 34 Kan. 8; 7 Pac. 584; 55 Am. Rep. 233; Young v. Stevens, 1868, 48 N. H. 133; 2 Am. Rep. 202; 97 Am. Dec. 592; Eaton v. Eaton, 1874, 37 N. J. L. 108; 18 Am. Rep. 716; Tiffany, "Persons," (2d ed.) Sec. 233.
3 See cases cited in note 2.
4 Nichol v. Thomas, 1876, 53 Ind. 42; Hovey v. Hobson, 1866, 53 Me. 451; 89 Am. Dec. 705; Gibson v. Soper, 1856, 6 Gray (Mass.) 279; 66 Am. Dec. 414; Crawford v. Scovell, 1880, 94 Pa. St. 48; 39 Am. Rep. 766; Williams v. Sapieha, 1901, 94 Tex. 430; 61 S. W. 115, 118; Tiffany, "Persons," (2d ed.) Sec. 233.
A recovery, either at law or in equity, has frequently been allowed:
Evans v. Garlock, 1885, 37 Hun (N. Y. Sup. Ct.) 588: Action in the nature of an ejectment. The defendant asks for equitable relief. Rogers, the husband of plaintiff's farm tenant, assuming to have authority to act for the plaintiff, contracted to sell a house and lot to the defendant, who paid part of the purchase money. With $450 of the money so paid Rogers purchased a draft which he sent to plaintiff on account of rent. Bradley, J. (p. 591): "The relief in view is equitable in character and the question is, which of the parties is in equity and good conscience entitled to the money? The defendant was wholly governed by misapprehension and mistake of the fact in respect to the authority of Rogers, and parted with the money upon the faith and belief that he legitimately represented the plaintiff, and was his agent in the transaction duly authorized in that behalf. And the plaintiff, on the receipt of it, neither relinquished nor advanced anything which made him the recipient for value in a legal sense. It would seem to follow that upon well-recognized equitable considerations he may be treated as trustee of the fund in behalf of the defendant, on his refusal to ratify the purpose for which the money was paid by her." 1
1 Huffcut, "Agency," Sec. 102 and cases cited.
2 Huffcut, "Agency," Sec. 30 and cases cited. 3 Mechem, "Agency," Sec. 148.
There are several cases, however, which hold that the receipt of a benefit by the principal without a knowledge of all the material facts does not result in obligation. In other words proof of ratification is essential:
Kelley v. Lindsay, 1856, 7 Gray (Mass.) 287: Dewey, J. (p. 290): "If Coffin had no authority to borrow money on the account of the defendant, to expend in his business and to pay his debts, the money advanced for that purpose, though so applied, created no debt against the defendant. No one can thus make himself a creditor of another by the unsolicited payment of his debts: and it is not enough to create a liability that the defendant had the benefit of the money, by reason of its being expended in his business or in the payment of his debts." 2
Spooner v. Thompson, 1876, 48 Vt. 259: Redfield, J. (p. 265): "If Cutting borrowed money of the plaintiff on the credit of Mrs. Post, without her authority, and paid a part of it to Holmes & Ross without her knowledge, it could give the plaintiff no right of action against her. She could not be made the debtor of the plaintiff without her consent. If Cutting borrowed money in her name, without authority, and she had knowledge of the fact, and that the money went into her business, and she had the benefit of it, she thereby adopts the transaction and makes it her own." 3
1 Also: Reid v. Rigby,  2 Q. B. 40, (cf. Bannatyne v. Maclver,  1 K. B. 103, where it is intimated that there could be no recovery at law) ; First Nat. Bank v. Oberne, 1886,121 111. 25; 7. N. E. 85; Leonard v. Burlington, etc., Assn., 1881, 55 la. 594; 8 N. W. 463; Billings v. Inhabitants of Monmouth, 1881, 72 Me. 174; First Baptist Church v. Caughey, 1877, 85 Pa. St. 271; Werre v. Northwest Thresher Co., 1911, S. D. ; 131 N.W. 721; Farrand, etc., Co. v. Board of Church Extension, 1898, 17 Utah 469; 18 Utah 29; 54 Pac. 818; Black Lick Lumber Co. v. Camp Const. Co., 1908, 63 W. Va. 477 ; 60 S. E. 409, 410.
2 See, however, Newell v. Hadley, 1910, 206 Mass. 335, 343, where it is suggested that equity might have allowed the plaintiff to stand in the shoes of the defendant's creditors.
3 See also Bohart v. Oberne, 1887, 36 Kan. 284; 13 Pac. 388; Baldwin v. Burrows, 1872, 47 N. Y. 199.
Otis v. Inhabitants of Stockton, 1884, 76 Me. 506: Peters, J. (p. 507): "Although the question was not so distinctly presented in some of the earlier of this class of cases, it is now well settled that an action for money had and received will not lie against a town for money loaned to its officers upon the supposed credit of the town, but without the authority of the town, although the money be applied to the payment of the debts and liabilities of the town, unless the town make the act valid by its subsequent sanction and consent. If there be no precedent authority for the action of the town officers, it must be affirmatively proved that the town has subsequently approved and ratified their acts. Any other doctrine fails to extend to municipal corporations the privilege and immunities that are accorded by the law to any and all other classes of contracting parties." 1
The reason given for this conclusion - that to allow a recovery would be to enable one to make another his debtor without his consent - is met with the obvious answer that quasi contractual obligation in general is not dependent upon consent, and so long as the plaintiff's enrichment of the defendant is the result of honest mistake and not of malicious interference with the defendant's affairs, there is no harm in compelling restitution.