Botticello v. Stefanovicz

Connecticut Supreme Court · Corporations

CorporationsAgencyReal PropertySpecific PerformanceStatute of Fraudsagencyactual authorityratification

Facts

Mary and Walter Stefanovicz owned a farm as tenants in common, each holding an undivided half interest. Walter negotiated and signed a lease with an option to purchase the farm for $85,000, but neither party nor their lawyers realized that Walter did not own the entire property, and Mary did not sign the agreement. The plaintiff took possession, made substantial improvements, and later exercised the option, offering to pay the balance; the defendants refused to convey. The trial court found Mary bound through agency or ratification and ordered both defendants to convey by warranty deed.

Issue

Was Mary bound by the agreement signed only by Walter on theories of agency or ratification, and was the option-to-purchase agreement sufficiently definite under the Statute of Frauds despite asserted uncertainty in the mortgage payment terms? If the agreement was enforceable against Walter, what relief could be awarded given that he owned only an undivided half interest?

Rule

To prove agency, the plaintiff must show by a fair preponderance of the evidence: (1) a manifestation by the principal that the agent will act for her, (2) acceptance by the agent, and (3) an understanding that the principal will control the undertaking. Marital status or joint ownership alone is insufficient to establish agency. Ratification requires acceptance of the results of an act with intent to ratify and full knowledge of all material circumstances, and the act must have been done or purportedly done on the principal's account. A real estate contract must state its essential terms with sufficient certainty to satisfy the Statute of Frauds, but where the contract gives the buyer the unequivocal right to anticipate all payments and the buyer elects to pay cash, uncertainty in installment terms does not bar specific enforcement. A seller who contracts to convey full title is not excused from performance merely because he owns only a partial interest.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Toledo, Nora Velez and her brother Daniel Velez own a warehouse as tenants in common. Daniel alone signs a contract to sell the entire warehouse to Kestrel River Storage, and Nora had previously told the buyer only that she would not sell for less than $900,000.

Is Nora most likely bound to the contract on an actual agency theory?

Explanation. Actual agency requires proof of a manifestation by the principal, acceptance by the agent, and an understanding that the principal controls the undertaking. A statement that one will not sell for less than a certain price is not the equivalent of authorizing another person to sell at that price, and joint ownership alone does not establish agency. Therefore Nora is not bound on these facts. (Derived from Botticello v. Stefanovicz (n.d.).)