Associated Management Services, Inc. v. Ruff, Case Number DA 17-0102, Cit. 2018 MT 182

Representation: Agent: CEO: Board of directors: Licensing agreement:

Actual authority: Ostensible authority: Ratification: Equitable estoppel:

(…) AMS nonetheless asserts that the 2008 licensing agreement is invalid or unenforceable due to lack of mutual assent on the ground that Diane Ruff executed the agreement in an agency capacity without authorization of AMS’s board of directors.

Agency is “the fiduciary relation which results from the manifestation of consent by one person to another” that the agent shall act on behalf of the principal subject to the principal’s control and consent. Butler Mfg. Co. v. J & L Implement Co., 167 Mont. 519, 523, 540 P.2d 962, 965 (1975). See also Restatement (Third) of Agency § 1.01 (2006); § 28-10-101, MCA (agent is one who represents another in dealings with third parties).

Except as otherwise provided by statute, a principal may authorize an agent to perform any act that the principal may lawfully perform. Section 28-10-105, MCA. A principal may create an agency relationship by prior authorization or subsequent ratification of the representative acts of another. Section 28-10-201, MCA.

An agent has the authority actually or ostensibly conferred upon the agent by the principal. Section 28-10-401, MCA. Actual authority is authority that a principal either “intentionally confers” upon the agent or intentionally or negligently “allows the agent to believe the agent possesses.” Section 28-10-402, MCA. Ostensible authority is authority that a principal intentionally or negligently “allows a third person to believe the agent possesses.” Section 28-10-403, MCA. A principal may confer actual or ostensible authority upon an agent by express authorization or circumstantial implication. Freeman v. Withers, 104 Mont. 166, 172, 65 P.2d 601, 603 (1937). An actual or ostensible agent has implied authority to “do everything necessary, proper, and usual in the ordinary course” of the principal’s business “for effecting the purpose of the agency.” Section 28-10-405(1), MCA. A disclosed principal is liable in contract to third parties for the representative acts of an agent within the scope of the actual or ostensible authority conferred on the agent by the principal. Restatement (Third) of Agency § 6.01; see also §§ 28-10-401 and -405, MCA. Accordingly, unless otherwise “specially restricted” by board directive or bylaw, “a general or managing officer or agent” of a corporation has actual or ostensible authority to “enter into any contract which is usual, proper, or necessary . . . in the ordinary transaction of the company’s business.” Audit Servs., Inc. v. Elmo Rd. Corp., 175 Mont. 533, 536, 575 P.2d 77, 79 (1978).

Here, it is beyond genuine material dispute on the Rule 56 record that, at all times pertinent, Diane Ruff was the chief executive officer of AMS with general authority to act on behalf of the corporation within the broad scope of AMS’s ordinary course of business. AMS was engaged in the business of, inter alia, providing payroll recordkeeping and processing services to its clients, including but not limited to the acquisition of software necessary or helpful to that end. It is beyond genuine material dispute on the Rule 56 record that the 2008 licensing agreement and its subject matter were within the scope of the ordinary course of AMS’s business.

AMS’s corporate counsel drafted the licensing agreement for Diane Ruff’s signature in the name of the corporation. AMS made no affirmative factual showing disputing Diane’s authority to enter into the licensing agreement without prior authorization of the AMS board. AMS made no affirmative factual showing that Diane had any reason to believe that either the initial informal agreement or the subsequent licensing agreement was outside the scope of her authority as the chief executive officer of AMS. AMS further made no affirmative factual showing that Daniel had any non-speculative reason to believe that Diane was not authorized to enter into the development and licensing agreements or that Diane actively or intentionally concealed the existence and terms of the licensing agreement from the AMS board. The mere facts that Diane and Daniel were mother and son and that the AMS board was not formally or specifically aware of the licensing agreement until the new AMS executive director raised “concerns” about it in 2013 after Diane left the company are insufficient without more to raise a genuine issue of material fact as to whether Diane was acting outside the scope of her actual or ostensible authority when she executed the licensing agreement seven years earlier. On the Rule 56 record presented, we hold that Ruff was entitled to judgment that Diane executed the 2008 licensing agreement within the scope of her actual and ostensible authority as the chief executive officer of AMS.

The District Court alternatively ruled that, even if arguendo Diane had executed the licensing agreement outside the scope of her actual or ostensible authority, AMS nonetheless ratified the agreement after she left the company. A principal may create an agency relationship by subsequent ratification of the representative acts of another. Section 28-10-201, MCA. “A contract which is voidable solely for want of due consent may be ratified by a subsequent consent.” Section 28-2-304, MCA. Ratification is the affirmative confirmation of a prior act. Erler v. Creative Fin. & Inv., 2009 MT 36, ¶¶ 25-26, 349 Mont. 207, 203 P.3d 744. A principal with knowledge of the material facts may ratify a prior unauthorized act or transaction by express declaration or implicitly by acts, statements, or conduct which reasonably manifests an intent to affirm or be bound by the act. Erler, ¶¶ 25-26; Freeman, 104 Mont. at 172, 65 P.2d at 603. Thus, a principal may ratify an unauthorized act by “knowingly accepting or retaining the benefit of the act.” Section 28-10-211, MCA.

(…) Ratification rests, inter alia, upon the principle of equitable estoppel and “the duty of the principal to repudiate” an unauthorized act of an agent “within a reasonable time after discovery.” Larson, 61 Mont. at 9, 201 P. at 687. See also Butler Mfg. Co., 167 Mont. at 526, 540 P.2d at 966 (duty to repudiate or disavow unauthorized act of agent immediately upon discovery). Thus, a principal with knowledge who acquiesces and affirmatively performs or pays on a previously unauthorized but otherwise lawful and beneficial act of a previously established agent is equitably estopped from later asserting that the act was unauthorized ab initio.

(Montana Supreme Court, July 24, 2018, Associated Management Services, Inc. v. Ruff, Case Number DA 17-0102, Cit. 2018 MT 182, J. Sandefur)

Cette affaire est jugée en application du droit de l’état du Montana.

Etendue des pouvoirs de représentation d’un directeur général : ce directeur engage la société si son acte est expressément autorisé par le conseil d’administration, si le conseil laisse croire par négligence que l’acte est autorisé, ou s’il est ratifié par dit conseil. Le directeur général engage également la société si son acte pouvait raisonnablement être compris par un tiers comme étant autorisé par le conseil. Quant à elle, la ratification peut être expresse ou par actes concluants (par exemple en conservant les bénéfices découlant de l’acte non autorisé). S’agissant de la ratification, il y a plus : la notion de ratification est liée au principe d’ « equitable estoppel » ainsi qu’au devoir du représenté de répudier l’acte non autorisé dans un délai raisonnable après sa découverte. De la sorte, un représenté qui ne répudie pas peut être « equitably estopped » d’alléguer valablement que le représentant a excédé ses pouvoirs.

A défaut de directive contraire du conseil ou de norme statutaire contraire, le directeur dispose de la compétence de conclure tous les types de contrats usuels, ou appropriés, ou nécessaires à la réalisation du but social.

Est en l’espèce discutée la question de la validité d’un contrat de licence conclu par la CEO pour le compte de son entreprise, active dans la fourniture de services digitaux liés à la tenue de dossiers de ressources humaines. Le contrat de licence portait sur un software utile à la réalisation du but social, de sorte que la directrice disposait de la compétence de signer ce contrat au nom de la société. En outre, le contrat de licence avait été rédigé par le service juridique interne de l’entreprise. Dite entreprise n’a nullement contesté l’autorité de sa directrice de signer, et celle-ci n’avait aucune raison de penser qu’elle n’en avait pas la compétence. Et l’autre partie au contrat de licence n’avait aucune raison de penser que la directrice aurait été dépourvue de l’autorité de signer au nom de l’entreprise, ni de penser que la directrice aurait caché au conseil d’administration l’existence et les termes du contrat. Le fait qu’en l’espèce la directrice et l’autre partie au contrat de licence étaient mère et fils n’était en soi pas suffisant pour nier le pouvoir de représentation de la directrice. Aucun conflit d’intérêt n’a été démontré, s’agissant d’une transaction conforme aux conditions du marché.