Botticello v. Stefanovicz

Brief Fact Summary. Plaintiff, Anthony Botticello, entered a real estate leasing agreement with an option to buy with Defendant-husband, Walter Stefanovicz. Plaintiff was unaware that Walter Stefanovicz only had an undivided half interest in the real estate, while Defendant-wife, Mary Stefanovicz, owned the other half and refused to accept the terms of the agreement.

Synopsis of Rule of Law. Ratification of an agency relationship by the principal requires full knowledge of the material circumstances, regardless of the principal receiving the proceeds or benefits of the agent’s work.

Facts. Defendants, Walter and Mary Stefanovicz each owned one half of an undivided interest in a farm. Plaintiff and Walter discussed Plaintiff’s potential purchase of the farm, and Mary told Walter she would never sell the farm for less than $85,000. Plaintiff entered a lease with an option to buy the farm. Plaintiff dealt exclusively with Walter and did not know that Walter possessed only a half interest. Mary did not know the specifics of Walter and Plaintiff’s agreement, and she never consented to the sale. Prior to the agreement at issue, Walter handled a majority of the business but Mary always offered her signature other matters associated with the farm.

Issue. The issue is whether Mary agreed to allow Walter to act as her agent by ratifying his conduct when she received the proceeds of the agreement at issue.

Held. Walter was not acting as an agent on behalf of Mary. No apparent authority existed because Plaintiff never knew that Mary was a principal. There was no ratification by Mary for Walter’s conduct because she was unaware that the benefits she received from the agreement stemmed from a lease with an option to buy.

Discussion. The court holds that a marriage cannot in itself prove an agency relationship, and no agency relationship is established by a joint ownership. One owner cannot bind the other owner through an agency relationship simply because they are joint owners.