Schoenberger v. Chicago Transit Authority
i. Whether the CTA may be held liable under agency principles of a promise allegedly made by an employee of the CTA to the plaintiff at the time that he was hired to the effect that he would receive a $500 salary increase above and beyond?
ii. Former employee brought small claims action to recover damages for breach of employment contract.
iii. The Circuit Court, entered judgment in favor of employer, and employee appealed.
iv. The Appellate Court, held that:
1. (1) trial court properly determined that interviewer lacked actual authority to bind employer for additional compensation to employee;
2. (2) trial court's determination that employee could not have reasonably believed interviewer to have apparent authority to bind employer was not against manifest weight of the evidence; and
3. (3) employer was not bound by interviewer's promise on the ground that employer ratified interviewer's acts.
v. Judgment affirmed.
1. Authority of an agent may only come from principal and it is therefore necessary to trace source of agent's authority to some word or act of the alleged principal in order to impose liability on the principal; authority may be actual or apparent, actual being either express or implied.
2. Authority to bind a principal will not be presumed, but rather, person alleging authority must prove its source unless the act of the agent has been ratified; moreover, authority must be founded upon some word or act of the principal, not on acts or words of the agent.
3. Actual – authority that the principal manifest to the 3rd party
a. What evidence can the 3rd party present that shows that the 3rd party received information from the principal that showed that the agent was authorized by the principal?
i. “my attorney who is authorized to meet with you”
7. Ratification - “ratification” is equivalent to original authorization and confirms that which was originally unauthorized, and occurs where principal attempts to seek or retain benefits of the transaction
ii. Rest § 43: Acquiescence by the Principal in Agent’s Conduct
1. Acquiescence by the principal in conduct of an agent whose previously conferred authorization reasonably might include it, indicates that the conduct was authorized, if clearly not included in the authorizations, acquiescence in it indicates affirmance
2. Acquiescence by the principal in a series of acts by the agent indicates authorization to perform similar acts in the future
iii. Rest § 49: Interpretation of Apparent Authority Compared with Interpretation of Authority