Gordon v. Pettingill, 105 Colo. 214

Summary

Gordon sought to recover payments made by his bookkeeper, Baumgarten, who used company checks to pay personal rent owed to Pettingill. The court held that Gordon was barred by ratification and equitable estoppel because he placed Baumgarten in a position to issue the checks and failed to discover or challenge the transactions for an extended period, affirming judgment for Pettingill.

Holdings

1. Gordon was estopped from recovering from Pettingill because Gordon placed Baumgarten in charge of the business, authorized the bank to honor checks bearing Baumgarten's signature, and failed for an extended period to discover or challenge the payments, thereby enabling Pettingill to rely on Baumgarten's apparent authority.
2. Gordon's prolonged silence and failure to exercise reasonable diligence supported ratification of Baumgarten's issuance of the checks, particularly as to the second and third checks.
3. Actual full knowledge is not required where reasonable diligence would have disclosed the relevant facts; the law may presume knowledge of facts that a party would have discovered through reasonable diligence.

Questions Presented

1. Whether Pettingill was liable to Gordon for accepting company checks issued by Baumgarten to pay Baumgarten's personal rent.
2. Whether Gordon's delay and failure to discover or challenge the payments resulted in ratification or equitable estoppel barring recovery.
3. Whether ratification required proof that Gordon had actual full knowledge of the facts.

Disposition

affirmed